[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