Judge Bruce G. Iwasaki

Department 58

Hearing Date: April 14, 2025

Case Name: Modern HR Inc. v. Sarian

Case No.: 23STCV14308

Matter: Motion to Disqualify Counsel

Moving Party: Plaintiff Modern HR, Inc.

Responding Party: None

Tentative Ruling: The Motion to Disqualify Counsel is granted as to attorney Faisal Gill.

Plaintiff Modern HR, Inc. (Plaintiff) moves for an order disqualifying and barring Defendants’ counsel Faisal Gill and all attorneys employed by or associated with the Gill Law Firm from further representing or assisting Defendants in this action. No opposition was filed.

The motion to disqualify is granted as to Attorney Faisal Gill.

Legal Standard

When ruling on a disqualification motion, the Court must indicate on the record that it has considered all appropriate factors and must give its factual findings in support of the required balancing process. (Smith, Smith & Kring v. Superior Court (1997) 60 Cal.App.4th 573, 582; Lyle v. Superior Court (1981) 122 Cal.App.3d 470, 482–483.)

“The important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process.” (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145.) “Depending on the circumstances, a disqualification motion may involve such considerations as a client's right to chosen counsel, an attorney's interest in representing a client, the financial burden on a client to replace disqualified counsel, and the possibility that tactical abuse underlies the disqualification motion.” (Ibid.) “The paramount concern is the preservation of public trust in the scrupulous administration of justice and the integrity of the bar.” (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 705.) An attorney shall refrain from doing “ ‘anything which will injuriously affect his former client.’ ” (People ex rel. Deukmejian v. Brown (1981) 29 Cal.3d 150, 155; Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 573–574.)

Analysis

Plaintiff moves to disqualify Attorney Faisal Gill and his firm as counsel for Defendants on the grounds that Attorney Gill is a percipient witness.

A disqualification motion may be based on an attorney's dual roles as an advocate and a witness. “The ‘advocate-witness rule,’ which prohibits an attorney from acting both as an advocate and a witness in the same proceeding, has long been a tenet of ethics in the American legal system....” (Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, 1208.) “ ‘Occasionally a lawyer is called upon to decide in a particular case whether he will be a witness or an advocate. If a lawyer is both counsel and witness, he becomes more easily impeachable for interest and thus may be a less effective witness. Conversely, the opposing counsel may be handicapped in challenging the credibility of the lawyer when the lawyer also appears as an advocate in the case. An advocate who becomes a witness is in the unseemly and ineffective position of arguing his own credibility. The roles of an advocate and of a witness are inconsistent; the function of an advocate is to advance or argue the cause of another, while that of a witness is to state facts objectively.’ ” (People v. Donaldson (2001) 93 Cal.App.4th 916, 927–928.)

In some cases, “ ‘[c]ombining the roles of advocate and witness can prejudice the opposing party’ and confers on the opposing party ‘proper objection where the combination of roles may prejudice that party's rights in the litigation.’ [Citation.] ‘A witness is required to testify on the basis of personal knowledge, while an advocate is expected to explain and comment on evidence given by others. It may not be clear whether a statement by an advocate-witness should be taken as proof or as an analysis of the proof.’ ” (Donaldson, supra, 93 Cal.App.4th at p. 929.)

When reviewing a disqualification motion based on the advocate-witness rule, a court must consider the following: “(1) whether counsel’s testimony is, in fact, genuinely needed ; (2) the possibility [opposing] counsel is using the motion to disqualify for purely tactical reasons; and (3) the combined effects of the strong interest parties have in representation by counsel of their choice, and in avoiding the duplicate expense and time-consuming effort involved in replacing counsel already familiar with the case.” (Doe v. Yim (2020) 55 Cal.App.5th 573, 583–584.)

There are exceptions to the witness-advocate rule. “[T]he State Bar [of California] has adopted a rule of professional conduct that prohibits, with few exceptions, a lawyer from acting as both advocate and witness [citation].” (Donaldson, supra, 93 Cal.App.4th at p. 927 [citing rule 5–210 [now rule 3.7]].) Rule 3.7 states:

“(a) A lawyer shall not act as an advocate in a trial in which the lawyer is likely to be a witness unless:

(1) the lawyer's testimony relates to an uncontested issue or matter;

(2) the lawyer's testimony relates to the nature and value of legal services rendered in the case; or

(3) the lawyer has obtained informed written consent from the client. If the lawyer represents the People or a governmental entity, the consent shall be obtained from the head of the office or a designee of the head of the office by which the lawyer is employed.

(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm is likely to be called as a witness unless precluded from doing so by rule 1.7 or rule 1.9.”

Even if an advocate-witness has obtained the informed written consent of the clients, the trial court may exercise its discretion to disqualify counsel where he or she is a material witness in the case if the integrity of the judicial process would become compromised. (Lyle, supra, 122 Cal.App.3d 470, 482; Smith, Smith & Kring, supra, 60 Cal.App.4th 573, 579 [disqualification justified where convincing demonstration of detriment to the opponent exists, or injury shown to integrity of judicial process]; Reynolds v. Superior Court (1986) 177 Cal.App.3d 1021, 1028.)

Here, Plaintiff argues that Attorney Faisal Gill is a necessary witness.

By way of background, in or about May 2022, Defendant American Healthcare Systems Corp., Inc. entered into negotiations for a purchase of the assets and right to operate South City Hospital (“SCH”) in St. Louis, Missouri. Prior to May 2022, Plaintiff had been a party to a Client Services Agreement with the operator of SCH under which Plaintiff agreed to provide human resources services, including but not limited to employee payroll processing, to SCH in exchange for (a) compensation for its services at agreed-upon rates and (b) reimbursement for all amounts paid by Plaintiff in connection with the provision of such services, including but not limited to wages paid to SCH employees, premiums paid to maintain coverage of employee benefits afforded to SCH employees, and taxes paid on account of SCH’s employment of such employees.

Prior to May 2022, the operator of SCH had defaulted on its agreement with Plaintiff and was indebted to Plaintiff in an amount in excess of $800,000. Plaintiff had notified said operator of Plaintiff’s intent to terminate its agreement with Plaintiff on account of said breach. In or about May 2022, Defendant Michael Sarian, made an oral promise to Plaintiff, on his own behalf and on behalf of Defendant American Healthcare Systems Corp., Inc. (AHS), that if Plaintiff’s advanced further payroll and payroll-related expenses to SCH totaling in excess of $1,280,000, Defendants would repay Plaintiff a total amount in excess of $2,080,000 within one week.

Acting on behalf of Sarian and AHS, Defendants’ counsel in this action, Faisal Gill, made representations to induce Plaintiff not to terminate its services to SCH and to remain in place so that the purchase of the hospital could take place. In reliance on Defendants’ promise of prompt reimbursement, Plaintiff, already owed $800,000 by the prior operator of SCH, advanced an additional amount in excess of $1,280,000 in SCH payroll-related expenses, and delayed terminating its service agreement with the prior operator of SCH and embarking on collection efforts against said entity.

Attorney Gill drafted a number of emails directly related to Plaintiff Modern’s allegations that Defendants assumed the hospital’s debt to Plaintiff Modern. For example, on May 24, 2022, Attorney Gill sent from his email address, fgill@amhealthsystems.com, an email to Josh Sable and Faith Branvold of Plaintiff Modern attaching the signed purchase agreement for the hospital, representing that the transaction was “signed, sealed, and delivered.” (Larmore Decl., Ex. C.) Plaintiff represents that Attorney Gill also authored an email on May 27, 2022, sent from the same email address, representing to Plaintiff Modern and its outside counsel that “We have absolutely assumed the Modern HR debt. We were finalizing the schedule for some vendors. But All of Modern HR debt is fully assumed by AHS. Sincerely Faisal.” (Larmore Decl., Ex. D.) Finally, on May 27, Attorney Gill emailed Modern’s outside counsel stating “We have absolutely assumed the Modern HR debt . . . . All of Modern HR debt is fully assumed by AHS.” (Larmore Decl., Ex. E.)

Based on Attorney Gill’s involvement in the negotiations underlying this commercial dispute, Plaintiff has demonstrated that Attorney Gill’s “testimony is, in fact, genuinely needed.” Moreover, in the absence of an opposition, there is no evidence that Defendant consented to Attorney Gill’s continued representation in this dual capacity. As such, the Court will grant Plaintiff’s motion to disqualify Attorney Gill from representing Defendants in this action.

However, Plaintiff provides no specific facts to support the disqualifications of Attorney Aimee Gill or all attorneys employed by or associated with the Gill Law Firm.

Conclusion

The motion to disqualify counsel is granted at to Attorney Faisal Gill.