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Joseph Collick v. Weeks Marine

April 19, 2011


The opinion of the court was delivered by: Bongiovanni, Magistrate Judge



Currently pending before the Court is Defendant Weeks Marine, Inc.'s ("Weeks") motion to disqualify the law firm of Marshall, Dennehey, Warner, Coleman & Goggin ("Marshall Dennehey") from representing Defendant Haztek, Inc. ("Haztek") with respect to insurance coverage and insurance claim issues in this matter. Haztek opposes Weeks' motion. The Court has fully reviewed all arguments made in support of and in opposition to Weeks' motion. The Court considers Weeks' motion without oral argument pursuant to FED.R.CIV.P. 78. For the reasons set forth more fully below, Weeks' motion to disqualify is DENIED.

I. Background

The parties and the Court are all familiar with the facts underlying this litigation. As such, they are not restated at length herein. Weeks was awarded a contract to build a large, trident-shaped pier at the Earle Naval Weapons Station (the "Earle Project"). Weeks hired Haztek as a safety contractor on the Earle Project. Plaintiff Joseph Collick ("Collick") was employed by Weeks to work on the Earle Project as a dockbuilder. This matter arises out of an accident that occurred at the Earle Project, when, on November 17, 2006, Collick allegedly fell off of a piece of pre-cast concrete seriously injuring his leg. Collick sued Weeks and Haztek, asserting several claims based on the allegedly hazardous and unsafe work conditions present at the Earle Project.

After hiring Haztek on September 2, 2005 as a safety contractor with respect to the Earle Project, Weeks and Haztek entered into a Contractor Indemnification Agreement on November 10, 2005. In pertinent part, the Contractor Indemnification Agreement provides:

Contractor shall indemnify and hold WMI harmless from all liability, loss, cost or damages, including attorney fees, from claims for injuries or death from any cause, of Contractor's employees or the employees of its subcontractors or agents, or by reason of claims of any person or persons, including WMI, for injuries to person or property, from any cause occasioned in whole or in part by any act or omission of Contractor, its agents, employees, subcontractors or suppliers, whether or not it is contended WMI contributed thereto in whole or in part, or was responsible therefor by reason of non-delegable duty. If, however, this indemnification is subject to limitation by applicable law, then the indemnification shall be similarly limited to conform with such law, it being the intention that this indemnification shall be as broad as permitted by applicable law. WMI may retain any money due or to become due for the Work performed, sufficient to indemnify it against such injuries, claims, suits, actions, costs or damages should any such claim arise. Contractor shall at WMI's sole option, assume the defense in WMI's behalf of any action or proceeding commenced against WMI, whether or not Contractor is named as a party, as part of Contractor's aforementioned obligation to indemnify and hold WMI harmless.

Except as otherwise provided herein, the obligation of the Contractor to indemnify and hold WMI harmless is absolute and is not dependent upon any question of negligence on its part or on the part of its agents, officers or employees. The approval of WMI of the methods of doing the Work or the failure of the WMI to call attention to improper or inadequate methods or to require a change in methods or direct the Contractor to take any particular precautions or to refrain from doing any particular thing shall not excuse the Contractor in case of any such injury to person or damage to property. (Exhibit B to Betancourt Declaration at 1-2).

Further, pursuant to the Contractor Indemnification Agreement, Haztek was obligated to "procure and maintain and provide WMI Certificates of Insurance . . . evidencing issuance of the forms of insurance in companies and amounts and deductibles, if any, acceptable to WMI as stated in Schedule A - Insurance Requirements attached." (Id. at 2) According to Schedule A of the Contractor Indemnification Agreement, Haztek was responsible for "procur[ing] and maintain[ing] in force at its own expense and be[ing] responsible for all premiums, deductibles, self-insured retentions or other amounts for such insurance coverage in such form and in such amounts as are required to cover its responsibilities, liabilities and indemnification obligations under this agreement." (Id. at 3). Specifically, Haztek was required to obtain commercial general liability insurance with a $1,000,000 occurrence limit and a $2,000,000 aggregate limit. (Id.) In addition, Schedule A of the parties' agreement provided that "[a]ll insurance policies required . . . be endorsed to name WMI and its subsidiary companies as an additional insured inclusive of acts or omissions. (Id.) Haztek obtained the requisite insurance from Evanston Insurance Company ("Evanston"), and, as required, Weeks is listed as an additional insured on the policy. (Exhibit C to Betancourt Declaration at 1).

After Collick initiated the instant suit against Weeks and Haztek, Weeks presented its defense to Haztek pursuant to the aforementioned Contractor Indemnification Agreement. Haztek, however, refused to defend Weeks in this matter. Weeks also tendered its defense to Evanston as an additional insured under Haztek's policy with Evanston. Evanston, however, likewise refused to defend Weeks. In light of their refusal to provide it with a defense, Weeks (1) filed cross-claims against Haztek for breach of its contractual duties to defend and indemnify weeks and for failure to procure and maintain insurance coverage pursuant to the Contractor Indemnification Agreement and (2) filed a third-party claim against Evanston for failing to provide Weeks with coverage as an additional insured under Haztek's policy.

Haztek is represented in this matter by Marshall Dennehey. Evanston appointed Marshall Dennehey to represent Haztek with respect to the allegations raised in this case and is paying for the cost of Haztek's defense. Weeks claims that in addition to representing Haztek with respect to the liability issues involved in this case, Marshall Dennehey is also representing Haztek with regard to insurance coverage and insurance claims "between and among the parties, including Weeks' third-party suit against Evanston for insurance coverage." (Weeks Br. at 7). As a result, Weeks now seeks to disqualify Marshall Dennehey from representing Haztek with respect to any insurance coverage and insurance claim issues that have arisen between and among Weeks, Haztek and Evanston.

Weeks claims that Marshall Dennehey should be disqualified from representing Haztek with respect to insurance coverage and insurance claim issues based on New Jersey's Rule of Professional Conduct ("RPC") 1.7(a)(1), which prohibits a lawyer from representing a client if that representation would be directly adverse to another client. Weeks claims that such a conflict exists between Haztek, the insured, and its insurer, Evanston. Specifically, Weeks argues that "the interests of Haztek are directly and blatantly adverse to those of Evanston" because "Evanston has denied coverage to Weeks" and if Evanston prevails on this issue "Haztek will be required to indemnify Weeks from its own funds." (Weeks Br. at 10). Weeks also argues that it is clear that Haztek and Evantson's interests are adverse because "Evanston's failure to provide coverage to Weeks as an additional insured has resulted in Weeks' assertion of a claim for failure to procure insurance as required by the indemnification agreement between Weeks and Haztek." (Id. at 10-11).

Weeks therefore argues that "Evantson's failure to give Haztek the full benefit of the insurance policy that it purchased clearly presents an issue of coverage between Haztek and Evanston." (Weeks Reply Br. at 5). Weeks further contends that "[u]nder these circumstances, Haztek should be asserting a claim against Evanston to provide cover to Weeks and should have submitted papers in opposition to Evanston's motion for summary judgment." (Weeks Br. at 11). Weeks also contends that Haztek, which "contracted with Evanston to provide coverage to Weeks as an additional assured" and which "paid premiums to Evanston for such coverage[,]" has a "justiciable interest" in Weeks' coverage issue. (Weeks Reply Br. at 6).

Weeks, however, claims that Haztek has not brought a claim against Evanston based on Evanston's "apparent instructions" to Haztek's counsel, Marshall Dennehey, to forebear from asserting same. Weeks claims that Marshall Dennehey cannot avoid the clear conflict of interest between Haztek and Evanston by simply choosing not to act, i.e., "by failing to argue on behalf of Haztek that Evanston should provide cover to Weeks, and by failing to assert claims against Evanston and its broker." (Id.) Indeed, Weeks argues that Marshal Dennehey's failure to assert claims against Evanston based on its failure to cover Weeks "exacerbates, not alleviates, the conflict of interest, in that counsel is not acting in the best interest of their client." (Id.) Further, Weeks argues that even if an actual conflict does not exist between Haztek and Evanston, Marshall Dennehey should ...

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