Friday, November 11, 2016

Hackensack lawyer faces conflict of interest charges.

On October 18, 2016, a Bergen County attorney ethics committee claimed that a Hackensack lawyer violated the Rules of Professional Conduct by simultaneously representing two warring partners in a business enterprise.  In his November 1, 2016 answer to the charges, the lawyer said that he did nothing wrong because he represented only the business entity and not the two partners individually.

The lawyer at issue is Francis Kirk, who used to be with the Newark firm of McCarter & English until moving over to Tessler & Cohen of Hackensack in early 2014.  Ethics prosecutor Cathe McAuliffe claimed that Kirk represented Kevin Schmidt "on many occasions regarding his business pursuits and personally in a foreclosure action" and also represented Schmidt in a foreclosure against his personal residence.

Schmidt was the sole owner of a business named Ice Boxx, LLC until he sold a controlling share of the company in 2013 to Michael Williams.  According to the ethics complaint, Kirk simultaneously represented both Schmidt and Williams even though their relationship deteriorated and each man's interests became adverse to the other.

In his answer to the complaint, Kirk claimed that he never represented Schmidt personally (except for the foreclosure case) and that his client was Iceboxx, LLC rather than Schmidt himself.  "[T]his is not a situation in which I previously represented Mr. Schmidt in matters adverse to Iceboxx, LLC and thereafter switched sides," Kirk wrote in his answer.  As for the foreclosure matter, Kirk wrote that "nothing that I learned in that mortgage foreclosure action has any bearing on Iceboxx, LLC."

Kirk wrote that Schmidt filed the ethics grievance because he is "apparently aggrieved" because Kirk had filed a lawsuit on Iceboxx, LLC's behalf seeking an injunction against Schmidt who, according to the Kirk's answer, "damaged Company property, paid personal expenses through Company funds, misappropriated corporate opportunities, and locked the Company's members and employees out of the business premises and put the Company's inventory at risk."  Kirk noteed however, that Schmidt had successfully moved to have Kirk's firm disqualified from prosecuting the lawsuit.  Kirk wrote that the court granted Schmidt's motion "out of an abundance of caution."

The ethics charges are only allegations--nothing has been proven--and Kirk is presumed to have not committed a violation until otherwise determined.  Also, Kirk's allegations against Schmidt remain unproven although there may be some documents in the Iceboxx, LLC v. Schmidt, Docket No. BER-C-201-14 case file that might shed some light on what had occurred.  That file can be obtained from the New Jersey Judiciary. 

Since 1995, attorney disciplinary hearings have been open to the public.  Anyone who is interested in being notified in advance of any hearings on this matter may complete and send a hearing request form to District IIB Ethics Committee Secretary Nina C. Remson via e-mail to BergenEthics@co.bergen.nj.us