FEINGOLD et al v. LIBERTY MUTUAL GROUP et al

Filing 14

MEMORANDUM AND/OR OPINIONSIGNED BY HONORABLE HARVEY BARTLE, III ON 12/6/11. 12/7/11 ENTERED AND COPIES MAILED TO PRO SE PARTIES AND E-MAILED.(ti, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ALLEN L. FEINGOLD, et al.
v.
LIBERTY MUTUAL GROUP, et al.

:
:
:
:
:

CIVIL ACTION

NO. 11-5364

MEMORANDUM
Bartle, J.

December 6, 2011
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.
Mutual rejected the award.

Liberty

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,
-2-

disqualification never is automatic."
624 F.2d 1198, 1201 (3d Cir. 1980).

United States v. Miller,
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."

-3-

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
-4-

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 "confidential"
because Wolf was opposing counsel and therefore a third party.
E.g., United States v. Rockwell Int'l, 897 F.2d 1255, 1265 (3d
Cir. 1990).
There is also no reason to disqualify Marshall,
Dennehey based on Feingold's statement that Wolf and possibly
other members of Marshall, Dennehey will be "necessary witnesses"
at trial.

Under the Pennsylvania Rules of Professional Conduct,

"[a] lawyer shall not act as an advocate at a trial in which the
lawyer is likely to be a necessary witness."
3.7(a).

Pa. R. Prof. Cond.

However, "[a] lawyer may act as advocate in a trial in

which another lawyer in the lawyer's firm is likely to be called
as a witness unless precluded from doing so by [other conflict of
interest rules]."

Id. at 3.7(b).

When dealing with a motion to disqualify counsel based
on the opposing party's desire to call the attorney as a witness,
a court must ensure that ethical rules are not abused for
tactical reasons.

Kehrer v. Nationwide Ins. Co., No. 248, 1994

WL 805877, at *4 (Phila. C.P. Aug. 9, 1994).

The party seeking

disqualification must demonstrate that the testimony:

(1) is

material; (2) cannot be obtained elsewhere; and (3) would be
prejudicial to the testifying attorney's client.

Id.

Here, Feingold has not set forth any specific facts
from which this court can conclude that Wolf or other
-5-

unidentified attorneys from the Marshall, Dennehey firm will be
"necessary" witnesses.

Pa. R. Prof. Cond. 3.7(a).

It is unclear

why any of the facts known by Wolf or other counsel for Liberty
Mutual regarding the denial of Thompson's UM claim cannot be
obtained through documents or other employees of Liberty Mutual.
Furthermore, Rule 3.7(b) permits Marshall, Dennehey to continue
its representation of Liberty Mutual even if Wolf or another
attorney from the firm is called as a witness at trial as long as
a different attorney from the firm acts as trial counsel.
Finally, Feingold claims that Marshall, Dennehey should
be disqualified because of "its own potential liability
exposure."

He posits that Marshall, Dennehey will somehow be

exposed to a malpractice action by "Wolf's acts and omissions,
both before and after his departure from the defendants' employ,
[which] form the basis of much of the conduct complained of in
this bad-faith litigation."

Feingold cites Comment 10 to Rule

1.7 of the Pennsylvania Rules of Professional Conduct, which
states that:
The lawyer's own interests should not be
permitted to have an adverse effect on
representation of a client. For example, if
the probity of a lawyer's own conduct in a
transaction is in serious question, it may be
difficult or impossible for the lawyer to
give a client detached advice.
Pa. R. Prof. Con. 1.7, cmt. 10.
The mere possibility of a potential malpractice claim
against an attorney does not result in automatic
disqualification.

See Lease v. Rubacky, 987 F. Supp. 406, 408
-6-

(E.D. Pa. 1997).

Where claims against an attorney are largely

speculative and unlikely to be pursued, disqualification is not
necessary.

See Hamilton, 645 F. Supp. at 61–62.

Furthermore,

Liberty Mutual has not raised reliance on the advice of counsel
as an affirmative defense to the bad faith action, and therefore
the actions of Wolf and Marshall, Dennehey are not at issue.
See, e.g., Amquip Corp. v. Admiral Ins. Co., 231 F.R.D. 197, 198
(E.D. Pa. 2005); McAndrew v. Donegal Mut. Ins. Co., 56 Pa.
D. & C.4th 1, 14 (Phila. C.P. 2002).

As discussed above,

Feingold cannot assert this defense on behalf of Liberty Mutual
in a motion for disqualification simply to gain a tactical
advantage or to harass the opposing party.
Accordingly, the motion of Feingold for
disqualification will be denied.

-7-