DENVER (Legal Newsline) – A Denver personal injury lawyer has been disqualified from representing a car crash victim against an insurance company for which he worked more than 400 cases.
The Colorado Supreme Court issued its decision in the case on May 4, overruling arguments from Levy Law that Marc Levy’s work with Owners Insurance Company, which argued Levy had an unfair advantage, was not substantially related to the case of new client William Persichette.
The issue drew the attention of organizations representing Colorado’s defense and plaintiffs lawyers, with both groups filing amicus briefs.
“Here, the district court’s factual findings and our legal determinations leave no doubt that, given Levy Law’s prior representation of Owners, Levy Law’s current representation of Persichette is likely to obtain an advantage for him and a disadvantage for Owners,” Justice Carlos Samour wrote.
“Because allowing Levy Law to remain as Persichette’s counsel would seriously threaten the integrity and fairness of the proceedings, and because there is no effective remedy outside of disqualification, the district court should have granted Owners’ motion to disqualify.”
Colorado rules prevent a lawyer from representing one party, then representing another in an adverse proceeding against it “in the same or a substantially related matter” without permission from the old client.
Owners Insurance gave no permission to Levy, who was brought in to handle Persichette’s car crash case in a dispute over underinsured motorist coverage.
The trial court ruled against Owners’ motion to disqualify, leading to the appeal. Owners had noted that Levy Law represented it in 455 cases from 2004-2017, billing it for more than 1,700 hours in the last five years of that timeframe and more than $5 million in fees.
Twenty-three of the cases Levy worked had claims that mirrored Persichette’s. The firm also helped put in place Owners’ claim-handling policies.
Levy said the information he acquired while representing Owners was neither confidential nor disadvantageous to the company, arguing then that Persichette’s claims were not substantially related to his work with Owners.
The Supreme Court found the district court read the governing rule regarding disqualification too narrowly – “substantially similar” does not mean “the same,” the justices ruled. They also said Levy probably has confidential information about Owners.
“We are unpersuaded by Persichette’s contention that any confidential client information Levy Law may have about Owners is innocuous because there is no basis to believe that Owners’ claims-handling policies and procedures are the same today as they were during the prior representation,” Justice Samour wrote.
“Persichette is wrong. The district court specifically found that, as a result of the prior representation, Levy Law has knowledge of Owners’ current claims-handling policies and procedures. This finding is both supported by the record and uncontroverted.”
An effort by Levy to abandon claims-handling charges while attempting to prove bad faith was enough for the trial court but not the Supreme Court.
“(I)t makes no meaningful difference whether Persichette attacks Owners for the policies and procedures Levy Law helped put in place or Page (an adjustor) for not following them,” Samour wrote.
“In either case, confidential client information Levy Law probably possesses about Owners’ policies and procedures—including those that are front and center in this litigation—is relevant in this action in a way that likely disadvantages Owners.”
From Legal Newsline: Reach editor John O’Brien at john.obrien@therecordinc.com.