Kaselaan & D'Angelo Associates, Inc. v. D'Angelo

144 F.R.D. 235, 1992 U.S. Dist. LEXIS 16292, 1992 WL 302238
District Court, D. New Jersey·Decided October 21, 1992·No. Civ. A. No. 92-2282 (JBS)·Published·Cited by 29 cases

Opinion

OPINION

SIMANDLE, District Judge:

Presently before the court is the motion by plaintiffs, Kaselaan & D’Angelo Associates, Inc. and Hill International, Inc., to disqualify John J. Rosenberg, Esquire, and Varet, Marcus & Fink, P.C., as counsel for defendant William “Chip” D'Angelo, pursuant to the New Jersey Rules of Professional Conduct, Rules 1.9(a)(1), 1.9(a)(2), 1.9(b) and 1.10(a). For the reasons stated herein, plaintiffs’ motion will be granted.

Background

The present suit involves claims by plaintiffs, Kaselaan & D’Angelo, Inc. (“K & D”) and Hill International, Inc. (“Hill International”), against defendant, William “Chip” D’Angelo (“D’Angelo”), for unfair competition, tortious interference with business relations between K & D and both its clients and employees, misappropriation of trade secrets and confidential information, and breach of duties of loyalty as an officer, director, and employee. The claims are based in part on restrictive covenants in an employment agreement as well as on the common law. There are additional claims asserted including those by Hill International under a theory of third-party beneficiary under the employment agreement and breach of a promissory note. Plaintiffs have sought injunctive relief as well as damages for defendant’s alleged improprieties.

On or about December 24, 1988, Hill International’s predecessor, Hill Group, purchased all the issued and outstanding stock of K & D from defendant D’Angelo and his then partner, Valdur Kaselaan. K & D has remained an extant corporation throughout the acquisition. As part of the acquisition, D’Angelo, on or about January 1, 1989, entered into a written employment agreement with K & D whereby he agreed to be employed by K & D for a period of six (6) years, commencing on January 1, 1989 and ending on December 31, 1994. On or about May 6, 1989, the parties consented to a written amendment to the employment agreement.

Pursuant to the agreement, D’Angelo was to remain an employee of K & D for the six year period stated therein and to discharge his various obligations and responsibilities on behalf of K & D. As part of the agreement, defendant agreed to the following three limited restrictive covenants: (1) to refrain from soliciting or interfering with customers or clients of K & D, (2) to refrain from soliciting or interfering with employees of K & D, and (3) to refrain from misappropriating or disclosing confidential business information of K & D. Plaintiffs have now alleged that defendant [237] has violated his covenants, engaged in unfair competition, engaged in tortious interference with business relations of clients and employees, misappropriated trade secrets and confidential information, and breached his duty of loyalty as an officer, director, and employee of K & D.

After suit was filed, defendant contacted another firm to undertake his representation, but that firm declined. Defendant then retained as his counsel Varet, Marcus & Fink, P.C. (“Varet Marcus”), formerly known as Milgrim, Thomajan & Lee, P.C. (“Milgrim Thomajan”), of which John J. Rosenberg, Esquire (“Mr. Rosenberg”), is a member.1 Apparently, the first attorney involved in the case on defendant’s behalf was Michael Hepworth, Esquire. However, at the first day of defendant’s deposition held on July 28, 1992, Mr. Rosenberg identified himself as lead counsel on the case. Once plaintiffs became aware of Mr. Rosenberg’s prior representation of K & D, they filed the present disqualification motion because Mr. Rosenberg previously represented K & D as its lawyer.

Plaintiffs contend that Mr. Rosenberg began representing K & D on or about January 16, 1986, when he was an attorney with the firm of Friedman & Atherton, located in Boston, Massachusetts. See Plaintiffs’ Brief in Support of Motion at 7. According to plaintiffs, Mr. Rosenberg represented K & D in employment matters involving the following individuals: Paul Manna, James Dennison, Michael Collins, Michael Clarke, and William Eason. Id. at 8-14. In response, defendant concedes that Mr. Rosenberg’s prior representation of K & D is an “undisputed fact.” See Defendant’s Response to Plaintiffs’ Reply Brief at 2. He continued to represent K & D in such employment matters with present and former employees through at least March 29, 1990, which was 15 months after K & D bought out defendant D’Angelo. With this background in mind, this court will now consider the legal issues raised by this disqualification motion.

Discussion

According to D.N.J. Gen.R. 6 A, the New Jersey Rules of Professional Conduct (“RPC”) govern this dispute. General Rule 6 A states the following:

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, subject to such modifications as may be required or permitted by federal statute, regulation, court rule or decision of law.

The decisions announced by New Jersey state courts must generally inform this federal court’s interpretation of the New Jersey Rules of Processional Conduct.2 The reason that this court settled upon this formulation in its 1989 amendment of General Rule 6 A — adding the clarification that the RPC’s “as revised by the New Jersey Supreme Court” govern conduct of our bar — is obvious. “That amendment makes it clear that the ethical rules and constraints imposed on federal practitioners in New Jersey are the same as those imposed on New Jersey attorneys generally by the state Supreme Court under New Jersey Court Rule 1:14.” A. Lite, New Jersey Federal Practice Rules (1992 ed.) at 31-32. The only exceptions to this rule of uniformity arise from “such modifications as may be required or permitted by federal statute, regulation, court rule or decision of law,” as General Rule 6 A states. Where, as in [238] the present case, no federal statute, court rule or decision of a higher court suggests or necessitates departure from the New Jersey Rules of Professional Conduct, we must first look to New Jersey’s case law and commentary interpreting the relevant RPC’s. To do otherwise would create a second body of ethics law for federal practitioners in this state diverging from state practice.

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Kaselaan & D'Angelo Associates, Inc. v. D'Angelo, 144 F.R.D. 235, 1992 U.S. Dist. LEXIS 16292, 1992 WL 302238 (D.N.J. 1992).

144 F.R.D. 235 (Kaselaan & D'Angelo Associates, Inc. v. D'Angelo) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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