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Filed 12/18/14 Reimche v. Church CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

LUCY REIMCHE,




Plaintiff and Respondent,
v.
JOHN CHURCH et al.,
Defendants and Appellants.

F068384
(Super. Ct. No. 12CECG00719)


OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Kristi Culver Kapetan, Judge.

Sagaser, Watkins & Wieland, Howard A. Sagaser and Ian B. Wieland for Defendants and Appellants.

The Law Offices of Gregory J. Smith, Gregory J. Smith; Campagne, Campagne & Lerner, Justin T. Campagne and Wiley R. Driskill for Plaintiff and Respondent.

-ooOoo-

Defendants appeal from an order disqualifying their attorney, his associated cocounsel, and the law firms of both attorneys from representing defendants in this litigation. The disqualification was based on the associated cocounsel’s prior consultation with and advice to plaintiff in connection with the same dispute, which the trial court found gave rise to an attorney-client relationship. Because the cocounsel accepted employment adverse to plaintiff, his former client, in the same matter in which he represented her and without her written consent, he and his law firm were disqualified. Defense counsel and his law firm were also vicariously disqualified. We affirm.



FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff joined defendants’ accounting firm in March 2008. She asserts she was promised a partnership agreement and a salary of at least $250,000 if she joined the firm. After joining the firm, however, she contended the partnership agreement was never finalized and executed, and she was not paid as promised. She resigned from the firm and, in March 2012, sued the partnership (TCA Partners), another partnership (KHJC & Partners), and several partners (John Church, Rick Jackson, Kelly Hohenbrink, Jerrel Tucker, and Bobby Church). Initially, defendants were represented by James B. Betts and his firm, Betts, Rubin & McGuinness. In January 2013, defendants associated Russell K. Ryan and his firm, Motschiedler, Michaelides, Wishon, Brewer & Ryan, LLP, as cocounsel with Betts. Plaintiff filed a motion to disqualify Betts, Ryan, and their law firms from representing defendants in this litigation. Plaintiff asserted she consulted with Ryan about her claims and he assisted and advised her, which gave rise to an attorney-client relationship. She contends Ryan’s representation of defendants in this lawsuit, which arose out of the same dispute about which she consulted him, created a conflict of interest which justified disqualifying both Ryan and Betts.

In support of her motion, plaintiff presented evidence that, while she worked for defendants, she consulted Ryan about her partnership and salary claims against defendants. She asked for his assistance in finalizing a proposed partnership agreement with TCA Partners; with input from her and from defendant Jackson, Ryan drafted the agreement. Plaintiff had private conversations with Ryan, and they exchanged e-mails; she conveyed confidential information to him that was material to her claims against defendants. Plaintiff asserts both of them agreed their conversations would be kept confidential. On May 18, 2011, she and Ryan met alone at a restaurant and discussed the dispute about partnership and compensation; she shared her confidential thoughts, observations, and impressions with Ryan. Ryan advised her about the dispute and suggested writing a letter to defendants laying out the issues that needed to be resolved. Plaintiff drafted the letter and Ryan edited it. Ryan did not want her to disclose to defendants that he had helped with the drafting of the letter. Ryan billed plaintiff directly for the May 18, 2011, meeting and the revision of the letter to defendants; she paid with her own funds. On other occasions, Ryan billed TCA Partners, which forwarded the bills to plaintiff for payment.

In late summer 2011, when it seemed probable the dispute would end in litigation, Ryan informed plaintiff on multiple occasions that, because of his representation of both plaintiff and defendants, he would not be able to represent any party in such litigation.

In opposition to plaintiff’s motion, defendants asserted Ryan did not have an attorney-client relationship with plaintiff because, at all relevant times, he was representing defendants as their attorney and plaintiff was aware of that. Ryan declared he had represented TCA Partners as its attorney since Jackson, John Church, and Tucker started their practice together in 2001 or 2002. Ryan had also represented Jackson, Tucker and John Church since at least 2002. Beginning in 2009, Ryan worked with these individuals to draft a partnership agreement to formalize the partnership’s relationship with contracting accountants, such as plaintiff. The draft agreements were never finalized.

In January, 2011, Ryan met with Jackson, Church, Tucker and other professionals they worked with to discuss the draft agreement; plaintiff attended the meeting. In April, 2011, Jackson asked Ryan to meet directly with plaintiff to discuss questions or concerns she might have about the draft agreement and her relationship with defendants. Shortly after, plaintiff sent Ryan an April 15, 2011, e-mail asking him for help finalizing the agreement because it was holding things up. Ryan asserted that, in drafting the agreement and discussing it with plaintiff, he was at all times acting in his capacity as legal counsel for TCA Partners, and not for plaintiff. He stated he did not recall telling plaintiff that her comments would remain confidential, or that he could or would act as her legal counsel; he told her, and she knew at all times, that he was legal counsel for TCA Partners.

Ryan asserts he met with plaintiff on May 18, 2011, at Jackson’s express direction; he agreed to look over the draft letter plaintiff was preparing to send to Jackson and Church and give her his thoughts, in an effort to work through the issues for TCA Partners, not as her attorney. Ryan asserted he never expressly agreed to keep plaintiff’s communications confidential, and never led her to believe he was acting as her legal counsel or could represent her in her dealings with TCA Partners. He acknowledges saying in telephone conversations with plaintiff and her attorney and in e-mails that he would not be able to represent anyone in litigation, “but that statement was made strictly because of my personal feelings about the individuals involved at the time. It was not because I thought there had been an attorney-client relationship created between Plaintiff and me.” Both Ryan and Betts denied that Ryan disclosed any confidential information obtained from plaintiff to Betts.

The judge who initially heard the matter directed Ryan to provide a declaration explaining why he failed to advise plaintiff that he was not her counsel and explaining the circumstances of his accepting payment for alleged legal services provided. He directed plaintiff and her attorney to file a declaration under seal “containing a recitation of the actual confidential communications that were passed between Plaintiff Reimche and attorney Ryan.” That judge was subsequently disqualified pursuant to Code of Civil Procedure section 170.1. The parties filed the additional declarations and the newly assigned judge heard and granted the motion, disqualifying Ryan, Betts, and their respective law firms. Defendants appeal.



DISCUSSION




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