OCHOA v. FORDEL , INC

Filed 1/12/07

CERTIFIED FOR PARTIAL PUBLICATION^* 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

            APPEAL from a judgment of the Superior Court of Fresno County.  M.  Bruce Smith, Judge.

            Caswell Bell & Hillison and Russell  G. VanRozeboom for Defendants and Appellants.

            W.  J. Smith & Associates and William  J. Smith for Plaintiffs and Respondents.

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            Plaintiffs brought an employment discrimination and wrongful termination lawsuit against three corporations and one individual.  The defendants moved to disqualify the law firm representing the plaintiffs because that firm hired an attorney who previously worked at the law firm that represented the defendants.  Applying the modified substantial relationship test, the superior court found that the targeted attorney had carried his burden of proving that confidential information material to the plaintiffs' lawsuit was not imparted to him.  Accordingly, the superior court denied the motion.

            Two defendants appeal, claiming (1) the superior court's findings of fact were not supported by substantial evidence, (2) the superior court failed to consider and analyze material facts, (3) the superior court committed legal error in analyzing the firm-switching attorney's opportunity for acquiring confidential information while at his former law firm, and (4) the superior court erroneously denied their request to depose the firm-switching attorney.

            We conclude (1) the superior court's findings are supported by substantial evidence; (2) the superior court correctly ruled that the modified substantial relationship test, when met, shifts the burden to the targeted attorney to prove that he or she was not exposed to material confidential information (not prove that he or she had no opportunity to acquire confidential information), and (3) the superior court did not otherwise abuse its discretion.  Therefore, the order denying the motion to disqualify is affirmed.

FACTS AND PROCEEDINGS

            The second amended complaint of plaintiffs Pedro Garcia Ochoa and Agustin Ochoa alleges that they were employed by defendants Ridgeback Ranch, Inc. (Ridgeback), Fordel, Inc. (Fordel), and/or Peak Harvesting, Inc. (Peak Harvesting), from the late 1980's until their employment was terminated in May 2003.  The second amended complaint alleges (1) age discrimination, (2) disability discrimination, (3) wrongful termination in violation of public policy, (4) violations of provisions of the Labor Code, and (5) violations of Business and Professions Code section 17200. 

            Plaintiffs alleged that Ridgeback, Fordel, and Peak Harvesting are California corporations that do business in Fresno County.  Plaintiffs alleged that defendant Randall  S. Johnston was an employee as well as a shareholder, owner, and/or managing agent of the three corporate defendants.  They further alleged that Johnston was their direct supervisor. 

            Ridgeback and Johnston filed a motion to disqualify attorney Shelley  G. Bryant and the law firm of W.  J. Smith & Associates (Smith) from representing plaintiffs in this case on June  30, 2005.  Declarations in support of the motion set forth the following facts.

            Ridgeback and Johnston retained the law firm of Jory, Peterson, Watkins, Ross & Woolman (Jory Peterson) to defend them in this case soon after they were served with the complaint in January 2004.  Bryant was an associate of the Jory Peterson firm at that time.  From January  1 through May  11, 2005, Bryant was a shareholder in that firm. 

            In April 2005, Bryant informed Jory Peterson that he would resign his employment and shareholder status effective May  11, 2005, and would become associated with Smith.  Bryant subsequently told John Peterson of that firm he would begin work at Smith immediately after his departure from Jory Peterson. 

            On May  10 and May  25, 2005, John Peterson sent letters to Smith requesting it withdraw from representing plaintiffs in light of Bryant's new association with Smith.  Smith refused to withdraw.  Subsequently, Ridgeback and Johnston informed John Peterson that they would not waive the conflict and wished to file a motion to disqualify the Smith firm. 

            John Peterson is the attorney at Jory Peterson who is primarily responsible for representing Ridgeback and Johnston in this case.  He is assisted by Jason Parkin.  Jory Peterson's billing records do not contain any entries showing Bryant worked on this case. 

            Jason Parkin's office was adjacent to Bryant's office most of the time that Bryant was at Jory Peterson.  Parkin would regularly discuss issues and strategies with Bryant.  He remembered â€