The Appellate Division Second Department in VanNostrand v. New York Central Mutual Fire Ins. Co, affirmed the finding of Judge Feinman of Nassau County Supreme Court, disqualifying the attorney who represented the plaintiff in an underlying personal injury action, from also representing the plaintiff in a bad faith action.
VanNostrand commenced an action against Froehlich, to recover damages for personal injuries arising from an automobile accident. VanNostrand obtained a judgment against Froehlich for $300,000. The award exceeded the $100,000 bodily injury limit of Froehlich’s liability insurance policy with New York Central Mutual Fire Insurance Company (hereinafter NYCM). Subsequently, Froehlich assigned his “bad faith” claim against NYCM, to VanNostrand and VanNostrand commenced an action against NYCM, alleging that NYCM refused to settle the underlying action within the policy limits.
NYCM moved to disqualify the plaintiff’s attorney, claiming he was an “essential witness” and also served a subpoena on the attorney to compel him to testify and produce his file. The Appellate Division, Second Department held that the plaintiff’s attorney was an “essential witness” to the bad faith claim and was therefore disqualified from representing the plaintiff in the bad faith action. The Court also denied the plaintiff’s motion to quash the subpoena served on the plaintiff’s attorney to testify, but held that the attorney did not have to turn over his file materials. The Court held that NYCM could renew its request for the attorneys file after the deposition.
This is a case for defense counsel to keep in it’s arsenal when bad faith claims are asserted against the insurer.
Rosa M. Feeney, Esq