Coffeyville Resources Refining & Marketing v. Liberty Surplus Insurance

261 F.R.D. 586, 2009 U.S. Dist. LEXIS 85208, 2009 WL 3007125
CourtDistrict Court, D. Kansas
DecidedSeptember 16, 2009
DocketNo. 08-1204-WEB
StatusPublished
Cited by6 cases

This text of 261 F.R.D. 586 (Coffeyville Resources Refining & Marketing v. Liberty Surplus Insurance) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coffeyville Resources Refining & Marketing v. Liberty Surplus Insurance, 261 F.R.D. 586, 2009 U.S. Dist. LEXIS 85208, 2009 WL 3007125 (D. Kan. 2009).

Opinion

MEMORANDUM AND ORDER

KAREN M. HUMPHREYS, United States Magistrate Judge.

This matter is before the court on the following motions:

1. National Union’s Motion to Disqualify Counsel (Doc. 205);
2. Coffeyville Resources’ Motion to Compel (Doc. 207);
3. National Union’s Motion to Depose James Berry (Doc. 218);
4. National Union’s Motion to Strike Supplemental Expert Witness Disclosures (Doc. 225);
5. Coffeyville Resources’ Motion to Compel (Doc. 244);
6. Coffeyville Resources’ Motion to Quash (Doc. 246); and
7. Coffeyville Resources’ Motion to File Out of Time (Doe. 258).

The rulings are set forth below.

Background

This is a breach of contract action by plaintiff against its insurers. Highly summarized, plaintiff alleges that the Verdigris River topped its banks in the Coffeyville, Kansas area on the afternoon of June 30, 2007; the water continued to rise that evening and the following day. The rapidly rising flood waters required an emergency shutdown of Coffeyville Resources’ refinery and plaintiff accidentally released 80,000 gallons of crude oil and 9,000 gallons of crude oil fractions into the flood waters. The flood waters transported the crude oil into and around the City of Coffeyville and caused extensive damage.

Plaintiff had pollution and/or general liability insurance coverage with defendants and, as of the date this lawsuit was filed, has received ten million dollars in indemnification from defendants.1 However, plaintiff alleges that it has expended more than fifty million dollars for remediation, settlements, administrative costs, litigation costs and fines associated with the oil pollution. Plaintiff contends that the insurers have breached their respective insurance contracts and seeks to recover the difference between its expenditures and insurance reimbursements.

National Union’s Motion to Disqualify Counsel

National Union Fire Insurance Company moves to disqualify Joseph A. Ziemianski and Bryan P. Vezey from representing Illinois Union Insurance Company Litigation in this action. (Doc. 205). Specifically, National Union argues that Mr. Ziemianski should be disqualified from representing Illi[589]*589nois Union because of a “concurrent” conflict of interest in violation of Kansas Rules of Professional Conduct (“KRPC”) 1.7.2 National Union also seeks disqualification under KRPC 1.9(a) because Illinois Union’s interests in this action are materially adverse to National’s interests and Mr. Ziemianski represented National Union in “substantially related matters.”3 Finally, National Union asserts that Mr. Ziemianski’s conflicts are imputed to Mr. Vezey under KRPC 1.10(a); therefore, Mr. Vezey should be disqualified as well.4 Illinois Union counters that the motion should be denied because of National’s unjustified delay in moving to disqualify counsel.5 As explained in greater detail below, National’s delay in bringing the alleged ethical violation before the court is fatal to its motion.

The court has inherent supervisory powers to control attorneys and motions to disqualify counsel are committed to the court’s sound discretion. Koch v. Koch Industries, 798 F.Supp. 1525 (D.Kan.1992). A federal court sitting in Kansas and deciding a motion to disqualify for a conflict of interest generally looks to the Kansas Rules of Professional Conduct for guidance. See, e.g., Graham ex rel. Graham v. Wyeth Laboratories, 906 F.2d 1419 (10th Cir.1990). However, an unjustified delay in filing a motion to disqualify alone is sufficient grounds for denying the request. Redd v. Shell Oil Company, 518 F.2d 311 (10th Cir.1975). “A litigant may not delay filing a motion to disqualify in order to use the motion later as a tool to deprive his opponent of counsel of his choice after substantial preparation of the case has been completed.” Monarch Normandy Square Partners v. Normandy Square Associates Limited Partnership, 1989 WL 86963 at *3 (D.Kan. July 26,1989).

Moreover, attempts to use the Rules of Professional Conduct to gain a tactical advantage or to harass an opposing party are viewed with disfavor. The preamble to the Kansas Rules of Professional Conduct makes clear that the rules were adopted for the regulation of attorney conduct through disciplinary proceedings and that the rules should be applied cautiously in collateral proceedings:

Violation of a Rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached. In addition, violation of a Rule does not necessarily warrant any other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation. The Rules are designed to provided guidance to lawyers and to pro[590]*590vide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the rules can be subverted when they are involved by opposiny parties as procedural weapons. The fact that a Rule is a just basis for a lawyer’s self-assessment, or for sanctioning a lawyer under the administration of a disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the Rule.

Preamble to the Kansas Rules of Professional Conduct (amended May 1, 2007, emphasis added).

As noted above, National Union argues that Mr. Ziemianski has a “concurrent” conflict in violation of KRPC 1.7 because he was representing National Union in two other cases when, in July 2007, he began representing Illinois Union concerning Coffey-ville’s insurance coverage claims.6 National Union also argues that Mr. Ziemianski’s representation of Illinois Union violates KRPC 1.9(a) because his prior representation of National involved “substantially related matters” concerning “coverage sequencing” and application of the “pollution exclusion” in National’s policy. However, as explained below, National’s motion to disqualify was not timely filed.

Mr. Ziemianski began representing Illinois Union with respect to Coffeyville’s coverage claims in July 2007. Despite the potential for conflict by Mr. Ziemianski’s representation of Illinois Union, National voiced no objection and took no action. On March 18, 2008, Mr. Ziemianski sent a letter to National Union rejecting National’s position that Coffeyville had to exhaust Illinois Union’s policy before National Union’s policy would come into play. Notwithstanding the disagreement concerning the sequence of policy coverage, National Union took no action to disqualify Mr. Ziemianski from representing Illinois Union.7

Coffeyville filed this lawsuit on July 10, 2008 and Mr. Ziemianski and Mr. Vezey’s motions to appear Pro Hac Vice were granted on August 25, 2008.

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Bluebook (online)
261 F.R.D. 586, 2009 U.S. Dist. LEXIS 85208, 2009 WL 3007125, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coffeyville-resources-refining-marketing-v-liberty-surplus-insurance-ksd-2009.