THE RESIDENCE AT BAY POINT CONDOMINIUM ASSOCIATION, INC. et al v. CHERNOFF DIAMOND & CO., LLC et al
OPINION. Signed by Magistrate Judge Michael A. Hammer on 8/17/17. (sr, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CHERNOFF DIAMOND & CO., LLC, :
THE RESIDENCES AT BAY POINT
CONDOMINIUM ASSOC., INC.,
Civil Action No. 16-5190 (MCA) (MAH)
HAMMER, United States Magistrate Judge
This matter comes before the Court on the motion of Defendants, The Residences at Bay
Point, LLC, Albert Dweck and David Schwartz, to disqualify Plaintiff’s counsel, Louis J.
Lamatina, Esq. See Mot. to Disqualify, D.E. 44. Defendant Chernoff Diamond & Co., LLC, joins
in Defendants’ motion. Plaintiff opposes the motion. D.E. 50. The Court held oral argument on
May 5, 2017, and required the parties to submit supplemental briefing on the movants’ arguments
under New Jersey Rules of Professional Conduct 1.7(a)(2) and 1.8(i). The Court has considered
the parties’ submissions, the oral argument, and the law. For the reasons set forth herein, the Court
will deny the motion.
This case stems from a flood insurance claim made by Plaintiff, The Residences at Bay
Point Condominium Association (“the Association”) for flood damage occurring in the aftermath
of Superstorm Sandy in October 2012. See Compl. ¶¶ 15 to 18, Ex. 1 to Not. of Removal, D.E. 11. The Association is a “New Jersey not-for-profit corporation…entrusted with the management
of the premises known as The Residences at Bay Point (“The Residences”). Id. ¶ 8. The
Residences is a forty-eight-unit, “residential condominium complex located at 320 Maryland
Avenue, Point Pleasant Beach, New Jersey.” Id. Defendant, The Residences at Bay Point LLC,
is the Sponsor of the condominium (“the Sponsor”), meaning that it is the entity which purchased
the property and converted it to the condominium form of ownership. Compl. ¶ 10. Defendants
Albert Dweck and David Schwartz are managing members of the Sponsor. Id. ¶ 7. The Residences
at Bay Point, LLC, Dweck, and Schwartz shall be collectively known as “the Sponsor Defendants.”
Dweck and Schwartz were also members of the Plaintiff’s Board of Directors by virtue of the
Sponsor’s ownership of eighteen of the units, with Dweck serving as President of the Board at or
around the time of Superstorm Sandy. Declaration of Albert Dweck (“Dweck Decl.”) ¶ 3, Jan. 13,
2017, D.E. 44-1.
The flood insurance policy in controversy was issued by third party Defendant, The
Standard Fire Insurance Company d/b/a Travelers Indemnity and Affiliates (“Standard”). Compl.
¶ 1. Standard acts as an agent of the United States government and issues flood insurance policies
administered by the Federal Emergency Management Agency (“FEMA”). Id. ¶ 13. Defendant
Chernoff Diamond & Co. (“Chernoff”) is an insurance broker and was retained by Plaintiff for the
purpose of procuring proper flood insurance coverage for Plaintiff’s condominium complex. Id.
¶ 7. The Association’s initial Policies with Standard were written on the National Flood Insurance
Schwartz discontinued service on the Board of Directors in March 2013. Dweck Decl. ¶ 6.
Program (“NFIP”) General Property Form, which provides coverage on an actual cash value
basis. 2 Chernoff Compl. ¶ 15, Exh. 3 to Not. of Removal, D.E. 1-3. In or around 2008, Chernoff
became the broker of record in connection with the Policies, which were renewed without change.
Id. ¶ 16. In 2009, after the Residences became a condominium, the Association requested that the
Policies be amended to provide for reimbursement on a replacement cost basis, which Plaintiff
alleges would have been the proper type of insurance for a condominium complex. Id. ¶ 17.
Thereafter, Chernoff submitted an application to Standard for the policy to be written on the NFIP
Residential Condominium Building Association Policy (“RCBAP”) form, which provides
coverage on a replacement cost basis. Id. ¶ 18. Standard made the requested change. Id. ¶ 19. 3
Subsequently, the Association, through Dweck, informed Chernoff that it no longer wanted
coverage using the RCBAP form. Id. ¶¶ 23-25. Chernoff informed Standard of the requested
change, and Standard then re-wrote the coverage back to the General Property Form, meaning that
the condominiums were again covered on an actual cash value basis, not on a replacement cash
value basis. Id.
It is undisputed that for all relevant time periods, Plaintiff complied with the terms of the
General Property policies in place and paid all required premiums. Compl. ¶ 17, D.E. 1-1.
However, after Plaintiff notified Standard regarding the extensive damage to the premises as a
result of Superstorm Sandy, “Standard subsequently advised of its refusal to honor the policies as
Insurance provided on an actual cash value basis allows for the insured to be compensated for the
actual cash value of the damaged property at the time of the loss. Thus, if the damaged property
had depreciated in value since the time it had first been purchased, the insured would be
compensated only for the property at that depreciated value. On the other hand, insurance issued
on a replacement cost basis compensates the insured for the actual cost of replacing the damaged
property with new versions of the property.
The flood insurance was to have provided coverage to both the individual units as well as the
common areas of The Residences. Dweck Decl. ¶ 4.
written and its unilateral decision to ‘reform’ the policies from the General Property policies it
sold to Plaintiff to Residential Condominium Building Association Policies…because General
Property policies cannot be issued to residential condominiums.” Id. ¶ 19. Plaintiff alleges that
although its damages totaled $602,828.11, Standard paid only $221,131.24. Id. ¶ 20. Plaintiff also
alleges that Standard charged Plaintiff $361,696.87 in “co-insurance penalties” for Plaintiff’s
failure to obtain the correct insurance, the RCBAP policy, for a condominium property. Id.
Plaintiff filed a lawsuit against Standard in this Court on April 10, 2013 (“the 2013 action”).
See The Residences at Bay Point Condominium Ass’n, Inc. v. Standard Fire Ins. Co. et. al., Civ.
No. 13–2380. Mr. Lamatina represented Plaintiff.
In the 2013 action, Plaintiff alleged that
Standard’s “unilateral decision to ‘reform’ the policies from the General Property Policies it sold
to Plaintiff to Residential Condominium Building Association Policies” and the subsequent
imposition of the co-insurance penalties constituted a breach of the insurance contract. See
generally Complaint in 2013 Action, April 10, 2013 (“2013 Compl.”). Plaintiff also named
Chernoff as a defendant in the 2013 case, alleging breach of contract and negligence for Chernoff’s
failure to “procure adequate and applicable flood insurance for the plaintiff.” Id.
On January 14, 2014, Plaintiff amended its complaint in the 2013 Action to add the Sponsor
Defendants, alleging claims of negligence and breach of fiduciary duty, among other things. See
Sec. Am. Compl. in 2013 Action, Jan. 14, 2014. Plaintiff alleged that “[d]uring 2009-2010 and
through March 2013, Dweck controlled the Association together with the other Sponsor appointed
representative on the three (3) member Board, Schwartz.” Id. ¶ 76. Plaintiff claimed that the
Sponsor defendants, in so controlling the Board, failed to procure the proper type of flood
party moved to disqualify Lamatina as counsel for Plaintiff during the entirety of the 2013
Action in this Court.
insurance. Id. ¶ 83. Plaintiff alleged that it was Dweck who specifically instructed Chernoff to
re-write the policy back to the General Property policies, instead of maintaining the proper RCBAP
policies. Id. ¶ 72.
In August 2014, the Court dismissed all claims against Standard, ruling that the General
Property policies that Standard had issued could not be honored as written because the premises
had been converted to condominium form of ownership, that Standard correctly reformed the
policies to Residential Condominium Building Association Policies, and that Standard properly
applied the costly co-insurance penalties. See Wolfson Opin., Exh. U to Lamatina Decl., D.E. 513.
The Court then declined to exercise supplemental jurisdiction over the remaining state law
claims, including those made against Chernoff and the Sponsor Defendants, and dismissed the
entire action on August 28, 2014. Id.
On September 25, 2014, Plaintiff filed suit in Ocean County Superior Court, again asserting
its state law claims against Chernoff and the Sponsor Defendants for their failure to procure the
proper flood insurance for the premises. See generally Compl., D.E. 1-1. Plaintiff brought claims
of breach of contract and negligence against Defendant Chernoff. Id. ¶¶ 26-34. As against the
Sponsor Defendants, Plaintiff alleged negligence, breach of fiduciary duty, violation of the
Planned Real Estate Development Full Disclosure Act, N.J.S.A. 45:22A-37, and violation of the
Consumer Fraud Act, N.J.S.A. 56:8-1. Id. ¶¶ 35-62. The Sponsor Defendants then asserted cross
claims against co-Defendant Chernoff for indemnification, contribution, and negligence. See
Cross-Claim, Exh. 2 to Not. of Removal, D.E. 1-2. On July 11, 2016, Chernoff filed a ThirdParty Complaint against Standard for claims of contribution, and apportionment of liability as to
FEMA. Chernoff Compl., D.E. 1-3. FEMA, as a federal agency, removed the case to this Court
on August 23, 2016. Not. of Removal ¶ 4, D.E. 1.
The Sponsor Defendants brought this motion to disqualify on January 13, 2017, more than
three years after the Sponsor Defendants were made parties to this lawsuit, and even though Mr.
Lamatina represented Plaintiff in the 2013 Action without objection and has represented Plaintiff
in this action since its inception. D.E. 44. Chernoff has joined in the Sponsor Defendants’ motion
to disqualify, but does not assert any additional basis for disqualification than those already
advanced by the Sponsor Defendants. D.E. 46.
The movants argue that the Court should disqualify Plaintiff’s counsel, Louis Lamatina,
Esq., for three reasons: (1) the existence of a prior attorney-client relationship between Lamatina
and Defendant Dweck; (2) Lamatina has an improper proprietary interest in the current litigation,
because he owns, through his family’s company, ten of the condominium units at issue here; and
(3) Lamatina’s status as a necessary witness. See generally Mot. to Disqualify, D.E. 44. The
movants’ main argument in support of this motion is premised on the existence of a prior attorneyclient relationship between Lamatina and Dweck, which the movants argue warrants
disqualification under New Jersey Rule of Professional Conduct 1.9(a). See Br. in Supp. of Mot.,
a. Disqualification Based on RPC 1.9
Issues of professional ethics in the District Court of New Jersey are governed by L. Civ.
R. 103.1(a). See Carlyle Towers Condo. Ass'n v. Crossland Sav., FSB, 944 F. Supp. 341, 344
(D.N.J. 1996). This Rule provides that “the Rules of Professional Conduct of the American Bar
Association as revised by the New Jersey Supreme Court shall govern the conduct of the members
of the bar admitted to practice in this Court the Rules of Professional Conduct.” See L.Civ. R.
103.1(a). “Thus, to resolve questions of professional ethics, this Court turns to New Jersey's Rules
of Professional Conduct.” Carlyle Towers Condo., 944 F. Supp. at 345. In this case, the movants
mainly rely on New Jersey RPC 1.9, which provides that a “lawyer who has represented a client
in a matter shall not thereafter represent another client in the same or a substantially related matter
in which that client’s interests are materially adverse to the interests of the former client.”
“In an application for attorney disqualification…the party who brings a disqualification
motion, based on an attorney's successive representations, bears the burden of proving that
disqualification is appropriate.” Ciba-Geigy Corp. v. Alza Corp., 795 F. Supp. 711, 714 (D.N.J.
1992). The burden in motions of this nature is considered especially heavy because, in this District,
"[m]otions to disqualify are viewed with 'disfavor' and disqualification is considered a 'drastic
measure which courts should hesitate to impose except when absolutely necessary.'" Alexander v.
Primerica Holdings, Inc., 822 F. Supp. 1099, 1114 (D.N.J. 1993) (quoting Schiessle v. Stephens,
717 F.2d 417, 420 (7th Cir. 1983)).
Such disfavor results from the unfortunate reality that motions to disqualify are sometimes
made solely for “tactical reasons,” and that even when they are made in good faith, motions to
disqualify cause inevitable delay in the underlying proceedings and create added hardships to the
opposing party. Carlyle Towers Condo., 944 F. Supp. at 345 (citing Dewey v. R.J. Reynolds
Tobacco Co., 109 N.J. 201, 218 (1988)); see also Cohen v. Oasin, 844 F. Supp. 1065, 1067 (E.D.
Pa. 1994) (warning that the Rules of Professional Conduct are not indented to be used as a
“procedural weapon.”) Therefore, Courts are required to balance "the sacrosanct privacy of the
attorney-client relationship (and the professional integrity implicated by that relationship) and the
prerogative of a party to proceed with counsel of its choice.” Schiessle, 717 F.2d at 420; see also
In re Cedant Corp. Sec. Litig., 124 F. Supp.2d 235, 249 (D.N.J. 2000) (advising that a court
considering a disqualification motion should “closely scrutinize the facts ... [and] balance the
hardships to the client whose lawyer is sought to be disqualified against potential harm to the
adversary should the attorney be permitted to proceed").
In the case at bar, the movants allege that Dweck, while serving in his role as a member of
the Association’s Board of Directors, had an attorney client relationship with Lamatina in this
litigation before Dweck, as an individual, was added as a Defendant in the 2013 Action. The
movants assert that Lamatina’s prior representation of Dweck in this matter runs afoul of New
Jersey RPC 1.9(a), which states “[a] lawyer who has represented a client in a matter shall not
thereafter represent another client in the same or substantially related mater in which that client’s
interests are materially averse to the interests of the former client.” In support of their motion, the
movants rely heavily on Dweck’s declaration. See generally Br. in Supp. of Mot. to Disqualify,
Dweck asserts that he first became acquainted with Lamatina in August 2012, at which
time Lamatina, through his family’s company, Bay Point Investments, LLC, purchased ten
condominium units at the Residences. Dweck Decl. ¶ 2, D.E. 44-1. Dweck claims that after
Superstorm Sandy hit, he and Lamatina “work[ed] together to have the damage adjusted and
submit the claim and…worked together to pursue the initial lawsuit in federal court against the
flood insurer.” Id. ¶ 4. Dweck alleges that “[t]his joint endeavor had the added aspect that Lou
was an attorney and was providing whatever legal services and advice were relied upon.” Id.
Dweck states that “[d]uring the entire time I was working with Lou on the flood insurance claim,
my understanding was that Lou, as the attorney providing legal services to assist the pursuit of that
claim, was representing…me and the Sponsor as owner of [a] major share of the units, and the
Association and Residences as a whole.” Id.
The Sponsor Defendants also assert that Lamatina and Dweck were working together as
attorney and client when Lamatina asked Dweck to sign affidavits in support of the Association’s
opposition to Chernoff’s efforts to dismiss the case at some point in the 2013 Action. Exhs. A &
B to Dweck Decl., D.E. 44-1. Those affidavits provide very limited and general information about
the condominiums, the insurance policies, and the damages suffered from Hurricane Sandy. 5 Id.
The movants also point to multiple communications from Lamatina in which Lamatina identified
himself as the attorney for the Board of Directors of the Association, of which Dweck was a
member. See generally Reply Br. at 1-7, D.E. 62.
Dweck also claims in his declaration in support of this motion that he conveyed important
communications to Lamatina prior to this Dweck’s inclusion in this litigation, which evidence the
existence of an attorney client relationship. Dweck Decl. ¶¶ 4, 9-11
Dweck states that he
“discussed with Lou my entire history of transactions with Chernoff concerning the purchase of
property and flood insurance for the Residences over the years since Chernoff had taken over as
the broker which I believe was in 2008…[and] it was my understanding that I was providing this
information and having these discussions in the context of an attorney-client relationship.” Dweck
Decl. ¶ 4. The movants claim that these communications were significant because the they believe
that the information Dweck provided to Lamatina in relation to his history of transactions with
Chernoff is “being used against them” in the present lawsuit, insofar as Lamatina, as counsel for
In the affidavits, Dweck lists the dollar amount of damages each unit suffered, the amount
Standard had paid to date on the policies, and the square footage of each of the units. Exhs. A &
B to Dweck Decl. Dweck also explains that after Hurricane Irene in 2011, a claim was “submitted
under the General Property policies issued by Standard Fire, which was paid without incident.”
Exh. A. ¶4. He states that it “was only after the submission of the pending claim at issue in this
matter that Standard Fire determined that it was necessary to ‘reform’ the policies.” Id. The
affidavits do not go into any further detail beyond this.
the Association, is claiming that the Sponsor defendants controlled the Association’s Board of
Directors and “caused it to buy the wrong insurance.” Br. in Supp. of Mot. at 9-10, D.E. 44.
Lamatina, relying heavily on his own declaration, disputes Dweck’s characterization of
their relationship. See generally Lamatina Decl., 50-1. Lamatina claims that from the inception of
the first lawsuit filed against Standard and Chernoff in early 2013, it was “abundantly clear to
Dweck, a sophisticated real estate investor, founder and CEO of his own firm that I represented
the Association, and not him or his limited liability company.” Id. ¶ 4. Lamatina points to a
resolution drafted by the Association’s Board, and the subsequent Retainer agreement, both
executed in early 2013, which identified Lamatina as counsel for the Association and its Board of
Directors only. See Exh. K to Lamatina Decl., D.E. 51-2. (“Be it resolved that the Board of
Directors of the Residences at Bay Point Condominium Association, Inc. has met on March 2013
and resolved to retain the Law Offices of Louis J. Lamatina as General Counsel to the Association
and to represent the Board in litigation matters including the litigation against Standard”).
Furthermore, Lamatina emphasizes that his interactions with Dweck were only in Dweck’s
“capacity as a member of the Board of Directors of the Association,” rather than in Dweck’s
personal capacity. Id. ¶ 25.
Lamatina also refutes the movants’ contention that Lamatina used information disclosed
by Dweck as the basis for the present lawsuit against the Sponsor Defendants. Lamatina alleges
that he learned of the fact that Dweck directed Chernoff to purchase the wrong insurance by way
of an affidavit submitted in the 2013 action by Chernoff’s representative, rather than through any
confidential communications occurring between Lamatina and Dweck. Lamatina Decl. ¶ 25.
Lamatina explains that in the 2013 Action, Standard filed a motion to dismiss the
Complaint, and Chernoff, as a cross-defendant, submitted an affidavit of its member Michael
Aronson (“the Aronson Affidavit”), as part of its opposition to Standard’s motion. Lamatina Decl.
Based on this information, the Court must determine whether a prior attorney-client
relationship existed between Lamatina and Dweck in this litigation. If the answer to this threshold
question is no, then the Court need not look any further in analyzing whether disqualification is
warranted under NJRPC 1.9. See Host Marriott Corp. v. Fast Food Operators, 891 F. Supp. 1002,
1007 (D.N.J. 1995) (finding that disqualification under RPC 1.9 requires the existence of a prior
attorney client relationship).
An attorney-client relationship can be express or implied. Because the movants do not
argue that there was an express attorney-client relationship between Dweck and Lamatina, the
Court’s analysis will focus on whether the movants can carry their burden of establishing the
existence of an implied attorney-client relationship. “To establish an implied attorney-client
relationship ‘a party must show (1) that it submitted confidential information to a lawyer, and (2)
that it did so with the reasonable belief that the lawyer was acting as the party's attorney.’”
Montgomery Academy v. Kohn, 50 F. Supp.2d 344, 350 (D.N.J. 1999) (quoting Pain Prevention
Lab, Inc. v. Electronic Waveform Labs, Inc., 657 F. Supp. 1486, 1495 (N.D. Ill. 1987)). 7 To
¶ 21. The affidavit “implicated Dweck and the sponsor defendants, blaming the Association for
not having the proper insurance in place [and] squarely blam[ing] the failure on Dweck, who was
running the Association during the time the policies at issue were renewed.” Id. The Aronson
Affidavit included an email from Dweck to the Chernoff representative in which Dweck declined
to replace the existing, and improper, insurance policies for the premises. See Aronson Decl., Exh.
A to Lamatina Decl., D.E. 51-1.
Dweck’s decision to not buy the proper flood insurance is the basis of Plaintiff’s case
against the Sponsor Defendants. Lamatina claims that Dweck never shared this error with the
Association and that this inculpatory information only came to light “by way of public record”
upon the filing of the Aronson Affidavit. Lamatina Decl. ¶ 25. According to Lamatina, the
information revealed through Aronson affidavit, rather than any communications between
Lamatina and Dweck, was the “genesis for the Board of Directors’ decision to add him and the
Sponsor defendants to the lawsuit.” Id.
Although the Sponsor Defendants relied on Montgomery Kohn, 50 F. Supp. 2d 344 in their
moving brief, they changed course in their reply brief, arguing that the conveyance of confidential
information to an attorney is not necessary to establish the existence of an attorney client
establish the existence of an implied relationship, the party seeking disqualification must show
more than his or her subjective belief that the relationship existed. See Ellis v. Ethicon, Inc., Civ.
No. 05-726, 2005 U.S. Dist. LEXIS 25705 (D.N.J. Oct. 27, 2005). That party also must show, and
the court must conclude, that the moving party’s belief in the attorney-client relationship was
"objectively reasonable under the totality of the circumstances.” Id. at *12-13.
Judges within this District have previously opined on the issue of implied attorney-client
relationships in the context of RPC 1.9 on multiple occasions. In Montgomery Academy,
Defendant, Ms. Kohn, founder of Plaintiff Academy, allegedly shared confidential information
with Plaintiff’s counsel, Ms. Weeks, prior to Weeks’s retention as counsel for the Academy. Kohn
moved to disqualify Weeks, alleging that she had shared information with Weeks regarding
“nonfeasance for failing to exercise her fiduciary obligations” in relation to improper investments
of the Academy’s pension funds. Montgomery Academy, 50 F. Supp.2d at 350. The Court, after
holding an evidentiary hearing, granted Kohn’s motion, finding that there was “uncontroverted
evidence” that Kohn had shared confidential information with Weeks regarding Kohn’s improper
investments. Id. at 351. The Court also found that Kohn’s belief that Weeks jointly represented
both the Academy and Kohn was reasonable, because the interests of Kohn and the Academy were
aligned insofar as both parties sought to recoup lost investment funds. Id.
relationship. Moving Br. at 15-19, D.E. 44-2; Reply Br. at 7-8, D.E. 62. For this proposition, the
Sponsor Defendants rely on the New Jersey Supreme Court case Twenty-First Century Rail Corp.
v. New Jersey Transit Corp. 210 N.J. 264 (2010). But the Sponsor Defendants’ reliance on
Twenty-First Rail Corp. is misplaced. That decision did not discuss whether a prior implied
attorney client relationship existed between Defendant’s attorney and the Plaintiff. In fact, it was
undisputed that defense counsel and the plaintiff previously entered into a retainer agreement in
the same litigation before Defense counsel switched sides and began representing the Defendant.
Id. at 267. The existence of the retainer agreement likely obviated the need for the Court to even
consider whether there was an implied attorney-client relationship.
In Killion v. Coffey, Civ. No. 13-1808, 2014 WL 2931327 (D.N.J. June 30, 2014), the
Court found no attorney-client relationship warranting disqualification. In that case, defendants,
members of a labor union, moved to disqualify counsel for plaintiffs, who were members of the
same labor union.
Defendants argued that an implied attorney-client relationship existed with
plaintiffs’ counsel. Plaintiffs’ counsel served as general counsel for the labor union, based on a
legal services agreement executed prior to the relevant litigation. The legal services agreement
allowed union members to seek legal services from the union counsel for “questions relating to
the performance of their duties and/or potential employment and/or disciplinary matters.” Id. at
*1. The Court rejected defendants’ arguments and declined to disqualify plaintiffs’ counsel. The
Court reasoned that the legal services agreement merely made the union members eligible for legal
services. But the Court concluded that the movants never sought actually sought the union
counsel’s services prior to the litigation, and never revealed any confidential information to her,
and therefore no attorney-client relationship was ever formed. Id. at *4. The Court also noted that
although the movants had sought plaintiff’s counsel’s services after the start of the litigation,
plaintiffs’ counsel declined to provide them with representation. Id. at *5.
In Oestreicher v. Rutgers, Civ. No. 02-959, 2015 WL 6460423 (D.N.J. Oct. 26, 2015), the
Court found that no implied attorney-client relationship had formed between the plaintiff-students
and counsel for defendant Rutgers, despite the fact that Plaintiffs had been witnesses for Rutgers
during a dismissal hearing for a professor alleged to have acted inappropriately towards Plaintiffs
and other students. The Court noted that plaintiffs failed to prove they had shared any confidential
information with counsel for Rutgers, and that counsel for Rutgers “repeatedly and consistently
advised Plaintiffs that they did not represent them, and that they only represented Rutgers.” Id. at
After examining the totality of the circumstances in this case, and the governing law, this
Court concludes that the movants have not carried their burden of proving that there was an implied
attorney-client relationship between Lamatina and Dweck. As explained above, in order to
establish the existence of an attorney-client relationship, the movant must first establish the client’s
submission of confidential information to the attorney. See Montgomery Academy, 50 F. Supp.
2d at 351. The movants have failed to establish the existence of such communications in this case.
Dweck claims in his declaration that he “discussed with Lou my entire history of transactions with
Chernoff concerning the purchase of property and flood insurance for the Residences over the
years.” Dweck Decl. ¶ 4. He also states that he disclosed this information “with the understanding
that Lou was representing all of the persons and entities having an interest in the flood insurance
claim, which included the Sponsor.” Id. ¶ 10. Dweck also states that in the context of drafting
affidavits in the 2013 action, Dweck provided Lamatina “all the information I had regarding the
policies and the history of transactions with Chernoff, since I regarded him as representing my
interests as counsel.” Id. ¶ 11.
These vague and unsupported statements included in Dweck’s Declaration regarding
communications allegedly had between Dweck and Lamatina fail to prove that any exchange of
confidential information occurred, and therefore are insufficient to justify disqualifying Lamatina
as counsel. See Alexander, 822 F. Supp. 1099, 1115 (“the party seeking disqualification must carry
a heavy burden and must meet a high standard of proof before a lawyer is disqualified.”); see also
O Builders & Associates, Inc. v. Yuna Corp. of NJ, 206 N.J. 109 (2011) (affirming the Appellate
Division’s denial of a disqualification motion when the moving party’s submissions’ were
“unsubstantiated” and made in “the vaguest of terms.”). Moreover, Dweck does not identify a
single communication that conveyed confidential information to Lamatina. Dweck’s “entire
history of transactions with Chernoff” is not, by itself, a confidential communication. At a
minimum, Chernoff was a party to those transactions and presumably has similar information.
Nothing in Dweck’s Declaration further elucidates the substance or specifics of those
communications. As such, it is manifestly insufficient to carry the movant’s burden of proving
the exchange of confidential information. By contrast, in Montgomery Academy, Ms. Kohn was
considerably more specific in describing the information she had told the attorney.
Montgomery Academy, 50 F. Supp.2d at 346 (“Ms. Kohm claims that she ‘shared with [Ms.
Weeks] everything that had gone on and also [her] feelings and [her] concerns and [her] worries.
. . . ‘During those sessions, I told her everything I knew and remembered concerning my role as
Trustee and other relevant facts. We examined all documents and audiotapes of meetings
together.’”) (brackets in original); see also FMC Corp. v. Guthery, Civ. No. 07-5409, 2009 WL
485280, *5 (D.N.J. Feb. 25, 2009) (holding that broad claims of exchange of confidential
communications were insufficient to merit disqualification under RPC 1.9(a)). Accordingly, the
Court concludes that movants have failed to carry their burden of proving the first element of
establishing an implied attorney-client relationship between Lamatina and Dweck.
Because the movants must satisfy both prongs of the test to establish an implied attorneyclient relationship, their failure to prove the exchange of confidential information between Dweck
and Lamatina is fatal to their motion. Montgomery Academy, 50 F. Supp.2d at 350 (quoting Pain
Prevention Lab Inc. v. Electronic Waveform Labs Inc., 657 F. Supp. 1486, 1495 (N.D. Ill. 1987)
and Guerrero v. Bluebeard’s Castle Hotel Inc., 982 F. Supp. 343, 347 (D. VI. 1997)). In the
interests of completeness, however, the Court turns to the second prong. The Court concludes that
the movants have not met their burden.
The second step requires the movants to establish that any confidential communications
were conveyed with the “reasonable belief that the lawyer was acting as the party's attorney.” See
Montgomery Academy, 50 F. Supp. 2d at 351. This standard is an objective one, in that the
movants must establish that Dwek reasonably believed Lamatina was his attorney. To make this
showing, the movants argue that the Association and Dweck had a common interest in recovering
flood-insurance money after Superstorm Sandy hit, and until Dweck was added as a Defendant in
January 2014. But the mere fact that different parties to a legal dispute have common interests,
without more, is not enough to establish an attorney-client relationship. See e.g., Oestriecher, 2015
The movants also point to the affidavits that Dweck submitted in the 2013 Action as part
of the Association’s opposition to Standard’s motion to dismiss. But those affidavits provide little,
if any insight. The affidavits contain rather general and limited information regarding the
condominiums and the damages suffered, and provide scant evidence of an attorney-client
relationship. The movants also contend that Lamatina often referred to himself as counsel for the
Board of Directors, of which Dweck was a member. See generally Reply Br., D.E. 58. However,
the movants fail to point to any instance in which Lamatina referred to himself as counsel for
Dweck in his individual capacity, rather than as an attorney for the Association’s Board of
On the other hand, the resolution and retainer agreement executed by the Association
suggests there was no such attorney-client relationship. See Exh. K to Lamatina Decl., D.E. 51-2.
The retainer agreement and resolution clearly indicate that Lamatina was going to serve as counsel
for the Association and its Board of Directors only. The resolution states “[b]e it resolved that the
Board of Directors of the Residences at Bay Point Condominium Association, Inc. has met on
March 2013 and resolved to retain the Law Offices of Louis J. Lamatina as General Counsel to the
Association and to represent the Board in litigation matters including the litigation against
Standard.” Id. Nothing in the resolution nor the retainer agreement indicates that Lamatina would
serve as counsel for Dweck individually. Additionally, although the retainer agreement between
Lamatina and the Association provides for a contingent-fee arrangement, there is no evidence of
any separate fee arrangement between Lamatina and Dweck. Id.
Additionally, it appears that for a least part of the relevant time period, the Sponsor
Defendants, including Dweck, were represented by their own counsel, Mark O’Brien, Esq.
Lamatina Decl. ¶¶ 16, 23-24. In emails between Dweck, Lamatina and others dated between
January 2013 and May 2013, concerning the claims with Standard, Dweck clearly refers to
O’Brien as “my attorney” and “our counsel.” See Exhs. M & N to Lamatina Decl. For example,
one such email exchange in May 2013 reflects that Lamatina and Standard’s attorneys were
negotiating for the release of the proof of loss amounts, “while we litigate the other issues[.]” Id.
Exh. M. Lamatina needed information from Dweck regarding certain of the policies, which listed
BRT Realty as the mortgagee. Id. Dweck responded: “We refinanced brt in 2007. So they are no
longer relevant. Who should I contact to resolve this? Chernoff or my attorney or brt?” Id. In
another email exchange, Lamatina, Dweck, and others discussed the insurance claims and the
division of responsibilities between the Sponsor and the Association, in the context of answering
questions from the prospective purchaser of a condominium unit. In that email exchange, on May
31, 2013, Dweck told Lamatina: “We (through our counsel) have replied to the purchaser in detail
with respect to their questions and concerns regarding the unit. We need the association to answer
their questions about the common areas. . . .” Id. Exh. N.
The movants argue that these emails are not relevant for purposes of deciding this motion
because O’Brien was not acting as Dweck’s attorney in the context of this current litigation. Reply
Br. at 11-13. There are two problems with this argument, however. First, it is inconsistent with
the division of responsibilities that Dweck appears to have drawn in his May 31, 2013 email to
Lamatina. In that email, Dweck explained that the Sponsor had already resolved the questions
regarding the unit itself, but needed the Association, through Lamatina, to respond concerning the
common areas. See Exh. N to Lamatina Decl. Second, that O’Brien was acting as Dweck’s
advocate is clear from emails dated from January 2013, when O’Brien, Lamatina, Dweck and other
Association members discussed the upcoming March 2013 Board of Directors election. Indeed,
O’Brien offered his comments regarding issues as to how the vote would proceed. See Exh. J to
Lamatina Decl. These emails support the conclusion that Dweck viewed O’Brien as his personal
attorney, and Lamatina as counsel for the Association. O’Brien took an active role in protecting
Dweck’s interests in the March 2013 Board of Directors election. Moreover, even when issues
concerning the extent of insurance coverage and the pending litigation arose, Dweck’s emails
reflect his own belief that O’Brien was his personal attorney. Therefore, the Court concludes that
the movants have failed to satisfy either prong of the two step analysis in Montgomery Academy,
50 F. Supp. 2d at 351, as the movants have failed to prove (1) Dweck submitted confidential
information to Lamatina in this litigation and that (2) Dweck possessed a reasonable belief that
Lamatina was acting as his attorney in this litigation.
b. Disqualification Based on RPC 1.8(i) and 1.7(a)(2)
The movants next argue that Lamatina should be disqualified because his family’s
company, Bay Point Investments, LLC, “owns ten of the condominium units of the Residences
and will receive a portion of the eventual proceeds of this litigation allocable to the units he owns.”
See Moving Br. at 23-24, D.E. 44-2. The movants assert that Lamatina’s ownership of the
condominium units violates RPC 1.8(i), which states:
A lawyer shall not acquire a proprietary interest in the cause of
action or subject matter of litigation the lawyer is conducting for a
client, except that the lawyer may: (1) acquire a lien granted by law
to secure the lawyer's fee or expenses, (2) contract with a client for
a reasonable contingent fee in a civil case.
The movants also claim that Lamatina’s representation would violate RPC 1.7(a)(2). 8 That
rule states in relevant part: “[A] lawyer shall not represent a client if the representation involves a
current conflict of interest. A concurrent conflict of interest exists if…there is a significant risk
that the representation of one or more clients will be materially limited…by a personal interest of
The movants allege that Lamatina’s personal financial interest in the outcome of this
litigation, which could include both money for damages to his individual condominium units and
his 25% contingent attorney fee, “outweighs that of the Association and that of any other
condominium unit owner whose unit sustained flood damage in Hurricane Sandy.” Sponsors’
Supplemental Br. at 1, D.E. 75. The movants argue that this financial interest “creates an inherent
conflict of interest and materially limits his ability to apply independent professional judgment to
this litigation on plaintiff’s behalf.” Id. For example, the movants argue that Lamatina’s financial
interest could affect the fairness of a settlement agreement because Lamatina might try to skew a
settlement in his favor so that his units ultimately recover more than their fair share of the
settlement. Chernoff Supplemental Br. at 16, D.E. 74.
Neither of the movant’s original briefs discussed RPC 1.7(a)(2). The movants raised it, for the
first time, at oral argument. The Court allowed the parties to include discussion of RPC 1.7(a)(2)
in their supplemental briefing. Order, May 12, 2017, D.E. 69.
Lamatina responds that case law does not support the movants’ interpretation of RPC
1.8(i). Pl.’s Supplemental Br., D.E. 72. 9 Lamatina also argues that there is no possibility of
potentially misallocating settlement proceeds or reaching a settlement that would be more
advantageous to his condominium units than to those owned by other Association members. Id.
at 12-13. Lamatina explains that a formula has already been calculated for the fair apportionment
of any money recovered from a settlement, and that the formula is based on the amount of damages
each unit suffered from Superstorm Sandy.
Lamatina observes that the Association
successfully used this formula in 2013, to allocate funds paid by Standard in partial resolution of
the claims. See Supplemental Lamatina Decl., ¶¶ 4-7, 17-20, D.E. 73. The formula was based
upon proofs of loss prepared by Standard’s independent adjuster, and the work of both the
Association’s adjuster and Standard’s adjuster in assigning dollar values to each damaged item.
Id. ¶¶ 8-13 & Exh. F. The Association’s Board of Directors approved the formula, and the funds
were distributed by an insurance trustee appointed by the Board. Id. As such, Lamatina asserts
Lamatina relies principally on European Community v. RJR Nabisco Inc., 134 F. Supp.2d 297
(E.D.N.Y. 2001). But European Community is readily distinguished. In that case, the defendants
moved to disqualify plaintiffs’ counsel, asserting, inter alia, that the retainer agreements between
plaintiffs and their counsel: (1) obligated plaintiffs’ counsel to pay all costs and expenses of the
litigation, including an investigative firm, without any requirement that plaintiffs repay those
expenses absent a recovery; (2) indemnified plaintiffs against any other litigation expenses,
including a judgment on any counterclaim or order that plaintiffs pay defendants’ attorneys’ fees;
and (3) provided plaintiffs’ counsel exclusive control over certain strategic decisions. Id. at 30001. The court denied the disqualification motion, but did so based on a standard unique to the
Second Circuit. Id. at 303, 308. That standard requires the party seeking disqualification to prove
(1) an ethical violation, (2) that will “taint the trial by affecting his or her presentation of a case.”
Id. at 303 (quoting Bottaro v. Hatton Assocs., 680 F.2d 895, 896 (2d Cir. 1982)). See also id. at
304 (“Unless the ‘taint’ threshold has been crossed, precedent counsels reliance upon alternatively
institutional mechanisms for assessing the ethical propriety vel non of particular instances of
questionable attorney conduct.”). Plaintiff’s counsel has not cited, nor has this Court identified, a
decision by the Third Circuit or a District Judge in this District that adopted that standard.
that any future settlement proceeds would be distributed according to a predetermined algorithm
beyond his control.
The Sponsors admit that “[t]here is a paucity of law applying [Rule 1.8(i)] in New Jersey.”
Sponsors’ Moving Br. at 23, D.E. 44-2. The Court therefore requested that the parties submit
supplemental briefing on the topic, and asked the parties look to jurisdictions outside of New Jersey
for any additional guidance on the Rule. See Order, May 12, 2017, D.E. 69. Despite this
opportunity, the movants have failed to cite to any case which stands for the proposition that an
attorney in Lamatina’s position should be disqualified for his ownership of the condominium units.
In fact, many of the cases cited by the movants demonstrate that the prohibition against an attorney
having a “proprietary interest in the cause of action or subject matter of litigation” is inapplicable
in this circumstance, and does not warrant Lamatina’s disqualification.
For example, the movants cite to the case Ankerman v. Mancuso, 271 Conn. 772, 778-79
(2004). In that case, the Supreme Court of Connecticut observed that the prohibition against an
attorney acquiring a proprietary interest in the subject matter of litigation “has its basis in common
law champerty and maintenance. Champerty is simply a specialized form of maintenance 10 in
which the person assisting another's litigation becomes an interested investor because of a promise
by the assisted person to repay the investor with a share of any recovery." 11 There is no suggestion
Maintenance has been defined as “the intermeddling in a suit by a stranger, one having no privity
or concern in the subject matter and standing in no relation of duty to the suitor.” In re Resorts
Int'l, 145 B.R. 412, 471 (D.N.J. 1990).
In Ankerman, an attorney represented a client in an action involving title to property, and the
client executed a promissory note for legal fees owed, which was secured by a mortgage on the
property at issue in the title action. 271 Conn. at 774-75. The attorney sought to enforce the
promissory note, and the issue before the Supreme Court of Connecticut was whether the attorney
had violated Conn. R. Prof. Conduct 1.8(j), which is identical to NJRPC 1.8(i), by obtaining an
interest in property that was the subject of litigation. Id. at 776. The court determined that the
attorney had not violated the rule because he sought only to enforce the promissory note, and not
that Plaintiff’s counsel here has engaged in champterty, or any similar conduct that would form a
basis for disqualification under Rule 1.8(i).
The Sponsor Defendants rely on In re Pajerowski, 156 N.J. 509, 513 (1998). There, an
attorney was found to have “provided financial assistance to individual clients in connection with
their pending or contemplated litigation by advancing sums of money up to the amount he thought
would be the net settlement of their particular claim.” The New Jersey Supreme Court found that
the attorney’s loans to his clients violated RPC 1.8(i) because the sums of money advanced resulted
in the attorney having a direct “proprietary interest in client’s causes of action.” Id.
A similar issue arose in Peggy Walz, Inc. v. Liz Wain, Inc., Civ. No. 94-1579, 1996 U.S.
Dist. LEXIS 2294 (S.D.N.Y. Mar. 1, 1996), a case cited in Chernoff’s brief. In that case, plaintiff
accused the defendant of copyright infringement. Plaintiff’s counsel had loaned money to the
plaintiff corporation, and the attorney and client agreed that revenues generated by the plaintiff’s
business, after accounting for salaries and medical insurance, would be devoted to repaying
counsel. Id. at *4. Plaintiff’s counsel was also a co-principal of the plaintiff corporation. Id. The
Court found that the relationship between counsel and plaintiff, in which counsel was both a
creditor and a co-principal of the plaintiff corporation, conferred upon counsel a proprietary
interest in the plaintiffs’ causes of action. Id. at *6.
The other authorities on which the movants rely are no more persuasive. In support of the
contention that Lamatina should be disqualified based on RPC 1.7(a)(2), Chernoff cites to the
ethics opinion Matter of Berkowitz 136 N.J. 134 (1994), a case in which two partners at a law firm
were found to have violated multiple rules of professional conduct for representing clients with
foreclose on the mortgage. Id. at 780-81. The Court concluded that the promissory note alone did
not constitute a “proprietary interest in the cause of action or subject matter of the litigation” and
therefore, there was no violation of the rule. Id.
adverse interests. One of the attorneys had a personal proprietary interest in his client’s business,
and that client had interests that were adverse to another client of the firm. Id. at 135. That case
is inapplicable to this situation, because any financial interest which Lamatina has in this case is
aligned with that of the Association, not adverse to it. 12
The foregoing cases have interpreted Rule 1.8(i) in contexts where the attorney had become
an interested party or investor in the claim itself, such as by becoming their clients’ creditors for a
sum of money that could potentially be awarded in the litigation. This case poses a different
situation, in that Lamatina is not an “interested investor” in the subject matter of this litigation –
he has not loaned his client any money that the client agreed to repay with a potential future
recovery from the lawsuit. There is no suggestion that if Defendants prevail, the Plaintiff has an
outstanding obligation to Lamatina. That is not to say that Lamatina, as a condominium owner,
has no interest in the outcome of the litigation. To the contrary, given that his family owns ten of
the units, he has a substantial interest in any recovery by the Association. And the Court recognizes
that a situation in which an attorney has an interest in their client’s potential recovery, might raise
ethical concerns. But the circumstances of this case persuade the Court that disqualification is not
warranted and, in fact, would pose a considerable risk of prejudice to the Plaintiff.
First, even if the Court were to determine that disqualification was appropriate based on
Rules 1.7, 1.8 or 1.9, the Court would nevertheless deny the motion based on the movants’
The Sponsor Defendants also rely on cases standing for the proposition that in class action
litigation, an attorney may not act as both a class representative and as counsel for the class “under
circumstances where an equitable fund may be created from which an attorneys’ fee may be
awarded.” Sponsors’ Supplemental Br. at 9, D.E. 75 (citing Kramer v. Scientific Control Corp.,
534 F. 2d 1085, 1090 (3d Cir. 1976)). But the Sponsor Defendants fail to cite to any decision that
extended this rule beyond the context of class-action litigation.
extended and unjustified delay in bringing this motion. Lamatina has served as counsel for
Plaintiff since the Complaint was first filed in this Court on April 10, 2013. Dweck and the other
Sponsor Defendants were added as Defendants in this litigation on January 14, 2014. See Sec.
Am. Compl. in 2013 Action. However, no party moved to disqualify Lamatina as counsel during
the course of the 2013 Action in federal court. The federal claims in the 2013 Action were
dismissed from this Court on August 28, 2014, and because the Court declined to exercise
supplemental jurisdiction over the remaining state law claims, including those made against
Chernoff and the Sponsor Defendants, Plaintiff re-filed its claims against Chernoff and the Sponsor
Defendants in Ocean County Superior Court on September 25, 2014. See Compl., D.E. 1-1. At
no point in the course of the Ocean County litigation did any Defendant move to disqualify
Lamatina as counsel. The case was removed to this Court on August 23, 2016, and it was not until
November 3, 2016 that the Sponsor Defendants indicated their intention to move to disqualify
Plaintiff’s counsel. See Proposed Joint Discovery Plan at 8, D.E. 30. The present motion to
disqualify was filed on January 13, 2017. D.E. 44. Therefore, nearly three years passed between
the addition of Dweck as a defendant on January 14, 2014, and when the Sponsor Defendants
indicated their intention to move to disqualify Lamatina as counsel on November 3, 2017.
Courts in this Circuit have held that even when a Court has identified a conflict of interest
warranting disqualification, “disqualification is not mandatory,” when the party seeking
disqualification waited a significant amount of time in bringing the motion. Rohm & Haas v. Am
Cyanamid Co. 187 F. Supp. 2d 221, 229 (D.N.J. 2001); see also Zimmerman v. Duggan, 81 B.R.
296, 300 (E.D. Pa. 1987). In Alexander v. Primerica Holdings, Inc., the court concluded that
“when a former client was concededly aware of the former attorney’s representation of an
adversary but failed to raise an objection promptly when he has the opportunity,” a finding of the
moving party’s waiver is justified. 822 F. Supp. 1099, 1115 (D.N.J. 1993). These courts have
developed a five-factor balancing test to determine whether the moving party has waived its right
to seek disqualification based on delay: “(1) the length of the delay in bringing the motion to
disqualify, (2) when the movant learned of the conflict, (3) whether the movant was represented
by counsel during the delay, (4) why the delay occurred and (5) whether disqualification would
result in prejudice to the non-moving party.” Id. (citations omitted).
In this case, the five-factor test weighs in favor of finding that the movants waived their
right to seek disqualification of Lamatina. First, the length of the delay weighs decisively against
the movants. As stated above, the movants waited two years and eleven months from the time
they could have first brought a motion to disqualify. The Chernoff Defendants were involved in
this case from the beginning, April 2013, and waited even longer, three years and six months.
Courts in this Circuit have found waiver based on undue delay in cases where the movants acted
with considerably more expedience than the movants in this case. See Chi Ming Yau v. He Cheng
Rest Corp. Civ. No. 12-6754, 2015 WL 3540596 (D.N.J. June 2, 2015) (delay of one year); see
also Commonwealth Ins. Co. v. Graphix Hot Line, Inc. 808 F. Supp. 1200, 1208-09 (E.D. Pa.
1992) (delay of two years).
Second, the conflicts alleged by the movants were made known to the movants either
before or when each party was named a defendant to the case. As noted, the Chernoff Defendants
were named in the original complaint on April 10, 2013. The Sponsor Defendants were added to
this action on January 14, 2014. The movants do not contend that they could not raise the
disqualification issue in the 2013 Action or before the Ocean County Superior Court because they
were unaware of Lamatina’s ownership of the units. Instead, they argue that the procedural posture
of the litigation did not afford an opportunity to raise the issue. The Court addresses that issue in
its discussion of the fourth factor, below.
The third factor asks whether the movants were represented by counsel during the time of
the delay. This factor also weighs in favor of finding a waiver. The Sponsor Defendants have been
represented by their current law firm since they were named in the case. The Chernoff Defendants
have been represented their current counsel for the entire course of this litigation.
The fourth factor requires the Court to consider any proffered reason for the delay in
seeking disqualification. The movants claim that they delayed making the motion because while
the litigation was pending in the 2013 Action and in the Ocean County Superior Court, it did not
progress in terms of conducting any discovery, and therefore they did not have an opportunity to
raise the issue. This argument is unpersuasive. Examination of the record in the 2013 Action
alone reveals that movants had ample opportunity to raise the issue. The complaint in that case
made clear the Lamatina represented the Plaintiff. Therefore, the Chernoff Defendants could have
moved to disqualify in conjunction with their motion to dismiss, which was filed on May 5, 2013.
And any of the Defendants, including the Sponsor Defendants, could have raised the issue at any
time after the Sponsor Defendants were added in January 2014, and before the District Court
dismissed the case on August 28, 2014. Dweck, for example, answered the Complaint on March
31, 2014, and filed a counterclaim against Plaintiff. During that time, there was extensive briefing
and motion practice seeking dismissal. Yet none of the movants sought disqualification. In view
of the extensive motion practice in that case, movants’ assertion that they lacked an opportunity to
file the motion rings hollow.
As to the fifth factor, it is evident that the Plaintiff would suffer great prejudice if Lamatina
were to be disqualified. Lamatina has served as Plaintiff’s counsel for more than four years, has
devoted substantial amounts of time to this complex litigation, and is well familiar with it. This
dispute has been in the courts for years, and all parties are entitled to an expedient and efficient
resolution. To require Plaintiff to retain new counsel, and allow that new counsel time to become
familiar with the complexities and myriad moving pieces in this case, would unduly prolong this
litigation even further and cause Plaintiff to incur significant additional legal fees. 13
Upon consideration of these five factors, the Court finds that the movants have waived
their right to seek the disqualification of Lamatina as counsel for Plaintiff. The Court therefore
concludes that the movants have failed to carry their “heavy burden” of demonstrating that
disqualification is appropriate. See Alexander., 822 F. Supp. at 1114.
d. Disqualification Based on RPC 3.7
Finally, the movants argue that Lamatina should be disqualified under RPC 3.7 because he
is a necessary witness in this case. Moving Br. at 26-27. RPC 3.7 provides that:
(a) A lawyer shall not act as advocate at a trial in which the lawyer
is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services
rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship
on the client.
(b) A lawyer may act as advocate in a trial in which another lawyer
in the lawyer's firm is likely to be called as a witness unless
precluded from doing so by RPC 1.7 or RPC 1.9.
For example, Rules 1.8(i) and 1.7(a)(2) exist to protect the client from an attorney whose divided
loyalties compromise his or her ability to effectively represent that client’s best interests. Granting
disqualification at this late stage would hardly vindicate that purpose.
RPC 3.7 was enacted to prevent a situation where an attorney is forced to act as both an attorney
and witness during a trial, thus "creating the danger that the fact finder (particularly if it is a jury)
may confuse what is testimony and what is argument, and otherwise creating an unseemly
appearance at trial." Main Events Prods., LLC v. Lacy, 220 F. Supp. 2d 353, 357 (D.N.J. 2002).
But an attorney's testimony is considered "truly necessary if there are no documents or other
witnesses that can be used to introduce the relevant evidence.” Oswell v. Morgan Stanley Dean
Witter & Co., Inc., 2007 WL 2446529 at *4, Civ. No. 06-5814 (D.N.J. Aug. 22, 2007) (citing J.G.
Reis & Sons, Inc. v. Spectraserv, 384 N.J. Super. 216 (App. Div. 2006)). As such, if the attorney
in question possesses knowledge “which is equally possessed by other witnesses,” disqualification
is not required or appropriate. Id.
In this case, the movants argue that Lamatina is a necessary witness because he
would be in the best position to provide information regarding the nature, extent and
location of damages which each of these units allegedly suffered, to address questions
regarding any pre-existing damages, to testify regarding repairs which were or were not
made to those units, to identify the amount spent for any repairs and identify how much
of the proceeds from Standard were paid to Mr. Lamatina for those damages.
See Chernoff’s Br. in Supp. of Mot. at 3, D.E. 46.
That remains to be seen. At this stage, the movants have not established that there are “no
documents or other witnesses that can be used to introduce the same relevant evidence” for which
they would call on Lamatina. More importantly, however, New Jersey RPC 3.7(a) “prohibits an
attorney who may be a necessary witness from acting as an advocate at trial, but does not prevent
representation at the pretrial stage.” Truong v. 325 Broadway Assocs. LLC, 557 B.R. 326, 336
(D.N.J. 2016) (emphasis in original). Courts in this District have consistently declined to
disqualify counsel based on RPC 3.7, when the motion was brought during the pretrial stage. See
e.g., Main Events Prods. v. Lacy, 220 F. Supp. 2d 353 (D.N.J 2002); Tangible Value, Inc v. Town
Sports Int'l Holdings, Inc., Civ. No. 10-1453, 2012 WL 4660865 (D.N.J. Oct. 1, 2012). Although
it is possible that Lamatina’s testimony will be required at trial and may prompt disqualification
under RPC 3.7, the movants offer no reason to resort to such a drastic measure while the case
remains in its pretrial stages and no trial date is set.
For the foregoing reasons, Defendants’ motion to disqualify Louis J. Lamatina, Esq. as
counsel for Plaintiff [D.E. 44] pursuant to New Jersey Rules of Professional Conduct 1.7, 1.8(i),
and 1.9 is DENIED. Defendants’ motion to disqualify Louis J. Lamatina, Esq. pursuant to Rule
3.7 is DENIED WITHOUT PREJUDICE.
An appropriate Order accompanies this Opinion.
s/ Michael A. Hammer
UNITED STATES MAGISTRATE JUDGE
Dated: August 17, 2017
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