Baham v. Association of Apartment Owners of Opua Hale Patio Homes et al

Filing 34

ORDER Denying 10 Defendant's MOTION to Disqualify The Law Firm of Revere and Associates LLLC. Signed by Judge BARRY M. KURREN on 2/4/14. (gab, )CERTIFICATE OF SERVICEParticipants registered to receive electro nic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
RANDOLPH BAHAM,

)
)
Plaintiff,
)
)
vs.
)
)
ASSOCIATION OF APARTMENT )
OWNERS OF OPUA HALE PATIO )
HOMES, ET AL.,
)
)
Defendants.
)
______________________________ )

Civ. No. 13-00669HG-BMK
ORDER DENYING
DEFENDANT’S MOTION TO
DISQUALIFY THE LAW FIRM OF
REVERE AND ASSOCIATES
LLLC

ORDER DENYING DEFENDANT’S MOTION TO DISQUALIFY
THE LAW FIRM OF REVERE AND ASSOCIATES LLLC
Before the Court is Defendant Association of Apartment Owners of
Opua Hale Patio Homes’ (“AOAO”) Motion to Disqualify the Law Firm of Revere
and Associates LLLC. (Doc. 10.) The Court heard this Motion on January 24 and
31, 2014. After careful consideration of the Motion, the supporting and opposing
memoranda, and the arguments of counsel, AOAO’s Motion is DENIED.
FACTUAL BACKGROUND
On August 23, 2010, the firm of Motooka Yamamoto & Revere
(“MYR”) filed a Notice of Lien for Unpaid Assessments on behalf of AOAO

against Randolph Baham (“Baham”) and his mother Toyoko Baham.1 (Doc. 23 at
3.) In October of 2010, on behalf of AOAO, MYR established a payment plan
under which Baham would pay off the unpaid assessments as well as attorneys’
fees and costs. (Doc. 23-4.) When Baham defaulted on the payment plan, MYR
filed suit against him in State Court, and in July of 2011, obtained a judgment
against Baham on behalf of the AOAO. (Doc. 10-4.) That same month, MYR
issued a demand letter to Baham threatening further legal action if steps were not
taken to pay the amount of the judgment including attorneys’ fees and costs. (Doc.
23-6.)
Shortly thereafter, AOAO terminated MYR as counsel, and hired the
firm of Porter McGuire Kiakona & Chow (“PMKC”). (Doc. 23 at 5.) In March of
2012, Terrance Revere (“Revere”) left MYR to start his own firm, Revere and
Associates. (Doc. 22 at 5.)
About one-year after Revere left MYR, AOAO’s new counsel,
PMKC, instituted non-judicial foreclosure proceedings to recover a total
delinquency of $26,128.53 owed by Baham to AOAO, a delinquency arising in
large part from the prior judgment procured by MYR. (Id. at 4-5.) Baham’s unit

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According to the Complaint in this case, Baham owned a unit at Opua Hale Patio Homes as
joint tenants with his mother Toyoko. Toyoko Baham died in 2010, leaving Baham sole owner of the unit
in question. (Doc. 1-1 at 3.)

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was sold at auction sometime in May of 2013, to Jonah Kogan (“Kogan”). (Id. at
7.) In September of 2013, Kogan filed suit against Baham seeking possession of
the property, damages and back rent. (Id. at 9-10.)
On October 29, 2013, Revere & Associates filed suit on behalf of
Baham against AOAO, PMKC, and Kogan, in state court. (Doc. 1-1.) The
nineteen count Complaint asserts, among other things, illegal foreclosure, violation
of state and federal debt collection law, multiple contractual violations, and
wrongful eviction. (Id.)
PMKC, as a named defendant, removed the case to federal court.
(Doc. 1.) Shortly thereafter, AOAO filed the Motion currently before the Court to
disqualify Revere & Assoc. (Docs. 1, 10.) PMKC’s motion asserts that Revere &
Assoc. should be disqualified because the disputed foreclosure action underlying
the present suit directly stems from the work Revere’s former firm, MYR,
performed for AOAO. (Doc. 23 at 2.) To the heart of the matter, AOAO asserts it
is a clear conflict of interest to permit Revere to sue a former client AOAO, on
behalf of the very party that his prior firm represented AOAO against. (Doc. 10-1
at 2.) Revere opposes his disqualification on the grounds he had no involvement
with the work MYR performed for AOAO. (Doc. 22 at 2.) Moreover, Revere
contends that the uncontested financial judgment against Baham is unrelated to the
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allegedly unlawful actions surrounding the foreclosure of Baham’s property and
his later eviction, which occurred long after Revere left MYR.
DISCUSSION
Hawaii Rules of Professional Conduct (“HRPC”) Rule 1.9(b) governs
situations in which a lawyer ends his association with a firm, and later undertakes
representation of a client whose interests may conflict with a client of the lawyer’s
prior firm. Rule 1.9(b) provides that,
A lawyer shall not knowingly represent a person in the
same or a substantially related matter in which a firm
with which the lawyer formerly was associated had
previously represented a client
(1) whose interests are materially adverse to that person;
and
(2) about whom the lawyer had acquired information
protected by Rules 1.6 and 1.9(c) that is material to the
matter; unless the former client consents after
consultation, and confirms in writing.
Accordingly, under Rule 1.9(b) there are three prerequisites for
disqualifying an attorney and his current firm based upon work performed by the
attorney’s prior law firm: 1) representation involves “the same or a substantially
related matter”; 2) the interests of the former and current client are “materially
adverse”; and 3) the attorney has acquired protected information that is material to
the matter. Young v. Bishop Estate, CV 9-403 SOM-BMK, 2009 WL 3763029, *7
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(D. Haw. 2009) (setting out the requirements for disqualification under Rule
1.9(b)).
Even where the first two prerequisites for disqualification are met,
HRPC Rule 1.9(b)(2) operates to disqualify a lawyer “only when the lawyer . . .
has actual knowledge of information protected by Rule 1.6 and 1.9(c).” HRPC
Rule 1.9, cmt. 5.
Thus, if a lawyer while with one firm acquired no
knowledge or information relating to a particular client of
the firm, and that lawyer later joined another firm, neither
the lawyer individually nor the second firm is
disqualified from representing another client in the same
or a related matter even though the interests of the two
clients conflict.
Id.; see also In re ProEducation Int’l, 587 F.3d 296, 303 (5th Cir. 2009) (where
alleged conflict arose from former firm’s representation, disqualification is
unwarranted where lawyer never personally represented or gained any actual
knowledge of the client while with former firm).2
Under this Rule, while a lawyer who remained at a firm would be
subject to an imputed prohibition based upon the knowledge of other lawyers at the
firm, a departed lawyer becomes free of imputation “so long as that lawyer
2

The Hawaii Rules of Professional Conduct, along with the Rules of numerous other states, are
taken from the American Bar Association’s Model Rules of Professional Conduct. Accordingly, it is
appropriate to look to other jurisdictions’ interpretation of the Rules where Hawaii courts have not yet
spoken.

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obtained no material confidential information relevant to the matter.”3 Dieter v.
Regents of University of California, 963 F. Supp. 908, 911 (E.D. Cal. 1997)
(holding that under Model Rules of Professional Conduct Rule 1.9(b), three
lawyers who left a firm were not disqualified where they averred they had no
personal knowledge relevant to a client and the client presented no evidence to the
contrary).
In his briefs and at oral argument, Revere asserted that while
associated with MYR, he never personally worked on matters relating to AOAO,
did not acquire protected information about AOAO, and has “no actual confidences
to protect.” (Doc. 32 at 2-3.) At oral argument, AOAO conceded that it had no
evidence that Revere had any such actual knowledge. Accordingly, absent
evidence that Revere acquired protected information that would be material to the
matter now before the Court, the Court holds that disqualification is improper.
See In Re ProEducation Int’l, 587 F.3d at 303; see also San Gabriel Basin Water
Quality Auth. v. Aerojet-Gen. Corp., 105 F. Supp. 2d 1095, 1104 (C.D. Cal. 2000)

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Notably, HRPC Rule 1.9(b) is decidedly more lenient than the previously controlling Code of
Professional Conduct that provided for disqualification based upon the “appearance of impropriety”
without any showing of “actual” knowledge of protected information. See Edwards v. 360
Communications, 189 F.R.D. 433, 437 (D. Nev. 1999) (“The appearance of impropriety doctrine has been
specifically discredited by the new ABA Model Rules.”); see also Lansing-Delaware Water Dist. v. Oak
Lane Park, Inc., 808 P.2d 1369, 1375-76 (Kan. 1991) (comparing ABA Model Rules with prior Code of
Professional Responsibility). It is this former standard that was at play in Otaka, Inc. v. Klein, 791 P.2d
713, 718 (Haw. 1990), cited by AOAO in support of disqualification.

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(Even if the first two factors of the substantial relationship test are met, a lack of
involvement or knowledge of a prior case precludes disqualification of an attorney
based on his association with a prior law firm); Parker v. Volkswagenwerk
Aktiengesellschaft, 781 P.2d 1099, 1106 (Kan. 1989) (requiring a finding of actual
knowledge of material and confidential information before disqualification).
CONCLUSION
For the foregoing reasons, the Court DENIES Defendant’s Motion for
Summary Judgment (Doc 21).
DATED: Honolulu, Hawaii, February 4, 2014.
IT IS SO ORDERED.

/S/ Barry M. Kurren
Barry M. Kurren
United States Magistrate Judge

Randolph Baham v. Association of Apartment Owners of Opua Hale Patio Homes, et al., Civ. No. 13-00669HGBMK; ORDER DENYING DEFENDANT’S MOTION TO DISQUALIFY THE LAW FIRM OF REVERE AND
ASSOCIATES LLLC.

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