Bridgepoint Construction Services, Inc. v. Newton

Norman Salter (plaintiff) owned 25 percent of Bridgepoint Construction Services, Inc. (Bridgepoint) (plaintiff). Martin Newton (defendant) owned the remaining 75 percent of Bridgepoint. Newton also had an interest in Vista Oceano La Mesa Venture, LLC (Vista) (defendant). Dilip Ram (defendant) was Salter’s business associate. Bridgepoint performed construction services for Vista. Bridgepoint and Salter subsequently sued Vista and Newton in California state court, claiming that Vista owed Bridgepoint approximately $2 million for its work. Vista, in turn, filed a cross-complaint against Salter and Ram, asserting that they had diverted certain Bridgepoint assets, thereby depriving Vista of amounts it was allegedly owed. By December 2014, attorney Robert Klein represented Bridgepoint, Salter, and Ram in the case. In January 2017, the trial court disqualified Klein as counsel for Bridgepoint and Salter. Klein continued to represent Ram. In February 2017, Klein filed a cross-complaint on Ram’s behalf against Vista and Newton, seeking the return of money that Ram had allegedly advanced to the Vista project. The money that Ram sought via his cross-complaint was part of the same $2 million that Bridgepoint and Salter sought. In April 2017, Bridgepoint, acting through new counsel, filed a cross-complaint against Salter and Ram for, among other things, conversion and breach of fiduciary duty. After Klein filed Ram’s cross-complaint, Bridgepoint moved to disqualify Klein as Ram’s counsel. Newton joined in the motion. Klein acknowledged that he was representing Bridgepoint and Salter in a related case in federal district court. The trial court found that Klein had a conflict of interest and therefore disqualified him. The matter was appealed to the California Court of Appeal.