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Zador Corp. v. Kwan - 31 Cal. App. 4th 1285Z

Rule:

The authority to disqualify an attorney stems from the trial court's inherent power to control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.  In reviewing a disqualification motion, the appeals court will uphold the trial court's decision absent an abuse of discretion. The trial court's exercise of this discretion is limited by the applicable legal principles and is subject to reversal when there is no reasonable basis for the action.

Facts:

AThis arose out of a property dispute. Appellant Zador Corporation challenged the decision of the Superior Court of Santa Clara County (California), which granted respondent' C.K. Kwan's motion to disqualify Zador's attorney based on an alleged conflict of interest because of the attorney's prior joint representation of both parties.

Issue:

Did the trial court abuse its discretion in disqualifying the attorney and erred in applying the substantial relationship test?

Answer:

Yes

Conclusion:

The appellate court reversed holding that respondent had previously consented to the attorney's continued representation of Zador notwithstanding any adversity that developed. The trial court erred in applying the substantial relationship test because the conflict arose after the attorney had jointly represented both the respondent and the appellant. Therefore, the propriety of disqualification turned upon the scope of the clients' consent and the respondent had previously signed a detailed consent form authorizing such continued representation. Moreover, appellant presented evidence demonstrating that respondent's unreasonable delay in bringing the motion to disqualify had caused prejudice to appellant.

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