Law firm wants out as IPI counsel in recycling firm case

The law firm of O’Connor Berman Horey & Banes now wants out as counsel for the Imperial Pacific International (CNMI) LLC in IPI’s lawsuit against a recycling center, its owner, and several others.

Cong Nie, a member of the O’Connor law firm, said in a motion filed before the Superior Court last Friday that IPI failed to fulfill its obligations to their law office despite being warned of their possible withdrawal.

If the court needs more information about this, the O’Connor law firm asked to be allowed to submit the information under seal and ex parte. Ex parte refers to a court application brought by one person in the absence of or notification to other parties.

IPI, through Robert O’Connor, is suing FSM Recycling Corp., FSMRC owner Jae Yoon Cha, FSMRC employee Eric Cruz, a former IPI employee Ricky Reyes, and 15 unnamed co-defendants for allegedly conspiring to steal and sell construction materials from IPI’s warehouses. IPI is suing the defendants for conversion.

FSMRC, Cha, and Cruz filed counterclaims against IPI for invasion of privacy/false light, and abuse of process. In addition, FSMRC, Cha, and Cruz are suing IPI for business disparagement. They also filed a crossclaim for defamation against Reyes and 15 unnamed persons.

Reyes allegedly prepared a handwritten statement early this year that he and another man would cut about 10 feet of copper wire from spools owned by IPI and sell the wire to Cha and FSMRC.

FSMRC, Cha, and Cruz, through counsel Robert T. Torres, oppose the motion to withdraw without a new substitute lawyer to take over the case.

In the motion to withdraw, Nie said allowing O’Connor law firm to withdraw will not significantly disrupt this case or prejudice the other parties. He pointed out that the case is in its early stage and IPI has filed its answer to counterclaims, while one defendant, Ricky Reyes, has not yet filed an answer.

In defendants’ opposition filed last Saturday, Torres said the O’Connor law firm should be required to disclose to the court its reasons to justify its withdrawal.

Torres said the motion does not identify new counsel to substitute, leaving the matter to linger without a lawyer for IPI, who started this lawsuit. He said that, until IPI hires a substitute counsel, the motion should be denied or held in abeyance.

Torres said in this case, FSMRC has prosecuted its counterclaim against IPI, which IPI has answered with the assistance of the O’Connor law firm.

Torres said in the application for a Temporary Restraining Order and preliminary injunction, Robert O’Connor, who is a principal of the O’Connor law firm, is a percipient witness of record who filed a declaration in support of the TRO/preliminary injunction.

As such, Torres said, the O’Connor law firm must inform the court of how it will address the fact that its principal, O’Connor, will be a material witness in the case while respecting the obligations of duty to client while responding to discovery and other issues in the case.

“For example, if FSM Recycling seeks to depose Mr. O’Connor, will counsel for this firm represent him or will IPI counsel represent him?” he asked.

Torres said FSMRC would object to the former scenario to frustrate FSMRC’s right to discovery from counsel-witness.

Further, Torres said, in preparing for the hearing on the preliminary injunction, FSMRC learned that O’Connor wrote the handwritten declaration of Reyes and prepared the declaration of Reyes in support of IPI’s TRO/preliminary injunction application.

Torres said the other obvious issue is whether in drafting a statement for Reyes, the O’Connor law firm became counsel for Reyes, further entangling itself in the conflict quagmire of witness, counsel for IPI, potential counsel for Reyes and witness against Reyes.

“FSM Recycling is greatly concerned that it will suffer prejudice if this issue is left twisting in the wind on withdrawal of counsel of record,” Torres said.

Last May 11, Superior Court Associate Judge Wesley M. Bogdan dissolved the TRO he issued last April 16 that prohibits FSM Recycling and co-defendants from concealing or destroying all copper wires and other construction materials belonging to IPI under their possession or control.

Bogdan also denied IPI’s motion for preliminary injunction that seeks to maintain such prohibition until the conclusion of IPI’s lawsuit. Bogdan also denied IPI’s request to be allowed to inspect FSMRC’s premises in Tanapag.

The O’Connor law firm also wants out as counsel for IPI in three lawsuits filed in federal court against two of IPI’s former contractors.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona granted O’Connor’s request to be out as counsel for IPI in two suits, and ordered the law firm to stay in one suit.