Oaks Management Corp. v. Superior Court

The issue in this appeal is whether the trial court erred by disqualifying a law firm from representing plaintiffs at trial, based on lender-borrower relationships between two of the firm’s attorneys and a defendant that ended several years before this litigation commenced. Defendant argued the attorneys received his confidential financial information in conjunction with making loans, and plaintiffs could use it against him here, e.g., in making settlement demands.

We find error and grant the petition. Even if the attorneys did receive defendant’s financial information in making loans, he did not meet his burden of showing the information could give plaintiffs an unfair advantage or affect the outcome of this litigation. (Gregori v. Bank of America (1989) 207 Cal.App.3d 291, 300, 308 [ 254 Cal.Rptr. 853 ] (Gregori).) Through no fault of the attorneys, defendant produced to plaintiffs in this action updated financial information showing substantial income and wealth, and although the court found the production was inadvertent we cannot ignore its practical impact on the disqualification issue. Under the circumstances, disqualification would serve no legitimate purpose and…