Court Opinion

ID: 9389122
Source: CourtListenerOpinion
Date Created: 2023-04-24 18:02:36.029749+00
Date Added: 2024-06-11T17:18:25.296635
License: Public Domain

Filed 4/24/23 Park v. Kim CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 ONE

 HYUN JOU PARK,                                               B310225

           Plaintiff and Appellant,                           (Los Angeles County
                                                              Super. Ct. No.
           v.                                                 20STCV31674)

 HESOOK KIM et al.,

           Defendants and
           Respondents.

     APPEAL from an order of the Superior Court of Los
Angeles County, Christopher K. Lui, Judge. Affirmed.
     Klapach & Klapach and Joseph S. Klapach for Plaintiff and
Appellant.
     TroyGould, Aaron Bloom, and Amy Nashon for Defendants
and Respondents.
               _______________________________
       Plaintiff and appellant Hyun Jou Park appeals from an
order disqualifying her attorney and his law firm from
representing her in this action against her mother and brother
arising out of a real estate transaction. The trial court based the
disqualification order on its finding the attorney had jointly
represented Park, her mother, and her brother in the same real
estate transaction that is the subject of this action. The court
concluded disqualification of the attorney in this successive
representation of Park against her family members is mandatory,
based on the legal presumption that the attorney received
confidential information from Park’s family members in the prior
joint representation. On appeal, Park contends disqualification is
not required because her attorney never had an attorney-client
relationship with her mother or brother and, even if he did, they
had no reasonable expectation that their communications with
the attorney would be kept confidential from her during the prior
joint representation. We conclude the trial court’s factual
findings are supported by substantial evidence, and the trial
court did not abuse its discretion in ordering the disqualification
of the attorney and his firm. Accordingly, we affirm the order.
                          BACKGROUND
I.     The Pleadings
       A.    Original complaint
       In August 2020, Park and her attorney, Jeff Katofsky, as
           1
coplaintiffs, filed this action against Hesook Kim, Park’s mother,

      1
        As explained below, Katofsky does not assert a cause of
action or request relief in the operative first amended complaint.

                                 2
                                                             2
and Hyun Kwon Kim, Park’s brother (collectively, the Kims), in
their individual capacities and as trustees of the Hesook Kim
Trust Executed 8/24/04 (the Trust). Katofsky and two other
attorneys from his firm represented Park and Katofsky on the
original complaint. The complaint alleged as follows, in pertinent
part:
                                           3
      The Kims are cotrustees of the Trust. In or around March
2020, the Trust sold an asset (a piece of real estate) for nearly
$10 million. The net proceeds of the sale, $7.7 million, were to be
divided into five equal shares of $1,542,066 and distributed to
each beneficiary of the Trust, after being reinvested in
transactions that qualified for deferred capital gains under
Internal Revenue Code section 1031.
      In or around May 2020, using four of the beneficiaries’
shares of the $7.7 million in proceeds, excluding Park’s share, the
Trust purchased a property in Burbank for $6 million. For Park’s
share of the proceeds, the Kims asked Park to find a property
that would satisfy the legal requirements of an Internal Revenue
Code section 1031 exchange. Park and the Kims decided to

      2
        Because defendants Hesook Kim and Hyun Kwon Kim
share the same surname, when referring to them individually, we
will use the names Hesook and Hyun Kwon to avoid confusion
and not as a sign of disrespect.
      3
       As stated in Hyun Kwon’s declaration in support of the
motion to disqualify, during Hesook’s lifetime, the Trust’s income
and principal shall be used to pay her expenses and maintain her
standard of living. Hesook’s four adult children, including Hyun
Kwon and Park are the Trust’s primary remainder beneficiaries.

                                3
jointly purchase a property, referred to in this action as the
Moorpark Property, for $3.5 million.
       As reflected in a May 29, 2020 purchase and sale
agreement (the PSA) attached to the complaint, an entity called
Double Play, LLC (Double Play) owned the Moorpark Property.
Katofsky was Double Play’s Managing Member, and he drafted
the PSA. Park, Hesook, and Hyun Kwon signed the PSA as
buyers and tenants in common; Katofsky signed on behalf of the
seller, Double Play. Park and the Kims were to assign their
rights under the PSA to the Trust.
       The complaint alleged: “To protect the 1031 exchange and
prepare for the closing of the Moorpark transaction, significant
legal work was required. Defendants [the Kims] specifically
requested [plaintiff Katofsky] to perform such work and agreed to
pay for such.” In support of these allegations, Park and Katofsky
referenced and attached to the complaint an email exchange
between Hyun Kwon and Katofsky, which we summarize here.
        In an email dated June 29, 2020, a month after the parties
signed the PSA, Hyun Kwon thanked Katofsky “for taking [his]
call and explaining 1031 exchange laws to [him].” Hyun Kwon
provided his “thoughts” regarding proposed terms of an
agreement to “transfer 100 percent” of the Moorpark Property
from the Trust to Park around a year after the close of escrow of
the Moorpark Property transaction. He asked Katofsky whether
both he and Hesook would sign such an agreement, or only
Hesook. He concluded the email, stating: “Let me know if this
will work for the agreement. I value your expertise a lot on this
matter therefore, I am always open for better ways. [¶] You
should also ask Helen Park for her input on this matter. [¶]
Thank you again for your help.”

                                4
       On July 14, 2020, Hyun Kwon sent a follow-up email to
Katofsky, stating: “You were going to write in legal terms an
agreement letter (content is in yellow highlight [in the attached
June 29, 2020 email referenced above]) for both Helen Park and
[the] Trust. [¶] When can we have a draft/brief ready? We will
pay for the fee if that is the issue. [¶] Thank you in advance.”
       Park and Katofsky alleged in the complaint that in or
around late July 2020, the Moorpark Property transaction was
ready to close. By that point, Park had “incurred over $260,000
in fees, inspections, costs and commissions on the transaction.”
The Kims and the Trust had signed all documents required to
complete the purchase. According to the complaint, some of the
documents “were rejected by title for a fraudulent notary
acknowledgement. [¶] . . . After being notified of the fraudulent
notary acknowledgement, Defendants [the Kims], on the day of
closing, cancelled the transaction, refused any further document
signing and refused to close the transaction or pay Plaintiff Park.
[The] Trust will now suffer severe tax liability and has indicated
it will not pay Park or Katofsky as promised.”
       In the first cause of action in the original complaint,
Katofsky alleged: “Plaintiff Katofsky and Defendants [the Kims]
had an oral agreement whereby Defendants requested and
received legal services.” Katofsky further alleged the Kims and
the Trust “breached the agreement by failing to pay for such
services” in an amount not less than $32,800.
       Seeking, among other relief, a $1,542,066 share of the net
proceeds from the Trust’s sale of real property, and
reimbursement of expenses incurred in the Moorpark Property
transaction, Park asserted causes of action against the Kims and
the Trust for breach of oral contract, intentional and negligent

                                 5
interference with contract, promissory estoppel, and common law
fraud.
       B.     The Kims’ petition for arbitration of Katofsky’s
              attorney fees claim
       The Kims retained counsel to represent them in this action
in their individual capacities and as trustees of the Trust. On
September 15, 2020, their counsel sent a letter to Katofsky,
informing him that the Kims intended to file (1) a request for
arbitration of a fee dispute under the Mandatory Fee Arbitration
Act (Bus. & Prof. Code, § 6200 et seq.), (2) a notice of automatic
stay of the action due to the filing and service of the request for
arbitration (Bus. & Prof. Code, § 6201), and (3) a “motion to
disqualify [Katofsky] from representing Park in this action since
Park’s purported claims against the Kims relate to the exact
same Transaction in which [Katofsky] represented the Kims.”
       The Kims’ counsel asserted in the letter to Katofsky: “In
the Complaint, you admit that the Kims hired you to perform
legal work for them in connection with the Moorpark [Property]
Transaction. Your legal representation of the Kims creates a
number of problems with respect to the Complaint you have filed
on behalf of yourself and Park against your clients, the Kims.”
(Fn. omitted.) One of the “problems” the Kims’ counsel
enumerated is that Katofsky “never terminated the attorney-
client relationship between [him] and the Kims prior to filing the
lawsuit against them.”
       The following day, September 16, 2020, Katofsky sent a
letter to the Kims’ counsel, stating in full: “Thank you for your
September 15, 2020 letter regarding this matter. [¶] I
represented, and still represent, the Park Family, never the
Kims. [¶] Have a nice day.”

                                 6
       On or about September 17, 2020, the Kims filed a petition
for arbitration of Katofsky’s attorney fees claim with the Los
Angeles County Bar Association. Therein, they alleged:
Katofsky “violated multiple conflict of interest rules. He advised
clients with respect to a real estate transaction and is now suing
them on behalf of himself and the adverse party in that exact
same transaction. [Katofsky] also had a personal interest in the
transaction and did not obtain informed written consent from
clients.”
       On September 23, 2020, the Kims filed a notice of stay of
this action while the fee arbitration was pending.
       C.     First amended complaint
       On October 9, 2020, Katofsky filed a request for dismissal
of his cause of action against the Kims for breach of oral contract
for legal services, thereby obviating the need for a fee arbitration
and avoiding an automatic stay of this action. The same day, he
filed a first amended complaint on behalf of Park in which she
asserted the same five causes of action against the Kims that she
had alleged in the original complaint. She increased her claim
for damages by $32,800, the amount Katofsky had sought in the
original complaint, and she alleged in the first amended
complaint: “To protect the 1031 exchange and prepare for the
closing of the Moorpark [Property] transaction, significant legal
work was required. [Katofsky] performed such work and Plaintiff
[Park] paid for such, at a cost of $32,800.”
II.    The Kims’ Motion to Disqualify Katofsky
       A.     Moving papers
       On November 13, 2020, the Kims filed a motion to
disqualify Katofsky and his law firm, Katofsky Law, from
representing Park in this action. The motion was supported by a

                                 7
declaration from Hyun Kwon. Therein, he stated that after the
Trust sold the piece of real estate in March 2020 (as referenced
above), the Trust engaged Katofsky and Katofsky Law
(collectively, Katofsky) “to assist it in structuring the transaction
so that it would qualify as a tax-deferred exchange” under
Internal Revenue Code section 1031. At the same time, Katofsky
was also advising Park in connection with the 1031 exchange and
her purchase of a piece of property jointly with the Trust.
According to Kwon, “Katofsky accepted the representation but
did not prepare a written representation agreement, did not
advise [them] of any potential or actual conflicts of interest
involved in representing the interests of multiple family members
. . ., and did not obtain [their] informed written consent regarding
the joint representation.”
        Hyun Kwon further stated in the declaration that Katofsky
advised the Kims, as trustees of the Trust, with respect to the
purchase of the property in Burbank as well as the purchase of
the Moorpark Property. With respect to the latter transaction,
Hyun Kwon stated that at the time he and Hesook signed the
May 29, 2020 PSA, they were unaware of Katofsky’s role in
Double Play, the seller of the Moorpark Property (although
Katofsky signed the PSA as Double Play’s Managing Member).
Katofsky “did not obtain informed written consent from [the
Kims] in connection with [his] role as seller in the transaction” or
advise them to “to seek independent counsel.”
        Hyun Kwon attached to his declaration another purchase
and sale agreement that Katofsky prepared and had the Kims
sign in or around June or July 2020, which was postdated June
15, 2021. Under this agreement, the Trust would sell the
Moorpark Property to an entity called MoreMoorPark, LLC for

                                  8
$2,010,000, nearly $1.5 million less than they were going to pay
under the May 29, 2020 PSA to purchase the Moorpark Property
from Double Play.
       According to Hyun Kwon’s declaration, the Kims canceled
the Moorpark Property transaction, forfeiting a $175,000 deposit
they had made, after they became aware of Katofsky’s role as
seller and “became concerned that going forward with the
[transaction] would amount to tax fraud (since immediately /
simultaneously selling the Moorpark Property would negate the
requisite intent to hold the property for investment at the time of
the exchange.”
       Hyun Kwon asserted that during Katofsky’s representation
of the Kims, Katofsky “knowingly obtained confidential
information from [the Kims] about [their] real estate
transactions, tax planning, and trust administration and used
that information to advise [them] and prepare documents on
[their] behalves [sic].”
       In their motion, the Kims argued Katofsky should be
disqualified from representing Park in this action because (1)
Katofsky still represented the Kims when he filed this action
against them; (2) even if the Kims were former clients when
Katofsky filed this action, the action is substantially related to
Katofsky’s representation of the Kims, and he owes the Kims
ongoing duties of loyalty and confidentiality; (3) Katofsky “did not
obtain the Kims’ informed written consent to the conflicts of
interest presented by the representation”; and (4) Katofsky is
“seeking to enforce a financial transaction in which he has a
major financial interest.”

                                 9
      B.      Park’s substitution of counsel and opposition to
              the disqualification motion
       On November 30, 2020, Park substituted Gary Salomons
and Salomons Law Group as her counsel in this action. On
December 4, 2020, Salomons filed on Park’s behalf an opposition
to the Kims’ disqualification motion, in which Park argued the
Kims’ motion was moot based on her substitution of counsel.
Park acknowledged that Salomons was listed on Katofsky’s
letterhead as “of counsel,” but argued this designation “is, for all
practical purposes meaningless,” because although Salomons
rented office space from Katofsky, he operated his own law
practice and had his own malpractice insurance policy, which
listed him as a solo practitioner. In an accompanying
declaration, Salomons stated he had “not spoken to Katofsky
about any information that was provided by [the Kims] in the
course of Katofsky’s apparent alleged facilitation of the 1031
exchanges.”
       Katofsky also submitted a declaration in support of Park’s
opposition to the disqualification motion. Therein, he stated: “I
specifically advised [the Kims] that I represented the Park family
for close to 20 years. I specifically advised [the Kims] that I did
not represent them. [The Kims] specifically advised me that they
had separate legal counsel and accountants but did not want me
to directly communicate with either to keep their costs down.”
Katofsky had a retainer agreement with the Park family but “did
not send or prepare a retainer agreement to [the Kims] because
they had their own legal counsel.”
       Regarding his role in the Moorpark Property transaction,
Katofsky stated: “In May 2020, in order to protect tax-deferment
provided by Internal Revenue Code section 1031 and prepare for

                                10
the closing on the Moorpark Property, [the Kims] requested that
I, as seller’s counsel, prepare a first draft of [the PSA] and other
closing documents. Those documents would then be vetted by
[the Kims’] legal counsel and accountants. I prepared the
documents as requested.” He added: “It is standard in every real
estate transaction that one side’s lawyer prepares the first draft.
It is also standard that either the parties split the cost or, as
                                                               4
here, the buyer pays all legal costs of document preparation.”
       Katofsky denied receiving any confidential information
from the Kims. He asserted: “To the extent some information
was provided to me, it was, and continues to be, information that
was not material to [Park]’s claims asserted against [the Kims],
which are based upon [the Kims’] failure to pay [Park] the sum of
$1,542,066.” Katofsky also denied discussing with Salomons any
communications he had with the Kims.
       In her opposition, Park argued disqualification is not
required because (1) the Kims failed to meet their burden of
establishing Katofsky represented them; (2) even if Katofsky
represented them, the representation concluded, and “there is no
‘substantial relationship’ between Katofsky’s assistance in
preparing the first draft of closing documents for the Moorpark
property . . . and Katofsky’s previous representation of [Park] in
this action”; and (3) the Kims failed to meet their burden of
establishing Katofsky obtained material confidential information.

      4
        We note that the May 29, 2020 PSA that the parties
signed provides that each side would pay its own attorney fees in
connection with the Moorpark Property transaction and does not
state that the Kims would be solely responsible for the costs of
document preparation.

                                11
Based on these arguments, Park asserted “Salomons is not
subject to vicarious disqualification.”
       C.    The Kims’ reply brief
       In their reply brief in support of their motion, filed on
December 10, 2020, the Kims argued disqualification is required
because (1) Katofsky “expressly admitted” in the original
complaint that he represented the Kims, and the email exchange
between Hyun Kwon and Katofsky (summarized above)
demonstrates such representation; and (2) the prior and current
representations are substantially related, so the exchange of
confidential information is conclusively presumed. The Kims also
argued that disqualification “extends” to Salomons, as he is listed
as a “member” of Katofsky Law on the firm’s Web site and “of
counsel” on the firm’s letterhead; and after Salomons substituted
in as counsel for Park, an associate from Katofsky Law appeared
on behalf of Park at a hearing in this matter. There was no
showing of separation between Katofsky and Salomons or ethical
wall rules and procedures.
       Hyun Kwon submitted a supplemental declaration in
support of the Kims’ reply brief. He stated Katofsky was the
“only lawyer who gave legal advice to [the Kims] regarding the
1031 exchange and the Moorpark [Property] transaction.” The
Kims did not have independent counsel and he never told
Katofsky they did. Nor did Katofsky tell the Kims that he only
represented Park in connection with the 1031 exchange and the
Moorpark Property transaction. Hyun Kwon stated he had
“extensive discussions” with Katofsky regarding the Kims’ “real
estate transactions, tax planning, and trust administration,
including the potential distribution of Trust assets, which is now
at issue in this action.”

                                12
      D.     Further briefing by the parties
             1.    Park’s supplemental briefing
       On December 30, 2020, with the permission of the trial
court, Park filed a sur-reply, accompanied by declarations. Park
submitted a declaration stating Katofsky was her lawyer, and she
told Hyun Kwon that Katofsky was “providing [her] counsel
regarding the Moorpark [Property] transaction.” Hyun Kwon
never indicated to her that he believed Katofsky was
representing him, Hesook, or the Trust. Hyun Kwon “repeatedly
told [her] that he had his own lawyer and would be discussing the
Moorpark [Property] transaction with him, including the first
draft of [the PSA] prepared by [her] lawyer, Mr. Katofsky.” Hyun
Kwon declined her offer to have Katofsky communicate directly
with his lawyer, stating he wanted “to keep attorney costs down.”
He told her he would discuss the transaction with his own lawyer
and relay information to Katofsky. She told him “to stop
contacting Mr. Katofsky because [she] was incurring legal fees for
Mr. Katofsky helping [her] with the 1031 exchange process. In
response, [Hyun] Kwon explicitly told [her] that he would pay Mr.
Katofsky’s legal bill.”
       In support of her assertion that Katofsky was only her
lawyer, and not the Kims’ lawyer as well, Park attached to her
declaration text message exchanges with Hyun Kwon. In an
April 17, 2020 exchange, Hyun Kwon sought information about
the status of the Moorpark Property transaction, and Park
responded, in pertinent part: “I will forward the information to
you as soon as we have finished negotiating the purchase/sale

                               13
                                                5
agreement as it is being reviewed by counsel.” In a June 2020
exchange, Hyun Kwon wrote, “Ask you [sic] smart lawyer who
owns the property.” Park responded: This is our lawyer Jeff
Katofsky, Esq.” and provided his phone number. Hyun Kwon
replied: “I just discussed with Jeff. I explained the issue and he
will explain what we need to do. Call him.” Park argued in her
sur-reply that this text exchange shows the Kims did not engage
Katofsky in connection with the Burbank and Moorpark property
transactions because in June 2020, Hyun Kwon was referring to
Katofsky as Park’s lawyer.
      Katofsky submitted a supplemental declaration, stating he
never spoke with Hesook, and he only spoke to Hyun Kwon after
the Burbank transaction closed. Initially, the Park family asked
him to prepare a first draft of the PSA for the Moorpark Property
transaction and later, after the transaction was changed by the
Parks and the Kims, he “was then asked to redraft those
documents, including a loan package, leases and subsequent
                                6
purchase and sale documents.”        At most, he spoke with Hyun

      5
        Park stated in her declaration that she “did not even
involve Mr. Katofsky until after the Burbank transaction closed
escrow.” In her complaint and first amended complaint, she
alleged the Trust purchased the Burbank property in May 2020.
But here, in these text messages, she references an agreement
related to the Moorpark Property transaction that “is being
reviewed by counsel” the previous month, in April 2020. It
appears, therefore, that Katofsky was “involved” before the
Burbank transaction closed escrow.
      6
       Prior to the filing of this supplemental declaration,
Katofsky had maintained that it was the Kims who requested he

                                    14
Kwon three times “about some 1031 issues that would need to be
covered in the documents” for the Moorpark Property transaction.
No confidential information was exchanged during these
discussions. When he and Hyun Kwon emailed, “there were one
to three other people included” on the correspondence. He “did
not interpret the Kims’ agreement to pay [his] legal fees for
drafting the documents as creating an attorney-client
                                 7
relationship because Borrowers[ ] always pay those fees and
costs.” He repeated other statements he made in his initial
declaration, which we summarized above.
       Park also submitted a declaration from Stacey Rosenberg, a
partner in the Finance and Bankruptcy Practice Group at
Sheppard Mullin Richter & Hampton LLP. She stated that “[a]s
an industry standard, the Borrower pays for the legal fees and
costs of both the Lender’s and its own counsel,” but the “Lender’s
counsel never represents the Borrower in the same transaction.”
Fees for preparing documents in loan transactions “almost
always cost in the tens (or hundreds) of thousands of dollars.” “In
transactions involving Buyers and Sellers of real estate, it is
typical for one side’s counsel to take the laboring oar of doing the
first draft of documents, with the other side providing
comments . . . .” “The drafter is not counsel for the opposing side
                    8
of the transaction,” and direct communication between a

prepare the first draft of the Moorpark Property transaction
documents.
      7
          Presumably, he meant “buyers” not “borrowers.”
      8
        Yet here, Katofsky claims he represented Double Play
(the seller) and Park (one of the buyers) with respect to the
Moorpark Property transaction.

                                 15
lender/seller’s counsel and a borrower/buyer is common.
Typically, one side pays the costs of document preparation, as “a
negotiated term between the parties.” The costs are “almost
always” tens of thousands of dollars in these types of
transactions. “In no real estate transaction does the fact that one
side pays for documentation or creates the initial set of
documents have any determination or indication of
representation.”
       Based on Katofsky’s and Rosenberg’s declarations, Park
argued an attorney-client relationship was not created between
Katofsky and the Kims, and it was unreasonable for Hyun Kwon
to believe Katofsky represented the Kims. Park also challenged
the credibility of Hyun Park’s declarations, pointing out, among
other things, that he denied knowing at the time he signed the
PSA that Katofsky was the Managing Member of Double Play
(the seller), although Hyun Park signed the PSA on the same
page where Katofsky signed as the Managing Member of Double
Play.
              2.    The Kims’ supplemental briefing
       On January 5, 2021, with permission from the trial court,
the Kims filed a response to Park’s sur-reply, supported by a
third declaration from Hyun Kwon. In the declaration, he stated
he did not realize Katofsky was the Managing Member of Double
Play because he “did not pay any attention to who was signing on
behalf of the seller as that was not important to [him] at the
time.” He further stated it was his understanding that Katofsky
was providing legal advice to Park, Hesook and him, as they
“were all buyers of the Moorpark property.” He maintained that
Katofsky was “the only lawyer who gave legal advice to [him] and
[his] mother regarding the 1031 exchange and the Moorpark

                                16
[Property] transaction.” He noted that in the June 2020 text
                                                                 9
message exchange, Park referred to Katofsky as “ ‘our lawyer.’ ”
       In the supplemental brief, the Kims argued, among other
things, that attorney Rosenberg’s declaration was inadmissible
and irrelevant because she had no personal knowledge of the
subject transaction; she focused on lender/borrower relationships
that are not at issue here; her statement that the “drafter is not
counsel for the opposing side of the transaction” is belied by
Katofsky’s acknowledgement that he drafted the documents as
seller’s counsel and acted as counsel for one of the buyers (Park);
and she stated that payment of fees for document preparation is
a negotiated term, but the PSA does not provide that the buyers
were responsible for such fees in this case.
III. Trial Court’s Ruling
       On January 8, 2021, the trial court heard argument from
the parties on the disqualification motion and took the matter
under submission. Later, the same day, the court issued a 10-
page order granting the Kims’ motion to disqualify Katofsky and
Salomons.
       The trial court concluded Park’s substitution of counsel did
not render the matter moot. Katofsky Law listed Salomons as an
of counsel member of the firm. The court explained, “Attorneys
who are ‘of counsel’ relative to a law firm are subject to imputed
disqualification.”
       The trial court noted that Katofsky was a named plaintiff
in the original complaint in which he alleged (as summarized by

      9
        At the January 8, 2021 hearing on the disqualification
motion, Park argued “our lawyer” meant the Park family’s
lawyer.

                                17
the court): “Defendants [the Kims] specifically requested
Katofsky to perform significant legal work to protect the 1031
exchange and prepare for the closing of the Moorpark [Property]
transaction, and agreed to pay for such, which services cost
$32,800.00. [Citation.] Katofsky allege[d] that he had an oral
agreement with Defendants whereby Defendants requested and
received legal [services], [citation] and that Defendants breached
the agreement by failing to pay for such legal services.”
      The court explained: “Although these allegations are not
conclusive judicial admissions because they are contained in a
pleading which has been superseded by amendment, such
allegations are rebuttable evidentiary admissions. [Citation.]
The Court gives much weight to Katofsky’s allegations in the
original Complaint as evidentiary admissions.” The court
reasoned that Katofsky’s statements—that he represented (and
continues to represent) the Park family and has never
represented the Kims—must be viewed in the context of his
allegations in the original complaint. The court rejected any
implication that Katofsky was merely seeking to recover the costs
of document preparation through his cause of action in the
original complaint, as “$32,800 for document preparation is
excessive.” The court concluded the “inference is that Katofsky
was seeking to recover for legal advice rendered to Defendants
[the Kims], not simply their share of document preparation fees.”
The court found Katofsky presented no proof that the Kims were
represented by their own attorney in connection with the
Moorpark Property transaction.
      The court concluded: “In light of the foregoing evidence
[which included consideration of Hyun Kwon’s declarations],
especially the allegations Katofsky made as Plaintiff in the

                               18
original Complaint, the court finds that Katofsky represented
Defendants [the Kims] in connection with the underlying
Moorpark [Property] transaction, which forms the basis of
Plaintiff Park’s claims against Defendants. As such, access to
confidential information is presumed [due to the substantial
relationship between the former representation and the current
representation], and disqualification of Katofsky is mandatory.”
Notwithstanding the presumption, the court found Katofsky
actually acquired confidential information from the Kims,
crediting Hyun Kwon’s statements that “he had extensive
discussions with Katofsky regarding issues beyond the
preparation of the 1031 exchange documents, including tax
planning, trust administration, and potential distribution of trust
assets.”
       The court concluded Katofsky’s disqualification was
imputed to Salomons, reasoning: “The Declarations of Jeff
Katofsky and Gary Salomons fail to address the factors which
courts consider in deciding whether an ethical wall will impose
an effective screen. As such Plaintiff [Park] has not met the
burden of rebutting the presumption of imputed knowledge which
requires disqualification.”
                            DISCUSSION
       Park contends the trial court erred in disqualifying
Katofsky and Salomons from representing her in this action
because, among other things, (1) Katofsky never had an attorney-
client relationship with the Kims and, (2) even if he did, they had
no reasonable expectation that their communications with him
would be kept confidential from Park during the prior joint
representation. We note that on appeal, Park does not analyze
Salomons’s disqualification separately and apart from Katofsky’s.

                                19
I.     Katofsky Had an Attorney-Client Relationship With
       the Kims
       “ ‘Except for those situations where an attorney is
appointed by the court, the attorney-client relationship is created
by some form of contract, express or implied, formal or
informal.’ . . . [¶] ‘An implied contract is one, the existence and
terms of which are manifested by conduct.’ (Civ. Code, § 1621.)
‘The distinction between express and implied in fact contracts
relates only to the manifestation of assent; both types are based
upon the expressed or apparent intention of the parties.’ ”
(Responsible Citizens v. Superior Court (1993) 16 Cal.App.4th
1717, 1732-1733, italics omitted (Responsible Citizens).)
       A court considers the totality of the circumstances in
determining whether an attorney-client relationship exists. The
client’s expectation of the situation, measured by a reasonable
person in the client’s position, is one of the most important
factors in the determination. (Responsible Citizens, supra, 16
Cal.App.4th at p. 1733.)
       “The question of whether an attorney-client relationship
exists is one of law. [Citations.] However, when the evidence is
conflicting, the factual basis for the determination must be
determined before the legal question is addressed. [¶] . . . [¶]
Generally, in the absence of express findings, we will presume
the court found in favor of the prevailing party on all disputed
factual issues. [Citation.] Our task in such cases is to determine
if the presumed findings are supported by substantial evidence.
[Citation.] That presumption is not appropriate, though, when
the record reveals the court based its ruling on an interpretation
of law, rather than a resolution of disputed facts.” (Responsible
Citizens, supra, 16 Cal.App.4th at pp. 1733-1734.)

                                20
       Here, as the trial court concluded, Katofsky alleged in the
original complaint an express oral agreement between the Kims
and himself for the provision of legal services. He asserted the
Kims asked him to perform “significant legal work,” they agreed
to pay for it, and they “received legal services.” He referenced
and attached to the complaint (and Park attached to the first
amended complaint) a “copy of an email confirming” such
agreement. In the email, Hyun Kwon thanked Katofsky for
speaking with him and “explaining 1031 exchange laws” to him.
Hyun Kwon outlined proposed terms for an agreement to transfer
the Moorpark Property from the Trust to Park a year after the
close of escrow, and asked if such terms would “work for the
agreement.” He told Katofsky he valued his expertise and was
“always open for better ways.” He encouraged Katofsky to obtain
Park’s input regarding the proposed terms. Finally, he told
Katofsky he would pay him to memorialize the terms outlined in
the email exchange.
       Neither Katofsky’s assertions in the original complaint, nor
the contents of Hyun Kwon’s email “confirming” the
arrangement, suggest Katofsky was merely tasked with
preparing a first draft of the PSA and closing documents, at the
Kims’ expense, for the Kims to review with their own,
independent counsel. Rather, substantial evidence shows
Katofsky provided legal advice to the Kims regarding how to
structure the purchase of the Moorpark Property and transfer
their share to Park a year down the line. Katofsky drafted a
second agreement for the Kims, to which Park was not a party,
regarding the sale of the Moorpark Property to a limited liability
company. The trial court found the Kims did not have their own
attorney representing them in connection with the Moorpark

                                21
Property transaction, and they relied on Katofsky’s advice and
expertise. We have no cause to disturb the trial court’s credibility
determination on this issue.
       Park argues it was not reasonable for the Kims to believe
their adversary—the seller/seller’s counsel—was representing
them—the buyers—in connection with the Moorpark Property
transaction. And yet Katofsky acknowledges he was representing
Park—the Kims’ co-buyer—in the same transaction. That
Katofsky was the longtime Park family lawyer and, initially,
Park was the only one communicating with him, is beside the
point. The record shows there came a time when Hyun Kwon
was consulting Katofsky with such frequency that Park faulted
him for incurring additional legal fees, to which he responded
that he would pay the fees. In emails between Hyun Kwon and
Katofsky, and text messages between Hyun Kwon and Park,
Hyun Kwon encouraged additional consultation between
Katofsky and Park regarding the proposed structure of the
transaction that Hyun Kwon was discussing with Katofsky.
       As Park emphasizes, “payment of attorney fees alone does
not determine an attorney-client relationship; it is merely a
factor.” (Strasbourger Pearson Tulcin Wolff Inc. v. Wiz
Technology, Inc. (1999) 69 Cal.App.4th 1399, 1404
(Strasbourger).) This is not a case like those Park and her
“expert” describe in which a party agrees to pay the opposing
side’s attorney fees for drafting documents. For one thing, the
documents themselves in this case do not memorialize such an
agreement. Moreover, there are other factors demonstrating an
attorney-client relationship, which we have already reviewed
above.

                                22
      A lengthy discussion of the cases Park relies on is not
warranted, as they are readily distinguishable, and her reliance
is misplaced. A key factor emphasized in many of these cases is
that the party claiming the relationship with an attorney had
separate, independent counsel advising the party with respect to
the transaction at issue. (See, e.g., Strasbourger, supra, 69
Cal.App.4th at pp. 1404-1405.) That factor is not present in this
case, as the trial court found. As discussed above, substantial
evidence demonstrates the only attorney advising the Kims and
performing legal work on their behalf with respect to the
Moorpark Property transaction was Katofsky.
      Having decided there was an attorney-client relationship
between Katofsky and the Kims, we must now determine
whether a disqualifying conflict of interest exists.
II.   Katofsky’s Former Joint Representation of Park and
      the Kims is Substantially Related to Katofsky’s
      Current Representation of Park, and Access to
      Confidential Information Is Presumed
      Under the State Bar Rules of Professional Conduct, “A
lawyer who has formerly represented a client in a matter shall
not thereafter represent another person in the same or a
substantially related matter in which that person’s interests are
materially adverse to the interests of the former client unless the
former client gives informed written consent.” (Rules Prof.
Conduct, rule 1.9(a).) The “ ‘chief fiduciary value jeopardized’ ” in
such a successive representation “ ‘is that of client
confidentiality.’ ” (M’Guinness v. Johnson (2015) 243 Cal.App.4th
602, 613, italics omitted (M’Guinness).)
      “In successive representation cases, where the former client
seeks to disqualify counsel from representing a successive client

                                 23
in current litigation adverse to the former client’s interest, the
former client must ‘demonstrate a “substantial relationship”
between the subjects of the antecedent and current
representation.’ ” (M’Guinness, supra, 243 Cal.App.4th at p. 614,
italics omitted.) If the prior “representation was ‘direct—that is,
where the lawyer was personally involved in providing legal
advice and services to the former client’ [citation] the only
question is whether there is a substantial relationship between
the subject of the prior representation and the subject of the
current representation. If the answer is yes, ‘access to
confidential information by the attorney in the course of the first
representation (relevant, by definition, to the second
representation) is presumed and disqualification of the attorney’s
representation of the second client is mandatory. . . .’ ”
(Fiduciary Trust Internat. of California v. Superior Court (2013)
218 Cal.App.4th 465, 479 (Fiduciary Trust).) “On the other hand,
where the former attorney-client relationship is peripheral or
attenuated instead of direct, then the presumption will not be
applied in the absence of an adequate showing that the attorney
was in a position vis-à-vis the client to likely have acquired
confidential information.” (Jessen v. Hartford Casualty Ins. Co.
(2003) 111 Cal.App.4th 698, 710.)
       “In determining whether a conflict of interest requires
disqualification,” the “ ‘paramount concern must be to preserve
public trust in the scrupulous administration of justice and the
integrity of the bar. The important right to counsel of one’s
choice must yield to ethical considerations that affect the
fundamental principles of our judicial process.’ ” (Fiduciary
Trust, supra, 218 Cal.App.4th at p. 478.)

                                24
       “ ‘Generally, a trial court’s decision on a disqualification
motion is reviewed for abuse of discretion. [Citations.]’
[Citation.] As to disputed factual issues, a reviewing court’s role
is simply to determine whether substantial evidence supports the
trial court’s findings of fact; ‘the reviewing court should not
substitute its judgment for . . . express or implied [factual]
findings [that are] supported by substantial evidence.
[Citations.]’ [Citation.] As to the trial court’s conclusions of law,
however, review is de novo; a disposition that rests on an error of
law constitutes an abuse of discretion. [Citations.] The trial
court’s ‘application of the law to the facts is reversible only if
arbitrary and capricious.’ ” (In re Charlisse C. (2008) 45 Cal.4th
145, 159.)
       Katofsky’s representation of the Kims was direct, not
peripheral or attenuated. Hyun Kwon, on behalf of himself and
Hesook, was in consultation with Katofsky, and Katofsky
provided legal services directly to the Kims (as he alleged in the
original complaint). It is obvious there is a substantial
relationship between Katofsky’s prior joint representation of
Park and the Kims and the current representation of Park—they
involve the same real property transaction. Accordingly,
Katofsky’s access to confidential information during the course of
the prior representation is presumed and Katofsky’s/Salomons’s
disqualification from the current representation is mandatory.
Katofsky advised the Kims how to structure the Moorpark
Property transaction for tax planning and trust administration
purposes; now, members of his firm (first himself, then Salomons)
are representing Park in prosecuting this action against the
Kims, challenging the Kims’ actions with respect to the same
transaction.

                                 25
       Park argues a substantial relationship between the prior
and current representations is not sufficient to require
Katofsky’s/Salomons’s disqualification because Katofsky was not
in a position in the prior representation to receive confidential
information from the Kims that they would have reasonably
expected Katofsky to keep confidential from Park. Our analysis
here does not turn on Evidence Code section 962, however,—the
exception to the attorney-client privilege between joint clients.
This statutory provision does not “create[] a blanket exception to
the prohibition on adverse, successive representations in cases
where the attorney jointly represented the parties in the prior
matter.” (Fiduciary Trust, supra, 218 Cal.App.4th at p. 482.)
       Moreover, cases that have indicated “there may be some
circumstances under which an attorney may represent one
former joint client against another in a substantially related
matter” typically turn on the salient and distinguishable factor
we highlighted above—whether the party claiming the
relationship with an attorney had separate, independent counsel
advising the party with respect to the transaction at issue. As
one appellate court explained:
       “While we agree an attorney should not always be free to
represent one former joint client against another merely because
of the joint-client exception to the attorney-client privilege and
we can easily envision situations where such action would
seriously undermine the integrity of the attorney-client
relationship, the present case is not such a situation. Here
petitioner [a contractor] maintained an attorney-client
relationship with his personal attorney. There is no evidence
petitioner ever reposed confidence and trust in [a surety’s
attorney’s firm] or ever sought or obtained advice from [the

                                26
surety’s attorney] but rather at all times looked solely to his
personal attorney not only to advise him but to represent his
interests vis-a-vis [the surety’s attorney] and [the surety].
Petitioner knew [the surety’s attorney] considered [the surety] its
primary client and knew that in the event of a conflict between
petitioner [the contractor] and [the surety], [the surety’s
attorney] would continue to represent [the surety]. Thus our
conclusion is based on the specific facts present. Our conclusion
would be significantly altered if petitioner [the contractor] had
not been independently represented by counsel or if there was
evidence that petitioner [the contractor] looked to both its
personal counsel and [the surety’s counsel] for advice and
counsel.” (Cornish v. Superior Court (1989) 209 Cal.App.3d 467,
477-478.)
       Under the facts and circumstances of this case, the trial
court did not abuse its discretion in ordering the disqualification
of Katofsky and Salomons. There was no legal error, and the
court’s factual findings are supported by substantial evidence.
                           DISPOSITION
       The order is affirmed. Respondents are entitled to recover
their costs on appeal.
       NOT TO BE PUBLISHED

                                                 CHANEY, J.

We concur:

             ROTHSCHILD, P. J.                   WEINGART, J.

                                27