Say it ain’t so, Joe – Provost Umphrey calls State Farm out

Those Texas boys flat called it like they see it in their Response to State Farm’s motion requesting Judge Senter to decide if they are an “Associated” firm and the laid in on them again in their Response to State Farm’s motion to compel compliance with his order.

Good catch, bellesouth! I’m going to pitch it; but, watch out – these folks really come out swinging.

Plaintiffs Glenda Shows, et al.,respectfully file this Memorandum of Law in Response to… Although State Farm thrice filed its motion [367, 369, 371] and supporting memorandum [368,370, 372], the motions and memoranda appear to be identical., (emphasis added)

Pursuant to Local Rule 7.2(F), Plaintiffs request that the Court set this motion for a hearing at such time and place as may suit the convenience of the Court, and allow Plaintiffs’ counsel the opportunity to appear in person before the Court and present oral argument.

I wasn’t certain what to expect from Provost-Umphrey – primarily because Mr. Barrett takes “a little getting use to”, as we say. However, if you expect a justice to be blind – and I do – then you’re likewise obligation to focus on fact – and, the fact is that the Provost-Umphrey response is a very professional and thorough document that takes every issue head-on.

When the KLG was disqualified, State Farm decided to take advantage of the fact that the Plaintiffs had been temporarily deprived of effective legal counsel. The Associated Press recently reported that “State Farm Fire and Casualty Co. initiated or reopened settlement talks with policyholders after a federal judge in April disqualified their attorneys from handling up to 200 lawsuits against the Bloomington, Ill.-based company,” and that a State Farm spokesman said, “We’re willing to speak with them whether they’re represented by counselor not.” (Exhibit 4, AP story, State Farm Reaches Out-ofCourt Settlement in Katrina Cases (May 8, 2008).)

In his affidavit, Mr. Barrett explained his reasons for seeking out substitute counsel and selecting Provost Umphrey: After we transmitted the disqualification order to our clients for whom we had worked long and hard, the KLG offices received many calls seeking guidance and recommendations as to what they should do. At least one had gone to a Coast lawyer, who declined to take the case. Some (probably all) were being solicited by State Farm, seeking to settle their cases while they were effectively unrepresented.

I believed that we were morally and ethically bound to assist these clients who were facing a 45-day deadline to hire new counsel, in obtaining substitute counsel with the ability, resources, and commitment to successfully contend with State Farm and its powerful defense group. I ultimately decided that the firm that best met these criteria was Provost-Umphrey.

I agree totally with Barrett’s contention that KLG was morally and ethically bound to assist their clients in this transition – and that’s strictly a personal opinion based on my concern for the well-being of their clients.

Provost Umphrey also discussed State Farm’s contention that Barrett’s former KLG partners recognized immediately that this mass substitution scheme contravened Judge Senter’s Order writing back Mr. Nutt’s letter is neither a repudiation of Mr. Barrett’s recommendation of Provost Umphrey nor evidence that the recommendation was improper.

State Farm’s assertion is relies upon a letter David Nutt wrote to the court in McIntosh on April 14, 2008, in which Mr. Nutt stated, “Nutt & McAhster has not referred any of the referenced former clients to any counsel and does not seek recovery of any attorney fee for any work performed by our firm on behalf of the former clients.” (See Exhibit 2 to State Farm’s Brief.)

As State Farm would have realized if it had made any reasonable inquiry before fihng its motion, Mr. Nutt’s letter was written three days before Mr. Barrett’s first contact with provost Umphrey regarding the Katrina litigation. (See Exhibit 1, Declaration of Walter Umphrey at ~ 4; Exhibit 2,Affidavit of John W. (Don) Barrett at ~ 7.) It had nothing to do with Mr. Barrett’s decision to recommend Provost Umphrey to the former KLG clients, nor does it cast a shadow on the subsequent decision to do so.

I’m sure others will note as I did that there is no related declaration from the Nutt law firm. According to comments on the blogosphere – strictly rumors at this point – Mr. Nutt is closing his firm. Since he provided the capital for SKG and, no doubt, KLG as well, common sense suggests Mr. Nutt has figured out he’ll have more money by not working. Some will claim there are other factors, I’m certain, but nothing is know for certain and my assumption is simply a guess.

Speaking of guesses – this section of the Provost Umphrey response on page 18 is not – as the footnote at the bottom of the page documents.

State Farm first alleges that Provost Umphrey has a disabling conflict of interest because, “as several commentators have observed” the Plaintiffs supposedly have malpractice claims against SKG/Barrett. (See State Farm’s Motion at 11.) The only commentator referenced is a blogger whose credentials are undisclosed. According to State Farm, this blogger’s opinion that the Plaintiffs have “really spectacular malpractice clams'” presents a disabling conflict because Provost Umphrey is supposedly so indebted to Mr. Barrett for his recommendation that Provost Umphrey’s representation of its clients in this litigation would be materially limited. This claim is absurd.

As a preliminary matter, Plaintiffs would point out that, in general, courts do not disqualify an attorney based on complaints about conflicts of interest coming from opposing parties who are strangers to the conflict. See In re Yarn Processing Patent Validity Litigation, 530 F.2d 83, 88-89 (5th Cir. 1976); see also Clemens v. McNamee, Civil Action No. 4:08-CV-00471, 2008 U.S. Dist. LEXIS 36916 at *7-8 (S.D. Tex. May 6, 2008 ) (holding that In re Yarn Processing remains controlling authority in Fifth Circuit on this issue). The Fifth Circuit stated that there are “at most, narrow exceptions to [its] general rule,” one of which included cases where the ethical conflict is manifest and glaring. Id.

In this case, State Farm is playing the role of an “unauthorized surrogate” attempting “to use the conflict rules for [its] own purposes where a genuine conflict might not really exist.” In re Yarn Processing Patent Validity Litigation, 530 at 90. To allow State Farm standing to assert these supposed conflicts would “place in the hands of the unauthorized surrogate powerful presumptions which are inappropriate in his hands.” Id.

Apart from State Farm’s questionable standing as an unauthorized surrogate (whose interests are directly opposed to those of the Plaintiffs whose interests it purports to defend), State Farm’s claim that there is a conflict of interest, disabling or otherwise, is false.

First, regardless of any opinions that may have been expressed on the Internet, the former KLG clients who have signed on with Provost Umphrey do not at present have viable malpractice claims against anyone. “A cause of action accrues only when it comes into existence as an enforceable claim; that is when the right to sue becomes vested.” Owens-Illinois, Inc. v. Edwards, 573 So. 2d 704, 706 (Miss. 1990); see also Forman v. Mississippi Publishers Corp., 195 Miss. 90, 104, 14 So. 2d344,346 (1943).

Although well done – plenty of case law sited throughout, bellesouth – other than that the information is specific to Provost-Umphrey, arguments against disqualification are becoming familiar. However, Don Barrett’s declaration provides something fresh.

Defendants Renfroe and State Farm, in my opinion, have been aggressive in a calculated attempt to deflect attention from their illegal, bad-faith and probably criminal adjusting of hundreds of claims of families on the Coast following Hurricane Katrina. State Farm’s sophisticated public relation machine falsely portrays State Farm as a “victim” in this Katrina litigation. In true Orwellian fashion, black is portrayed as white, evil as good, and good as evil.

A striking example of this tactic is footnote 2 of the Memorandum, which suggests that my letter of recommendation involved coercion, duress, or harassment. To the contrary, my letter was entirely proper, and it was State Farm who acted wrongfully in making direct solicitations of our clients, while they were involuntarily without effective representation for a short period of time. See Exhibit 1 attached.

The ethical and moral high road would have been for State Farm to have allowed these vulnerable people in this vulnerable time to have obtained new counsel, to have at least waited for the 45 days granted by the Court to expire, before contacting them. But State Farm doesn’t know where the high road is, and is not interested in seeking it.
Further affiant sayeth not.

Well, further sayeth not, myself – it’s time to get these cases in court regardless of the outcome. After all, these policy holders have been waiting three years and have just now gotten to the point they can get in the game.