San Diego judge recuses law firm from major divorce case

Procopio, Cory, Hargreaves & Savitch LLP has been removed from a multi-million dollar divorce case in San Diego after a judge determined its past representation of a company substantially relates to its current representation of the company owner's ex-wife.

It's the latest twist in years-long litigation surrounding venture capitalist Kevin Kinsella's contentious divorce, which included a false advertising lawsuit against JAMS in which Kinsella alleged the dispute resolution powerhouse lied about the credentials of arbitrator Sheila Prell Sonenshine, a retired 4th District Court of Appeal justice who ruled against Kinsella on a spousal support issue.

A San Diego County jury sided with Sonenshine and JAMS in May 2017 amid an especially continious litigation history that included a withdrawn motion to disqualify the entire 4th District because so many justices go to JAMS after leaving the bench. Kinsella then unsuccessfully moved to recuse the trial judge from post-trial proceedings. In the midst of litigation, JAMS added a disclaimer to its website that says it can't guarantee the accuracy of information appearing there. It's linked at the bottom of each neutral's profile.

The new, unrelated ruling in Kinsella's favor, issued last Wednesday by San Diego County Superior Court Judge David B. Oberholtzer, derails plans by his ex-wife Tamara Kinsella to have Procopio's family law team represent her in a battle over community property. Oberholtzer determined the property dispute substantially relates to Procopio's work with Kevin Kinsella's company Avalon Ventures VI, LP.

Oberholtzer said he's mindful of his ruling's effect on Procopio and Tamara Kinsella, "but with a finding the two representations are substantially related, the court is mandated" to remove Procopio.

Kinsella said he plans to file a formal state bar complaint about Procopio's actions, which he described as "gobsmacking" and "outrageous."

"I and/or Avalon Ventures have retained practically all of the major bulge-bracket national and international law firms who practice in San Diego," Kinsella said in an email to the Daily Journal. "That I would come to work one day to find that one of them was now representing my ex-wife against me would have been beyond belief."

Kinsella is represented by Erik C. Jenkins of Jenkins P.C., who filed a request for order in June seeking an enjoinder after learning Procopio attorneys planned to represent Tamara Kinsella in the divorce and accepted a $50,000 retainer.

The Kinsellas' seven-year-old family law case involves millions of dollars in investments and properties that are part of an ongoing community property dispute. Kevin Kinsella, a financier whose investments include hundreds of tech companies and the Broadway musical "Jersey Boys," hired Procopio in 2008 to represent his company Avalon Ventures. In the course of that representation, "Mr. Kinsella provided Procopio with confidential information that would give Ms. Kinsella an unfair advantage in this litigation," Jenkins wrote in support of the recusal motion.

In their opposition, Procopio partners Lionel P. "Chip" Hernholm, Jr., David M. Zachry and Michele B. Brown described the firm's relationship with Kevin Kinsella as "episodic" and one that "does not give rise to a conflict of interest."

They cited Johnson v. Superior Court, 159 Cal.App.3d 573 (1984), but the judge said the case is distinguishable "because, unlike the facts here, the Johnson court found there was 'no relationship at all' between the current and past representation."

At issue, Oberholtzer said, is not whether a direct conflict exits but whether Procopio's representation of Avalon "is substantially related to dividing community property." The main remaining issue in the divorce case involves separating individual property and community property, and Oberholtzer said the Procopio's representation of Avalon substantially relates to dividing community property. He likened the situation to a hypothetical in which an attorney named Bob worked on liquidating trust for Avalon before an attorney named Alice represented the wife in a divorce. If Bob asks Alice what she remembers about Avalon, "Alice's duty of loyalty to wife compels her to tell Bob what she knows; Alice's duty to preserve Avalon's confidences prohibits it."

The judge said Procopio's argument that Kevin Kinsella has a duty to disclose everything about Avalon to Tamara Kinsella is a "red herring."

"Avalon VI can seek advice about shielding profits from community property laws for its founder; family law attorneys give that sort of counsel all the time, and their clients act on it," Oberholtzer said. "Whether Procopio actually provided that advice is privileged and irrelevant - it could have, and that is enough."

Procopio attorneys did not return messages seeking comment on Thursday. Brown was joined in court Wednesday by James G. Sandler of Sandler, Lasry, Laube, Byer & Valdez LLP. Marriage of Kinsella, D540396 (S.D. Super. Ct., filed Dec. 21, 2012).