This matter comes before the court on motions of Greate Bay Hotel & Casino, Inc. t/a Sands Hotel & Casino and Boardwalk Regency Corporation. Pursuant to R.P.C. 1.7, movants seek disqualification of the law firm of Clapp & Eisenberg, P.C. as counsel for Square Brighton Corporation, Inc. in this action.
This case was initiated by plaintiff Sands seeking, among other things, an order requiring the City of Atlantic City to take the necessary action to acquire the southerly 15 feet of Pop Lloyd Boulevard and keep it in the public domain for vehicular and pedestrian access. Based upon its leasehold interest in the property in question, an order was entered by this court permitting intervention by Square Brighton. At the time of the motion for intervention, Square Brighton was represented by the law firm of Gruccio, Pepper, Giovinazzi, DeSanto and Farnoly. Thereafter, Clapp & Eisenberg, P.C. was substituted as attorneys for Square Brighton.
Prior to the institution of this suit, and continuing to the present time, the firm of Clapp & Eisenberg has been retained as counsel by the trustees of five separate trusts which have been established cooperatively by various casinos in the City of Atlantic City. The trusts were established for the purposes of operation of a computerized link of progressive slot machines and management of the twenty year payout of the progressive jackpots related thereto. They are known as The Atlantic City Megabucks Trust, The Atlantic City Quartermania Trust, The Atlantic City Fabulous
Fifties Trust, The Atlantic City Star Pokermania Trust, and The Atlantic City High Rollers Trust. Membership in the trusts varies from seven to eleven casinos respectively, with Boardwalk Regency involved in each trust and Sands involved in three. In addition to being settlors of said trusts, the casinos also serve as co-trustees. Each casino is represented in its capacity as trustee by a designated person appointed by that casino. The business of the trusts is carried on by the trustees through votes of the trustees' representatives at quarterly meetings, through the services of professionals retained by the trustees, through contracted services from IGT, Inc. and through employees of Showboat Hotel and Casino whose wages and related expenses are paid by the trusts.
Sands and Boardwalk Regency seek disqualification of Clapp & Eisenberg in this suit based upon R.P.C. 1.7 which provides:
(a) a lawyer shall not represent a client if the representation of that client will be directly adverse to another client unless: (1) the lawyer reasonably believes that representation will not adversely affect the relationship with the other client; and (2) each client consents after a full disclosure of the circumstances and consultation with the client, except that a public entity cannot consent to any such representation.
Movants assert that Clapp & Eisenberg represents them in their capacity as members and co-trustees of the various trusts and that by representing Square Brighton herein that firm is engaging in representation of a client directly adverse to their interests. They further assert that there has been no consultation with them by Clapp & Eisenberg concerning the representation of Square Brighton and no consent given by them to such representation.*fn1
Clapp & Eisenberg acknowledges that it has not obtained consent from Sands and Boardwalk Regency to represent Square Brighton herein. It asserts, however, that there is no adverse
client relationship involved because its representation with respect to the trusts is covered by ...