Court Opinion

ID: 9676280
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:19:56.640117+00
Date Added: 2024-06-11T18:16:46.857099
License: Public Domain

COOPER, Justice,
dissenting.
Supreme Court Rule 3.130(3.7) provides, inter alia, that “[a] lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness except where ... disqualification would work substantial hardship on the client.” (Emphasis added.)
This is an appeal from an original action in the Court of Appeals that resulted in the issuance of a writ of prohibition against Appellant Judge McDonald to prevent him from disqualifying attorney Larry Franklin as counsel for Appellees Lloyd and Jackie Knotts in the underlying “bad faith” action brought by the Knottses against Appellant Zurich Insurance Company. The Knottses claim that Zurich violated the Uniform Claims Settlement Practices Act (UCSPA), KRS 304.12-230, during the litigation of a personal injury action brought by the Knottses against Alusuisse Flexible Packing, Inc. In their discovery depositions in the bad faith action, both Mr. and Mrs. Knotts disclaimed any knowledge of any settlement negotia*561tions that did or did not occur during the personal injury action, asserting that they entrusted such matters entirely to their attorney, Larry Franklin.
Q. Do you have a feeling that anything bad was done to you by Zurich before the trial?
A. I really don’t know because I wasn’t in — I left it up to my attorney.
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Q. Well, let me ask you this. Do you think- it was reasonable for Zurich to make you prove your claim?
A. I really don’t know anything, any legal things about it. I just left it up to my attorney.
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Q. During the course of the case and before the trial, what did you yourself [do] to try to settle the claim?
A. We left it up to our attorney to handle the total case.
Q. So Mr. Franklin was in charge of the case and Mr. Franklin would have been in charge of trying to settle the case?
A. Yes, sir.
Q. And you left it up to him to handle that?
A. That is correct.
Q. With regard to offers of settlement or attempts at settlement, do you know if any offer made by Mr. Franklin, if any offer, was it a joint offer on behalf of you and Mrs. Knotts or would it have been an offer for you and a separate offer for Mrs. Knotts, if you know?
A. I don’t know.
Q. As between you and Mrs. Knotts, who controlled the claim?
A. Our attorney.
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Q. Can you tell me when in time you believe that an offer of settlement should have been made to you by Zurich?
A. I don’t know.
Q. Is this again something you would have left up to Mr. Franklin?
A. Yes, sir.
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Q. ... Are you able to tell me what amount you think should have been offered by Zurich to settle the case?
A. Again, we relied upon Larry Franklin.
Q. Can you tell me what amount you would have accepted in full and complete settlement of your claim?
A. Again, we would have to — I would have just left it up to Larry. I really don’t know.
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Q. ... Are you able to tell me how much money would have satisfied your claim in your mind?
A. No, sir, I can’t.
Q. Did Larry Franklin ever tell you how much your case was worth?
MR. SITLINGER: Are you talking about before trial?
Q. Before trial?
A. No, not really.
Q. Did you ever have any discussion with Larry Franklin about what the case was worth?
A. The money — the money wasn’t really the major — it wasn’t really it. We wanted our bills paid and they refused to do so, and money, we never talked about money.
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Q. Did you ever talk with him about what the case was worth?
A. I don’t recall.
*562Q. Did you ever have, in your own mind, an idea as to what the case was worth?
A. No, sir.
Zurich filed a motion for summary judgment. In response, the Knottses filed the affidavit of attorney Franklin, which included the following:
It was not until the third day of trial that the very first and only offer was made by Zurich. And at that time, they offered the deductible of the policy which was the personal responsibility of the Defendant and nothing from Zurich. This remained the offer throughout the trial. On the last day of trial, Plaintiffs made them final request to settle for $1,000,000.00. There was no response to this. The jury awarded $1,200,000.00.
At a settlement conference held at the appellate level, Zurich requested that the Plaintiffs reduce the verdict by an additional 25%.... When asked what basis that Zurich wanted this additional 25% reduction. (Sic.) They failed to give a reason.
It was quite clear through the trial of this matter that the defense attorney, Bissell Roberts, wanted, very much, to deal in good faith with me, but that his hands were tied and that his recommendations were ignored....
When Zurich American appealed this matter, they asked for a reduction in the amount of interest on the Judgment.... I could only attribute additional harassment and bad faith by Zurich for not paying this working man, who had no other source of income and who was totally precluded from his ability to earn a living and who already had most of his possessions repossessed to then file an appeal. And I also wrote to the appellate attorney that this was just yet another continuing act of bad faith by Zurich.
The letter mentioned in the last sentence was attached to the affidavit and included the following:
I can see no reason for Zurich American’s position in this ease except, as always, it appears to be just business as usual trying to take an unfair advantage as a result of their relative positions of power in this case with Zurich American being the multinational, all-powerful and wealthy insurance company and Lloyd being just a poor citizen of the state of Kentucky. I really think that their conduct in this case has been the utmost in bad faith and I think by continuing to deny Lloyd the payment of the judgment that he received as a result of the trial that they forced him through is only a further extension of their callous disrespect for the human goodness of the individual and the jury system and the citizens of our state.
On the basis of Franklin’s affidavit and attached letter, summary judgment was denied. Because this case began as an original action in the Court of Appeals, we do not have access to the record in the underlying action. However, the Knottses had already retained attorney Lee Sitlinger to represent them in the bad faith action; and if Sitlinger, as lead counsel, prepared and filed the response to the motion for summary judgment that was supported by Franklin’s affidavit, then Sitlinger was acting as the Knottses’ attorney and Franklin as their chief witness in that phase of the litigation.
Franklin was the attorney who conducted the negotiations that are the gravamen of the Knottses’ bad faith claim. The Knottses disclaim any knowledge of any facts supporting their claim and assert that they relied entirely on Franklin to negotiate with Zurich. Franklin’s affidavit relates personal knowledge, observations *563and opinions that are uniquely known to him and essential to the success of his clients’ claim. For that reason, I conclude that Judge McDonald did not err in deciding that Franklin was “likely to be a necessary witness” at trial, thus, should be disqualified as counsel for the Knottses. Mauze v. Curry, 861 S.W.2d 869, 870 (Tex.1993) (attorney should have been disqualified after rendering an expert opinion in an affidavit filed in response to the defendant’s motion for summary judgment).
The facts of this case are almost identical to those in 155 North High, Ltd. v. Cincinnati Insurance Co., 72 Ohio St.3d 423, 650 N.E.2d 869 (1995), except that the Ohio case was decided in the context of an appeal from an adverse judgment (which was reversed) whereas this case is decided in the context of an appeal from the grant of a pretrial writ.
[W]e find it obvious not only that Wiles’s testimony was admissible, but also that it was clear that he “ought to be called as a witness on behalf of his client.” Wiles had personal knowledge regarding the alleged acts of bad-faith claims handling. He was an active participant in dealings and negotiations beginning shortly after the fire and continuing up to the time the lawsuit was filed. He testified to conversations and actions taken by the insurance company. Thus, his testimony was necessary to prove his client’s claims. Moreover, this was not a sudden development. Wiles had known early on that he was a key witness. This fact is attested to in his affidavit which was attached to appellant’s memorandum contra Cincinnati’s motion for summary judgment....
Id. at 872-73. See also General Mill Supply Co. v. SCA Services, Inc., 697 F.2d 704 (6th Cir.1982).
Nor does Franklin’s disqualification fall within the “undue hardship” exception to the rule of disqualification. As noted in Warrilow v. Norrell, 791 S.W.2d 515 (Tex.App.1989), “[t]his exception generally contemplates an attorney who has some expertise in a specialized area of the law such as patents, and the burden is on the attorney seeking to continue representation to prove distinctiveness.” Id. at 520. Intimate familiarity with the case and mere increased expenses do not meet this standard. 155 North High, Ltd., supra, at 873-74. If bad faith litigation is a specialized area of the law, then Sitlinger, not Franklin, is the presumed specialist, since he was specifically retained to act as lead counsel in the bad faith case against Zurich. (Actually, considering Franklin’s reputation as a skilled and successful litigator, it is more probable that Sitlinger was retained as lead counsel because Franklin knew he was “likely to be a necessary witness” and, thus, would be disqualified as counsel at some point during the litigation.)
An unfortunate consequence of the outcome of this appeal may be that Franklin is now precluded from testifying as a witness at trial even if subsequent events indicate that he “ought to be called as a witness on behalf of his client” either to prove the facts as he viewed them or to rebut a contrary version offered by Zurich’s witnesses. 155 North High, Ltd., supra, at 872-73. Nevertheless, the Knottses prefer to have Franklin at counsel table rather than on the witness stand, and the majority of this Court has granted their wish. This case may prove the adage of “be careful what you ask for; you might get it.”
Accordingly, I dissent.
KELLER and WINTERSHEIMER, JJ., join this dissenting opinion.