A Hypothetical Question: What If Confidential Information That Could Be The Basis For Disqualifying An Attorney Is Obtained Through Mediation?
Gobar v. Gong, D070876 (4/1 6/26/17) (Huffman, Benke, Haller) (unpublished) involves unsuccessful efforts by defendant Gong to disqualify plaintiff Gobar's attorney who earlier represented a law firm seeking to collect a money judgment from Gong, as a result of which Gobar's attorney allegedly received confidential information giving him an unfair advantage. That's a mouthful, so let's unpack it.
Plaintiff Gobar sought to collect a money judgment obtained against defendant Gong, and to set aside allegedly fraudulent conveyances by Gong. In order to do so, Gobar hired Herzlich & Blum, LLP (Herzlich). However, the Herzlich law firm had previously represented Luce, Forward, Hamilton & Scripps, LLP (Luce) in its efforts to collect attorney's fees from Gong. So Gong moved to disqualify Herzlich, alleging a conflict of interest existed because Luce had previously represented Gong, and during the course of settling the Luce lawsuit against Gong, Herzlich had learned confidential information about Gong's assets that Herzlich could only have learned because it represented Gong's former attorney.
Gong relied on Acacia Patent Acquisition, LLC v. Superior Court, 234 Cal.App.4th 1091 (2015) to make his disqualification argument, because Acacia holds that in the "limited realm of cases featuring attorneys as parties opposed to their former clients, lawyers representing the attorney party must avoid participation in substantially related matters, whether thereby their access to privileged information in the former action would potentially serve as an advantage in the latter."
Both the trial court and the Court of Appeal rejected Gong's argument. The Court of Appeal concluded that Gong had not shown that Herzlich had discovered confidential information about Gong's assets through settlement, that the asset information was independently available through the public record, and that the lawsuit by Gobar was not substantially similar to the lawsuit by Luce.
All of this is a set up for my hypothetical question. What if the allegedly confidential information had been learned by Herzlich through mediation? Would the nigh absolute mediation privilege have made it impossible for Gong to introduce information about conflicts into evidence? Would the same privilege that prevents introducing evidence of malpractice prevent introducing evidence of conflicts?
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