Won first-in-nation opinion disqualifying lawyers from suing a former client.
WTO lawyers won a first-in-the-nation decision from a state supreme court disqualifying lawyers under Rule 1.9 of the rules of professional conduct from suing a former insurance-company client. It is also the first opinion in which the Colorado Supreme Court has disqualified any civil lawyer for being adverse to a client in a “substantially related” matter.
Owners Insurance Company (“Owners”) hired WTO to defend it when its long-time former attorneys began assisting a plaintiff’s personal injury firm in a bad faith case against Owners. To prevent its former lawyers from deposing and cross-examining Owners’ employees regarding claim-handling practices that were a subject of the firm’s prior representation, Owners sought disqualification from the action of its former law firm. WTO argued in the trial court that the firm’s prior representation of Owners was “substantially related” to the current similar lawsuit alleging Owners had acted in bad faith. The trial court, however, declined to disqualify the law firm.
Owners and WTO challenged in the Colorado Supreme Court the trial court’s denial of disqualification in an original proceeding seeking “extraordinary” relief under Colorado Appellate Rule 21. Owners argued that the district court’s decision effectively deleted the phrase “substantially related” from Rule 1.9 by confining disqualification in these circumstances to situations in which the attorney sues his client regarding the same claim.
The supreme court agreed with WTO’s arguments and noted it was “troubled” by the former firm’s readiness to potentially attack its own work in a subsequent proceeding against a former client. The opinion protects clients’ confidential information and the sanctity of the attorney-client relationship.