Judge: Gregory Keosian, Case: 21STCV30516, Date: 2023-04-11 Tentative Ruling

Case Number: 21STCV30516    Hearing Date: April 11, 2023    Dept: 61

Defendant Miao Li’s Motion to Disqualify Plaintiff Jesse Weiner from Representing Plaintiff Miaoxin Yu is GRANTED.

Plaintiff Miaoxin Yu’s Motions to Compel and Deem Admitted against Defendants Ting Li and Fame BMS are GRANTED as to Fame BMS and DENIED as to Ting Li.

I.                   MOTION TO DISQUALIFY

Defendant Miao Li (Defendant) moves to disqualify Plaintiff Jesse Weiner from representing Plaintiff Miaoxin Yu, based on Weiner’s prior representation of Defendant Moregain Capital Group and affiliated entities.(Motion at pp. 3–7.) Defendant also moves to disqualify Weiner from representing Yu on the grounds that he is acting as an advocate-witness. (Motion at pp. 7–9.)

“[C]ourts have authority to disqualify counsel when necessary in the furtherance of justice.” (People ex rel. Clancy v. Superior Court (1985) 39 Cal.3d 740, 745.) Motions to disqualify counsel “implicate several important interests,” including “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.” (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145.)

“Ultimately, disqualification motions involve a conflict between the clients' right to counsel of their choice and the need to maintain ethical standards of professional responsibility. The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar. The important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process.” (Ibid., internal citations omitted.) “It must be remembered, however, that disqualification is a drastic course of action that should not be taken simply out of hypersensitivity to ethical nuances or the appearance of impropriety.” (Roush v. Seagate Technology, LLC (2007) 150 Cal.App.4th 210, 219.)

Conflicts of interest commonly arise in one of two factual contexts: (1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client of the attorney; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests. The primary fiduciary value at stake in each of these context differs, and the applicable disqualification standards vary accordingly. In successive representation cases, the chief fiduciary value jeopardized is that of client confidentiality. Therefore, the disqualification standards we have developed for such cases focus on the former client's interest in ensuring the permanent confidentiality of matters disclosed to the attorney in the course of the prior representation. In simultaneous representation cases, the primary value at stake is the attorney's duty — and the client's legitimate expectation — of loyalty, rather than confidentiality. Because a conflict involving an attorney's duty of loyalty is the most egregious kind of conflict, the disqualification standards we have developed for simultaneous representation cases are more stringent than those that apply in successive representation cases; with few exceptions, disqualification in a case of simultaneous representation follows automatically, regardless of whether the simultaneous representations have anything in common or present any risk that confidences obtained in one matter would be used in the other. This strict rule recognizes that 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 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.

(In re Charlisse C. (2008) 45 Cal.4th 145, 159–60, internal citations, alterations, and quotation marks omitted.)

“Where an attorney successively represents clients with adverse interests, and where the subjects of the two representations are substantially related, ... the attorney [must] be disqualified from the second representation. The substantial relationship test is ‘intended to protect the confidences of former clients when an attorney has been in a position to learn them.” (Knight v. Ferguson (2007) 149 Cal.App.4th 1207, 1213, internal citations and quotation marks omitted.) “The court should focus on the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases. It should consider the attorney's possible exposure to formulation of policy or strategy. Where there is a substantial relationship, it is presumed the attorney had access to confidential information.” (Ibid., internal citations, alterations and quotation marks omitted.)

Defendant here has not shown any reason to disqualify Weiner based on his successive representations of Moregain Capital and his Miaoxin Yu, his wife. The defects in this argument are several. First, Defendant has substantially and unreasonably delayed seeking disqualification. Defendant Miao Li filed an answer in this matter on April 16, 2021, almost two years before this motion was filed. Trial is now set for June 2023, less than two months from now. This unreasonable and extreme delay, requiring Plaintiff to obtain new counsel a short time before trial, furnishes an independent basis to deny the motion. (See Western Continental Operating Co. v. Natural Gas Corp. (1989) 212 Cal.App.3d 752, 763.) Defendant’s sole justification for the delay in seeking disqualification is to maintain an amicable environment for the promotion of a potential settlement. (Motion at p. 9.) If this rationale is genuine, it suggests only that Defendant holds the interests justifying disqualification to be of little weight.

Moreover, Defendant Miao Li does not establish standing to seek disqualification of Weiner, as Li was not a prior client of Weiner’s. Defendant only states that they were a CEO of one of the companies that Weiner previously represented, with no further evidence or elaboration. (Motion at p. 7.) When a non-client seeks to disqualify opposing counsel based on a potential misuse of confidential information obtained about the non-client, “the non-client must meet stringent standing requirements, that is, harm arising from a legally cognizable interest which is concrete and particularized, not hypothetical.” (Moreci v. Scaffold Solutions, Inc. (2021) 70 Cal.App.5th 425, 434.) Defendant has not attempted to make this showing here.

Indeed, Defendant has scarcely attempted to show that Weiner is in possession of confidential information as would be necessary to disqualify Weiner for successive conflicting representations. Where successive representations are at issue, “the governing test requires that the client demonstrate a substantial relationship  between the subjects of the antecedent and current representations in order to obtain the disqualification of the target attorney.” (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 705.) The present case is one for defamation and infliction of emotional distress, in which Defendants are accused of publishing an attack on Weiner — corroborating a cross-complaint filed by Moregain in another action — accusing Weiner of lying about his qualifications and defrauding Moregain and affiliated entities. It is unclear what prior matters or what manner of confidential information obtained by Plaintiff in the course of his prior representation bears a substantial relationship to these allegations, or how Weiner’s access to that information could assist him here.

To grant Defendant’s relief based on successive representations would, in the final analysis, be an idle act. Weiner is a plaintiff in this action. Defendant does not seek to dismiss Weiner’s claims, but to disqualify him from representing his wife and co-plaintiff. To do so here would not remove, or in any way reduce, the ill-supported threat that Weiner will use confidential information against Defendants, since disqualifying Weiner from representing Yu would not prevent Weiner from using any such information as a party to this case. Thus successive representations furnish no basis to disqualify Weiner.

Defendant further argues that Weiner may be disqualified for his role as a potential witness in this case. Rule 3.7 of the Rules of Professional Conduct 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 consent1 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.

(Rules of Professional Conduct, Rule 3.7, subd. (a)(1)–(3).)

“[T]he prohibition seeks to avoid the appearance of attorney impropriety.” (Comden v. Superior Court (1978) 20 Cal.3d 906, 912.) The purpose of the rule, as stated in the comment to the American Bar Association’s analogous model rule, is to prevent the trier of fact from confusing evidence from argument, as “[i]t may not be clear whether a statement by an advocate-witness should be taken as proof or as an analysis of the proof.” (ABA Model Rule 3.7, Comment [2].)

The rule requires that the court “first consider whether the attorney's testimony will be necessary to protect his client's interests and, if it concludes such testimony will likely be necessary, that it order a timely withdrawal consistent with minimizing prejudices which may result from the substitution of counsel. Whether an attorney ought to testify ordinarily is a discretionary determination based on the court's considered evaluation of all pertinent factors including, inter alia, the significance of the matters to which he might testify, the weight his testimony might have in resolving such matters, and the availability of other witnesses or documentary evidence by which these matters may be independently established.” (Comden, supra, 20 Cal.3d at p. 913.)

The present action concerns various published statements that defamed Weiner and Yu. (Complaint ¶ 40.) Some statements target Weiner and Yu together; some target Weiner only, but none target Yu alone. (Complaint ¶ 28, Exh. 1.)  Weiner’s testimony in this matter to confirm the truth or falsity of these reports is therefore highly probable. Weiner has not, however, presented evidence that Yu has given informed consent to his dual role as advocate and witness. Although Plaintiffs in opposition contend that Weiner’s testimony is not necessary to establish Yu’s claims, this argument is unpersuasive, as their claims are highly linked, and proving the falsity of statements made as to Yu will likely require the testimony of both parties. This role poses a risk of confusion and prejudice, as Weiner will be expected to perform dual roles as a witness offering evidence and an advocate interpreting the evidence to the trier of fact.

Accordingly, the motion to disqualify is GRANTED.

I.                   MOTIONS TO COMPEL & DEEM ADMITTED

A propounding party may demand a responding party to produce documents that are in their possession, custody or control. (Code Civ. Proc., § 2031.010.) A party may likewise conduct discovery by propounding interrogatories to another party to be answered under oath. (Code Civ. Proc. § 2030.010, subd. (a).) The responding party must respond to the production demand either by complying, by representing that the party lacks the ability to comply, or by objecting to the demand. (Code Civ. Proc., § 2031.210.) The responding party must respond to the interrogatories by answering or objecting. (Code Civ. Proc. § 2030.210, subd. (a).) If the responding party fails to serve timely responses, the propounding party may move for an order compelling responses to the production demand and interrogatories. (Code Civ. Proc., §§ 2030.290, 2031.300.)

“Any party may obtain discovery . . . by a written request that any other party to the action admit the genuineness of specified documents, or the truth of specified matters of fact, opinion relating to fact, or application of law to fact. A request for admission may relate to a matter that is in controversy between the parties.” (Code Civ. Proc., § 2033.010.) If a party fails to serve a timely response to requests for admissions, “[t]he requesting party may move for an order that the genuineness of any documents and the truth of any matters specified in the requests be deemed admitted, as well as for a monetary sanction” (Code Civ. Proc., § 2033.280 subd. (b).)

A party who fails to serve a timely response to interrogatories or a demand for inspection waives any objection to the demand. (Code Civ. Proc., §§ 2030.290, 2031.300.)

Plaintiff Miaoxin Yu (Plaintiff) served the form and special interrogatories, requests for admissions, and requests for production at issue in this motion upon Defendants Ting Li and Fame BMS on January 18, 2023, with responses due on February 17, 2023. (Weiner Decl. ¶¶ 2–3.) Plaintiff claims that no responses have been provided. (Weiner Decl. ¶¶ 4–5.)

Defendant Ting Li contends that responses were timely served on February 17, 2023. (Opposition Exh. B.) Li also argues that they served a notice of withdrawal of consent to electronic service on February 14, 2023, meaning the present motions were improperly served on Li. (Opposition at p. 3.)

Plaintiff acknowledges the receipt of Li’s responses as of February 23, 2023. (Reply at p. 3.) The motions are therefore DENIED as to Ting Li.  

If responses are not received from Defendant Fame BMS by the date of hearing on these motions, the motions will be GRANTED as to Fame BMS.

II.    SANCTIONS

The prevailing party on a motion to compel is generally entitled to monetary sanctions, unless the court “finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Code Civ. Proc. §§ 2030.290, 2031.300.) Sanctions are also mandatory against a party whose failure to serve responses to requests for admission makes the motion necessary. (Code Civ. Proc. § 2033.280, subd. (c).)

Plaintiff seeks $1,060.00 in connection with each motion, representing two hours of attorney work at $500 per hour, plus two $60 filing fees, for a total sanctions request of $6,360.00. (Weiner Decl. ¶ 6.) Because Ting Li served responses on the due date, no sanctions are appropriate against Li. Sanctions against FAME BMS to be addressed at hearing.