Procedural Posture

Procedural Posture

Appellants, homeowners and a subcontractor, sought review of an order from the Superior Court of Los Angeles County (California), which granted respondent contractor’s motion to disqualify opposing counsel in litigation arising from a remodeling project.

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Overview

The subcontractor, asserting that he had not been paid, placed a lien on the project and stopped work. The parties disputed whether the contractor had abandoned the project or whether the homeowners had failed to pay amounts due under the contract. The subcontractor filed a cross-complaint against the contractor for breach of an oral contract and common counts. The contractor then filed a cross-complaint against the subcontractor, alleging that he had failed to perform certain tasks under the subcontract and seeking contractual indemnity thereunder. The homeowners’ counsel concurrently represented the subcontractor in the litigation and secured written waivers of conflicts of interest. The disqualification motion was based upon an alleged actual conflict in the joint representation arising from the indemnification provision in the subcontract. The court held that the contractor lacked standing to seek disqualification under Code Civ. Proc., § 128, subd. (a)(5), based on opposing counsel’s alleged violation of Rules Prof. Conduct, rule 3-310(C)(2), because the contractor had no legally cognizable interest in ensuring that its adversaries were properly represented.

Outcome

The court reversed the disqualification order and remanded.