Urs Corp. v. Venture

223 Cal. Rptr. 3d 674, 15 Cal. App. 5th 872, 2017 WL 4251127, 2017 Cal. App. LEXIS 838
California Court of Appeal, 5th District·Decided September 26, 2017·No. G055271·Published·Cited by 18 cases

Opinion

THE COURT:*

*876Does an appeal of an order disqualifying counsel result in an automatic stay pursuant *676to Code of Civil Procedure section 916 ?1 If so, how far does the automatic stay extend-solely to enforcement of the disqualification order or to all trial court proceedings? Surprisingly, these precise questions have not yet been answered by California courts. *877The trial court ruled that nothing was stayed by the appeal. We conclude the appeal automatically stayed enforcement of the order disqualifying counsel, but not all trial court proceedings. We therefore grant, in part, appellants' petition for writ of supersedeas.2

We decline to address appellants' request for a discretionary stay of all trial court proceedings pursuant to section 923. Given our holding with regard to the automatic stay of the disqualification order, we deem it prudent for the parties to submit any remaining disputes to the trial court in the first instance.

PROCEDURAL HISTORY

This action commenced in March 2017. The dispute is between a contractor (respondent) and subcontractor (appellants). The parties sued each other for alleged damages arising out of a construction project on State Route 91.

On June 26, 2017, respondent filed a motion to disqualify Pepper Hamilton LLP and its individual attorneys (collectively, Pepper Hamilton) from representing appellants in this action and to issue additional injunctive relief pertaining to confidential documents. Respondent claimed that Pepper Hamilton, appellants' litigation counsel, had improperly accessed documents made available by respondent solely for mediation sessions that preceded the commencement of the action.

Appellants opposed the motion, primarily asserting that Pepper Hamilton did not violate the parties' written confidentiality agreement by accessing the documents or subsequently filing a complaint on behalf of appellants while in possession of those documents.

On July 31, 2017, the court granted the motion. The court found "that Pepper Hamilton has obtained confidential and privileged documents that would likely be used advantageously against [respondent] during the course of litigation. Disqualification is therefore appropriate to eliminate the possibility that Pepper Hamilton would exploit the unfair advantage."

Appellants promptly filed notices of appeal. On August 3, 2017, the trial court denied appellants' ex parte application to stay proceedings pending the appeal, rejecting the assertion that the appeal automatically stayed proceedings.

On August 4, 2017, appellants filed a petition for writ of supersedeas, arguing: (1) their appeal of the disqualification order resulted in an automatic *878stay of all trial court proceedings; or (2) if there is no automatic stay, this court should exercise its discretionary power to stay all trial court proceedings. Respondent filed an initial opposition to the petition.

On August 10, 2017, we issued a temporary stay of all trial court proceedings and invited further briefing by the parties. The parties responded and this matter is now set for determination.

DISCUSSION

Among other contentions, the petition presents two pure questions of law: (1) is a *677party who appeals an order disqualifying an attorney statutorily entitled to an automatic stay; and (2) if so, does the automatic stay extend to all trial court proceedings? ( § 916, subd. (a).) We have chosen to focus solely on these two questions in this opinion and forego (for the time being) determining whether a discretionary stay of all trial court proceedings would be appropriate. (See § 923 ["reviewing court" has discretion "to make any order appropriate to preserve the status quo ... or otherwise in aid of its jurisdiction"].)

Given the narrow issues under consideration, supersedeas is the proper remedy and our review is de novo. ( Quiles v. Parent (2017) 10 Cal.App.5th 130, 136, 215 Cal.Rptr.3d 858 ( Quiles ).) It is therefore unnecessary to describe the particular factual and procedural details that would be pertinent to discretionary relief under section 923, such as the merits of the disqualification motion and the specific harms to the parties of either granting or denying a discretionary stay. ( Quiles , at p. 136, 215 Cal.Rptr.3d 858.)

A Step Back: Why are Attorney Disqualification Orders Appealable in the First Place?

Asking whether this appeal automatically stays proceedings in the trial court presupposes that attorney disqualification orders are appealable. Of course, orders granting or denying attorney disqualification motions are immediately appealable in California state courts. (E.g., Costello v. Buckley (2016) 245 Cal.App.4th 748, 752, 199 Cal.Rptr.3d 891 ; Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, 1203, 135 Cal.Rptr.3d 545 ; Machado v. Superior Court (2007) 148 Cal.App.4th 875, 882, 55 Cal.Rptr.3d 902 ( Machado ).)

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Urs Corp. v. Venture, 223 Cal. Rptr. 3d 674, 15 Cal. App. 5th 872, 2017 WL 4251127, 2017 Cal. App. LEXIS 838 (Cal. Ct. App. 2017).

223 Cal. Rptr. 3d 674 (Urs Corp. v. Venture) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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