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Court of Appeal:
Party Must Share Inactive Status of Opposing Side’s Counsel
Opinion Faults Attorneys, Who Became Aware of Pending Disciplinary Action Against Opponent’s Lawyer, for Not Informing Affected Clients, Says Fee Award in Their Favor Would Be ‘Shocking’ Injustice
By a MetNews Staff Writer
Div. Three of the Fourth District Court of Appeal held Friday that a party who has become aware that an opponent’s attorney has been involuntarily placed on inactive status due to disciplinary proceedings is obligated to give notice to the other side, critiquing the opposing lawyers, the State Bar, and the trial court to for failing to inform the affected client before rulings were made to her detriment.
At issue is Code of Civil Procedure §286, which provides that:
“When an attorney dies, or is removed or suspended, or ceases to act as such, a party to an action, for whom he was acting as attorney, must, before any further proceedings are had against him, be required by the adverse party, by written notice, to appoint another attorney, or to appear in person.”
In yesterday’s opinion, written by Acting Presiding Justice Eileen C. Moore and joined in by Justices Joanne Motoike and Nathan Scott, the court held that being ordered on “involuntarily inactive” status is a triggering event under the section.
The issue arose after a property owner, Sheila Prato, and her affiliated company, Prato LLC, filed suit in November 2021 against Lee & Associates Commercial Real Estate Services Inc. and its senior vice president, Thomas Gioia, alleging breach of fiduciary duties relating to a sublease of a property on which the executive had acted as a joint agent for both the lessee and the owner.
Prato hired Timothy McFarlin, then the managing partner of the Irvine-based McFarlin LLP, to represent her in the matter. After multiple requests for discovery went unanswered, Gioia’s lawyer, Thomas Aplin of the Law Offices of Thomas P. Aplin, and Lee’s counsel, Desmond Collins of the Law Offices of Desmond J. Collins, discovered that the State Bar had filed disciplinary charges against McFarlin in January 2023.
McFarlin was ordered inactive on April 9.
No Trial Appearance
Neither McFarlin nor Prato appeared for trial on May 22, and the case was dismissed without prejudice under Code of Civil Procedure §581(b)(5); notice of the dismissal was served on McFarlin only.
In June, both defendants filed motions for attorney fees based on a broadly-worded contractual provision. McFarlin was suspended by the State Bar in July.
The hearing on attorney fees was continued to allow for proper service on the plaintiffs.
Aplin and Collins served notice of the upcoming hearing and §286 notices on Prato and the LLC in November, demanding that the plaintiffs appoint new counsel for the proceedings, and Collins followed up by sending Prato a copy of the notice of entry of dismissal.
At the hearing on attorney fees, the plaintiffs were represented by new counsel, David Chaffin, who opposed any award and argued that the defendants had failed to give his clients proper notice as to McFarlin’s inactive status to allow for the appointment of a new attorney before the matter was dismissed.
Orange Superior Court Judge Jonathan S. Fish awarded Gioia $42,092.20 and the Lee Firm $28,175 in fees, saying that he was exercising his discretion to find that the defendants were prevailing parties despite the dismissal being involuntary. He did not address §286.
Failure to Deliver
Moore said that the case represented a “fail[ure] to deliver” by the legal profession on obligations to help people resolve disputes. She wrote:
“At its core, this case presents a disturbing litany of mistakes by a profession we deem far too estimable to make so many. And there is plenty of culpability to go around, starting with Ms. Prato’s own attorney, who failed to inform her he was no longer eligible to practice law. But the circle grows. We see nothing in the record to show the State Bar took steps to inform Ms. Prato (or any…other clients) of his status once he entered disciplinary proceedings. Respondents’ attorneys certainly seemed to be in no hurry to flag for the court or Ms. Prato that she lacked representation; even though they should have known it was impacting the case. And the record does not show the trial court took any action even when informed about McFarlin’s proceedings.”
Moore continued:
“What might have changed the course of events here? We have an idea. Perhaps just a modicum of courtesy on the part of respondents’ attorneys would have made all the difference. Something to the effect of: ‘Your Honor, we’re not sure Ms. Prato knows her lawyer is ineligible to practice.’ Or, ‘Your Honor, with the court’s permission, may we send notice to Ms. Prato directly to ensure she is aware of her counsel’s status?’ ”
She added:
“We do not know why respondents’ counsel chose not to make such nominal attempts at basic professionalism and civility. What we do know is the attorneys’ conduct was more tactical than anything else–they obtained a dismissal of Ms. Prato’s lawsuit while she was unrepresented, and then had the audacity to move for an award of attorney fees against her. This conduct does not comport with the professional and ethical standards we expect from lawyers. But, as it happens, neither does it comport with the law on the books.”
Sec. 286
As to §286, she opined:
“Clearly, respondents’ counsel knew about the requirements of section 286, because they provided notice under its auspices after filing motions for attorney fees after trial. But they did not serve Ms. Prato with such notice before trial, when she would have been in a better position to affect the outcome of the case (and potentially thwart respondents’ plan to seek attorney fees in the first place). And they did not serve the notice in time to allow Ms. Prato to meet statutory deadlines to try and vacate the dismissal of her case.”
Agreeing with Prato that the award of attorney fees was unreasonable, she acknowledged that “the fee provision here, at first blush, would entitle the respondents to their fees, as it is extremely broad,” but concluded:
“The record here reflects that Ms. Prato’s complaint was dismissed not because she had abandoned her claims, but because her counsel had abandoned her. It would shock the conscience to award attorney fees against such a party.”
Under these circumstances, she declared:
“The judgment is reversed and the matter remanded with directions to reconsider respondents’ motions for attorney fees, taking into account our interpretation of section 286 herein.”
State Bar records reflect that McFarlin was disbarred in 2024, after he failed to respond to the charges against him.
Aplin’s Response
Aplin responded to Friday’s opinion, writing:
“Judge [Martha] Gooding, now a Justice on the Court of Appeal, entered the Judgment of Dismissal in the trial court. She knew about Mr. McFarlin’s status because she raised it with me and Mr. Collins and ordered a delay for counsel to notify Ms. Prato directly. I previously knew about Bar ‘proceedings’ not disbarment. Bar proceedings are commonly temporary and related to non-payment of fees. I did not know what was going on because nobody at the McFarlin firm answered the phone or responded to email….”
He continued:
“Ms. Prato never appealed directly from the Order of Dismissal; yet, the Court of Appeal reversed the Order granting the motion for attorney’s fees. That’s puzzling.
“The Opinion cites no evidence that I had any knowledge regarding how to contact Ms. Prato directly prior to my knowledge of Mr. McFarlin’s disbarment, and I did not. She was also represented by counsel at the time, and it is an ethical violation for an attorney to contact an opposing party while that party is represented.”
The attorney added:
“Ms. Prato admitted (on the record) that she knew for months that her lawyer had not communicated with her, but she failed to hire a new lawyer before trial. It seemed that she had abandoned her case because it had no merit. Plus, we had already obtained an evidence sanction that precluded any chance of her winning on the merits….”
No Accountability
Alpin criticized the opinion for imposing “no accountability on Ms. Prato” and said:
“As a lawyer, my primary duty is to my client, not to an opponent. The Opinion does not address that.
“Ms. Prato may have had legal malpractice remedies against Mr. McFarlin and his firm. The Opinion does not address that.
“There were other lawyers at the McFarlin Firm who could have attended trial. Nobody did. The Opinion does not address that.”
He concluded:
“The Opinion shifts responsibility from Ms. Prato and Mr. McFarlin to innocent parties and their counsel. The suggestion that Mr. Collins and I were wrong to file the motions for attorney’s fees is inconsistent with our duties to our clients.”
Collins also responded to the decision, saying:
“We respectfully disagree with the Court of Appeal’s decision, especially any insinuation that we acted unprofessionally or violated any statutory obligation. Our client is considering further options at this time.”
The case is Prato v. Gioia, 2025 S.O.S. 1842.
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