Arbella Insurance Protection Insurance Company (Arbella”) cancelled Point Insurance Agency’s (“Point”) commercial automobile Exclusive Representative Producer appointment on June 29, 2017. Arbella, in its 500-page termination letter, alleged Point had violated CAR Rules 14.B.1.c., e., k., l., and n. Point appealed the termination to the Market Review Committee of Commonwealth Automobile Reinsurers (CAR). See Agency Checklists’ article of September 12, 2017, “Point Insurance Appeals Arbella Cancellation At CAR.”
The Market Review Committee scheduled the hearing on Point’s Request for Review for 1:00 p. m., September 12. However, to the surprise of many the hearing was cancelled after Point’s lawyer, Joshua Lewin filed a notice with the Market Review Committee he could not represent Point on any further proceedings.
Motion for continuance filed day before hearing
Usually any documents presented to the Market Review Committee on a Request for Review must be filed at least five days before the hearing. However, on September 11, 2017, the day before the hearing, Attorney Lewin filed a “Motion to Request Continuance of Market Review Committee Hearing.”
The short motion requested a continuance and time to:
- allow Point to seek new counsel so that current counsel (Mr. Lewin) may withdraw;
- enable Point to find new counsel;
- allow Point’s new counsel time to review the matter and prepare for the hearing.
Newly-discovered conflict of interest
At the hearing, on September 12th, the day after filing his motion, Attorney Lewin requested the Market Review Committee to hear his motion to continue the Point hearing to a future unspecified date. the Committee members did not object to hearing his reasons for the making the motion.
Attorney Lewin advised the Committee that he had only recently discovered a conflict of interest relating to this matter and had taken the following actions:
- On Friday, September 1, 2017, he had discussed the newly-discovered conflict internally at his firm, Bowditch & Dewey;
- On Tuesday, September 4, 2017, the day after the Labor Day holiday, he had raised the issue for the first time with Point;
- He had advised Point that because of this conflict he could not continue to represent Point.
Confidential information from Point and another client leads to discovery of conflict
At the hearing, Attorney Lewin did not elaborate on the nature of the conflict. However, he did note that the conflict came to light based upon confidential information learned from Point and another unidentified client of his firm. His firm determined, under the Supreme Judicial Court’s Rules of Professional Conduct applicable to Massachusetts lawyers, due to this conflict of interest with another client’s interests it was necessary for him to withdraw his representation of Point in this matter.
Attorney Lewin emphasized it was not Point requesting the Market Review Committee continue the hearing. Instead it was Attorney Lewin personally requesting a continuance to allow Point to retain new counsel and time for that counsel to prepare since he could not represent Point because of his firm’s determination such representation would violate his and his firm’s ethical obligations to Point and the firm’s unspecified other client.
Arbella opposes continuance for “insufficient information of a true conflict”
Attorney Frances Robinson, representing Arbella, expressed her opposition to Mr. Lewin’s request for a continuance, noting that Arbella is well prepared to go forward with this matter. She believes the request to be without substantial basis as there is insufficient information for the Committee to determine whether a true conflict of interest exists. She stated that legal precedent suggests that Mr. Lewin could present the Committee with details relative to the conflict ex parte, in camera – out of the hearing of herself and her client.
Attorney Lewin responded that he legally he was not able to disclose to the Committee private communications between his clients. His firm having assessed the issue, he reemphasized that due to the existence of this newly-discovered conflict, he was simply not ethically able to continue representing Point on its Request for Review from Arbella’s contract termination.
Private committee review of alleged conflict nixed because of Open Meeting Law
In response to a question from the Committee, Attorney Steven Torres, counsel for CAR, stated on the Market Review Committee performing a review of the conflict in executive session, CAR committees are subject to the Open Meeting Law. And, unless a potential conflict of interest were one of the exceptions that authorizes the committee to convene in executive session, they could not do so without violating the Open Meeting Law. Additionally, although not stated by Attorney Torres, executive session recordings and minutes cannot be held indefinitely. When the reason for the executive session disappears, anyone has a right to demand these records as public records.
However, going beyond the Open Meeting issue, Attorney Torres noted for the Market Review Committee members that:
- this situation is somewhat unique in that when conflicts do arise, they typically arise at the beginning of an engagement.
- there already have been several proceedings this year involving Point and Arbella, in a number of different forums.
- if the Committee were to move forward today and the termination were upheld, Point could obtain successor counsel and a new review of the termination by a Governing Committee Review Panel.
However, Attorney Torres ended by noting Market Review Committee should consider how the Division of Insurance may view the matter on an appeal.
Voting member grant continuance request
After discussion, the Committee unanimously voted, with Arbella’s member recusing herself, to grant the continuance requested by Attorney Lewin. Although the Chair, Charles Boynton, III, encouraged any review be rescheduled as soon as practical, no new date for a hearing or a deadline for Point to obtain new counsel was set by the Market Review Committee.
Under CAR Rule 14.F, Arbella’s termination notice are stayed during Point’s appeal process at CAR.