STAGEN REALTY & MANAGEMENT, INC., a corporation, Thomas Stagen and William Warren, Petitioners, v. SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; Joseph J. PERTUSATI, Estate of Frances M. Masciotra, Fund International, Inc., George S. Poppers, Individually and doing business as Knoll Crest Realty, Real Parties in Interest.
On June 6, 1978, the time set for trial of the pending consolidated actions, respondent court, on its own motion, but under compulsion of Comden v. Superior Court (1978) 20 Cal.3d 906, 145 Cal.Rptr. 9, 576 P.2d 971, ruled that the firm of Buchalter, Nimer, Fields & Chrystie was disqualified from representing petitioners. This petition for writ of mandate seeks to overturn that order.1
In Comden a bare majority of the Supreme Court held that rule 2-111(A)(4) of the California Rules of Professional Conduct2 requires the disqualification of a law firm if a member of the firm will testify at trial, unless one of the exceptions enumerated in the rule applies. It was further held that the purpose of the rule was to avoid the appearance of attorney impropriety to preserve public trust in the integrity of the bar, and that it was incumbent upon the trial court to act upon its own motion if it appeared that an attorney for a party would be called as a witness. (Comden v. Superior Court, supra, 20 Cal.3d 906, 912, 915, fn. 3, 145 Cal.Rptr. 9, fn. 3, 576 P.2d 971, fn. 3.)
The facts underlying the dispute between the petitioner and real parties are these: Pertusati and Masciotra3 owned a piece of real property. Petitioners made an offer to purchase it. Negotiations ensued, initially with Pertusati, then with real party Poppers, an attorney representing the sellers. Certain written communications passed between the parties. A formal contract was prepared by Poppers. Petitioners retained the Buchalter firm to review the formal contract. Marvin Smooke, a member of the Buchalter firm, had various communications with Poppers regarding the transaction. The formal contract was never signed, allegedly because the sellers received a more lucrative offer and Poppers, by letter, ended his dealings with petitioners.
The pending litigation involves causes of action for breach of contract, as well as claims and counterclaims of interference with contractual relationships. One of the crucial questions is whether the written communications which passed between petitioners and Poppers as the agent of the sellers created a binding agreement which the formal contract was merely intended to memorialize, or whether those communications constituted only preliminary negotiations.
In preparation for trial, attorney Smooke's deposition has twice been taken, once at the request of Pertusati and again on behalf of Poppers. It is undisputed that Smooke will be called as a witness for petitioners, that certain of the real parties intend to subpoena him, and that his testimony will be controverted.
Petitioners assert that disqualification of the Buchalter firm will work a substantial hardship upon them because of the distinctive value of the firm as counsel in this case, that their situation therefore falls within the exception stated in subparagraph (d) of rule 2-111(A)(4), and that respondent abused its discretion in ordering the disqualification. Petitioners base their claims on the following factors: the rapport petitioners have developed with the Buchalter firm, the firm's familiarity with the case by virtue of their continuous representation of petitioners since the inception of the dispute with real parties, the impressions of potential witnesses which counsel have developed in the course of preparing for trial, the lateness of the disqualification order and the consequent financial burden of securing other counsel. A similar argument based upon the nontransferability of counsel's “ ‘impressions and rapport with the people involved’ ” was made and rejected in Comden. The court declared that these factors might cause inconvenience to the petitioners, but did not rise to the level of “substantial hardship . . . because of the distinctive value of the . . . firm as counsel.” (Rule 2-111(A)(4)(d).) The majority declared: “If we were to hold that interview, research, and preliminary discussion on trial strategy are sufficient to cloak a firm with such ‘distinctive value’ that a loss of its service results in substantial hardship within the meaning of the rule, the latter will be consumed by exception.” (Id., p. 914, 145 Cal.Rptr. p. 13, 576 P.2d p. 975.)
The only manner in which the instant case differs from Comden is in the lateness of the disqualification.4 In Comden the disqualification was ordered at a hearing on a request for a preliminary injunction. The petitioners there had requested that a ruling on the motion to disqualify be delayed until after discovery had been undertaken and it could be determined with greater certainty whether their attorney would in fact be called upon to testify. The Supreme Court held that the trial court did not abuse its discretion in finding that a delay would only further prejudice the petitioners and in ordering immediate disqualification.
From this, petitioners herein would have us say that disqualification on the eve of trial is automatically an abuse of discretion. Obviously, however, a holding that a disqualification at the time of the preliminary injunction is not too early as a matter of law, hardly compels the conclusion that a disqualification on the eve of trial is too late. In the instant case the disqualification came late in the litigation only because Comden was not decided until April 11, 1978. Comden provides no guidelines, express or implied, as to the measure of retroactivity to be accorded to the rule which it enunciates. Absent such help, we must assume that Comden was intended to apply to all cases in which trial had not yet commenced at the time Comden was decided. Any contrary rule would have to be established by the Supreme Court itself, not by us. Given the applicability of Comden, the virtual certainty that Smooke will testify and the fact that his testimony will involve an issue central to the litigation, respondent did not abuse its discretion in ordering that the Buchalter firm be disqualified.
The alternative writ is discharged. The peremptory writ is denied.
1. Respondent has stayed the effectiveness of the disqualification order until the conclusion of the proceedings before us. No one has suggested that there is any reason to disqualify the Buchalter firm from representing petitioner in this court.
2. Rule 2-111(A)(4) provides: “If upon or after undertaking employment, a member of the State Bar knows or should know that he or a lawyer in his firm ought to be called as a witness on behalf of his client in litigation concerning the subject matter of such employment he shall withdraw from the conduct of the trial and his firm may continue the representation and he or a lawyer in his firm may testify in the following circumstances:“(a) If the testimony will relate solely to an uncontested matter; or (b) If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony; or (c) If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or his firm to the client; or (d) As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.”
3. Masciotra died following the filing of petitioner's initial complaint. Her estate has been substituted as a party defendant.
4. The instant case also appears to differ from Comden in that here the disqualification came on the court's own motion, whereas in Comden it came at the request of the adverse party. Footnote 3 in Comden (20 Cal.3d at p. 915, 145 Cal.Rptr. 9, 576 P.2d p. 971) instructs us that this is a distinction without a difference.
KAUS, Presiding Justice.
STEPHENS and ASHBY, JJ., concur.