Persichette v. Owners Ins. Co.

462 P.3d 581 (2020)

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Nature of the Case

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Facts

P, through Franklin D. Azar & Associates, P.C. (Azar firm), brought this underinsured-motorist (UIM) action against D for allegedly handling his insurance claim unreasonably and in bad faith. About three months later, P retained Mark R. Levy of Levy Law, P.C. (Levy Law) as co-counsel. D promptly moved to disqualify Levy Law pursuant to Rule 1.9(a) on the ground that Levy Law was D's longtime former counsel and had a conflict of interest. P alleged in his complaint that he incurred more than $130,000 in medical bills as a result of a two-car accident with an underinsured driver in May 2018. P was insured by D and D later determined that the underinsured driver was 100% at fault for the collision. P claims D failed to: (1) reasonably evaluate and investigate his insurance claim; (2) timely pay benefits related to his claim; (3) communicate with his lawyer in a timely manner; and (4) consent to a proposed settlement with the underinsured driver. P's complaint includes claims for breach of insurance contract, unreasonable delay or denial of payment, and bad faith. D claims that P failed to provide the necessary documentation to allow for a proper adjustment of his insurance claim. D further maintains that it made a Fisher payment less than a month after P provided such documentation, but that P nevertheless 'raced to the courthouse to assert bad faith' while his claim was still under investigation. Three months after the Azar firm initiated this action P retained Levy Law to serve as co-counsel. Levy Law represented D in 455 cases over a 13-year span. D paid them more than $5,000,000 in attorney fees. Twenty-three of the cases in which Levy Law represented D involved claims that mirror those brought by P. D asserted that Levy Law helped put in place D's claims-handling policies and practices, including some P criticizes. Levy Law provided legal advice and training to D's employees, including Geoffrey Page, the adjuster in charge of P's claim and the primary target of the allegations advanced in this lawsuit. In the past, Levy Law counseled Page and others on ways to minimize D's legal exposure and in the process learned confidential client information, including with respect to D's litigation strategy in general and Page's strengths and weaknesses as an adjuster in particular. P contends that the information acquired by Levy Law during the prior representation is neither confidential nor disadvantageous because P’s claims are not substantially related to the prior representation. D's motion was denied. The court ruled that, while the present and prior representations are 'substantially similar' and involve 'numerous and substantial' similarities, they are not 'substantially related.' D appealed.