Beachcomber Mgmt. Crystal Cove, LLC v. Superior Court of Orange Cnty.

*1111 Defendants Beachcomber Management Crystal Cove, LLC (Management) and Douglas Cavanaugh (collectively, Defendants) challenge the trial court's order disqualifying the law firm of Kohut & Kohut LLP (Kohut) from continuing to represent Defendants in the underlying matter. Plaintiffs Douglas L. Salisbury, as trustee of the DLS Living Trust, Philip de Carion, and Gina de Carion (collectively, Plaintiffs) brought this derivative lawsuit on behalf of Beachcomber at Crystal Cove, LLC (Company) to challenge various actions Defendants took in managing the Company.

The duty of confidentiality generally prevents an attorney from continuing to represent a client if the representation conflicts with the attorney's representation of a previous client in a related matter. Once the previous client establishes a substantial relationship between the successive representations, the court must disqualify the attorney from continuing to represent the second client because the law presumes the attorney received confidential information during the first representation that is relevant to the second.

Here, the trial court concluded disqualification was mandatory based on its findings that (1)…