Darrow v. PPL Elec. Utilities Corp.

266 A.3d 1105

Matthew DARROW

v.PPL ELECTRIC UTILITIES CORPORATION, Appellant

No. 236 MDA 2021

Superior Court of Pennsylvania.

Argued October 19, 2021

Filed December 14, 2021

Karyn D. Rienzi, Philadelphia, for appellant.

Marion K. Munley, Scranton, for appellee.

Howard J. Bashman, Willow Grove, for appellee.

BEFORE: PANELLA, P.J., MURRAY, J., and STEVENS, P.J.E.^*

OPINION BY MURRAY, J.:

PPL Electric Utilities Corporation (Appellant) appeals from the order denying its motion to disqualify the law firm of Munley Law, P.C. and its attorneys (Munley or Munley firm) from representing Matthew Darrow (Darrow), the plaintiff in the underlying personal injury, negligence/premises liability action against Appellant. After careful review, we reverse and remand for the entry of an order precluding the Munley firm and its attorneys from representing Darrow.

On April 17, 2015, Darrow suffered serious injuries when the vehicle he was driving collided with a utility pole and came into contact with a downed power line. Darrow subsequently retained Munley attorney John M. Mulcahey, Esquire (Mulcahey or Attorney Mulcahey). On June 6, 2017, Mulcahey initiated suit by filing a writ of summons against Appellant on Darrow's behalf. The same day, Mulcahey also filed a request for pre-complaint discovery.

Mulcahey, since February 2014, has practiced law with Munley, a Scranton-based firm specializing in personal injury, and employing approximately 10 attorneys. Prior to joining Munley, Mulcahey worked for 18 years for the law firm of Lenahan & Dempsey, P.C. (Lenahan). During that time, Mulcahey represented Appellant in defending numerous personal injury lawsuits.

On July 26, 2017, Appellant filed a motion to disqualify Mulcahey and the entire Munley firm from representing Darrow. Appellant based its request on Mulcahey's: (a) extensive past representation of Appellant; and (b) "intimate knowledge of the inner workings of [Appellant's] operations" and litigation strategy. Motion to Disqualify, 7/26/17, at 7. Appellant asserted that an impermissible conflict of interest existed under the Pennsylvania Rules of Professional Conduct, and the conflict implicated all of Munley's attorneys.

Appellant attached to the motion to disqualify an affidavit executed by Andrea Martino (Martino). For 15 years, Martino worked in Appellant's Office of General Counsel as a legal claims specialist and later, legal operations manager. Affidavit, 7/24/17, at 1. Martino stated:

During [Mulcahey's] representation of [Appellant] ... Attorney Mulcahey had direct involvement in the handling [of] no less than thirty-five (35) active litigation files. ...

Some of these matters involved facts similar to the instant suit, wherein person(s) were allegedly injured, or property was allegedly damaged as a result of a [utility] pole hit or [electric] line contact.

* * *

The underlying facts of [the instant] personal injury lawsuit will be substantially similar to Attorney Mulcahey's prior representations of [Appellant], and will involve information of a similar character and degree as Attorney Mulcahey was privy to in accordance with his attorney-client relationship with [Appellant].

* * *

During his representation of [Appellant], Attorney Mulcahey received, handled, or utilized confidential and proprietary information regarding [Appellant's] operations and other privileged and confidential business matters.

As a result of his representation of [Appellant], Attorney Mulcahey and by imputation [Munley,] possess intimate knowledge and familiarity with [Appellant's] business and privileged and confidential information as to [Appellant's] practices and litigation strategy and handling ...

Id. at 2-4 (paragraph numbering omitted). Further, Martino stated that Mulcahey never notified Appellant about Mulcahey's representation of Darrow, nor did Appellant waive the conflict of interest created by Mulcahey's representation of Darrow. Id. at 2.

On August 14, 2017, Darrow, through Mulcahey, filed a response in opposition to Appellant's motion to disqualify, arguing no conflict of interest existed and Mulcahey's representation of Darrow was not improper. Darrow asserted, inter alia :

Attorney Mulcahey has not represented [Appellant] in any action involving the subject [utility] pole or electrical wires. As such, Attorney Mulcahey did not obtain any confidential and/or proprietary records that would be beneficial, relevant, or related to the subject matter of this litigation. Attorney Mulcahey's representation of [Appellant] ended almost four years ago. Thus, any alleged confidential or proprietary information that he may have obtained would be obsolete.

Response to Motion to Disqualify, 8/14/17, at ¶ 10.

The trial court heard oral argument on the motion, and on August 9, 2019, granted the motion in part and disqualified Mulcahey from representing Darrow. The court reasoned:

Mulcahey does not deny his prior representation [of Appellant], nor does he dispute that some of the matters involved downed wires from damaged utility poles. Mulcahey does argue, however, that the current case in which he represented [ ] Darrow is not the "same or a substantially related matter" as envisioned in the Rules of Professional Conduct. [See Pa.R.P.C. 1.9.¹ ] Mulcahey explains his rationale by pointing out that the pole at issue in the instant matter in which he represents Darrow is a separate and distinct pole from any of the other [prior] matters in which he represented [Appellant]. Mulcahey's argument here is at best unpersuasive. Nothing is presented by either side here to support even an inkling that this case would not be substantially related to other cases involving downed utility wires.

* * *

The fact that the utility pole in this case was not involved in any of the cases in which Mulcahey previously represented [Appellant] is, quite simply, immaterial. We do not believe that the phrase "substantially related" means that Mulcahey can only be excluded from cases against [Appellant] involving poles which happened also to be the subject of matters defended previously by Mulcahey. That is, quite simply, too narrow.

Opinion and Order, 8/9/19, at 3, 4 (footnote added). However, the trial court found the record was not sufficiently developed to determine whether disqualification of the Munley firm was appropriate under Pennsylvania Rule of Professional Conduct 1.10 (imputed disqualification of a law firm). See id. at 4-5 (finding record insufficient "to conclude one way or the other regarding the sufficiency or propriety of any type of screening process employed by the Munley firm"). Thus, the trial court indicated it would schedule an evidentiary hearing on the matter.

Pertinently, Rule 1.10(b) provides:

(b) When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter unless :

(1) the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(2) written notice is promptly given to the appropriate client to enable it to ascertain compliance with the provisions of this rule.

Pa.R.P.C. 1.10(b) (emphasis added); see also Pa.R.P.C. 1.0(k) (defining "screened" as "the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law."). "Confidential information gained by one member of a law firm is imputable to other members of the same law firm ." Estate of Pew , 440 Pa.Super. 195, 655 A.2d 521, 545 (1994) (emphasis added); see also Pa.R.P.C. 1.10, cmt. 2 ("The rule of imputed disqualification ... gives effect to the principle of loyalty to the client as it applies to lawyers who practice in a law firm. Such situations can be considered from the premise that a firm of lawyers is essentially one lawyer for purposes of the rules governing loyalty to the client").

Notably, in August 2019, two other attorneys from the Munley firm filed an unrelated wrongful death/survival action against Appellant in the Lackawanna County Court of Common Pleas on behalf of Mary Ann Rudalavage (Rudalavage), individually and as administrator of the estate of John Rudalavage.² On October 21, 2019, Appellant filed a separate motion to disqualify Munley in the Rudalavage case, arguing Munley failed to establish an adequate and timely screening protocol pursuant to Rule 1.10(b), and Mulcahey's conflict of interest was imputed to all Munley attorneys.

On January 24, 2020, the trial court held a joint hearing in the Darrow and Rudalavage cases to address Appellant's respective motions to disqualify the Munley firm. Appellant presented the testimony of Martino and Joel Compton (Compton); Compton previously worked in Appellant's Office of General Counsel as a Legal Claims Coordinator. Munley, on behalf of Darrow and Rudalavage, presented the testimony of Mulcahey and Maria Elkins (Elkins), Munley's Chief Operations Officer.

Mulcahey testified that during the 18 years he worked for Lenahan, he served as outside counsel for Appellant. N.T., 1/24/20, at 85. Mulcahey acknowledged handling "as many as 40 or 50 cases" for Appellant while working at Lenahan. Id. at 97. On some occasions, Mulcahey collaborated with Martino and Compton in defending Appellant against personal injury lawsuits. Id. at 97-98. Mulcahey stated he did not discuss with any of the attorneys at Munley, "proprietary knowledge," "trial strategies" or "settlement strategies" that Mulcahey may have learned while representing Appellant. Id. at 92-93. Mulcahey testified that since his...