Court Opinion

ID: 9925437
Source: CourtListenerOpinion
Date Created: 2024-01-19 20:03:37.388408+00
Date Added: 2024-06-11T09:20:40.238845
License: Public Domain

Filed 1/19/24 University of San Francisco v. Community Initiatives CA1/3

                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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ordered published for purposes of rule 8.1115.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 UNIVERSITY OF SAN
 FRANCISCO,
           Plaintiff and Appellant,                                     A167142

 v.                                                                     (City & County of San Francisco
 COMMUNITY INITIATIVES,                                                 Super. Ct. No. CGC22597932)
           Defendant and Respondent.

         This appeal arises from successive lawsuits relating to administration
of the San Francisco Teacher Residency Program (Residency program).
Loran Simon, a former employee of the Residency program, filed two prior
lawsuits based on allegations that appellant University of San Francisco
(USF) and respondent Community Initiatives fraudulently obtained federal
funding to administer the Residency program. In the present action, USF
seeks indemnity from Community Initiatives for damages it incurred in
connection with the Simon litigation. This appeal is from an order
disqualifying Michael Vartain and Vartain Law Group (Vartain) from
representing USF in the pending indemnity action due to Vartain’s prior
representation of Community Initiatives in the Simon lawsuits. We affirm
that order.

                                                               1
                              BACKGROUND
The Prior Lawsuits
      Simon’s Complaints
      In November 2016, Simon filed a federal action against USF and
Community Initiatives under qui tam provisions of the False Claims Act. At
the time, Simon was Assistant Director of the Residency program, which he
described as a training program for teachers to improve achievement of
historically underserved students that was operated by five organizations:
USF; Community Initiatives; the San Francisco Unified School District (SF
Unified); the Stanford University Teacher Education Program (Stanford); and
United Educators of San Francisco. According to his complaint, Simon was
initially employed by USF in June 2014, and in September 2016 his
employment was transferred to Community Initiatives, a fiscal sponsor that
assisted with administration of the Residency program.
      Simon alleged that during his tenure as Assistant Director of the
Residency program, USF and Community Initiatives submitted fraudulent
claims to obtain grant money from federal programs, including AmeriCorps
(previously known as the Corporation for National and Community Services).
According to the complaint, all teacher candidates who participated in the
Residency program obtained an AmeriCorps stipend, as well as other
financial benefits from their respective universities. Simon alleged that the
defendants failed to “track” the time and effort of these AmeriCorps
participants and instead used falsified timesheets to obtain federal funding.
      In June 2019, while his federal case was pending, Simon filed a state
court action seeking damages for wrongful termination, naming multiple
defendants including USF, Community Initiatives, and Peter Williamson, a
Stanford faculty member who served as Chairman of the Residency

                                      2
program’s Advisory Board. Simon alleged that on June 30, 2017, he was
wrongfully terminated from his employment as Assistant Director of the
Residency program in retaliation for engaging in protected activity, including
contesting racial discrimination, and reporting violations of the state and
federal False Claims Acts. Simon alleged that the defendants were all liable
for his wrongful termination as they were his joint employers and acted
together to terminate him.
      Arbitration Petitions In Simon’s Wrongful Termination Case
      On October 2, 2019, USF petitioned the superior court to compel
arbitration and stay Simon’s wrongful termination action. Vartain drafted
and filed the petition on behalf of USF. USF sought to compel arbitration
pursuant to a provision in its written employment agreement with Simon.
      The following day, USF executed a Joint Defense and Confidentiality
Agreement (JDA) with Community Initiatives and Peter Williamson. The
stated purpose of the JDA was to “ensure that exchanges and disclosures of
confidential, privileged, and otherwise protected information” among the
parties for purposes of pursuing a petition for an order to arbitrate were not
interpreted as a waiver of the confidential or privileged nature of the
information that was disclosed. Michael Vartain signed the JDA on behalf of
Vartain as attorneys for USF, and Stanford’s Vice President and General
Counsel, Debra Zumwalt, signed the JDA as attorney for Williamson and
Community Initiatives.
      The terms of the JDA were set forth in 24 numbered paragraphs,
addressing issues such as the type of material covered by the agreement, and
ongoing obligations of the parties and their counsel to protect the privileged
nature of the shared material. Paragraph 11 addressed the subject of
continued representation should a party to the JDA assert a claim against

                                       3
another party in the wrongful termination case or separate litigation. In that
event, the JDA states, “each attorney of any Party who has access to or
receives any Joint Defense Material shared under [the JDA] shall remain
nonetheless qualified to continue to represent his or her client in the defense
or pursuit of the claim(s).” In paragraph 11, the parties also agreed to the
following: “Any conflict of interest arising out of the sharing of Joint Defense
Materials under this Agreement is waived. Any right of any Party to move to
disqualify any attorney for any Party to this Agreement on the grounds that
such attorney has received Joint Defense Materials shared under this
Agreement is waived.”
      On October 4, 2019, Community Initiatives and Peter Williamson filed
a petition for an order to arbitrate and stay Simon’s wrongful termination
complaint (the non-signatories’ petition). The non-signatories’ petition and
supporting documents were signed by Vartain as attorneys for Community
Initiatives and Williamson. Michael Vartain filed a supporting declaration,
which stated that he was appearing on behalf of Community Initiatives and
Williamson for the limited purpose of filing and arguing their arbitration
petition. In a supporting memorandum, Vartain argued that USF’s
arbitration agreement encompassed Simon’s entire complaint, that Simon
was estopped from refusing to arbitrate his claims against Community
Initiatives and other entity defendants, and that the arbitration agreement
applied to Williamson and other individual defendants pursuant to principles
of agency.
      On November 1, 2019, the superior court held a hearing on both
arbitration petitions. USF’s petition was granted pursuant to an uncontested
tentative ruling that Simon’s broad arbitration agreement with USF applied
to his employment law claims. Simon contested a tentative ruling to grant

                                       4
the non-signatories’ petition, but after the matter was argued, the court
granted that petition as well.
      Dismissals of Simon’s Lawsuits
      The Simon lawsuits were both resolved in May 2020. On May 18, the
United States government intervened in the qui tam action “for settlement
purposes against defendant [USF].” During negotiations between the
government and USF, Vartain requested that a contemplated release of
Simon’s qui tam claims also include Community Initiatives, and the
government agreed to the request. On May 18, the United States and Simon
filed a joint proposed dismissal of the qui tam action with prejudice. The
order was filed May 21, confirming Simon’s dismissal extended to all
defendants. The United States dismissed Simon’s claims with prejudice to
the extent they were “brought against USF under the False Claims Act,
arising from USF’s status as the fiscal agent which applied AmeriCorps funds
to support and administer the [Residency program] during the 2014, 2015,
and 2016 grant years.” The following week, on May 27, Simon dismissed his
wrongful termination case, serving notice of the dismissal on Vartain as
attorneys for USF, Community Initiatives, and Williamson.
The Current Indemnity Action
      In February 2022, USF, represented by Vartain, filed the underlying
action for contractual and equitable indemnity and declaratory relief, seeking
to recover more than $4.5 million as damages it incurred to settle the qui tam
action. USF alleges that its liability in the Simon cases was based solely on
conduct by the Residency program’s manager, who was the employee and
agent of SF Unified. In its original complaint, USF named SF Unified as the
sole defendant, but its operative first amended complaint names Community
Initiatives and Stanford as additional defendants. USF’s pleaded theory is

                                       5
that each defendant must indemnify USF in proportion to its relative fault
relating to the fraudulent procurement of AmeriCorps funds because they
were all USF’s partners and comembers of the Residency program’s Advisory
Board.
      In November 2022, Stanford filed its answer to USF’s complaint along
with a cross-complaint. Community Initiatives filed a demurrer, which was
vigorously opposed and ultimately denied on December 22. On December 14,
while the demurrer was still pending, Community Initiatives filed a motion
to disqualify Vartain from representing USF in the present action.
Community Initiatives argued that Vartain’s previous attorney-client
relationship with Community Initiatives in the Simon cases created a conflict
of interest that Community Initiatives did not waive. Stanford filed a joinder
in Community’s Initiatives disqualification motion and USF filed vigorous
opposition.
The Disqualification Order
      On January 18 and 20, 2023, the trial court held a hearing before
taking the disqualification motion under submission. On January 23, the
court disqualified Vartain from representing USF in the pending action,
memorializing its findings in a six-page order.
      The trial court’s analysis of the disqualification motion was framed by a
preliminary finding that Vartain represented Community Initiatives in
Simon’s wrongful termination case. The court emphasized that Vartain
signed and filed Community Initiatives’ successful petition to compel
arbitration, supporting memorandum, and reply brief, and all these court
filings identified Vartain as “ ‘Attorneys for Defendant Community
Initiatives.’ ” The court made an additional finding that Vartain assisted
Community Initiatives with “ ‘getting released’ ” from the qui tam case, which

                                       6
was also brought by Simon and named Community Initiatives and USF as
codefendants.
      Turning to the merits of the motion, the court applied a “ ‘substantial
relationship’ ” test, which courts use to evaluate alleged attorney conflicts
that arise from successive representation of clients with adverse interests.
(Citing, e.g., City and County of San Francisco v. Cobra Solutions, Inc. (2006)
38 Cal.4th 839, 847 (Cobra Solutions).) Concluding that Community
Initiatives made the requisite showing of a substantial relationship between
Vartain’s former representation of Community Initiatives and their current
representation of USF, the court made two sets of material findings.
      First, Vartain had a direct professional relationship with Community
initiatives during the prior actions. This finding was based on Michael
Vartain’s personal involvement in successfully litigating Community
Initiatives’ arbitration petition, and the fact that the petition was the most
important motion in the wrongful termination case because after that
petition was granted “ ‘[t]he case was over.’ ” Simon “ ‘never submitted the
dispute to arbitrat[ion]’ and instead dismissed it with prejudice.” (Quoting
Michael Vartain’s declaration.) In addition, the court observed that after
Vartain obtained a positive outcome for Community Initiatives in the
employment termination case, they offered further assistance by helping to
secure a release from liability for Community Initiatives in the federal qui
tam action.
      Second, the court found that the Simon cases and the pending
indemnity action are linked by their subject matter, as they involve
overlapping parties and issues. As the court explained, the wrongful
termination case and USF’s current indemnity action concern the same
allegations of “wrongdoing” against Community Initiatives—that it played a

                                        7
role in submitting falsified timesheets for AmeriCorps funding—which is the
same conduct that led USF to settle Simon’s qui tam action. After previously
defending Community Initiatives from those allegations, Vartain was now
attempting to prove wrongdoing by Community Initiatives, and, the court
found, “information material to the former representation and assistance is
also material to the subsequent representation.”
      The court found that because a substantial relationship exists between
the former representation and the current case, “it is ‘conclusively presumed
that [the] attorney knows confidential information adverse to [his or her]
former client.’ ” (Quoting National Grange of Order of Patrons of Husbandry
v. California Guild (2019) 38 Cal.App.5th 706, 717 (National Grange).)
Under these circumstances, the court concluded, the substantial relationship
between Vartain’s former representation of Community Initiatives and the
subject matter of the current action mandates disqualifying Michael Vartain
and his firm from representing USF in the pending case.
      In reaching this disposition, the court rejected contentions by USF that
Community Initiatives waived its right to seek disqualification of Vartain.
Specifically, USF argued that Community Initiatives consented to Vartain’s
current representation of USF by signing the JDA in Simon’s wrongful
termination action. The court disagreed, finding that the JDA pertained to
the sharing of information among codefendants, not to a waiver of future
conflicts of interest. USF also argued that Community Initiatives was
attempting to gain an unfair tactical advantage by bringing its motion after
21 months’ delay and causing extreme prejudice to USF. The court found
that “delay and any prejudice” in bringing the motion “were minimal,”
pointing out that the case began when Vartain sued SF Unified; that
Community Initiative was later added as a defendant in the amended

                                      8
complaint, which was not served until July 2022; discovery did not begin
until November; and the disqualification motion was filed the following
month.
                                  DISCUSSION
      “The authority of a trial court ‘to disqualify an attorney derives from
the power inherent in every court “[t]o control in furtherance of justice, the
conduct of its ministerial officers.” ’ ” (Cobra Solutions, supra, 38 Cal.4th at
p. 846.) Disqualification motions implicate conflicts between the client’s right
to counsel of choice and the need to maintain ethical standards of
professional responsibility, but the “ ‘paramount concern must be to preserve
public trust in the scrupulous administration of justice and the integrity of
the bar.’ ” (Ibid.) We review the trial court’s decision on a disqualification
motion for abuse of discretion, applying the deferential substantial evidence
test to any disputed findings of fact. (People ex rel. Dept. of Corporations v.
SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1143.) “However,
the trial court’s discretion is limited by the applicable legal principles,” and “a
disqualification motion involves concerns that justify careful review of the
trial court’s exercise of discretion.” (Id. at p. 1144.)
I. Issues on Appeal
      Attorney disqualification matters typically arise from one of two
common factual scenarios: successive representations, where an attorney
seeks to represent a client with interests that are potentially adverse to a
former client; and concurrent representations, where an attorney seeks to
simultaneously represent clients with potentially or actually adverse
interests. (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283; Antelope Valley
Groundwater Cases (2018) 30 Cal.App.5th 602, 617 (Antelope Valley).)

                                          9
Courts have developed distinct disqualification standards to address each
scenario. (Flatt, at p. 283.)
      In this case, we review a disqualification order that precludes Vartain’s
successive representation of clients with adverse interests. “It is well
established that an attorney, after severing his or her relationship with a
client, ‘may not do anything which will injuriously affect his former client in
any matter in which he formerly represented him nor may he at any time use
against his former client knowledge or information acquired by virtue of the
previous relationship.’ [Citations.] This prohibition is grounded in both the
California State Bar Rules of Professional Conduct, former rule 3-310(E) in
effect until November 1, 2018, and rule 1.9, effective November 1, 2018, and
governing case law.” (O’Gara Coach Co., LLC v. Ra (2019) 30 Cal.App.5th
1115, 1124.)
      The “enduring duty to preserve client confidences precludes an attorney
from later agreeing to represent an adversary of the attorney’s former client
unless the former client provides an ‘informed written consent’ waiving the
conflict.” (Cobra Solutions, supra, 38 Cal.4th at p. 847, quoting Rules Prof.
Conduct, former rule 3-310(E); see current rule 1.9 (citations to rules refer to
the California State Bar Rules of Professional Conduct).)1 “If the attorney
fails to obtain such consent and undertakes to represent the adversary, the
former client may disqualify the attorney by showing a ‘ “substantial
relationship” ’ between the subjects of the prior and current representations.”

      1  In moving for Vartain’s disqualification from this case, Community
Initiatives relied specifically on rule 1.9(a), which states: “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.”

                                       10
(Cobra Solutions, at p. 847; see also Victaulic Co. v. American Home
Assurance Co. (2022) 80 Cal.App.5th 485, 506 (Victaulic).) “When a
substantial relationship between the two representations is established, the
attorney is automatically disqualified from representing the second client.”
(Cobra Solutions, at p. 847.)
      On appeal, USF implicitly concedes that Community Initiatives is
Vartain’s former client. But it contends the trial court abused its discretion
by disqualifying Vartain because (1) there is no substantial relationship
between the previous representation and the present action, and (2)
Community Initiatives waived Vartain’s conflict of interest. We reject both
arguments.
II. Substantial Relationship Analysis
      In Cobra Solutions, supra, 38 Cal.4th 847, the California Supreme
Court affirmed that the substantial relationship test should be used to
evaluate disqualification issues in successive representation cases and
summarized the key features of this inquiry. The court “must first determine
whether the attorney had a direct professional relationship with the former
client in which the attorney personally provided legal advice and services on
a legal issue that is closely related to the legal issue in the present
representation. [Citation.] If the former representation involved such a
direct relationship with the client, the former client need not prove that the
attorney possesses actual confidential information. [Citation.] Instead, the
attorney is presumed to possess confidential information if the subject of the
prior representation put the attorney in a position in which confidences
material to the current representation would normally have been imparted to
counsel.” (Id. at p. 847; see also rule 1.9, comment 3 [two matters are

                                        11
substantially related for purposes of this rule if they involve a substantial
risk of a violation of a duty owed to the former client].)
      “When the attorney’s contact with the prior client was not direct, then
the court examines both the attorney’s relationship to the prior client and the
relationship between the prior and the present representation. If the
subjects of the prior representation are such as to ‘make it likely the attorney
acquired confidential information’ that is relevant and material to the
present representation, then the two representations are substantially
related.” (Cobra Solutions, supra, 38 Cal.4th at p. 847.)
      We conclude that the trial court correctly applied the principles set
forth in Cobra Solutions, and its findings are supported by substantial
evidence.2
      The finding of a direct professional relationship between Vartain and
Community Initiatives is supported by Michael Vartain’s personal
appearance on behalf of Community Initiatives in the wrongful termination
case, and the substantive legal services Vartain rendered to successfully
litigate the non-signatories’ arbitration petition. USF contends Vartain’s
prior representation of Community Initiatives was indirect and insubstantial
because it was a limited appearance based on work Vartain had already put
into preparing USF’s arbitration petition. In fact, the record shows that the
two arbitration petitions presented distinct legal issues; USF’s petition was
granted pursuant to an arbitration agreement, while the non-signatories’
petition was granted pursuant to principles of agency and estoppel.
Moreover, the minute order from the hearing on the petitions reflects that

      2  Although the trial court expressly relied on Cobra Solutions in
reaching its conclusions, the case is not even mentioned in the appellate
briefs that Vartain prepared and filed on behalf of USF.

                                        12
USF’s petition was unopposed, while Community Initiatives’ petition was
contested. Beyond that, as Michael Vartain conceded below, the non-
signatories’ arbitration petition was dispositive, leading directly to dismissal
of the wrongful termination action.
      USF argues that Michael Vartain’s declaration conclusively shows
there was no direct prior relationship with Community Initiatives because
Mr. Vartain’s only contact with Community Initiatives occurred prior to the
arbitration hearing, when he was briefly introduced to Community Initiatives
Vice President, David McGee. We are unpersuaded by this argument, which
is premised on an untenably narrow conception of the word “direct.” McGee,
who also filed a declaration in the lower court, recalled exchanging an email
with Michael Vartain and also having an in-person discussion with him about
Vartain’s representation of Community Initiatives when they met before the
hearing. Moreover, Michael Vartain acknowledged that he worked directly
with attorneys from Stanford’s General Counsel office to draft the non-
signatories’ arbitration petition. USF fails to diminish Vartain’s role by
pointing out that Stanford’s General Counsel also represented Community
Initiatives. Vartain’s collaboration with other lawyers who also represented
their client is additional evidence of Vartain’s direct representation of
Community Initiatives in the wrongful termination case.
      Substantial evidence also supports the trial court’s finding that the
legal services Vartain provided during their prior representation of
Community Initiatives involved a legal issue that is substantially related to
the legal issue in the pending action. Indeed, a pivotal issue in the wrongful
termination case underlies this indemnity action—whether Community
Initiatives is liable for problems in the administration of the Residency
program, including the submission of false claims for AmeriCorps funding,

                                       13
and the alleged retaliatory discharge of Simon for reporting this misconduct.
After previously defending Community Initiatives against these allegations,
Vartain now seeks to change sides and pursue those same allegations of
wrongdoing against Community Initiatives.
      In its reply brief, USF posits that these two matters are not sufficiently
related to satisfy the substantial relationship test. We disagree. In the
wrongful termination action, Simon’s claims against Community Initiatives
were premised on agency allegations, including that Community Initiatives
became his joint employer in October 2016, and that Community Initiatives
conspired with USF to wrongfully terminate him in 2017 in retaliation for
engaging in protected activity.3 Simon’s allegedly protected activity included
reporting violations of the False Claims Act, which was the same conduct at
issue in Simon’s qui tam case, the settlement of which gave rise to USF’s
pending indemnity claims against Community Initiatives.
      USF takes the position that the substantive nature of the wrongful
termination case is irrelevant since Vartain’s representation of Community
Initiatives was limited to the petition to arbitrate. To begin with, the record
does not show that Vartain and Community Initiatives agreed to a limited
scope representation. USF acknowledged at oral argument before this court
that Vartain did not file a form CIV-150 Notice of Limited Scope
Representation. (See Cal. Rules of Court, rule 3.36.) And the declaration
Michael Vartain filed in the wrongful termination case stated that he was
appearing in court on behalf of the non-signatories’ for a limited purpose but
did not address the nature or scope of Vartain’s agreement to represent

      3 According to USF, Simon’s “accusation of whistleblower retaliation
was specifically aimed at USF and not [Community Initiatives].” Not so.
Every cause of action alleged against USF in the wrongful termination case
was also alleged against Community Initiatives.

                                       14
Community Initiatives. In any event, USF overlooks that the grounds for the
non-signatories’ arbitration petition were the very agency allegations upon
which Simon sought to hold Community Initiatives jointly liable for wrongful
termination in his employment case and for violating the False Claims Act in
the federal qui tam case. This factor connects not only Simon’s two cases, but
the pending action in which USF seeks indemnity from Community
Initiatives. Only this time, Vartain is not defending Community Initiatives
against allegations of joint misconduct but attempting to hold it liable for
that precise reason.
      Taking a different tack, USF argues that the trial court abused its
discretion by finding a substantial relationship between the qui tam action
and the current action despite the fact that Vartain did not represent
Community Initiatives in the qui tam action. This argument misconstrues
the trial court’s ruling, which did not parse out the qui tam case as an
independent basis for disqualification. Instead, the court found evidentiary
support for Community Initiative’s argument in the fact that after Vartain
appeared in court as Community Initiative’s lawyer in the wrongful
termination case, they provided additional assistance to Community
Initiatives by obtaining its release in the qui tam case. This evidence
reinforces that the two Simon cases and the present indemnity action are
interrelated, and we find no abuse of discretion in the court’s taking account
of this fact.
      Attempting to shore up its sufficiency of the evidence challenge, USF
contends that Community Initiatives failed to carry its burden of proof
because there is no evidence that Vartain actually obtained relevant
confidential information about Community Initiatives. However, no such
showing is required when, as here, a substantial relationship exists between

                                       15
the former and current representation. (See e.g., National Grange, supra, 38
Cal.App.5th at p. 717; Henriksen v. Great American Savings & Loan (1992)
11 Cal.App.4th 109, 114.) “If the former client establishes the existence of a
substantial relationship between the two representations the court will
conclusively presume that the attorney possesses confidential information
adverse to the former client and order disqualification.” (Henriksen, at
p. 114.) Indeed, “where the lawyer was personally involved in providing legal
advice and services to the former client—then it must be presumed that
confidential information has passed to the attorney and there cannot be any
delving into the specifics of the communications between the attorney and the
former client in an effort to show that the attorney did or did not receive
confidential information during the course of that relationship.” (Jessen v.
Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 709 (Jessen).)
      Insisting that Vartain’s prior relationship with Community Initiatives
does not give rise to a presumption that confidences were shared, USF
mistakenly relies on Victaulic, supra, 80 Cal.App.5th 485. In that protracted
insurance coverage litigation, the defendants filed a motion to disqualify the
plaintiff’s law firm on the ground that two lawyers who recently joined the
firm had—several years earlier—done work for the claims-handling arm of
the defendants’ parent company. (Id. at p. 491.) An order denying
disqualification was affirmed on appeal pursuant to a detailed evidentiary
analysis that we need not recount here. Suffice it to say, both the trial and
appellate court agreed that the defendants failed to prove that the two
attorneys in question had a direct personal relationship with them, or even
that a prior attorney-client relationship existed. (Id. at pp. 501–502 & 510.)
Without that showing, there was no presumption the attorneys possessed
confidential information. (Id. at p. 502; see also Cobra Solutions, supra, 38

                                       16
Cal.4th at p. 847.) For this reason, the Victaulic court also considered
whether other circumstances showed that it was likely the attorneys acquired
confidential information that was relevant and material to the current
matter, and again agreed with the trial court that the defendants failed to
make that showing. (Victaulic, at pp. 511–514; see pp. 502–503.)
      In contrast to Victaulic, in the present case we review an order
granting disqualification, and because the trial court’s findings are supported
by substantial evidence, USF’s heavy reliance on Victaulic is misplaced.
Unlike that case, here a closer consideration of the nature of the prior
relationship was unnecessary once Community Services carried its burden of
showing that Vartain had a direct professional relationship with Community
Services and personally provided legal advice and services in a
representation that is substantially related to the present action. As the trial
court found, these facts give rise to a presumption Vartain possesses
confidential information, without the need for further proof that material
confidential information was likely conveyed. (Cobra Solutions, supra, 38
Cal.4th at p. 847; Jessen, supra, 111 Cal.App.4th at p. 709.)
III. Waiver Analysis
      “Not all conflicts of interest require disqualification. In some
situations, the attorney may still represent the client if the client’s consent is
obtained. [Citations.] ‘Giving effect to a client’s consent to a conflicting
representation might rest either on the ground of contract freedom or on the
related ground of personal autonomy of a client to choose whatever champion
the client feels is best suited to vindicate the client’s legal entitlements.’ ”
(Zador Corp. v. Kwan (1995) 31 Cal.App.4th 1285, 1295.)
      Under the circumstances presented here, involving successive
representation of clients with adverse interests, Vartain may not represent

                                         17
USF in this action that is substantially related to its prior representation of
Community Initiatives without obtaining informed written consent waiving
the conflict. (Cobra Solutions, supra, 38 Cal.4th at p. 847; rule 1.9(a).) USF
argues that Vartain did obtain the requisite consent from Community
Initiatives, and the trial court abused its discretion by finding otherwise. We
disagree.
      USF bases its claim of error on the JDA that was executed in the
wrongful termination case. As discussed in our background summary, the
JDA is an agreement to share defense materials without waiving privileges
applicable to those materials. The only attorney conflict that was waived in
the JDA is the conflict arising from access to joint defense materials that
were shared pursuant to that agreement. As the trial court found, the JDA
does not address the type of conflict that arose when Vartain filed USF’s
indemnity complaint against their former client. USF’s contrary view is not
supported by the language of the JDA or the factual circumstances. Indeed,
it appears that when the JDA was executed by the parties’ counsel on
October 3, 2019, Vartain did not have an attorney-client relationship with
Community Initiatives. However, in the ensuing weeks and months, Vartain
appeared in court on behalf of Community Initiatives and provided additional
assistance in the related qui tam case. Now, more than two years later,
Vartain seeks to sue its former client on behalf of USF. The JDA does not
expressly or implicitly address Vartain’s current conflict of interest. On its
face, the JDA is not informed written consent to Vartain’s current
representation of an adversary of their former client.
      USF argues that the JDA should be construed as a waiver of Vartain’s
current conflict because it shows that the parties in the wrongful termination
case did not have any expectation of confidentiality with respect to material

                                       18
they exchanged under the JDA. This logic is flawed; the fact that USF and
Community Initiatives agreed to share discrete information in the prior
litigation does mean there was a blanket waiver of attorney-client
confidentiality. By signing the JDA, the parties agreed expressly to waive
one specific right: to bring a disqualification motion based on the fact that
they shared defense materials. Evidence of that narrowly drawn waiver cuts
against USF’s theory here that all of Vartain’s conflicts of interest were
waived by signing the JDA.
      USF’s other arguments pertaining to the JDA lack factual and legal
support. For example, USF assumes that the trial court failed to consider
evidence that the JDA was drafted by Stanford’s general counsel, pointing
out that ambiguities in a contract must be construed against the drafter. But
USF fails to identify ambiguous language in the JDA. Relatedly, USF
intimates that the JDA contains a latent ambiguity, requiring consideration
of extrinsic evidence to determine whether the agreement is a broad waiver of
any potential conflict relating to Vartain’s representation of USF. (Citing
Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
114.) However, extrinsic evidence is admissible only when it is relevant to
support a reasonable interpretation of the contract. (Brown v. Goldstien
(2019) 34 Cal.App.5th 418, 432–433.) USF’s extrinsic evidence consists of
statements in Michael Vartain’s declaration to the effect that USF was
unwilling to consent to Vartain’s concurrent representation of Community
Initiatives in the wrongful termination case unless the JDA contained a
conflict of interest waiver.4 This evidence pertains to USF’s motivation for

      4Similar statements appear in a declaration by USF’s general counsel,
Donna Davis. Davis states that she “allowed” Vartain to represent
Community Initiatives as a “courtesy to Stanford” because she viewed
Stanford’s and Community Initiatives’ signatures on the JDA as an

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waiving Vartain’s separate conflict arising out of Vartain’s concurrent
representation of clients with potentially adverse interests in the wrongful
termination case. It does not support USF’s theory here that the JDA can be
construed reasonably as a blanket waiver of all future attorney conflicts in
cases involving these parties.
      Shifting focus, USF appears to contend that Community Initiatives
impliedly consented to Vartain’s adverse representation of USF by agreeing
to present a joint defense with USF in the wrongful termination action. We
have a few problems with this argument, beginning with Cobra Solutions,
supra, 38 Cal.4th at p. 847, which states that the former client’s informed
written consent is required to waive a conflict arising out of successive
representation of the former client’s adversary in a substantially related
matter. We note, however, that the disputed issue in Cobra Solutions
pertained to vicarious disqualification; whether a city attorney’s admitted
conflict of interest required disqualification of the entire government office.
(Id. at p. 848.) Because there was no contention in Cobra Solutions that the
former clients consented to the conflict, that decision does not squarely hold
that informed consent to an otherwise disqualifying attorney conflict must be
in writing.
      USF cites Antelope Valley, supra, 30 Cal.App.5th at pp. 619–624, for
the proposition that consent to an attorney’s conflict of interest can be
implied. We note that the conflict of interest analyzed in Antelope Valley
arose from an attorney’s concurrent representation of clients with adverse
interests (id. at pp. 616–617), but even if the same analysis were to apply in
cases of successive representation (see id. at pp. 619, 621–625), we conclude

assurance that those parties would have no basis for disqualifying Vartain
from representing USF.

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that Antelope Valley does not support USF’s argument under the facts
presented here.
      Antelope Valley involved multiple consolidated lawsuits arising from a
protracted dispute about water rights. (Antelope Valley, supra, 30
Cal.App.5th at p. 608.) The law firm Best Best & Krieger, LLP (BB&K)
undertook to represent a water district defendant in the consolidated
proceedings, while it was simultaneously representing a water contractor in
other matters. (Id. at pp. 609–610.) The water contractor also had an
interest in the consolidated proceedings, and, at some point, it was named as
a cross-defendant by an unrelated party. The water contractor retained the
Brunick law firm to represent it in the consolidated proceedings, while
continuing to use BB&K to represent it in other matters. (Id. at p. 611.)
More than 10 years later, the water contractor terminated its relationship
with BB&K and filed a motion to disqualify BB&K from continuing to
represent the water district in the consolidated proceedings, claiming for the
first time that the concurrent representation was a disqualifying conflict of
interest. (Id. at p. 613.) The trial court denied the motion, finding that the
water contractor impliedly consented to BB&K’s concurrent representation of
the water district by accepting BB&K’s advice on other matters for more than
10 years without ever objecting to the concurrent representation. (Id. at
pp. 613–614.)
      On appeal, the Antelope Valley court affirmed the order denying the
disqualification motion on two independent grounds. First, the finding that
the water contractor impliedly consented to the concurrent representations
was supported by substantial evidence. (Id. at pp. 618 & 625.) Rejecting a
contention that the absence of the water contractor’s written consent was
dispositive, the Antelope Valley court held that “a trial court may deny a

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disqualification motion when it finds the moving party by its conduct gave
knowing and informed consent to the concurrent representation of
themselves and another client.” (Id. at p. 625.) Alternatively, the court
found that even if implied consent was insufficient, the water contractor
waived its right to bring a disqualification motion by failing to bring the
motion within a reasonable time. (Id. at pp. 625–626.)
      Like the Antelope Valley court, we affirm a trial court ruling on a
disqualification matter because it is supported by substantial evidence. If we
were to assume, as the Antelope Valley court did, that informed consent to an
otherwise disqualifying conflict of interest can be implied from conduct, that
factor would not alter our conclusion that the disqualification order is
supported by substantial evidence. In contrast to the situation in Antelope
Valley, in this case there is no concrete evidence that the party asserting a
conflict of interest knowingly participated in the arrangement for years
without objection. USF’s theory that Community Initiatives impliedly
consented to Vartain’s conflict is based on the same evidence that USF uses
to argue express consent, i.e., the fact that Community Initiatives signed the
JDA. As explained, the language of the JDA and the factual circumstances of
this case support finding that the JDA was an agreement to share defense
evidence, not to waive all potential future attorney conflicts of interest.
      USF contends that if Community Initiatives did not impliedly consent
to Vartain’s conflict, it impliedly waived its right to bring a motion to
disqualify Vartain. “ ‘[A]ttorney disqualification can be impliedly waived by
failing to bring the motion in a timely manner.’ [Citation.] As explained by
one court, ‘it is not in the interests of justice to make the “substantial
relationship” rule so unyielding as to permit the former client to inexcusably
postpone objections without penalty. Therefore, a narrow exception should

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apply if the present client, by way of opposition, offers prima facie evidence of
an unreasonable delay by the former client in making the motion and
resulting prejudice to the current client.’ [Citation.] To operate as a waiver,
however, the ‘delay [and] . . . the prejudice to the opponent must be extreme.’
[Citations.] If the opposing party makes a prima facie showing of extreme
delay and prejudice, the burden then shifts to the moving party to justify the
delay.” (Fiduciary Trust Internat. of California v. Superior Court (2013) 218
Cal.App.4th 465, 490.)
      Consistent with these principles, the Antelope Valley court found
“ample justification” for finding that the water contractor’s delay in bringing
a disqualification motion was unreasonable and extremely prejudicial.
(Antelope Valley, supra, 30 Cal.App.5th at p. 626.) The court based this
conclusion on evidence that the water contractor waited 10 years to bring the
motion while reaping “substantial benefits” from BB&K’s representation of
the water district during that same period; that the water district would
suffer substantial financial cost if required to replace BB&K; and that the
courts and other interested parties would also be harmed by BB&K’s removal
from the ongoing litigation. (Id. at p. 626.)
      In contrast to Antelope Valley, in this case USF failed to make a prima
facie showing of unreasonable delay or extreme prejudice. Again, it relies
primarily on Michael Vartain’s declaration. Mr. Vartain states that for
several months before and after the current lawsuit was filed, he spent
considerable time attempting to negotiate a settlement with the attorneys
representing Stanford and Community Initiatives, and nobody complained
about a conflict of interest. In our view, the time Vartain spent on settlement
efforts on behalf of USF is not evidence that Community Initiatives engaged
in unreasonable delay. The record contains ample evidence that once Vartain

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made the decision to sue its former client, Community Initiatives acted
promptly to address Vartain’s conflict. Community Initiatives was served
with process in July 2022 and filed its motion to disqualify Vartain five
months later.
         Regarding prejudice, Mr. Vartain posits that no other attorney can
adequately replace him in the pending indemnity action. He states, for
example, that he represents USF in most if not all litigation that is filed in
San Francisco, that he has “thousands of attorney hours of experience
working on this lawsuit,” and that his institutional knowledge of USF is “not
replaceable.” This glowing review is corroborated by USF’s general counsel,
but it is not evidence of prejudice attributable to Community Initiatives.
Despite Vartain’s close relationship with USF, they elected to represent
Community Initiatives in a prior, substantially related matter. Promptly
after Vartain’s decision to sue Community Initiatives on behalf of USF in the
pending action, Community Initiatives asserted the conflict and filed a
disqualification motion. Thus, it neither consented to nor waived its right to
object to Vartain’s current conflict of interest.
                                                DISPOSITION
          The order is affirmed. Costs to respondent.

                                                                 TUCHER, P.J.

WE CONCUR:

PETROU, J.
RODRÍGUEZ, J.

University of San Francisco v. Community Initiatives (A167142)

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