By KENNETH OFGANG, Staff Writer

The attorney representing Los Angeles Superior Court Judge Patrick Murphy in a suit for fraudulent misappropriation of funds was allowed to withdraw from the case following a hearing yesterday.

Senior U.S. District Judge Wm. Matthew Byrne Jr. said he was satisfied that Murphy and Diamond Bar sole practitioner Thomas Dovidio had an irreconcilable conflict "of how the case should proceed."

The conflict didn't rise to the level of an ethical conflict, Byrne commented after reopening the courtroom, which was closed while the attorney explained why he was asking to be relieved. Byrne also noted that Dovidio hadn't been paid nearly as much as he was entitled to under his fee agreement.

Dovidio explained that he has received only $18,000 from the judge, of which $5,100 went to costs. He said Murphy agreed to pay a heavily discounted rate of $110 per hour, and Dovidio said he was still owed over $40,000 in connection with a suit brought by Smith Barney Inc. and Prudential Securities Inc. and two related matters.

The securities firms claim Murphy and several other defendants "laundered" funds which Smith Barney and Prudential claim were improperly withdrawn by a friend of Murphy's, Dr. George Taus, from accounts held jointly by Taus and his now ex-wife.

Dovidio presented the judge with a transcript of an e-mail the attorney said he received from Murphy. In it, the judge--who has been absent from the bench for most of the past two years due to what he says are cardiac- and stress-related problems--said he was "debilitated" and couldn't drive to court for yesterday's hearing.

In the e-mail message Murphy added that he did not object to Dovidio's withdrawal. Byrne granted the motion, although Dovidio agreed to remain in the case long enough to represent Murphy's interests at depositions scheduled for the remainder of this week.

Byrne also scheduled another court appearance for Feb. 29, and said Murphy could be defaulted out of the case if he fails to appear either personally or through new counsel. The judge added that he did not "at this time" expect to continue the trial, now set for April 11.

Dovidio said after court that he still does not believe there was any provable wrongdoing on Murphy's part. "There's no evidence Pat Murphy touched any of this money," he said, referring to about $1.7 million which was the subject of a complex series of transfers among various parties with past personal and professional relationships with Murphy.

Nor, he said, is there evidence that would prove Murphy was part of any conspiracy to defraud the securities firms.

Dovidio has also moved to withdraw the two related matters he had been representing Murphy in. Those motions are both set for hearing next month.

In one case, now pending before an Orange Superior Court judge, Murphy is suing attorneys Paul Ottosi and Paul Jacobs for violation of the state statute prohibiting the recording of private conversations without the consent of all parties.

Ottosi is a co-defendant in the Smith Barney case, while Jacobs--who once represented Murphy in an unrelated matter--once represented another of the Smith Barney defendants in yet another lawsuit over the missing money.

Murphy claimed, in a verified complaint filed last September that the dissemination of the recorded conversations were a "substantial factor" in his being sued, and also resulted in his being investigated by the Commission on Judicial Performance.

Dovidio is also moving to withdraw from a suit by the Taus bankruptcy trustee, who claims Murphy and others have concealed money rightfully belonging to Taus' creditors, including his former wife.

Dovidio said another lawyer, whom he did not name, is representing the judge in connection with the Commission on Judicial Performance investigation. Dovidio disclosed that Murphy was examined by a commission-appointed doctor last fall.

That would have been shortly after Judge Rolf Treu, then the presiding judge of the Citrus Municipal Court on which Murphy was serving, notified the commission that Murphy had been absent for more than 90 days in a 12-month period.

Commission Director/Chief Counsel Victoria Henley said Monday that Murphy has not asked for a disability retirement.