Risk Update

Conflicts Complexities — Disqualifying Conflict Doesn’t Disqualify, Fake Electors + Fake Conflict?

Appellate Division Says Law Firm May Not Withdraw From Case Despite Disqualifying Conflict of Interest” —

  • “In an unpublished opinion, the New Jersey Appellate Division consolidated two back-to-back appeals arising from a 2013 complaint filed by Allstate against a group of medical defendants which alleged a number of violations of the Insurance Fraud Prevention Act—one of which addressed a firm’s motion to be relieved as counsel in the case.”
  • “As to the Gloucester County matter, the Flynn firm argued that the court erred in denying its motion to be relieved as counsel and claimed that Vernon’s dissolution action against Carabasi created a disqualifying conflict of interest under RPC 1.7(a). According to the opinion, the firm stated that ‘with the demise of the SJHW entity in bankruptcy, the individuals’ stated position at the outset of the case that any potential liability would be paid by the entity and thus shared between all defendants has vanished.'”
  • “Additionally, the firm asserted that Vernon’s allegations against Carabasi constituted an alteration to the original agreement due to unanticipated, extenuating circumstances and that the conflict is nonwaivable under RPC 1.7(b), according to the opinion.”
  • “‘We decline to adopt the court’s finding that Dr. Vernon’s claims against Dr. Carabasi did not create a RPC 1.7 disqualifying conflict of interest for the Flynn Firm,” the opinion said. “Nevertheless, we are satisfied the court did not abuse its discretion in denying the Flynn Firm’s motion to withdraw as counsel.'”
  • “According to the opinion, an attorney is not automatically relieved from representing a client on discovering their representation is in violation of a rule of professional conduct. The appeals court stated that here, as in the New Jersey Supreme Court opinion in Dewey v. R.J. Reynolds Tobacco, the court found it would be near impossible for substitute counsel to develop the same knowledge of complex litigation as the Flynn firm.”
  • “‘As noted, we depart from the court’s reasoning to the extent it determined the Flynn Firm was not faced with a disqualifying conflict of interest under RPC 1.7,’ the appeals court said. ‘As explained in Loughry’s ethics review, Dr. Vernon’s claims against Dr. Carabasi could have a material impact on the Flynn Firm’s joint representation of the medical defendants in the Gloucester County litigation. Even if a disqualifying conflict existed, however, the court was within its discretion to determine equitable factors precluded the Flynn Firm’s withdrawal.'”

Dane County judge rejects effort to disqualify law firm suing over fake electors” —

  • “A Dane County judge on Wednesday rejected a request by one of the attorneys involved in the Republican attempt to hand Wisconsin’s Electoral College votes to Donald Trump to disqualify the law firm suing the group.”
  • “Jim Troupis, a former Republican-appointed Dane County judge who represented Trump in a failed effort to overturn Wisconsin’s 2020 election results, filed the motion last summer alleging he and his wife had an ongoing attorney-client relationship with Stafford Rosenbaum attorney Johanna Allex at the time that other lawyers with the law firm brought the lawsuit against him and several others in May 2022.”
  • “Troupis and his wife retained the firm in late 2019 and worked with Allex to develop and prepare an estate plan, which involved providing the law firm with ‘intensely private and confidential matters and information about their family, assets, and finance,’ according to Troupis’ motion.”
  • “While the estate plan was never finalized, Troupis considers himself a client of Stafford Rosenbaum. He contended the financial information provided to the law firm as part of preparing an estate plan is relevant to the lawsuit, as it seeks punitive damages from the defendants.”
  • “Dane County Circuit Judge Frank Remington ruled that Troupis’ attorney-client relationship with Allex ended in February 2020, after he paid the firm for services related to the estate plan — more than two years before the lawsuit was filed. Remington said Troupis’ belief that he continued to have an attorney-client relationship after that point ‘was not reasonable.'”