Jarrah M. Elgadi v. Ideal Development, LLC

• Court: Superior Court of The Virgin Islands
• Decided: July 30, 2021
• Docket: ST-20-CV-20
• Status: Unpublished

Opinion

[IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST THOMAS AlND ST JOHN *******

JARRAH M ELGADI ) CASE 1V0 ST 2020 CV 00020 ) Plaintiff ) ACTION FOR DECREE OF vs ) JUDICIAL DISSOLUTION A1\D WIl\DUP ) IDEAL DEVELOPMENT LLC ) ) Defendant )

Cite as 2021 VI Super 80U

MEMORANDUM OPINION AND ORDER

111 THIS MATTER is before the Court 0n

1 Defendant 5 Motion To Disqualify ( Motion ) filed Maich 24 2020

2 Plaintiff‘s Opposition T0 Motion To Disqualify filed Apiil 15 2020

3 Defendant 5 Reply To Opposition T0 Motion To Disqualify ( Reply ) filed May 5 2020

4 Plaintiff‘s Motion F01 Leaxe To File Sux Response To Reply To Opposition T0 Motion To Disqualify ( Motion For Leave ) filed May 14 2020 and

5 Plaintiff‘s Sm Response To Reply To Opposition to Motion To Disqualify ( Sur Response ) filed May 14 2020

112 The Court will not disqualify Plaintiff Jarrah M Elgadi s ( Elgadi )s counsel as the current matter is not the same or a substantively similar matter to the one counsel pleviously worked on the risk of prejudice is slight Elgadi 3 right to chosen counsel is not outweighed by Defendant 5 interest in continued loyalty and the integrity of court proceedings will not be corrupted

I IRTRODLCTION

113 On January 23 2013 Shom T Joseph ( Joseph ) filed Articles of Organization creating the company Ideal Development LLC ( [deal ) ' The pumose 0f the company is to hold certain 1eal pioperties in the U S Vilgin Islands fen development or resale 7 On July 7 2014 Salem Zuhdi ( Zuhdi ) became a member with a 51% equity interest in Ideal while Joseph became a membe1 with a 49% inteiest 3 On September 2 2016 Joseph allegedly sold one half (1/2) of his

lDef sMot Ex 2 ~Def sMot Ex 2 3 Def sMot Ex 2 Jarmh M Elgatll v Ideal Development, LLC 2021 VI Super 801] Case l\o ST 2020 CV 00020 Memorandum Opinion & Order Page 2 of 11

membership interest to Elgadi for S362 000 00 4 Elgadi filed his Complaint on January 15, 2020 seeking a judicial dissolution of Ideal and enforcement of his right to participate in the winding up of Ideal s affairs 3

114 Ideal states in its Motion that Attorney Carol Rich ( Rich ) counsel for Elgadi drafted a Memmandum of Understanding between Joseph and Zuhdi and provided othei substantial confidential legal services in forming the relationship between Ideal 5 members ( Futthet Ideal aveis that neither member of Ideal has consented to allow Rich to repiesent Elgadi in this matter Ideal argues that Rich must be disqualified because she lepresented Ideal in a substantially related mattei and she was intimately if“ olved in constructing Ideal 5 current f01 mation 8

115 Ideal contends that Rule 1 9 of the Model Rules of Professional Conduct precludes Rich from repiesenting Elgadi 9 Ideal maintains that Elgadi insists he is a member of Ideal and Ideal insists he is not and the Memmandum of Understanding Rich allegedly drafted along with other agreements contiol who can become a membei of Ideal '0 Thus it is Ideal 3 position that the Memorandum of Undeistanding is an intimate part of the claims of this case ‘1 Ideal also states that the July 7 2014 First Amendment to Articles OfOrganization of Ideal De\ elopment LLC was chatted by Rich and that Rich may be a necessary witness in this case ‘7 Thus Ideal aigues that Rich must be disqualified

116 Elgadi a1 gues that Ideal has not provided any exidence Rich represented Ideal but, rather Idea] 5 Motion is based on counsel 5 unswom lepiesentations ' Elgadi also aigues that Ideal 5 Motion does not comport “fill the basic requirements of Viigin Islands Rule of Civil Procedure 6 1 '4 Elgadi argues futthei that Rich has fully complied with hei ethical obligations under Rule 211 l 9 of the Virgin Islands Rules of Professional Conduct " Elgadi asseits that Rich was not retained as counsel for Ideal but on behalf of Zuhdi and she facilitated the execution of a Memmandum of Understanding that had already been drafted, as w e11 as an Amendment to Ideal s Articles of Olganization '6 Elgadi asserts citing to the Affirmation of Caiol Rich Esq that Attomey Rich obtained no intonnation confidential 01 otherwise regarding Ideal othei than what is expiessly stated within the four comers of the [MemOIandum of Understanding] or is contained within publicly lec01ded documents '

4Pl sCompl f; 11 ‘ Pl 5 Compl W 26 35 6 Def 5 Mot l 7 Def 5 Mot l 8 Def 5 Mot 1 9 Def 5 Mot 1 2 MODEL RbLES OP PROF L CONDUCT! 1 9(a) (AM B \R Ass N 2019) ( A laVVyel who has formei 1y repiesented a client in a mattei shall not thereaftei repiesent another person in the same 01 a substantially 1elated mattei in which that person's interests ale materially adverse to the inteiests of the fennel client unless the fOimei client gives informed consent confirmed in w1iting ) mDef sMot 2 ” Def 5 Mot 2 '1 Def 5 Mot 2 ’ P1 3 Opp n l '4 P1 3 Opp n 1 ‘ Pl 3 Opp n 1 ‘6 P1 5 Opp n 2 17Pl sOppn2‘Pl sOpanx 111117 91011 Jarmh M Elgar]: v Ideal Development, LLC 2021 VI Super 80U Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 3 of 11

117 Elgadi also asserts that Rich 5 brief and limited representation of Zuhdi ended years bef01e Ideal acquiied [the] piopei'ties it now operates '8 Additionally Elgadi acquiied his inteiest in Ideal nearly two (2) years after Rich teiminated her representation of Zuhdi and Elgadi retained Rich four (4) years after her representation terminated ” Elgadi also points out that Ideal bases its allegation of unethical conduct on the Wiong rule as the Viigin Islands Rules of Professional C onduct not the Model Rules of Piofessional Conduct govern 20 Nevertheless, Elgadi a1 gues that cases interpreting the Model Rules of Professional Conduct are still authoritative as the two (2) rules are largely the same 7‘

${8 Elgadi then asserts that disqualification is consideied a diastic measuie ” and that to disqualify an attorney the moving litigant must proxe

(1) an attorney client relationship existed bet“ een the attorney and the fonnei client (2) the formei representation was with iespect to the same 01 a substantially related inattei as the piesth matter (3) the interests of counsel s current Client ate materially adverse to the inteiests of the former client and (4) the formei client has not consented 3’

119 Additionally Elgadi states that

The Court must balance the following fact01s to determine if disqualification is appiopiiate (1) the mowing litigant 3 interest in the continued loyalty of his attomey (2) the opposing litigant 3 interest in retaining his chosen counsel' (3) prejudice to the opposing litigant in tenns of time and expense required to fainiliaiize a new attomey with the mattei and (4) the ‘policy that attorneys be f1 ee to piactice without excessive restrictions 24

1110 Thus Elgadi states that Ideal has clearly not met its buiden in this case since first Rich nevei repiesented Ideal theie w as no attorney client relationship betw een Attorney Rich and Ideal and Rich does not owe a duty of loyalty to Ideal ” Further Eigadi argues that Rich could not have acquired confidential intonnation the paramount concem tegaiding Rule 211 1 9, about a client she never had and thus she has no infonnation which can be used to hann the client after repiesentation was terminated V Elgadi also states that the second prong of the test fails as Rich 3 facilitation of the pioper execution of the Memorandum of Understanding is ineleV ant because the Memorandum of Undeistanding merely addressed the terms by which Ideal might acquiie

'3 P1 5 Opp n 2 ‘9 P1 5 Opp n 3 20 P1 s Opp n 3 3‘ Pl 5 Opp n 4 P1 5 Opp n 4 (quoting Dene”) v Palm H01! 0m Mgmt [m Civil No 2013 73 2015 b S Dist LEXIS 25864 at *2(DVI Mal 4 2015)) Pl 5 Opp n 4 5 (citing Denero 2015 U S Dist LEXIS 25864 at *3) 4 P1 5 Opp n 5 (quoting Deneio 2015 U S Dist LEXIS 25864 at *2) ’3 P1 3 Opp n 5 6 Pl 5 Opp n 5 6 Jarrah M Elgmll v Ideal Development, LLC 2021 VI Supei 80U Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 4 of 11

foreclosed propeities )7 Elgadi also states that Ideal falsely accused Rich of diafting the Memorandum of Understanding when she merely facilitated its execution 78

1111 Elgadi states that the Memorandum of Understanding by its tennis has nothing to do with the case as it relates only to an understanding between Zuhdi and Joseph and theii attempt to exeicise an assignment of the right to redeem foreclosed pioperties which ended up not being redeemed 7° The only relevance Elgadi asserts is that Joseph filed a document in the public record alleging that Zuhdi violated the Memmandum of Understanding and that Elgadi recognized this dispute in his Complaint without admitting to any knowledge of or taking any position on the merits of the dispute in Elgadi also claims that the Memorandum of Understanding may €V61’1 be void as it piovides that if the redemption of the properties is not successful the Memorandum of Understanding shall be null and void ’1

fil12 Elgadi aveis that two matters are substantially 1elated if theie is a substantial risk that confidential factual infonnation as would normally haVe been obtained in the piior lepresentation is useful or relevant in advancing the client 5 position in the new matter 7 Elgadi asserts that Rich could not hax e obtained any inlonnation useful or ielevant as Ideal acquiied the piopeities concerning the Memorandum of Understanding two (2) years after Rich ceased lepresentation Ideal acquired the properties through a U S Marshal 5 sale the deed of which is public 1e001d and the instant case involves Ideal s inability to opeiate since 2017 and Elgadi s tights as a member 3‘ Thus the matters are unielated Fuithei Zuhdi cannot point to or suggest what information that Rich could have possibly leamed that would be mateiially adveise to his interest in this dispute ’4

1113 Elgadi concludes by stating that because Rich does not satisfy the fiist two prongs of the test there is no need to analyze the othei prongs 3 Elgadi maintains that [a]n attomey does not have a conflict of inteiest because she represented an 11’1le idual with an interest in the same company font years ago in a transaction that was never consummated and that Rich obtained no factual infonnation that is legally relevant to the advancement of Elgadi 5 position in this case ’ ‘6

1114 In its Reply Ideal con ects the technical errms that weie piesent in its original Motion and proxides a new affidavit and an accompanying Older Citing to king \ 4pp/emn 3 Ideal aigues that a C0nCUI‘16nt conflict of inteiest exists wheie there is a significant iisk that the lepresentation of one 01 mom clients will be materially limited by the lawyei s responsibilities to a former

7 Pl 8 Opp n 6 N Pl s Opp n 6 7" Pl 3 Opp n 6 0 Pl 5 Opp n n 3 3‘ Pl 5 Opp n 7 3’ P1 5 Opp n 7 (Citing ESSENTIAL CONFLICTS OF INTEREST RULES 169 (Dec 5 2019) RESTATEMEM OF THE L m GOV ERMNG LAWYERS § 132 cmt e (2007)) P1 3 Opp n 7 34 Pl 3 Opp n 7 3 Pl 3 Opp n 7 8 3" Pl 5 Opp n 8 ‘ 61V1339(V12014) Jarralt M Elgmll v Ideal Development LLC 2021 VI Super 80U Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 5 of 11

client 3“ Ideal also argues that while Rich argues that Ideal was not he1 client she pe1 formed work f01 Zuhdi in executing celtain documents concerning Ideal and therefore she pelformed work on behalf of and thus reptesented Ideal 3"

1115 Ideal also provides evidence that Rich wrote to U S Matshal Jacobs concerning the redemption of celtain real ploperties and stated in her letter, on firm letterhead that she w rites on behalf of Ideal DeVelopment LLC, and the letter itself contained Rich 3 attempts to tectify a payment enor arising from the Marshal s sale in Ideal s favor 4” Fu1ther Ideal argues that because the property referenced in the lettet is the same property fiom which the dispute between Zuhdi and Joseph arises Rich 5 p1ior lepresentation concerned a substantially related matter to that which forms the basis ofthis case 4' Ideal, citing to lchen 1e C (ms! 1 8‘1 (ION 910mg; C 0;}? 4’ argues that the Court must presume that confidences we1e disclosed and that Ideal is not required to show that confidences we1e actually disclosed 4‘

1116 [deal also cites to [n :8 Di 1(e44f01 the ploposition that the Court must hold an evidentiary healing or factual inquiry to determine whethet there is a conflict the nature of it and whether the attomey can zealously 1ep1esent the client despite the conflict 4‘ Ideal also asserts that not only is thele a conflict im olving a substantially 1elated matte1 but its membels haVe a significant inte1est in Rich 5 loyalty since she lepresented to the public that Ideal was her client and engaged in negotiations on Ideal s behalf “‘6 Ideal alleges that there was no dispute or disagreement between Ideal 5 members until Elgadi Iaised certain issues and that the Notice of Interest filed by Joseph contending that Zuhdi violated then agteement was filed at Elgadi s insistence thus making Elgadi s intelest matelially adx erse to those of Ideal and its membets “1

1117 Furthel [i1n 01de1 to proye the existence ofdiscord sufficient to ptevail on Count I ofthe Complaint Attorney Rich would necessarily have to cross examine her former Client at t1ial and advocate a position contrary to the intexest of hex formet client 48 Ideal also argues that disqualification he1e is important to maintain public confidence in the integrity ofthe ban and to maintain public confidence in the judiciary 4" Ideal concludes by stating that Rich may only continue as counsel with Ideal s mitten consent and that the instant Motion indicates that such consent will not be forthcoming ‘0

1118 Elgadi then filed a Motion For Leave on May 14 2020 a10uing that Ideal inappropliately taised new arguments and submitted new eVidence as pan of its reply 1' Elgadi quuests the

“Id atn 12 (citingVI Rem; PRO}- LCOI\DLCTR 211 1 7(a)(2)) 39 Def 3 Reply 3 4" Def 5 Reply 3 4’ Def 5 Reply 4 4 37V1105(DVI 1997) *3 Def 5 Reply 4 44 57 V1517(V12012) 4 Def 5 Reply 4 4" Def 3 Reply 4 5 4 Def 5 Reply 5 4x Def 5 Reply 5 ‘9 Def 3 Reply 6 ‘0 Def s Reply 6 3' P1 5 Mot F01 Leave l Jarmh M Elgmll i Ideal Development, LLC 2021 VI Super 80U Case M ST 2020 CV 00020 Memorandum Opinion & Order Page 6 of 11

Ccurt t0 deem waived and disregaid new 1y presented theories evidence and a1 gument because a ieply to an opposition is not the mechanism for presenting new the01ies ex idence 01 argument to the Court ‘7 Elgadi cites to Pele \ R1! Carlton (I I) [m ‘3 as well as seveial COUI‘t decisions fiom outside this juiisdiction for this proposition 4 Specifically Elgadi points to new eVidence based on an affidavit from Joseph a member of Ideal who could have prior to the Reply prepared and piesented the affidavit in support of the original Motion “ Essentially Elgadi argues that the C curt should not consider Joseph s affidavit and Ideal s new arguments because Ideal should not be allowed to submit evidence in its reply which was available at the time [ ] the motion was made, and to which Elgadi and Attomey Rich cannot now respond without permission of the Ccurt ‘6

1119 In Elgadi 5 Stir Response Elgadi contends that Joseph s affidavit in which Joseph states that the Memotandum of Understanding was drafted by Rich is false and that Rich did not know who drafted the document but rathei she simply facilitated the execution of the agieement bef01e witnesses and a notary ‘7 Elgadi asseits that after reviewing Joseph s affidavit Rich began investigating the Oiigins of the [Memoxandum of Understanding] and she discoveied an email forw aided to her fiom Joseph with communication between Joseph and then counsel f01 Ideal, Attomey Kevin Rames ( Rames )w The email contained a iedline and clean version of the Memorandum of Undeistanding and w as sent on July 1 2014 the day Zuhdi retained Rich and the embedded editing data of the document showed the author to be Joseph and the editm to be Rames ‘9

1120 Fuithei Elgadi shows that Joseph negotiated and diafted the Memorandum of Undeistanding and Elgadi alleges that Joseph knowingly submitted a false affidavit to this Court in an effort to disqualify Attomey Rich while pointing out that [deal has not submitted an affidavit fiom Zuhdi Rich 5 client (0 Elgadi avers that the Motion should be denied and Joseph s affidavit be disxegaided as false since the Motion is based solely on Rich 5 alleged involvement in drafting the Memmandum 0f Undexstanding"I Lastly Elgadi asserts that Rich 5 iole in calculating the iedemption price is irrelevant since Ideal did not redeem the piopeities (‘7 In addition to othei documents Elgadi piovides a supplemental affidavit fiom Rich and the email from Rames 6’

3’ P1 5 Mot For Leave 1 3 59 V I 522 (V I 2013) ‘4 Pl 8 Mot F01 Leave 2 3 P1 3 Mot For LeaVe 1 3" P1 5 Mot F01 Leave 3 ‘7 P1 5 SUI Resp 1 ‘8 P1 5 Sui Resp 1 3" P1 5 Sur Resp 2 6" P1 5 Sui Resp 2 6‘ Pl 5 Sur Resp 2 67 Pl s Sur Resp 2 63 Pl s Sur Resp Ex 1 Ex A Jarrall M Elgadl v Ideal Development LLC 2021 VI Supei 80U Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 7 of 11

II LEGAL STANDARD

A Motion To File Sur Response

$121 Virgin Islands Rule of Civil Procedure 6 l(e) states [o]nly a motion, a response in opposition, and a reply may be served on other parties and filed with the court, further response or reply may be made only by leave of court obtained before filing Parties may be sanctioned for Violation of this limitation 64 Sur responses and sur replies are generally disfavored but may be allowed if they will aid the Court in addressing relevant issues 6‘

B Motion Requirements

1122 Virgin Islands Rule of Civil Pioceduie 6 l governs requirements for all motions including form suppon and timing (6 Rule 6 l(a)(4) requires motions gianting affinnative relief to be accompanied by a proposed ordei (’7 When allegations of fact which are not in the rec01d ate relied upon to support a motion Rule 6 l(d) tequiies the moving pa1ty to submit supplemental affidavits and othei supporting documentation with the motion “R Rule 6 l(e) gm ems the font size word limit and page limit of motions and Rule 6 l(e)(3) tequiies that motions contain a statement that [t]his document complies with the page or word limitation set forth in Rule 6 l(e) ’ (’9

C Disqualification of Attorneys

{[23 The Cou1’t has the inheient powei to disqualify an attorney and can do so at its discretion so as to safeguard the integiity of judicial pioceedings and eliminate the threat of tainted

64VI R Cu P 61(0) 6‘ Augustin v Hes? 01/ I Ilgm Islands (01p 67 VI 488 503 (Super Ct 2017) (quoting Del Wee) v Hess ()1! I I 601p 64 VI 107 122 (Supel Ct 2016)) ( As with sunesponses and suireplies which are geneially disfavored because patties are expected to fully and expeditiously addless all matteis raised in the Oiiginal motion in then responses courts do giant leaVe to finthei Iespon[d] 01 ieply [when it] will aid the couit by addtessing televant issues including issues that might otheiwise be waived if not timely iaised ) “VI R Cu P 6 1 “7 V l R CIV P 6 l(a)(4)( [I]fthe motion tequests affirmative relief the motion must be accompanied by a pioposed otdet gianting the relief sought ) 6“ V I R CW P 6 l(d) ( When allegations of fact not appearing of ieCOid ale relied upon in support of a paity s motion response or 1eply unless the court giants permission fox a different schedule for the filing of supporting matexials ( 1) all then available affidavits and othei documents supporting the patty 5 position shall be filed simultaneously with the motion response or reply (2) any supplemental affidavits 01 othei documents in support of the party 5 position on the motion must be filed at least 10 days piior to heating of the motion and (3) if supplemental affidavits 01 other documents are filed by any party under subpart (d)(2) any othei party may submit additional affidavits or documents at least 5 days prim to hearing of the motion ) (’9 V I R CW P 6 l(e) ( (1) All motions responses and replies shall be piepaied using a chaiacter font of at least 12 points in height (2) Unless otheiwise OldCI‘ed by the court all motions responses and replies filed with the couit shall not exceed the gleatei of 20 pages or 6 000 words in length unless leave of court has been obtained in advance for a longei submission This page or word limit does not include any cover page caption, table of contents table of authorities appendices or exhibits the statements of undisputed or disputed facts as proxided in Rule 56(c) and certificates of service (3) Every motion response and reply shall contain as part of the certificate of service a statement that This document complies with the page or word limitation set forth in Rule 6 l(e) ) Jarralz M Elgml! v Ideal Development, LLC 2021 VI Super 80U Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 8 0f 11

litigation 7‘) The Supreme Court of the Virgin Islands adopted on Decembei 23 2013 the Virgin Islands Rule ofPiofessional C onduct and the rules went into effect February 1 2014 7‘ The Virgin Islands Rule of Piofessional C 0nduct is Rule 211 of the Virgin Islands Supreme Court Rules and it governs the behavior of lawyeis in the Viigin Islands Rule 21 1 1 9 outlines a lawyer s duty to formei clients and Rule 21 1 1 9(a) states that a lawyer who has formerly represented a client in a mattei shall not thereafter repiesent another person in the same or a substantially related matter in which that person s interests are materially adVerse to the interests of the fennel client unless the formei client gives informed consent confirmed in writing 7’

1124 Disqualification is a drastic step and a stronger indicator than judicial intuition or surmise 0n the part of opposing counsel is necessary to warrant it 73 Mme than vague and unsupported allegations ale needed and courts should hesitate to disqualify counsel unless absolutely necessaiy 74 Accmdingly the party seeking disqualification canies a heavy buiden and must meet a high standard of proof prim to a lawyei s disqualification 7‘ The Third C ircuit Ccurt of Appeals established multiple factms f01 a court to IEVICW in deciding a motion to disqualify counsel and this Couit has subsequently adopted this test the factors axe 1) the fennel client 5 interest in attomey loyalty; 2) the cunent client 5 inteiest in retaining [chosen counsel] 3) the risk of piejudice t0 the current client and 4) the couit 5 interest in protecting the integiity 0f the proceedings and maintaining public confidence in the judicial system 6

1125 Because the Viigin Islands rules are substantively identical to the ABA rules pievious decisions interpreting and applying the ABA rules remain equally applicable in the interpietation and application of the Viigin Islands miles 7 When deciding whether to disqualify an attorney on account 01 a tormei client the District Court of the Virgin Islands found the ABA rules illuminating and stated that courts should look fox the existence of the following foul (4) factors whethei

70Pewter I Dechubert Case No SX 16 CV 343 2017VI LEXIS 149 at *4(VI Supei Ct Sept 27 2017)(quoting filStFt/Hel]\ Hess 01/1 I 57VI 50 57 (VI Supei Ct 2012) then Radllgue l SpuItanConuete Prods LLC 2017 U S Dist LEXIS 62923 at *5 (D V I Apr 25 2017)) ( The Court is tasked with supeivising the conduct of attomeys that appeal before it and has inheient power to disqualify any attomey if it finds such action is waiianted It is at the Couit s discxetion to deteimine whether disqualification is wairanted The undeilying plinciple in considering motions to disqualify counsel is safeguaiding the integiity of the couit pioceedings and the pulpose of gianting such motions is to eliminate the them that the litigation will be tainted ) 7’ See [)1 1e Application ofAeHns 60 V I 800 804 n 1 (VI 2014) (citing Promulgation Oidei No 2013 0001 (V 1 Dec 23 2013)) 7’ VI RLLE PROF L CONDUCT R 211 19(a) I Denem i Palm Hall ans Mgmt 2015 U S Dist LEXIS 110783 at *21 (D V I Aug 21 2015) (quoting SanfOI d i Ingmm 687F Supp 2d 591 603 (ED Va 2009)) 74 Femtel 2017 VI LEXIS 149 at *5 (quoting Denelo 2015 U S Dist LEXIS 25864 at *7 8) ( Vague and unsupported allegations ale not sufficient to meet this standard Motions to disqualify axe viewed with disfavor and disqualification is considered a drastic measuxe which courts should hesitate to impose except when absolutely necessaiy ) 7‘ Fan ell 57 V I at 57 (quoting Plosse) v Nat [Rum] UNI Cooper ante Fm Cmp 2009 U S Dist LEXIS 47744 *6 (D V I 2009)) ( Although doubts are to be resolved in favox of disqualification the party seeking disqualification must carry a heavy buiden and must meet a high standard of proof before a lawyer is disqualified ) 7" [d at 58 7 [n the Mattel 0fthe Suspenszon QfMaynald 68 V I 632 641 n 8 (V I 2018) Jarralt M Elgadl v Ideal Deielopment, LLC 2021 VI Super 80U Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 9 0f 11

(1) an attorney client ielationship existed between the attorney and the former client (2) the former lepiesentation was with respect to the same or a substantially 1e1ated mattei as the present mattei (3) the interests of counsel 5 curl ent c1ient aie materially adV e1 se to the interests of the formei client and (4) the f01mei client has not consented 78

1126 When a Court is notified that there is an actual 01 potential conflict the Court must take steps to ascertain whether it should appoint separate counsel 01 whethei the risk posed by the conflict is too remote to warrant separate counsel 79 The C ouit may hold an evidentiary hearing or factual inquin to determine the nature of the conflict whether the client is awaie of the conflict and waived it, and whethei counsel is still able to zealously lepresent the client despite the conflict 8” Howevei whethei to hold such a healing is case specific and may not be required if the necessary factual information has been disclosed to the Court 8‘

III ANALYSIS

1127 As a preliminary matter, the Court finds that the relevant information as to Rich 5 prior representation of Zuhdi has been disclosed to the Court through the motions and pleadings and that an evidentiary hearing is not necessary in the instant case

A Elgadi may file his Sur Response

128 While in geneial sur replies and sur iesponses are looked upon untavoxably by the Court one instance in which they may be pennitted is when a party intioduces new a1 guments or evidence in its reply such that another party may not adequately respond to the novel accusations or refute the proffered testimonies 01 documentation without a sur response Here Ideal has presented new arguments and evidence namely an affidavit fiom one of Ideal 5 members Sui iesponses and sur ieplies may also be admitted by the Couit when they usefully elucidate issues before the Court and are not mere repetitions of a party 5 argumentation Heie Elgadi s Sui Response helpfully identifies the author of the Memorandum of Understanding resolving an issue in contention presented in Idea] 5 original Motion Theref01e the Court will grant Elgadi 5 Motion F01 Leave and Elgadi s Sui Response will be admitted num pm tum as of its filing date

B Ideal’s Rule 6 l failures are not fatal

1129 As stated in denying Ideal 5 Motion To Dismiss the Court declines to adopt a broad rule but in the instant case Ideal s failuie to abide by Rule 6 1 is not fatal Ideal included in subsequent filings the pioposed oxder the statement certifying compliance and a sworn affidavit attesting to the facts Ideal alleges Dismissal on these procedural giounds would not be wananted Howevei Ideal is f01ew armed to be mindful of these requiiements in future filings

7“ Dene”) 2015 b S Dist LEXIS 25864 at *9 (discussing the similai 1y diafted Rule 1 9(3) of the Model Rules of Professional Conduct) 7" In :3 Di ue 57 V I at 524 (citing Campbell v Rice 408 F 3d 1166 1170 (9th Cir 2005) (en banc)) 3" [d (citing fiist Gov tofthe I I v Zepp 748 F 2d 125 139 (3d Cii 1984) then At/e} v A111! 191 F 3d 865 871 (8th Cir 1999)) 8‘ [d (citing Arie) 191 F 3d at 872) Jarmlt M Elgar]: v Ideal Development, LLC 2021 VI Super 801) Case No ST 2020 CV 00020 Memorandum Opinion & Order Page 10 of 11

C Disqualification of Attorney Rich is not necessary

1 There was an attorney client relationship between Attorney Rich and Ideal

{[30 Fiist, the C ourt must analyze whether an attorney client relationship existed between Ideal and Rich Ideal asserts that Rich represented it and Rich counters that she lepresented Zuhdi not ideal Zuhdi is the managing membei of Ideal Rich 5 representation of Zuhdi anOlVCd documents conceining pIOpCI'ty Ideal intended to redeem and, most importantly Rich held herself out the public as representing Ideal when she mailed her letter to the United States Marshal 5 Service regarding the payment calculations for the Marshal 5 sale Thus the C ourt finds that an attorney client relationship bet“ een Rich and Ideal can be imputed to Rich for purposes of the disqualification Motion

2 The former representation was not of a similar or substantially related matter

{[31 Second the Court must consider whether Rich 5 prior representation w as in a similar or substantially related matter Rich 3 prior representation anOlV ed the execution of a Memorandum of Understanding drafted by anothei attorney conceming the rights of redemption of certain properties as between two members of Ideal as well as work concerning the Marshal 5 sale of said properties specifically a lettei explaining the calculation of the redemption price The VV ork was done on behalf of a single membei of Ideal Zuhdi Matteis imolx ing the iedemption W e1e settled after Rich ceased to lepiesent Zuhdi and the properties were purportedly never actually redeemed

1132 The instant representation involves an alleged other member of Ideal and concerns the inability of members of Ideal to early on business and their deieliction of basic business 1equi1ements The matter does not involve the redemption of the properties that were the object of the Memorandum of Understanding Rich 5 de mImm/s work involving Zuhdi and the calculation of property Iedemption prices is not substantially similai to Ideal s inability to operate or pay required fees and taxes Thus as the second element is not met the Court need not consider whether the interests ate adverse or w hether Ideal consented

1B3 Lastly the Court consideis the Thiid Circuit Court of Appeals balancing test f0] disqualification of attorneys Given Rich 5 minimal lepresentation Zuhdi 5 interest in attomey loyalty is not outweighed by Elgadi 5 interest in retaining Rich Theie is not a lalge risk of prejudice to the current client as the properties ale not at issue and w e1e not redeemed N01 is the C ourt concerned that Rich 3 representation of Elgadi would impugn the integrity of the proceedings 01 erode public confidence in the judicial system as Rich 5 work in facilitating the execution of a document and calculating property redemption plices would have little if any relevance to Ideal s alleged inability to opeiate even to a casual outside observer

IV CONCLUSION

1B4 On January 15 2020 Elgadi filed his Complaint seeking a judicial dissolution of Ideal and enforcement of his right to participate in the winding up of Ideal s affairs Ideal was formed as a limited liability company by Joseph who was later joined by Zuhdi for the purpose of developing Jarruh M Elgar]! v Ideal Development, LLC 2021 VI Supex 80U Case 1N0 ST 2020 CV 00020 Memorandum Opinion & Order Page 11 of 11

and/or reselling certain parcels of teal property in the U S Virgin Islands Joseph latei allegedly sold one half (1/2) of his membeiship interest to Elgadi Elgadi alleges that a dispute between Zuhdi and Joseph has pievented Ideal from operating and that Ideal has failed to pay celtain tequired taxes and fees

1135 Ideal has mm ed to disqualify Elgadi s chosen counsel on the basis that she tepiesented a membei of Ideal Zuhdi previously Specifically Rich assisted in the execution of a Memorandum of Undeistanding between Joseph and Zuhdi concerning the iedemption of certain plopeities and Rich submitted to the Marshal 5 Office a letter calculating the iedemption p11C6 0f the pioperties Rich then ceased hei repiesentation 0f Zuhdi and the properties were not redeemed Yeais later, another member of Ideal who joined the company after Rich ceased representation of Zuhdi hired Rich to assist in seeking a judicial dissolution of the company because of an inability of othe1 members to opeiate the company Because the matter at hand is not the same 01 substantially similai t0 the previous mattei Rich worked on and after considering the factors provided by the Thiid C ireuit C Quit of Appeals in its balancing test the Court determines that disqualification of Rich is not wananted ACCOIdingly it is hereby

ORDERED that Defendant 5 Motion To Disqualify filed March 24 2020 is DENIED and it is fui'thei

ORDERED that Plaintist Motion F01 Leave To File Sui Response To Reply To Opposition To Motion To Disqualify filed May 14 2020 is GRANTED and it is furthei

ORDERED that Plaintiff s 8111 Response To Reply To Opposition to Motion To Disqualify, filed May 14 2020 is ADMITTED into the record mmcplo tunc t0 MAY 14, 2020; and it is further

ORDERED that a copy of this Memorandum Opinion and Order shall be distributed to counsel of record

Dated July 30 2021 WW 2] Maw DENISE M FRANCOIS Judge of the Superior Court of the Virgin Islands

ATTEST

TA ARA CHARL S Cler Court

BY m MM DON A D D01\0V 1% Cou Clerk Supervisor /2‘ QCQi