United States District Court, W.D. Washington, Seattle
ORDER DENYING MOTION TO DISQUALIFY COUNSEL
RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendants' Amended
Motion to Disqualify Plaintiff's counsel from
representing Plaintiff in this matter. Dkt. #23. Defendants
argue that Plaintiff's counsel, Todd Blischke, is a
material witness in this case, and therefore he should be
disqualified under Washington's Rule of Professional
Conduct (“RPC”) 3.7. Id. Defendants
further argue that the entire firm of Williams, Kastner &
Gibbs PLLC should be disqualified as well. Id.
Plaintiff opposes the motion, asserting that Defendants do
not have sufficient evidence to demonstrate the need for
disqualification under RPC 3.7 and that exceptions to the
Rule are applicable in any event. Dkt. #24. For the reasons
discussed below, the Court agrees with Plaintiff and DENIES
Defendants' motion. Plaintiff has also sought discovery
sanctions against Defendants, which this Court now GRANTS.
matter arises out of an underlying construction contract
dispute. On January 12, 2016, Plaintiff American Safety
Casualty Insurance Company (“American”) filed an
action for breach of contract, declaratory judgment and
unjust enrichment against Defendants Happy Acres Enterprises
Co., Inc., Rolf Eriksen and Matilija d/b/a Matilija, Inc.
(collectively “Happy Acres”). Dkt. #1. Plaintiff
alleges the following facts:
10. American issued surety bonds on behalf of Happy Acres in
connection with certain construction projects performed in
the State of Washington.
11. As partial consideration for American's agreement to
furnish surety bonds on behalf of Happy Acres, on or about
September 21, 2010, American and Defendants Happy Acres,
Matilija, and Rolf Eriksen, properly and formally executed
and entered into a General Agreement of Indemnity
(“GAI”). . . .
12. Pursuant to the terms of the GAI, Defendants, jointly and
severally, agreed to indemnify American from and against any
and all liability for losses, fees, costs, and expenses of
whatsoever kind or nature which American incurred as a
consequence of issuing bonds on behalf of Happy Acres or as a
consequence of a breach of the GAI by Defendants. . . .
. . .
14. After execution of the GAI and at the request of the
Defendants, American issued Performance Bond No. OKC607701
naming Doe Bay Water User's Association, Inc. (“Doe
Bay”) as obligee for the contract between Happy Acres
and Doe Bay, dated November 15, 2010, for the Slow Sand
Filter Facility (“Contract”) on or about November
22, 2010, in the penal sum of $664, 632.86
(“Bond”). . . .
15. In approximately March 2013, Happy Acres filed an
arbitration demand against Doe Bay relating to Happy
Acres' and Doe Bay's disputes under the Contract with
the American Arbitration Association in a matter styled
In the Matter of the Arbitration between Happy Acres
Enterprises Company, Inc. v. Doe Bay Water Users
Association, Case No. 75-20-1300-0095
(“Arbitration”). Doe Bay brought a counterclaim
against Happy Acres regarding Happy Acres alleged
deficiencies in performing the Contract.
16. In late December 2014 and early January 2015, Doe Bay
claimed that Happy Acres was in default under the Contract
and tendered its claim against the Bond to American. Doe Bay
then sought to have American joined as a party in the
Arbitration in order to pursue its claims under the Bond and
17. American was joined as a party to the arbitration in
approximately March 2015.
18. The Arbitration hearing was held from October 26-30,
2015. An Award of Arbitrator, dated December 16, 2015
(“Award”), was entered in favor of Happy Acres on
its claims against Doe Bay. The Award also found in favor of
Happy Acres on Doe Bay's counterclaims. Further, the