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Court of Appeal:
Law Firm Can’t Be Disqualified Based on Its Misstatement of Conflicting Representation
By a MetNews Staff Writer
An attorney’s flub in saying that his law firm represented five employees of a company that was the firm’s client—where those employees, whom it didn’t represent, had interests that were potentially adverse to the client—was not a sufficient basis for disqualifying the firm from representing the company in a Private Attorneys General Act action against it, the Court of Appeal for this district has held.
Acting Presiding Justice John L. Segal of Div. Seven wrote the opinion, filed Thursday. The opinion, which was not certified for publication, reverses an order by Los Angeles Superior Court Judge Gregory Keosian.
Keosian barred the Beverly Hills law firm of Rosen Saba from defending its client LandCare USA, LLC and a former company supervisor in a PAGA lawsuit brought by employee Ismael Cortez on behalf of himself and others similarly situated.
The order stemmed from a response by a named partner of the firm, Ryan Saba, to Jamie Stein of the Simi Valley firm of Green Law, counsel for Cortez. Stein queried as to contact information for five specific employees, and Saba advised that his firm represented them and that he would make them available for depositions.
Stein sought, ex parte, a temporary restraining order and a preliminary injunction barring Rosen Saba and LandCare from communicating with the five employees, which Stein branded as “ridiculous,” noting that the five “individuals are clients of Rosen Saba.”
Keosian denied the relief sought by Cortez. Two days later, Saba dispatched an email to Stein saying:
“I was mistaken when I stated ‘our firm represents these individuals.’ What I meant to say, is that our firm will coordinate with these individuals and any other LandCare employee so that the individuals will appear for a deposition, upon your request.”
Keosian subsequently issued his disqualification order. Segal wrote:
“Rosen Saba’s statements that it represented the potentially aggrieved employees were unilateral statements showing, at most, that Rosen Saba believed, at least for a short period of time, it represented the employees. The statements were not substantial evidence of an attorney-client relationship….Rosen Saba’s statements did not show the aggrieved employees intended to retain Rosen Saba as their attorneys, that Rosen Saba obtained confidential information from the employees, or that Rosen Saba provided legal advice to the employees.”
The jurist went on to say:
“That is not to say an attorney’s conduct is never evidence of an attorney-client relationship….Rosen Saba, however, did not make a court appearance or file anything on behalf of the aggrieved employees. Rosen Saba opposed Cortez’s request for a temporary restraining order on behalf of LandCare, not the employees. And, at the time LandCare filed the opposition, none of the aggrieved employees was a party to the action or subject to a subpoena or a notice to appear for deposition. Because Rosen Saba was not appearing on behalf of the employees, its statement that it represented the employees did not raise a presumption the employees knew of or had authorized Rosen Saba to make the statement. The trial court erred in ruling that the statements showed Rosen Saba represented the potentially aggrieved employees and that such representation required disqualification.”
Two of the five employees were Octavio Aguilera and Raphael Diaz Valdivia. Keosian also disqualified the firm representing them—Schwartz Semerdjian Cauley & Moot—which was compensated by LandCare.
Segal pointed to Rule 1.8.6 if the Rules of Professional Conduct which provides, in part:
“A lawyer shall not enter into an agreement for, charge, or accept compensation for representing a client from one other than the client unless: [¶] (a) there is no interference with the lawyer’s independent professional judgment or with the lawyer-client relationship” and “(c) the lawyer obtains the client’s informed written consent.”
Keosian did not base the disqualification on a finding that written consent from the clients was absent or that Schwartz Semerdjian had taken any particular action reflecting a lack of independent judgment, Segal said, observing:
“Instead, the trial court ruled that, because Schwartz Semerdjian previously represented LandCare, and because LandCare was a party to an action in which Aguilera and Valdivia stood to recover if Cortez prevailed, it was not reasonable to expect Schwartz Semerdjian to exercise independent professional judgment when representing Aguilera and Valdivia.”
He declared:
“But contrary to the trial court’s ruling and Cortez’s assertion, that LandCare is paying Schwartz Semerdjian’s fees does not establish as a matter of law Schwartz Semerdjian cannot exercise independent professional judgment in representing Aguilera, Valdivia, or other employees. Of course, Schwartz Semerdjian may have an incentive to appease LandCare rather than its clients…. But that is always a risk when a person other than the client pays the client’s attorney’s fees, and the rules of professional conduct generally permit the arrangement with the client’s informed written consent.”
Barring representation by Schwartz Semerdjian “would be unfair to Aguilera and Valdivia,” Segal said, explaining:
“Were we to affirm the order disqualifying Schwartz Semerdjian simply because LandCare is paying Schwartz Semerdjian’s fees, despite Aguilera’s and Valdivia’s informed written consent and without evidence the financial arrangement was interfering with Schwartz Semerdjian’s independent professional judgment, Aguilera and Valdivia would face an untenable choice: They either would have to pay for an attorney despite LandCare’s willingness to pay, or (more likely) they would have to be deposed without representation.”
The case is Cortez v. LandCare USA, LLC, B298044.
Elizabeth L. Bradley joined Saba in representing LandCare and the former supervisor. Dick A. Semerdjian, Sarah Brite Evans, and Danielle L. Macedo of Schwartz Semerdjian acted for Aguilera and Valdivia. Matthew T. Bechtel of The Green Law Group argued for Cortez.
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