Conflict of interest may lurk for municipalities

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Villages of Rockton and Roscoe represented by two attorneys from same law firm

Should a legal dispute between local municipalities arise, or confidential information is learned that could be used to pit one community against another, the law firm Nicolosi and Associates, P.C., may have to withdraw from representing the villages of Roscoe or Rockton, according to Northern Illinois University Visiting Law Professor Terri Day.

Specifically, Day said that if a dispute occured between the communities, and the municipalities did not waive the conflict: “[T]he law firm has to understand that if that happens, they need to withdraw from all representation [of those communities].”

She also cautioned that the law firm could use “confidential information from their previous client to help a future client where the matter is the same or substantially related.”

Day said the potential for conflict grows as those communities continue to expand through increases in population and annexation. That growth may pave the way for policy disagreements between the communities, which may spur legal disputes between the villages.

Day, who arrived in the area in August, is a visiting professor to Northern Illinois Law School in DeKalb. She is from Barry University Law School in Orlando, Fla.

Growing by numbers

The two villages have been undergoing rapid growth during the past 35 years and are expected to continue to grow and develop well into the future. Roscoe and Rockton are separated at their closest point by less than 100 feet.

Depending on planning policies and annexation within the next 15 years, the Health Systems Research Center at the University of Illinois College of Medicine at Rockford projected by 2020, the communities may significantly increase their populations.

Census data show Roscoe may undergo the largest percentage growth at 107 percent from 6,244 residents in 2000 to 12,924 by 2020. Rockton may increase 67 percent from 5,296 in 2000 to 8,868 in 2020.

In 1980, Roscoe only had 1,388 residents, while Rockton had 2,313 citizens.

Two communities, one law firm

Both villages are represented by two attorneys from one law firm. That law firm, Nicolosi and Associates, is partly owned and operated by Paul S. Nicolosi, who is also the attorney for the City of Loves Park and Village of Rockton.

While Nicolosi represents Loves Park and Rockton, his employee, attorney David J. Kurlinkus, represents the Village of Roscoe. Kurlinkus applied earlier this year for a position as judge in the 17th Judicial Circuit. However, Kurlinkus was not appointed to that position.

Potential conflicts

As a result of this proximity and growth potential, Day said if a dispute should arise, such as a lawsuit or an annexation dispute, “[T]hey would have a direct adverse interest. And the lawyers, who are representing them, would not be able to continue to represent them.”

Day went on to cite the Model Rules for Professional Responsibility, which govern attorney actions. Under those rules, which are rules also used by the American Bar Association, Day said: “[T]he firm would be disqualified from continuing to represent either of the municipalities.

“Of course, there’s always ways of getting around the conflict. And that would be if the municipalities or the clients waive the conflict. Although there are some conflicts where reasonable attorneys would not even ask clients to waive.

“The second way a conflict may arise is if the attorneys representing the municipalities, in the process of representing them, learn confidential information,” Day said. She added that learning confidential information is a normal byproduct of attorneys and clients sharing facts and messages.

However, Day warned the confidential information could be used at a later date to the detriment of the municipality.

As an example, Day said: “If they would have a future case where the confidentiality could be used to help a future client…[that would] be adverse to the municipality.

“I think the problem is these municipalities are right next to each other. And as you said before with there being growing and developing, the potential for having adverse interests to each other is great, and the law firm has to understand that if that happens, they need to withdraw from all representation,” Day said.

Nicolosi, who steadfastly refused to be recorded for an interview, said a protocol had been established by the Chicago law firm of Ansel and Glick, on how to deal with the potential conflicts Day described. He added the protocol was set up approximately three years ago, before his law firm agreed to represent Roscoe, after the village asked them for their services.

Nicolosi said whatever conflict of interest may arise, the protocol follows the Model Rules for Professional Responsibility.

Nicolosi also expressed dissatisfaction with what he described as “unfair” news coverage in previous articles concerning his law firm and associated businesses. He said: “some of the facts [in those articles] weren’t on target, either.” However, Nicolosi did not elaborate on his complaint, nor had he returned messages for comment when the original articles were published. A guest column was offered to him to cover any points of dispute he wished to address.

Fees and contributions

The Village of Rockton has budgeted $100,000 for legal services this fiscal year, while Roscoe has budgeted $140,000 this fiscal year. The municipalities expect to spend close to what they have budgeted.

While the law firm collected money from municipalities for their legal services, their associated businesses, Buckley Partners, Buckley Holdings and Buckley Construction, also contributed significant sums of money to local and state politicians.

July 1, Gerlando “Gino” Galluzzo and Nicolosi sponsored a fund-raiser at Cliffbreakers resort for Republican Winnebago County Board Chairman Scott Christiansen. They also heavily loaned and contributed money to Christiansen’s campaign fund, which was detailed in the July 13-19 issue of The Rock River Times.

Gino Galluzzo is the son of Salvatore “Sam” Galluzzo, and is an attorney at Nicolosi and Associates.

Nicolosi was also business partners with Natale Galluzzo and his brother, Salvatore Galluzzo, in Buckley Partners LLC. Salvatore Galluzzo was identified as an alleged Mafia soldier in a March 4, 1984 Rockford Register Star article.

Buckley Partners was awarded at least two known state contracts within the past seven years. One of those contracts was between Buckley Partners and former Illinois Attorney General Jim Ryan’s administration for their regional office at 7230 Argus Drive in Rockford.

However, under Attorney General Lisa Madigan, the regional headquarters was moved from that location to downtown Rockford after a contract dispute arose in 2003 concerning the required number of exits in the facility. The contracts were detailed in the June 22-28, 2005, issue of The Rock River Times.

The Nicolosis and Buckley Partners were also frequent contributors to Republican campaign coffers, including those of Winnebago County Clerk Marc Gasparini (R), State Sen. Dave Syverson (R-34), State Rep. Dave Winters (R-69). In recent Rockford mayoral races, they contributed to Republican Dennis Johnson, Independent Larry Morrissey and Democrat Doug Scott.

As to the extent the contributions influenced public policy, which determined growth and development patterns, this is only fully understood by those who made such contributions, and those public officials on the receiving end.

Regarding the contributions and legal representation, Frank Schier, editor and publisher of The Rock River Times, said: “Those same public officials, especially the ones in Rockton and Roscoe, have the duty to monitor the best interests of their communities as represented by their outsourced attorneys.”

From the Nov. 2-8, 2005, issue

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