TEXARKANA, Ark. Ã¯Â¿Â½ After almost four years of litigation in the Circuit Court of Miller County, Ark., plaintiffs' attorneys are attempting to remove opposing attorney Richard Griffin and his law firm Jackson Walker LLP from representing Foremost Insurance Company.
The motion filed Feb. 25 argues the disqualification of Griffin is necessary because the attorney acted as both an advocate and a witness, alleging violation of Arkansas Rules of Professional Conduct 3.7.
The rule states that a lawyer shall not act as an advocate at a trial in which the lawyer is likely to be a necessary witness. The rule includes three exceptions: if the testimony is regarding an uncontested issue; if the testimony relates to the nature and value of legal services; and if the disqualification would cause substantial hardship.
Within the motion for disqualification, the plaintiffs argue an affidavit provided by Griffin, relating to the burden and expense of Foremost Insurance Company producing claim files, makes Griffin a necessary witness in the case.
The lawsuit, filed Sept. 8, 2004, involves allegations that insurance companies did not disclose or pay the general contractors' overhead and profit after a loss or damage to an insured's property.
Although the insurance companies paid the claims of those insured, the plaintiffs' attorneys believe their clients are entitled to more money.
A heated dispute between the plaintiffs and defendant Foremost began in 2006 over discovery responses and requests for production.
Originally, the plaintiffs included Foremost in an agreement with other insurance companies seeking only a statistical sampling of claim files. Foremost objected to the requests, citing compliance with federal privacy regulations to guard those who have not agreed to join the ongoing litigation.
The plaintiffs' attorneys declared the defendant's efforts as "lame" and retracted the previous agreement, changing the request for Foremost to produce all of its claim files from 1996. Responding in objections to the full requests, Foremost described that to produce the over 600,000 individual claim files (with an average of 47 pages per file); it could incur costs of over $45 million, which included thousands of attorney hours to remove confidential information.
Foremost argues that the "plaintiffs are attempting to manipulate the judicial process in order to gain an unfair advantage over Foremost by forcing Foremost to spend millions of dollars to collect and produce documents with the aim of forcing early settlement."
In mid- July, Judge Kirk Johnson ordered Foremost to produce "unredacted claims files pursuant to discovery requests," within 10 days. Foremost called the order "outrageous discovery abuse" and filed a motion for reconsidered along with a request for extension of time.
In late August, Foremost offered to make its claim files available by remote server so plaintiffs' counsel could select a sampling of 2,000. Plaintiffs denied this offer.
Again attempting to end the dispute, in mid-September Foremost sent the plaintiffs' attorney a CD with the same type of data that other defendants had provided. Plaintiffs sent the unopened CD package back.
Also in September, Foremost filed a notice of appeal to the Arkansas Supreme Court regarding the court's order that denied Foremost's motion for protective order. Shortly after the notice of appeal, Foremost filed a Motion to Stay pending a ruling by the Arkansas Supreme Court in the GM Class action.
Within the motion, Foremost wrote that the higher court is expected to rule on whether a nationwide class action under the laws of all 51 jurisdictions can or should be certified. Even if the higher court does not rule in the GM class action, Foremost seeks a stay of the litigation until the circuit court rules on a motion for reconsideration regarding the discovery order or other pending counterclaims and motions.
In a letter filed in December, Judge Johnson ordered Foremost to provide a list of all its' claim files, allowing the plaintiff to select a sampling.
Within answers to discovery responses, Foremost's attorney Richard Griffin submitted an affidavit relating to the potential attorney expense. Within the affidavit at issue, Griffin states that after he reviewed the affidavit of Foremost's claims system business manager relating to the amount of claim files, Griffin estimates that there is a necessary attorney review of the files for protected information and will require 235,833 hours of attorney time, at an expense occurring at $180 per hour.
Within the motion for disqualification, the plaintiffs argue Griffin's affidavit does not meet any of the exceptions to the Arkansas rules. Specifically the plaintiffs argue the issue of the cost and burden of producing the claim file is contested, the affidavit does not relate solely to the nature or value of legal services but relates to the truthfulness of the claim's managers affidavit, discusses the process for reviewing claim files, testifies to the amount of money required to produce the files and argues the disqualification will not create a substantial hardship.
Further, the plaintiffs state that attorney Griffin and his law firm are the only material witnesses able to testify as to whether or not Foremost destroyed certain claims files (from 1996 and 1997), after plaintiffs requested production of them. The plaintiffs also believe the attorney's testimony is the only means for the court to determine the possible sanctions against Foremost.
The motion for disqualification comes less than a week after Foremost responded to a circuit court order and produced 2,100 claim files to the plaintiffs. A list of the claim files provided by Foremost Insurance Company is filed under seal with the circuit court.
Case No: 2004-294-3
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