## Facts

- Bridgepoint Construction Services, Inc. performed construction work for Vista Oceano La Mesa Venture, LLC on a Santa Barbara project; Bridgepoint and shareholder Norman Salter claimed Vista and shareholder Martin Newton owed about $2 million.
- Vista and Newton responded with claims alleging Salter and Dilip Ram diverted Bridgepoint assets, harming Vista’s financial position on the project.
- Attorney Robert Klein appeared as counsel in the state action for Bridgepoint, Salter, and Ram, and engaged an expert to analyze Bridgepoint’s financial records relevant to entitlement to the roughly $2 million.
- In January 2017, the trial court disqualified Klein from representing Bridgepoint and Salter in the state action after their interests became adverse, but Klein continued representing Ram.
- In February 2017, Klein (for Ram) filed a cross-complaint against Vista and Newton seeking repayment of funds Ram claimed he advanced to the project, drawing from the same limited pool Bridgepoint and Salter sought.
- In April 2017, Bridgepoint (through new counsel) filed a cross-complaint against Salter and Ram for, among other claims, conversion and breach of fiduciary duty based on alleged diversion of Bridgepoint assets.
- Klein also continued to represent Bridgepoint and Salter in related federal litigation arising from the same project and overlapping financial issues.

## Issues

1. Whether the trial court abused its discretion by disqualifying Klein from representing Ram in the state action where Klein had prior representation of Bridgepoint and Salter in the same case and ongoing representation of them in related federal litigation.
2. Whether Klein’s representation created impermissible current-client conflicts, former-client conflicts under a substantial-relationship analysis, or both, given the parties’ competing claims to the same finite pool of recovery.

## Decision

- The Court of Appeal affirmed the disqualification order.
- The court held the record supported a finding that Klein’s representation of Ram was materially adverse to Bridgepoint and Salter, who were Klein’s current clients in related federal litigation and former clients in the state action.
- The court concluded the conflict was heightened because the clients’ claims were effectively zero-sum: each sought recovery from the same limited fund tied to the project.
- The court further found substantial overlap between Klein’s prior work for Bridgepoint/Salter and his later advocacy for Ram, including access to confidential financial information relevant to the competing claims.

## Legal Principles

- Disqualification rulings are reviewed for abuse of discretion, with deference to the trial court’s fact-bound assessment aimed at protecting the integrity of the proceedings.
- A lawyer generally may not represent a client whose interests are directly adverse to a current client in the same or a related matter; the duty of loyalty is central in evaluating such conflicts.
- In successive representation, disqualification is appropriate when the matters are substantially related, because confidential information material to the new representation is presumed to have been obtained during the prior representation.
- When multiple clients pursue recovery from a single limited pool of assets in intertwined litigation, counsel’s representation of one client can be materially adverse to another’s interests, supporting disqualification.
- Conflict waivers and scope limits may be relevant to former-client conflicts but may not cure direct adversity that compromises the duty of loyalty in concurrent representations.

## Conclusion

The court upheld disqualification because Klein’s concurrent and successive representations placed him on opposing sides of closely related disputes over the same limited recovery and involved confidential financial information, creating conflicts that justified removal to protect loyalty and fairness in the litigation.


Bridgepoint Constr. Servs., Inc. v. Newton, 26 Cal. App. 5th 966 (Cal. Ct. App. 2018)