Mind the more mundane ethical rules, too

APPELLATE ZEALOTS / NEW RULES OF PROFESSIONAL CONDUCT

Stealing client funds, interfering with a criminal defendant's rights, lying to a judge -- the most egregious examples of unethical lawyering garner the most attention. But less sensational violations also damage clients, undermine the reputation of the legal profession, and take a toll on the administration of justice. With the new Rules of Professional Conduct set to take effect Nov. 1, it is a good moment to consider the impact of more mundane ethical violations.

Take the recent case of Levingston v. Kaiser Found. Health Plan, Inc., 26 Cal. App. 5th 309 (2018). The court disqualified the plaintiff's first lawyers for unethical use of privileged information, and then ruled against plaintiff's second attorneys because of their incompetent lawyering. That ethical breach almost ended plaintiff's case.

In January 2014, the plaintiff sued her former employer, Kaiser, alleging that Kaiser had retaliated and wrongfully terminated her for being a whistleblower.

Kaiser inadvertently disclosed privileged information to plaintiff's first attorneys, who did not notify Kaiser about the disclosure for unknown reasons. Kaiser later moved for summary judgment, and plaintiff's counsel filed an opposition that included the privileged information. Kaiser responded by moving to disqualify plaintiff's counsel and to expunge the privileged information. After a hearing, the trial court disqualified counsel and struck the opposition.

Notably, the current Rules of Professional Conduct do not address an attorney's duties when handling inadvertently disclosed privileged information. New Rule 4.4, however, provides, "Where it is reasonably apparent to a lawyer who receives a writing relating to a lawyer's representation of a client that the writing was inadvertently sent or produced, and the lawyer knows or reasonably should know that the writing is privileged or subject to the work product doctrine, the lawyer shall: (a) refrain from examining the writing any more than is necessary to determine that it is privileged or subject to the work product doctrine, and (b) promptly notify the sender." Thus, counsel's mishandling of privileged information would be a basis for discipline under the new rule.

After the disqualification, the trial court continued the summary judgment hearing to Jan. 22, 2016, to allow plaintiff time to hire new counsel and to file an opposition. Though retained almost two months before the opposition was due, plaintiff's new counsel did not file an opposition by the Jan. 8, 2016, deadline or otherwise. On Jan. 15, Kaiser filed a notice regarding this failure.

On the day of the Jan. 22 hearing, plaintiff's counsel sought relief on grounds of "excusable neglect" under Code of Civil Procedure Section 473, subdivision (b) and for a continuance. In their papers, counsel explained that when they took over the case they believed that the summary judgment motion had been fully briefed and they only planned to appear at the hearing to argue the motion. It was Kaiser's notice that apprised them of their failure to file an opposing brief.

The trial court's tentative ruling was to grant the plaintiff's request for relief in light of an excusable miscommunication. But the trial court changed its mind when it heard counsel's oral argument.

Counsel told the trial court that all they knew was that prior counsel had been disqualified. The trial court skeptically inquired why that disqualification "'was not a big red flag that you should look at the court's file and look at the order and what the status of the case was?'" Counsel responded that they normally prepared for a summary judgment motion on the day before the hearing. Counsel wasn't even able to clarify whether they had or had not read the opposition filed by former counsel. The trial court did not find counsel to be "'very credible'" and found no "'excusable neglect in any way whatsoever.'"

With that, the trial court reversed its tentative ruling and granted the summary judgment motion. The trial court denied a subsequent request for relief, entered judgment for Kaiser, and then denied plaintiff's motion for a new trial.

Plaintiff appealed. She did not challenge the trial court's finding of inexcusable neglect. Instead, she argued that the trial court erred by refusing to continue the summary judgment proceedings to allow her to file an opposition.

The 4th District Court of Appeal, Division Two, agreed. In a decision authored by Presiding Justice Manuel A. Ramirez, the court reversed the judgment and remanded to allow plaintiff to file an opposition to the summary judgment motion. The court noted that denying a continuance and granting summary judgment based on procedural error is an abuse of discretion unless predicated on a willful violation of the procedural rule.

Though the result of inexcusable neglect, the court did not find counsel's error to be willful. The court wrote there simply was no conceivable motive not to file the opposition. Further, no evidence linked plaintiff to the ethical violation committed by her disqualified attorneys, plaintiff's new counsel had committed no procedural abuses -- having done nothing in the case -- and a short continuance would not have resulted in any prejudice to Kaiser. The court held that under the circumstances the trial court could not deny a continuance based on inexcusable neglect.

What is notable from an ethics standpoint is that the court was not tasked with reviewing whether the neglect was indeed inexcusable. Yet the court went to some lengths to recite the related facts. The court even quoted the trial court's attempts to try to understand why counsel did not file an opposition. This recitation provides a snapshot of the moment when the trial court, who had been prepared to permit a late-filed opposition, switched course after it was confronted by counsel's deficits in competence and credibility.

The Court of Appeal also did not shy away from adding its opinion about counsel's conduct. It agreed with the trial court that counsel's explanation was "unbelievable" -- merely looking at the publicly available docket would have shown the opposition had been stricken. And the court described as "equally mind-boggling" the notion that counsel could take on a case in November in which summary judgment was pending with a plan to wait until a day before the January hearing to prepare. As described in the opinion, the conduct implicates current Rule 3-110, which prohibits attorneys from intentionally, recklessly or repeatedly failing to perform legal services with competence as well as the new rule on competence (Rule 1.1), which adds gross negligence as a basis for discipline.

While the court assigned error to the trial court, the decision reveals how counsel's conduct contributed to the error. Had counsel been up to speed on the status of plaintiff's case or able to speak credibly when addressing the trial court, the trial court would have likely granted the extension -- saving the client the cost and stress of an appeal, and saving the lawyers the risk of a malpractice claim or bar investigation.