The opinion
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
JOHN S. VANDERBOL III, and
§
ERICA QUINN,
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§
Plaintiffs,
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§ Civil Action No.: 4:19-cv-119-SDJ-KPJ
v.
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STATE FARM MUTUAL AUTO INS. CO.,
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et al.,
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Defendants.
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MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiffs John S. Vanderbol III and Erica Quinn’s (together,
“Plaintiffs”) Motion to Disqualify (the “Motion”) (Dkt. 77). In the Motion, Plaintiffs seek to disqualify
attorney Scott Philip Brinkerhoff (“Brinkerhoff”) from representing State Farm Mutual Insurance Company
and State Farm Fire and Casualty Company (collectively, the “State Farm Defendants”) and Defendants
Michael Tipsord, Jon Charles Farney, Randall Houston Harbert, Paul Joseph Smith, and Stephen Michael
Wey (collectively, the “Individual Defendants”) (State Farm Defendants and Individual Defendants
collectively “Defendants”) , alleging he “actively engaged in patterns of racketeering activity.” See Dkt.
77. Plaintiffs further seek to disqualify attorney W. Neil Rambin (“Rambin”) and the law firm of Drinker
Biddle & Reath, LLP (“Drinker Biddle”), from representing the Individual Defendants, as Plaintiffs allege
a conflict of interest exists. See id. Defendants State Farm Mutual Automobile Insurance Company, State
Farm Fire and Casualty Company, and the Individual Defendants (collectively, “Defendants”) filed a
response in opposition (Dkt. 82), and Plaintiffs filed a reply1 (Dkt. 85). The Court held a hearing during
1 Plaintiffs’ reply is not in compliance with the Local Rules of the Eastern District of Texas. While the Court has
considered Plaintiffs’ reply, the Court directs Plaintiffs to Local Rule CV-7(a)(2): “Non-dispositive motions shall not
exceed fifteen pages, excluding attachments, unless leave of court is first obtained. Likewise, responses to such
motions shall not exceed fifteen pages, excluding attachments, unless leave of court is first obtained. Any reply or sur-
reply brief to an opposed non-dispositive motion filed pursuant to Section (f) of this rule shall not exceed five pages,
excluding attachments.” Local Rule CV-7(a)(2) (emphasis added). Any future pleadings not in accordance with the
Local Rules shall be struck.
the Court finds Plaintiffs’ Motion (Dkt. 77) is hereby DENIED.
I. BACKGROUND
On February 13, 2019, Plaintiff John S. Vanderbol III, acting pro se, filed his Original Complaint
(the “Complaint”) (Dkt. 1) against the State Farm Defendants, alleging violations of the Racketeer
Influenced and Corrupt Organizations Act, the Hobbs Act, the Clayton Act, the False Claims Act, the Texas
Deceptive Trade Practices Act, the Texas Insurance Code, and the Texas Business and Commerce Code.2
See Dkt. 1. The Complaint arises out of a February 17, 2017, fire loss to Vanderbol’s residential property
located at 605 Kiowa Drive West, Lake Kiowa, Texas 76240 (the “Property”). See Dkt. 27 at 1. Since
initiating this suit, Plaintiffs have filed two amended complaints (Dkts. 15, 39) and—while seeking leave
to file a third amended complaint—two “Rule 12.1 Civil RICO Case Statements” (Dkts. 73, 87). In their
Second Amended Complaint, Plaintiffs alleged additional claims against the Individual Defendants. See
Dkt. 39.
During the Rule 16 Management Conference on June 12, 2019, the Court admonished Plaintiffs’
for their disrespectful communications with Defendants’ counsel and reminded both parties that they are
expected to be courteous, both to the Court and each other. See Dkt. 30. The Court further warned Plaintiffs
against filing documents with the Court containing Defendants’ counsels’ names and personal attacks in its
July 26, 2019, Report and Recommendation regarding Defendants’ Motion to Declare Plaintiff a Vexatious
Litigant. See Dkt. 47.
On September 5, 2019, the State Farm Defendants filed the Motion for Sanctions (“Motion for
Sanctions”) (Dkt. 67), alleging that Plaintiffs violated Federal Rule of Civil Procedure 11, by filing
documents with the Court containing “vexatious personal attacks on Defendants’ counsel” and making
factual contentions lacking evidentiary support, including allegations that Defendants’ counsel engaged in
criminal activity. See Dkt. 67. On September 25, 2019, Plaintiffs filed the Motion, which contains additional
2 On the same date, Plaintiff Erica Quinn filed a similar action against the State Farm Defendants. See Case No.
4:19cv120, Dkt. 1. These cases were consolidated by the Court on June 17, 2019. See Dkt. 33.
and the Motion for Sanctions, and warned Plaintiffs that unsubstantiated personal attacks against
Defendants’ counsel would not be tolerated. See Dkt. 91. Plaintiffs agreed to withdraw all derogatory
references to Defendants’ counsel and/or allegations that Defendants’ counsel participated in criminal
activity in their case filings, and to refrain from making any such additional filings in this case.3 See id.
II. LEGAL STANDARD
The Fifth Circuit has “made clear that ‘disqualification cases are governed by state and
national ethical standards adopted by the court.’” FDIC v. U.S. Fire Ind. Co., 50 F.3d 1304, 1311–
12 (5th Cir. 1995) (quoting In re Am. Airlines, Inc., 972 F.3d 605, 610 (5th Cir. 1992)). In the Fifth
Circuit, when considering disqualification of an attorney, district courts generally rely upon the
following: (1) the local rules in the district; (2) the American Bar Association’s (“ABA”) Model
Rules of Professional Conduct; (3) the ABA’s Model Code of Professional Responsibility; and (4)
the state rules of conduct. Horaist v. Doctor’s Hosp. of Opelousas, 255 F.3d 261, 266 (5th Cir.
2001); Ayus v. Total Renal Care, Inc., 48 F. Supp. 2d 714, 714 (S.D. Tex. 1999). The party seeking
to disqualify an attorney bears the burden of proving that disqualification is warranted. See Duncan
v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 646 F.2d 1020, 1028 (5th Cir. Unit B June 1, 1981).
Beyond the various rules and codes identified above, “[a] court should be conscious of its
responsibility to preserve a reasonable balance between the need to ensure ethical conduct on the
part of lawyers appearing before it and other social interests, which include the litigant’s right to
freely chosen counsel.” Woods v. Covington Cty. Bank, 537 F.2d 804, 810 (5th Cir. 1976) (citing
Emle Indus., Inc. v. Patentex, Inc., 478 F.2d 562, 564–65 (2d Cir. 1973)).
3 As stated in the Court’s November 12, 2019, Order, Plaintiffs are ordered to “file a notice identifying all filings
containing derogatory references regarding Defendants’ counsel or accusations that Defendants’ counsel engaged in
any criminal activity and instructing the Clerk of Court to withdraw such filings.” Dkt. 95. While the Court
acknowledges that the Motion clearly contains references to and accusations against Defendants’ counsel, this will be
the last Motion the Court decides that contains such language. Any future filing containing personal attacks or
accusations against Defendants’ counsel shall be struck and monetary sanctions shall be imposed. See Dkt. 95.
the Rules Governing the State Bar of Texas shall serve as a guide governing the obligations and
responsibilities of all attorneys appearing in this court.” Local Rule AT-2. In Texas,
disqualification is a “severe remedy.” NCNB Tex. Nat’l Bank v. Coker, 765 S.W.2d 398, 399 (Tex.
1989). Motions to disqualify are subject to an exacting standard both to protect a party’s right to
counsel of choice as well as to discourage the use of such motions as a “dilatory trial tactic.” Id.
III. ANALYSIS
Plaintiffs argue that Brinkerhoff should be disqualified from representing any of the
Defendants, alleging that he is “a ‘third-party’ employee of an enterprise,” he “actively engaged
in ‘patterns of racketeering activity’” and in Defendant State Farm Mutual Automobile Insurance
Company’s “entity fraud scheme,” and that he engaged “in acts of organized crime, as defined by
Texas statute.” See Dkt. 77 at 1. Plaintiffs further argue that Rambin and Drinker Biddle should be
disqualified from representing the Individual Defendants, since Plaintiffs assert their claims are
“derivative in nature,” and thus, there is a conflict of interest between the State Farm Defendants
and the Individual Defendants. See id. at 3. Defendants respond that Plaintiffs’ allegations against
Brinkerhoff are baseless and a violation of Federal Rule of Civil Procedure 11. See Dkt. 82 at 1–
2. Further, Defendants argue Plaintiffs have not asserted any derivative claims, and thus, there is
no conflict in all Defendants being represented by the same counsel. See id. at 1.
The Court has evaluated the substance of Plaintiffs’ allegations, rather than the form. In its
findings herein, the Court has been mindful that pro se pleadings are entitled to a liberal
construction that includes all reasonable inferences which can be drawn from them. See Haines v.
Kerner, 404 U.S. 519, 521 (1972); Tasso v. Onemain Fin., Inc., No. 4:15-cv-484, 2016 WL
410024, at *1 (E.D. Tex. Feb. 3, 2016).
Plaintiffs allege Defendants used Brinkerhoff in “the execution of the ‘enterprises’ fraud
schemes” and racketeering activities, and thus Brinkerhoff should be disqualified. See Dkt. 77 at
4. Defendants argue that Plaintiffs have not identified a single instance when Brinkerhoff’s actions
were unethical or criminal, and thus, the Motion is baseless and should be denied. See Dkt. 82 at
7–8.
Determining whether counsel should be disqualified is a fact-specific inquiry. See
Brennan’s Inc. v. Brennan’s Rests., Inc., 590 F.2d 168, 173–74 (5th Cir. 1979). Under Fifth Circuit
precedent, attorney disqualification is “a sanction that must not be imposed cavalierly.” FDIC, 50
F.3d at 1316. As stated at the Hearing and in the Court’s November 12, 2019, Order, Plaintiffs’
allegations against Brinkerhoff are unsubstantiated. See Dkts. 91, 94. Plaintiffs have offered no
evidence in support of their allegations against Brinkerhoff tending to show that he is involved in
any criminal or unethical activity. Because the Court finds that Plaintiffs’ allegations against
Brinkerhoff are without merit, Plaintiffs’ Motion to Disqualify Brinkerhoff is DENIED.
B. INDIVIDUAL DEFENDANTS’ COUNSEL
Plaintiffs claim the “derivative” nature of their claims against Defendants creates an
inherent conflict of interest between the Individual Defendants and the State Farm Defendants that
requires the disqualification of Rambin and Drinker Biddle. See Dkt. 77. Defendants argue
Plaintiffs have not asserted any derivative claims, and thus, there is no conflict of interest between
the Individual Defendants and the State Farm Defendants. See Dkt. 82.
Rule 1.06 of the Texas Disciplinary Rules of Professional Conduct states:
(a) A lawyer shall not represent opposing parties to the same litigation.
(b) In other situations and except to the extent permitted by paragraph (c), a lawyer
shall not represent a person if the representation of that person:
materially and directly adverse to the interests of another client of the lawyer or
the lawyer’s firm; or
(2) reasonably appears to be or become adversely limited by the lawyer’s or law
firm’s responsibilities to another client or to a third person or by the lawyer’s or
law firm’s own interests.”
TEX. DISCIPLINARY R. OF PROF’L CONDUCT 1.06. Plaintiffs allege the Individual Defendants’
interests are materially and directly adverse to the interests of the State Farm Defendants because
Plaintiffs’ claims against the Individual Defendants are “derivative in nature.” See Dkt. 77.
However, the Court does not find that Plaintiffs have pled any derivative claims.
Under Federal Rule of Civil Procedure 23.1, derivative actions are claims brought “to
enforce a right that the corporation or association may properly assert but has failed to enforce.”
FED. R. CIV. P. 23.1(a). Therefore, the claims brought by a plaintiff in a derivative suit belong to
the corporation, not the plaintiff. See Ross v. Bernhard, 396 U.S. 531, 538 (1970). “The proceeds
of the [derivative] action belong to the corporation and it is bound by the result of the suit.” Id. In
order to bring a derivative action, the plaintiff must file a verified complaint. See FED. R. CIV. P.
23.1(b).
Though Plaintiffs have alleged in the Motion that they are shareholders in Defendant State
Farm Mutual Automobile Insurance Company, Plaintiffs have not brought a derivative action. See
Dkt. 77 at 2. None of Plaintiffs’ complaints, including their Second Amended Complaint, have
been verified, as is required by the Federal Rules of Civil Procedure for a derivative action. See
FED. R. CIV. P. 23.1(b). Further, Plaintiffs seek damages for themselves instead of on behalf of the
State Farm Defendants. See Dkt. 39 at 68–69.
Because Plaintiffs have not brought any derivative claims, the Court finds that there is no
conflict of interest that would prevent Defendants’ counsel from representing both the Individual
Biddle is therefore DENIED.
IV. CONCLUSION
Based on the foregoing, the Court finds that Plaintiffs’ Motion (Dkt. 77) is hereby
DENIED.