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Allen L. Feingold, et al. v. Liberty Mutual Group

December 6, 2011

ALLEN L. FEINGOLD, ET AL.
v.
LIBERTY MUTUAL GROUP, ET AL.



The opinion of the court was delivered by: Bartle, J.

MEMORANDUM

Pro se plaintiffs Allen L. Feingold ("Feingold") and Barbara Quinn as executrix of the estate of Theresa Thompson ("Thompson") bring this diversity action against Liberty Mutual Group, Liberty Mutual Insurance Company, Liberty Guard Auto Company, and Liberty Mutual Fire Insurance Company (collectively "Liberty Mutual") for bad faith insurance coverage in violation of 42 Pa. Cons. Stat. Ann. § 8371. Before the court is the motion of Feingold for disqualification of defense counsel, Marshall, Dennehey, Warner, Coleman and Goggin ("Marshall, Dennehey").

I.

This action arises out of a claim made by Thompson for uninsured motorist ("UM") benefits under her policy with Liberty Mutual after suffering injuries in a motor vehicle accident. Thompson, with Feingold as her counsel, filed suit in the Court of Common Pleas of Philadelphia County after Liberty Mutual refused to pay the UM benefits. She then filed a motion to compel arbitration which the court granted. The arbitration panel awarded Thompson $90,000 but found that Liberty Mutual was only obligated to pay a third of the award if it was determined that Thompson had other available insurance coverage. Liberty Mutual rejected the award. After several years, Quinn as executrix of Thompson's estate petitioned the Court of Common Pleas for confirmation of the arbitration award. The court granted the petition and entered judgment in the amount of $90,000 plus interest in Thompson's favor. Liberty Mutual has since appealed the order confirming the award to the Superior Court of Pennsylvania.

Feingold moves to disqualify Marshall, Dennehey based on the actions of David Wolf, Esquire ("Wolf"). Wolf was an employee of Liberty Mutual from 1986 to 2007 and appeared as counsel on its behalf in the Thompson matter in the Court of Common Pleas.

Wolf is now an attorney with Marshall, Dennehey. He withdrew his appearance in the Thompson state court action on August 2, 2011. Wolf has never appeared on behalf of Liberty Mutual in this court. Instead, William C. Foster, Esquire and Allison B. Goldis, Esquire of Marshall, Dennehey represent Liberty Mutual in this action.

II.

Our Court of Appeals has instructed that "[a]lthough disqualification ordinarily is the result of a finding that a disciplinary rule prohibits an attorney's appearance in a case, disqualification never is automatic." United States v. Miller, 624 F.2d 1198, 1201 (3d Cir. 1980). Instead, disqualification is a matter committed to the discretion of the court. Id. A court must consider "the ends that the disciplinary rule is designed to serve and any countervailing policies, such as permitting a litigant to retain the counsel of his choice and enabling attorneys to practice without excessive restrictions." Id. Disqualification is appropriate when necessary to "[e]nsure the parties receive the fair trial which due process requires." In re Estate of Pedrick, 482 A.2d 215, 221 (Pa. 1984).

Motions to disqualify opposing counsel are not favored. E.g., Hamilton v. Merrill Lynch, 645 F. Supp. 60, 61 (E.D. Pa. 1986). The party seeking disqualification bears the burden of proving that disqualification is necessary. Cohen v. Oasin, 844 F. Supp. 1065, 1067 (E.D. Pa. 1994) (citing Commercial Credit Bus. Loans, Inc. v. Martin, 590 F. Supp. 328, 335--36 (E.D. Pa. 1984)). "Vague and unsupported allegations are not sufficient to meet this standard." Id. (citing Commercial Credit Bus. Loans, 590 F. Supp. at 335--36).

Feingold first argues that Marshall, Dennehey is engaged in a "dual advocacy role" by reason of Wolf's past involvement in the underlying state court action. Feingold also asserts that Marshall, Dennehey "has acquired confidential information from plaintiffs which is material to the defense in the present bad-faith litigation."

An advocate may not undertake representation adverse to the interests of a present or former client in the same or a "substantially related" matter. Pa. R. Prof. Cond. 1.7, 1.9; see also Maritrans v. Pepper, Hamilton & Scheetz, 602 A.2d 1277, 1284 (Pa. 1992). Here, Wolf represented Liberty Mutual in the state court action, and he is now employed by the firm which represents Liberty Mutual in this litigation. Thus, neither Wolf nor Marshall, Dennehey represents a client with interests adverse to those of a current or former client. Neither Wolf nor any other attorney from Marshall, Dennehey represented Thompson in the state court action.

There is simply no support for Feingold's claim that counsel for Liberty Mutual owe a fiduciary duty to Thompson or her estate. UM claims "are inherently and unavoidably arm's length and adversarial." Condio v. Erie Ins. Exch., 899 A.2d 1136, 1144 (Pa. Super. 2006). This is because "the insured is naturally and inherently seeking to maximize his recovery of general damages, while the insurer seeks, within reasonable limits, to minimize that recovery." Id. Both the insurer and insured are entitled to have separate legal counsel to advocate for their own interests. Id.; see also Phillip v. Clark, 560 A.2d 777, 779 (Pa. Super. 1989). Here, Liberty Mutual and Thompson were adverse parties in the UM litigation and were represented by separate counsel.

Contrary to Feingold's assertions, there is no reason to believe that Marshall, Dennehey has "acquired confidential information from plaintiffs" through Wolf's involvement in the state court action. Any information provided by Feingold and Thompson to Wolf could not have been privileged or ...


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