The Court of Appeal for the Fourth Appellate District in Costello v. Buckley (3/16/2016 – Case No. D068536) affirmed the trial court’s disqualification of defendant’s counsel where he had previously represented plaintiff in an earlier action.
In Costello, plaintiff Leslie A. Costello (“Costello”) sued defendant and former boyfriend Peter C. Buckley (“Peter”) to collect $92,000 she allegedly loaned him during their prior relationship. Peter retained his attorney brother, Robert Buckley (“Robert”), to defend him in the action brought by Costello. Robert, however, at Peter’s recommendation, had previously represented Costello during a wholly-unrelated litigation involving Costello and a neighbor over an easement dispute while Costello and Peter were still dating. After Peter and Costello broke up, Robert offered to withdraw as Costello’s counsel. Costello declined and Robert continued to represent her until the trial concluded in June 2012. Costello paid Robert almost $40,000 for his legal services.
Approximately two years after the conclusion of the easement dispute, Costello sued Peter to recover the $92,000 loan. Peter retained Robert to defend him. Robert filed an answer to the complaint and propounded discovery to Costello. Included in the discovery were requests for admission asking Costello to admit she engaged in a romantic relationship with Peter and that she had given money to Peter during that relationship with no expectation of repayment.
Costello promptly requested that Robert withdraw as counsel for Peter based on a conflict of interest. Robert refused and demanded responses to the discovery. Costello then filed a motion to disqualify Robert contending that confidential information he acquired in the previous representation could be used against her interests in the present action. The trial court acknowledged the easement dispute and the collection cases were completely unrelated but also determined that, during the time Robert represented Costello in the easement dispute, he acquired confidential information about the nature of her romantic relationship with Peter which could have been used against Costello in the collection litigation. The court granted Costello’s motion to disqualify and Peter appealed.
On appeal the Appellate Court cited longstanding authority that, “‘[t]he obligation to represent the client with undivided fidelity does not end with the matter in which the lawyer may have been employed. Thenceforth the lawyer must refrain not only from divulging the client’s secrets or confidences, but also from acting for others in any matters where such secrets or confidences or knowledge of the client’s affairs acquired in the course of the earlier employment can be used to the former client’s disadvantage.” Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 571. The court also noted that such obligation continues even after the termination of the attorney-client relationship. People ex re. Dept. of Corporations v. SpeeDee Oil Systems, Inc. (1999) 20 Cal.4th 1135, 1147.
The court held that Costello had established that, although information regarding her romantic relationship with Peter was not helpful to prove her claim, Peter could use that information to seek to defeat her collection claim. Accordingly, because Robert may have obtained information that could be used against Costello in his subsequent representation of Peter, that was enough to create a conflict of interest requiring that Robert be recused. It was not necessary for Robert to actually use any confidential information, Costello need only show that Robert could use it in Peter’s case. And, where there is a conflict between a current and a former client, the rights and interests of the former client will prevail. River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1304, 1308.
Here it was not that a current client had been romantically involved with a former client which created the conflict. Instead, it was whether counsel was privy to any confidences or secrets gleaned during a prior representation of his brother’s former girlfriend which could have been used advantageously in the subsequent litigation. Based on the ruling in Costello, counsel should be cautious before agreeing to represent a prospective new client who may have interests adverse to any prior clients and about whom counsel may have become aware of confidential information during such prior matter.
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