Lawyer Representing 35 Defendants in Fraud Case Has Insurmountable Conflict
Post 5110
Alleged Fraudsters have Obvious Conflicts with Each Other
See the full video at https://lnkd.in/gGC6FcAx and at https://lnkd.in/gJVjACnq and at https://zalma.com/blog plus more than 5100 posts.
In Allstate Insurance Company, et. al v. Robert Matturro, D.C., et al.; New Jersey Department Of Banking And Insurance, Intervenor, No. A-0711-24, Superior Court of New Jersey, Appellate Division (June 16, 2025) Allstate and several related entities sued forty-two defendants, including medical practices, their owners, administrators, and various corporate entities. The plaintiffs alleged that the defendants engaged in an insurance fraud scheme involving unlawfully structured medical practices, self-referrals, kickbacks, and medically unnecessary treatments and tests.
The Allstate plaintiffs sought damages for personal injury protection (PIP) benefits paid to the defendants, compensatory damages for investigating fraudulent bills, arbitration-related costs, a declaratory judgment, treble damages, injunctive relief, and attorneys’ fees.
DEFENSE COUNSEL
The Randolph Firm represents approximately thirty-five of the forty-two defendants, including several medical practices and corporate entities. Plaintiffs moved to disqualify the Randolph Firm from representing these defendants due to significant risks of conflicts of interest.
The Appellate Division found that there are significant risks of conflicts developing among the defendants represented by the Randolph Firm, especially as the case proceeds and liability and damages may need to be apportioned under the Comparative Negligence Act (CN Act).
DISCUSSION
A determination of whether counsel should be disqualified the burden is on the movant to prove a basis for disqualification.
When deciding a motion to disqualify counsel, courts must balance competing interests, weighing the need to maintain the highest standards of the profession against a client’s right freely to choose his or her counsel. Motions for disqualification should be viewed skeptically in light of their potential abuse to secure tactical advantage.
Nevertheless, if there is “any doubt as to the propriety of an attorney’s representation of a client, such doubt must be resolved in favor of disqualification.”
Risk of Conflicts
The Appellate Division concluded that trial court erroneously found that there was no significant risk that potential conflicts could arise among the approximately thirty-five defendants represented by the Randolph Firm.
The Appellate Division held there are significant risks that conflicts will develop among defendants represented by the Randolph Firm. Even more there is evidence that significant conflicts of interest have already developed between and amongst the numerous defendants represented by the Randolph Firm.
The certifications and depositions provided by plaintiffs support that conclusion. Moreover, there are significant risks certain defendants may, as the facts develop further, assert that other defendants had a greater role in the alleged fraud schemes or compelled them to participate in the schemes. If those situations arise, the Randolph Firm could not ethically advise all defendants because of those conflicting interests. Fundamentally, at least some defendants maintain that Rosania or Matturro managed the Rosania entities, and they controlled the finances of the Rosania entities.
In response to plaintiffs’ interrogatories, the Randolph Firm served the expert report of Gary S. Stetz, a certified public accountant. In his report, Stetz made two findings, which are potentially detrimental to the positions advanced by the physicians represented by the Randolph Firm. First, Stetz noted his “investigation found that none of the [Rosania] entities . . . would require a [medical doctor] or [doctor of osteopathic medicine] to perform examinations and procedures [which] were controlled by [doctors of chiropractic.] “Second, Stetz determined there were no medical doctors or osteopaths who were employed by Matturro or Rosania.
In seeking to minimize the liability of some defendants it represents, the Randolph Firm would have to argue that the other defendants it represents were more at fault, or perhaps more involved in the alleged fraud scheme. The record in this matter establishes that there are significant risks that conflicts will develop among defendants. As stated, defendants have a common interest in disputing the allegations against them, but as the case develops, they also may have an interest in seeking to minimize their own liability and maximize their co-defendants’ liability. If plaintiffs’ claims proceed to trial and there is a verdict against defendants, the liability and damages will have to be apportioned among defendants under statute.
Therefore, the Appellate Division held that there are significant risks of conflict arising among the thirty-five defendants represented by the Randolph Firm, especially in light of a pending trial date, requires disqualification of the Randolph Firm.
ZALMA OPINION
A law firm that represents 35 different defendants who are claimed to have defrauded the plaintiff using various schemes where one can, and must, have different interests than other defendants. Disqualification was required since the lawyers, to represent their clients properly, will necessarily find one client adverse to the other and will be unable to fairly represent each of its clients. In the best of all possible worlds each of the 42 defendants should have separate counsel with one lawyer or law firm representing each defendant to the best of each client’s rights.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://barryzalma.substack.com/subscribe
Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://lnkd.in/gwEYk
The Largest Residential Burglary of All Time
Post 5407
Fraud & the Fear of Bad Faith Suits
Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime.
After ...
Chutzpah is not Enough
Post 5397
Posted on July 20, 2026 by Barry Zalma
See the video and at https://lnkd.in/gNUs2XzT and at https://lnkd.in/g2MawyzX
Magistrate Issues a Search Warrant if there is a Fair Probability that Contraband or Evidence of a Crime will be Found in a Particular Place.
In United States Of America v. Frank Suess, et al., CRIMINAL No. 3:24-308, United States District Court, M.D. Pennsylvania (July 16, 2026) a federal grand jury indicted Frank Suess, Melissa Driscoll, and others in a 55-count health care fraud and anti-kickback prosecution arising from an alleged scheme involving medically unnecessary prescription “foot baths.”
As part of the investigation, the FBI obtained an August 19, 2022 warrant to search Driscoll’s Sterling Pharmacy Yahoo email account for emails from January 1, 2018 through December 31, 2020. Driscoll moved to suppress the resulting evidence, arguing that the warrant lacked probable cause, was overbroad, and rested on material misstatements and omissions.
LAW:
The ...
Fraud Shouldn’t Pay
Post 5396
See the video and at https://rumble.com/v7ctgmq-the-great-jewel-theft.html at https://youtu.be/aRbQ2sJfGwA
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the ¬¬¬Perpetrators than any Other Crime.
The Insured purchased, for the first time in his life, a policy of Personal Articles Floater Insurance (PAF) scheduling $125,000 worth of ladies jewelry. He advised the insurer that the jewelry was always kept in a class E safe at his residence. He also told the insurer that he was employed full time as the owner of a gasoline service station and that he had never been canceled or suffered a previous loss.
One month after the policy was ...
Day Care Owner Loses Subsidies Because She Criticized State
Post 5421
Posted on August 11, 2026 by Barry Zalma
First Amendment Right Will be Allowed to Go to Trial
In Betsey J. Grant v. Maine State Department Of Heath And Human Services, No. 1:25-cv-00490-JAW, United States District Court, D. Maine (August 6, 2026), Betsey J. Grant, a licensed childcare provider and operator of Tiny Tikes Daycare in Trenton, Maine, sued Maine DHHS and several employees after she publicly criticized DHHS before Maine’s Government Oversight Committee and alleged that officials retaliated against her.
She claimed DHHS imposed and extended a conditional license, published stigmatizing information, interfered with subsidies and program funding, removed her from a food program, rescinded an expansion grant, and used biased or falsified evidence in licensing proceedings. Following the March 10, 2023, GOC testimony, Ms. Grant alleges that foster children's subsidies (approximately $30,000) were withheld; she was removed from the ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units. After an underlying personal injury action was filed, Union Mutual determined that the property actually contained three apartment units and rescinded the policies on the ground that the defendants had made a material misrepresentation in the applications.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true ...
Rescission for Material Misrepresentation
Post 5418
Posted on August 5, 2026 by Barry Zalma
An Insurer May Rescind An Insurance Policy Where The Applicant Made A Material Misrepresentation In The Application.
In Union Mutual Fire Insurance Company v. 844 Knickerbocker, LLC, et al. No. 2024-10359, Index No. 602824/22, 2026 NY Slip Op 04789, Supreme Court of New York, Second Department (July 29, 2026) Union Mutual Fire Insurance Company issued commercial insurance policies to 844 Knickerbocker, LLC, and Sanjaya Mallick based on applications stating that the insured property contained two apartment units.
LAW:
A misrepresentation is material if the insurer would not have issued the same policy, or would have issued it only on different terms, had the true facts been disclosed. To establish materiality as a matter of law, the insurer must submit documentation of its underwriting practices, such as manuals, guidelines, bulletins, or rules addressing similar risks.
DISCUSSION/ANALYSIS:
As a result, the...
