George Ku et al. v. Harald Herchen

"The nonclient must show an invasion of a legally protected interest which is concrete and particularized.... A broad interest in the administration of justice is insufficient." (Great Lakes, supra, 186 Cal.App.4th at pp. 1357-1358.)

Defendant was never represented by FHD. Moreover, the alleged conflict arises from FHD's temporary representation of Kim Ngo in an unrelated automobile insurance matter. Ngo was never a party to the underlying wrongful death action in which judgment has already been entered. Defendant has not demonstrated how that representation invaded any legally protected interest belonging to him rather than asserting only a generalized concern regarding the integrity of the proceedings.

Although California recognizes a narrow exception where an ethical violation is so "manifest and glaring" that it infects the litigation itself (Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, 1204), the Court concludes Defendant has not made that showing here. The asserted conflict does not involve Defendant's confidential information, his attorney-client relationship, or representation adverse to Defendant himself. Rather, Defendant seeks to invoke an ethical issue arising from the representation of a third party in an unrelated matter after judgment had already been entered.

Accordingly, Defendant's standing to seek disqualification is, at best, doubtful. Even assuming Defendant has standing, the court analyzes on the merits.

II. FHD

There is no dispute that FHD represented Plaintiffs in this litigation for several years before David Farling undertook the representation of Kim Ngo in an unrelated automobile insurance claim in November 2025.

Nor does the Court minimize the duty of loyalty imposed by Rule 1.7 of the California Rules of Professional Conduct. California has long recognized that simultaneous representation of clients with directly adverse interests ordinarily presents a serious ethical violation. (Flatt v. Superior Court (1994) 9 Cal.4th 275, 284-289.)

The present case, however, is materially distinguishable from the typical concurrent representation cases.

The undisputed evidence demonstrates the conflict was not knowingly undertaken. Rather, FHD has presented evidence that:

• Ngo retained David Farling under a different variation of her name; • she provided a different residence; • the representation involved an unrelated automobile insurance matter handled by a different partner in a separate practice; • FHD maintained conflict-check procedures which failed only because of those discrepancies; and • upon discovering the conflict, FHD immediately terminated the representation and transferred the matter to successor counsel.

Truck Insurance Exchange v. Fireman's Fund Insurance Co. (1992) 6 Cal.App.4th 1050 recognizes that not every conflict arises because counsel knowingly accepted an adverse representation. The Court of Appeal distinguished the ordinary concurrent representation case from circumstances in which a conflict is thrust upon counsel through the “mere happenstance of an unseen concurrent adverse representation” occurring through no fault of the attorney.

Unlike Flatt, this is not a case in which counsel knowingly accepted representation directly adverse to an existing client or strategically abandoned one client in favor of another. The record instead supports the conclusion that the conflict was inadvertently created despite reasonable conflict-check procedures and was promptly cured immediately upon discovery.

Equally significant, Defendant has failed to demonstrate any prejudice resulting from the temporary concurrent representation. The automobile insurance representation was unrelated to the wrongful death litigation or judgment enforcement proceedings. Defendant has identified no confidential information obtained from Ngo that bears upon the issues presented in this litigation, and no evidence that any confidential information was communicated to attorneys prosecuting Plaintiffs' claims.

While protection of client loyalty remains paramount, disqualification is not imposed as punishment for every ethical lapse. Rather, "[t]he important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process." (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1145.) At the same time, disqualification remains an equitable remedy committed to the sound discretion of the trial court. (Kirk v. First American Title Insurance Co. (2010) 183 Cal.App.4th 776, 792.)

The Court also considers the substantial prejudice disqualification would impose upon Plaintiffs. FHD has represented Plaintiffs since the inception of this litigation, through years of

discovery, motion practice, trial, and ultimately a $23.6 million judgment. Ngo has never been a party to that action. FHD has already withdrawn from both the automobile insurance matter and the related UVTA action in which Ngo was named as a defendant.

Under these unique circumstances, the Court concludes that disqualification would be a disproportionate remedy. The conflict was inadvertent, promptly remedied, unrelated to the subject matter of Ngo's representation, unsupported by any showing that confidential information was obtained or misused, and would work substantial prejudice upon Plaintiffs while providing little corresponding benefit to the integrity of these proceedings.

Accordingly, the motion to disqualify FHD is DENIED.

III. Draa, Lapcevic & Stockwell LLP

The motion is likewise denied as to Draa, Lapcevic & Stockwell LLP ("DLS").

California recognizes automatic imputation of conflicts among attorneys practicing within the same firm and, in appropriate circumstances, attorneys functioning as a single de facto firm through an "of counsel" relationship. (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1153-1155; Sands & Associates v. Juknavorian (2012) 209 Cal.App.4th 1269, 1292-1293.)

Here, however, Defendant has produced no evidence that DLS and FHD operated as a single law firm, maintained an "of counsel" relationship, shared computer systems, or exchanged confidential information concerning Ngo's automobile insurance matter. The evidence instead establishes that the firms maintained separate practices and separate systems, and Defendant offers only speculation that confidential information may have been shared.

Ordinary cooperation between co-counsel in litigation, standing alone, does not justify vicarious disqualification.

Accordingly, the motion to disqualify DLS is likewise DENIED.

DISPOSITION:

The motion to disqualify Farling, Hecht & Davis LLP and Draa, Lapcevic & Stockwell LLP is DENIED.

Plaintiffs to prepare the final proposed order and submit with the necessary EFS-020 within 7 days of the hearing.

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