Rudalavage v. PPL Elec. Utilities Corp.

268 A.3d 470

Mary Ann RUDALAVAGE, Individually and as the Administrator of the Estate of John Rudalavage, Deceased

v.PPL ELECTRIC UTILITIES CORPORATION, Appellant

No. 237 MDA 2021

Superior Court of Pennsylvania.

Argued October 19, 2021

Filed January 4, 2022

Marianne J. Gilmartin, Scranton, for appellant.

Thomas I. Vanaskie, Scranton, for appellant.

Howard J. Bashman, Willow Grove, for appellee.

Ciara L. DeNaples, Scranton, 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 Mary Ann Rudalavage (Rudalavage), individually and as administrator of the estate of John Rudalavage (decedent), the plaintiff in the underlying personal injury action brought against Appellant in the Lackawanna County Court of Common Pleas. After careful review, we reverse and remand for the entry of an order precluding the Munley firm from representing Rudalavage.

On November 27, 2017, the decedent lost control of his vehicle while driving on a private road owned by Appellant. Decedent hit a guardrail, was ejected from his vehicle, and died as a result of his injuries. On August 26, 2019, Rudalavage filed a complaint against Appellant asserting wrongful death and survival claims. Rudalavage was represented by the Scranton-based Munley firm, which is comprised of approximately ten attorneys and specializes in personal injury law. Specifically, Rudalavage was represented by two attorneys other than John M. Mulcahey, Esquire (Mulcahey or Attorney Mulcahey),¹ who we discuss below. On September 23, 2019, Appellant filed preliminary objections to the complaint, after which Rudalavage filed a response.

On October 21, 2019, Appellant filed a motion to disqualify the Munley firm and its attorneys as counsel for Rudalavage based on conflict of interest in violation of the Pennsylvania Rules of Professional Conduct. Appellant noted that Mulcahey previously represented Appellant on numerous occasions during his 18-year tenure at the law firm of Lenahan & Dempsey, P.C. (Lenahan), where he was employed prior to joining Munley in February 2014. Appellant argued:

While representing [Appellant] in numerous active litigation matters, Attorney Mulcahey was responsible for all phases of litigation ....

In the course of his representation, Attorney Mulcahey was responsible for reviewing and analyzing [Appellant's] confidential and proprietary records for numerous reasons, including preparing [defense] litigation strategy, assessing claims, and determining the relevancy and discoverability of documents.

* * *

Because of Attorney Mulcahey's intimate and lengthy representation of [Appellant] in forming and asserting [ ] defenses, he clearly has confidential knowledge that would severely prejudice [Appellant], such as knowing what to ask for in discovery, which witnesses to seek to depose, ... what settlements to accept and what offers to reject, and innumerable other uses.

Motion to Disqualify, 10/21/19, at 3, 7-8 (paragraph numbering omitted; citations and quotations omitted). Appellant argued Pennsylvania Rule of Professional Conduct 1.9² prohibited Mulcahey from representing Rudalavage in this matter. Id. at 8. Appellant further asserted that Mulcahey's conflict of interest should be imputed to all attorneys at the Munley firm pursuant to Rule of Professional Conduct 1.10 (governing imputed disqualification of a law firm). Id. at 8-9.

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").

Appellant attached to its motion to disqualify an affidavit executed by Andrea Martino (Martino). At the time she signed the affidavit, Martino had worked in Appellant's Office of General Counsel for approximately 17 years, first as a legal claims specialist, and later as legal operations manager. Affidavit, 10/18/19, at 1-2. Martino stated:

As Claims Specialist, I was directly responsible for assigning claims made against [Appellant] to outside counsel and working directly with outside counsel and appropriate employees of [Appellant] in defending these claims.

* * *

During his representation of [Appellant], Attorney Mulcahey was retained to represent [Appellant] in no less than forty-eight (48) matters in which [Appellant] required the assistance of outside counsel. Further, Attorney Mulcahey had direct involvement in over thirty-five (35) active litigation matters. ...

* * *

During his representation of [Appellant], Attorney Mulcahey was intimately involved with generally all aspects of litigation, such as investigations, pleadings, discovery, motions, alternative dispute resolutions, witness preparation, settlement discussions, and trials. Moreover, Attorney Mulcahey learned [Appellant's] confidential litigation strategies and philosophy.

* * *

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

* * *

The underlying facts of this personal injury lawsuit are 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 throughout his [approximately 18-]year attorney-client relationship with [Appellant].

Id. at 2-5 (paragraph numbering omitted). Martino also stated that Appellant never waived the conflict of interest created by Mulcahey's representation. Id. at 5.

On November 20, 2019, Rudalavage filed a response to the motion to disqualify, arguing, inter alia :

Attorney Mulcahey had a past attorney/client relationship with [Appellant]. It is specifically denied that the underlying facts of those types of cases are substantially similar to the underlying facts of this case. Attorney Mulcahey's representation of [Appellant] ended almost six (6) years ago. Thus, any alleged confidential or proprietary information that he may have obtained would be obsolete. As such, disqualification is not appropriate in this action. Additionally, Attorney Mulcahey has not represented [Appellant] for any claims arising out of the subject roadway. During the course of his representation of [Appellant], Attorney Mulcahey has not gained any information regarding the subject roadway or any of the facts underlying the subject action. In fact, the incident that caused injury to [the decedent] in the instant action occurred in 2017, approximately three (3) years after Attorney Mulcahey had terminated his representation of [Appellant]. Therefore, it is impossible for Attorney Mulcahey to have obtained any confidential or privileged information regarding the subject matter of this litigation. ...

Response to Motion to Disqualify, 11/20/19, at ¶ 42.

Approximately two years earlier, in July 2017, Appellant filed a separate motion to disqualify Mulcahey and the Munley firm from representing Matthew Darrow (Darrow), the plaintiff in a personal injury case Mulcahey filed against Appellant in the Lackawanna County Court of Common Pleas.³ On August 9, 2019, the trial court granted Appellant's motion in part and disqualified Mulcahey from representing Darrow. However, the court found the record was not sufficiently developed to determine whether disqualification of the Munley firm was appropriate under Pa.R.P.C. 1.10(b). Thus, the trial court scheduled an evidentiary hearing.

On January 24, 2020, the trial court held a joint evidentiary hearing in the Rudalavage and Darrow matters to address Appellant's respective motions to disqualify Munley. 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 and Rudalavage and Darrow, presented testimony from Mulcahey and Maria Elkins (Elkins), Munley's chief operations officer.

Mulcahey testified that during the 18 years he worked at 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. Id. at 97. On some occasions, Mulcahey collaborated with Martino and Compton in defending Appellant. Id. at 97-100. Mulcahey stated that at no time did he discuss...