Trip Mate, Inc. f/k/a Trip Mate Agency, Inc. v. Stonebridge Casualty Insurance Company et al

Filing 136

ORDER denying 101 motion for disqualification of counsel. Signed on 9/24/12 by District Judge Ortrie D. Smith. (Wolfe, Steve)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
TRIP MATE, INC., formerly known as
Trip Mate Agency, Inc.,
Plaintiff,
vs.
STONEBRIDGE CASUALTY
INSURANCE COMPANY, et al.,
Defendants.

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Case No. 10-0793-CV-W-ODS

ORDER AND OPINION DENYING
DEFENDANT’S MOTION TO DISQUALIFY COUNSEL
Pending is Defendant’s Motion to Disqualify, which seeks an order disqualifying
counsel for Unique Vacations, Inc.. The motion (Doc. # 101) is denied.
In August 2010, Trip Mate sued Stonebridge, Transamerica Life Insurance
Company and Work First Casualty Company (formerly Monumental General Casualty
Company) in connection with profit sharing obligations alleged to exist in certain
contracts. The defendants sued by Trip Mate are “sister companies” in what is
described by them as “the AEGON family.”
In October 2011, Unique Vacations (“Unique”) filed suit against Trip Mate
seeking amounts allegedly owed to it under those same profit sharing obligations. In
November, Trip Mate filed a Third Party Complaint against Stonebridge, contending any
amounts it owed Unique were owed to it by Stonebridge. The two lawsuits were
consolidated in December. In February 2012, Unique sought leave to file an Amended
Complaint so it could add Stonebridge as a defendant. The motion was granted and the
Amended Complaint was filed on March 20.
Unique is represented by the law firm of Greenberg Traurig, LLP (“GT”). Tom
Bond, an attorney at GT, has performed legal work for Transamerica on regulatory
matters. Unique also admits Bond performed “a minimal amount of legal work for

Stonebridge.” Specifically, Bond performed the following amount of work for
Stonebridge in the following months:
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1.2 hours in December 2009

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0.2 hours in January 2010

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0.4 hours in February 2010

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0.6 hours in December 2011

Bond is not involved in this lawsuit, and it does not appear that GT or Bond
represented any AEGON family member on matters related to this lawsuit. Paul
Latchford is the Vice President of Law and Government Affairs for various members of
the AEGON family, including Stonebridge and Transamerica. In that capacity, Latchford
has worked with Bond during the course of Bond’s representation. Latchford is also a
fact witness in this litigation.
Motions to disqualify counsel are subject to particularly strict scrutiny because of
their potential for abuse. E.g., Macheca Transport Co. v. Philadelphia Indemnity Co.,
463 F.3d 827, 833 (8th Cir. 2006) (citing cases). The Court applies the Code of
Professional Responsibility adopted by the Missouri Supreme Court. Local Rule
83.5(c)(2). With exceptions that need not be discussed here,1 Rule 4-1.7 provides that
a lawyer “shall not represent a client if the representation involves a concurrent conflict
of interest. A concurrent conflict of interest exists if the representation of one client will
be directly adverse to another client.” The paramount issue in resolving the pending
motion is ascertaining who GT’s clients have been, and when.
GT has performed legal work for Stonebridge, but Stonebridge was not a client
when GT filed the Amended Complaint. It was not until February 2012 at the earliest
that GT’s present client (Unique) became adverse to Stonebridge. By then,
Stonebridge was a former client. Attorneys may represent parties adverse to former
clients so long as the matters are not substantially related, Mo. Rule 4-1.9, but the work
GT did for Stonebridge has nothing to do with the present suit. Stonebridge insists that
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In light of the Court’s discussion, the Court declines to address GT’s arguments
regarding the alleged waiver of conflicts.
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it was obvious before February 2012 that Unique would become adverse to
Stonebridge, but this is not necessarily the case. The possibility certainly existed, but it
was not inevitable that Unique would add Stonebridge as a defendant.
Defendants also argue that GT’s representation of Unique violates Rule 4-1.7
because GT performed work for other members of the AEGON family. The Court does
not agree this is a sufficient reason to disqualify GT. Comment 34 to Rule 4-1.7
provides the following guidance:
[T]he lawyer for an organization is not barred from accepting
representation adverse to an affiliate in an unrelated matter, unless the
circumstances are such that the affiliate should also be considered a client
of the lawyer, there is an understanding between the lawyer and the
organizational client that the lawyer will avoid representation adverse to
the client’s affiliates, or the lawyer’s obligations to either the organizational
client or the new client are likely to limit materially the lawyer’s
representation of the other client.
The circumstances do not persuade the Court that GT’s work for Transamerica bars GT
from taking actions adverse to Stonebridge. The two entities are different companies,
and they sell different kinds of insurance: Stonebridge is a property and casualty
insurer, and Transamerica issues life insurance policies. There is no suggestion that
Bond’s work for Transamerica was applicable to Stonebridge in any way.
Defendants have gone to great lengths to demonstrate their dissatisfaction with
GT. However, they have not suggested an understanding between GT and
Transamerica (or anyone else) that GT’s representation of Transamerica would prevent
GT from representing parties adverse to Transamerica’s “sister entities.” Finally, (1) the
regulatory matters that Bond worked on for Transamerica are not likely to limit GT’s
ability to represent Unique, and (2) representation of Unique should not limit GT’s ability
to represent Transamerica. The facts do not persuade the Court that GT became the
lawyer for all members of the AEGON family simply by doing work for one of them.
Defendants’ sentiments express a sense of unhappiness and betrayal. Certainly,
Defendants are free to refrain from retaining GT in the future. In addition, the parties
are cautioned that the Court’s ruling has no application or force outside of this lawsuit:
while the Court declines to disqualify GT, nothing prevents the appropriate disciplinary

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authorities from reaching a different conclusion about GT’s conduct (either with or
without a more complete investigation of the matter).

IT IS SO ORDERED.

/s/ Ortrie D. Smith
ORTRIE D. SMITH, SENIOR JUDGE
UNITED STATES DISTRICT COURT

DATE: September 24, 2012

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