Attorneys for First National Community Bank have asked a judge to remove a Scranton attorney and other lawyers from a shareholder lawsuit against the bank's board.
The lawsuit, a derivative action filed against the Dunmore-based bank's board alleging cover-ups and self-dealing that nearly brought down the bank, has taken a new turn as bank attorneys line up to demand attorney Joseph Solfanelli, O'Malley & Langan, and New York City-based Faruqi & Faruqi be disqualified from the action.
The original motion to disqualify was filed by an attorney for former FNCB employee Steve Kavulich, whom O'Malley & Langan, a firm that now includes Mr. Solfanelli, represented in 2011 and 2012. During that time, the law firm received confidential information, the motion alleges, about Mr. Kavulich's job performance and operations at FNCB. The attorneys in the shareholder suit are using some of that information in the action against the bank in a way that could harm Mr. Kavulich, presenting a conflict of interest.
"Information that goes to the law firm is reserved and confidential," said Pat O'Connor, attorney representing bank board members. "That information can't be used against clients later to improperly build a case."
In order for the shareholder action to prevail, Mr. Solfanelli will have to prove that the firm's former client, Mr. Kavulich, failed to perform his duties, the bank argued. Mr. Kavulich was the manager of the bank's loan administration and compliance office. The brief accuses Mr. Solfanelli and the firm of numerous violations of rules of professional conduct.
Mr. Solfanelli said he is not concerned about the motion.
"The derivative action does nothing adverse to Mr. Kavulich," Mr. Solfanelli said. "I view this as just another attempt by the board to dismiss legitimate shareholders' claims, an effort that shows what they think of their own defense."
Contact the writer: dfalchek@timesshamrock.com