It is not unusual for a lawyer, who has represented insurers, to make a jump to the other side and now represent policyholders against insurers. But when this happens it is also not unusual to wonder if conflict issues could hamstring the lawyer in his or her new position. This was the issue in In re National Lloyds Insurance Company, No. 13-15-521 (Tex. Ct. App. Feb. 10, 2016).

The facts are not complicated. Lauren Chapman was an associate at the law firm of Andrews Kurth from September 2008 to February 2015, when she left the firm and joined the Mostyn Law Firm. Since 2012, Andrews Kurth has been involved in the defense of first party bad faith suits filed against National Lloyds Insurance Company. Right after joining the Mostyn firm, Ms. Chapman began appearing on behalf of plaintiffs in hailstorm cases filed against National Lloyds.

National Lloyds was none too pleased with this and filed a motion to disqualify Ms. Chapman, and the Mostyn firm, based on Chapman’s prior employment with Andrews Kurth.

The trial court denied National Lloyds’s motion to disqualify. A Petition for Writ of Mandamus was filed with the appeals court. Without getting bogged down in the specifics of Texas Disciplinary Rule of Professional Conduct 1.09, addressing former client conflicts, the appeals court concluded that disqualification was not warranted.

As National Lloyd’s saw it, the disqualification was mandated by certain irrebuttable presumptions in the law, which gave rise to the following step-by-step arguments: “(1) Andrews Kurth represented National Lloyds; (2) there is an irrebuttable presumption that Andrews Kurth obtained confidential information during the representation; (3) Andrews Kurth’s knowledge of National Lloyds’s confidential information was imputed to Chapman as an associate at that firm, thereby disqualifying her from representing [hail storm plaintiffs]; and (4) Chapman’s imputed knowledge of National Lloyds’ confidential information was imputed to the Mostyn Law Firm when Chapman joined that firm, thereby disqualifying it from representing [hail storm plaintiffs].”

However, the Texas appeals court did not adopt such a rigid approach. Instead, looking to a Fifth Circuit case for guidance, the court stated that the appropriate rule was as follows: “[A] departing lawyer must have actually acquired confidential information about the former firm’s client or personally represented the former client to remain under imputed disqualification.”

On that basis, the Texas appeals court examined the specific circumstances surrounding Ms. Chapman’s work at Andrews Kurth. The key to the court’s decision was that the parties stipulated that “Chapman ‘did not work on any matter’ regarding National Lloyds and that she ‘did not personally represent National Lloyds Insurance Company, and did not personally receive any confidential information of National Lloyds Insurance Company.’”

Having had no involvement with National Lloyd’s, while working at Andrews Kurth, the court held that Ms. Chapman did not have a conflict in representing the hail storm plaintiffs when she joined the Mostyn firm.