Court Opinion

ID: 4690517
Source: CourtListenerOpinion
Date Created: 2021-05-26 22:04:40.616297+00
Date Added: 2024-06-11T08:05:00.441224
License: Public Domain

Filed 5/26/21 Devora v. Costco 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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

ROCIO DEVORA,                                                   B306090

         Plaintiff and Respondent,                              (Los Angeles County
                                                                Super. Ct. No. BC704678)
         v.

COSTCO WHOLESALE
CORPORATION,

         Defendant and Appellant.

     APPEAL from an order of the Superior Court of
Los Angeles County. Olivia Rosales, Judge. Affirmed.

     Yukevich | Cavanaugh, James J. Yukevich, Nina J. Kim
and David A. Turner for Defendant and Appellant.

      Vaziri Law Group, Siamak Vaziri and David Shay for
Plaintiff and Respondent.

                               _________________________
      Appellant Costco Wholesale Corporation (Costco) Costco
appeals from the denial of its motion to disqualify the attorneys
representing respondent Rocio Devora (Devora) against Costco in
her personal injury action. We find no error and affirm the trial
court’s order.
                                FACTS
      Devora sued Costco for premises liability and negligence.
She alleged that she slipped and fell on a slippery substance
while walking close to the checkout isles at a Costco store in the
City of Lakewood.
      Soon after, Costco moved to disqualify the attorneys
representing Devora, the Vaziri Law Group (VLG) and David C.
Shay (Shay) (collectively Devora’s attorneys). Costco claimed
that VLG was employing Federico Stea (Stea), a nonlawyer who
previously worked for Costco’s counsel, Yukevich | Cavanaugh
(Yukevich firm). Citing In re Complex Asbestos Litigation (1991)
232 Cal.App.3d 572, 596 (Complex Asbestos), Costco argued that
Stea possessed confidential attorney-client information that is
materially related to Devora’s pending litigation, and that
Devora’s attorneys could not rebut the presumption that Stea
used or disclosed that information while working at VLG.
      In support of its motion, Costco submitted overlapping
declarations from its attorneys, James J. Yukevich (Yukevich)
and Nina J. Kim (Kim).
      Yukevich declared: Starting in 2017, Stea worked at the
Yukevich firm as a law clerk while in law school, and then while
awaiting results from the California Bar Exam. He “was
assigned to the team of attorneys and paralegals handling the
defense of Costco in at least twenty (20) different actions. Two of
these cases . . . were filed by VLG[.] . . . [¶] . . . [¶] During his

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work on the defense of Costco while employed by [the Yukevich
firm], [Stea] learned confidential attorney-client information
related to Costco’s defense in personal injury actions similar if
not identical to” Devora’s case. He “frequently prepared drafts of
initial case evaluation and damages evaluations for Costco.”
       Yukevich explained that the preparation of initial case
evaluations for Costco required analysis of various topics,
including: “(1) a particular plaintiff’s counsel, including his or
her education, experience, and verdict and settlement history;
(2) analysis of the venue, including the assigned judge’s education
and experience and relevant past rulings, the statistical data for
the applicable jury pool and whether Costco considers a
particular jury pool favorable; (3) summaries of the plaintiff’s
alleged causes of action; (4) analyses of defenses[,] including
identification of the applicable statutes of limitations and other
issues that may support a demurrer as to causes of action or
motion to strike claims for damages; (5) analyses and summaries
of privileged and confidential Costco client materials;
(6) summaries of the plaintiff’s alleged injuries, including
calculation of alleged medical expenses; and (7) strategic
recommendations, proposed handling, and action items for the
defense of the case.”
       The preparation of initial damages evaluations for Costco
involved, inter alia: “(1) [analysis of] the plaintiff’s medical
records including pertinent diagnoses, prognoses and other
information; (2) analysis of the plaintiff’s responses to written
discovery requests and documents produced; (3) analysis of the
plaintiff’s deposition testimony if any; and (4) research into
damages issues specific to the plaintiff.”

                                3
       While working at the Yukevich firm, Stea “had access to
Costco case files and was tasked with analyzing case files,
identifying critical documents in each, and maintaining the
critical documents in each case. [Stea] would also communicate
with plaintiffs’ counsel in connection with cases involving Costco.
Furthermore, through his employment with [the Yukevich firm],
[Stea] was exposed to and learned [the Yukevich firm’s] case
evaluation approach and litigation defense strategy as it
pertained to Costco.” After Stea failed the California Bar Exam
three times, the Yukevich firm terminated his employment. Six
months later, Yukevich learned that Stea had accepted
employment in Shay’s practice group at VLG.1
       In opposition, Devora’s attorneys argued that disqualifying
them was unnecessary because VLG successfully implemented
ethical screening procedures to prevent Stea from working on, or
communicating about, Costco matters, and because Costco failed
to demonstrate that Stea worked on matters substantially related
to Devora’s case.
       VLG offered the declarations of Stea and Shay.
       Per Stea, while he was at the Yukevich firm, he worked on
Costco cases for 10 months. He added, “Of the work I did
perform, my tasks were limited to menial tasks and did not
involve confidential attorney-client communications from the
client. I did not communicate directly with Costco regarding any
trade secrets, nor any confidential or proprietary information.”

1     Shay worked at the predecessor of the Yukevich firm,
Yukevich, Calfo & Cavanaugh, from 2007 to 2012, which was
before the Yukevich firm represented Costco. Costco’s motion to
disqualify was not based on Shay’s employment with Yukevich,
Calfo & Cavanaugh.

                                4
Stea further declared, among other things, that when he was
hired at VLG, he was told that he would be screened off from, and
denied access to, any Costco files. He averred that he has not
worked on any Costco matter at VLG, he has not “at any time
communicated case strategies to anyone at [VLG],” and that his
new employers at VLG avoid speaking to him about his previous
employer and Costco.
       Shay declared that prior to hiring Stea, Shay informed him
“that he would be ethically screened from involvement in any
manner with any Costco cases,” and that “he would not be
assigned to any Costco matters and could not assist in any such
matters in any capacity.” Also, Shay told Stea that “steps would
be taken prior to [Stea’s] employment to implement an ethical
screen to ensure that he could not and would not convey any
information about Costco he may have gleaned from his
employment at” the Yukevich firm. “Consistent with VLG’s pre-
hire directive that [Stea] not work on any Costco matters in any
way, VLG implemented intensive procedures for an ethical screen
prior to [Stea] commencing work.” For example, VLG created
tailored e-mail distribution lists that screened Stea from
receiving any e-mails relating to Costco. Shay explained that all
Costco files are stored by handling attorneys in file cabinets
labeled “Costco—Subject to Ethical Screen—Restricted Access;”
Stea does not have a key to the locked cabinets, nor does he have
the ability to access files; all VLG employees, including Stea,
were informed of the ethical screen and told that any violation of
the ethical screen would result in termination; and, all attorneys
and staff including new employees, are periodically reminded of
the ethical screen and the consequences that would flow from a
violation of the ethical screen. Shay further explained that the

                                5
ethical screening measures have been meticulously followed as
follows. Stea has been assigned to, and works on, cases that do
not involve Costco. He has not divulged any information about
Costco, and he has not been asked to divulge any trial strategies
used by the Yukevich firm.
       The trial court denied Costco’s motion to disqualify
Devora’s attorneys, ruling that there was insufficient evidence of
a substantial relationship between the subject of the prior and
current representations because the parties were not identical
even if the claims were similar. Further, the trial court
determined that Costco failed to establish that Stea obtained
confidential attorney-client information about Costco during his
employment at the Yukevich firm. Finally, the trial court
determined that Shay’s declaration established that VLG put
mechanisms “in place to prevent Stea from divulging tainted
information, or from coming into contact with any information
concerning ‘Costco’ matters,” and that Stea’s declaration averred
that he has not worked on any Costco matters while at VLG, nor
has he communicated any of the Yukevich firm’s case strategies
to anyone at VLG.
       Costco appealed.
                            DISCUSSION
I. Standard of Review.
       “Generally, a trial court’s decision on a disqualification
motion is reviewed for abuse of discretion.” (People ex rel. Dept.
of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20
Cal.4th 1135, 1143.) We review a trial court’s factual findings
under the substantial evidence test. (In re Charlisse C. (2008) 45
Cal.4th 145, 159.) In doing so, we resolve every evidentiary
conflict and indulge every reasonable inference in favor of the

                                6
prevailing party if the evidence supporting the challenged ruling
is of ponderable legal significance, and if it has reasonable,
credible, and solid value. (Oregel v. American Isuzu Motors, Inc.
(2001) 90 Cal.App.4th 1094, 1100.) “The doctrine of implied
findings requires the appellate court to infer the trial court made
all factual findings necessary to support the judgment.
[Citation.]” (Fladeboe v. American Isuzu Motors Inc. (2007) 150
Cal.App.4th 42, 58.) Under the substantial evidence test, we
indulge reasonable inferences that can be deduced from the
evidence. (Antelope Valley Press v. Poizner (2008) 162
Cal.App.4th 839, 849, fn. 11.)
       An order is presumed correct. (Denham v. Superior Court
(1970) 2 Cal.3d 557, 564 (Denham).) All intendments and
presumptions are indulged to support it on matters as to which
the record is silent, and error must be affirmatively shown. An
appellant has the burden of establishing that the lower court
erred or abused its discretion. It is not the role of appellate
courts to construct a legal argument for an appellant. If no
argument is provided on a particular point, the court may treat it
as waived and pass it without consideration. (Ibid.)
       Even if a trial court erred, we will not reverse a challenged
order unless an appellant suffered prejudice under People v.
Watson (1956) 46 Cal.2d 818 (Watson). Watson held that there is
a miscarriage of justice under article VI, section 13 of the
California Constitution sufficient to reverse a trial court’s ruling
only when an appellate court “is of the ‘opinion’ that it is
reasonably probable that a result more favorable to the appealing
party would have been reached in the absence of the error.”
(Watson, supra, 46 Cal.2d at p. 836.)

                                 7
II. Disqualification Law.
       “[T]he proper rule . . . for disqualification based on
nonlawyer employee conflicts of interest should be as follows.
The party seeking disqualification must show that its present or
past attorney’s former employee possesses confidential attorney-
client information materially related to the proceedings before
the court. The party should not be required to disclose the actual
information contended to be confidential. However, the court
should be provided with the nature of the information and its
material relationship to the proceeding. [Citation.] [¶] Once this
showing has been made, a rebuttable presumption arises that the
information has been used or disclosed in the current
employment. . . . To rebut the presumption, the challenged
attorney has the burden of showing that the practical effect of
formal screening has been achieved. The showing must satisfy
the trial court that the employee has not had and will not have
any involvement with the litigation, or any communication with
attorneys or coemployees concerning the litigation, that would
support a reasonable inference that the information has been
used or disclosed. If the challenged attorney fails to [establish
that effective screening has been achieved], then the court may
disqualify the attorney and law firm.” (Complex Asbestos, supra,
232 Cal.App.3d at p. 596, fn. omitted.)
       Courts apply a different test for disqualification when an
attorney represents a current client against a former client. In
that situation, the test is whether that matters embraced within
the pending suit are substantially related to the matters involved
in the prior representation, i.e., whether information material to
the current dispute would have been imparted to the attorney.
(Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698,

                                8
706–708.) If the attorney had a direct attorney-client
relationship with the former client, the courts presume the
attorney “acquired confidential information relevant to the
current representation if it is congruent with the former
representation. [Citations].” (Id. at p. 709.) Where the former
attorney-client relationship is attenuated, “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 material to the current
representation.” (Id. at p. 711.) If there is a presumption,
disqualification is automatic. (Id. at pp. 710–711.)
       “Under California law a law firm is not subject to
disqualification because one of its attorneys possesses
information concerning an adversary’s general business practices
or litigation philosophy acquired during the attorney’s previous
relationship with the adversary. [Citation.] To be protected
through a disqualification order, ‘“the information acquired
during the first representation [must] be ‘material’ to the second;
that is, it must be found to be directly at issue in, or have some
critical importance to, the second representation.”’ [Citation.]”
(Wu v. O’Gara Coach Co., LLC (2019) 38 Cal.App.5th 1069, 1083.)
III. Analysis.
       Costco argues that the trial court erred (1) when it applied
the substantial relationship test applicable to attorneys instead
of the materially related test for nonattorneys, and when it failed
to apply the substantial relationship test correctly; (2) when it
determined that Costco failed to show that Stea possessed
Costco’s confidential attorney-client information; and (3) when it
determined that VLG established that Stea had been adequately

                                9
screened from all Costco cases and files during his employment at
VLG.
       As we discuss below, Costco’s arguments as to the second
and third points fail and any error with respect to the first point
is therefore harmless.
       A. Whether Stea Possessed Confidential Attorney-Client
Information.
       The trial court concluded that Costco failed to establish
that Stea obtained confidential attorney-client information.
Impliedly, the trial court credited Stea’s declaration that his work
on Costco matters did not involve confidential attorney-client
information, and it found that the menial tasks performed by
Stea did not include the tasks identified by Costco. Instead of
analyzing whether there was sufficient evidence to support these
express and implied findings in its opening brief, Costco merely
assumes Stea possessed attorney-client information and then
reargues its motion. Costco failed to explain why Stea’s
assertions that his work did not involve confidential attorney-
client information and that he only performed menial tasks on
Costco files were insufficient under the substantial evidence test
to rebut the claim that he possessed confidential attorney-client
information. Arguments should be tailored to the standard of
review. Failure to acknowledge the proper scope of review
concedes a lack of merit. (Ewald v. Nationstar Mortgage, LLC
(2017) 13 Cal.App.5th 947, 948.)
       In the reply, Costco notes that Stea did not dispute the
specific facts in Costco’s detailed description of his job
responsibilities or participation in privileged communications,
and that he did not give any specific facts when he stated that he
performed only menial tasks. This argument is not tied to the

                                10
standard of review and, in any event, we consider arguments
raised for the first time in the reply to be waived. (Reichardt v.
Hoffman (1997) 52 Cal.App.4th 754, 764.) We are left with the
presumption that Stea’s declaration was sufficient to support the
trial court’s implied finding and that the trial court was justified
in denying the motion.
       B. Whether VLG Created an Adequate Screen.
       Precedent establishes that “[t]he specific elements of an
effective screen will vary from case to case, although two
elements are necessary: First, the screen must be timely
imposed; a firm must impose screening measures when the
conflict first arises. It is not sufficient to wait until the trial court
imposes screening measures as part of its order on the
disqualification motion. [Citations.] Second, it is not sufficient to
simply produce declarations stating that confidential information
was not conveyed or that the disqualified attorney did not work
on the case; an effective wall involves the imposition of preventive
measures to guarantee that information will not be conveyed.
[Citation.]” (Kirk v. First American Title Ins. Co. (2010) 183
Cal.App.4th 776, 810, fn. omitted (Kirk).) Various measures can
be employed, such as the physical, geographic, and departmental
separation of personnel. But “the inquiry before a trial court
considering the efficacy of any particular [screen] is not to
determine whether all of a prescribed list of [measures] (beyond
timeliness and the imposition of prophylactic measures) have
been established; it is, instead, a case-by-case inquiry focusing on
whether the court is satisfied that the tainted [employee] has not
had and will not have any improper communication with others
at the firm concerning the litigation.” (Id. at p. 811.)

                                   11
       Per Shay, “VGL implemented intensive procedures for an
ethical screen prior to [Stea] commencing work.” Shay explained
that Stea was told before he was hired that he would not be
allowed to work on Costco cases. In addition, Shay noted that
VLG created e-mail distribution lists so that Stea would not
receive any Costco related e-mails, VLG locked file cabinets
containing Costco files and denied Stea access to those file
cabinets, and VLG admonished all employees that they would be
terminated if they violated the ethical screen. Stea declared that
he was told, prior to being hired, that he would be screened off
from any Costco matters. He explained that he and VLG had
observed the ethical screen.
       These declarations, and the reasonable inferences arising
from them, supported the trial court’s findings and implied
findings that VLG implemented various screening procedures
both before and as soon as Stea began working for VLG, and that
those procedures were in fact effective in ensuring that Stea
never worked on Costco matters or communicated anything he
may have learned at the Yukevich firm to VLG. Given these
findings and implied findings, the trial court did not abuse its
discretion, i.e., exceed the bounds of reason (Denham, supra,
2 Cal.3d at p. 566), by denying Costco’s motion to disqualify VLG.
After all, if the ethical screening was effective, Costco was
protected and there is no basis to deprive Devora of her chosen
counsel.
       In urging us to adopt a contrary view, Costco argues that
VLG was required to implement screening before it hired Stea
but made no such showing. We disagree on both counts. Costco
cites Complex Asbestos, supra, 232 Cal.App.3d at p. 594, but it
says “screening should be implemented” prior to a hiring, not

                                12
that it must be. In the next sentence, Complex Asbestos does use
mandatory language but only says that screening “must take
place at the outset to prevent any confidences from being
disclosed.” (Ibid.) It does not define “outset” (ibid), but we take
this to mean the moment there is a risk that confidences are in
jeopardy. Moreover, Kirk only requires screening measures when
a conflict first arises. Thus, we conclude that screening is
required only as soon as reasonably necessary to protect the
confidences of the former client. In any event, there was
prehiring screening here. Shay declared that he told Stea before
he was hired that he would not be allowed to work on Costco
matters. Shay also declared, “[T]he sum total of any discussion of
Costco with . . . Stea has been to (1) establish and maintain the
screening procedures . . . , and (2) provide a declaration to oppose
Costco’s motions for disqualification.” This statement covers both
pre- and posthiring time periods. It is unclear what more Costco
expected VLG or Shay to do prior to Stea being hired. Notably,
there would have been no rational reason to implement any other
screening procedures until Stea had accepted employment.
Further, until he was hired and commenced working, he could
not have worked on, or had access to, any Costco matters.
       Costco contends that Shay’s declaration was insufficient
because it was vague and ambiguous as to when screening was
implemented. We again disagree. Shay specifically explained
that he did not discuss Costco matters with Stea other than to
establish and maintain the screening procedures and then, later,
to provide a declaration related to Costco’s motion. Also, Shay
advised Stea prior to hiring him that he would be ethically
screened from Costco matters, and he could not work on Costco
matters. Prior to Stea beginning work, VLG implemented e-mail

                                13
distribution lists to avoid Stea from receiving Costco related
e-mails. Nothing about these statements are vague and
ambiguous. In his declaration, Shay referred to locked cabinets
and an admonition to employees about the screen and the
consequences of violating it. In isolation, these references are
temporally vague. But the context of Shay’s whole declaration
gives rise to the reasonable inference that these measures were
implemented as soon as Stea began working. After all, the tenor
of Shay’s declaration portrayed diligence regarding the ethical
screen starting with Stea’s interview.
       Turning to a new point, Costco contends that VLG
admitted that Stea has electronic access to Costco’s case files. At
the hearing, Yukevich expressed concern about Stea’s access to
electronic case files involving Costco. Shay stated, “One, we have
done what we can do to limit [him from] . . . inadvertently
obtaining information about . . . pending matters. We’ve done so
in the form of tailored lists of e-mails. [Stea] has been removed
from lists of e-mails. [¶] I think what [Yukevich] is saying,
essentially, is that . . . there [is] a means by which someone who
was really intent on circumventing a screen could circumvent a
screen[.] I agree, someone who is really intent on being a bad
actor can circumvent any screen.”
       We do not read Shay’s statement as a concession that Stea
has access to Costco related files. Rather, Shay mused about the
possibility. But even if Shay made such a concession, it would
not change our analysis. At most, any such concession would
merely admit that Stea could surreptitiously and without
authorization access such files. It would not suggest that Stea
has had or will have any involvement with Devora’s case, which
is the touchstone for the analysis under Complex Asbestos. The

                                14
reasonable inference from Shay’s declaration is that if Stea ever
did access electronic files involving Costco, he would be fired and
that none of Costco’s confidential attorney-client communication
would be divulged to attorneys or other employees at VLG. Even
if Shay’s statement supported Costco’s position, it would simply
be conflicting evidence. We must disregard conflicting evidence
under the substantial evidence test.
       Costco maintains that the trial court should have
considered VLG’s failure to ask Costco to consent to Stea’s
employment at VLG as evidence that it has a highly casual view
of its ethical duties and therefore the ethical screen that it
implemented was insufficient. Also, Costco posits that VLG
failed to make the “required” showing that Stea was separated
physically, geographically, or departmentally from attorneys
working on cases involving Costco. As to both points, Costco
relies on Kirk. But Kirk does not suggest that a law firm must
give notice to the client of opposing counsel when employing a
nonlawyer who used to work for that opposing counsel, or that
the failure to give such notice undermines the adequacy of an
ethical screen as a matter of law. At most, the court indicated
that when evaluating whether an attorney has been ethically
screened from cases involving his or her former client, a trial
court should consider whether the former client was given notice.
Stea is a nonlawyer, and the law did not require the trial court to
consider whether VLG gave the Yukevich firm notice that VLG
had hired Stea. Finally, we note that Kirk says that physical,
geographical, or departmental separation are simply factors for a
trial court to consider. They are not mandatory requirements of
an ethical screen. (Kirk, supra, 183 Cal.App.4th at p. 813.) Thus,
the absence of such factors here does not establish either that the

                                15
evidence was insufficient to support the trial court’s order or that
it abused its discretion.
       C. Any Error as to the Test the Trial Court Applied was
Harmless.
       The trial court erred when it applied the substantial
relationship test. Because Stea was a nonlawyer, the trial court
should have applied the materially related test from Complex
Asbestos. Ultimately, however, Devora rebutted any presumption
that Stea possessed confidential attorney-client information, and
Shay established that VLG created an adequate screen. As a
result, even absent the error, the trial court would not have
disqualified VLG and Shay. We therefore conclude any error was
harmless under Watson.
                           DISPOSITION
       The order is affirmed. Devora shall recover her costs on
appeal.
       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                               _____________________, Acting P. J.
                               ASHMANN-GERST

We concur:

________________________, J.
CHAVEZ

_______________________, J.
HOFFSTADT

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