Judge Erred in Finding a Conflict in Representation

Ameribuilt Contractors appealed the workers' compensation judge's February 1, 2022 order rejecting a proposed settlement and disqualifying its assigned insurance counsel, Brown & Connery, LLP (B&C), on the basis of a perceived conflict between Ameribuilt's workers' compensation carrier, Travelers Property Casualty Insurance Co. (Travelers), and Travelers' ostensible insured, respondent Robert Alam. The court concluded that the judge erred in finding that a conflict existed and, thus, there was no basis for the disqualification. Accordingly, the court is constrained to reverse.

When a Judge May Remove Counsel
A trial judge may order the removal of counsel where there is a violation of the Rules of Professional Conduct. Here, the judge disqualified B&C based on a violation of R.P.C. 1.7, which states, in pertinent part, that "a lawyer shall not represent a client if the representation involves a concurrent conflict of interest." In evaluating whether a conflict exists, however, we are mindful that "[a] corporation is regarded as an entity separate and distinct from its shareholders." Tully v. Mirz, 457 N.J. Super. 114, 123 (App. Div. 2018) (quoting Strasenburgh v. Straubmuller, 146 N.J. 527, 549 (1996)). Additionally, "a corporation is regarded in law as an entity distinct from its individual officers, directors, and agents." Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 761 (1989) (citation omitted).

Failure to Distinguish a Corporation from a Shareholder/Owner
Guided by these well-established legal principles, the court concludes that the trial judge erred in finding a conflict between Travelers and Alam. In reaching that conclusion, the court held that the judge failed to distinguish Ameribuilt, the corporation, from Alam, an owner and shareholder.

Robert Alam v Ameribuilt Contractors, Docket A-2114-21, (N.J.App. Div. 2022)

By Jon L. Gelman

Courtesy of Workers' Compensation

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