Friday, March 3, 2017

Elizabeth Board of Education receives $300,000 confidential settlement in its legal malpractice case.

By written agreement which received its final signature on December 22, 2016, the Newark based law firm of McCarter & English agreed to pay $300,000 to settle the Elizabeth Board of Education's (Union County) legal malpractice lawsuit against the firm and one of its lawyers. 

In its malpractice lawsuit, filed on April 24, 2012, the school board claimed that firm attorney Francis A. Kirk negligently advised it to file a defamation lawsuit against "John Doe" defendants in order to find out who authored and disseminated three allegedly defamatory campaign fliers.  The fliers, which were mailed to Elizabeth voters in advance of the June 6, 2006 primary election, contained photographs of Board President Rafael Fajardo and Superintendent Pablo Muñoz and labeled them as "the army of undercover republicans."  According to a May 29, 2013 news article, the mailings also "included a forged letter, purportedly written by Muñoz, urging Fajardo to campaign hard on behalf of the city’s Hispanic candidates to help insure a low turnout of Italian residents leading up to a city council election in 2006."

Kirk allegedly advised the Board, Muñoz and Fajardo to be named as plaintiffs in the lawsuit.  The suit was later dismissed by consent after the New Jersey Department of Education ruled that the $63,621.68 the Board paid McCarter & English for representing the plaintiffs in the defamation suit was an improper expenditure of public money.  The lawsuit also claimed that Kirk was negligent in naming the Board as a plaintiff because "it has been black letter law [since 1964] that a public entity such as the Board had no standing to file a defamation action." 

A concerned taxpayer named Antonio Rivera filed a lawsuit against the Board, Muñoz and Fajardo that resulted in a court order requiring Muñoz and Fajardo to each reimburse the Board half of the legal fees expended to pursue the defamation suit.  According to the above cited news article, Muñoz's and Fajardo's appeal of the court's reimbursement order was unsuccessful.

In 2012, McCarter & English filed a third party complaint against Kirk Nelson, who acted as the school board's attorney during the time the "John Doe" lawsuit was filed.  According to that complaint, Kirk had recommended that the school board adopt a resolution authorizing the filing of the defamation suit but Nelson went against that advice causing the defamation lawsuit to be filed without formal board approval.  McCarter & English claimed that Nelson's decision to allow the suit to be filed without a board resolution was part of the reason why the court ordered Muñoz and Fajardo to reimburse the Board.

Both the lawsuit and the third party complaint were resolved by two confidential settlement agreements signed in 2016.  The settlement of the third party complaint did not require either party to pay money to the other.  Rather, it simply released each party from the other's claims.  The settlement of the main lawsuit required McCarter & English to pay $300,000 to the Board of Education.

The case is captioned Elizabeth Board of Education v. McCarter & English, et al, Union County Superior Court Docket No. UNN-L-3014-12 and the school board's attorney was Michael S. Stein of Hackensack.  Case documents are on-line here

Both settlement agreements contain a confidentiality clause, which prevents the parties to the suit from publicly disclosing the settlement terms.  Fortunately, however, these confidentiality clauses do not trump the public's right to obtain copies of settlement agreements that arise out of lawsuits in which a government agency or official is a party.

None of lawsuit's allegations have been proven or disproven in court.  The settlement agreement states that payment does not constitute an admission of wrongdoing by McCarter & English, Mr. Kirk or Mr. Nelson.  All that is known for sure is that McCarter & English or its insurer, for whatever reason, decided that it would rather pay the school board $300,000 than take the matter to trial. Perhaps McCarter & English's decision was done to save further legal expense and the costs of trying what were in fact exaggerated or meritless claims. Or, perhaps the claims were true and McCarter & English wanted to avoid being embarrassed at trial. This is the problem when cases resolve before trial--it is impossible to know the truth of what really happened.