By Joel A. Osman
Welcome to the first of what is planned to be an ongoing quarterly series of articles focusing on legal ethics, brought to you by myself and my colleagues at Parker Shaffie LLP. Legal ethics is a large part of our daily practice and, we believe, should be a matter of daily concern to all practicing attorneys. Our hope is to provide regular articles which will encourage you, the reader, to keep this vital subject at the forefront of your daily practice.
For our first topic we direct your attention to the April 2, 2025, opinion of the Second District Court of Appeal in the case of Jeffrey Winter, as Trustee v. Franklin H. Menlo (2025) 110 Cal.App.5th 299. In this case, Winter, a trustee of a family trust, filed a petition to remove a co-trustee based on the co-trustee’s undue influence over the trustor and alleged causes of action including financial elder abuse. Winter also moved to disqualify the co-trustee’s attorney and his firm, on the grounds that Winter had previously sought to retain the attorney to represent him in his case against the co-trustee and had disclosed confidential information about that litigation to the attorney. The trial court granted the motion to disqualify counsel, and the co-trustee appealed. The Court of Appeals concluded that the equities in this case wanted disqualification and upheld the granting of that motion.
The underlying court disqualified Menlo’s counsel, Sheppard Mullin, because it had previously been consulted by Winter and pursuant to Rule of Professional Conduct 1.18, was prohibited from representing a client with interest materially adverse to those of its previous prospective client, Winter.
Rule of Professional Conduct 1.18 (c) provides, in relevant part: “A lawyer subject to paragraph (b) shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received from the prospective client information protected by Business and Professions Code section 6068, subdivision (e) and rule 1.6 that is material to the matter, except as provided in paragraph (d). If a lawyer is prohibited from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d).”
The Winter v. Menlo court concluded that, in the context of a motion to disqualify counsel from representing a client with interests materially adverse to those of a prospective client from whom the attorney received confidential information that is material to the matter, courts must evaluate materiality at the time of disqualification, that is, they must evaluate whether the confidential information disclosed by the prospective client remains material to the representation; if it does, disqualification is warranted where no exception under the rule applies. In this instance, the Court found that information disclosed by Winter to Sheppard Mullin when he consulted with that firm regarding a potential retention seeking to remove the co-trustee and the leading cause of action including financial elder abuse was quote material to the matter quote at the time of disqualification thereby justifying the disqualification of Sheppard Mullin. In so holding, the Court concluded that the appropriate test is not whether the information shared by the protective client was basic or comprehensive, but the test is whether the prospective client shared confidential information which was material to its dispute with the adverse party.
The takeaway from Winter v. Menlo for the careful practitioner is obvious: Conflict checking must include consideration of contacts with prospective clients, not merely those which ultimately engaged the firm. Failure to do so can, and indeed should, result in disqualification if the firm undertakes a representation of a party materially adverse to the prospective client in the same or similar dispute. What is mystifying, though obviously beyond the scope of this brief article, is how a firm as sophisticated as Sheppard Mullin could have failed to do so in this case, to its obvious detriment.
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About the Author:
Joel A. Osman is a Partner in and General Counsel to Parker Shaffie LLP. He concentrates his practice on professional responsibility matters including legal malpractice, ethics counseling, serving as an expert witness and representing attorneys in response to State Bar complaint investigations.
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