Bui Simon etc. v. Angela Scott, et al

Case Number

23CV02376

Case Type

Hearing Date / Time

Wed, 08/28/2024 - 10:00

Nature of Proceedings

1) Motion of Defendant Scott Milden to Disqualify Counsel for Plaintiff; 2) Motion of Plaintiff to Compel Deposition of Defendant Milden; and, 3) Motion of Defendant Milden for Protective Order

Tentative Ruling

For Plaintiff Bui Simon: Patricia L. Glaser, Cynthia E. Organ, Alexander R. Miller, Bryan A. McIntyre, Glaser Weil Fink Howard Jordan & Shapiro LLP                                   

For Defendants Angela Scott, Scott Milden, and Milden, LLC: Bert H. Deixler, Patrick J. Somers, David T. Freenock, Kendall Brill & Kelly LLP

             

RULING:

(1) For the reasons set forth herein, the motion of defendant Scott Milden to disqualify counsel for plaintiff Bui Simon is denied.

(2) The motion of plaintiff Simon to compel the deposition of defendant Scott Milden is granted to the extent set forth herein. The motion of defendant Milden for a protective order is denied. All requests for awards of monetary sanctions are denied.

(3) On or before September 4, 2024, counsel for the parties shall meet and confer, in person, by telephone, or by video conference, as to the date, time, and place of the deposition of Scott Milden. If the parties are unable to agree as to a date, time, or place by that time, counsel for Simon shall, by September 9, communicate in writing three alternative dates during the weeks of September 16, 23, and 30 as suitable for the deposition; by September 10, counsel for Milden shall communicate in writing which of these dates are accepted for the deposition to occur. If counsel for Milden fails timely to communicate acceptance of one of these dates, Simon may notice the deposition to occur on any of the three dates previously communicated. Defendant Scott Milden shall appear for deposition at the date, time, and place agreed or noticed. The parties may otherwise agree in writing to a different date, time, or place for the deposition.

Background

This is a derivative action involving The Office of Angela Scott LLC (TOOAS or Company), a Texas limited liability company. As alleged in plaintiffs’ first amended complaint (FAC), plaintiff Bui Simon (Simon) is a 50 percent owner/ member of TOOAS and defendant Angela Scott (Scott) is the other 50 percent owner/ member. The FAC asserts claims against Scott, (her husband) defendant Scott Milden (Milden), and (Milden’s company) defendant Milden LLC, based upon alleged improper payments from TOOAS to Scott, Milden, and Milden LLC. There is a related action, Simon v. Scott, case No. 23CV03184, asserting similar claims brought by Simon individually.

Simon filed this derivative action on June 2, 2023. Simon filed the FAC on September 12, 2023. The FAC asserts 16 causes of action: (1) declaratory relief; (2) breach of fiduciary duty; (3) aiding and abetting breach of fiduciary duty; (4) waste of corporate assets; (5) fraud; (6) aiding and abetting fraud; (7) conversion; (8) violation of Penal Code section 496; (9) third-party beneficiary breach of contract; (10) third-party beneficiary breach of the covenant of good faith and fair dealing; (11) inducing breach of contract; (12) intentional interference with contractual relations; (13) money had and received; (14) accounting; (15) restitution from unjust enrichment; and (16) injunctive relief. These claims are all asserted by Simon as a derivative action for the benefit of nominal defendant TOOAS.

On October 12, 2023, defendants Scott, Milden, and Milden LLC (collectively, defendants) filed their answer to the FAC, generally denying the allegations thereof and asserting 32 affirmative defenses.

On December 29, 2023, defendants filed a motion for judgment on the pleadings. On March 13, 2024, after striking the title of the so-called sixteenth cause of action, the court denied that motion in its entirety. Also on March 13, the court set trial for November 27, 2024.

On June 7, 2024, on the stipulation of the parties, the court entered a protective order for the confidential designation of discovery.

On July 19, 2024, Simon filed this motion to compel defendant Milden to appear for deposition. Also on July 19, Milden filed this motion to disqualify counsel for plaintiff.

On July 22, 2024, Milden filed this motion for protective order relating to his deposition.

All motions are opposed.

Defendants have filed summary judgment/ summary adjudication motions that are pending. Trial is now set for December 18, 2024.

Analysis

(1)       Motion to Disqualify Counsel

“ ‘A trial court’s authority 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, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.” [Citations.]’ [Citation.]” (In re Charlisse C. (2008) 45 Cal.4th 145, 159.)

“Conflicts of interest commonly arise in one of two factual contexts: (1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client of the attorney; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests. The primary fiduciary value at stake in each of these context differs, and the applicable disqualification standards vary accordingly. In successive representation cases, ‘the chief fiduciary value jeopardized is that of client confidentiality.’ [Citation.] Therefore, the disqualification standards we have developed for such cases focus on the former client’s interest ‘in ensuring the permanent confidentiality of matters disclosed to the attorney in the course of the prior representation.’ [Citation.] In simultaneous representation cases, ‘[t]he primary value at stake ... is the attorney’s duty—and the client’s legitimate expectation—of loyalty, rather than confidentiality.’ [Citation.] Because a conflict involving an attorney’s duty of loyalty is ‘[t]he most egregious’ kind of conflict, the disqualification standards we have developed for simultaneous representation cases are ‘more stringent’ than those that apply in successive representation cases; ‘[w]ith few exceptions, disqualification [in a case of simultaneous representation] follows automatically, regardless of whether the simultaneous representations have anything in common or present any risk that confidences obtained in one matter would be used in the other. [Citation.]’ [Citation.] This strict rule recognizes that ‘[a] client who learns that his or her lawyer is also representing a litigation adversary, even with respect to a matter wholly unrelated to the one for which counsel was retained, cannot long be expected to sustain the level of confidence and trust in counsel that is one of the foundations of the professional relationship. All legal technicalities aside, few if any clients would be willing to suffer the prospect of their attorney continuing to represent them under such circumstances.’ [Citation.]” (In re Charlisse C., supra, 45 Cal.4th at pp. 159–160.)

            (A)       Nature of Prior Representation

As asserted in the declaration of Milden:

Milden was hired by SeaVees, Inc. (SeaVees) in January 2015 as an Executive in Business Development. (Milden decl., ¶ 2.) SeaVees is a footwear brand and company located in Santa Barbara. (Ibid.) At the time Milden was hired, Milden lived in Dallas, Texas, and worked for Justin Boot Company as Vice President of International Sales. (Milden decl., ¶ 3.) Because SeaVees was located in Santa Barbara, after Milden accepted the position, he moved to California. (Ibid.)

As part of Milden’s work for SeaVees, Milden discovered that the current management was overstating the company’s forecasted sales to the board, and refused go along with false representations to the SeaVees board and its investors, including in particular Herbert and Bui Simon. (Milden decl., ¶ 4.) Because Milden refused to cover up the inflated sales and valuation, SeaVees terminated Milden in May 2015. (Milden decl., ¶ 5.) Milden’s termination was extremely distressing, including causing him concern about his business reputation. (Ibid.)

Upon learning of Milden’s termination, Simon, an investor in SeaVees with her husband Herbert Simon, expressed gratitude for Milden’s decision to blow the whistle. (Milden decl., ¶ 6.) For that reason, Simon secured joint representation for herself and Milden from the law firm Glaser Weil (GW) and agreed to pay all Milden’s legal expenses. (Ibid.) Milden retained GW as litigation counsel to protect his business reputation and acumen, respond to his unlawful termination from SeaVees, fight any false narrative about his termination, and negotiate an equitable settlement. (Ibid.) In retaining GW, Milden provided them with information about Milden’s business reputation and stated goals for Milden’s own employment and business opportunities. (Ibid.)

Although GW agreed to jointly represent Milden and Simon, GW did not provide Milden with a written disclosure regarding the joint representation or obtain his informed written consent to the joint representation. (Milden decl., ¶ 7.) Because Milden was not so advised, Milden did not understand the risks and potential conflicts associated with joint representation. (Ibid.) Although GW agreed to represent Milden, GW did not prepare a written engagement letter for Milden to sign and Milden did not receive or sign any written engagement agreement. (Milden decl., ¶ 8.)

On June 3, 2015, GW sent a letter to SeaVees, asserting that the facts surrounding

Milden’s termination “raise serious issues and suggest substantial liability of the Company,” including “liability for intentional or negligent misrepresentation, as well as for violation of the State’s ‘Whistleblower Statute.” (Milden decl., ¶ 9 & exhibit A.) GW and SeaVees engaged in settlement negotiations through August 2015. (Milden decl., ¶ 10.) When SeaVees responded to GW’s demand letter by suggesting that Milden’s future interactions with others associated with SeaVees, including Simon, might need to be limited, Milden sought legal advice from GW. (Milden decl., ¶ 11.) After receiving advice from GW, Milden eventually declined a proposed settlement so that there were no limitations on his ability to work or interact with others, including with Simon and TOOAS. (Ibid.)

During Milden’s work at TOOAS, Milden directly sent and received numerous emails to and from Simon, her agents, including Mark Bernstein, and other employees of TOOAS from his company email address, which appears in emails as “Scott Milden scott@theofficeofangelascott.com,” regarding TOOAS business. (Milden decl., ¶ 12.)

As asserted in the declaration of Simon:

In early 2015, Simon was surprised to learn that Milden was working for SeaVees, a company in which Simon’s husband had recently acquired a minority ownership interest. (Simon decl., ¶ 2.) In May 2015, Milden reached out to Simon, explaining that he was in a difficult financial situation because of the threat of Milden losing his job. (Simon decl., ¶ 3.) Milden reached out to Simon almost every day with the details of his concerns and Simon attempted to coach Milden on communicating with his boss. (Ibid.) This came too late; Milden was terminated within days. (Ibid.) Milden and Scott (Milden’s wife and Simon’s business partner) pleaded for Simon’s assistance and guidance. (Ibid.)

After many conversations with Milden, Simon wanted Milden to receive sound advice, so Simon reached out to her attorney Joel Klevens at GW. (Simon decl., ¶ 6.) Simon explained to Klevens the details of Milden’s situation and discussed with Klevens the SeaVees employment letter that Milden had sent to Simon. (Ibid.) Klevens had further questions about details that Milden had shared with Simon. (Ibid.) Simon brought Milden into the conversation with Klevens, and was present on most, if not all, subsequent phone calls and email communications between Milden and Klevens regarding Mr. Milden’s termination from SeaVees. (Ibid.) The details that Milden shared with Klevens about his situation at SeaVees had already been shared with Simon by Milden before Klevens’s involvement. (Ibid.) Simon’s intention in reaching out to Klevens was to get professional advice about if it was appropriate for Milden to send an appeal letter to obtain a severance that would allow him to have some money while searching for and transitioning to a new job. (Ibid.) After Milden and Simon spoke with Klevens, Klevens sent a letter to SeaVees asking for severance, and engaged in some back and forth about a potential settlement. (Ibid.) There was no discussion of TOOAS in connection with the settlement discussions. (Ibid.)

GW’s invoices for Klevens’s time were sent directly to Simon, who paid the $4,097.50 in charges in full as the one who asked for Klevens’s help. (Simon decl., ¶ 7.) Milden was not expected to pay for any part of Klevens’s time because Simon was always clear that Simon was GW’s client. (Ibid.) Simon made it clear to Milden that if any legal work was required beyond the sending of a letter and reviewing the responding to that letter, Milden would need to obtain his own counsel. (Simon decl., ¶ 8.) Simon believes that the matter did not proceed any further. (Ibid.)

From the evidence presented by the parties, including the two declarations summarized above, it is clear that an attorney-client relationship existed between Klevens of GW and Milden. Among other things, the letter written by Klevens to SeaVees dated June 3, 2015, states specifically that “This office represents Scott Milden.” (Milden decl., ¶ 9 & exhibit A, p. 5.) The evidence further shows that this representation of Milden as against SeaVees concluded in 2015. This action was filed in 2023 where GW represents Simon against Milden (and others). The applicable disqualification rules, therefore, are those applied to successive representation and not to simultaneous representation.

            (B)       Successive Representation

“A lawyer who has formerly represented a client in a matter shall not thereafter represent another person¹ 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).)

“After termination of a lawyer-client relationship, the lawyer owes two duties to a former client. The lawyer may not (i) do anything that will injuriously affect the former client in any matter in which the lawyer represented the former client, or (ii) at any time use against the former client knowledge or information acquired by virtue of the previous relationship. [Citations.] For example, (i) a lawyer could not properly seek to rescind on behalf of a new client a contract drafted on behalf of the former client and (ii) a lawyer who has prosecuted an accused person* could not represent the accused in a subsequent civil action against the government concerning the same matter. [Citations.] These duties exist to preserve a client’s trust in the lawyer and to encourage the client’s candor in communications with the lawyer.” (Rules Prof. Conduct, com. [1] foll. rule 1.9.)
 

“Two matters are ‘the same or substantially related’ for purposes of this rule if they involve a substantial* risk of a violation of one of the two duties to a former client described above in Comment [1]. For example, this will occur: (i) if the matters involve the same transaction or legal dispute or other work performed by the lawyer for the former client; or (ii) if the lawyer normally would have obtained information in the prior representation that is protected by Business and Professions Code section 6068, subdivision (e) and rule 1.6, and the lawyer would be expected to use or disclose that information in the subsequent representation because it is material to the subsequent representation.” (Rules Prof. Conduct, com. [3] foll. rule 1.9.)
 

“To determine whether there is a substantial relationship between successive representations, a 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. [Citations.] 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. [Citations.] When a substantial relationship between the two representations is established, the attorney is automatically disqualified from representing the second client.” (City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 847.)

“Contrary to defendants’ assertion, this materiality requirement is not satisfied by mere relevance. The presumption that former counsel possesses confidential information is triggered only if there is a substantial risk that confidential information would be used in the current representation, which occurs where it is ‘reasonable to conclude’ that the information ‘would materially advance the [present] client’s position.’ [Citations.] As one recent case put it, reversing an attorney disqualification, to support disqualification ‘ “ ‘the information acquired during the first representation [must] be “material” to the second; that is, ... directly at issue in, or have some critical importance to, the second representation.’ ” ’ [Citation.]” (Victaulic Company v. American Home Assurance Company (2022) 80 Cal.App.5th 485, 512.)

Milden argues that there is a substantial relationship between the two representations based upon Simon’s allegations regarding Milden’s prior employment.

“Additionally, Defendant Milden has used his wife’s connections with the Simon family to obtain a number of business opportunities for himself. For example, when Defendant Milden was invited to a Simon family Easter party as Defendant Scott’s guest, he networked his way into a job at the shoe company SeaVees, in which Plaintiff is also an investor. On information and belief, Defendant Milden was fired by SeaVees within months. Similarly, Defendant Milden obtained a position at the Jean Shop from a Simon family friend who he met at the Simon family home.” (FAC, ¶ 52.)

“While Defendant Milden’s name appears on some of the initial formation documents for the Company, when Plaintiff invested in the Company she made it expressly clear that she was going into business with Defendant Scott, not her husband, and that Defendant Milden was not to be part of the Company. It was always Plaintiff’s goal to empower and support Defendant Scott, not her husband, especially in light of his track record in business.” (FAC, ¶ 53.)

“This understanding is incorporated into the Operating Agreement. Again, among other things, section 4.4(D) provides that Defendant Scott has no power to hire employees without Plaintiff’s approval. Ex. A § 4.4(D) (‘[N]o Manager shall have authority to cause the Company to engage in the following transactions without first obtaining the approval of all of the Members: . . . The hiring of employees, accountants and attorneys for the Company.’).” (FAC, ¶ 54.)

“Section 3.5 also provides that affiliates of members are not ‘entitled to remuneration for services rendered or goods provides to the Company,’ and Section 6.8(A) provides that if Defendant Scott and Defendant Milden divorce, Defendant Milden’s community property membership interest in TOOAS must be distributed to or be purchased by Defendant Scott (or Plaintiff, if Defendant Scott fails to execute such sale), ensuring that Defendant Milden would not obtain any interest in the Company in a divorce. Ex. A §§ 3.5, 6.8(A).” (FAC, ¶ 55.)

From these allegations, Milden argues that central to Simon’s case is that Milden was not permitted to work at TOOAS or receive compensation from TOOAS because he was an alleged failed businessman. (Motion, at pp. 9-10.)

In support of the motion, Milden points to Knight v. Ferguson (2007) 149 Cal.App.4th 1207 (Knight). In Knight, the plaintiff owned a restaurant and decided to open a second branch of that restaurant. (Id. at pp. 1210-1211.) The plaintiff found a potential partner and met with an attorney to discuss the lease and partnership agreement for the new restaurant. (Id. at p. 1211.) The attorney billed the plaintiff for his consultations. (Ibid.) The plaintiff did not form a partnership with this potential partner, so the plaintiff asked defendants—plaintiff’s sister and brother-in-law—to take the potential partner’s place in the ownership and management of the branch restaurant. (Ibid.) The defendants agreed. (Ibid.) The attorney with whom the plaintiff had previously met was also the attorney for the defendants. (Ibid.) Later, the plaintiff sued the defendants for breach of contract and sought dissolution of the partnership, alleging that the defendants breached their duties as corporate directors; the defendants filed a cross-complaint alleging fraud, breach of contract, and breach of fiduciary duty. (Ibid.) The same attorney substituted in to represent the defendants in this litigation. (Ibid.)

In the trial court in Knight, the plaintiff moved to disqualify the attorney from representing the defendants. (Knight, supra, 149 Cal.App.4th at p. 1211.) In support of the motion, the plaintiff declared that she told the attorney of her feelings about litigation and her position relating to the lease, as well as her relationship with the first potential partner and her business plans. (Ibid.) In response, the attorney declared that he did not obtain confidential information from the plaintiff, that he met with the plaintiff with the plaintiff’s attorney at the request of the defendants who were also present, and that they discussed possible litigation with the potential partner arising out of their partnership agreement. (Id. at p. 1212.) The trial court granted the motion, finding that the attorney’s role as litigation counsel was brief, but was not peripheral, so that confidential material to the current dispute would normally have been imparted to the attorney. (Ibid.)

The Knight court affirmed. (Knight, supra, 149 Cal.App.4th at p. 1217.) “The ‘court should “focus on the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases.” ’ [Citation.]” (Id. at p. 1213.) Applying this standard, the court noted that, as a result of the meetings the attorney had with the plaintiff, the attorney discussed with plaintiff’s other attorney a strategy which anticipated possible future litigation relating to the agreement with the first potential partner. (Id. at p. 1215.) This set the framework for the defendants to take over the first potential partner’s interest, which was directly at issue in the litigation between the plaintiff and the defendants. (Ibid.)

Simon distinguishes Knight by noting that, in Knight, the prior representation involved issues with the same lease and the same partnership agreement as in the subsequent litigation, leading to the conclusion that there was a substantial relationship between the two representations. (Opposition, at p. 10.) Simon argues that Milden’s employment issues in the prior relationship are different from the issues here and with a different employer, distinguishing Knight from the instant case. With respect to the allegations of the FAC, Simon asserts that these allegations are background and peripheral to the claims in the FAC.

The evidence presented shows that GW’s prior representation of Milden was peripheral to the claims in this matter. The FAC alleges claims principally against Scott based upon allegations that Scott breached her fiduciary duties by using TOOAS funds improperly for her own benefit and that Scott employed and paid Milden and his company notwithstanding express obligations not to do so. As to the latter allegations, the breaches alleged based upon the employment of Milden by TOOAS stem from Milden’s status as Scott’s husband, from Milden’s receipt of such improperly paid funds, and from Scott hiring Milden without Simon’s approval in violation of the express terms of the operating agreement. (E.g., FAC, ¶ 54.) The reasons why Simon would not want Milden as an employee of TOOAS is not relevant to whether there is a breach of those contractual and fiduciary duties. Indeed, any reference to Milden’s employment with SeaVees, or with others apart from TOOAS, could be eliminated from the FAC without materially changing the nature or scope of Simon’s claims against Milden.

The prior representation involved Milden’s issues with his prior employer. To whatever extent there was overlap in time with Milden’s employment issues with SeaVees and the development of the TOOAS operating agreement, the evidence indicates that the overlap was not a matter of confidences imparted in connection with the prior representation but a matter of communications among Simon, Scott, and Milden themselves.

The court concludes that, within the standards of this motion, no substantial relationship, is shown to exist between the two representations. This is a sufficient alternative basis to deny this motion.

            (C)       Delay

As both a separate basis for denial of the motion and an additional factor supporting denial of the motion, Simon argues that there is prejudicial delay in the making of this motion. This action was filed on June 2, 2023. Milden filed his answer to the FAC on October 12, 2023. Trial was set for November 27, 2024, at a case management conference on November 29, 2023. Milden, together with the other defendants filed a motion for judgment on the pleadings on December 29, 2023, that was heard and denied on March 13, 2024, at which time trial was confirmed for November 27, 2024. (The court has since continued the trial by three weeks to December 18.) According to counsel for defendants, attorney Patrick J. Somers, counsel first learned of the prior representation of GW on July 9, 2024, while preparing Milden for his deposition then scheduled for July 12. (Somers decl., ¶ 2.)

“[A]ttorney disqualification can be impliedly waived by failing to bring the motion in a timely manner.” (Liberty National Enterprises, L.P. v. Chicago Title Ins. Co. (2011) 194 Cal.App.4th 839, 844 (Liberty National).) “[A]t least in California, the delay has to be extreme or unreasonable before it operates as a waiver. [Citations.] It has been held that when the party opposing the motion has made a prima facie showing of unreasonable delay causing prejudice, disqualification should not be ordered, and the burden shifts to the moving party to justify the delay. [Citation.] It has also been held that the prejudice to the opponent must be extreme.” (Id. at p. 845.)

“[People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135 (SpeeDee Oil)] … noted that ‘[d]epending on the circumstances’ [citation], a disqualification motion permits a trial court to consider such things as the financial burden that would accompany requiring a client to replace a disqualified counsel after the challenged counsel performed a substantial amount of work, and whether ‘despite knowing the pertinent facts, a party unreasonably delayed seeking disqualification and so caused its opponent significant prejudice.’ [Citation.]” (Antelope Valley Groundwater Cases (2018) 30 Cal.App.5th 602, 625.)

“ ‘Factors relevant to the reasonableness of a delay include the “stage of litigation at which the disqualification motion is made” and the complexity of the case. [Citation.] Delay can also be “an indication that the alleged breach of confidentiality was not seen as serious or substantial by the moving party,” and can suggest “the possibility that the ‘party brought the motion as a tactical device ....’ ” [Citation.] “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.” [Citations.]’ [Citation.]” (Antelope Valley Groundwater Cases, supra, 30 Cal.App.5th at p. 625.)

The court finds that Simon has met her burden to show unreasonable delay and prejudice. This matter is a Texas limited liability company derivative action; the related case involves an individual owner of a limited liability company against the other owner, who is also the manager, for breach of fiduciary duties owed to the plaintiff individually. Both cases involve nuanced distinctions between and among the respective rights at issue. These cases are relatively complex actions. At the time of the filing of this motion to disqualify on July 19, 2024, the action had been pending over one year. Trial is set for December 18, 2024. Defendants have filed motions for summary judgment or alternatively for summary adjudication that are set for hearing on November 6, 2024—nearly as late as such motions can be heard with the impending trial date—and are based upon five volumes of evidence. Granting the motion at this late stage would necessarily and substantially delay the disposition of the motions for summary judgment and trial.

“The trial court must have discretion to find laches forecloses the former client’s claim of conflict. The burden then shifts back to the party seeking disqualification to justify the delay. That party should address: (1) how long it has known of the potential conflict; (2) whether it has been represented by counsel since it has known of the potential conflict; (3) whether anyone prevented the moving party from making the motion earlier, and if so, under what circumstances; and (4) whether an earlier motion to disqualify would have been inappropriate or futile and why.” (River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1309 (River West).)

Milden does not provide a satisfactory response to any of the River West factors. Milden himself has known about the potential conflict since he was named as a defendant in this action in the FAC in September 2023. It is only Milden’s counsel who learned of this potential conflict later, when preparing Milden for deposition. Milden has been represented by counsel during the entirety of this litigation. There is no evidence that anyone prevented Milden from making the motion earlier. Indeed, Milden filed a motion for judgment on the pleadings in December 2023 in order to address the merits of this derivative action without any claim being made that there was a conflict with counsel. There is no showing that an earlier motion to disqualify would have been inappropriate.

The court finds that Milden’s delay in bringing this motion is a sufficient basis to deny the motion, even if, contrary to the above analysis, there is found to exist a substantial relationship between the two representations.

            (D)       Equitable Considerations

“Ultimately, disqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility. [Citation.] The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar.” (SpeeDee Oil, supra, 20 Cal.4th at p. 1145.)

Whether delay is sufficient by itself to deny the motion, prejudicial delay, together with the circumstances here, demonstrate that there is a strong basis for denying the motion. The undisputed evidence is that GW has been, significantly and for a long, continuous time, counsel for Simon, including Simon’s involvement with TOOAS. There would be a substantial burden on Simon to replace GW as counsel in this matter. At the same time, “[d]elay is significant not only from the perspective of prejudice to the nonmoving party, it is also an indication that the alleged breach of confidentiality was not seen as serious or substantial by the moving party.” (Liberty National, supra, 194 Cal.App.4th at p. 847.) Despite knowing that Simon had arranged and paid for Milden’s legal assistance in addressing his employment issue with SeaVees, Milden did not raise the issue of a potential conflict until immediately before Milden’s deposition. This effectively derailed the deposition and interfered with Simon’s own trial preparations, but, as the filing of the summary judgment motions demonstrate, did not derail Milden’s counsel’s own litigation efforts. These facts provide a strong inference that Milden did not view the potential conflict as “serious or substantial.” “It has also been held that one can properly consider the possibility that the ‘party brought the motion as a tactical device to delay litigation.’ [Citation.]” (Id. at p. 847.)

Based upon the totality of the facts and circumstances here, and weighing the admissible evidence, the motion to disqualify GW will be denied.

(2)       Discovery Motions

The two discovery motions also before the court involve the deposition of Milden. On July 19, 2024, Simon filed a motion to compel Milden to appear for deposition and to answer questions. Milden’s opposes this motion on the grounds that he does not dispute Simon’s right to take his deposition, but objects to the deposition being taken by Simon’s present counsel because of the conflict addressed in Milden’s motion to disqualify GW as counsel. Correspondingly, on July 22, 2024, Milden filed a motion for a protective order to prevent GW from deposing or cross-examining Milden.

As discussed above, the court will deny the motion to disqualify GW. As a consequence, there is no reason why the deposition of Milden should not take place promptly and by Simon’s current counsel. Milden expressly does not move to preclude his deposition from being taken at all. (Motion for Protective Order, at pp. 14-15.) Milden’s motion for protective order is therefore denied.

With respect to the motion to compel Milden’s deposition, Milden makes a number of procedural objections. Regardless of whether or not there is any merit to those objections, “[i]f the motion for a protective order is denied in whole or in part, the court may order that the deponent provide or permit the discovery against which protection was sought on those terms and conditions that are just.” (Code Civ. Proc., § 2025.420, subd. (g).) The court will therefore order the deposition of Milden to take place. The court will not address in this motion any matter relating to the conduct of that deposition except to overrule the objection regarding the deposition being conducted by GW as counsel for Simon. To the extent there are any objections to particular questions, the disposition of such objections would need to be the subject of a question-specific meet and confer process and a further motion.

Each party has requested an award of monetary sanctions against the other. Although the court denied the motion to disqualify and found that the timing and circumstances justify an inference of gamesmanship in the making of that motion, the court does not find that motion to be frivolous. A consequence of making that motion, however, was to prevent the deposition of Milden to go forward until the disqualification issue was resolved. Under the totality of the circumstances, the court finds that an award of sanctions against Milden or its counsel would be unjust. All requests for awards of sanctions will therefore be denied. (See Code Civ. Proc., §§ 2025.420, subd. (g), 2025.450, subd. (g)(1), 2025.480, subd. (j).)