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The Lafond Family Trust v. Allstate Property and Casualty Insurance Co.

United States District Court, D. Colorado

August 8, 2019



          Kristen L. Mix United States Magistrate Judge.

         This matter is before the Court on Defendant's Motion to Address Plaintiff's Attorney's Conflict of Interest, or in the Alternative, to Disqualify [#25][1] (the “Motion”).[2]Plaintiff filed a Response [#26] in opposition to the Motion and Defendant filed a Reply [#28]. This case has been referred to the undersigned for all purposes pursuant to D.C.COLO.LCivR 40.1(c) and 28 U.S.C. § 636(c), on consent of the parties. See [#19, #20]. The Court has reviewed the Motion, Response, Reply, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#25] is DENIED in part and GRANTED in part.

         I. Background

         This bad faith insurance case involves a claim for hail, wind, and water damage to Plaintiff's property under a Homeowner's Policy issued by Defendant. See generally Compl. [#6]. Plaintiff alleges that it made a timely claim for the property damage and that Defendant offered an unreasonably low settlement for the cost of repairs and unreasonably delayed or denied payment of covered benefits without a reasonable basis in violation of Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116, and in breach of the parties' insurance contract. See Id. ¶¶ 8-27.

         In the instant Motion, Defendant represents that Mr. Richard LaFond (“LaFond”), Plaintiff's counsel of record, made Plaintiff's initial claim for the property damage and was Plaintiff's primary contact with Defendant prior to the filing of this lawsuit. [#25] at 2. For this reason, Defendant argues that Mr. LaFond cannot act as an advocate on Plaintiff's behalf in this case because he is a necessary witness and will be subject to cross examination. Id. Specifically, Defendant asserts that Mr. LaFond “must be disqualified from this case as the attorney for the Plaintiff, or, in the alternative, disqualified from depositions and the trial.” Id. at 8.

         In its Response, Plaintiff does not contest Defendant's characterization of Mr. LaFond's involvement in Plaintiff's insurance claim pre-suit, but nonetheless argues that the Motion [#25] should be denied. See generally [#26]. Plaintiff first argues that the request to completely disqualify Mr. LaFond from any involvement or participation in this case is not supported by law or fact. Id. at 2. Second, Plaintiff argues that Defendant's request to disqualify Mr. LaFond from participating at trial is now moot given that Plaintiff has retained Mr. Robert Lichty (“Lichty”) to represent Plaintiff during trial in place of Mr. LaFond. Id. at 3. Finally, Plaintiff asserts that unless Mr. LaFond's identity will likely be disclosed to the jury by deposition testimony admitted into evidence, Plaintiff's counsel should not be disqualified from conducting depositions. Id. at 4-7.

         In its Reply [#28], Defendant appears to abandon its request that Mr. LaFond be disqualified either from the case entirely or from trial, stating: “Since Plaintiff's attorney has advised that he will not serve as trial counsel in this action, the only issue to be addressed is whether or not he can take and defend depositions.” Reply [#28] at 3. Pursuant thereto, Defendant maintains that Mr. LaFond “must be precluded from taking and defending depositions” because to hold otherwise would, among other reasons, prejudice Defendant “in not being able to challenge Mr. LaFond's factual statements and questions during the depositions in this action.” Id. at 7.

         II. Legal Standard

         “A motion to disqualify counsel is addressed to the sound discretion of the district court.” World Youth Day, Inc. v. Famous Artists Merch. Exch., Inc., 866 F.Supp. 1297, 1301 (D. Colo. 1994). The movant bears the burden of establishing the grounds for disqualification. World Youth Day, 866 F.Supp. at 1299. “When ruling on a motion for disqualification of counsel, [the Court] must make specific findings and conclusions.” Id. (citation omitted). The Court should evaluate motions to disqualify with suspicion, and it must be aware that such motions may be used to “secure a tactical advantage in the proceedings.” Pappas v. Frank Azar & Assoc., P.C., No. 06-cv-01024-MSK-BNB, 2007 WL 4224196, at *6 (D. Colo. Nov. 27, 2007) (citing Religious Tech. Ctr. v. F.A.C.T. Net, Inc., 945 F.Supp. 1470, 1478 (D. Colo. 1996)).

         Pursuant to D.C.COLO.LAttyR 2(a), this District applies the Colorado Rules of Professional Conduct as its standards for professional responsibility. Defendant premises its request on Colorado Rule of Professional Conduct 3.7 (“Rule 3.7”). In pertinent part, Rule 3.7 prescribes that:

(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.

         “[A] lawyer is a ‘necessary' witness if his or her testimony is relevant, material and unobtainable elsewhere.” World Youth Day, 866 F.Supp. at 1302. “[T]he opposing counsel cannot be disqualified on the basis of speculation or conjecture, and disqualification can occur only after facts have been alleged that demonstrate a potential violation of the Rule.” Fognani v. Young, 115 P.3d 1268, 1272 (Colo. 2005) (citation omitted).

         “[T]he mere violation of [Rule 3.7] does not automatically result in disqualification.” Id. at 1303 (citation omitted). The Court must determine “whether the litigation can be conducted in fairness to all parties, ” and whether “the claimed misconduct in some way ‘taints' the trial or the legal system.” World Youth Day, 866 F.Supp. at 1302. In making this determination, the Court should evaluate whether the jury would be confused by the advocate also appearing as a witness, and whether the dual role would implicate “an unfair advantage in rebutting or advancing the substantive allegations at issue.” Id. The Court must also consider “the nature of the case, with emphasis on (1) the subject of the lawyer's testimony; (2) the weight the testimony might have in resolving disputed ...

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