Knight v. Ferguson

In Knight v. Ferguson (2007) 149 Cal.App.4th 1207, the plaintiff planned to open a restaurant and found a partner to assist with the financing. Prior to formalizing the partnership, she met with Attorney Wideman, who also represented her sister and brother-in-law (the Fergusons), to discuss the partnership agreement and the restaurant lease. When the intended partnership did not materialize, the plaintiff asked the Fergusons to take her partner's place. They agreed. (Id. at p. 1211.) The following year, however, the relationship soured and the plaintiff sued the Fergusons for breach of contract and sought dissolution of the partnership. The Fergusons cross-claimed and retained Wideman to represent them. (Ibid.) Plaintiff moved to disqualify Wideman. In her declaration, she said she told Wideman of her "'feelings about litigation and her position . . . relating to the restaurant lease. . . .' She also discussed her relationship with her intended partner and her plans to 'purchase' the restaurant 'ground lease.'" (Knight, supra, 149 Cal.App.4th at p. 1211.) Wideman submitted an opposing declaration in which he stated that he did not obtain confidential information from the plaintiff. He said that he met with plaintiff at the request of the Fergusons, who were also present, and that plaintiff discussed with him potential litigation involving her former partner. (Id. at p. 1212.) The trial court granted the motion to disqualify, concluding that the nature of Wideman's representation was such that confidential information material to the dispute between the plaintiff and the Fergusons normally would have been imparted to him. (Knight, supra, 149 Cal.App.4th at p. 1212.) The Court of Appeal affirmed. The court concluded: "A 'distinct fundamental value of our legal system is the attorney's obligation of loyalty.'The disqualification rule is 'to keep honest attorneys from having to choose between conflicting duties, or being tempted to reconcile conflicting interests, rather than fully pursuing their clients' rights.The loyalty the attorney owes one client cannot be allowed to compromise the duty owed another. 'The trial court's ruling ends this ethical dilemma and protects plaintiff's interests as a former client." (Knight, supra, 149 Cal.App.4th at p. 1216.)