Friday, June 24, 2011

Novel Future Conflicts of Interest Decision issued by Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas

In his June 16, 2011 Opinion in the case of Lasavage v. Smith, No. 10 - CV - 2183 (Lacka. Co. June 16, 2011 Nealon, J.), Lackawanna County Judge Terrence R. Nealon addressed conflicts of interest issues involving personal injury firms that represent health care providers on business matters and then later sue their former clients in medical malpractice actions.

The case involved an "advance conflict waiver" that a plaintiff's personal injury law firm had its physician clients sign acknowledging that the law firm may later sue them for medical malpractice if appropriate.

In this matter, visiting Senior Judge Peter O'Brien originally decided that the medical malpractice defendants' motion to disqualify the plaintiff's law firm from handling the case by Order only denying that motion.

The plaintiff's law firm followed up by later filing a motion for sanctions seeking attorney's fees for having to defend against the motion for disqualification previously decided by Judge O'Brien.  The motion for sanctions was assigned to Judge Nealon for decision. In deciding the sanctions motion, Judge Nealon analyzed the parties' arguments concerning both the advance conflict waiver issue and the "substantially related" matters test.

Judge Nealon ruled that although the medical malpractice defendant did not succeed with their disqualification motion, the challenge to the enforceability of the advance conflict waiver was not frivolous, particularly in light of the absence of any Pennsylvania decisional precedent interpreting Comment 22 to Rule of Professional Conduct No. 1.9 governing consents to future conflicts. 

The court also found that there was evidentiary support and a novel legal argument for the proposition that the former and current representations involved “substantially related” subjects due to the plaintiff’s corporate liability claim in this case and the confidential information that plaintiff’s counsel had reportedly acquired when previously creating the medical malpractice defendant's corporation. 

Accordingly, the court denied the plaintiff’s petition for sanctions.

Anyone desiring a copy of Judge Nealon's decision in Lasavage may contact me at dancummins@comcast.net.

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