Wednesday, October 26, 2016

Perth Amboy attorney/judge charged by ethics authorities with convincing widow to give unsecured loans to a woman who had borne the lawyer's child.

On August 1, 2016, the District VIII Ethics Committee, an arm of the New Jersey Supreme Court's attorney disciplinary function, filed a formal ethics complaint against a Perth Amboy-based attorney who serves as one of the City's municipal court judge as well as a judge in neighboring Woodbridge Township.  The complaint alleges that the lawyer convinced an Edison widow to lend $790,000 she received from life insurance and a wrongful death lawsuit settlement to a woman with whom the lawyer had a sexual relationship out of which a child was born.  The lawyer is also charged with billing the widow $80,000 for the "minimal service" of filing a $250,000 double-indemnity claim against her deceased husband's life insurance company.

The complaint, Docket No. VIII-2016-00002E, alleges that Emery Z. Toth, who maintains an office on Maple Street in Perth Amboy, introduced Marybeth DeHanes of Edison, whose husband died in 1992, to Carol Gronczewski.  Toth allegedly had been intimately involved with Gronczewski since the late 1970s and fathered Gronczewski's child.  Yet, according to the complaint, Toth never disclosed to DeHanes his relationship with Gronczewski and DeHanes, at Toth's suggestion, lent $290,000 in 1993 to Gronczewski's company, CG Investment Realty.  The loan was supposed to be secured by a mortgage on an Edison property but, according to the complaint, "a mortgage was never filed to protect the interests of [Gronczewski]."

Toth is listed on Woodbridge Township's website as being one of the Township's four municipal court judges and on Perth Amboy's site as being one of three judges.  According to the ethics complaint, Toth has been practicing law since 1974.

After a different lawyer won a $2,000,000 wrongful death lawsuit in favor of DeHanes' deceased husband's estate, Toth allegedly advised DeHanes to invest her $500,000 share of the settlement with Gronczewski in 2000.  Again, DeHanes was allegedly led to believe that her investment was secured by a mortgage that "was never filed."

Separately, the lawyer who obtained the wrongful death settlement advised DeHanes that she was entitled to double-indemnity on her deceased husband's life insurance policy.  Toth allegedly contacted the insurance carrier and received an additional $250,000 and then told DeHanes that she owed him $80,000 for his services in obtaining the $250,000 insurance check.  According to the complaint, DeHanes paid Toth $80,000 "for the minimal services that he rendered in obtaining the extra $250,000" which was writing a "'few letters' to the insurance carrier."

Toth has had a previous brush with ethics officials. On January 5, 2009, the Advisory Committee on Judicial Conduct filed a formal complaint against him for sentencing a man to 180 days in jail for a contempt charge without affording him an opportunity to respond and without staying the sentence for five days to give the man a chance to appeal.  According to press reports, Toth received a reprimand from the New Jersey Supreme Court.

At the time of this writing, Toth had not yet filed an answer to the complaint.  The ethics charges are only allegations--nothing has been proven--and Toth is entitled to hearing.

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 VIII Ethics Committee Secretary Barry J. Muller via fax to 609-896-1469.

Friday, October 21, 2016

Kearny admits to at least five year delay in transcribing its Town Council closed session minutes. Blames lack of staffing and municipal budget woes.

In her October 20, 2016 response to a Government Records Council (GRC) Denial of Access Complaint, Patricia Carpenter, Clerk of the Town of Kearny (Hudson County), admitted that her office has not yet transcribed the minutes of Town Council nonpublic (closed or executive) meetings held as early as September 8, 2011.

In her Statement of Information (SOI) to the GRC, Carpenter wrote:
The Closed/Executive Session meeting minutes requested have not been released because they have not been transcribed. Therefore, they were not available for release when the request was received.

The Town of Kearny's municipal budget over the years in question suffered a reduction in staffing in all departments which ultimately had a negative impact on the Town Clerk's office and the many essential functions within the department.

Without the necessary staffing in the Clerk's Office due to budget constraints, the transcription of the Closed/Executive Session minutes have been delayed.
Currently, the fiscal condition of the Town of Kearny has improved and the necessary staffing should be in place to provide the requested documents by November 15, 2016.
The complaint to which Carpenter responded, Libertarians for Transparent Government (LFTG) v. Town of Kearny, GRC Complaint No. 2016-261, referenced two Open Public Records Act (OPRA) requests that Carpenter's office acknowledged but then abandoned.  In its May 10, 2016 request, LFTG requested five sets of closed minutes and resolutions, including those from September 8, 2011.  Carpenter disclosed the resolutions on May 17, 2016 but said that "additional time [is] required" to produce the minutes.  Carpenter had not responded further on that request when LFTG filed its Denial of Access Complaint on September 19, 2016. 

The other request, filed on June 6, 2016, asked for the Kearny Town Council's  March 25, 2008; April 9, 2013 and May 8, 2012 closed session resolutions and minutes and, if none existed, "the minutes of the three most recently held Town Council closed sessions for which minutes can be disclosed in whole or in part."  Again, Carpenter told LFTG that she needed additional time and then took no further action to fulfill the request.  Carpenter's October 20, 2016 response to the GRC did not explain why Carpenter's office failed to disclose any of the records sought in the June 6, 2016 request.

According to the Open Public Meetings Act, N.J.S.A. 10:4-14, government agencies, including municipal governing bodies, are required to make the non-exempt portions of their closed meeting minutes "promptly available" to the public.

LFTG is being represented in this matter by Ted M. Rosenberg of Moorestown.

Saturday, October 15, 2016

Appellate court reverses revocation of handgun carry permit by Middlesex judge who gave no notice to the permit's holder.

In an October 7, 2016 written opinion, the Appellate Division of the New Jersey Superior Court reversed a Middlesex County judge's order that revoked an armored car driver's limited permit to carry a handgun because the permit holder was not given notice of the revocation proceeding and was thus deprived of "an opportunity to be heard."

According to the opinion, Rickey R. Duncanson of Carteret, who worked as a driver and guard for the Garda armored car service, applied in November 2014 to renew his "two-year limited permit to carry a handgun" that was set to expire on January 28, 2015.  The permit allowed Duncanson to carry a handgun during his work assignments and "while proceeding directly to and from work assignments and at no other time or place."  The Superior Court granted Duncanson's application which had been approved by the New Jersey State Police.

But, on January 21, 2015, a Middlesex County Superior Court judge conducted a proceeding without having notified Duncanson, the State Police or the Middlesex County Prosecutor.  During the proceeding, the judge said that he had learned that the permit "had been altered to appear to give Duncanson the unlimited ability to carry a handgun."  After the proceeding, the judge issued an order and mailed it to Duncanson.  The judge based his decision on "public health, safety and welfare" concerns. 

The Appellate Division made no ruling on whether Duncanson's permit should ultimately be renewed.  Rather, the court held only that the judge's "after the fact denial of his application" violated Duncanson's right to due process of law.  The case was remanded back to the same judge with instructions to hold an evidentiary hearing.

Appellate Division decisions never identify judges who are reversed but often identify and praise those whose rulings are affirmed.  I believe that all judges whose rulings are subjected to appeal should be publicly identified.  Accordingly, an Open Public Records Act (OPRA) request was made to the Middlesex County Prosecutor's Office for the order from which Duncanson's appeal was taken.  The response to the OPRA request disclosed that the revocation order was entered by Judge Joseph L. Rea.

Thursday, October 13, 2016

A Hunterdon County lawyer's $67.10 overdrawn trust account led to multiple ethics charges being brought against him.

When a New Jersey lawyer overdraws his or her trust account, Court Rule 1:21-6(b) requires the bank to notify the Office of Attorney Ethics (OAE).  When TD Bank notified the OAE that a Clinton lawyer's trust account was overdrawn by $67.10, the OAE's investigation discovered a lot more than just a minor bookkeeping error.

The January 7, 2015, $67.10 overdraft of Paul F. Clausen's trust account was caused by his withdraw of $250 for fees that he had earned on a case.  But an attorney's fees are supposed to deposited and withdrawn from the lawyer's business account.  A trust account is for money that the lawyer is holding in trust for others.  According to the September 27, 2016 ethics complaint, (Office of Attorney Ethics v. Paul F. Clausen, Docket Nos. XIV-2015-0016E and XIV-2015-0374E), the OAE's investigation revealed 77 instances where Clausen withdrew his fees directly from the trust account, sometimes by way of cash withdraws, rather than issuing a check payable to his business account. 

Ethics officials claim that Clausen was less than truthful when he appeared at the OAE's office on April 23, 2015 for a demand audit.  According to the complaint, Clausen told ethics officials that he had never filed bankruptcy even though court records show that Clausen's Chapter 13 bankruptcy petition had been dismissed only on August 17, 2015--only days before.  The complaint also alleges that Clausen lied about withdrawing cash from his trust account--an act that is specifically prohibited by the court rules--when the bank statements showed multiple $100 cash withdraws having been made from Clausen's trust account. 

Ethics officials claim that while Clausen had a business account, it was frequently overdrawn and that Clausen used his trust account for his business transactions because wanted to avoid having the bank take overdraft fees out of any money he deposited into the business account.  The OAE alleges that Clausen also kept his business account's balance at zero to frustrate his judgment creditors' attempts to levy against his bank accounts.  According to the complaint, three creditors, including a woman named Grace Casement who took a $29,254 default judgment in her malpractice suit against Clausen, attempted to levy on the business account only to find that there was no money in it.

According to the ethics complaint, Clausen's landlord, Meridian Property Group, which also had a judgment against him for unpaid office rent, also unsuccessfully levied against the empty business account.  Meridian, however, was able to execute against Clausen's 2004 Lexus ES330 and have it sold at public auction.  According to the ethics complaint, within a month after his Lexus' seizure, Clausen deposited a $4,500 retainer in his trust account and made a $4,100 cash withdraw from the trust account to make a deposit on another car.

In sum, the OAE alleged that Clausen's "deposit of his earned and unearned legal fees in his trust account and subsequent cash withdrawals therefrom was intended to insulate [Clausen's] personal assets and to attempt to place them beyond the reach of his creditors."

The complaint also accuses Clausen of misleading ethics officials into believing that he had made multiple payments to Casement, the malpractice plaintiff, when he actually had made only one $1,000 payment.  The Supreme Court reprimanded Clausen on January 12, 2016 for gross negligence because he failed to file Casement's personal injury lawsuit before the statute of limitations had run.

At the time of this writing, Clausen had not yet filed an answer to the complaint.  The ethics charges are only allegations--nothing has been proven--and Clausen is entitled to hearing.

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 the Office of Attorney Ethics in care of Barbara Cristofaro via fax to 609-530-5238.

Tuesday, October 4, 2016

Court tosses Firemen's Association president's defamation suit against NJ Fireman's Home.

George H. Heflich, Sr.
On March 18, 2016, Morris County Superior Court Judge Robert J. Brennan ordered the attorney for a past president of the New Jersey State Firemen's Association to pay $3,465 toward the attorney fees expended by the New Jersey Firemen's Home and several members of the Home's Board of Managers to stave off the president's unsuccessful defamation lawsuit.

Former New Jersey State Firemen's Association President George H. Heflich, Sr., who recently lost his reelection bid at the Association's September 2016 convention in Wildwood, filed a lawsuit on January 7, 2015 against the New Jersey Firemen's Home, the Home's superintendent Hugh E. Flood and Oscar Dutch, Jr., Kenneth Silvestri, Harry T. Strube, Harry Dedreu, Anthony Grenci, Philip Valese,: Cassmiro Delaurentis, Jr., Thomas J. Murray, Jr., Anthony Frato, Sr., Robert W. Sanders, Thomas Miserendino, James A. Matthews, Gregory D. Leonberg, Sr., Gilbert W. Lugossy, Thomas G. Sutphen and Lester V. Denny who are all members of the Home's Board of Managers.  Heflich's lawsuit claimed that he was a whistle blower and that the defendants took action "with the purpose to degrade and humiliate" him.

At the bottom of Heflich's complaint was a January 11, 2014 resolution passed by the Home's Board of Managers that ordered Heflich to "issue letters of apology" to unnamed Home employees that Heflich allegedly harassed.  The resolution also called upon Heflich to attend "a specialized training seminar for sensitivity awareness" and "publicly admonished, censured and reprimanded" Heflich "for his [alleged] inappropriate and unprofessional conduct toward" the Home's staff and officials.

In response to Heflich's lawsuit, the Home and its Board of Managers, through Newark attorney Peter F. Berk, filed a Motion to Dismiss.  In a June 17, 2015 Order, Superior Court Judge Rosemary E. Ramsey agreed and dismissed Heflich's complaint.  Judge Brennan's March 18, 2016 Order required Heflich's attorney, Mark W. Catanzaro of Mount Holly, to pay $3,465 toward the $14,000 in attorney fees the defendants sought.  Judge Brennan's order cited Court Rule 1:4-8(b), entitled "Frivolous Litigation" which allows parties to civil lawsuits to recover their attorney fees from other parties.