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Harper v. Beacon Air, Inc.

Superior Court of Delaware

March 2, 2017

GARY M. HARPER and SAMANTHA HARPER, husband and wife, Plaintiffs,
v.
BEACON AIR, INC., HARVEY, HANNA & ASSOCIATES, INC., JOHN HARVEY, AND SUNDEW PAINTING, INC. Defendants,

          Submitted: January 17, 2017

         On Defendant John Harvey's Motion to Disqualify Plaintiffs' Counsel. DENIED.

          Gary S. Nitsche, Esquire and Joel H. Fredericks, Esquire, Weik, Nitsche & Dougherty, Wilmington, Delaware, Attorneys for Plaintiffs.

          Benjamin C. Wetzel, III, Esquire and Natalie M. Ippolito, Esquire, Wetzel & Associates, P.A., Wilmington, Delaware, Attorneys for Defendant John Harvey

          Colin M. Shalk, Esquire, Casarino Christman Shalk Ransom & Doss, P.A., Wilmington, Delaware, Attorney for Defendant Beacon Air, Inc.

          Eric S. Thompson, Esquire and William A. Crawford, Esquire, Franklin & Prokopik, Wilmington, Delaware, Attorneys for Defendant Harvey, Hanna & Associates, Inc.

          Susan L. Hauske, Esquire, Tybout, Redfearn & Pell, Wilmington, Delaware, Attorney for Defendant Sundew Painting, Inc.

          MEMORANDUM OPINION

          Richard R. Cooch, R.J.

         I. INTRODUCTION

         Before the Court is Defendant John Harvey's Motion to Disqualify Plaintiffs' Counsel. This motion arises from Plaintiff Gary Harper's alleged slip and fall on Defendant John Harvey's property. Mr. Harvey has moved to disqualify Plaintiffs' counsel on grounds that a conflict of interest exists, since Plaintiffs' counsel previously had represented Mr. Harvey as a plaintiff in a separate unrelated automobile accident case. Mr. Harvey contends that during his previous automobile accident lawsuit, he "likely" revealed information to Plaintiffs' counsel that now gives Plaintiffs' counsel an advantage in this case, creating a conflict of interest that warrants Plaintiffs' counsel's disqualification.

         Comment [3] to Delaware Lawyers' Rule of Professional Conduct 1.9 guides this Court's analysis of whether two matters are "substantially related." Under that Rule, two matters are "substantially related" "if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter."[1]

         Whether there is a "substantial risk that confidential factual information as would normally have been obtained in the prior representation [that] would materially advance the client's position in [this] subsequent matter" is the only factor of Rule 1.9 at issue in this case. The parties agree that the two legal matters are not "substantially related" in the sense that they do not involve the same transaction or legal dispute.

         This Court concludes that Mr. Harvey, bearing the burden of proof, has not set forth sufficient evidence to demonstrate a "substantial risk" that he disclosed information to Plaintiffs' counsel that now "materially advance[s]" his clients' position in this case, thus requiring disqualification. Rather, Mr. Harvey has simply proffered that it is "likely" that he revealed information to Plaintiffs' counsel that would give Plaintiffs' counsel an "indirect advantage" in this case.[2]The Court understands that Mr. Harvey is quite upset that his former counsel in the automobile accident case have now brought a slip and fall case against him. However, disqualification of prior counsel has been held by this Court to be an "extreme remedy" which the Court finds is not warranted by the facts of this particular case. The Court thus DENIES the motion.

         II. FACTS AND PROCEDURAL HISTORY

         Plaintiffs, represented by present counsel Gary S. Nitsche and Joel H. Fredericks, filed the instant slip and fall action on May 16, 2016. Plaintiffs allege that on October 15, 2014, while performing plumbing work on a residential property owned by Mr. Harvey, Plaintiff Gary Harper "fell through a hole cut for an HVAC vent that was hidden by a tarp."[3] On the date of the accident, Mr. Harvey had insurance for the property though The Travelers insurance company ("Travelers"). Plaintiffs filed suit against Harvey, Hanna & Associates, Inc. as the general contractor, Beacon Air, Inc. as the HVAC subcontractor, and Mr. Harvey as the property owner and the person who hired the contractor.[4]

         Plaintiffs' counsel, Gary S. Nitsche, had previously represented Mr. Harvey as a plaintiff against an unrelated defendant in the earlier automobile accident action.[5] In that action, Mr. Nitsche had the assistance of his associate, Samuel D. Pratcher, III, who was the primary attorney handling that matter. That action was instituted in this Court on June 5, 2013, and involved a motor vehicle accident in which an unrelated party had struck Mr. Harvey's vehicle with her vehicle on Limestone Road in New Castle County. That action was dismissed on January 12, 2015 after the parties agreed to submit the case to binding arbitration.

         III. PARTIES' CONTENTIONS[6]

         Mr. Harvey opposes Mr. Nitsche and his law firm's representation of Plaintiffs against him on grounds that a conflict of interest exists. Although Mr. Harvey's counsel had originally alleged in the Motion to Disqualify that the two matters were "substantially related, " Mr. Harvey's counsel now acknowledges that the two matters are not "substantially related" as set forth in Delaware Lawyers' Rule of Professional Conduct 1.9, in that this action does not arise from the same transaction or legal dispute as the previous action. Mr. Harvey had also originally contended "that a conflict of interest exists based on the fact that the incident giving rise to this action occurred at [Mr.] Harvey's residence at the same time he was represented by Mr. Nitsche and his firm, " and that there is a "great likelihood that [Mr.] Harvey mentioned or discussed this incident with [Mr.] Nitsche or another member of his firm" during the prior representation.[7] Mr. Harvey also argues that Mr. Nitsche "would have the advantage of knowing [Mr.] Harvey's settlement philosophy, " and that "Harper's position in this action could be materially advanced based on any information provided to Nitsche during the Harper incident at [Mr. Harvey's] residence."[8]

         However, in a later affidavit submitted to the Court, Mr. Harvey stated in toto:

1. I am a defendant in the above-captioned action.
2. On October 15, 2013, when the plaintiff was allegedly injured while working on my residence, I was represented by Gary Nitsche, Esquire and his law firm as a plaintiff in a personal injury action.
3. It is likely that I would have mentioned or discussed this incident to Mr. Nitsche or someone from his law firm around the time the incident occurred, because they were my attorneys at the time.
4. In conclusion, Mr. Harvey asserts that "[w]alling off Mr. Nitsche and Mr. Pratcher from this action allowing plaintiff to continue to be represented by Mr. Fredericks would satisfy Harvey's conflict of interest concerns."[9]

         In response, Plaintiffs' counsel, Mr. Nitsche, contends that no conflict of interest exists and that he should not be disqualified from representing Plaintiffs. Mr. Nitsche argues that this case and his previous case with Mr. Harvey "involve separate and distinct incidents and claims."[10] Mr. Nitsche "certified" in his Response that "he has spoken with all persons from his office who would have communicated with [Mr.] Harvey during the previous representation and that they have no recollection of [Mr.] Harvey disclosing, or even mentioning, any information regarding the incident involving [Mr.] Harper."[11] Mr. Nitsche also "certif[ies] that Mr. Harvey never discussed the incident involving Mr. Harper with [him]."[12] Lastly, Plaintiffs contend that as Mr. Harvey is insured by Travelers, Travelers will assume the defense in its entirety, and that "[Mr.] Harvey does not participate in or have a right to dictate any settlement negotiations. The negotiations, to the extent there are any, are through Travelers pursuant to the policy of insurance."[13] Mr. Harvey's counsel does not dispute this contention.[14] Mr. Nitsche has advised the Court, however, that "as Mr. Pratcher was the primary attorney handling the [previous] matter and in an effort to compromise with Mr. Harvey, [Mr. Nitsche] will agree to 'wall off' Mr. Pratcher from Mr. Harper's case."[15]

         IV. DISCUSSION

         A. A Test of Whether There Is a "Substantial Risk" that Plaintiffs' Counsel's PriorRepresentation of Mr. Harvey "Material Advances" Plaintiffs' Position Governs a Motion for Disqualification

         Even though the parties agree that Mr. Harvey's previous case with Plaintiffs' counsel is not factually or legally "substantially related" to the case at bar, a statement of the test regarding disclosure of confidential information that would "materially advance" the lawyer's new client's position, thus requiring lawyer disqualification pursuant to Delaware Lawyers' Rule of Professional Conduct 1.9, is warranted.

         "Generally, disqualification motions are disfavored because they are often filed for tactical reasons rather than bona fide concerns about client loyalty."[16]"The party moving for disqualification bears the burden of proof. A movant for disqualification must have evidence to buttress his claim of conflict because a litigant should, as much as possible, be able to use the counsel of his choice."[17]"To ensure that disqualification motions are not granted liberally, the Court reviewing the motion must weigh the effect of any alleged conflict on the fairness and integrity of the proceedings before disqualifying the challenged counsel."[18]Notably, this Court has cautioned that "disqualification of counsel is an extreme remedy that should be employed only when necessary to ensure the fairness of the litigation process."[19]

         Whether a conflict of interest exists in a given case is governed by the Delaware Lawyers' Rules of Professional Conduct. Rule 1.9 provides:

A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.[20]

         Comment [3] to Rule 1.9 states:

[m]atters are 'substantially related' for purposes of this Rule [1] if they involve the same transaction or legal dispute or [2] if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter.[21]

         Delaware courts have previously analyzed the "substantially related" requirement of Rule 1.9. Prior to the adoption of Comment [3] in 2003, this Court held in Kanaga v. Gannett Co., Inc that three factors existed as to whether two actions were "substantially related."[22] First, the Court would inquire into the nature and scope of the prior representation. Second, the Court would determine the nature and scope of the present litigation. Third, the Court would analyze "whether the client might have disclosed confidences to counsel in the course of the prior representation that were ...


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