Thursday, December 22, 2005
C.A. Extends Rule on Disqualification of Attorney Over Conflicts
Lawyer, Whose Associate Counsel May Have Been Privy to Other Side’s Secrets, Ordered Off Case
By KENNETH OFGANG, Staff Writer/Appellate Courts
A law firm must be disqualified from a case when it associates as counsel an attorney who previously obtained confidential information from the opposing party, even in the absence of any evidence that confidential information was shared between the firm and the associated counsel, the Fifth District Court of Appeal ruled yesterday.
Describing the issue as one of first impression, Justice Dennis Cornell said there was no “logical or substantive” reason why the longstanding rule of automatic disqualification, which would apply if a law firm employed an attorney who had obtained confidential information from an adverse party, should not also apply when an attorney with confidential knowledge is associated for a specific matter.
“We view this case as essentially identical to those cases involving attorneys changing law firms, from one side (plaintiffs) to the other (defendants), during the pendency of a case,” Cornell wrote.
Overturning a Fresno Superior Court judge’s contrary ruling, the appellate panel ordered that Fresno attorney Andrew B. Jones be disqualified from representing a group of accountants who are suing their former employers in Fresno Superior Court.
The plaintiffs are former employees of the firm of DeMera DeMera Cameron. They are seeking a declaration of their potential obligations and liabilities under various agreements with the firm, which they left to start their own enterprise, as well as damages for alleged fraud and breach of fiduciary duties by the firm’s principals, while the firm is seeking damages for breach of the plaintiffs’ employment contracts.
After Jones associated Peter S. Bradley, another Fresno attorney, as co-counsel about three years into the litigation, the defendants moved to disqualify both Jones and Bradley, claiming that Bradley had obtained confidential information from their counsel about the case.
Michael Smith, the attorney for DeMera DeMera Cameron, explained that when the plaintiffs filed their amended complaint naming the firm’s principals as individual defendants, he interviewed several lawyers with a view toward hiring one of them to represent those individuals. One of the lawyers he interviewed, he declared, was Bradley, who he said received confidential information in the course of the interview.
Bradley responded that at the time he was retained by Jones, he did not realize that the case was the same one he had discussed with Smith three years earlier. He confirmed that he met with Smith, but could not recall anything about the particulars of the case other than that it involved corporate law issues and that he was told that Jones was representing the other side.
Any discussion of the facts of the case, he recalled, would have been limited to what one could from the pleadings; the primary purpose of the meeting was to discuss his expertise and experience, he said.
Jones also declared that no confidential information was shared between him and Bradley based on anything Bradley had learned from Smith.
Judge Hilary A. Chittick ordered Bradley disqualified, but ruled that because Jones had not received confidential information from Bradley, he could continue to represent the plaintiffs.
Cornell, however, said the mere possibility that confidential information was exchanged between Bradley and Jones is sufficient to knock the latter out of the case.
Whenever a lawyer who has represented or otherwise received confidential information from one side is hired to represent the other, whether as a member of employee of the adverse law firm or as co-counsel, “it is the attorney’s duties of loyalty and confidentiality to his client that are implicated,” the justice wrote.
“The distinction between hiring Bradley as an associate or partner, on the one hand, and associating him as counsel, on the other hand, does not change the need to protect defendants’ confidences,” Cornell said. “The only effective method to protect defendants’ confidences from the possibility of inadvertent disclosure is also to disqualify Jones.”
The justice went on to reject the contention that Smith waived confidentiality by discussing the case with Bradley in the absence of a confidentiality agreement.
“We do not agree, as Jones suggests, that an attorney must obtain a written confidentiality agreement from another attorney or consultant before disclosing any attorney work product during the employment process,” Cornell wrote. “Bradley has a duty to maintain the confidences of his clients...even in the absence of a confidentiality agreement.”
The justice further explained that “the absence of any evidence or inference that Smith acted in a manner inconsistent with the intent to retain the confidentiality of his work product compels the conclusion the privilege was not waived.”
The case is Pound v. DeMera DeMera Cameron, F04709.
Copyright 2005, Metropolitan News Company