The opinion of the court was delivered by: Bongiovanni, United States Magistrate Judge
This matter comes before the Court upon Motion by Gavin Handwerker, attorney for Defendant, Vincent Victor Roggio seeking to disqualify the law firm of Scarinci and Hollenbeck from representing Plaintiffs, Mondo Pallon; Mondo Pallon Development, Corp. (hereinafter "Plaintiffs")[04-3625; Docket Entry No. 54] as well as by a Motion to Disqualify brought by Donald E. Taylor, Esq., attorney for Defendants, Vincent Victor Roggio, Callie Lasch Roggio, Noved Real Estate Corp., Gibraltar Stone, Corp., and Gibraltar Granite & Marble, Corp seeking to disqualify the law firm of Scarinci and Hollenbeck from representing Plaintiffs, Anthony Z. Emmanouil, Eugenia K. Emmanouil, Zachary Emmanouil, Esq., and West Belt Auto Supply, Inc., (hereinafter Plaintiffs)[06-1068; Docket Entry No. 4]*fn1 . Plaintiffs oppose said Motion. For the reasons stated below, Defendants' Motions to Disqualify are GRANTED in part and DENIED in part.
Plaintiffs have instituted these actions against Defendants, Vincent Victor Roggio, Sovereign Bank, N.A., Callie Lasch Roggio, Noved Real Estate Corp., Gibraltar Stone Corp. and Gibraltar Granite & Marble Corp., for fraud, conversion, breach of contract, unjust enrichment, negligence and replevin stemming from a series of alleged misrepresentations and fraudulent statements made by Roggio that allegedly induced Plaintiffs to enter into a series of real estate and other transactions with him. (Pl.Br. at 3). Two separate actions were filed against Defendant: the first involves Plaintiffs Mondo Pallon and Mondo Pallon Development, Corp. stemming from primarily real estate transactions [Docket No. 04-3625]; and the second involves Plaintiffs Anthony Z. Emmanouil, Eugenia K. Emmanouil, Zachary Emmanouil, Esq., and West Belt Auto Supply, Inc. stemming from a number of allegedly fraudulent real estate and other transactions [Docket No. 06-1068].
Plaintiff, Zachary Emmanouil (hereinafter "Emmanouil") entered into an attorney-client relationship with Defendant in the fall of 2000. Id. at 6. The extent of that attorney client relationship moving forward beyond the initial matter in which Emmanouil was involved is unclear. Defendant alleges that Emmanouil acted as his attorney in a number of transactions, including a number implicated in Emmanouil's Complaint. (Def. Br. #2 at 5). Plaintiff's brief fails to distinguish those transactions in which Emmanouil represented Defendant from those where he did not. Although Emmanouil's Certification lists a number of real estate transactions in which he did not represent Defendant, none of those transactions involved Plaintiff Pallon and are therefore not relevant here.
While the extent of the attorney client relationship is unclear, what is clear, however, is that these complaints have at least one property/transaction in common. The Pallon and Mondo Pallon Development Corp.'s Complaint alleges fraud and conversion stemming from a series of real estate transactions, including a proposed venture to rehabilitate and sell for profit a property designated as the "Rumson" property. The Emmanouil Complaint alleges fraud and conversion regarding the mortgage on the "Rumson" property on behalf of Plaintiff Anthony Emmanouil. (Emmanouil Comp. At ¶¶ 147-151). Since Plaintiffs have failed to provide evidence that Emmanouil was not privy to confidential information through his relationship with Defendant, the Court finds for purposes of deciding these motions to disqualify, that a presumption exists that confidential information was exchanged. See Reardon v. Marlayne, 416 A.2d 852, 859 (N.J. 1980).
Following Emmanouil's retention of Scarinci and Hollenbeck in his case [Docket No. 06-1068], Defendants filed Motions to Disqualify Scarinci and Hollenbeck as counsel for Plaintiffs in both actions. Defendants contend that Scarinci and Hollenbeck, through Emmanouil, improperly received confidential information in violation of the Rules of Professional Conduct 1.6 and 1.9 and that the firm has an imputed conflict of interest in violation of Rule 1.7, 1.10 and 8.4. Plaintiffs contend that Roggio's allegedly fraudulent actions eliminate any duty of confidentiality on the part of Emmanouil and any information disclosed to Scarinci and Hollenbeck is not bound by the attorney client privilege. Plaintiffs further contend that disqualification of Scarinci and Hollenbeck is extreme given the circumstances and contrary to public policy.
Plaintiffs Mondo Pallon and Mondo Pallon Development instituted an action against Defendants Vincent Victor Roggio and Sovereign Bank, N.A. on August 5, 2004, for fraud, conversion, breach of contract, replevin and unjust enrichment. Scarinci and Hollenbeck entered an appearance on February 22, 2006, on behalf of Plaintiffs Mondo Pallon and Mondo Pallon Development.*fn2 Plaintiffs Anthony Z. Emmanouil; Eugenia K. Emmanouil; Zachary Emmanouil, Esq.; and West Belt Auto Supply, Inc. instituted their action against Defendants Roggio, Callie Lasch Roggio, Noved Real Estate Corp., Gibraltar Stone Corp. and Gibraltar Granite & Marble Corp. on March 7, 2006, for fraud, conversion, breach of contract, replevin and unjust enrichment. Plaintiffs Anthony Z. Emmanouil; Eugenia K. Emmanouil; Zachary Emmanouil, Esq.; and West Belt Auto Supply, Inc. were represented by Scarinci and Hollenbeck from the outset of their action.
Defendant filed a Motion to Disqualify Scarinci and Hollenbeck on April 25, 2006, in the Pallon matter [Docket No. 04-3625]. A Motion to Disqualify Scarinci and Hollenbeck was also filed on behalf of all Defendants in the Emmanouil matter [Docket No. 06-1068] on April 25, 2006. The Court will consider the Motions to Disqualify jointly.
The United States District Court for New Jersey has adopted the Rules of Professional Conduct for the State of New Jersey pursuant to L.CIV.R 103.1(a). Generally speaking, motions to disqualify are viewed with disfavor as disqualification is a drastic remedy with broad, sometimes devastating implications. Carlyle Towers Condominium Ass'n v. Crossland Sav., 944 F.Supp. 341, 345 (D.N.J.1996). Although doubts are to be resolved in favor of disqualification, a party seeking to disqualify counsel carries a heavy burden and must satisfy a high standard of proof. Id.
A. Scarinci and Hollenbeck are Disqualified as Counsel for Mondo Pallon; Mondo Pallon Development, Corp.; Anthony Z. Emmanouil; Eugenia K. Emmanouil; and West Belt Auto Supply, Inc. for Assisting Emmanouil in Violating the Rules of Professional Conduct
Scarinci and Hollenbeck knowingly assisted or induced Emmanouil in violating the Rules of Professional Conduct, and therefore, they are disqualified from representing all Plaintiffs in this matter other than Zachary Emmanouil. Rule of Professional Conduct 8.4 states that, "It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or to do so through the acts of another; .... [or to] (d) engage in conduct that is prejudicial to the administration of justice ..." R.P.C. 8.4. The Rules of Professional Conduct impose duties upon attorneys in the treatment of their former clients. The actions of Scarinci and Hollenbeck, through their representation of Emmanouil and all other Plaintiffs in this action against a former client of Emmanouil, knowingly assisted or induced Emmanouil to violate the Rules 1.6,1.9(a) and 1.9(c).
1. Emmanouil Revealed Confidential Information to Scarinci and Hollenbeck in Violation of Rule 1.6
Emmanouil revealed information to Scarinci and Hollenbeck in violation of Rule 1.6. The Rules of Professional Conduct impose a duty of confidentiality upon attorneys in connection with information obtained as a result of representation of their clients. Greig v. Macy's Northeast, ...