Judge Jill Feeney, Case Number: 23STCV15068, Date: 2023-12-22 Tentative Ruling

This is an action for breach of contract, quantum meruit, account stated, open book account, and recovery on payment bond. Plaintiff alleges that in March 2022, Defendants entered into a prime contract with the County of Los Angeles to provide the labor, services, equipment, and materials necessary to perform public work improvements at the Whittier Aquatic Center. Thereafter, Defendants subcontracted Plaintiff to perform plumbing and site utilities for the project. Defendants ordered additional work and promised to pay Plaintiff for the extra work. On May 31, 2023, Defendants breached the subcontract by failing to pay $330,880.67.

“Disqualification of counsel may be ordered ‘when necessary in furtherance of justice. (Code Civ. Proc., § 128, subd. (a)(5).)’” (In re Marriage of Zimmerman (1993) 16 Cal.App.4th 556, 562 (quoting Elliott v. McFarland Unified School Dist. (1985) 165 Cal.App.3d 562, 567).) “‘It is well settled that an attorney is prohibited from doing either of two things after severing a relationship with a former client. . . . He may not do anything which will injuriously affect his former client in any manner in which he formerly represented him nor may he at any time use against his former client knowledge or information acquired by virtue of the previous relationship.’” (Id. (quoting People ex rel. Deukmejian v. Brown (1981) 29 Cal.3d 150, 155) (internal quotation marks omitted).) “The purpose of the rule is to protect both confidential communications and the enduring confidential relationship between attorney and client.” (Id.)

“Where . . . a motion for disqualification is predicated upon a claimed breach of confidentiality or conflict of interest, the trial court must undertake a cautious balancing of competing interests.” (Id.) “‘The court must weigh the combined effect of a party’s right to counsel of choice, an attorney’s interest in representing a client, the financial burden on a client of replacing disqualified counsel and any tactical abuse underlying a disqualification proceeding against the fundamental principle that the fair resolution of disputes within our adversary system requires vigorous representation of parties by independent counsel unencumbered by conflicts of interest. [Citations.]’” (Id. at 562-63 (quoting William H. Raley Co. v. Superior Court (1983) 149 Cal.App.3d 1042, 1048).)

“[W]here a former client seeks to have a previous attorney disqualified from serving as counsel to a successive client in litigation adverse to the interests of the first client, the governing test requires that the client demonstrate a ‘substantial relationship’ between the subjects of the antecedent and current representations.” (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283 [emphasis in original].) “Where the requisite substantial relationship between the subjects of the prior and the current representations can be demonstrated, access to confidential information by the attorney in the course of the first representation (relevant, by definition, to the second representation) is presumed and disqualification of the attorney’s representation of the second client is mandatory; indeed, the disqualification extends vicariously to the entire firm.” (Id. [emphasis in original].) “The former client need not establish that the attorney actually possesses confidential information.” (In re Marriage of Zimmerman, supra, 16 Cal.App.4th at 563.) “It is the possibility of the breach of confidence, not the fact of an actual breach that triggers disqualification.” (Id.)

“[T]he attorney’s possession of confidential information will be presumed only when ‘a substantial relationship has been shown to exist between the former representation and the current representation, and when it appears by virtue of the nature of the former representation or the relationship of the attorney to his former client confidential information material to the current dispute would normally have been imparted to the attorney . . . .’” (H.F. Ahmanson & Co., supra, 229 Cal.App.3d at 1454.) Disqualification of the attorney from representing the second client is mandatory where the substantial relationship test is met and access to confidential information is presumed. (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283.)

“[A] ‘substantial relationship’ exists whenever the ‘subjects’ of the prior and the current representations are linked in some rational manner.” (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 711 (citing Flatt, supra, 9 Cal.4th at 283).) The “subject” of a representation includes “information material to the evaluation, prosecution, settlement or accomplishment of the litigation or transaction given its specific legal and factual issues.” (Id. at 712-13.) “[S]uccessive representations will be ‘substantially related’ when the evidence before the trial court supports a rational conclusion that information material to the evaluation, prosecution, settlement or accomplishment of the former representation given its factual and legal issues is also material to the evaluation, prosecution, settlement or accomplishment of the current representation given its factual and legal issues.” (Id. at 713.)

To bring a motion to disqualify, generally, the movant must be a current or former client of the attorney against whom disqualification is sought; alternatively, a fiduciary or confidential relationship providing for the duty of loyalty must exist.¿ (See In re Marriage of Murchinson (2016) 245 Cal.App.4th 847, 851.)¿An attorney represents a client for purposes of a conflict of interest analysis when the attorney knowingly obtains material confidential information from the client and renders legal advice or services as a result. (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1148.)

Crosby’s Chief Executive Officer, Anthony Tatikian, testifies that before he formed Crosby, he was the treasurer and Responsible Managing Officer of Sevan Plumbing, Inc.. (Tatikian Decl., ¶4.) Tatikian’s father, Sarkis Tatikian, was the president of Sevan Plumbing, Inc. (Id.) Tatikian alleges he was a client of Feldman & Associates, Inc. (Id., ¶5.) Sevan Plumbing had been Feldman’s client for ten years. (Id., ¶7.) Feldman dealt with Tatikian during those ten years. (Id., ¶8.) Tatikian dissolved Sevan Plumbing at Feldman’s direction. (Id., ¶9.) Shortly after Tatikian formed Crosby in 2014, the company terminated its relationship with Feldman. (Id., ¶10.) During his representation of Sevan Plumbing, Feldman handled construction, contract, and employment disputes and accessed the company’s confidential information. (Id., ¶11.) Feldman attorneys spent long hours with Tatikian during at least one mediation. (Id.)

Crosby additionally alleges in its moving papers that Morillo introduced contract interpretation issues in its Cross-Complaint and that Feldman likely reviewed the contract in dispute for Morillo. (Motion, p. 5.) The disputed clauses could have been part of contracts reviewed by Feldman for Sevan Plumbing. Feldman would have also advised Sevan on the advantages of different contract clauses and legal authority for payment disputes. Feldman also allegedly represented Sevan on a similar back charge claim to this action.

Feldman argues in opposition that although the firm represented Sevan on several matters, Tatikian has never been Feldman’s client. Additionally, Crosby has never been Feldman’s client. Feldman argues that Crosby failed to meet its burden of proving an attorney-client relationship existed between Feldman and Tatikian. Feldman also argues that Sevan is not an entity related to Crosby because there is no connection between Feldman’s previous representation of Sevan and the instant case. Finally, Feldman argues that it did not obtain confidential information about Crosby.

Crosby appears to argue that Feldman’s previous representation of Sevan is substantially related to its current representation of Morillo because Tatikian was a client of Feldman’s. However, Feldman provides a retainer agreement from 2004 between Feldman and Sevan Plumbing which was executed by Sarkis Tatikian. (Opp., Exh. A.) The agreement does not state that Feldman agreed to represent Sevan’s officers. Tatikian admits that he interacted with Feldman in his capacity as an officer of Sevan. (Tatikian Decl., ¶5.) Thus, it appears Tatikian was never Feldman’s client in his individual capacity. Additionally, Tatikian is not suing in his individual capacity in this matter. Rather, Plaintiff is the corporate entity, Crosby.

Crosby also alleges that Feldman’s previous representation is substantially related to the current representation because Sevan had a ten-year relationship with Feldman. However, Sevan was dissolved and Feldman ceased representation of Sevan nearly ten years ago. Although Tatikian, a former officer of Sevan, also established Crosby and the two companies both perform plumbing services, Crosby provides no evidence that the two entities are the same or that this action involves any of the same matters Feldman was involved with during his representation of Sevan. Although Crosby argues that Feldman once represented Sevan on another back charge dispute, there is no evidence that this matter is at all related to that case. Additionally, even if Feldman attorneys communicated extensively with Tatikian during the past representation of Sevan, there is no evidence that any information Tatikian provided to Feldman in the past is at all related to the dispute in this action. Moreover, Feldman last communicated with Tatikian nearly a decade ago. Moreover, Crosby’s assertation that contract provisions possibly drafted by Feldman are at issue makes no sense since Feldman never drafted any documents for Crosby or represented Crosby. These facts do not lead to a reasonable inference that this matter is substantially related to Feldman’s previous representation of Sevan.