Filed 8/23/22 RJS Financial v. Dos Potrillos CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

RJS FINANCIAL, INC.,

Plaintiff and Respondent,

v.

DOS POTRILLOS LLC et al.,

Defendants and Appellants.

 B316465

 (Los Angeles County

 Super. Ct. No. 20STCV43490)

APPEAL from an order of the Superior Court of 

Los Angeles County. Terry A. Green, Judge. Affirmed.

Law Office of Nick A. Alden and Nick A. Alden for 

Defendants and Appellants.

Anderson, McPharlin & Conners, Elmira R. Howard and 

Ali Z. Vaqar for Plaintiff and Respondent.

______________________________
2

Counsel for plaintiff and respondent RJS Financial, Inc. 

(RJS), inadvertently forwarded a privileged e-mail to opposing 

counsel, Nick A. Alden (Alden) and the Law Office of Nick A. 

Alden (collectively the Alden firm). When the Alden firm failed to 

delete the privileged e-mail, and in fact used it in court 

proceedings, RJS brought a motion to disqualify the Alden firm 

from representing defendants and appellants Dos Potrillos LLC 

and David A. Romero, individually and as trustee of the Laguna 

Seca Living Trust, in this matter. The trial court granted RJS’s 

motion, and defendants appeal.

We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Factual Background

RJS initiated this action to establish the enforceability of a 

mortgage on real property owned by defendants. Defendants in 

turn allege that the terms of the loan were illegal.1

RJS hired Richard D. Marks (Marks) to be its attorney of 

record in this matter. RJS had also hired Frandzel Robins Bloom 

1

The appellate record presented is incomplete, rendering the

procedural history of this case unclear. After the complaint was 

filed and served, defendants’ defaults seem to have been entered. 

But they were able to file an answer and cross-complaint. On 

August 23, 2021, defendants filed a motion to set aside their 

defaults (although they did not concede that their defaults had in 

fact been entered). That same day, RJS filed a motion to strike 

defendants’ answer on the grounds that their defaults had been 

entered. RJS also opposed defendants’ motion to set aside their 

defaults. Ultimately, the trial court granted defendants’ motion 

to set aside defendants’ defaults and denied RJS’s motion to 

strike.
3

& Csato, L.C., and Brett L. McClure (McClure) to represent its 

interests in this case. The Alden firm represented defendants.

On August 3, 2021, Marks inadvertently forwarded an

e-mail between himself and McClure to Alden. The e-mail 

contained attorney-client privileged information and/or material 

covered by the work product doctrine related to matters in this 

case.

2

 At the time, Marks was still counsel of record for RJS.

Within two hours, Marks sent an e-mail to Alden, stating: 

“An unintentional and inadvertent e-mail to you from me today 

. . . included communications from counsel for RJS to me that 

were privileged and not intended to be sent to you. Under the 

Rules of Professional Conduct, I request that you delete in its 

entirety the entire email, refrain from reading the email, and 

disregard the contents.” Marks’s e-mail also drew Alden’s 

attention to Rico v. Mitsubishi Motors Corp. (2007) 42 Cal.4th 

807 (Rico) and State Comp. Ins. Fund v. WPS, Inc. (1999) 

70 Cal.App.4th 644 (State Fund). The e-mail continued: “I know 

that you are an honorable attorney at law having practiced in 

Southern California almost as long as the undersigned. So, I 

assume that the email will be deleted by you and not saved or 

printed out. And, of course, you cannot use the communication as 

evidence in this case. [¶] I do apologize for the unintended 

email. In my haste to respond to you, I did not look carefully at 

the emails that followed mine to you. [¶] Please confirm that you 

will comply with the Rules of Professional Conduct, Rico and 

State [Fund].”

2 We have carefully reviewed the subject e-mail. Given our 

conclusion that it is privileged, we decline to quote it.
4

“Despite receiving notice of the inadvertent disclosure and 

demand to delete and destroy the privileged communication, the 

Alden Firm . . . refused to do so.” In fact, the Alden firm

repeatedly used the e-mail in public filings and court hearings.

Motion for Disqualification

On October 6, 2021, RJS filed a motion seeking to 

disqualify the Alden firm. According to McClure’s declaration 

filed in connection with RJS’s reply brief: “The privileged email 

which is the subject of RJS’[s] motion to disqualify . . . contains 

my thoughts and impressions and legal strategy as an attorney 

for RJS as well as instructions from RJS to its counsel, 

Mr. Marks. I intended the subject email to be completely 

privileged and confidential, including under the work product 

doctrine and attorney-client privilege.” RJS argued that the 

Alden firm’s refusal to delete the privileged communication, 

coupled with its use and dissemination of it, constituted unethical 

conduct and compelled disqualification.

Defendants opposed the motion, arguing that the 

communication was not confidential because (1) the information 

contained therein was taken from public records, and (2) it was 

between two attorneys representing conflicting interests.

Hearing on RJS’s Motion

The parties appeared for the hearing on November 3, 2021. 

At the onset of the hearing,3the trial court noted: “Well, this is a 

bit disturbing Mr. Alden. I read this, and it appears you’ve got 

clearly what was an attorney-client communication. You got it 

3 We grant RJS’s motion to augment the appellate record 

with a copy of the reporter’s transcript of the November 3, 2021, 

hearing on its motion to disqualify the Alden firm.
5

from essentially in-house counsel to outside counsel directing how 

to deal with the case. And the one counsel was expressing 

displeasure at the way the—directed the plaintiff’s counsel was 

handling the case and gave instructions. I mean, it’s a classic 

attorney-client communication. It’s obvious on its face.”

The trial court continued by noting that it had never 

inadvertently received an attorney-client communication, but if it 

had, its “instincts would be to return it immediately to counsel 

because that’s what I would want if the situation was reversed.

“But instead, you seized upon this communication, and not 

only didn’t return it after being notified, but used it in court 

apparently taking the position that it showed the hypocrisy on 

the part of the opposing party and that the opposing party didn’t 

really have that much confidence in the case they were 

presenting to the court.

“I don’t know what to say. I mean, I’m rather shocked, 

actually. This is a – this is a substantial breach. You know, the 

Rules of Professional Conduct exist as a default position. How we 

treat each other as professionals should be intuitive. . . . [¶] . . .

“I’m sure, Mr. Alden, if through sheer inadvertence, an 

attorney-client communication by you was sent to an opposing 

party by accident, that you would expect the opposing party to 

return it immediately. I would expect that.

“I don’t understand why you took a course of action like 

this, that not only not return it, but to use it in court against 

them.”

Thereafter, the trial court entertained oral argument; 

ultimately, it indicated that it would be granting RJS’s motion.
6

Trial Court Order

On November 5, 2021, the trial court issued its written 

order granting RJS’s motion. It found: “The facts underlying 

this motion are undisputed. On August 3, 2021, Defense counsel 

received an email that was not meant for him. The email was 

sent by Mr. Brett L. McClure and addressed to Mr. Richard 

Marks, who accidentally forwarded it to Mr. Alden. At the time, 

Mr. Marks and Mr. McClure were both known to be counsel for 

Plaintiff. Mr. Marks was insurance counsel, hired by a title 

company to represent Plaintiff; his name appears on the caption 

of Plaintiff’s Complaint and all subsequent pleadings prior to his 

substitution out of the case. Mr. McClure was Plaintiff’s direct 

counsel, in a position analogous to that of an in-house attorney.

“The email stated that Mr. McClure had reviewed the 

docket in this case and was not impressed with Mr. Marks’s 

work, since a series of filings had been rejected over a time span 

of six months. Mr. McClure conveyed his impression of the legal 

risks to which he feared this had exposed Plaintiff, and expressed 

his displeasure with those risks. The email closes with a direct 

client instruction . . . to negotiate a settlement of the case.

“2 hours and 19 minutes after this email was forwarded to 

Mr. Alden, counsel for Plaintiff realized their mistake and sent a 

follow-up note, identifying the email by precise date and time and 

explaining that it contained privileged material. Counsel for 

Plaintiff asked Mr. Alden to delete the email and disregard the 

contents. Instead, Mr. Alden chose to submit the email as 

evidence in multiple court filings and to quote from it in open 

court during a subsequent hearing.

“The email Mr. Alden received is clearly and on its face a 

privileged communication. It contains the legal impressions and 
7

analysis of in-house counsel, followed by a direct client 

instruction to outside counsel. Even a cursory review of the email 

would lead any reasonable counsel to believe that their ethical 

obligations under Rule 4.4 had been triggered, with or without

any subsequent warning or request from opposing counsel. But 

in this case, a warning and a request for deletion was provided 

almost immediately. There could be no doubt that this was a 

privileged communication, which Mr. Alden was obligated to 

delete and disregard. Yet he did not.”

The trial court then turned to the question of whether to 

remove the Alden firm from the case. “Removal of counsel by 

court order at the behest of the opposition is a serious matter. 

Defendants rightly point out that they are entitled to their choice 

of counsel. But this is a serious ethical violation, and counsel of 

Mr. Alden’s experience and standing should have known better. 

Any counsel, no matter their experience or lack thereof, should 

have been able to tell that the email Mr. Alden received was 

privileged. His decision, not only to retain the email but 

repeatedly make it part of the public record in an effort to hold 

privileged statements against the Plaintiff, directly undermines 

the integrity of these proceedings. No lesser or alternative 

remedy than disqualification has been proposed by either side, 

and disqualification is appropriate under these circumstances.” 

(Fn. omitted.)

While the trial court disqualified the Alden firm, it denied 

plaintiff’s request for monetary sanctions, noting: “[T]he court’s 

power to disqualify counsel is protective in nature, based on the 

need to safeguard both the actual and apparent integrity of the 

proceedings in each case. With Defense counsel now out of the 

case, that protective interest has been served. An award of 
8

monetary sanctions against counsel would be more punitive than 

protective in nature. The power to discipline attorneys lies with 

other agencies than the Superior Court. How they choose to 

proceed (or not) is up to them.”

Appeal

Defendants filed a notice of appeal from the trial court’s 

November 9, 2021, order disqualifying the Alden firm.

Motion to Stay Proceedings

Despite being disqualified, the Alden firm continued to 

actively represent defendants in this litigation. For example, on 

November 19, 2021, it filed a first amended cross-complaint on 

defendants’ behalf against RJS. The Alden firm’s conduct 

prompted RJS to file a motion to stay the proceedings pending 

defendants’ appeal from the order disqualifying the Alden firm. 

On January 26, 2022, the trial court granted RJS’s motion to stay 

the proceedings.

Defendants’ petition for a writ of mandate was summarily 

denied.

DISCUSSION

I. Scope of this appeal

As set forth above, defendants have only filed a notice of 

appeal challenging the trial court’s order disqualifying the Alden 

firm. In fact, in their opening brief, defendants specifically 

recognize that the only order on appeal is the disqualification 

order. Nevertheless, defendants devote much time and argument 

in their appellate briefs to issues outside the scope of this appeal. 

We decline to address these issues. (Soldate v. Fidelity National

Financial, Inc. (1998) 62 Cal.App.4th 1069, 1073 [“‘Our 

jurisdiction on appeal is limited in scope to the notice of appeal 

and the judgment or order appealed from’”].)
9

With that in mind, we turn to the propriety of the trial 

court’s order disqualifying the Alden firm from representing 

defendants in this litigation.

II. Standards of review

We ordinarily review an order granting a motion to 

disqualify under the deferential abuse of discretion standard, and 

any subsidiary factual questions for substantial evidence. 

(McDermott Will & Emery LLP v. Superior Court (2017) 

10 Cal.App.5th 1083, 1117, 1121 (McDermott); Rico, supra, 

42 Cal.4th at p. 819.) But where the material facts are 

undisputed, our review is de novo. (People ex rel. Dept. of 

Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 

20 Cal.4th 1135, 1148.)

“‘The question whether the attorney-client privilege applies 

to a particular communication is a question of fact if the evidence 

is in conflict.’ [Citation.] ‘“When the facts, or reasonable 

inferences from the facts, shown in support of or in opposition to 

the claim of privilege are in conflict, the determination of 

whether the evidence supports one conclusion or the other is for 

the trial court, and a reviewing court may not disturb such 

finding if there is any substantial evidence to support it . . . .”’ 

[Citation.]” (DP Pham LLC v. Cheadle (2016) 246 Cal.App.4th 

653, 664.) Likewise, “[w]e review the trial court’s conclusion that 

a document is protected by the attorney work product doctrine to 

determine whether it is supported by substantial evidence. 

[Citations.]” (League of California Cities v. Superior Court (2015) 

241 Cal.App.4th 976, 993.)
10

III. Relevant law

A. Privilege

“‘The party claiming the [attorney-client] privilege has the 

burden of establishing the preliminary facts necessary to support 

its exercise, i.e., a communication made in the course of an 

attorney-client relationship. [Citations.] Once that party 

establishes facts necessary to support a prima facie claim of 

privilege, the communication is presumed to have been made in 

confidence and the opposition of the claim of privilege has the 

burden of proof to establish the communication was not 

confidential or that the privilege does not for other reasons 

apply.’ [Citations.]” (DP Pham LLC v. Cheadle, supra, 

246 Cal.App.4th at p. 665.)

“A writing that reflects an attorney’s impressions, 

conclusions, opinions, or legal research or theories is not 

discoverable under any circumstances.” (Cal. Code Civ. Proc., 

§ 2018.030, subd. (a).) “Parties claiming the benefit of the work 

product rule have the burden to show preliminary facts to 

support its applicability.” (Carehouse Convalescent Hospital v. 

Superior Court (2006) 143 Cal.App.4th 1558, 1563.)

B. Disqualification of counsel

Trial courts have the power to disqualify counsel as part of 

their inherent authority to control the proceedings before them. 

(In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572, 

585.) Among other instances, disqualification of counsel may be 

warranted if (1) counsel does not comply with the procedures set 

forth in State Fund, which are also now codified in rule 4.4 of the 

California Rules of Professional Conduct, for what to do if counsel 

inadvertently receives privileged documents, and (2) “other 
11

factors compel disqualification.” (State Fund, supra, 70 

Cal.App.4th at p. 657; Rico, supra, 42 Cal.4th at pp. 817, 819.)

The procedures set forth in State Fund apply when a 

lawyer “inadvertent[ly]” receives materials that objectively 

“appear to be subject to an attorney-client privilege” or to be 

otherwise “confidential and privileged” (State Fund, supra, 

70 Cal.App.4th at pp. 656–657; Rico, supra, 42 Cal.4th at p. 818), 

but those procedures vary depending on the degree to which the 

privileged or confidential nature of the materials is obvious 

(McDermott, supra, 10 Cal.App.5th at pp. 1108–1109): “[W]hen 

an attorney receives materials that obviously or clearly appear to 

be privileged . . . ,” the attorney must “refrain from examining 

them any more than . . . necessary,” must notify the privilege 

holder, and must try to resolve the situation by agreement or, 

failing that, by resort to the court (id. at p. 1108; State Fund, at 

pp. 656–657); however, when the materials received are “not 

obviously or clearly privileged,” the attorney’s duties are “more 

limited” and he or she need only “notify the privilege holder,” who 

at that point has the “onus” of “tak[ing] appropriate steps to 

protect the materials if the holder believes [they] are privileged 

and were inadvertently disclosed” (McDermott, at pp. 1108–1109; 

see Great Am. Assur. Co. v. Liberty Surplus Ins. Corp. (N.D. Cal. 

2009) 669 F.Supp.2d 1084, 1093–1094).

IV. Analysis

Applying these legal principles, we conclude that the trial 

court properly granted RJS’s motion to disqualify the Alden firm. 

The forwarded e-mail obviously is protected by the attorneyclient privilege and/or contains protected attorney work product. 

It is a communication between Marks and McClure, two 

attorneys representing RJS. It sets forth McClure’s criticism of 
12

Marks’s representation of RJS in this matter. And, McClure

gives instructions to Marks to settle the case immediately. Upon 

receipt, Alden should have immediately notified RJS’s attorneys 

that he received a confidential communication not intended for 

him or his clients.

Defendants contend that the e-mail was not obviously 

privileged because neither they nor Alden knew at that time that 

McClure also represented RJS (or was an agent of RJS). Even if

that is true, within two hours of inadvertently sending it to 

Alden, Marks notified Alden of his unintentional error, reminded 

him of the law regarding inadvertent receipt of attorney work 

product, asked him to delete the e-mail and not use it as 

evidence, and apologized. Despite the rapid advisement from 

Marks, Alden did not delete the e-mail. Worse, he affirmatively 

used the privileged communication in court filings. As the trial 

court aptly found, Alden’s misconduct constitutes a “serious 

ethical violation,” warranting disqualification.

Defendants’ arguments on appeal wholly lack merit. For 

example, they argue that “even if the email was to be considered 

a privileged communication, that privilege was lost by [being] 

communicated to others.” Regardless of who held the privilege 

over the e-mail,4“waiver requires an intention to voluntarily 

waive a known right.” (McDermott, supra, 10 Cal.App.5th at 

p. 1104.) Here there is no evidence that RJS or its attorneys 

4

“The attorney, not the client, is the exclusive holder of the 

work product privilege.” (Melendrez v. Superior Court (2013) 

215 Cal.App.4th 1343, 1353.) “The attorney-client privilege, 

however, is held by the client.” (Ibid.)
13

intentionally waived either the attorney-client or work product

privilege.5

Defendants further argue that the e-mail was not 

privileged because it discussed defaults, information about which 

could be gleaned from the publicly available court docket. But, it 

is the nature of the communication, not the information, that 

determines whether a communication is privileged. “The 

attorney-client privilege attaches to a confidential communication 

between the attorney and the client and bars discovery of the 

communication irrespective of whether it includes unprivileged 

material.” (Costco Wholesale Corp. v. Superior Court (2009) 

47 Cal.4th 725, 734.)

Citing Fremont Indemnity Co. v. Fremont General Corp.

(2006) 143 Cal.App.4th 50, 69 and Khani v. Ford Motor Co. (2013) 

215 Cal.App.4th 916, 921–922, defendants assert that because 

the e-mail is not material to this litigation, the Alden firm should 

not have been disqualified. Defendants’ reliance upon these two 

cases is misplaced; those cases address successive and concurrent 

representation of clients with adverse interests. (Khani v. Ford 

Motor Co., supra, at p. 920; Fremont Indemnity Co. v. Fremont 

General Corp., supra, at pp. 65–67.) They did not address the 

issue presented in this case. (Association for Los Angeles Deputy 

Sheriffs v. County of Los Angeles (2021) 60 Cal.App.5th 327, 342 

5 Defendants assert that there is no evidence that the e-mail 

was sent inadvertently as there is no declaration from Marks 

attesting to this fact. We disagree. Marks’s follow-up e-mail to 

Alden evinces inadvertence. The fact that Marks intentionally 

sent Alden other e-mails that day does not mean that he 

intentionally sent this one.
14

[“A case is not authority for a proposition not even mentioned, 

must less discussed, in it”].) Even if materiality were relevant to 

the issue presented here, the comments made by McClure to 

Marks concerning this matter, particularly the demand for a 

quick settlement, are highly material.

In addition, defendants contend that RJS failed to 

demonstrate “how the information contained in the email, 

assuming it is privileged, would or could affect the outcome of 

this case.” We disagree with defendants’ characterization of the 

contents of the e-mail. At the risk of sounding redundant, 

McClure’s insistence that Marks immediately settle the case

could absolutely affect the outcome of this case.

In a similar vein, defendants advance an absurd argument: 

“[N]ow that the ‘cat is out of the bag’ so to speak, what will 

prevent new counsel from taking advantage.” As RJS points out, 

this approach “is completely at odds with California law and the 

Alden Firm’s ethical obligations.” Pursuant to well-settled legal 

authority and the California Rules of Professional Conduct, upon 

receipt of the e-mail, Alden should have immediately notified 

Marks, Alden should have deleted the e-mail, and Alden certainly 

should not have used it against RJS. His ethical violations let 

the cat out of the bag, so to speak.

Defendants further contend that RJS’s motion to disqualify 

the Alden firm was an improper motion for reconsideration (Code 

Civ. Proc., § 1008) of two prior filings: (1) RJS’s opposition to 

defendants’ motion to set aside their defaults, and (2) RJS’s 

motion to strike defendants’ answer and cross-complaint. 

Defendants did not raise this argument below, thereby forfeiting 

it on appeal. (P&D Consultants, Inc. v. City of Carlsbad (2010) 

190 Cal.App.4th 1332, 1344.) Regardless, defendants have not 
15

demonstrated how the motion to disqualify constitutes an 

improper motion for reconsideration. The motion to strike does 

not even mention the privileged e-mail. And, in its opposition to 

defendants’ motion to set aside their defaults, RJS objected to 

defendants’ use of the privileged e-mail in support of their motion 

and advised the trial court that it would “be filing a formal 

motion for disqualification and sanctions.”

Finally, we reject defendants’ unfounded argument that 

RJS only filed the motion to disqualify because it knows that 

defendants “lack the financial means to hire a new counsel.” 

Defendants not only offer no evidence in support of this claim, 

but they also fail to provide any legal authority for the 

proposition that a party’s motivation for filing a motion to 

disqualify counsel for ethical violations is relevant.

V. Referral to State Bar

Canon 3(D)(2) of the California Code of Judicial Ethics 

provides: “Whenever a judge has personal knowledge, or 

concludes in a judicial decision, that a lawyer has committed 

misconduct or has violated any provision of the Rules of 

Professional Conduct, the judge shall take appropriate corrective 

action, which may include reporting the violation to the 

appropriate authority.” In light of Alden’s egregious misconduct, 

we refer this matter to the State Bar.
16

DISPOSITION

The order granting RJS’s motion to disqualify Nick A. 

Alden and the Law Office of Nick A. Alden is affirmed. The clerk 

of this court is ordered to forward a copy of this opinion to the 

California State Bar upon issuance of the remittitur. RJS is

entitled to costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_____________________, J.

ASHMANN-GERST

We concur:

________________________, P. J.

LUI

________________________, J.

HOFFSTADT