Judge Lee W. Tsao, Case 19NWCV00375 2023-03-21 Tentative Ruling

Judge: Lee W. Tsao, Case: 19NWCV00375, Date: 2023-03-21 Tentative Ruling

DEPARTMENT SE-C LAW & MOTION PROCEDURES ARE AS FOLLOWS: APPEARANCES: The Court will hear oral arguments on all matters at the scheduled time of hearing. If all counsel intend to submit on the Tentative Order and do not want oral argument, please advise the clerk, in Department “C”, by calling (562-345-3702). If all sides submit on the Tentative Order and the clerk is so advised, the Tentative Order will become the final order of the court and the prevailing party shall give written Notice of Ruling per CRC 3.1312. If the Moving and Responding parties do not agree to submit on the Tentative Order, the motion will be called as calendared for hearing. There is no need to contact Department “C”, as the matter will remain on calendar for hearing. If the Moving party does not call Department “C” to submit on the Tentative Order and there is no appearance by any party, then the motion(s), at the Court’s discretion, may be taken off calendar without ruling on the motion(s). ORDERS: The minute order reflecting the Court’s Order will constitute the final Order. No additional orders should be submitted to the Court for signature unless required by law or by the Court. Prevailing party shall give written Notice of Ruling per CRC 3.1312. Minute orders, which constitute the final Order of the Court, will only be sent to the parties via U.S. mail for the following: OSC re: sanctions, OSC re: contempt or matters taken under submission after oral arguments or briefing. Counsel or parties may request copies of all other minute orders/final orders either at the clerk’s office or in writing. If a request is in writing, a self-addressed stamped envelope and the appropriate fee for copies shall be submitted.

Case Number: 19NWCV00375 Hearing Date: March 21, 2023 Dept: SEC

TENTATIVE RULILNG

Defendant Dae Shin USA, Inc.’s motion to compel responses to disqualify Steven C. Kim and Law Offices of Steven C. Kim & Associates is GRANTED.

Moving Party to give NOTICE.

Defendant Dae Shin USA, Inc. moves disqualify Attorney Steven C. Kim from representing Plaintiff Americolor, LLC and Cross-Defendants Paul Om, Lisa Om, OMC Industries, and Protex Supply Company pursuant to B&P Code § 6068(e).

A member shall not, without the informed written consent of each client: (1) Accept representation of more than one client in a matter in which the interests of the clients potentially conflict; or (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict; or (3) Represent a client in a matter and at the same time in a separate matter accept as a client a person or entity whose interest in the first matter is adverse to the client in the first matter. (Rules of Prof. Conduct 3-310(C).) “It is the duty of an attorney to do all of the following… To maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client. (B&P Code § 6068(e).)

It is beyond dispute a court may disqualify an attorney from representing a client with interests adverse to those of a former client. Disqualification in cases of successive representation is based on the prohibition against employment adverse to a former client where, by reason of the representation of the former client, the attorney has obtained confidential information material to the employment. Where such a conflict of interest exists, and the former client has not consented to the current representation, disqualification follows as a matter of course. The court does not engage in a "balancing of equities" between the former and current clients. The rights and interests of the former client will prevail…. The conclusive presumption of knowledge of confidential information has been justified as a rule of necessity, for it is not within the power of the former client to prove what is in the mind of the attorney. Nor should the attorney have to engage in a subtle evaluation of the extent to which he acquired relevant information in the first representation and of the actual use of that knowledge and information in the subsequent representation…. it is well settled actual possession of confidential information need not be proved in order to disqualify the former attorney. It is enough to show a "substantial relationship" between the former and current representation… 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. As part of its review, the court should examine the time spent by the attorney on the earlier cases, the type of work performed, and the attorney's possible exposure to formulation of policy or strategy. (H. F. Ahmanson & Co. v. Salomon Bros. (1991) 229 Cal. App. 3d 1445, 1451.)

Attorney Kim represented Defendant Dae Shin in a prior action, Dae Shin USA v. Fantasy Activewear, Inc. (Case No. 03CC09878). When Kim represented Dae Shin in the 2003 Action, Dae Shin, through Jae Weon Lee, disclosed to Kim confidential information which included ownership structure Dae Shin, its parent company, Jae Weon Lee’s personal interest in Dae Shin, Dae Shin’s business operations, and accounting policies and procedures. (JWLee Supp. Dec. ¶¶ 9-10.) This information which Kim inquired about at Jae Weon Lee’s 1/5/2021 goes to the heart of the alter ego allegations in this claim. (Lee Supp Decl. ¶ 3, Ex. H). Defendant never consented to Attorney Kim’s representation of Americolor and the Americolor Parties. (JWLee Decl. ¶ 9.)

In opposition, Attorney Kim contends that the prior action was a collections action based on a dispute over chargebacks and credits claimed by the defendant Fantasy Activewear. (Kim Decl., ¶ 8.)

The prior case was a collection matter that involved accounting policies and procedures. This case is also a collection matter that relates to Dae Shin’s accounting policies and procedure. There is a substantial relationship between the two cases as to the claims against Dae Shin.

As such, the law conclusively presumes Kim’s receipt of confidential information during such representation. (Jessen v. Hartford Casualty Insurance Company (2003) 111 Cal.App.4th 698, 709-13.)

The instant matter also involves Dae Shin’s accounting policies and procedures. The court finds the instant case is “linked in some rational manner” to the 2003 case wherein Kim acted as Plaintiff’s counsel for Dae Shin. (See Jessen, supra, 111 Cal.App.4th at 709-13.) Thus, it is presumed that Kim obtained knowledge of Dae Shin’s litigation strategy, settlement strategy and approach in dealing with cases involving its corporate practices.

Attorney Kim contends any confidential information acquired in the 2003 Action has long since been forgotten. (Kim Decl., ¶ 33.) However, “[t]he conclusive presumption of knowledge of confidential information has been justified as a rule of necessity, for it is not within the power of the former client to prove what is in the mind of the attorney.” (H. F. Ahmanson & Co. v. Salomon Bros. (1991) 229 Cal. App. 3d 1445, 1451.)

Attorney Kim also contends that he should not be disqualified from representing Americolor against the other Defendants. Kim cites absolutely no legal authority for this proposition. It is presumed that Kim has acquired confidential information belonging to Dae Shin. Dae Shin is similarly situated as the other co-Defendants, and this court cannot allow any such breach of confidential information to occur.

Accordingly, the motion is GRANTED. Attorney Kim and Law Offices of Steven C. Kim & Associates are disqualified from further representing Plaintiff Americolor, LLC and Cross-Defendants Paul Om, Lisa Om, OMC Industries, and Protex Supply Company.