Benjamin
CHARLESTON – Prospective jurors need to peek behind the false front of a "captive" law firm that works for an insurance company and no one else, the West Virginia Supreme Court of Appeals decided Feb. 14.
Four of five Justices affirmed Marshall Circuit Judge Mark Karl, who let a lawyer ask prospective jurors if they knew anyone at "Nationwide Trial Division."
Nationwide Mutual Insurance Company stopped the questioning and took the dispute to the Supreme Court of Appeals, but now Karl can resume the trial.
Karl "recognized that defense counsel's office is known in the community as Nationwide Trial Division and that prospective jurors would recognize that name," Justice Brent Benjamin wrote.
The firm operates as Law Offices of W. Stephen Flesher.
To ease the fears of insurers, Benjamin advised Karl to split the identity question into two questions that jurors might not grasp as easily.
Karl should appreciate the tip, because he chose to delay his trial in light of other pending cases with the same identity crisis.
The decision disappoints the West Virginia Insurance Federation, the Property Casualty Insurers of America and the American Insurance Association.
They supported Nationwide as friends of the Court, warning that behavior of jurors can change depending on what they know about insurance.
Benjamin offered the insurers no comfort beyond splitting the question. He practically declared captive law firms illegitimate.
"We observe that the issue of whether captive law firms should be permitted in West Virginia is not an issue in this proceeding," he wrote.
"We do, however, take this opportunity to express our serious reservations with the practice of the use by insurance companies of in-house attorneys to represent its insureds and the operation of captive law firms in West Virginia."
He deplored the inherent conflict of interest between a captive attorney's loyalty to the insurer and the insured.
He pointed out that the Lawyer Disciplinary Board requires captive firms to disclose insurer affiliation on letterhead, business cards, phone book entries, answering machines, office entrances and court pleadings.
He wrote that Nationwide was aware of the disclosure requirements when it chose to do business in this manner in West Virginia.
Captive firms change names regularly, he wrote, and Nationwide Trial Division has operated under at least three names in the last decade.
"A proper subject for voir dire is whether a juror has a relationship with a law firm involved in the litigation or one of its employees such that the juror may be biased for or against the party represented by that firm," he wrote.
"Here, the insurer made a choice to utilize captive counsel. Having done so, the insurer cannot now insulate itself from otherwise proper voir dire simply by deciding to utilize captive counsel."
He recommended a "balanced approach" to minimize any potential for prejudice, giving credit to Ohio Circuit Judge James Mazzone.
"Judge Mazzone inquired of the juror's affiliation with Nationwide Trial Division without associating Nationwide Trial Division with defense counsel's office," he wrote.
He wrote that a lawyer at voir dire can ask a question disclosing an insurer's identity but that, "…there should be separate questions regarding captive counsel and the insurer."
First the lawyer would ask if prospective jurors knew individuals at the firm by name.
Then the lawyer would ask if they knew anyone at Nationwide Trial Division.
Justice Spike Maynard reserved the right to file a dissenting opinion.
Amy Pigg Shafer and Stephen Flesher of Wheeling represented Nationwide.
James Bordas III and James Stoneking of Wheeling represented plaintiff Stacey Meadows, who suffered a brain injury in a 1999 car crash.