The State Bar of California adopted its Rules of Professional Conduct (CRPC) to regulate the behavior of lawyers who would be subject to discipline for willful violations. When a lawyer threatened to use the personal, confidential information he had obtained in a previous case against a former client who was now suing him, that conflict of interest disqualified him from acting as a lawyer in the case.
Sunil A. Brahmbhatt, an attorney from Santa Ana, entered into a cannabis-business-related investment deal with his client, Samir J. Patel, and several other investors. The attorney had a conflict of interest because he was part of that same cannabis growing and testing business. When soliciting Patel’s interest, Brahmbhatt told him that his “investments were completely safe and could guarantee more than 100 percent in returns in a short period of time.” Since Brahmbhatt was likely to be a key witness in the case, Orange County Superior Court Judge John C. Gastelum, disqualified him from serving as defense counsel during all stages of the litigation.
A unanimous three-justice panel of Division Three of California’s Fourth District Court of Appeal affirmed Gastelum’s decision on July 18. An opinion authored by Justice Joanne Motoike, explained, “The California Rules of Professional Conduct prohibit an attorney from revealing or using to his or her own advantage the confidences of a client, and require the attorney to maintain his or her duty of loyalty to the client.” She said that Brahmbhatt’s representation of his co-defendants would be “directly adverse” to Patel’s interest and would violate the attorney’s professional, ethical duties.
The case began when Patel and his co-plaintiffs invested in the E Street Funding Group (E Street), which financed the cannabis business. The plaintiff’s investment was prompted by Brahmbhatt’s positive solicitation, which neglected to mention his “potential conflict of interest.” The attorney also failed to make any written disclosure of the conflict and he did not obtain a written waiver.
Dissatisfied with their returns, Patel and his fellow investor-plaintiffs asked for their money back and the right to inspect E Street’s corporate books. Brahmbhatt refused and “threatened” Patel with criminal action. He also said he would use some of the confidential information he had obtained from Patel when he had previously represented him. Plaintiffs sued for breach of contract, breach of fiduciary duty, negligence, fraud, fraudulent concealment, negligent interference with prospective economic advantage, and unfair competition” in March 2021.
Plaintiffs also sought a writ of mandamus that would allow them to inspect the relevant books and records. They later amended their complaint to ask that Brahmbhatt be disqualified from acting as an attorney in the case. This appeal followed the trial court’s grant of the amended complaint.
Motoike’s opinion began with a discussion of the legal standards a trial court must use to disqualify an attorney. Precedent requires that there must be a “conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility.” The court’s decision should be “to preserve public trust in the scrupulous administration of justice and the integrity of the bar,” she wrote.
Next, she applied the CRPC to Brahmbhatt’s behavior. She said that subject to a few irrelevant exceptions, “a lawyer shall not act as an advocate in a trial in which the lawyer is likely to be a witness.” This rule, she explained, also pertains to pre-trial activity. Brahmbhatt admitted he could not be an attorney at trial because this could confuse the jury. However, he objected to extending the rule to pre-trial activity.
The opinion did not see a problem with this disqualification and also found an independent ground to affirm it. Justice Motoike reminded the defendant that he has a “duty to maintain undivided loyalty” to his client which was necessary to maintain public confidence in the legal profession and the judicial process.” She wrote that “…with few exceptions, disqualification follows automatically…” The opinion stressed that Brahmbhatt’s threats are “the type of breach of loyalty to the client that undermines public confidence in the legal system.”
Justice Motoike concluded by quoting the trial court’s decision that disqualification was a proper “prophylactic measure against prejudice to Plaintiffs and the integrity of the judicial process arising from Brahmbhatt’s dual role as an advocate-witness and his potential misuse of confidential information appears warranted.”
Brahmbhatt’s conflict of interest is exactly what the California Rules of Professional Conduct were created to avoid.
