Judge: Anne Richardson, Case: 20STCV27665, Date: 2023-10-03 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 20STCV27665    Hearing Date: April 3, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Court Order

I. Background

A. Pleadings in Lead Case (23STCV27665)

On July 22, 2020, Plaintiffs Sandra Norlund—individually and as a trustee—filed a Complaint suing Defendants Richard L. Norlund and Sharon K. Norlund in various capacities (the Norlund Defendants) and Nominal Defendant Nancy Hymas as Trustee for Trust A FBO Nancy Hymas and Trust B FBO Nancy Hymas (Nancy Hymas)—pursuant to claims of (1) Judicial Foreclosure, (2) Fraud, and (3) Interference with Prospective Economic Advantage.

On July 29, 2020, Sandra Norlund filed a First Amended Complaint (FAC) stating the same claims against the same Defendants and Nominal Defendant.

The fraud and interference claims were stricken by Department 40 on April 13, 2021, based on a representation by Plaintiffs that only the Judicial Foreclosure cause of action remained, i.e., an election of remedies.

On October 20, 2023, Nancy Hymas filed a Complaint in Intervention alleging claims of (1) Judicial Foreclosure, (2) Fraud, and (3) Interference with Prospective Economic Advantage against the Norlund Defendants.

The Complaint in Intervention’s claims arise largely from the same allegations as Sandra Norlund’s pleading but framed around Nancy Hymas’s resulting injuries.

On March 8, 2024, the Court took a motion by Nancy Hymas for leave to amend the Cross-Complaint in Intervention under submission, which remains under submission.

On March 20, 2024, the Court granted a December 15, 2023, motion filed by Sandra Norlund for leave to amend her FAC.

That same day, Sandra Norlund filed her Second Amended Complaint (SAC), which alleges claims of (1) Judicial Foreclosure, (2) Quiet Title, (3) Reformation of Contract, (4) Declaratory Relief, and (5) Elder Abuse against the Norlund Defendants and Does 6 through 100.

This action (the Lead Case) was originally assigned and remains assigned to Department 40 at the Stanley Mosk Courthouse (the Court).

B. Pleadings in Butte Case (23STCV19070), Now Before Department 40

On September 8, 2021, Sandra Norlund—in her individual and representative capacities—filed a Complaint naming Richard Norlund in his various capacities, Tittle & Company LLP (Tittle & Co.), Chandese Meghadi, CPA (Meghadi, CPA), Old Republic Title Company (Old Republic), and Does 1 through 100 as Defendants and alleging claims of (1) Breach of Contract against Richard Norlund and Does 1 through 70, (2) Actual Fraud, (3) Constructive Fraud, and (4) Conversion against all Defendants, and (5) Professional Negligence against Tittle & Co., Megdhadi, CPA, and Old Republic.

On February 1, 2022, Sandra Norlund filed a First Amended Complaint (FAC) naming Richard Norlund in his various capacities, Tittle & Co., Meghadi, CPA, Old Republic, and Does 1 through 100 as Defendants and alleging claims of (1) Breach of Contract against Richard Norlund and Does 1 through 70, (2) Actual Fraud and (3) Constructive Fraud against all Defendants, and (4) Professional Negligence and (5) Aiding and Abetting against Old Republic.

On November 30, 2022, Sandra Norlund filed an amendment to complaint naming John C. Schaller as Doe 1.

On January 18, 2023, Nancy Hymas filed a Complaint in Intervention in the Butte case naming Richard Norlund in his various capacities, Tittle & Co., Meghadi, CPA, Old Republic, and Does 1 through 100 as Defendants and alleging claims of (1) Breach of Contract against Richard Norlund and Does 1 through 70, (2) Actual Fraud and (3) Constructive Fraud against all Defendants, and (4) Professional Negligence and (5) Aiding and Abetting against Old Republic.

On August 10, 2023, the Butte County Superior Court—where this later-filed action was filed—transferred the action to the Los Angeles Superior Court, which was assigned to Department 72 at the Stanley Mosk Courthouse as 23STCV19070 (hereafter, the Butte case).

On August 28, 2023, the Court related the Lead Case and Butte cases, transferred the Butte Case to Department 40 with the Lead Case as the lead case, and advanced and vacated all hearings in the Butte Case.

On March 8, 2024, the Court took a motion by Nancy Hymas for leave to amend the Cross-Complaint in Intervention under submission, which remains under submission.

C. Motion Before the Court

On February 27, 2024, Rick Edwards, Esq.—counsel for the Norlund Defendants—filed motions to be relieved as counsel in the Lead Case and in the Butte Case.

On February 28, 2024, Rick Edwards filed ex parte applications in the Lead Case and the Butte Case for an order advancing the hearing date on Rick Edwards motions from May 14, 2014, and June 14, 2024.

That same day, Sandra Norlund and Sharon Norlund filed oppositions to the ex parte application in the Lead Case, and Richard Norlund filed oppositions to the ex parte applications in the Lead Case and the Butte Case.

On March 1, 2024, the Court granted the ex parte applications and advanced and continued the hearings to April 3, 2024.

On March 20, 2024, the Norlund Defendants filed an opposition to Rick Edwards’ motions to be relieved as counsel in the Lead Case and the Butte Case.

On March 26, 2024, Rick Edwards filed a combined reply to the nearly identical March 20, 2024, oppositions.

Rick Edwards’ motions are now before the Court.

II. Guidelines for Civility

A. Relevant Law

“Neither written submissions nor oral presentations should disparage the intelligence, ethics, morals, integrity or personal behavior of one’s adversaries, unless such things are directly and necessarily in issue.” (Super. Ct. L.A. County, Local Rules, appen. 3.A., subd. (c)(2).)

B. Admonishment of the Norlund Defendants for Improper Statements Made in Opposition Papers

Here, Sections I.B., VIII, and IX of the opposition points and authorities, as well as, for example, footnote nine on page 11 of that memo, show a long list of statements disparaging Nancy Hymas, her counsel, Ronald V. Larson, Esq. and Andrew Micaraset, Esq., Sandra Norlund, and her counsel, Mark B. Plummer, Esq., e.g., accusing these individuals of being “liars” and accusing some of perjury. Such conduct is unreasonable and impermissible in this Court where these topics are not directly and necessarily at issue vis-à-vis whether Rick Edwards should be permitted to withdraw based on, for example, prejudice to the Norlund Defendants. Although the Norlund Defendants submitted these papers in pro per as they are opposing their counsel’s request to withdraw, the rules still apply to them, and thus they are ORDERED to comply with the guidelines for civility, and admonished that further failure to comply with the guidelines of civility may result in sanctions or other orders by the Court against the Norlund Defendants.

III. Motion to Be Relieved as Counsel: GRANTED.

A. Preliminary Note on Structure of Ruling

The Court notes that because (1) the motions to relieve counsel in the Lead Case and the Butte case are based on the same grounds, (2) the oppositions are virtually identical, and (3) the issues relating to representation are equally applicable to the Lead Case and Butte Case, the motions are analyzed jointly.

B. Legal Standard

1. Procedural Requirements

To be relieved as counsel, an attorney must meet certain procedural requirements set forth in the California Rules of Court, which provide that:

(1) A notice of motion and motion to be relieved as counsel under Code of Civil Procedure section 284(2) must be directed to the client and must be made on the Notice of Motion and Motion to Be Relieved as Counsel-Civil (form MC-051);

(2) The motion to be relieved as counsel must be accompanied by a declaration on the Declaration in Support of Attorney's Motion to Be Relieved as Counsel-Civil (form MC-052), with the declaration needing to state in general terms and without compromising the confidentiality of the attorney-client relationship why a motion under Code of Civil Procedure section 284(2) is brought instead of filing a consent under Code of Civil Procedure section 284(1);

(3) The proposed order relieving counsel must be prepared on the Order Granting Attorney's Motion to Be Relieved as Counsel-Civil (form MC-053), must be lodged with the court with the moving papers, and must specify all hearing dates scheduled in the action or proceeding, including the date of trial, if known; and

(4) The notice of motion and motion, the declaration, and the proposed order must be served on the client and on all other parties who have appeared in the case, where service may be made by personal service, electronic service, or mail, subject to certain conditions for service by mail, overnight delivery, or fax, as well as for service by email.

(Cal. Rules of Court, rule 3.1362, subds. (a), (c)-(e).)

After an order relieving counsel of representation order is signed, a copy of the signed order must be served on the client and on all parties that have appeared in the case. The court may delay the effective date of the order relieving counsel until proof of service of a copy of the signed order on the client has been filed with the court. (Cal. Rules of Court, rule 3.1362, subd. (e).)

2. Substantive Considerations

“The question of granting or denying an application of an attorney to withdraw as counsel ([without client consent pursuant to Code of Civil Procedure, section] 284, subd. (2)) is one which lies within the sound discretion of the trial court ‘having in mind whether such withdrawal might work an injustice in the handling of the case.’” (People v. Prince (1968) 268 Cal.App.2d 398, 406 [internal quotations omitted].)

The grant or denial of an attorney’s motion to withdraw is always discretionary; an attorney does not have an absolute right to withdraw. (See Rules Prof. Conduct, rule 1.16(c) & cmt. 4; Flake v. Neumiller & Beardslee (2017) 9 Cal.App.5th 223, 230; Linn v. Superior Court (1926) 79 Cal.App. 721, 725-726 (Linn).) Although Rule of Professional Conduct 1.16, subdivision (a) lists circumstances in which an attorney “shall” withdraw, a court does not lose its discretion to deny a motion in these circumstances. (See Rules Prof. Conduct, rule 1.16 cmt. 4 [attorney cannot withdraw if court denies motion, even if withdrawal is based on conflict of interest].)

If the attorney’s “withdrawal can be accomplished without undue prejudice to the client’s interests,” however, the court should grant the motion rather than force an unwilling attorney to work for a client. (Ramirez v. Sturdevant (1994) 21 Cal.App.4th 904, 915 (Ramirez); accord Linn, supra, at p. 725 [in great majority of instances, attorney should be permitted to withdraw unless prejudice is found]; see, e.g., Rus, Miliband & Smith v. Conkle & Olesten (2003) 113 Cal.App.4th 656, 673 [no reason to force unwilling attorney-client relationship]; Ramirez, supra, at p. 915 [no reason for court to deny motion when no prejudice is found].)

A court may deny a motion to be relieved as counsel where withdrawal will cause undue delay in the proceeding or cause injustice. (Mandell v. Superior Court (1977) 67 Cal.App.3d 1, 4.)

C. Analysis

1. Compliance with Cal. Rules of Court, rule 3.1362

The Court determines that Rick Edwards has complied with California Rules of Court, rule 3.1342.

This is because Rick Edwards has filed completely and appropriately filled out motions to be relieved as counsel in the Lead Case and the Butte Case, declarations in support of the motion to be relieved as counsel, and proposed orders related to his motions. (See 2/27/24 Forms MC-051, MC-052, MC-053, and Proofs of Service.)

2. Proper Reason for Withdrawal

a. Rules of Prof. Conduct, rule 1.16(a)

The Court determines that an appropriate reason for withdrawal has been provided by Rick Edwards.

A declaration in support of a motion to be relieved as counsel must state, in general terms, why a motion to withdraw was brought instead of filing a consensual withdrawal under Code of Civil Procedure section 284, subdivision (1). (Cal. Rules of Court, rule 3.1362(c); see Judicial Council Forms, form MC-052; see also Cal. State Bar Formal Opn. No. 2015-192 [it is ordinarily sufficient to state words to effect that ethical considerations require withdrawal or that there has been irreconcilable breakdown in attorney-client relationship].)

If the reason for withdrawal is based on confidential information, the declaration should state, in general terms, the basis for the withdrawal without compromising the confidentiality of the attorney-client relationship. (Cal. Rules of Court, rule 3.1362(c).)

When the duty of confidentiality prevents the attorney from disclosing the underlying basis for the withdrawal, the court cannot force the attorney to disclose the protected information. (Aceves v. Superior Court (1996) 51 Cal.App.4th 584, 596 (Aceves); cf. Evid. Code, § 915, subd. (a) [court may not require disclosure of privileged information to rule on claim of attorney-client privilege]; Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 736-737 [same].)

But this does not mean that the court is obligated to accept a blanket statement that confidential information requires the attorney’s withdrawal. (See, e.g., Manfredi & Levine v. Superior Court (1998) 66 Cal.App.4th 1128, 1134 (Manfredi) [court did not abuse its discretion by denying motion to withdraw when court asked attorney to explain conflict and attorney replied that he could not and would not explain it].) The court has a duty to explore the basis for the withdrawal, and the attorney has a corresponding duty to respond and describe the general nature of the conflict as fully as possible within the confines of the duty of confidentiality. (Ibid.; Aceves, supra, 51 Cal.App.4th at pp. 592-593.)

For example, if an attorney claims that she has a conflict of interest but the attorney-client privilege prevents her from disclosing the basis of the withdrawal, the attorney should (1) give meaningful information about the general nature of the conflict, (2) make clear that the attorney evaluated exceptions to the privilege, and (3) state whether a conflict is likely to occur if a new attorney is hired. (See Manfredi, supra, at pp. 1135-1136.)

If there is no question about the attorney’s good faith or sincerity, the court should accept the attorney’s explanation. (Leversen v. Superior Court (1983) 34 Cal.3d 530, 539; see Aceves, supra, at pp. 593-594 [it is proper for court to rely solely on attorney’s explanation because attorney is in best position to determine if conflict would affect quality of representation]; see, e.g., Manfredi, supra, at pp. 1133-1134 [court questioned attorney’s good faith and sincerity because attorney used several delay tactics and refused to give general description of conflict].)

Here, the Edwards’ declarations attached to both motions explain: “The attorney-client relationship has become one in which withdrawal is appropriate. The need to withdraw here involves privileged communications, and professional considerations require termination of the representation. Although I do believe that California Rule of Professional Conduct 1.16 (a) permits or requires my withdrawal, no inference should be made that my clients have engaged in any criminal or fraudulent course of conduct. I include the previous sentence in this declaration only because of the ferocious attacks the opposing parties have made against Richard Norlund’s character, primarily. After some research, my understanding is that this declaration should state nothing further on the subjects this paragraph contains.” (See Forms MC-052, Edwards Decls., ¶ 5.)

Based on this representation, and based on the Court’s familiarity with the proceedings—e.g., the addition and later removal of Rick Edwards from the pleadings as a Defendant, issues of representation that arose from those changes to the pleadings, and recordation of instruments or execution of agreements relating to priority of liens on the Property generally and with respect to Rick Edwards more specifically—the Court accepts that here, Rick Edwards has shown a sufficient basis for withdrawal.

b. Notes on Opposition Arguments

The Court briefly notes that while the opposition repeatedly raises arguments relating to monies owed to Rick Edwards as a consideration for granting or denying these motions (see, e.g., Oppositions (Opp’ns), p. 8 at § II.C & pp. 9-10 at § IV & pp. 11-14 at §§ VI-VIII), failure to pay fees is not explicitly raised as the basis for Rick Edwards’ motions. (See Forms MC-052, Edwards Decls., ¶ 5.)

3. Prejudice

Here, in support of their position that the Court should deny this motion, the Norlund Defendants argue various points regarding prejudice. (Opp’ns, pp. 7-14.)

After review, the Court finds that while some prejudice arises from the below issues, the individual prejudices and collective prejudice arising from these points do not rise to undue prejudice for the purposes of denying Rick Edwards’ motions. (Ramirez, supra, 21 Cal.App.4th at p. 915.)

a. Risk of Self-Representation to Trustee Norlund Defendants

First, the Court determines that the argument that withdrawal of representation will leave the trustee Norlund Defendants without representation is insufficiently availing as to prejudice. (See Opp’ns, pp. 7-8 at §§ I.C.-II.A.)

The court can grant a motion to withdraw even if granting the motion would result in a violation of the rule against self-representation. (See Ferruzzo v. Superior Court (1980) 104 Cal.App.3d 501, 504.) In that case, the court should inform the client of its need to find a substitute attorney, or it will face the possibility of a dismissal for lack of representation. (See Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1284, fn. 5 [court has duty to inform corporate client of need for representation]; Torres v. Friedman (1985) 169 Cal.App.3d 880, 888 [court should inform guardian ad litem of need to find replacement counsel].)

b. Need to Determine Self-Representation Issue Prior to Withdrawal

Second, the Court determines that the argument that the issue of representation for the trustee Norlund Defendants must be decided prior to withdrawal based on irreparable harm is not availing as to prejudice specifically or even generally. (See Opp’ns, pp. 8 at § II.B.)

The irreparable harm argument is not more than cursorily addressed in this section (Opp’ns, pp. 8 at § II.B), the risk that the trustee Defendants may not be able to self-represent is not a basis for denying this motion (Section III.C.3.a. discussion supra), and the Court otherwise addresses the remainder of the grounds for the oppositions below.

c. Risk of Appeal

Third, the Cout determines that the risk that the Norlund Defendants may appeal a grant of Rick Edwards’ motions is unavailing. (See Opp’ns, p. 8 at § I.B.; Mot., p. 11 at § V.)

No authority in the opposition supports a position that the risk of appeal based on irreparable harm should foreclose the grant of a motion to relieve counsel. (See Opp’ns, p. 8 at § I.B.; Mot., p. 11 at § V.)

d. Sums of Money Owed to Rick Edwards

Fourth, the Court determines that the fact that a large amount of money is owed by the Norlund Defendants to Rick Edwards is unavailing. (See Opp’ns, pp. 9-10 at §§ III-IV [$1.6 million owed].)

The cited authorities do not relate to the amount owed to counsel that seeks to withdraw so much as outstanding fees as a basis for withdrawal (the quoted portion of Linn) and the Court’s discretion to grant or deny motions to relieve counsel of representation (Linn, Comden, Acevez). (Opp’ns, pp. 9-10 at §§ III-IV.) Here, the monies owed to Rick Edwards have been incurred by counsel and can be disputed as to reasonability, but, as a matter of common sense, already exist. Whether or not withdrawal occurs does not affect the fact that Rick Edwards incurred fees in this action.

Some prejudice undoubtedly arises from the loss of knowledge and contest of counsel. Moreover, prejudice may arise from potential new counsel realizing that more than $1.5 million dollars are owed to Rick Edwards by the Norlund Defendants, thus disincentivizing the prospect of assuming representation of the Norlund Defendants.

However, such considerations do not directly relate to the fact these monies are already owed and are not raised in this particular section of the oppositions.

e. Rick Edwards’ Encumbrance of Norlund Defendants’ Property Prevents Security for Substitute Counsel

Fifth, the Court determines that Rick Edwards’ encumbrance of real property belonging to the Norlund Defendants is not sufficiently availing as to prejudice. (See Opp’ns, p. 8 at § II.C; Mot., pp. 11-14 at §§ VI-VIII.)

There is undoubtedly prejudice in having what the Norlund Defendants characterize as “95% to 98/99%” of all their assets subject to encumbrances. (Opp’n, p. 13 at § VII.) Potential counsel may refuse a client who has properties encumbered by past counsel.

However, the argument that the properties here at issue are overly encumbered by Rick Edwards, thus leaving the Norlund Defendants “virtually nothing to use to hired attorney to defend the cases, with which a new attorney could fee reasonably sure of payment were this Court to grant Rick Edwards’” motions, is flawed. (Opp’n, p. 13 at ¶ 46.) The Norlund Defendants do not refute their ability to pay off a hypothetical fees judgment in favor of Rick Edwards or their ability to maintain multiple liens on the properties at issue. Indeed, the Rick Edwards liens would simply be senior to the more junior liens of hypothetical subsequent counsel. And the Richard Norlund declaration establishes that the fees owed here are around “$1,600,000+” (Opp’ns, Norlund Decls., ¶ 82) while the oppositions characterize the equity in the real property assets owned by the Norlund Defendants as involving $4,650,000 to $6,250,000, with the figure comprising “more than 95%-98/99% of [the Norlund Defendants’] wealth” (Opp’n, pp. 12-13 at ¶ 46 & fn. 13.)

f. Money Owed to Rick Edward is Properly Secured and Other Monies Are Being Earned by the Norlund Defendants, Mooting the Need for Withdrawal

Sixth, the Court determines that the fact that the Norlund Defendants can pay off Rick Edwards fees through the encumbrances or otherwise is unavailing as to prejudice. (Opp’ns, pp. 11-14 at §§ VI-VIII.)

This issue is irrelevant to prejudice here. As discussed above, the motion to be relieved of representation here is not based on unpaid fees, but rather, involves considerations of mandatory withdrawal. (See Section III.C.2.a-b. discussions supra.) And as further discussed above, the Norlund Defendants appear to have sufficient assets to obtain substitute counsel. (See Section III.C.3.e. discussion supra.)

g. Equity

Seventh, the Court determines that equity is unavailing as an argument for denying Rick Edwards’ motions. (See Opp’ns, pp. 10-11 at § V.)

No authority is cited for this proposition. (See Opp’ns, pp. 10-11 at § V.)

Moreover, this argument is derivative of the above discussed arguments relating to (1) encumbrances of the Norlund Defendants properties and the resulting difficulties that will arise in finding substitute counsel and (2) the need for a hearing on how the trustees will represent themselves if Rick Edwards’ motions are granted, and thus also fails on that ground. (See Section III.C.3.a-b. & e. discussion supra.)

Insofar as this section argues that the Norlund Defendants will suffer prejudice from the need to soon answer Sandra Norlund’s SAC in this action, which requires counsel with specialized knowledge of this case (Opp’ns, ¶ 41), the Court notes that it can make orders to continue certain proceedings to mitigate any prejudice.

h. Final Notes

Undoubtedly, losing counsel at this stage of the proceedings, and all the specialized knowledge that comes of this case with counsel, is prejudicial. However, such prejudice arises to varying degrees whenever counsel seeks to withdraw and is permitted to do so at a developed stage of the proceedings, such as here.

However, the Court is satisfied that a sufficient reason for withdrawal exists, and that insufficient undue prejudice has been presented by the Norlund Defendants.

Moreover, the Court notes that prejudice arising from responsive pleading deadlines or trial can be mitigated by continuances to be discussed with the parties.

Thus, the Court, on the above grounds, GRANTS Rick Edwards’ motions. 

IV. Conclusion

A. Motion to Be Relieved as Counsel, Lead Case

Rick Edwards, Esq.’s Motion to Be Relieved as Counsel [Lead Case] is GRANTED.

B. Motion to Be Relieved as Counsel, Butte Case

Rick Edwards, Esq.’s Motion to Be Relieved as Counsel [Butte Case] is GRANTED.

C. Effective Date

A copy of the signed order must be served on the Norlund Defendants and on all parties that have appeared in the case, and the effective date of this order is delayed until proof of service of a copy of the signed order on the Norlund Defendants and all other parties has been filed with the Court. (Cal. Rules of Court, rule 3.1362, subd. (e).)