Nevada Yellow Cab Corp. v. Eighth Judicial District Court, 123 Nev. 44

Summary

The Supreme Court of Nevada denied a petition for a writ of mandamus challenging the disqualification of counsel representing Nevada Yellow Cab in an insurance bad-faith action against Insurance Company of the West. The court adopted the majority rule that counsel retained by an insurer to defend its insured represents both the insurer and the insured absent a conflict, and held that the former and current representations were substantially related and adverse. The court concluded that the district court did not manifestly abuse its discretion in ordering disqualification and that the insurer had not waived the conflict.

Holdings

1. ICW did not waive its right to seek disqualification because delay alone is insufficient to establish waiver, and ICW promptly asserted the conflict, expressly reserved its right to seek disqualification during mediation, and filed its motion after mediation failed.
2. In the absence of a conflict, counsel retained by an insurer to defend its insured represents both the insured and the insurer, creating an attorney-client relationship between the insurer and defense counsel.
3. The prior defense representation and the current bad faith representation were substantially related, and the conflict of the associate who participated extensively in the prior representation was imputed to Vannah and the rest of VCVG.
4. The district court did not manifestly abuse its discretion by disqualifying Vannah and VCVG, so mandamus relief was unwarranted.

Questions Presented

1. Whether ICW waived its right to seek disqualification by delaying its motion for more than two years after the bad faith action began.
2. Whether counsel retained by an insurer to defend its insured represents both the insurer and the insured, absent a conflict, for purposes of former-client conflict analysis.
3. Whether the former defense representation and the current bad faith representation were substantially related and adverse under SCR 159 and SCR 160.
4. Whether the district court manifestly abused its discretion by disqualifying Vannah and his firm.

Disposition

writ_denied