Filed 5/28/13; pub. order 6/18/13 (reposted 7/1/13 to clerically correct panel designation on 6/18 pub. order)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

HAVASU LAKESHORE 

INVESTMENTS, LLC, et al.,

 Cross-Complainants and Appellants,

v.

TERRY L. FLEMING, SR., Individually 

and as Trustee, etc., et al.,

 Cross-defendants and Respondents.

 G047244 

 (consol. with G047329)

 (Super. Ct. No. 30-2011-00487736)

 O P I N I O N 

Appeal from an order of the Superior Court of Orange County, Thierry 

Patrick Colaw, Judge. Reversed.

Stradling Yocca Carlson & Rauth, Donald J. Hamman and Eve A. 

Brackmann for Cross-complainant and Appellant Havasu Lakeshore Investments, LLC.

Watt Tider Haffar & Fitzegerald and Jeffrey T. Robbins for Crosscomplainants and Appellants Jean Victor Peloquin, J. Victor Construction, Inc., and 

Capital Source Partners.
2

Hartnett Law Group, Patrick M. Hartnett, and Jessica L. Jasper for Crossdefendant and Respondent Terry L. Fleming, Jr.

No appearance for Cross-defendant and Respondent Terry L. Fleming, Sr., 

Individually and as Trustee.

 

The trial court disqualified a law firm from simultaneously representing a 

limited liability company, its managing member (a partnership), and the person who 

managed that partnership (who was not himself a member of the company) in a lawsuit 

against two of the company‟s minority members. The court found that the interests of the 

company and the nonmember individual potentially conflicted, and concluded the law 

firm could not jointly represent the company and the nonmember individual against the 

company‟s minority members. The court based its ruling on rule 3-310(C) of the State 

Bar Rules of Professional Conduct and Gong v. RFG Oil, Inc. (2008) 166 

Cal.App.4th 209, 214-216 (Gong), both of which concern an attorney‟s duty of loyalty to 

simultaneously represented clients.

1

 Because no actual conflict of interest existed 

between the company and the individual who managed the company‟s managing 

member, and there was no reasonable likelihood such a conflict would arise, we reverse 

the court‟s ruling.2

FACTS

3

 

1

All references to rules are to the State Bar Rules of Professional Conduct.

2

“[A]n order granting or denying a motion to disqualify an attorney is 

appealable . . . .” (Truck Ins. Exchange v. Fireman’s Fund Ins. Co. (1992) 6 Cal.App.4th 

1050, 1052, fn. 1.)

3

We take the facts from the pleadings in the underlying litigation (Gong,

supra, 166 Cal.App.4th at p. 215), declarations of the parties and their counsel, and the 

contracts between the parties.
3

The limited liability company — Havasu Lakeshore Investments, LLC (the 

LLC) — was formed in 2004 to acquire land and develop a recreational mobilehome park 

in the City of Lake Havasu, California. The LLC‟s managing member — Capital Source 

Partners (Peloquin‟s partnership) — is a partnership in which Jean Victor Peloquin is a 

general partner. Peloquin is also the principal of J. Victor Construction, Inc. (Peloquin‟s 

corporation), another member of the LLC. Peloquin, as an individual, is not himself a 

member of the LLC.

The LLC, Peloquin‟s partnership, Peloquin‟s corporation, and Peloquin are 

the appellants in this appeal and the cross-complainants in the underlying litigation. The 

respondents and cross-defendants — Terry L. Fleming, Sr. (Fleming Sr.) and his son, 

Terry L. Fleming, Jr. (Fleming Jr.) — are members of the LLC, each owning a 9.26 

percent interest in the LLC.

4

 

In June 2011, Fleming Jr. sued Peloquin individually for breach of contract, 

fraud, and negligent misrepresentation. Fleming Jr. alleged he exercised his buy-out 

option under an option agreement with Peloquin to have Peloquin buy Fleming Jr.‟s 

membership interest in the LLC for an agreed upon fixed price (with interest thereon), 

but Peloquin did not comply.

In August 2011, the LLC, Peloquin‟s partnership, Peloquin‟s corporation, 

and Peloquin filed a cross-complaint against Fleming Sr. and Fleming Jr. for, inter alia, 

breach of contract and bad faith, as well as to set aside a trustee‟s sale and cancel the 

option agreement. The law firm of Hart, King & Coldren (HKC) represented all crosscomplainants.

 

4

Some references to “Fleming Sr.” in this opinion refer collectively to 

Fleming Sr. (individually and as a trustee) and to an entity allegedly controlled and 

managed by the Flemings and to which Fleming Sr. transferred the LLC‟s property after 

he bought it at a trustee‟s sale.
4

In February 2012, Fleming Sr. moved to disqualify HKC from representing 

the LLC. Fleming Sr. based his motion on an attorney‟s duty of confidentiality under 

rule 3-310(E), arguing that he, as a member of the LLC, had previously communicated 

confidential information to HKC.

5

In the disqualification motion, Fleming Sr. alleged that in August 2004, he 

and Fleming Jr. loaned $1.25 million to Peloquin‟s corporation. Fleming Sr. alleged that 

in November 2004, the Flemings converted the loan into a membership interest in the 

LLC. In December 2004, Peloquin entered into an option agreement with the Flemings, 

giving them an option to sell to Peloquin their membership interests in the LLC. In 

February 2009, the LLC defaulted on a bank construction loan (personally guaranteed by 

Peloquin and Peloquin‟s corporation) and the mobilehome park went into foreclosure. 

“At the instruction . . . of, and with the full knowledge and agreement of” crosscomplainants, Fleming Sr. negotiated with the lender bank to buy the construction note. 

In May 2010, a notice of trustee‟s sale was recorded. In June 2010, Fleming Sr. bought 

the mobile home park at the trustee‟s sale.

Fleming Sr. supported these allegations with his declaration and that of his 

counsel. In addition, Fleming Sr. declared HKC represented the LLC in all or most of its 

dealings. He further declared, “On numerous occasions prior to the Trustee‟s Sale . . . , I 

discussed numerous legal matters with [HKC] with regard to [the LLC] and my 

membership interest in the same. [¶] At no time did I ever waive any attorney-client 

privilege as an owner of [the LLC] nor at anytime did [HKC] ask my permission to 

represent [the LLC] against myself . . . .”

 

5

On appeal, only Fleming Jr. has filed a respondent‟s brief, even though he 

admittedly did not join in Fleming Sr.‟s disqualification motion below. Appellants 

question Fleming Jr.‟s standing to file a respondent‟s brief, but raise this issue in their 

reply brief; therefore, we do not address it. (Kahn v. Wilson (1898) 120 Cal. 643, 644.)
5

Peloquin and the LLC opposed Fleming Sr.‟s disqualification motion. 

They argued that HKC did not represent the LLC “during the Flemings‟ actions that gave 

rise to the liability asserted in the Cross-Complaint” and that “HKC never represented 

Fleming Sr. and never received confidential information from Fleming Sr.” Peloquin and 

the LLC asserted that, prior to the cross-complaint, HKC “represented Peloquin in 

relation to [the LLC] regarding only mobilehome park operational matters, none of which 

involved either Fleming Sr. or Jr.” These matters pertained to lease agreements and 

community guidelines for the mobilehome park, its possible conversion to resident 

ownership, and rent defaults and security interests in the mobilehomes — matters which 

“required no information, and none was provided, concerning the members or internal 

operations of [the LLC], and in particular required no information and none was provided 

concerning Fleming Sr. or Jr.” HKC represented Peloquin after Fleming Sr. bought the 

construction loan from the lender bank. “At that time Fleming Sr. was represented by 

separate counsel, Paul Bojic, who is [Fleming Sr.‟s] counsel in this case.”

Peloquin supported these allegations with his declaration and that of a 

partner of HKC. Peloquin declared that Snipper, Wainer and Markoff, not HKC, was 

legal counsel for the LLC in forming the LLC and preparing its operating agreement. He 

declared that HKC did not represent the LLC until Peloquin, as a partner in Peloquins‟ 

partnership (the managing member of the LLC), engaged HKC to file the crosscomplaint.

A partner with HKC declared he had never represented or had 

conversations with Fleming Sr., and had never reviewed confidential information 

belonging to or handled matters pertaining to Fleming Sr. (other than through Fleming 

Sr.‟s counsel). He declared that on April 23, 2010, Peloquin asked him “to address a 

situation where [Fleming Sr.] had apparently entered into a purchase agreement for the 

construction note on [the LLC‟s] property at an extreme discount without [Peloquin‟s] 

permission.” The attorney further declared that, prior to that date, HKC had no 
6

involvement in matters relating to the option agreement and the LLC‟s operating 

agreement.

Our review of the contracts between the parties reveals that the LLC‟s 

operating agreement states that Snipper, Wainer & Markoff drafted the operating 

agreement and represented Peloquin‟s partnership and was permitted in the future to act 

as attorney for the LLC and Peloquin‟s partnership, but not for any other member of the 

LLC “as it relates to their interest in the [LLC].” The option agreement (upon which 

Fleming Jr.‟s lawsuit is based) lists Hartnett & Hayes, LLP as counsel for the Flemings.

In April 2012, the court requested the parties to brief the potential relevance 

of Gong, supra, 166 Cal.App.4th at pages 214-216 to Fleming Sr.‟s motion for 

disqualification of HKC as counsel for the LLC.

In June 2012, the court granted Fleming Sr.‟s motion to disqualify HKC as 

counsel for the LLC, thus allowing HKC to continue representing Peloquin, Peloquin‟s 

partnership, and Peloquin‟s corporation.6 The court stated HKC should not be 

representing the LLC and “non-member Peloquin” in a cross-complaint against the 

Flemings, who are members of the LLC. The court relied on rule 3.310(C) and Gong, 

supra, 166 Cal.App.4th at pp. 214-216. The court quoted Gong‟s statement, “„To resolve 

this issue, we review the pleadings to determine whether the interests of [a majority 

shareholder and a corporation] potentially or actually conflict. (Rule 3-310(C).)‟” The 

court concluded that “disqualification can be based on potentially conflicting interests.” 

The court stated “the pleadings in this case demonstrate that, at a minimum, the interests 

of [the LLC] and Peloquin as a non-member of [the LLC] are at least potentially 

conflicting.”

 

6

The court, by ruling HKC could continue to represent Peloquin, Peloquin‟s 

partnership, and Peloquin‟s corporation impliedly found HKC had not obtained 

confidential information about Fleming Sr. so as to require disqualification of HKC from 

representing cross-complainants (adversaries of Fleming Jr.) under Rule 3-310(E).
7

DISCUSSION

Cross-complainants contend that neither the record nor the respondent‟s 

brief filed by Fleming Jr. reveal that an actual conflict exists to support the 

disqualification of HKC from jointly representing the LLC and Peloquin. They argue 

that Gong, supra, 166 Cal.App.4th 209 stated that disqualification is unwarranted when 

the conflict is merely hypothetical.

“„Generally, a trial court‟s decision on a disqualification motion is 

reviewed for abuse of discretion.‟” (City and County of San Francisco v. Cobra 

Solutions, Inc. (2006) 38 Cal.4th 839, 848 (San Francisco).) “„When substantial 

evidence supports the trial court‟s factual findings, the appellate court reviews the 

conclusions based on those findings for abuse of discretion.‟” (Ibid.) But “„where there 

are no material disputed factual issues, the appellate court reviews the trial court‟s 

determination as a question of law.‟” (Ibid.)

A court may disqualify an attorney upon “„a showing that disqualification 

is required under professional standards governing avoidance of conflicts of interest or 

potential adverse use of confidential information.‟” (Oaks Management Corporation v. 

Superior Court (2006) 145 Cal.App.4th 453, 462.) An attorney bears two distinct ethical 

duties to a client: (1) a duty of loyalty, whereby an attorney devotes his or her “„entire 

energies to his client‟s interests‟” (Flatt v. Superior Court (1994) 9 Cal.4th 275, 289, 

italics omitted), and (2) a duty of confidentiality, “which fosters full and open 

communication between client and counsel” (San Francisco, supra, 38 Cal.4th at p. 846).

Fleming Sr. based his disqualification motion on HKC‟s duty of 

confidentiality, claiming HKC “received confidential information” about him that could 

be used against him in the cross-complainants‟ action. Fleming Sr. relied on rule 3-

310(E), which prohibits an attorney from accepting, without a current or former client‟s 
8

consent, “employment adverse to the client or former client where, by reason of the 

representation of the client or former client, the member has obtained confidential 

information material to the employment.”

But the court granted Fleming Sr.‟s motion on the basis of HKC‟s duty of 

loyalty, citing rule 3-310(C) and Gong, supra, 166 Cal.App.4th 209. Rule 3-310(C) 

provides: “A member shall not, without the informed written consent of each client: [¶] 

(1) Accept representation of more than one client in a matter in which the interests of the 

clients potentially conflict; or [¶] (2) Accept or continue representation of more than one 

client in a matter in which the interests of the clients actually conflict; or [¶] (3) 

Represent a client in a matter and at the same time in a separate matter accept as a client a 

person or entity whose interest in the first matter is adverse to the client in the first 

matter.” In other words, with few exceptions, an attorney may not simultaneously 

represent clients (even as to unrelated matters) whose interests are adverse to one another. 

(Flatt v. Superior Court, supra, 9 Cal.4th at p. 285, fn. 4.) This is because an attorney 

has a “„duty to protect his client in every possible way, and it is a violation of that duty 

for him to assume a position adverse or antagonistic to his client without the latter‟s free 

and intelligent consent given after full knowledge of all the facts and circumstances.‟” 

(Id. at p. 289.) “A conflict of interest exists when a lawyer‟s duty on behalf of one client 

obligates the lawyer to take action prejudicial to the interests of another client; i.e., 

„when, in behalf of one client, it is his duty to contend for that which duty to another 

client requires him to oppose.‟” (Vapnek et al., Cal. Practice Guide: Professional 

Responsibility (The Rutter Group 2012) ¶ 4:1, p. 4-1.)

Finally, rule 3-600(E) is relevant to this case, as it permits counsel 

“representing an organization [to] also represent any of its directors, officers, employees, 

members, shareholders, or other constituents, subject to the provisions of rule 3-310.” 

Case law has established certain principles governing an attorney‟s ability ethically to 

simultaneously represent an organization and one or more of its constituents. For 
9

example, counsel may not represent a corporation and its management when they have 

adverse, conflicting interests. (Gong, supra, 166 Cal.App.4th at p. 214.) “[O]nce a 

conflict has arisen between a corporation and one or more of its officers, directors or 

shareholders, corporate counsel may not simultaneously represent the corporation and the 

adverse officer, director or shareholder.” (La Jolla Cove Motel & Hotel Apartments, Inc. 

v. Superior Court (2004) 121 Cal.App.4th 773, 785.) “Thus, where a shareholder has 

filed an action questioning [the corporation‟s] management or the actions of individual 

officers or directors, such as in a shareholder derivative or . . . dissolution action, 

corporate counsel cannot represent both the corporation and the officers, directors or 

shareholders with which the corporation has a conflict of interest.” (Id. at pp. 785-786.) 

In addition, counsel for a corporation should “refrain from taking part in any 

controversies or factional differences among shareholders as to control of the 

corporation . . . .” (Metro-Goldwyn-Mayer, Inc. v. Tracinda Corp. (1995) 36 

Cal.App.4th 1832, 1842, italics added.) On the other hand, a “potential conflict . . . does 

not warrant automatic disqualification of joint counsel.” (Gong, at p. 215.) 

The issue here is whether the LLC and Peloquin have adverse interests, 

either actually or potentially. Fleming Jr. asserts that an actual conflict exists between the

interests of the LLC and Peloquin, and describes the conflict as follows: “Peloquin‟s 

counsel must defend him against the claims of breach, misrepresentation, and fraud. 

[Citations.] Counsel for [the LLC] should be focused on the propriety of the claims 

regarding the purchase and foreclosure of [the LLC‟s] property.” In other words, the 

alleged conflict is that HKC must defend Peloquin in Fleming Jr.‟s action against him, 

while simultaneously prosecuting the cross-complaint on behalf of Peloquin, the LLC, 

and the other cross-complainants. Essentially, the risk is that HKC may spread itself too 

thin, become distracted, or prioritize one matter over the other. This is not the type of 

conflict addressed by rule 3-310(C). Even if it were, Fleming Jr. lacks standing to raise 

this concern as he “cannot show any legally cognizable interest that [was] harmed by 
10

[HKC‟s] joint representation of [the Flemings‟] adversaries.” (Great Lakes Construction,

Inc. v. Burman (2010) 186 Cal.App.4th 1347, 1358.)

We therefore examine the record for any substantial evidence to support the 

court‟s finding that the LLC and Peloquin had, at a minimum, a potential conflict of 

interest. In doing so, we recognize that a mere hypothetical conflict is insufficient. (Fox 

Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 302) Rather, there 

must be some identifiable potential conflict. In Carroll v. Superior Court (2002) 101 

Cal.App.4th 1423, 1430, the appellate court “interpret[ed] the Rule 3-310 concept of 

potential conflict to mean, at least in the [juvenile] dependency context, a reasonable 

likelihood an actual conflict will arise.” (Italics added.) Subsequently, our Supreme 

Court approved Carroll’s interpretation in a juvenile dependency case. (In re Celine R.

(2003) 31 Cal.4th 45, 58.) Similarly, a major treatise defines a potential conflict under 

rule 3-310 to mean “a reasonably foreseeable set of circumstances which could impair 

the attorney‟s ability to fulfill his or her professional obligations to each client in the 

proposed representation.” (Vapnek et al., Cal. Practice Guide: Professional 

Responsibility, supra, ¶ 4:64, p. 4-24.14, italics added.)

7

We apply the foregoing definitions of a potential conflict to the three sets of 

circumstances presented by the record and Fleming Jr.‟s contentions: (1) the action on 

the cross-complaint, (2) Fleming Jr.‟s lawsuit, and (3) the Flemings‟ status as members of 

the LLC.

 

7

Absent a somewhat restrictive interpretation of the term “potential 

conflict,” potential conflicts of interest would be inherent in every case of multiple 

representation. Counsel and their clients should not be subjected to such risk and 

uncertainty. Disqualification of counsel can harm the disqualified attorney‟s client, who 

must bear the monetary and other costs of finding a replacement. (Gregori v. Bank of 

America (1989) 207 Cal.App.3d 291, 300.) Indeed, disqualification motions can be (and 

often are) misused as weapons to harass opposing counsel, delay litigation, or force 

disadvantageous settlement. (Id. at p. 301.)
11

With respect to the cross-complaint, there is no conflict; the LLC‟s interests 

and Peloquin‟s are clearly allied. The LLC and the other cross-complainants seek to 

recover the LLC‟s property and to restore value to the LLC. Fleming Jr., in his 

respondent‟s brief, agrees these are the LLC‟s litigation goals. These goals are beneficial 

to every member of the LLC, including the Flemings in their status as members of the 

LLC, and to Peloquin, in his status as a partner and principal in the LLC‟s other 

members. 

With respect to Fleming Jr.‟s action against Peloquin based on the option 

agreement, the LLC is not a party to the lawsuit or the option agreement. The option 

agreement obligates Peloquin (should a Fleming exercise the contractual “put”) to buy 

out Fleming‟s membership interest in the LLC at a contractually specified fixed price. 

The LLC has no beneficial right or obligation under, or duty arising from, the option 

agreement. It is a stranger to that transaction. Since the LLC has no right or duty at all 

under the option agreement, a fortiori it has no right or duty, the benefit or performance 

of which could conflict with a right, duty or obligation owed by Peloquin.

The only remaining question is whether the LLC‟s interests conflict with 

Peloquin‟s solely because two of the LLC‟s minority members are adversaries of 

Peloquin (and coincidentally of the LLC). The trial court, in granting Fleming Sr.‟s 

disqualification motion, relied on Gong, supra, 166 Cal.App.4th 209, as does Fleming Jr. 

in his respondent‟s brief. Fleming Jr. contends he “has a vested interest in the 

independent representation of [the LLC] based on the fact that he maintains a percentage 

membership interest in [the LLC],” despite his exercise of the option to sell his interest 

under the option agreement.

In Gong, the issue was whether the interests of a corporation conflicted 

with those of its majority shareholder (who owned 51 percent of the corporation‟s stock 

and was also its managing director) for purposes of rule 3-310(C). (Gong, supra, 166 

Cal.App.4th at pp. 212, 215.) The minority shareholder (the majority shareholder‟s 
12

brother and a director of the corporation) owned 49 percent of the stock and sued the 

majority shareholder and the corporation (id at p. 212), seeking, inter alia, involuntary 

dissolution of the corporation and declaratory relief and specific performance of a buysell agreement (id at p. 215). The trial court severed the minority shareholder‟s claim for 

declaratory relief and ruled that the buy-sell agreement required the majority shareholder 

to buy the minority shareholder‟s shares at “„fair market value.‟” (Id. at p. 213.) The 

minority shareholder then challenged the continuing ability of a law firm to represent 

both the majority shareholder and the corporation, claiming the corporation “now had a 

significant role in the dispute between the two brothers because the buy-sell agreement 

required [the corporation] to pay for an appraiser, selected by” the majority shareholder. 

(Ibid.) The minority shareholder also asserted the majority shareholder had “dissuaded a 

potential third party from purchasing” the corporation. (Ibid.) The minority shareholder 

further alleged the majority shareholder had abused his authority and wasted corporate 

property (e.g., damaging the corporation through his personal use of corporate funds). 

(Id. at p. 216.)

The Court of Appeal observed that “case law forbids dual representation in 

a derivative suit alleging fraud by the principals, because the principals and the 

organization have adverse, conflicting interests.” (Gong, supra, 166 Cal.App.4th at 

p. 215.) The Court of Appeal also noted that although the minority shareholder had “not 

yet filed a derivative claim seeking damages on behalf of the corporation 

(which . . . would require [joint counsel‟s] disqualification), [the minority shareholder‟s] 

complaint alleges damage to [the corporation] through [the majority shareholder‟s] 

personal use of corporate funds, and the dissolution claim threatens [the corporation‟s] 

corporate existence.” (Id. at p. 216.) In addition, the corporation had filed (through the 

majority shareholder and joint counsel for the corporation and the majority shareholder) a 

cross-complaint against the minority shareholder, which raised a concern the majority 

shareholder was using the corporation “as a pawn in his dispute with [his brother], 
13

possibly to [the corporation‟s] detriment.” (Ibid.) The Court of Appeal concluded that 

the minority shareholder‟s “allegations and the dissolution cause of action show that the 

interests of [the majority shareholder] and [the corporation] diverge” (ibid.), thereby 

requiring the disqualification of joint counsel for the corporation and the majority 

shareholder (id. at p. 212).

8

The distinctions between Gong, supra, 166 Cal.App.4th 209 and the case at 

hand are significant. The instant case does not involve a derivative suit (or its substantive 

equivalent) or an attempt by the Flemings to force dissolution of the LLC. The Flemings 

do not allege Peloquin mismanaged the LLC or misused the LLC‟s property or funds. 

(Indeed, it is Fleming Sr. who has apparently foreclosed on and taken from the LLC its 

primary asset.) There is no pending buy-out at a price based on the LLC‟s fair market 

value (which, if mismanagement had been alleged, may have affected the value).

9

 

Fleming Jr. cites no authority for the proposition that an attorney may never 

jointly represent an entity and its management against a non-managing minority member. 

That notion is contrary to rule 3-600(E), which expressly permits counsel to represent an 

organization and its constituents, subject to rule 3-310. In Formal Opinion No. 1999-153 

of the State Bar of California Standing Committee on Professional Responsibility and 

Conduct, the committee interpreted rules 3-310 and 3-600 to decide the following issue: 

“May a lawyer, who is not currently and has not previously represented a close 

 

8

Cross-complainants suggest Gong was wrongly decided because the 

appellate court merely required the majority shareholder to hire and manage a second set 

of attorneys, while allowing him to continue to manage the corporation despite his 

alleged conflict of interest with it. Cross-complainants suggest the proper remedy for the 

majority shareholder‟s misuse of the corporation for his own personal interests was an 

appointment of a receiver for the corporation.

9

Fleming Jr. obliquely asserts that evidence exists of fraud and 

misappropriation by Peloquin, but provides no record references and fails to specify 

whether the alleged fraud was perpetrated against the Flemings or upon the LLC.
14

corporation as to the subject of a dispute, be retained to represent the corporation and 

Shareholder A, who is authorized to retain and oversee counsel for the corporation, in a 

lawsuit brought by Shareholder B, the only other shareholder of the corporation, against 

both the corporation and Shareholder A?” (Ibid.) The committee concluded: “Under the 

particular facts presented, and subject to any limitations created by any fiduciary duties of 

Shareholder A, a lawyer may ethically represent both the corporation and Shareholder A 

in the lawsuit. . . . Under the facts presented, the corporation‟s consent to the joint 

representation may be obtained from Shareholder A. Consistent with rule 3-310(C)(1), 

this joint representation is permissible only for so long as the corporation and A do not 

have opposing interests in the lawsuit which the attorney would have a duty to advance 

simultaneously for each. Additionally, the lawyer must fulfill those duties to the 

corporation described in rule 3-600.” (Ibid.) “In such circumstances, there may be 

economic and practical reasons for the Corporation and A to be represented jointly in B‟s 

lawsuit. Given the nature of the lawyer‟s duties to the corporation in this case, the 

Committee concludes there is no reason why a corporation‟s options under the facts 

presented should be any more limited than any other defendant in a similar situation.” 

(Ibid.)

We find this reasoning to be persuasive and equally applicable to the facts 

at hand. Absent an actual conflict of interest (or the reasonable likelihood of one arising) 

between Peloquin and the LLC, HKC was ethically permitted to jointly represent all 

cross-complainants against the Flemings. Furthermore, Peloquin was authorized to 

provide, on the LLC‟s behalf, its consent to multiple representation.10

Fleming Jr. points out that HKC has withdrawn from its representation of 

any party in this case and concludes cross-complainants‟ appeal is “illogical.” Whether, 

 

10

Cross-complainants contend their unanimous opposition to Fleming Sr.‟s 

disqualification reveals they consented (and presumably would have done so in writing) 

to joint representation by HKC.
15

as Fleming Jr. postulates, cross-complainants wish to reinstate HKC as their counsel or 

desire to retain different counsel to jointly represent them, rule 3-310(C) does not bar an 

attorney from such joint representation under the current facts. 

DISPOSITION

The court‟s order is reversed. Cross-complainants are entitled to recover 

their costs on appeal. 

IKOLA, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

FYBEL, J.
Filed 6/18/13

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

HAVASU LAKESHORE 

INVESTMENTS, LLC, et al.,

 Cross-Complainants and Appellants,

v.

TERRY L. FLEMING, SR., Individually 

and as Trustee, etc., et al.,

 Cross-defendants and Respondents.

 G047244 

 (consol. with G047329)

 (Super. Ct. No. 30-2011-00487736)

 O R D E R 

Cross-complainant and appellant Havasu Lakeshore Investments LLC, and 

the law firms of Sheppard, Mullin, Richter & Hampton, O‟Melveny & Meyers, Wilson, 

Sonsini, Goodrich & Rosati, Morrison & Forester and Gibson, Dunn & Crutcher have 

requested that our opinion, filed on May 28, 2013, be certified for publication. It appears 

that our opinion meets the standards set forth in California Rules of Court, rule 8.1105(c). 

The request is GRANTED.

The opinion is ordered published in the Official Reports. 

IKOLA, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

FYBEL, J.