Persichette v. Owners Insurance Co.

Levy Law, P.C. represented Owners Insurance Company (Owners) (defendant) in bad-faith insurance litigation for 13 years. During that time, Levy Law routinely defended Owners against bad-faith lawsuits. Levy Law also helped Owners implement certain claims-handling policies and procedures and trained numerous employees, including adjustor Geoffrey Page, on those policies and procedures. William Persichette (plaintiff) sued Owners for bad-faith insurance practices. Persichette’s claims were quite similar to the claims asserted in some of the suits in which Levy Law had defended Owners. Page was the adjustor on Persichette’s case. Levy Law, which no longer represented Owners, served as Persichette’s cocounsel. Owners moved to disqualify Levy Law pursuant to Colorado Rule of Professional Conduct 1.9(a). That rule provided that an attorney may not represent a current client whose interests are materially adverse to a former client if the two matters are the same or substantially related and the former client has not consented in writing. The trial court found that Levy Law had knowledge of Owners’ claims-handling policies and procedures because Levy Law helped Owners implement them. Accordingly, Levy Law’s representation of Persichette could potentially result in Levy Law attacking its own work. Nevertheless, the trial court found that although the former and current matters were substantially similar, they were not substantially related. Therefore, the trial court denied Owners’ disqualification motion. The matter came before the Colorado Supreme Court.