No Disqualification Of Counsel Because No Attorney-Client Relationship.

In one case, a lawyer represented a client who was one of two shareholders in a development corporation.  That client sued the other shareholder for violation of fiduciary duties.  The other shareholder filed a petition for court supervision of the winding up of the corporation.  In the winding-up action, the same lawyer who represented the shareholder who was plaintiff in the fiduciary duty action represented the same shareholder as a creditor claimant in the winding-up action.  The contention was that, in one action, the lawyer was prosecuting claims on behalf of the corporation and in the other action was simultaneously prosecuting claims against the corporation. Therefore, the argument was that the lawyer should be disqualified. The trial court denied the motion to disqualify, stating “the distinction between a ‘client’ and ‘a real party in interest’ is important in the analysis of this motion. … ultimately, there is no basis for this Court to infer that an attorney-client relationship ever arose between [the lawyer’s] firm and [the corporation] such that the firm is concurrently representing two ‘clients’ with adverse interests.”  The Court of Appeal agreed with the trial judge, stating it was not convinced the lawyer had a duty of loyalty or confidentiality to the corporation which prevented him from representing his client. Shen v. Miller (Cal. App. Second Dist., Div. 2; December 18, 2012) 212 Cal.App.4th 48.