Appellate Division Affirms Interlocutory Order Disqualifying Law Firm

Arboleda v. Paychex, No. A-0085-25 (February 25, 2026)

In Arboleda v. Paychex, Paychex appealed interlocutory orders disqualifying the law firm of Goldberg Segalla LLP from representing Paychex, and a denial of a motion for reconsideration. The respondent, Prop N Spoon, entered into a professional employer-organization agreement with Paychex to administer Prop N Spoon’s human resources functions, including workers’ compensation. The petitioner, Johann Mejia Arboleda, filed a workers’ compensation claim, which Prop N Spoon tendered to Paychex. American Zurich Insurance Company, as the carrier, assigned Goldberg Segalla, as defense counsel.

On October 31, 2024, Goldberg Segalla filed an answer on behalf of Prop N Spoon. Subsequently on November 4, 2024, an amended answer was filed on behalf of Paychex as insured by Zurich and ESIS, a third party administrator. This answer noted Goldberg Segalla did not represent Prop N Spoon and denied coverage.

On November 14, 2024, Goldberg Segalla moved to dismiss the claim due to lack of coverage, alleging Prop N Spoon concealed Arboleda’s employment from Paychex. Prop N Spoon retained new counsel and filed a motion on the coverage issue, as well as disqualification of Goldberg Segalla based on its initial representation of Prop N Spoon and the later adverse position. Goldberg Segalla opposed the motion with an attorney certification, indicating the initial answer designating Prop N Spoon as the client was a technological issue. After further investigation, Goldberg Segalla amended the answer only four days later, asserting the quick amendment revealed no substantive representation of Prop N Spoon, nor provided it with any legal advice.

After considering the submissions, the workers’ compensation judge disqualified Goldberg Segalla, denying its motion for reconsideration after oral arguments. The judge first pointed out that there was no procedural impropriety, as a judge had authority to decide the matter on the papers. The judge then rejected Goldberg Segalla’s argument that the online system was the reason and that a manual answer could have been filed. Goldberg Segalla appealed, arguing the judge erred due to his decision not being supported by findings, not having a hearing, and that there was no attorney-client relationship with Prop N Spoon. The Appellate Division affirmed, adding he did not have to conduct a hearing under N.J.A.C. 12:235-3.5(c); the plain language of RPC 1.9(a) revealed Goldberg Segalla clearly represented Prop N Spoon by filing an answer; and manual filing of an Answer on behalf of Paychex would have resolved the issue.