UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
February 12, 2013
THE BERNHOFT LAW FIRM, S.C.,
The opinion of the court was delivered by: Hon. Thomas J. Whelan United States District Judge
ORDER GRANTING DEFENDANT'S MOTION TO DEEM OPPOSITION TIMELY FILED [DOC. 12] AND MOTION TO DISQUALIFY GRANTING PLAINTIFF'S COUNSEL [DOC. 8]
Plaintiff Bernhoft Law Firm seeks to disqualify Defendant Blaine Pollock's counsel Richard E. Barnes on a number of grounds. Mr. Pollock filed his opposition late, accompanied with a motion to deem his opposition timely. The Bernhoft Law Firm filed an opposition to Mr. Pollock's motion.
The Court decides the matter on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1). Upon review of the papers relating to Mr. Pollock's motion, and good cause appearing,*fn1 the Court GRANTS Mr. Pollock's motion and deems his opposition timely. For the reasons discussed below, the Court GRANTS the Bernhoft Law Firms's motion to disqualify Attorney Richard E. Barnes from representing Mr. Pollock.
In August 2011, Defendant Mr. Pollock ("Mr. Pollock") retained the Plaintiff Bernhoft Law Firm (the "Bernhoft Firm")regarding an IRS criminal tax investigation. (Bernhoft Decl. [Doc. 8-2] ¶ 9.)At the time, Mr. Barnes was employed by the Bernhoft Firm, and was the firm's lead attorney in the case. (Id. at ¶ 11.)As lead attorney, he was directly responsible for all facets of the firm's representation of Mr. Pollock, including directing and completing all substantive work, devising and implementing representation strategies, client communication, and approval and coordination of all third-party professional work. (Id.) Mr. Barnes specifically approved all terms set forth in the Pollock representation agreement, including hourly billing rates for all firm employees, representation cost provisions, supplemental retainers, and trust account and billing protocols. (Id.) He drafted and approved representation agreements for the Bernhoft Firm that shared complete identity of material terms with Mr. Pollock's representation agreement. (Id. at ¶ 36.)
On October 12, 2011, Mr. Barnes informed the Bernhoft Firm that he was leaving to start his own firm. (Id. at ¶ 13.) On the same day, Mr. Barnes also informed the Bernhoft Firm that Mr. Pollock had discharged the firm and hired Mr. Barnes in its stead. (Id. at ¶ 14.)
On August 8, 2012, the Bernhoft Firm commenced this action against Mr. Pollock for breach of contract. (Compl. [Doc. 1] 3.) Therein, the Bernhoft Firm alleges that Mr. Pollock owes it $138,351.58 in attorney's fees plus interest. (Id. at 4.) On October 25, 2012, the Bernhoft Firm filed a motion to disqualify Mr. Barnes from representing Mr. Pollock in this matter, claiming that Mr. Barnes had breached and would continue to breach his duty of confidentiality to the Bernhoft Firm, and that Mr. Barnes has a conflict of interest with Mr. Pollock. Mr. Pollock opposes.
II. LEGAL STANDARD
"A trial court's authority to disqualify an attorney derives from the power inherent in every court '[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto." Kennedy v. Eldridge, 201 Cal. App. 4th 1197, 1204 (2011)(alterations in original). "[D]isqualification motions involve a conflict between the clients' right to counsel of their choice and the need to maintain ethical standards of professional responsibility." Id. "The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar." Id. "The important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process." Id.
Disqualification of counsel not only prevents attorneys from breaching their ethical duties, but also protects the judicial process from any taint of unfairness that might arise from conflicts of interest. Sharp v. Next Entm't Inc., 163 Cal. App. 4th 410, 425 (2008). "A conflict arises when the circumstances of a particular case present a 'substantial risk that the lawyer's representation of the client would be adversely affected by the lawyer's own interests.'" Sharp, 163 Cal. App. 4th at 426. Where such a conflict arises, and an attorney's continued representation threatens that attorney's client with cognizable injury or would undermine the integrity of the judicial process, a trial court may grant a motion for disqualification. See Kennedy, 201 Cal. App. 4th at 1205.
The Bernhoft Firm argues that Mr. Barnes' substantial involvement in the Bernhoft Firm's representation of Mr. Pollock prevent him from representing Mr. Pollock in this matter because any defense to the Bernhoft Firm's breach-of-contract claim will necessarily and negatively implicate Mr. Barnes' own performance, ethics, and/or conduct. (Disqual. Motion 16-17.) The Court agrees.
Here, there is an obvious conflict of interest between Mr. Barnes and Mr. Pollock stemming from Mr. Barnes' prior representation of Mr. Pollock. The legal fees that Mr. Pollock has refused to pay were, in large part, generated and approved by Mr. Barnes. He billed a very substantial portion of the total legal fees that Mr. Pollock accrued during the firm's representation. (Bernhoft Decl. at ¶ 35.) Also, Mr. Barnes' own record keeping and judgment controlled the final bills that Mr. Pollock received. (Id. at ¶ 36.) In the event that Mr. Pollock refutes the validity of these fees during the course of this litigation, such an argument will require Mr. Barnes to attack the appropriateness of his own representation, a position that the Court finds untenable. Mr. Barnes cannot zealously represent his client's interests if it means attacking the validity of bills that he approved and the legal services that he provided. These circumstances present a substantial risk that Mr. Barnes' own interests would adversely affect his representation of Mr. Pollock, thereby creating a conflict warranting disqualification.
Moreover, Mr. Pollock does not directly address the alleged conflict anywhere in his opposition, effectively conceding that Mr. Barnes has a conflict of interest that warrants disqualification. The crux of Mr. Pollock's opposition*fn2 is his contention that no attorney-client relationship existed between the Bernhoft Firm and Mr. Barnes. (See generally Opp'n.) While this argument addresses the Bernhoft Firm's claim that Mr. Barnes breached his duty of confidentiality,*fn3 it does not directly address the alleged conflict of interest. Even if the Court construes Mr. Pollock's opposition to suggest that Mr. Barnes may only be disqualified based on a violation of an attorney-client privilege, the argument is still unavailing. See Meza v. H. Muehlstein & Co., 176 Cal. App. 4th 969, 980 (2009)(explaining that "[p]rotection of the attorney-client privilege is not the only ground for a motion to disqualify an attorney."); Kennedy, 201 Cal. App. 4th at 1204-05 (emphasizing that it makes no sense for a court to "stand idly by and permit conflicted counsel to participate in a case merely because neither a client nor former client has brought a motion.")
In light of the foregoing, the Court GRANTS Mr. Pollock's timeliness motion is GRANTS the Bernhoft Firm's motion to disqualify Mr. Barnes as Mr. Pollock's counsel.
In light of this order, the Court holds the pending motion for default judgment [Doc. 17] in abeyance for Mr. Pollock to have an opportunity to find new counsel and file a supplemental opposition to the pending motion for default judgment, if he wishes. Any supplemental response to the motion for default judgment must be filed on or before March 18, 2013. If the Bernhoft Firm chooses to reply to Mr. Pollock's supplemental opposition, it must do so on or before March 25, 2013. If no supplemental opposition is filed on or before March 18, 2013, the Court will rule on the motion for default judgment as currently briefed.
IT IS SO ORDERED.