RICHARD PLEIN, a married person, and DEBORAH PLEIN (formerly Deborah De Witt), a married person, and the marital community composed thereof, Respondents,
USAA CASUALTY INSURANCE COMPANY, an insurance company, Appellant, and THE STERLING GROUP, INC. (doing business as Sterling Group, DKI), a corporation, Defendant.
address whether, given the facts of this case, a law firm may
represent a person adverse to a former client. In doing so,
we analyze whether this case constitutes a matter
"substantially related" to the firm's
representation of the former client under RPC 1.9(a). Comment
3 to RPC 1.9 guides our analysis.
behalf of Richard and Debra Plein, attorney Joel Hanson filed
a complaint for insurance bad faith and various other claims
against USAA Casualty Insurance Company. The claims stemmed
from the actions of USAA and its recommended contractor for
repairs following a house fire.
months later, attorneys William Smart and Ian Birk from the
law firm Keller Rohrback LLP, joined the Pleins' legal
team. USAA objected to Keller's participation in the
litigation because the company and law firm had recently
ended their extensive attorney-client relationship.
requested the trial court rule on the asserted conflict of
interest. The trial court found no conflict under RPC 1.9.
USAA moved for discretionary review, which this court
granted. We conclude Keller's representation of the
Pleins violates RPC 1.9(a). Accordingly, we reverse.
Pleins purchased homeowners' insurance from USAA. Later,
in August 2015, a fire damaged their home and personal
property. USAA determined that the insurance policy covered
the damage and recommended The Sterling Group, LLC as a
contractor to perform repairs. The Pleins followed the
Pleins moved back into their home after Sterling finished the
repairs. They claim to have noticed a substantial lingering
odor of smoke upon their return. According to the Pleins,
Sterling had concealed, rather than properly repaired, the
fire damage. The Pleins hired a public adjuster and USAA
hired an industrial hygienist. The industrial hygienist
discovered numerous deficiencies in the repair work. The
Pleins alleged that USAA agreed to move them to a rental
house to complete the repairs, but it did not investigate the
cost of the needed repairs or offer payment for those
Pleins claim that as of November 14, 2017, USAA had not made
a coverage decision as to the additional repairs. That day,
Mr. Hanson filed a complaint against USAA and
Sterling on behalf of the Pleins. In January 2018,
Mr. Hanson approached William Smart, an attorney with Keller,
about representing the Pleins in their lawsuit. That same
month, Mr. Smart and another Keller attorney, Ian Birk,
agreed to associate as counsel on the case.
conflicts check at Keller revealed the firm's past
relationship with USAA. Keller attorney Irene Hecht and at
least seven additional attorneys at the firm represented USAA
and its affiliates for over a decade. Between August 2006 and
November 2017, Keller represented USAA and its affiliates in
at least 165 cases, approximately 12 of which involved
insurance bad faith litigation by homeowners. Keller served
as USAA's primary law firm in Washington for bad faith
litigation. In the last two years of its representation,
Keller billed over 8, 000 hours of work for USAA.
the cases in which Keller represented a USAA subsidiary in an
insurance bad faith lawsuit involved issues very similar to
the Pleins' case. Specifically, Cueva v. Garrison
Prop. & Cas. Ins. Co., Pierce County Superior Court
No. 10-2-06680-8, concerned an allegation of insurance bad
faith relating to the handling of repairs after a house fire.
The similarities between Cueva and the Pleins'
case included smoke damage inadequately repaired by a
recommended contractor, health concerns arising from the
smoke damage, appropriate methods to clean the house and
personal property, and "factual and legal disputes
concerning the methodology for objectively testing for smoke
relationship between USAA and Keller ended in November 2017,
the same month the Pleins filed suit. Keller's past work
for USAA had not involved the Pleins. Additionally, the firm
indicated that Mr. Smart and Mr. Birk had never been involved
in Keller's relationship with USAA and did not have any
knowledge of attorney-client communications with the company.
learning of Keller's involvement in the Plein lawsuit,
USAA contacted the firm to claim a conflict of interest and
demand immediate withdrawal. Keller moved for a ruling on the
asserted conflict of interest. In response, USAA requested
disqualification of Mr. Smart, Mr. Birk, and Mr. Hanson. The
trial court concluded "the Plein matter is
factually distinct from and not substantially related to
[Keller]'s prior representation of USAA, and as a result,
the firm's representation of the Pleins is not a conflict
under RPC 1.9." The trial court allowed the Keller
attorneys and Mr. Hanson to remain as counsel for the Pleins.
requested discretionary review of the trial court's
ruling. A commissioner of this court granted discretionary
review as to the representation by the Keller lawyers, but
denied review as to Mr. Hanson, who remains as counsel for
the Pleins. The Pleins moved to modify the commissioner's
ruling. A panel of this court denied the motion.
contends Keller's participation in the case violates RPC
1.9(a). It argues that this case constitutes a matter
substantially related to the firm's prior representation
of the company. The Pleins argue the conflict of interest
prohibition does not apply, and ask us to view their case as
factually distinct from prior USAA cases handled by Keller.
For the reasons discussed herein, we agree with USAA.
Standard of Review
review de novo "a court's decision to grant or deny
a motion to disqualify counsel." Sanders v.
Woods. 121 Wn.App. 593, 597, 89 P.3d 312
(2004). Likewise, we review de novo a
determination of whether an attorney has violated the RPC.
Teja v. Saran. 68 Wn.App. 793, 796, 846 P.2d 1375
(1993); see State v. Hunsaker. 74 Wn.App. 38, 42,
873 P.2d 540 (1994).
1.9(a) & RPC 1.10(a)
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 ...