O'Gara Coach Co. v. Ra

242 Cal. Rptr. 3d 239, 30 Cal. App. 5th 1115
CourtCalifornia Court of Appeal, 5th District
DecidedJanuary 7, 2019
DocketB286730
StatusPublished
Cited by27 cases

This text of 242 Cal. Rptr. 3d 239 (O'Gara Coach Co. v. Ra) 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
O'Gara Coach Co. v. Ra, 242 Cal. Rptr. 3d 239, 30 Cal. App. 5th 1115 (Cal. Ct. App. 2019).

Opinion

PERLUSS, P. J.

*242*1119Darren Richie, the former president and chief operating officer of O'Gara Coach Company, LLC, is a principal of Richie Litigation, P.C. O'Gara Coach moved to disqualify Richie Litigation from representing its former senior executive Joseph Ra in litigation, including cross-actions between O'Gara Coach and Ra, arising from allegations by Marcelo Caraveo that O'Gara Coach and Ra had committed fraud in connection with Caraveo's acquisition of luxury vehicles from O'Gara Coach. In support of its motion O'Gara Coach relied on evidence that, while president of O'Gara Coach, Richie had been a client contact for outside counsel investigating the charges of fraudulent conduct that ultimately led to Caraveo's lawsuit. The trial court denied the motion. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

1. Caraveo's Lawsuit, Ra's Cross-complaint and O'Gara's Cross-complaint

In March 2016 Caraveo and two related limited liability companies filed a complaint, and in June 2016 a first amended complaint, against O'Gara Coach, Ra and several other entities asserting causes of action for fraud, *1120conversion and unfair business practices based on their allegedly wrongful conduct with respect to Caraveo's acquisition of luxury vehicles from O'Gara Coach.

In October 2016 Ra filed a cross-complaint for defamation, intentional interference with contractual relations and indemnity against O'Gara Coach, its principal owner and chief executive officer Thomas O'Gara and various other individuals. Ra claimed O'Gara Coach was obligated to indemnify him because the allegations in Caraveo's complaint arose from his actions as an employee of the company. As for his tort claims, Ra alleged, in part, that shortly after he was forced to resign from his position with O'Gara Coach in early 2016, the cross-defendants "all repeated the same thing: that Ra stole vehicles, stole money from O'Gara Coach, improperly rented O'Gara Coach's cars and stole the revenues from those rentals, and committed other criminal acts that resulted in both the Federal Bureau of Investigation and the Los Angeles District Attorney in search of Ra for prosecution."

In January 2017 O'Gara Coach filed its own cross-complaint, and on March 27, 2017 a first amended cross-complaint, against Caraveo, Ra, Thomas Wu, another former employee of O'Gara Coach, and others for breach of contract, fraud and related torts, and as to Ra and Wu for breach of fiduciary duties arising from employment. O'Gara Coach's cross-complaint alleged that Caraveo and Ra were the primary architects of a multi-pronged fraudulent scheme involving the sale, leasing and financing of vehicles from unsuspecting automobile dealerships.

2. Richie's Role at O'Gara Coach

O'Gara Coach hired Richie in September 2013 as general manager for its Westlake Village location. He was subsequently promoted *243to director of sales operations for the company and then in November 2014 to president and chief operating officer.

In his declaration in support of O'Gara Coach's motion to disqualify Richie Litigation, Thomas O'Gara stated O'Gara Coach does not employ in-house lawyers and, while serving as president, Richie was a primary point of contact for the company's outside counsel on many legal matters: "Mr. Richie would regularly engage and direct legal counsel on O'Gara Coach's behalf, regarding day-to-day advice on a litany of subjects, the development and implementation of policies and procedures, and on all aspects of pending litigation, and pre and post-litigation functions."

When Richie was initially hired by the company, Thomas O'Gara knew Richie had graduated from law school and had experience overseeing legal *1121matters. (Richie graduated from law school in 2003.) According to O'Gara, it was this "legal education and professed experience that provided me comfort in assigning to him decision-making authority during his tenure, including without limitation engaging outside legal counsel and overseeing (on a companywide basis) all legal matters affecting the company."

Richie's employment with O'Gara Coach was terminated on February 2016. In his declaration Thomas O'Gara states O'Gara Coach and Richie executed a severance agreement in which Richie agreed not to file claims against O'Gara Coach or to assist others in bringing claims against the company. That document, which is described as subject to confidentiality provisions, was not filed with the trial court, but counsel offered to make it available to the court for in camera inspection.1

3. Ra's Retention of Richie Litigation; Richie's Admission to the California Bar

When he filed his answer to Caraveo's first amended complaint and his own cross-complaint in October 2016, Ra was represented by Ethan J. Brown of the law firm of Brown Neri Smith & Khan LLP.

Richie sat for the California bar examination in February 2017. On May 19, 2107 Richie filed articles of incorporation of a professional corporation for Richie Litigation, P.C. with the California Secretary of State. A statement of information for Richie Litigation, P.C. filed on June 26, 2017 with the Secretary of State identified Robert K. Lu as the sole officer and director, as well as the agent for service of process of the professional corporation. Richie was admitted to the State Bar in August 2017. A new statement of information for Richie Litigation, P.C., filed on September 13, 2017 with the Secretary of State, identified Richie as the sole officer, director and agent for service of process for the professional corporation.2

*244*1122On June 8, 2017, two months before Richie was admitted to practice in California, Robert Lu of Richie Litigation substituted for Ethan J. Brown as counsel of record for defendant and cross-complainant Ra in this lawsuit. Richie Litigation also appeared as counsel for Jorge Loera and Thomas Wu, two other former O'Gara Coach employees, in lawsuits they filed against O'Gara Coach.

4. The Motion To Disqualify Richie Litigation

On October 11, 2017 O'Gara Coach moved to disqualify Richie Litigation. O'Gara Coach asserted, even though Richie was not a member of the California bar while serving as president and chief operating officer of the company, given his role in coordinating legal matters for O'Gara Coach, including interfacing with outside counsel, the court should apply the rule requiring disqualification of attorneys representing adverse parties in successive representations when, as here, the matters are substantially related, as well as the rule that, when a former client's confidential information is known to any attorney at a law firm, the entire firm must be disqualified.

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Cite This Page — Counsel Stack

Bluebook (online)
242 Cal. Rptr. 3d 239, 30 Cal. App. 5th 1115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ogara-coach-co-v-ra-calctapp5d-2019.