Not that Special

Moreci v. Scaffold Solutions, Inc., No. A161193 (D1d2 Oct. 18, 2021)

A Plumber was injured when he fell from a construction scaffold. He sued ScaffCo. They settled. Under the terms of the settlement Plumber agreed to assume ScaffCo's defenses for any claims arising from the accident. Plumber’s employer Workers’ Comp Carrier—which had paid Plumber about $240k in benefits—intervened and crossclaimed against ScaffCo and one of the other contractors on the job site. The underlying case between Plumber and ScaffCo was dismissed. Subsequently, Plumber’s Lawyers associate in to defend ScaffCo in its litigation against WCC. 

WCC moves to disqualify Plumber’s Lawyers from repping ScaffCo. It argues that Plumber’s Lawyers can’t be allowed to switch sides like that. Substantively, that might be correct. But the problem with the argument is that to have standing to DQ a lawyer, you generally need to be a current or former client of that lawyer. Which WCC was not. So the trial court denied the motion. WCC appealed.

The Court of Appeal notes a split of authority regarding standing to bring a DQ. Under the so-called “majority rule,” only a client has standing. But under a “minority rule”—which appears to have developed largely in cases with very messy fact patterns—a non-client can have standing, but only if the attorney owed the non-client some kind of duty of confidentiality.

WCC tried to glom onto some of the language in a federal minority rule case that suggested that having a “personal stake” in a conflicted representation is enough to afford standing. According to WCC, it had such a stake because Plumber’s Lawyers have an advantage given all they know from representing Plumber. But the language from that case was discussing Article III notions. And it ultimately held that the movant lacked standing because the lawyer it sought to DQ didn’t owe the movant any duties and that neither a “broad interest in the administration of justice” nor a “tactical interest” that a failure to DQ will “increase [the opposing party’s] chances of losing this lawsuit” were adequate to convey standing. 

WCC also tried to argue that its relationship as Plumber’s Employer’s Workers Comp Insurer created some kind of special relationship that would give rise to standing. The discussion involves a bunch of substantive issues regarding workers’ comp law that are way out of my lane as a civ pro blogger. But at the end of the day, the Court of Appeal finds that the substantive law does not so closely align the interests of employer, employee, and insurer to create some kind of special or privy relationship that would permit them to raise each others’ rights. 

Affirmed.