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II. Disqualification of Ryan and His Firm

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II. Disqualification of Ryan and His Firm

“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.’ (Code Civ. Proc., § 128, subd. (a)(5) .…) Ultimately, disqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility. [Citation.] The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar. The important right to counsel of one’s choice must yield to ethical considerations that affect the fundamental principles of our judicial process. [Citations.]” (SpeeDee Oil, supra, 20 Cal.4th at p. 1145.)

Plaintiff’s motion to disqualify Ryan was based on rule 3-310(E) of the Rules of Professional Conduct of the State Bar of California (rule 3-310(E)) which provides: “A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment.” “The rule implements the ethical imperative of Business and Professions Code section 6068, subdivision (e), which states that it is the obligation of every attorney ‘[t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.’” (Adams v. Aerojet-General Corp. (2001) 86 Cal.App.4th 1324, 1334 (Adams).) Rule 3-310(E) generally has been invoked in two situations: “where the attorney successively represents clients with potential or actual adverse interests and where the attorney simultaneously represents clients with potential or actual adverse interests.” (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 705 (Jessen).) We are concerned here with a question of successive representation: whether Ryan accepted employment adverse to plaintiff, his former client, in an action arising out of the same dispute about which she had previously consulted him and obtained his advice.

A. Existence of attorney-client relationship

Defendants contend the trial court erred in disqualifying Ryan, because plaintiff failed to demonstrate that an attorney-client relationship existed between her and Ryan. Defendants contend Ryan was at all times acting as counsel for TCA Partners; he met with plaintiff at the direction of Jackson, and plaintiff was aware he represented TCA Partners. Under these circumstances, defendants contend plaintiff could not reasonably have believed Ryan was representing her to the exclusion of TCA Partners. Essentially, defendants are asking this court to reweigh the facts and reach a conclusion contrary to that reached by the trial court. This we cannot do. If there is substantial evidence in the record, contradicted or uncontradicted, supporting the trial court’s factual findings, we cannot substitute our own findings for those of the trial court. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.)

“‘Except for those situations where an attorney is appointed by the court, the attorney-client relationship is created by some form of contract, express or implied, formal or informal. [Citation.]’ [Citations.]” (Responsible Citizens v. Superior Court (1993) 16 Cal.App.4th 1717, 1732 (Citizens).) “An express contract is one, the terms of which are stated in words.” (Civ. Code, § 1620.) “An implied contract is one, the existence and terms of which are manifested by conduct.” (Civ. Code, § 1621.) “‘The distinction between express and implied in fact contracts relates only to the manifestation of assent; both types are based upon the expressed or apparent intention of the parties.’ [Citation.]” (Citizens, at pp. 1732-1733.) There is no contention in this case that an attorney-client relationship between plaintiff and Ryan was created by appointment of counsel or express contract. Consequently, the question is whether an implied in fact contract was created by their conduct.

An attorney who represents a partnership does not automatically have an attorney-client relationship with an individual partner. (Citizens, supra, 16 Cal.App.4th at p. 1731.) Here, however, plaintiff is not claiming an attorney-client relationship arose between her and the partnership’s attorney by virtue of her position as a partner in the partnership. Rather, she is claiming an attorney-client relationship arose as a result of interactions between Ryan and plaintiff individually.

The trial court found an attorney-client relationship existed between plaintiff and Ryan. In support of that finding, it noted plaintiff sought advice and counsel from Ryan about the partnership agreement and her claim for additional compensation on multiple occasions. They privately discussed her claims; she asked that he keep their communications confidential, and he did not tell her he would not do so. Ryan did not tell plaintiff that he did not represent her or that he represented only TCA Partners; he did not advise her to seek independent counsel to represent her in her dispute with TCA Partners. Ryan advised plaintiff about her dispute with defendants and helped her draft a demand letter setting out her claims against defendants. Plaintiff reimbursed TCA Partners for work Ryan did for her, and Ryan directly billed plaintiff for his legal services on one occasion. Finally, Ryan stated in e-mails that he could not represent either side in the event of litigation between them because he had represented them both. The trial court described this evidence as “[p]articularly damning,” and rejected as unconvincing Ryan’s attempt to explain those statements as being based on the relationships of the people involved and not on the existence of an attorney-client relationship.

The trial court’s findings are supported by substantial evidence. Plaintiff joined TCA Partners in 2008. In 2009, Ryan began drafting a partnership agreement to formalize the relationship between TCA Partners and the professionals who worked for it, including plaintiff. In April 2011, plaintiff asked Ryan for assistance in finalizing her proposed partnership agreement with TCA Partners. Ryan had private meetings with plaintiff during which they discussed matters plaintiff asked Ryan to keep confidential; in e-mails, she expressed her appreciation that he was keeping the information confidential. Plaintiff declared she and Ryan “both agreed that these conversations should be kept completely confidential.” Although the evidence was conflicting, there was evidence Ryan did not tell plaintiff he did not represent her, did not tell plaintiff he represented only TCA Partners, and did not tell plaintiff he would not keep her information confidential.

On May 18, 2011, Ryan and plaintiff met privately at a restaurant and discussed plaintiff’s dispute with defendants over the partnership agreement and compensation. Plaintiff discussed with Ryan her confidential thoughts, observations, and impressions of the dispute with defendants. In a declaration filed under seal, plaintiff explained the nature and content of the confidential information she disclosed to Ryan. Ryan advised her and suggested drafting a letter to defendants setting out the issues that needed to be resolved. He subsequently reviewed and made extensive changes to the letter she drafted. Plaintiff denied Ryan’s claim that he met with her on May 18, 2011, at Jackson’s request or with Jackson’s knowledge. She also denied his claim he merely looked over her draft letter “in an effort to work through the issues on the part of TCA Partners and not as her attorney.” Plaintiff stated she and Ryan discussed reasons they should keep their meetings confidential, including her fear that Church and other defendants would retaliate against her for standing up to them. Ryan understood her concerns and agreed to meet away from TCA Partners’ office on May 18, to hide the meeting from defendants. Further, Ryan told her he did not want anyone at TCA Partners to know he was involved in drafting her letter to defendants; when he e-mailed the revisions to her, he instructed her to save his draft as a new file.

Plaintiff declared that she believed Ryan was acting as her attorney and providing her with legal advice regarding how to resolve her dispute with defendants. Ryan met with plaintiff, discussed with her the dispute with defendants, and advised her how to proceed. Plaintiff offered to either reimburse TCA Partners for the time Ryan spent with her or be billed directly. For some of his work, Ryan billed TCA Partners, and TCA Partners forwarded the bill to plaintiff. For the May 18, 2011, meeting and the revision of the demand letter, plaintiff was billed directly. Ryan’s law firm sent her a bill on its letterhead, charging her for “[p]rofessional services rendered”; the services were itemized as a May 18, 2011, conference with plaintiff and reviewing and revising correspondence regarding partnership issues. Plaintiff paid Ryan for his services with her personal funds. It can be reasonably inferred from their conduct that both parties understood plaintiff was consulting Ryan in his capacity as an attorney and Ryan was rendering advice and counsel in that capacity.

In an e-mail to plaintiff dated August 5, 2011, Ryan stated: “As I mentioned in our past conversations, because of my relationship with you, on the one hand, and John and Rick, on the other, I would not be able to represent anyone in any litigation, but I would certainly do my best to facilitate a resolution and settlement if I can.” In another e-mail to plaintiff, dated two days later, after expressing a wish that Church would “come to his senses and work through issues with you soon,” Ryan stated: “However, and as we discussed, I cannot be involved in any representation of anyone if the matters escalate to litigation due to my representation of both of you.” Thus, Ryan himself referred to his “representation” of plaintiff and implicitly recognized the conflict in representing both TCA Partners and plaintiff.

Both express and implied in fact contracts are based on agreement of the parties. (Caron v. Andrew (1955) 133 Cal.App.2d 412, 417.) Agreement to an express contract is manifested in words, either oral or written. (Id. at p. 416.) Agreement to an implied in fact contract must be “inferred from the conduct, situation, or mutual relation of the parties.” (Id. at p. 417.) Mutual assent to a contract is based upon objective and outward manifestations of the parties; subjective intent is irrelevant. (Stewart v. Preston Pipeline, Inc. (2005) 134 Cal.App.4th 1565, 1587.) We conclude the evidence of Ryan’s objective manifestations of agreement with plaintiff was sufficient to support the trial court’s conclusion that plaintiff and Ryan entered into an implied in fact contract for Ryan to provide legal advice and counsel to plaintiff in connection with her dispute with TCA Partners and to keep her information confidential.

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