Judge: Kevin C. Brazile, Case: BC700563, Date: 2023-07-24 Tentative Ruling

Hearing Date: July 24, 2023

Case Name: Wolfe v. Wolfe, et al.

Case No.: 21STCV36925

Matter: Motion to Disqualify

Moving Party: Plaintiff Sean Jeffrey Wolfe

Responding Party: Defendants Brandon and Michael Wolfe

Notice: OK

Ruling: The Motion is granted in part.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On July 19, 2022, Plaintiff Sean Jeffrey Wolfe filed the operative Second Amended Complaint (“SAC”) against Defendants Brandon Jerold Wolfe, Michael Wolfe, Wolfe Family Enterprises, LLC, iPayment, Inc., Robert Neal Purcell, and Robert Brady for (1) breach of written contract; (2) breach of implied covenant of good faith and fair dealing; (3) promissory estoppel; (4) fraudulent misrepresentation; (5) constructive fraud; (6) breach of fiduciary duty; (7) negligent misrepresentation; (8) civil conspiracy; (9) violations of Bus. & Prof. Code § 17200; (10) intentional interference with prospective economic advantage; (11) negligent interference with prospective economic advantage; (12) intentional interference with contractual relations; (13) intentional infliction of emotional distress; (14) negligent infliction of emotional distress; (15) actual fraudulent transfer (Civ. Code § 3439.04); (16) constructive fraudulent transfer (Civ. Code § 3439.04(a)(2)); (17) demand for accounting; and (18) constructive trust.  

The SAC alleges that “[Plaintiff] is the founder of the company that eventually became defendant Leaders Merchant Services, LLC; the brother of defendant Brandon Jerold Wolfe; and the son of defendant Michael Wolfe. Sean served as the company’s CEO until he was unlawfully and wrongfully ousted in 2012. . . . The purpose of this action is to resolve Sean’s legal disputes regarding Brandon and Michael’s unlawful dissipation of millions of dollars of his assets stemming from multiple forced transfers of his ownership interest in LMS to them; the sale of LMS to iPayment; as well as from Sean’s status as a conservatee . . . .”  (SAC ¶¶ 2, 13.)

Plaintiff now seeks to disqualify counsel for Defendants Michel and Brandon Wolfe, DCLG PC, including Jose-Manuel A. de Castro, David G. Larmore, and Lori V. Minassian.  Plaintiff contends that “Mr. de Castro, personally represented plaintiff from 2005 through 2012 - the same period during which he also represented defendants while acting as corporate counsel for the parties' family business, former defendant Leaders Merchant Services, LLC.”

Whether an attorney should be disqualified is a matter addressed to the sound discretion of the trial court.  (Comden v. Superior Court (1978) 20 Cal.3d 906, 910-911, 915-916.)  The court’s authority to disqualify an attorney derives from the court’s inherent power to control the proceedings before it.  (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145 (SpeeDee Oil).)  

Motions to disqualify counsel generally concern a conflict between the client’s right to choose his or her legal representative and the need to maintain ethical standards of professional responsibility.  In assessing disqualification motions, the court’s primary concern is “to preserve public trust in the scrupulous administration of justice and the integrity of the bar,” and in certain circumstances, the client’s right to his or her counsel of choice “must yield to ethical consideration that affect the fundamental principles of our judicial process.”  (SpeeDee Oil, supra, 20 Cal.4th at pp. 1145-1146.)  The purpose of disqualification is not punitive but prophylactic, meaning that the primary issue on any such motion is whether there is a genuine likelihood that permitting the challenged attorney to remain will affect the outcome of the proceedings before the court.  (Kirk v. First American Title Ins. Co. (2010) 183 Cal.App.4th 776, 815 (Kirk).)

Disqualification motions generally arise in two circumstances, each of which involves a conflict of interest.  First, where an attorney concurrently represents parties with conflicting interests, the attorney’s duty of undivided loyalty to each client is placed at issue, since each client is entitled to expect legal counsel’s full devotion to his or her sole interests.  (Great Lakes Const., Inc. v. Burman (2010) 186 Cal.App.4th 1347, 1355-1356 (Great Lakes).)  

Second, where an attorney successively represents clients with adverse interests, the attorney’s duty of confidentiality to the former client is at issue.  Under the substantial relationship test, if the former client can demonstrate a substantial relationship between the subjects of the former and current representations, a presumption arises that the attorney had access to confidential information in the first representation that is relevant to the second representation.  (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283; Kirk, supra, 183 Cal.App.4th at pp. 796-797.)  

Each of the two foregoing circumstances generally warrants disqualification in the absence of informed written consent from each adversely impacted client.  (See Rules Prof. Conduct, rule 3-310(C), (E).)

After reviewing the totality of the evidence, the Court finds that Plaintiff has failed to show by a preponderance of the evidence that de Castro ever represented him individually.  Therefore, there is no basis to disqualify DCLG based on a conflict arising from confidential information.  

Plaintiff also argues that DCLG’s attorneys should be disqualified because they will likely be called at trial as witnesses.

Cal. Rules of Professional Conduct, Rule 3.7(a) provides, “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. . . .”

The Court agrees that de Castro is likely to be a witness at trial such that his disqualification is warranted for trial only.  Indeed, de Castro drafted “(a) the November 15, 2012 ‘Amended and Restated Operating Agreement of Leaders Merchant Services, LLC’; (b) the proposed September 18, 2018 trust agreement, whereby Brandon and Michael sought ‘to absolve themselves of any potential liability for financial malfeasance against Sean’ [ ]; and (c) the 2019 settlement agreement that purportedly settled all claims between Brandon and myself.”  (Sean Decl. ¶ 10.)  It is therefore quite probable that de Castro will be asked about the circumstances surrounding these agreements. 

On the other hand, Plaintiff has failed to present any real evidence supporting that Minassian is likely to be a witness.  Likewise, the only evidence with respect to Larmore is that he has worked for de Castro since 2014; this alone is insufficient.  Notably, 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.”  (Cal. Rules of Professional Conduct, Rule 3.7(b).) 

In sum, the Motion is granted only to the extent that de Castro is disqualified from acting as counsel at trial; the Motion is otherwise denied.

The objections are overruled.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.