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Attorneys for ANA Ask for Release

With fewer than three weeks to go before a Sept. 25 trial on the merits, chaos has been introduced to the legal proceedings brought by Christopher Cipoletti and the American Numismatic Association against its former computer services vendor, John Nebel of Computer Systems Design, and several former ANA employees that include former comptroller Wayne Abraham, museum curator Larry Lee and Information Technology director Barbara (Susie) Nulty.

The ANA’s attorney has withdrawn and the trial has been postponed until January 2008.

The law firm of Davis Graham and Stubbs LLP, and as the filed motion papers say, “(including Janet Savage, Sybil Kisken and Stephanie Ries),” have applied to the Colorado District Court “for an order permitting them to withdraw as attorneys” for the ANA and Cipoletti.

From the inception of the suit in July 2005 until August of this year — more than two years — Cipoletti and the ANA have both been represented by Janet Savage, a partner in the Davis, Graham law firm. As she explained in a court-filed document dated Aug. 30, Savage “undertook the representation of plaintiffs [ANA and Cipoletti] pursuant to Colorado Rule of Professional Conduct 1.13(e), which ‘recognizes that a lawyer for an organization may also represent a principal officer or major shareholder.'”

Joint representation is not mandatory, but permissible if, under the circumstances, the positions are not incompatible. Cipoletti is not a major shareholder in the ANA — it is a membership corporation — but is a principal officer. Other than Treasurer Adna G. Wilde Jr., he is the only corporate officer listed on the masthead of Numismatist, ANA’s monthly magazine.

While at first blush Savage’s representation of Cipoletti is similar to Nebel, who is the owner of Computer Design Systems, also being represented by the same lawyer — Joel Cantrick — the same ethics rules allow the dual representation only so long as there is no conflict of interest, or philosophy.

Cipoletti meets the first test, that is that he is a principal officer, but the claims that he made as a co-plaintiff may flunk the second test.

Savage acknowledges that it flunks now: “At the inception of the representation and at all times up until Aug. 12, 2007, counsel [Savage and others] reasonably and in good faith believed that the joint representation of both plaintiffs met the requirements of Colo. RPC 1.7.” she wrote.

But, Savage wrote to the court, that changed.

“On Aug. 12, 2007, a newly constituted ANA board of governors placed Cipoletti, its executive director, on ‘administrative leave,’ and published a press release concerning its actions,” Savage wrote.

“Since the decision to place Cipoletti on administrative leave,” Savage told the court, she “has become aware of facts indicating that (there is) a nonconsentable conflict of interest … mandating counsel’s withdrawal…”

Savage writes, “Counsel is not at liberty to disclose the details of this conflict … but specifically represent to the court as officers of the court that they have concluded that their continuing representation of the plaintiffs (or either of them) in this case would result in a violation of the Colorado Rules of Professional Conduct. Accordingly counsel have no alternative to moving to withdraw as the attorneys for the Plaintiffs.”

In a news release issued at the time litigation was initiated, the lawyers claim the suit was brought “to protect the security of [the ANA] Internet site and the privacy of membership and other confidential information.”

At the time, Joel W. Cantrick of the Denver law firm of Ducker, Montgomery, Aronstein and Bess, P.C., which represents Nebel, Computer Systems Design, and another defendant, said “the allegations of the complaint are not well-founded.”

The first claim in the ANA-Cipoletti lawsuit is for “intentional infliction of emotional distress by outrageous conduct,” and pits Cipoletti against Nebel, Nulty, Abraham and Lee. The second claim is for “intentional interference with prospective business relation and economic advantage,” and pits the ANA against Nebel, Nulty, Abraham and Lee.

Third is a routine breach of contract claim (ANA against Computer Design Systems), and fourth is a claim of breach of settlement agreement between ANA and Abraham. Fifth, ANA has brought a civil theft claim against all defendants; sixth is a “breach of fiduciary duty” claim against Abraham, Nulty and Lee, and finally a civil conspiracy claim against all defendants is lodged.

The application to the court revealed some other details, previously unknown. Again Savage: “Shortly after counsel became aware of the decision to place Cipoletti on administrative leave, counsel engaged in continuing discussion with lawyers for both the ANA and Cipoletti about the conflict issues. No resolution of those conflicts … is possible. Both parties requested counsel to attend a court-ordered mediation on Monday, Aug. 27, 2007. That mediation was unsuccessful.”

As all this was happening, the case was moving toward a Sept. 25 trial date, hence the need for an expedited application to the court. Savage spoke with her now former clients and told the court a trial adjournment was necessary because “to identify and exchange witness lists and exhibits, for example, is impossible for counsel to do for either or both plaintiffs in light of the conflict that has arisen.”

A January 2008 trial — with new counsel — is planned unless the ANA board acts sooner in a different direction. When Cipoletti was put on paid administrative leave, the press release announced, “The reason Cipoletti was asked to go on … leave was so that he could focus all of his attention on preparing his part of the case in a lawsuit against former employees in which he is a co-plaintiff with the ANA.”

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