January 13, 1992
A lawyer representing a large group of plaintiffs in a consolidation of litigations before an individual judge may communicate directly with a nonparty indemnitor of a defendant litigant without consent of defense counsel.
References: MRPC 4.2, 4.3; R-2; ABA i1103 (1969).
The defendants in certain toxic tort litigation have no insurance for claims of this type, but each defendant is connected with certain associations which, under contract, will indemnify for a portion of the respective loss after payout by the individual defendant. The indemnitors do not undertake to defend, that task being the sole responsibility of the individual defendant. Furthermore, the lawyer for the individual defendants have stated in open court that they do not represent the interests of the indemnitors in any manner. The indemnitors are not represented in the litigation.
Plaintiff's counsel wishes to confer with the indemnitors as part of settlement negotiations undertaken at the request of the presiding judge before whom several hundred of these claims have been consolidated. Plaintiff's counsel asks whether counsel may directly contact, without consent of defense counsel, an indemnitor who will partially protect individual defendants in the suit.
MRPC 4.2 states:
"A lawyer shall not communicate about the subject matter of the representation with a party whom the lawyer knows to be represented in the matter by another attorney, unless the lawyer has the consent of the other attorney or is authorized by law to do so." Emphasis added.
The facts state the respective indemnitors are not represented by a lawyer in the matter. The lawyers representing the defendants in the litigation have denied that they in fact represent the indemnitors. Therefore a direct contact to the indemnitor by plaintiff's counsel without consent of defense counsel would not violate MRPC 4.2.
In ABA i1103 (1969), an insurance carrier's attorney informed the plaintiff's counsel that the insurance attorney's representation of the defendant was limited to the policy limits, although the suit was for a greater amount. The opinion held that plaintiff's attorney may contact defendant directly stating that the insurer's attorney had advised plaintiff's attorney that he did not represent defendant insofar as defendant's excess exposure was concerned, and that plaintiff's attorney "would be glad to discuss with [defendant's] personal attorney, if [defendant] at any time secures one, the matter of [defendant's] liability over and above the policy limits of liability."
MRPC 4.3, which deals with communicating with an unrepresented person, states:
"In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows, or reasonably should know, that the unrepresented person misunderstand the
lawyer's role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding."
In this fact situation, only a portion of the settlement by the individual defendants will be indemnified. The persons sought to be contacted are indemnitors, i.e., sophisticated entities well aware of the ramifications of the adversarial process between plaintiff's counsel and the defendants/indemnitees. In R-2, although acknowledging a split of authority on whether former employees of an entity party may be contacted without consent of party counsel, this Committee reasoned that the former employee nurses should be allowed to decide for themselves whether to respond to contacts of opposing counsel. It is clear that the caveat contained in the comment of MRPC 4.3, an unrepresented person "particularly one not experienced in dealing with legal matters . . ." is not applicable here.
Nothing in the fact situation suggests that the lawyer representing the defendant, although denying representation of the indemnitor, would in practical effect represent the indemnitors' position, so as to make direct communication between plaintiff's counsel and the indemnitors, without consent of defense counsel, prohibited.
We are told that plaintiff's counsel's purpose in contacting the indemnitors is connected with settlement negotiations under which the duty to indemnify may be triggered. If the indemnitors are represented by counsel generally, even though they may not have technically identified their counsel "in the matter," we believe it prudent practice for plaintiff's counsel to contact the indemnitors through the indemnitors' legal representatives.