Cal. Self-Insurers' Sec. Fund v. Superior Court of Orange Cnty.

228 Cal. Rptr. 3d 546, 19 Cal. App. 5th 1065
CourtCalifornia Court of Appeal, 5th District
DecidedJanuary 26, 2018
DocketG054981
StatusPublished
Cited by16 cases

This text of 228 Cal. Rptr. 3d 546 (Cal. Self-Insurers' Sec. Fund v. Superior Court of Orange Cnty.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cal. Self-Insurers' Sec. Fund v. Superior Court of Orange Cnty., 228 Cal. Rptr. 3d 546, 19 Cal. App. 5th 1065 (Cal. Ct. App. 2018).

Opinion

MOORE, J.

*548*1068Petitioners California Self-Insurers' Security Fund (the Fund) and Nixon Peabody LLP (Nixon Peabody or the firm) seek a writ of mandate directing the trial court to vacate its order disqualifying Nixon Peabody from representing the Fund in the instant case. Petitioners argue the trial court mistakenly believed it was compelled by law to disqualify the firm; the court instead should have made further factual findings and exercised its discretion. Real parties in interest contend disqualification was mandatory and therefore no discretion needed to be exercised.

We conclude, for the reasons set forth below, that automatic disqualification was not required under these facts. We therefore grant the petition and direct the trial court to determine whether confidential information was transmitted to Nixon Peabody, or whether, in the court's discretion, other compelling reasons dictate the firm should be disqualified.

*1069I

FACTS

The Fund is a nonprofit organization charged by the state Legislature with continuing payment of workers' compensation claims when a self-insured entity is unable to do so. ( Lab. Code, § 3740.) When the Fund steps in to provide such payments, it is required by law to seek reimbursement from the employer. ( Lab. Code, § 3744, subd. (a).) The instant action is a collection effort by the Fund.

The law permits groups of employers to band together into self-insurance groups, and the Fund is also responsible for paying workers' compensation claims when such groups cannot. The Healthcare Industry Self-Insurance Program (the Program) is one such group. In 2013, the California Department of Industrial Relations ordered the Fund to assume the Program's workers' compensation claims.

The Fund hired Nixon Peabody to represent it in order to seek reimbursement. In November 2013, the Fund filed a lawsuit naming 304 members of the Program as defendants, approximately 170 of which have since settled. The remaining defendants are real parties in interest (real parties) in this proceeding.

Two real parties are of particular note here. Activcare Health Care Group and Mountview Retirement, Ltd., et al. (the moving parties) are represented by Michelman & Robinson, LLP (M&R). According to a declaration filed by M&R attorney Jeffrey D. Farrow, from approximately 2009 until February 1, 2017, attorney Andrew Selesnick served as Chair of the Health Care Department at M&R, overseeing and managing a team of attorneys *549who represented clients in the healthcare industry. Since 2014, M&R served as attorneys for moving parties, as well as four other defendants in this matter. The representation of those parties was handled primarily by four attorneys at M&R, including Selesnick. According to Farrow, Selesnick was actively involved in the case, including participation in a confidential discussion pertaining to moving parties' liability and damages. After real parties began working together on a common defense, in February 2014, Selesnick was copied on many e-mails containing communications about that defense.

On or about February 1, 2017, Selesnick left M&R and joined Nixon Peabody. Nixon Peabody was promptly advised of the potential conflict issue by M&R. On or about March 8, Selesnick "part[ed] ways" with Nixon Peabody.

*1070On March 15, moving parties filed a motion to disqualify Nixon Peabody. Numerous other real parties subsequently filed joinders in the motion.1 They argued that Selesnick had done prior work for the moving parties in the same action, and as a result, Nixon Peabody and all its attorneys had a conflict of interest as a matter of law. They further argued Selesnick had received confidential information about the moving parties while at M&R. Nixon Peabody and the Fund responded that the firm should not be disqualified because Selesnick had left the firm, and no current Nixon Peabody attorney had received confidential information from him. Further, the Fund would be prejudiced if the firm were disqualified.

Nixon Peabody hired attorney Sean M. SeLegue to review this issue. According to SeLegue, Selesnick had represented four defendants as part of the team at M&R's Los Angeles office, while Farrow represented the moving parties from the Orange County office. The parties Selesnick was actively involved with, according to him, were among those who settled before Selesnick left M&R. Selesnick did not, consequently, believe he had confidential information regarding the moving parties. He also told SeLegue he had not been involved in the case to a "significant extent," as another attorney had taken the lead. Selesnick had been hired to work in Nixon Peabody's Los Angeles office, while the firm's team working on this matter worked in the San Francisco office. Every member of that team submitted a declaration stating that Selesnick had not shared confidential information with them, and the firm had put an "ethical wall" in place.

In reply, the moving parties noted that Selesnick himself had not submitted a declaration in opposition to the motion. They further argued that the ethical wall had not been put in place before Selesnick began working at the firm, but only after the moving parties and other real parties objected to the conflict.

The trial court granted the motion, concluding that Selesnick had previously personally represented the two moving parties as well as four defendants who settled. It concluded that when an attorney switches sides, disqualification is mandatory; no amount of ethical screening can save the representation.

The Fund and Nixon Peabody filed the instant petition for a writ of mandate and a stay of trial court proceedings on May 19, 2017. We granted the stay and requested preliminary opposition. After receiving briefing, including joinders from additional real parties and opposition briefs from several *550of them, we issued an order to show cause as to why relief should not be granted. *1071II

DISCUSSION

" ' "The relation between attorney and client is a fiduciary relation of the very highest character, and binds the attorney to most conscientious fidelity-uberrima fides ." [Citations.] Among other things, the fiduciary relationship requires that the attorney respect his or her client's confidences. [Citations.] It also means that the attorney has a duty of loyalty to his or her clients. [Citations.]' [Citation.]" ( Cal Pak Delivery , Inc. v. United Parcel Services, Inc. (1997) 52 Cal.App.4th 1, 11, 60 Cal.Rptr.2d 207.)

"Generally, a trial court's decision on a disqualification motion is reviewed for abuse of discretion.

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Cite This Page — Counsel Stack

Bluebook (online)
228 Cal. Rptr. 3d 546, 19 Cal. App. 5th 1065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cal-self-insurers-sec-fund-v-superior-court-of-orange-cnty-calctapp5d-2018.