30-15-777361

Dang VS Field

Motion to Disqualify Defense Counsel Dirk Julander

This case involves a non-judicial foreclosure sale (now enjoined) by the holder of an apparently stray deed.

As of 2005, cross-complainant Kimberly Nguyen owned the subject property in Fountain Valley. It was encumbered by two deeds of trust: a senior debt of $315,000 (hereinafter “EverHome lien”), and a second debt of $249,000 (hereinafter “Wells Fargo lien”).

In 2008, the property received a third encumbrance of $564,466, which represented the value of a debt incurred by Kimberly’s spouse Duncan Hare. He was a broker, and was sued for breaching his fiduciary duties with regard to the sale of the Ivy Day Spa in Laguna Beach. That litigation (07CC10380), along with a related action (07CC10451), culminated in a global settlement and Hare’s agreement to chip away at that debt over time – even agreeing to carry the debt as an encumbrance onto any new property he acquired (hereinafter “Field-Hare lien”). The beneficial interest in the Hare lien belongs to defendant William Field – who was at all pertinent times represented in the underlying case by Attorney Dirk Julander.

On 06/14/11, plaintiff purchased the Fountain Valley property from Kimberly Nguyen for $546,000. The funds paid off the EverHome and Wells Fargo liens (reconveyances were recorded), but apparently nobody told plaintiff about the Field-Hare lien (it was not in the title report, and thus presumably concealed). Hare has since acquired a new property in Santa Ana, but did not have the Hare lien transferred over to that property. So as it stands, plaintiff paid market value for a home she has negative interest in due to the Field-Hare lien, and Hare extricated himself from the Field-Hare lien by acquiring a new property and refusing to transfer the debt over.

On 03/16/15, plaintiff Dang filed suit against Field, Hare and Nguyen. Based on the evidence submitted early in the case, this Court granted plaintiff’s application for a preliminary injunction barring Field from foreclosing on the property. Nguyen (seller) and Hare (debtor) filed a cross-complaint against the escrow company (Lucky Team Escrow) and title insurance company (First American) alleging that both should have warned plaintiff about the Field-Hare lien.

Before the Court this day are two complimentary motions to have defense counsel Dirk Julander disqualified from continuing to represent Field. “Disqualification motions involve a conflict between the client’s right to counsel of choice and the need to maintain ethical standards of professional responsibility. The paramount concern is to preserve public trust in the scrupulous administration of justice and the integrity of the bar. Thus, the 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.

In the ordinary case of a motion to disqualify, the targeted attorney is usually accused of engaging in some type of illegality or conflict with an opposing party. That is not the allegation here. Instead, opposing parties want Dirk Julander disqualified because there is a reasonable likelihood that he will be called as a percipient witness at trial to elaborate on his involvement in the underlying debt which gave rise to the Field-Hare lien in the first place.

CRPC 5-210 is moving parties’ first line of offense. In pertinent part, it provides that “a member shall not act as an advocate before a jury which will hear testimony from the member unless the member has the informed, written consent of the client.” In other words, if an attorney ought to know that he/she might be called as a witness in the action, he/she must secure the informed written consent of his/her client before continuing to act as counsel in the case. Attorney Julander has apparently not yet obtained his client’s informed consent, which means that compliance has not yet been attained. Since this is presumably a relatively easy fix, it shall not be dispositive just yet.

Nonetheless, “an advocate who becomes a witness is in the unseemly and ineffective position of arguing his own credibility. The roles of an advocate and of a witness are inconsistent; the function of an advocate is to advance or argue the cause of another, while that of a witness is to state facts objectively.” People v. Donaldson (2001) 93 Cal.App.4th 916, 927–928. Even if an advocate-witness has obtained the informed written consent of his or her client, the trial court nevertheless has discretion to disqualify counsel where he or she is a material witness in the case and the interests of justice dictate such. See Lyle v. Superior Court (1981) 122 Cal.App.3d 470, 482. In exercising that discretion, a trial court balances the competing interests of the counsel’s client, the opposing party, and the integrity of the judicial system. Id. at 482–483; see also Smith, Smith & Kring v. Superior Court (1997) 60 Cal.App.4th 573, 580–581.

Moving parties rely heavily on Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, which found that disqualification was proper notwithstanding the fact that no violation of CRPC 5-210 was shown. Kennedy represents a stark departure from the usual outcome, in large part “because its holding was tethered to messy interfamilial squabbles and was not based solely on the receipt of confidential information.” Acacia Patent Acquisition, LLC v. Superior Court (2015) 234 Cal.App.4th 1091, 1100. Kennedy was principally about conflicts of interest, not merely the risk that counsel would be an important percipient witness as well. For that reason, its applicability to the case at bar is only for the proposition that in extreme cases an attorney can be disqualified when he will act as advocate and witness when already possessed of confidential information he obtained from opposing parties. It is a far cry from what is alleged against Julander.

Before opposing counsel can be called as a witness, there must be a showing that there is no other alternative source for the same testimony. People v. Garcia (2000) 84 Cal.App.4th 316, 332. Moving parties describe a cornucopia of areas that Julander might be called to testify about, but not one of those areas has anything to do with the case at bar. Julander’s role in running the day spa, negotiating the buy-out and settlement agreement, and dealing with the various parties has nothing to do with plaintiff and her right to have the Field-Hare encumbrance expunged. The evidence is fairly clear that – at least as it relates to the equitable claims for declaratory relief and quiet title – the Field-Hare encumbrance will not burden plaintiff’s property for much longer. Whatever issues might exist between Field and Hare are theirs to endure, not plaintiff’s.

Motion to disqualify DENIED, without prejudice.