Blueberry Hill Restaurants v. Superior Court CA2/3 ( 2014 )

Filed 4/8/14 Blueberry Hill Restaurants v. Superior Court CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(a). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115(a).
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
BLUEBERRY HILL RESTAURANTS, B250597
INC., et al.,
(Los Angeles County
Petitioner, Super. Ct. No. BC481797
v.
SUPERIOR COURT OF THE
STATE OF CALIFORNIA, COUNTY OF
LOS ANGELES,
Respondent;
GOODMAN FOOD PRODUCTS, INC.,
et al.,
Real Parties in Interest.
ORIGINAL PROCEEDINGS in mandate. Michael L. Stern, Judge. Petition
granted.
Joseph R. Wilbert; Michael E. Lopez; Pepper Hamilton, Harry P. Weitzel and
Jeffrey M. Goldman, for Petitioner.
No appearance for Respondent.
Hobart Linzer, Kenneth A. Linzer, Joseph N. Akrotirianakis, Amy Duncan and
Elisha Weiner, for Real Parties in Interest.
_______________________________________
Petitioner Blueberry Hill Restaurants, Inc. (Blueberry Hill) filed the instant
petition for writ of mandate challenging the trial court’s order denying its motion to
disqualify counsel for real party in interest Goodman Food Products, Inc. (Goodman) in
litigation arising from a contract dispute. We conclude the motion to disqualify was, in
effect, unopposed, and therefore should have been granted. We will grant the petition.
FACTUAL AND PROCEDURAL BACKGROUND
The litigation at issue involves a vegetable patty invented by Blueberry Hill and
manufactured and sold by Goodman, pursuant to a contract by which Blueberry Hill
receives a royalty. It appears that Goodman subsequently began manufacturing and
selling a gluten-free vegetable patty. Blueberry Hill takes the position that Goodman’s
gluten-free vegetable patty was simply a variation of the Blueberry Hill patty, for which
Blueberry Hill was entitled to royalties. Goodman takes the position that the gluten-free
vegetable patty was its own creation, and that Blueberry Hill’s statements to the
contrary threatened Goodman’s contractual relations with third parties. Goodman
brought suit against Blueberry Hill; Blueberry Hill cross-complained against Goodman.
At issue in this writ proceeding is the continued representation of Goodman by
Attorney Linzer, and his firm Hobart Linzer LLP.1 Attorney Linzer had represented
both Goodman and Blueberry Hill in separate matters in the past.2 Blueberry Hill
1
Attorney Linzer’s firm was previously Linzer & Associates. Where applicable,
references to Attorney Linzer include both firms.
2
Although Attorney Linzer simultaneously represented Goodman and Blueberry
Hill, there was never a joint representation. That is, Attorney Linzer did not previously
represent both Goodman and Blueberry Hill in the same matter.
2
argues that Attorney Linzer must be disqualified from representing Goodman in the
instant matter because of his representation of Blueberry Hill in other matters. We
discuss the relevant facts3 and procedural background.
1. Blueberry Hill Retains Attorney Linzer
In 2004, before Goodman and Blueberry Hill had entered into the contract that is
the subject of the instant litigation, Goodman referred Blueberry Hill to Attorney
Linzer. Blueberry Hill retained Attorney Linzer to be its attorney. Attorney Linzer was
initially retained only to assist Blueberry Hill in trademark matters.
2. The December 2004 Conflict of Interest Waiver Letter
Attorney Linzer prepared a “Conflict of Interest Waiver Letter” for Blueberry
Hill’s president to sign.4 The document indicated that Attorney Linzer was being
3
As we shall discuss, it is not proper for this court to consider Goodman’s
opposition to the motion to disqualify. Therefore, our discussion of the facts is limited
to the facts as presented by Blueberry Hill in support of the motion to disqualify.
4
We set forth the text of the letter in full: “As you know, the Law Offices of
Linzer & Associates, P.C. (the ‘Firm’) have been asked to represent Blueberry Hill
Restaurants Inc. (‘Blueberry Hill’) in the preparation, filing and prosecution of certain
trademark applications. Our firm also currently represents Goodman Food Products,
Inc. (‘Goodman Foods’) in various corporate and business litigation matters. The rules
of professional conduct of the State Bar of California prohibit a member of the bar from
representing conflicting interests, except with the written consent of all parties
concerned, Rules of Professional Conduct 5-102(B). [¶] Because the interests of
Blueberry Hill and Goodman Foods may at some time in the future become adverse to
one another, for example, should the two businesses enter into a co-packing
arrangement, an actual conflict would exist and must be disclosed to each of you, as it
has been. Therefore, the Firm needs for each of you to sign a Waiver of Conflict letter
to acknowledge the fact that by this letter you have been advised of the contents of this
letter and allow the Firm to represent or act on behalf of both of you. This is the
purpose of this letter. [¶] In view of the foregoing, you hereby acknowledge that you:
[¶] (a) have been advised by Linzer & Associates, P.C. that Blueberry Hill’s interests in
3
retained “in the preparation, filing and prosecution of certain trademark applications.”
It stated that Attorney Linzer also represented Goodman, and sought to obtain Blueberry
Hill’s “written consent” in the event Blueberry Hill and Goodman “may at some time in
the future become adverse to one another.”
The Conflict of Interest Waiver Letter, dated December 16, 2004, explained,
“The rules of professional conduct of the State Bar of California prohibit a member of
the bar from representing conflicting interests, except with the written consent of all
parties concerned, Rules of Professional Conduct 5-102(B).” Indeed, Rules of
Professional Conduct former rule 5-102(B) had provided, “A member of the State Bar
shall not represent conflicting interests, except with the written consent of all parties
concerned.” However, that rule had been replaced by Rules of Professional Conduct
rule 3-310 effective 1989. In other words, Attorney Linzer’s Conflict of Interest Waiver
certain matters may conflict with those of Goodman Foods; [¶] (b) have received from
Linzer & Associates, P.C. a full disclosure of the facts causing that conflict of interest;
[¶] (c) have been advised by Linzer & Associates, P.C. to have independent counsel
review the legal implications of the Firm’s joint representation and be consulted
regarding future litigation and negotiations strategies; [¶] (d) have agreed to have Linzer
& Associates, P.C. prepare, file and prosecute certain trademark applications on behalf
of Blueberry Hill; [¶] (e) have agreed that Linzer & Associates, P.C. will not be
representing Blueberry Hill in any contract negotiations with Goodman Foods; [¶]
(f) have agreed that Linzer & Associates, P.C. will not be obtaining any confidential
information regarding its co-packing arrangement with Goodman Foods from Blueberry
Hill; [¶] (e) [sic] have agreed that any conflict that may arise will not serve as a basis for
Linzer & Associates, P.C.’s disqualification in representing Goodman Foods in any
matter, including any matter which is or may be adverse to Blueberry Hill, with the
exception of any disputes with respect to trademark matters for which we have filed
applications for federal trademark registration on behalf of Blueberry Hill.” The letter
is signed by Attorney Linzer for Linzer & Associates. Then it is signed by the president
of Blueberry Hill, under the line, “The undersigned acknowledges the foregoing and
agrees to the representation of Blueberry Hill and Goodman Foods by Linzer &
Associates, P.C. under these circumstances.”
4
Letter cited to, quoted, and attempted to satisfy, a standard which had been superseded
some fifteen years prior to the date of the letter. Specifically, while former
rule 5-102(B) had required “written consent,” rule 3-310 requires “informed written
consent” when representing clients with potentially conflicting interests. (Rules Prof.
Conduct, rule 3-310(C)(1).) Moreover, the rule specifically defines “informed written
consent” as the “client's written agreement to the representation following written
disclosure.” (Rules Prof. Conduct, rule 3-310(A)(2).) “Disclosure,” in turn, is defined
as “informing the client or former client of the relevant circumstances and of the actual
and reasonably foreseeable adverse consequences to the client or former client.” (Rules
Prof. Conduct, rule 3-310(A)(1).)
That Attorney Linzer’s Conflict of Interest Waiver Letter failed to satisfy this
standard is clear from the text of the letter itself. As Attorney Linzer was relying on
a prior rule that did not require written disclosure, the letter did not include written
disclosure, but simply had an acknowledgement of some other (perhaps oral) disclosure.
It stated, “you hereby acknowledge that you: [¶] (a) have been advised by Linzer &
Associates, P.C. that Blueberry Hill’s interests in certain matters may conflict with
those of Goodman . . . ; [and] [¶] (b) have received from Linzer & Associates, P.C.
a full disclosure of the facts causing that conflict of interest . . . . ” But the letter itself
did not fully disclose any facts causing a conflict, stating only that Blueberry Hill and
Goodman’s interests “may at some time in the future become adverse to one another,
for example, should the two businesses enter into a co-packing arrangement.”
5
Moreover, as to the scope of work Attorney Linzer would do for Blueberry Hill,
the letter addressed only Attorney Linzer’s representation of Blueberry Hill in
connection with trademark matters. It specifically stated that Blueberry Hill “agreed to
have [Attorney Linzer] prepare, file and prosecute certain trademark applications on
behalf of Blueberry Hill.” As such, it was silent as to any conflict which might arise if
Attorney Linzer performed other work for Blueberry Hill. Indeed, the letter obtained
Blueberry Hill’s agreement that Attorney Linzer would “not be obtaining any
confidential information regarding its co-packing arrangement with Goodman Foods
from Blueberry Hill.” It was silent as to any other confidential information that
Attorney Linzer might obtain from Blueberry Hill.
The Conflict of Interest Waiver Letter provided that Blueberry Hill “agreed that
any conflict that may arise will not serve as a basis for [Attorney Linzer’s]
disqualification in representing Goodman . . . in any matter, including any matter which
is or may be adverse to Blueberry Hill, with the exception of any disputes with respect
to trademark matters for which we have filed applications for federal trademark
registration on behalf of Blueberry Hill.” However, given the letter’s failure to comply
with the informed disclosure requirements of Rules of Professional Conduct rule 3-310,
and the subsequent circumstances which expanded the scope of Attorney Linzer’s
representation beyond that anticipated by the letter, the waiver is unenforceable.5
5
Indeed, we note that the letter provided that Attorney Linzer would do only
trademark work for Blueberry Hill, and that, should a conflict arise between Goodman
and Blueberry Hill, Attorney Linzer would represent Goodman, except with respect to
the trademarks Attorney Linzer obtained for Blueberry Hill. In other words, the letter
6
3. The Scope of Attorney Linzer’s Representation Increases
Although Attorney Linzer was initially retained by Blueberry Hill in 2004 to
assist with obtaining trademark protection, the scope of his representation greatly
expanded. From 2004 to 2012, Attorney Linzer was Blueberry Hill’s “primary attorney
advising it on various matters.” For example, he represented Blueberry Hill in litigation
with a franchisee through settlement of the dispute, thereby learning confidential
information regarding Blueberry Hill’s financial situation and litigation strategy.
From 2005 to 2012, Attorney Linzer “was directly involved in many of the
interactions between Blueberry Hill and Goodman concerning the production and sale
of the Blueberry Hill vegetable patty.” He specifically advised Blueberry Hill about
how to interact with Goodman “regarding potential business opportunities for selling
the veggie patty and other products.” In 2009, Blueberry Hill consulted with Attorney
Linzer about the very agreement that is the subject of the instant litigation, seeking his
assistance in clarifying the agreement. In general, Blueberry Hill’s owner “confided in”
Attorney Linzer, telling him her “thoughts on the status of Blueberry Hill’s relationship
with Goodman, particularly concerning Blueberry Hill’s vegetable products.”
provided that Attorney Linzer would represent Blueberry Hill in a dispute with
Goodman which might arise from the only work Attorney Linzer anticipated doing for
Blueberry Hill. Surely, it would not be unreasonable for Blueberry Hill to believe that,
when Attorney Linzer later performed non-trademark work for it, Attorney Linzer
would take Blueberry Hill’s part in litigation arising from that additional work as well.
7
4. Attorney Linzer Sends Blueberry Hill a Cease and Desist
Letter for Goodman
Goodman’s dispute with Blueberry Hill over the gluten-free vegetable patty
escalated. On February 3, 2012, Attorney Linzer sent Blueberry Hill a cease and desist
letter, demanding that Blueberry Hill cease claiming that it had royalty rights to the
gluten-free patty. The cease and desist letter stated that Attorney Linzer had previously
advised Blueberry Hill that if a dispute ever arose between Blueberry Hill and
Goodman, Attorney Linzer would represent only Goodman and Blueberry Hill would be
required to obtain independent counsel. The letter stated, “that day has now arrived.”
However, Attorney Linzer continued performing legal work for Blueberry Hill.
On February 29, 2012, Attorney Linzer’s firm billed Blueberry Hill for some trademark
work performed on February 7 and 22, 2012.
5. Attorney Linzer Terminates Blueberry Hill as a Client, and Brings Suit
On March 7, 2012, one month after the cease and desist letter, Attorney Linzer
wrote Blueberry Hill officially terminating the representation in all matters.6 On
6
It is interesting to note that this letter contained an overstatement of the Conflict
of Interest Waiver Letter Attorney Linzer had obtained from Blueberry Hill. The
termination letter stated, “In fact, you signed a waiver of conflict of interest
letter, . . . stating that you had not divulged any confidential information regarding your
business or the [Goodman] arrangement to us.” (Emphasis added.) In fact, the
Conflict of Interest Waiver Letter had stated only that Blueberry Hill agreed that
Attorney Linzer would “not be obtaining any confidential information regarding its
co-packing arrangement with Goodman Foods from Blueberry Hill.” Setting to one
side the issue of whether the royalty agreement Blueberry Hill entered into with
Goodman was a “co-packing” agreement, it is clear that the Conflict of Interest Waiver
Letter said nothing about Blueberry Hill agreeing that it would not divulge any
confidential information about its business to Attorney Linzer.
8
March 26, 2012, Goodman, represented by Attorney Linzer, brought the instant action
against Blueberry Hill.
6. The Litigation Proceeds
As the action proceeded, Blueberry Hill became increasingly concerned about
Attorney Linzer’s continued representation of Goodman. At an October 2012
deposition of one of Blueberry Hill’s officers, Attorney Linzer questioned her regarding
whether Blueberry Hill had applied for intellectual property protection for its
proprietary vegetable patty recipe. But Blueberry Hill had “relied on [Attorney]
Linzer’s advice concerning the extent to which Blueberry Hill should apply for
intellectual property protection.”
In a March 2013 meet and confer letter, Attorney Linzer disclosed a privilege
log. The log indicated that Attorney Linzer had worked with Goodman on a draft letter
to Blueberry Hill, in connection with this dispute, as early as January 26, 2012.
7. Blueberry Hill Moves to Disqualify Attorney Linzer
On April 5, 2013, Blueberry Hill moved to disqualify Attorney Linzer from
continuing to represent Goodman in this action. Blueberry Hill argued that
disqualification was mandated on two grounds: (1) breach of the duty of loyalty, due to
Attorney Linzer’s simultaneous representation of both Goodman and Blueberry Hill
from January 26, 2012 through March 7, 2012; and (2) breach of the duty of
confidentiality, due to Attorney Linzer’s prior representation of Blueberry Hill in
matters substantially related to the instant litigation.
9
Anticipating the argument expected to be made by Goodman in response,
Blueberry Hill argued that the Conflict of Interest Waiver Letter was inadequate to
waive Attorney Linzer’s disqualification. It further argued that the motion to disqualify
was not untimely.
8. Goodman Argues Opposition is Barred by the Attorney-Client Privilege
Goodman felt that, in order to properly oppose the motion to disqualify, it would
be necessary to reveal information which potentially was subject to Blueberry Hill’s
attorney-client privilege. We stress that Goodman argued that no opposition could be
filed without such information. Thus, Goodman filed an ex parte application for an
order either finding that the attorney-client privilege had been waived with respect to
the motion to disqualify or denying the motion to disqualify. In its application,
Goodman argued, “[U]ntil there has been an adjudication that Blueberry Hill has
waived the attorney-client privilege as to matters related to the Motion, such that
[Attorney Linzer’s firm] can file Mr. Linzer’s declaration in opposition to the Motion,
along with the exhibits thereto and the Memorandum of Points and Authorities in
Opposition to the Motion to Disqualify [Attorney Linzer], [Goodman] cannot oppose
the Motion.” (Emphasis added.)
In order to file a timely opposition to the motion, Goodman filed the so-called
“redacted version” of three documents – its opposition, a declaration of Attorney Linzer,
and a declaration of a legal assistant at Attorney Linzer’s firm. The documents were
redacted in their entirety. The full text of each one stated only, “Papers will be filed
conditionally under seal after June 5, 2013 hearing on ex parte application of Goodman
10
Food Products, Inc. [] for determination of any possible claim by Blueberry Hill . . . of
any waiver by [Attorney Linzer] of the attorney client privilege without consent.”
(Capitalization omitted.)
The ex parte motion was denied as procedurally defective. The trial court
considered it to be a request for an order shortening time for a noticed motion, which
the court granted. The court set a briefing schedule on Goodman’s motion for
a determination that the attorney-client privilege had been waived with respect to
matters at issue in the motion to disqualify Attorney Linzer. The motion was to be
heard on June 14, 2013, the same day as the motion to disqualify itself.
Having lodged the unredacted opposition documents under seal, Goodman was
concerned that the court may inadvertently review the sealed documents prior to ruling
on whether the privilege had been waived, in preparing for the hearing on the motion to
disqualify. As such, on June 6, 2013, Goodman filed a “Very Important Notice” to the
court, requesting that the court not open or review the unredacted lodged documents
until it had resolved the attorney-client privilege waiver issue.
9. The June 14, 2013 Hearing
The matters were heard on June 14, 2013. Blueberry Hill suggested that the trial
court could grant the disqualification motion without ever reaching the attorney-client
privilege waiver argument. The trial court agreed with the “approach” of addressing the
motion to disqualify first, but concluded the motion to disqualify should be denied. The
court gave no explanation for its ruling.
11
Later in the hearing, the court reached Goodman’s motion to determine that the
attorney-client privilege had been waived by Blueberry Hill’s motion to disqualify. The
court initially thought the motion might be moot by the denial of the motion to
disqualify. However, Goodman’s counsel sought a ruling on the motion, stating, “it’s
relevant in ways other than as to that motion.”7 The court heard argument on the merits
of the motion, and denied it.
10. Blueberry Hill’s Writ Petition
On August 13, 2013, Blueberry Hill filed a petition for writ of mandate, seeking
a writ directing the trial court to grant its motion to disqualify Attorney Linzer.
11. Goodman’s Preliminary Opposition
On August 23, 2013, Goodman filed a preliminary opposition to the writ petition.
Among other arguments, Goodman argued that the writ petition was procedurally
defective in that Blueberry Hill had not included all documents submitted to the court
supporting and opposing the motion to disqualify. Specifically, Goodman argued that
Blueberry Hill failed to include Goodman’s opposition to the motion to disqualify and
its supporting documents.8 Goodman then attached to its preliminary opposition a copy
7
The caption on the initial ex parte application sought an order either finding that
Blueberry Hill had waived the attorney-client privilege in connection with the motion to
disqualify or denying the motion to disqualify. Goodman had obtained the alternative
relief it sought; the motion to disqualify had been denied. At the hearing, however,
Goodman pursued a ruling on the issue that Blueberry Hill had waived the
attorney-client privilege, apparently for some additional, unspoken purpose.
8
Goodman suggested that the reporter’s transcript of the hearing on the motion to
disqualify indicated that its documents were considered by the trial court in ruling on
the motion – despite the fact that Goodman had, in its “Very Important Notice,”
12
of the opposition it had lodged with the trial court, redacting “any portion that could
conceivably be considered to reveal attorney-client communications.”
We have not reviewed this partially-redacted opposition, as it was not before the
trial court. However, we note that the document is 15 1/2 pages long, and has
approximately 23 lines, or one page of text, redacted. In other words, although
Goodman had argued to the trial court that it could not oppose the motion to disqualify
unless the court found the attorney-client privilege to be waived, Goodman represented
to this court that over 90% of its opposition points and authorities contained
non-privileged material. In fact, Goodman took the position that Blueberry Hill’s writ
petition should be denied because Blueberry Hill failed to provide this court with
a partially-redacted version of Goodman’s opposition that Goodman had never provided
to the trial court.
12. Further Briefing
We issued an order to show cause and set a briefing schedule. In connection
with its return to the petition, Goodman filed several exhibits. Three of those exhibits
were the unredacted versions of the three documents Goodman had lodged with the
court in opposition to the motion to disqualify – the opposition, Attorney Linzer’s
requested that the court not read the documents until it had ruled that the attorney-client
privilege had been waived, which the court never did. In any event, Goodman relies on
a statement by the trial court that the clerk gave the trial court all of the motions for that
hearing, with the sealed documents in one pile and everything else in another. That the
clerk provided the court with the sealed documents does not mean that the court
reviewed those documents, especially when the court had been requested not to do so.
13
declaration, and the declaration of the legal assistant. Goodman moved to file those
documents under seal; the motion was unopposed.
However, Goodman also filed an unsealed appendix of exhibits. Each of the
three documents is identified in the appendix of exhibits as being encompassed by the
motion to seal. The table of contents for the appendix of exhibits states that a “redacted
copy of [each] document is included in” the unsealed volume of exhibits. As to two of
those exhibits, the opposition and Attorney Linzer’s declaration, this statement is simply
untrue. Goodman represents that the version of the documents included in its unsealed
appendix of exhibits is the redacted (or partially-redacted) version, but the appendix
includes the unredacted version of both documents.9 Blueberry Hill filed an objection,
arguing that Goodman included privileged documents in its appendix of exhibits. We
agree with Blueberry Hill with respect to the two unredacted documents; exhibits 1 (the
opposition to the motion to disqualify) and 3 (Attorney Linzer’s declaration) should not
be part of the unsealed record in this writ petition. We hereby order them stricken from
the record.
CONTENTIONS OF THE PARTIES
Blueberry Hill contends that the trial court erred in denying its motion to
disqualify Attorney Linzer. Goodman contends that the trial court’s order was
well-supported by substantial evidence, but relies, in large part, on documents which
were not before the trial court.
9
Several of the exhibits to Attorney Linzer’s declaration have been redacted, but
the declaration itself has not been.
14
DISCUSSION
1. Standard of Review
“ ‘ “Generally, a trial court’s decision on a disqualification motion is reviewed
for abuse of discretion. [Citations.]” [Citation.] As to disputed factual issues,
a reviewing court’s role is simply to determine whether substantial evidence supports
the trial court’s findings of fact; “the reviewing court should not substitute its judgment
for . . . express or implied [factual] findings [that are] supported by substantial evidence.
[Citations.]” [Citation.] As to the trial court’s conclusions of law, however, review is
de novo; a disposition that rests on an error of law constitutes an abuse of discretion.
[Citations.] The trial court’s “application of the law to the facts is reversible only if
arbitrary and capricious.” [Citation.]’ [Citation.]” (Fiduciary Trust Internat. of
California v. Superior Court (2013) 218 Cal.App.4th 465, 477-478.)
2. Blueberry Hill’s Motion Was Unopposed
Before turning to the merits of Blueberry Hill’s writ petition, we find it necessary
to discuss the status of Goodman’s opposition to the motion to disqualify. Goodman
filed blank documents in opposition to the motion. It lodged unredacted versions, but
specifically requested the court not to review those documents unless and until the court
ruled in its favor on the motion to find the attorney-client privilege had been waived.
The court did not conclude that the attorney-client privilege had been waived; it
specifically denied Goodman’s motion seeking such a ruling. Goodman does not
15
challenge that ruling in the instant writ petition.10 Therefore, in accordance with
Goodman’s own request, the lodged documents were neither filed nor considered by the
trial court. As such, no opposition to the motion to disqualify was before the trial court.
Therefore, no opposition to the motion to disqualify is properly before this court. To
the extent Goodman relies on any version of its opposition, redacted or unredacted, we
disregard it.
Goodman very easily could have filed partially-redacted versions of its
opposition documents with the trial court; indeed, Goodman has provided this court
with a redacted version of its opposition points and authorities, leaving more than 90%
of the document untouched. Goodman chose not to do so before the trial court,
preferring to take an “all or nothing” approach, so that it could argue to the trial court
that unless the court found that Blueberry Hill had waived the privilege, Goodman could
not oppose the motion to disqualify at all. Having failed in its gamble, Goodman cannot
now rely on the partially-redacted opposition it could and should have filed in the trial
court.
10
Goodman makes two passing references (one in a footnote) to its belief that the
privilege does not apply in this case, but makes no real argument to that effect. Instead,
Goodman argues that Blueberry Hill’s refusal to waive the privilege prevented it from
opposing the motion. Goodman did not raise this argument before the trial court and, in
any event, Goodman’s premise is unsupported by the record. In opposing Goodman’s
ex parte application, Blueberry Hill’s counsel submitted an e-mail exchange in which
Blueberry Hill’s counsel confirmed that Goodman could discuss potentially privileged
communications in its opposition to the motion to disqualify, as long as the opposition
was filed under seal and Goodman agreed that Blueberry Hill’s consent to this limited
disclosure did not waive the privilege. For reasons which are not entirely clear, this
representation was not sufficient for Goodman, which chose instead to seek a court
order holding that the privilege had been waived.
16
3. The Motion to Disqualify Should Have Been Granted
As the only evidence we can consider is the evidence submitted by Blueberry
Hill in connection with its motion to disqualify Attorney Linzer, we reach the
inescapable conclusion that the motion should have been granted. Blueberry Hill’s
motion was based on: (1) improper simultaneous representation of Blueberry Hill and
Goodman in violation of the duty of loyalty; and (2) improper successive representation
of Goodman and Blueberry Hill in violation of the duty of confidentiality. The motion
also anticipated the defenses that any conflict had been waived and that the motion was
untimely.
a. Improper Simultaneous Representation
“The primary value at stake in cases of simultaneous or dual representation is the
attorney’s duty—and the client’s legitimate expectation—of loyalty, rather than
confidentiality.” (Flatt v. Superior Court (1994) 9 Cal.4th 275, 284.) “Even though the
simultaneous representations may have nothing in common, and there is no risk that
confidences to which counsel is a party in the one case have any relation to the other
matter, disqualification may nevertheless be required. Indeed, in all but a few
instances, the rule of disqualification in simultaneous representation cases is a per se or
‘automatic’ one.” (Ibid.)
“The reason for such a rule is evident, even (or perhaps especially) to the
nonattorney. A client who learns that his or her lawyer is also representing a litigation
adversary, even with respect to a matter wholly unrelated to the one for which counsel
was retained, cannot long be expected to sustain the level of confidence and trust in
17
counsel that is one of the foundations of the professional relationship. All legal
technicalities aside, few if any clients would be willing to suffer the prospect of their
attorney continuing to represent them under such circumstances.” (Flatt v. Superior
Court, supra, 9 Cal.4th at p. 285.) Thus, “courts and ethical codes alike prohibit an
attorney from simultaneously representing two client adversaries, even where the
substance of the representations are unrelated.” (Ibid.)
Blueberry Hill submitted substantial uncontroverted evidence that, from
January 26, 2012 through March 7, 2012, Attorney Linzer represented Blueberry Hill
while representing Goodman against Blueberry Hill. Indeed, Attorney Linzer sent
Blueberry Hill a cease and desist letter on behalf of Goodman while his firm continued
to bill Blueberry Hill for trademark work. Disqualification is therefore mandatory,
unless Attorney Linzer properly obtained client consent (Flatt v. Superior Court, supra,9 Cal.4th at p. 285, fn. 4) or could prevail on a claim of untimeliness.
b. Improper Successive Representations
“An attorney’s representation of a client in a matter against a former client
implicates the duty of confidentiality. ‘Protecting the confidentiality of
communications between attorney and client is fundamental to our legal system. The
attorney-client privilege is a hallmark of our jurisprudence that furthers the public
policy of ensuring “ ‘the right of every person to freely and fully confer and confide in
one having knowledge of the law, and skilled in its practice, in order that the former
may have adequate advice and a proper defense.’ [Citation.]” [Citation.] To this end,
a basic obligation of every attorney is “[t]o maintain inviolate the confidence, and at
18
every peril to himself or herself to preserve the secrets, of his or her client.” [Citation.]’
[Citation.]” (Fremont Indemnity Co. v. Fremont General Corp. (2006) 43 Cal.App.4th
50, 66.)
“Rule 3-310(E) prohibits the successive representation of clients in certain
circumstances without the informed written consent of the client and former
client. . . . If there is a substantial relationship between the subject of the current
representation and the subject of the former representation, the attorney’s access to
privileged and confidential information in the former representation is presumed and
disqualification of the attorney from the current representation is mandatory in order to
preserve the former client’s confidences. [Citations.]” (Fremont Indemnity Co. v.
Fremont General Corp., supra, 143 Cal.App.4th at pp. 66-67.)
In considering whether there is a substantial relationship between the former and
current representations, a court should not look exclusively at the discrete legal and
factual issues involved in the representations. (Jessen v. Hartford Casualty Ins. Co.
(2003) 111 Cal.App.4th 698, 712.) We also consider whether the attorney acquired
confidential information about the client or the client’s affairs which is “material to the
evaluation, prosecution, settlement or accomplishment of the litigation or transaction
given its specific legal and factual issues.” (Id. at p. 713.) This does not mean that an
attorney who represented a former client is forever barred from representing that client’s
adversaries due to knowledge of the former client’s “playbook” – its litigation strategies
and attitudes toward settlement. Instead, to create a disqualification, “the information
acquired during the first representation [must] be ‘material’ to the second; that is, it
19
must be found to be directly at issue in, or have some critical importance to, the second
representation.” (Farris v. Fireman’s Fund Ins. Co. (2004) 119 Cal.App.4th 671, 680.)
While the evidence submitted by Blueberry Hill on the issue of the confidential
information acquired by Attorney Linzer in the course of his prior representation was
not overwhelming, in the absence of any opposition by Goodman, it stands undisputed.
Blueberry Hill submitted the declaration of its owner to the effect that: (1) Attorney
Linzer was Blueberry Hill’s primary attorney advising it on business matters from 2004
to 2012; (2) Attorney Linzer advised Blueberry Hill on the extent to which it should
seek intellectual property protection; (3) Attorney Linzer advised Blueberry Hill on how
to interact with Goodman regarding potential business opportunities; (4) Blueberry
Hill’s owner confided in Attorney Lizner her thoughts on the status of Blueberry Hill’s
relationship with Goodman; and (5) Blueberry Hill specifically sought Attorney
Linzer’s advice in clarifying the agreement that is the subject of the instant litigation.
As to the materiality of this information to the instant litigation, the evidence is
undisputed that this case involves the scope of the contract between Blueberry Hill and
Goodman, and whether it extends to the gluten-free vegetable patty. Blueberry Hill also
submitted evidence that Attorney Linzer, while representing Goodman in this case,
questioned Blueberry Hill’s owner at deposition regarding intellectual property
protection she had obtained for her recipe, a topic on which Attorney Linzer had
advised Blueberry Hill. This evidence satisfies the substantial relationship test, and
there is no evidence to the contrary. Thus, disqualification should have been ordered
unless a defense applies.
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c. There Is Insufficient Evidence of Waiver
It appears that the issue of waiver of a disqualifying conflict is one on which the
party opposing the motion to disqualify bears the burden of proof. (Flatt v. Superior
Court, supra, 9 Cal.4th at p. 285, fn. 4.) As Goodman filed no opposition to the motion,
it is difficult to see how it could have sustained this burden.
In any event, the only evidence of waiver is the Conflict of Interest Waiver Letter
obtained by Attorney Linzer in 2004. As we have discussed, the letter attempted to
satisfy a standard which had been superseded 15 years earlier. Moreover, the letter is
inadequate to satisfy the requirement of informed written consent following disclosure
of the relevant circumstances and actual and foreseeable consequences. The letter
contemplated Attorney Linzer’s representation of Blueberry Hill exclusively in the
prosecution of trademark protection. It disclosed nothing regarding the circumstances
which would arise if and when Attorney Linzer became Blueberry Hill’s primary
attorney in all business matters, and specifically advised it in its dealings with
Goodman. As such, the waiver is inadequate, and the trial court erred to the extent it
relied on the waiver in denying the motion.
d. There Is Insufficient Evidence of Untimeliness
“ ‘[A]ttorney disqualification can be impliedly waived by failing to bring the
motion in a timely manner.’ [Citation.] As explained by one court, ‘it is not in the
interests of justice to make the “substantial relationship” rule so unyielding as to permit
the former client to inexcusably postpone objections without penalty. Therefore,
a narrow exception should apply if the present client, by way of opposition, offers
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prima facie evidence of an unreasonable delay by the former client in making the
motion and resulting prejudice to the current client.’ [Citation.] To operate as a waiver,
however, the ‘the delay [and] . . . the prejudice to the opponent must be extreme.’
[Citations.] If the opposing party makes a prima facie showing of extreme delay and
prejudice, the burden then shifts to the moving party to justify the delay. [Citations.]”
(Fiduciary Trust Internat. of California v. Superior Court, supra, 218 Cal.App.4th at
p. 490.)11
Goodman filed no opposition; it therefore made no showing of extreme delay and
prejudice. While a court could infer delay from the passage of time between Blueberry
Hill’s awareness of the dual representation (its receipt of the cease and desist letter in
February 2012) and its pursuit of disqualification (April 2013), prejudice cannot be
presumed. Goodman suggests that we can infer prejudice from the docket sheet, which
shows the extent to which this case has been litigated on its behalf by Attorney Linzer.
This is not sufficient to establish extreme prejudice. There is, for example, no
declaration by Goodman indicating how much it has paid Attorney Linzer to litigate this
matter. Indeed, the record does not reflect whether Attorney Linzer is charging
Goodman on an hourly or contingency basis. Nor is there any evidence in the record as
to how long it would take new counsel for Goodman to prepare to take over the case if
Attorney Linzer is disqualified. This appears to be a routine contract dispute; nothing in
the docket sheet indicates new counsel could not pick up the case and continue the
11
Fiduciary Trust is a successive representation case. (Id. at pp. 478-479.) We
express no opinion on the issue of whether a party can waive attorney disqualification
based on simultaneous representation by failing to timely bring the motion.
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representation of Goodman without undue delay or expense. Thus, extreme prejudice
cannot be inferred. Thus, untimeliness is not a legitimate basis on which the trial court
could have denied the motion to disqualify.
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DISPOSITION
The petition for writ of mandate is granted. Let a peremptory writ issue directing
the trial court to vacate its order denying Blueberry Hill’s motion to disqualify Attorney
Linzer from representing Goodman in this action and to enter a new and different order
granting the motion. Blueberry Hill shall recover its costs in connection with this writ
proceeding.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, Acting P. J.
WE CONCUR:
KITCHING, J.
ALDRICH, J.
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