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Hartford Casualty Insurance Co. v. Peerless Insurance Co.

United States District Court, D. New Jersey

September 30, 2019

HARTFORD CASUALTY INSURANCE COMPANY, Plaintiff,
v.
PEERLESS INSURANCE COMPANY et al., Defendants.

          OPINION

          Kevin McNulty, United States District Judge.

         This case requires the Court to review the defense and settlement on behalf of Carquest Corporation in a 2007 action presided over by District Judge Wigenton and Magistrate Judge (later District Judge) Salas[1] in this Court. Mechin v. Carquest Corp., 07-cv-5824 (D.N.J.) (the "Mechin action"). In the Mechin action, a young man sued Voltec Industries, LLC ("Voltec"), TMC/Tasco, and three interrelated Carquest entities-Carquest Corporation, Carquest Products, Inc. ("CPI"), and BWP Distributors, Inc. ("BWP")-for injuries resulting from a garage accident involving a Carquest Trouble Light. Hartford defended Voltec, TMC/Tasco, Carquest Corporation, CPI and BWP, taking on the Carquest entities as additional insureds on its Voltec Policy. Eventually, the Mechin case settled. Voltec agreed to pay $900, 000; TMC/Tasco, $1, 750, 000; and the Carquest entities, collectively, $2, 050, 000. The dispute here is whether responsibility for that $2, 050, 000 should be allocated evenly among the three Carquest entities, or some other way. Why would these related corporations care? Actually, they apparently don't, and, to the chagrin of Peerless, that indifference seems to be reflected in the evidentiary record of the Mechin action. The problem here is that the three Carquest entities have separate insurance carriers, to whom the allocation makes a great deal of difference. Hence this action, in which the parties are insurance carriers.

         While the Mechin Action was still pending, Hartford (which assumed the defense of all three Carquest entities) filed this action seeking a declaratory judgment against Carquest Corporation's primary insurer, Peerless Insurance Company ("Peerless"), as well as the insurers of BWP and CPI. BWP's and CPI's insurers have settled, but the dispute between Hartford and Peerless remains. Peerless (along with other insurers) has filed a counterclaim against Hartford for breach of fiduciary duty, negligence, and breach of contract.

         An additional recurring issue in this litigation relates to indemnification. In the Mechin action, before Hartford undertook the defense of the Carquest entities, Carquest Corporation and CPI individually filed claims for contribution and indemnification against Voltec. Later in the case, they moved for summary judgment, arguing that Voltec and TMC/Tasco must indemnify them under the provisions of a contract between Voltec and CPI. Voltec cross-moved for summary judgment with respect to the Carquest entities' indemnification claim. Judge Wigenton, finding the language of the indemnification agreement to be insufficiently clear, granted Voltec summary judgment and dismissed the indemnification claim. In this action, Peerless has attempted to relitigate that issue.

         I have gleaned the following claims from the complaints (DE 1, 27), Judge Wigenton's docket, and the joint pretrial order (DE 219). To summarize, the claims now before me are:

• Hartford's claim for one-third of the defense costs and one-third of the indemnity cost paid on behalf of the Carquest entities in settling the Mechin action. Peerless, in response, asserts estoppel. Hartford, it says, unfairly pursued a defense strategy that neglected (a) the indemnity claim of its insured, Carquest Corporation, against Voltec, [2] and (b) arguments that Carquest Corporation bore no responsibility for the injury. Peerless further asserts that, even if contribution is appropriate, a one-third allocation is not reasonable.
• Peerless's claim against Hartford for breach of its fiduciary duty to Carquest Corporation (and, by extension, Peerless).
• Peerless's claim against Hartford for breach of its insurance contract for failing to appoint independent counsel for Carquest Corporation.
• Peerless's claim that Hartford was negligent in its control and management of the defense of the claims against Carquest Corporation.

         Between the dates of December 3, 2018 and December 11, 2018, I held a bench trial on all outstanding factual issues.[3] The court heard testimony, both from live witnesses and via read-ins from depositions.[4] Each party was afforded the right to cross-examine as appropriate. Exhibits were introduced in evidence. The parties were given the additional opportunity to designate and submit deposition excerpts from this action and the underlying Mechin action.

         I. FINDINGS OF FACT

         1. The Mechin Action

         1. Jean Mechin, an auto mechanic, suffered burn injuries when a gas tank toppled onto a "Professional Duty Carquest Trouble Light," igniting gas that had spilled on Mechin's clothing. Pl. Exs. 374, 117, 108; see also Stipulated Facts ¶ 5.[5] As a result of the accident, Mechin was in a coma for four weeks and was left with permanent scarring on his neck, upper extremities, torso, and hands. PL Ex. 374, 117, 108. Aside from permanent disfigurement, he also suffered psychological injuries. 4T 841:17-849:13; Pl. Exs. 117, 259.

         2. In December 2007, Mechin sued Carquest Corporation, alleging his injuries were the result of "the "the Carquest Trouble Light being defectively designed, manufactured, distributed, sold," and asserting breach of express warranty. Pl. Ex. 99; see also Stipulated Facts ¶ 6. Mechin sought recovery under the New Jersey Product Liability Act, N.J. Stat. Ann. § 2A:58C-1, et seq. Under the NJPLA, liability can attach to those who manufacture, sell or market defective products. Ex. 398; Stipulated Facts ¶ 8.

         3. In April 2008, Mechin amended his Complaint to name CPI, Tasco, Voltec, and BWP Industries, Inc. ("BWP"). Pl. Ex. 99; Stipulated Facts ¶ 7.

         4. When they first entered appearances in the Underlying Action, Carquest Corporation, CPI, BWP, and Voltec each had separate counsel, appointed by their respective insurers. Stipulated Facts ¶ 9.

         5. At the outset of the action, the defendants' insurance coverage was as follows:

• Voltec had business liability insurance with a primary coverage (limited to $2 million per occurrence) and an umbrella coverage (also limited to $2 million per occurrence) from Hartford. (Hartford also issued insurance to TMC.)
• Carquest Corporation held commercial general liability insurance from, collectively, Peerless.[6]
• CPI held both a commercial general liability insurance and umbrella coverage from Universal Underwriters Insurance Company ("UUIC").
• BWP held commercial general liability insurance from Zurich American Insurance Company ("Zurich").

Stipulated Facts ¶ 10.

         2. Peerless initially controls Carquest Corporation's defense

         6. On August 4, 2008, Carquest Corporation asserted a cross-claim against Voltec for contractual indemnification. Def. Ex. 26; 4T.991:18-992:2.

         7. Carquest Corporation also asserted a cross-claim against BWP. Def. Ex. 26; 4T.991:18-992:20.

         8. When Peerless controlled the defense of the Mechin Action (from its outset to April 2009), Peerless did not seek dismissal or move for summary judgment on behalf of Carquest Corporation. 5T. 1093:7-15; Kotcher Dep. at 31:21-32:23; 38:5-13; Gagner Dep. at 66:4-8.

         3. Contract between Voltec and CPI, and the Carquest entities' tender to Hartford

         9. In early 2008, Carquest Corporation, CPI and BWP (the "Carquest entities") sought coverage from Hartford, referencing the supply contract between Voltec and CPI and the indemnification provision therein. Def. Ex. 19. The Hartford policy provided coverage for "vendors" as additional insureds by contract. Policy, Business Liability Coverage Form, Sec. C(6)(a), Pl. Ex. 400. The contract also included Section 2.4, titled "Indemnification," which stated:

(a) The Supplier shall indemnify and hold harmless the Company, CARQUEST Corp. and each Member against any and all liabilities, losses, damages, costs, and expenses, including court costs and reasonable attorney's fees, that the Company, CARQUEST Corp. or any Member may incur or sustain by reason of any claim, demand, legal actions or judgment based upon or arising out of (i) any alleged or actual misappropriation or infringement by the Supplier of the trade secrets, patent rights, trademarks, copyrights or other industrial property rights of others in connection with the Supplier's manufacture and/or sale of the Products, or (ii) any alleged or actual defects of any kind in the design, manufacture, preparation, or handling of the Products; provided that the Supplier shall not be liable for the gross negligence or willful misconduct of the Company, CARQUEST Corp. or any Member. The Supplier agrees to defend any claim, demand, action, suit, or proceeding brought against the Company, CARQUEST Corp. or any Member insofar as such claim, demand, action, suit, or proceeding is based upon or arises out of the matters referred to in this Agreement; provided that, upon the Supplier's assumption of such defense, the Supplier shall not be liable for any attorney's fees of the Company, CARQUEST Corp. or any Member. The Company, CARQUEST Corp. or any Member claiming indemnification hereunder shall provide prompt notice to the Supplier of any claim, demand or legal action in respect of which indemnification may be claimed; provided that the failure to provide such notice shall not release the Supplier for any liability except and solely to the extent that the Supplier is materially prejudiced by such failure. The Supplier shall not be liable for any settlement without its prior written consent.

Def. Ex. 7.

         10. On January 31, 2008, Hartford denied the Carquest entities' tender. Def. Ex. 19.

         4. Hartford assumes the Carquest entities' defense

         11. In April 2009, Hartford accepted the tender of the Carquest Entities and assigned Thomas Mulcahy, Voltec's counsel, to also represent Carquest Corporation, CPI and BWP. Stipulated Facts ¶ 11; 4T.1036: 5-1037: 1; DeMerchant Dep. at 38: 3-39: 4. Hartford did not offer the Carquest entities, separately or collectively, the option of separate counsel. 5T.1164:9-25, 1199:4-1200:1.

         12. Hartford asserts that it accepted the tender under the "vendors" provision. In its acceptance, Hartford noted that all of the Carquest entities had sought coverage as "additional insured" and stated that its coverage would be subject to all policy terms. Peerless states that Hartford accepted tender in a different letter, dated April 3, 2009. Def. Ex. 33. In that letter, Giarrizzo writes:

The Hartford will agree to indemnify and defend Carquest against any and all claims of the plaintiff, Jean Michael Mechin, and will assume Carquest's defenses and dismiss all cross-claims against said entities subject to a full reservation of rights which would allow The Hartford to disclaim its coverage obligation to Carquest in the event discovery reveals that the subject product at issue in this litigation is proven not to be a product imported and distributed by any of the The Hartford's named insured's entities.

Def. Ex. 33.[7]

         13. Mechin, the plaintiff, was represented by David Mazie, Esq. Pl. Ex. 398.

         14. Mulcahy described Mazie as "a very capable opponent. He's a formidable plaintiffs lawyer." 4T.814:5-6. John Maucher, Mulcahy's successor as the Carquest entities' lawyer, described Mazie as "very professional [-] he knew what he was doing." 1T.56:19-20.

         15. Peerless asserts that Hartford employees responsible for overseeing the defense of the Carquest entities were "confused" about the respective roles of the companies in the marketing and sale of the Trouble Light. IT. 169:16-24; Pl. Ex. 80; 4T.1073:11-20, 1076:13-18, 1077:16-24, 1079:1-5; 5T.1222:2-1223:3. Peerless also notes that, at the outset of the Mechin action, a Hartford representative had a conversation with Frederick Kotcher (see ¶ 18, infra) in which Kotcher stated that Carquest Corporation was wrongly named as a defendant and had not participated in the chain of distribution. 5T. 1304:5-1307:19.

         5. Innocent seller defense

         16. Voltec, Carquest, CPI, and BWP assured Hartford that none of them had been materially involved in the marketing, labeling, warnings, design or manufacture of the Trouble Light. DeMerchant read-in, 4T. 1037:4-12; DeMerchant Dep. at 42: 21-43: 6; Herman Dep. at 5-50: 13; 118: 23-120: 7; Kotcher Testimony, 5T.1094:3-11; Kotcher Dep. at 90:8-94:23.

         17. Thus, the Carquest entities, through Mulcahy and, later, John Maucher, pursued an "innocent seller" defense. 4T.811:18-812:14; Pl. Exs. 117, 127, [8] 492.[9] Gagner, who monitored the file at Peerless, Pl. Ex. 65, 66, understood that Mulcahy was pursuing a joint "innocent seller" defense. Gagner Dep. at 108:18-109:25. She did not raise an issue of conflict with Mulcahy pursuing the joint defense. 4T. 1049:19-1050:16; Gagner Dep. at 88:23-89:25.

         6. Overlapping principals of the Carquest entities

         18. Frederick Kotcher served as the principal for Carquest Corp. and CPI. 5T1091:7-23, Kotcher Dep. at 24:10-22; Wicker Dep. at 26:6-17. Kotcher was Vice President of Corporate Administration for General Parts of Raleigh, NC. Kotcher Dep. at 19:18-20:24. During the Mechin Action, Kotcher served as an outside consultant to General Parts, Carquest Corporation and CPI. 5T.1089: 23-1091:4. Kotcher is not a lawyer. 5T.1089: 18-20; Kotcher Dep. at 13:7-24:1.

         19. Robert Wicker was the General Counsel for General Parts International ("GPI"). GPI's subsidiary is General Parts, Inc., which along with BWP and other subsidiaries, were the shareholders of Carquest Corporation. Wicker's role was to advise Frederick Kotcher. 5T.1106:21-1107:1; Wicker Dep. at 19:12-24:12; 26:6-17.

         20. Len Herman, an independent lawyer, was officially the principal for BWP throughout the Mechin action. 4T. 1068:14-21, Herman Dep. at 11:18-12:21.

         21. When Mulcahy represented the defendants, and at the beginning of Maucher's representation, Herman acted as the primary contact for the three Carquest entities: Carquest Corp., BWP, and CPI. 4T.816:20-817:14; 1T.63:24-64:8; 1T.68:19-69:7; 4T.1031:25-1032:16; see also Exs 311, 312, 116. Herman attended most depositions in the case and every deposition for the Carquest, BWP, and CPI witnesses. 4T.817:15-818:11.

         22. Kotcher consulted with both Wicker and Herman regarding the Mechin action. 5T.1092:13-1093:2. Kotcher Dep. at 27:7-28:1; 24:23-25:1; 260:4-261:16.

         23. Kotcher testified that Carquest Corp. and CPI coordinated their defense with BWP throughout the Mechin action. 5T. 1092:2-9, Kotcher Dep. at 25:12-20.

         7. Thomas Mulcahy, Esq.

         24. Defense Counsel Thomas Mulcahy has handled over 500 civil bodily injury cases for Hartford and other insurers. 4T.806:11-25. He has never been brought before the Committee on Professional Responsibility. 4T.807:22-24.

         25. Mulcahy testified that, during his time representing the Carquest entities, there was no discord among those entities regarding his defense strategy. 4T.873:4-14.

         26. At one point, Voltec and the Carquest entities were in disagreement over whether to file a third-party complaint against Firestone, Mechin's employer. Pl. Exs. 311, 111; 4T.816-5-820:23. However, by March 2, 2010, Mulcahy reported that Voltec and Carquest agreed that there was insufficient evidence to sue Firestone. Pl. Ex. 117, at 6.[10]

         27. At the beginning of Mr. Mulcahy's representation, Herman was concerned about the fact that one law firm was representing all of the Carquest entities and Voltec. Pl. Ex. 117. That issue became heightened when it was disclosed that TMC/Tasco, which has the same owner as Voltec, had a close relationship with the importing company. Pl. Ex. 117. See Miller Dep. at 8-30. However, once the litigation went into discovery, Herman was "on board" with the defense strategy that all three Carquest entities should press an "innocent seller" defense. 4T.873.12-19.

         8. Deposition testimony during Mulcahy's representation regarding the roles of the Carquest entities

         28. During discovery, Mulcahy prepared the witnesses to be detailed and explicit as to what the respective roles of the corporations were. 4T.959:3-12. However, as described infra, those very witnesses created confusion as to each Carquest entities' role in the marketing and chain of distribution for the Trouble Light. Generally, the witnesses did not clearly distinguish between the Carquest entities and often times mixed up their names. See infra ¶¶ 27-33.

         29. Peerless has submitted significant evidence to demonstrate that Carquest Corporation did not participate in marketing or the chain of distribution. Nevertheless, evidence existed in the record of the Mechin action that would tend to implicate Carquest Corporation.

         30. Dan Lewis, the CPI Market Director and corporate designee (Lewis Dep. at 5), created uncertainty as to:

(a) the specific role each Carquest entity played in marketing and labeling the Trouble Light, id. at 57:16-58:5, 89:9-25; 90:3-6, 109:4-9;
(b) the relationships among the Carquest entities, id. at 6:1-8, 13:1-14:24, 25:12-19, 32:1-17, 47:13-48:25; and
(c) Carquest Corporation's role in the chain of distribution. Id. 60:13-61:22, 90:7-16.

         31. The witnesses from BWP marketing added to the confusion regarding Carquest's Corporation's role in marketing the product. Manno Dep. at 7-8, 11; Pallai Dep. at 24-25, 26:21-25.

(a) Gaic Manno, the Carquest Marketing Manager at BWP, testified that, to advertise the 81829 Trouble Light, he took and paraphrased language from the Carquest service line catalog and included it in a flyer, Manno Dep. at 11; at another point, Manno had testified that Carquest corporation puts out the Carquest catalogs and commercial advertising. Id. at 7.
(b) Richard Pallai, Vice President of Marketing at BWP, testified that BWP, another Carquest member, or an independent Carquest store could have made a flyer regarding the 81829 Trouble Light. Pallai Dep. at 24-25.

         32. The witnesses from Voltec also created confusion by using "Carquest" as a catchall term for all three entities, or for CPI. Miller Dep. at 56-58, 81:17-21, 98-99, 101:19-102:8; Wray Dep. at 33:16-21.

(a) Thomas Miller, the founder and owner of TMC/Tasco and Voltec, see Miller Dep. at 8-30, stated that Voltec sold the trouble light to "Carquest." Id. at 56-58. Miller stated that he was not aware of any instances in which TMC/Tasco or Voltec sold their products to CPI. Id. Miller also testified that, as he understood it, "Carquest" sold the trouble light to Firestone. Id. at 98-99. Further, Miller testified that "Carquest" created the actual packaging on the box for Trouble Light. Id. at 81:17-21.
(b) John Wray, Vice President of Sales for the Automotive Division of Voltec, testified that Voltec sells to Carquest Products Incorporation (CPI). Wray Dep. at 33:16-21. Wray testified that "Carquest" designed the packaging, then specified that Carquest Products "designed it and provided the designs back to us." Id. at 53:6-54:14. At points in his answers, Wray would use the name "Carquest," as opposed to CPI or Carquest Products. See e.g., Id. Further, Wray testified that he did not know who owned "Carquest, CPI, or BWP;" he then stated CPI is owned by Carquest and, by common knowledge in the marketplace, BWP is an independently owned Carquest distributor. Id. 34:1-22.

         33. During this bench trial, Mulcahy stated that he did not ask questions after Mazie concluded his examination. In his view, doing so would have been a classic young lawyer's mistake; it would only confuse the client and dig "a deeper hole." 4T.915:16-916:13.

         9. Mulcahy's reports

         34. Mulcahy sent two reports to Hartford providing updates on the state of the case. Pl. Exs. 117; 107.

         35. Margaret Gagner, the Peerless adjuster, was copied on both of Mulcahy's letter reports, and both were re-sent to her on March 30, 2010. Pl. Ex. 67. Mulcahy testified that he never received criticism from Gagner. 4T.873.9-11. At no time did Gagner request that separate counsel be retained to defend Carquest Corporation. 4T. 1051:25-1052:4.

         i. March 2, 2010 report

         36. On March 2, 2010, Mulcahy reported to Hartford on the state of the case. Pl. Ex. 117. Mulcahy wrote:

In my opinion, our Carquest clients are somewhat vulnerable in this litigation arising from the degree to which they claimed to know nothing about the testing which may or may not have been performed . . .Those lights were marketed under the Carquest brand, but the Carquest entities have done essentially no testing on the product relative to their safety.

Pl. Ex. 117 p. 20.

         1. Mazie's strategy

         37. Mulcahy reported that one of Mazie's theories was that "as an entity that markets its products under the Carquest brand" to service station customers, the Carquest-related companies had a duty to sell products that could be safely used in that work environment. Pl. Ex. 117, p. 3. Mulcahy also reported that Mazie was attempting to prove that the Carquest companies were not mere distributors, but rather were "branding" the product, indicating that they should be held to the same standard as companies that designed or manufactured the lights. Id. p. 5.

         38. Mulcahy reported that the there was no real challenge "to the fact that [the Trouble Light] was a Carquest product," and that the Trouble Light "came through the Carquest distribution chain of Carquest Corp., CPI and BWP. . ."Pl. Ex. 117 at 10.

         39. Mulcahy also reported on the anticipated strategy of the plaintiff to extend liability to all three Carquest entities:

It became fairly clear throughout these depositions that plaintiffs counsel, David A. Mazie, is going to come after those entities which were responsible for the Carquest brand because of the extent of the Carquest brand business . . . Mr. Mazie will attempt to use the extent of the Carquest empire to justify the argument that if you are going to put your name on a product, you should at least have some knowledge of the testing associated with the product and the arguable dangers associated with its use under certain circumstances. I am of the opinion that this is not a bad argument on plaintiffs behalf.

Pl. Ex. 117 at 24.

         2. Deposition reports

         40. Mulcahy also reported that, by the time of Lewis's deposition, "it had become clear that Carquest had at least some input into the marketing materials and packaging for the drop light at issue." Pl. Ex. 117 at 19.

         41. Pallai, Mulcahy reported, made a decision to include the Trouble Light in the Carquest product flyers that are distributed throughout the nation. Id. p. 22. Mulcahy further recounted Pallai's deposition testimony that BWP was responsible for preparing the flyers, but that Carquest Corporation was responsible for the creation of the brochures which had been previously marked. Id.

         42. On March 29, 2010, Mulcahy reported to Hartford that the UL Certification for the Trouble Light was incorrect. Pl. Ex. 107, at 3. Further, Mulcahy reported, the Carquest witnesses testified that they had relied on Voltec and TMC/Tasco's representations that the Trouble Light was suitable for the automotive service environment, id., but the product had only been tested for "general use." Id. at 2-3, 9 (citing John Herschbach, a UL expert, who posited that the Trouble Light was not appropriate for the automotive service station environment).

         10. Mulcahy's testimony in this action

         43. By the end of March 2010, although discovery was not finished, Mulcahy believed that it was extremely unlikely that he could obtain summary judgment for any of the individual Carquest entities, because there was enough evidence relating to each of the three to create a triable issue. 4T.909:22-410:6. Mulcahy also found Lewis's deposition to be inconsistent. Id. 907:1-9. In Mulcahy's experience, "it doesn't take much for a summary judgment to be denied by a Court if there's any level of inconsistency in the factual testimony." Id. 907:7-9.

         44. Mulcahy believed that Mazie's goal was "definitely attacking [the Carquest entities] as an enterprise." 4T.861:8-12. Illustrating the point, he testified as follows:

As we dealt with individual representatives at depositions, he would ask that particular person who came from one or the other of the Carquest entities you know, specifically what that entity did in connection with the product just to give himself some background. But I mean, [Mazie], as is the case with most plaintiff attorneys, didn't really care where the responsible specific mistake may have been made within the entities. It was in his interest . . . because Carquest was such a well-known brand, as being responsible for the marketing of this product. ... It was pretty apparent that he was going to have an expert who was going to say that this particular light was inappropriate for this particular application.

4T.861:8-826:3. See also 4T.959:24-960:5.

         45. Mulcahy was concerned that Mazie's deposition questioning signaled an attack on choices to market the Trouble Light to garages and to place the "Carquest" label on the Trouble Light without testing or having knowledge of testing. 4T. 867:16-868; 868:19-869:6; 4T.883:2-21; 4T.884:24-885:23; see also 4T. 869:3-6.

         11. Decision to split off the Voltec file

         46. In early April 2010, Hartford adjuster Daniel DeMerchant determined that there was a potential conflict between the Carquest entities and Voltec. The conflict arose from past disagreements about suing Firestone, DeMerchant Dep. at 47:7-48:23, and the discovery that the Carquest entities had some role in marketing the trouble light, including the placing of the "Professional-Duty" label on the box. 45:8-46:17. Thus, he decided to split the file and retain separate counsel as between the Carquest entities and Voltec. Id. at 47:7-48:23. Hartford allowed the Carquest entities to choose their counsel. PL. Ex. 44; 4T. 1040:20-1041:2, 1041:15-1043.

         47. Len Herman disagreed with the decision to split the defense. Id.

         12. Maucher's representation of the Carquest entities

         48. As their new, separate counsel, the Carquest entities chose John Maucher of Mintzer Sarowitz, the firm which had defended BWP during the first year of the case. Pl. Ex. 119, 294. Hartford paid Mintzer Sarowitz $159, 230.07 in total for the defense of the Carquest entities. Pl. Exs. 3, 16-27.

         49. John Maucher has practiced as a civil defense lawyer in New Jersey since 1995, and during that time he has tried ten cases before a jury. Maucher specializes in bodily injury cases. 1T.44:5-46:12. Maucher has never been sued for malpractice, sanctioned, or brought before the Committee of Professional Responsibility. Id.

         50. At the beginning of his representation, Maucher's client contact was Herman; he reported to Herman with the understanding that Herman spoke for all three Carquest entities. 1T.63:10-64:8. Later, Maucher reported to Herman, Kotcher, and Wicker jointly. IT.69:4-1.

         51. As for the insurance carriers, Maucher reported to Scherer and Jeter at Hartford, and to Margaret Gagner and her successor, Donna Jones, at Peerless. 1T.53:5-23, 85:5-86:16, Pl. Ex. 68 (Maucher reaching out to Gagner to discuss the transfer of the case).

         52. Maucher found that Jeter and Scherer paid attention to the file, and that Jeter would send follow-up e-mails whenever he sent a report. IT. 176:7-15. That being said, many times, Maucher communicated with his clients and other insurers without copying Hartford. PL Exs. 76, 83, 84, 124, 143, 145, 155, 181, 220, 221, 222.

         13. Maucher's relationship with the Carquest entities

         53. The Carquest entities never requested separate counsel, nor did they advise Maucher that he had a conflict of interest. 1T:49:6-25, 50:7-12, 132:5-9; Herman Dep. at 142:6-144:15, 184:8-10, 313:5-315:4; 5T.1108.4-11.

         54. Maucher testified that none of the Carquest principals expressed a disagreement over his defense strategy. 1T.49:22-50:6, 189:16-20. See also, 5T. 1092:2-9. Further, he testified, none of the entities' principals ever proposed that they assert cross-claims against each other. 1T:50:13-16. Nor did they ever request that Maucher cease using "Carquest" as a short-hand designation for all three entities. IT. 192:13-193:3. From Maucher's perspective, the Carquest entities "were pretty much a team." IT. 189:14-15.

         55. Although paid by Hartford, Maucher acted as independent defense counsel for the Carquest entities. 2T.254:11-255:16; Pl. Ex. 8; 1T.54:8-55:10.

         14. Maucher's June 26, 2010 status report

         56. On June 26, 2010, Maucher submitted a status report to Hartford. Pl. Ex. 74. Maucher reported that the plaintiffs case would focus on the fact that the drop lights "should not be marketed for use by service or repair facilities, such as Firestone." Id. Maucher noted that Carquest depositions revealed that the drop light was marketed to the service and repair industry through "flyers, in store brochures and pamphlets, etc." Id. Discussing manufacturing and the chain of distribution, Maucher reported that "[a]fter TMC/Tasco brings the product ...


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