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A lawyer for one of 100 plaintiffs left adrift by malpractice lawyer Hilton Stein’s breakdown asked Chief Justice Deborah Poritz last week to consider a mass relaxation of procedural rules to protect claimants hurt by Stein’s disability. In a March 31 letter to Poritz, Diane Acciavatti of Totowa said delays finding replacement counsel have jeopardized a number of cases Stein handled before he dropped out of his practice because of a mental health disability. The plea suggested that the fall of New Jersey’s best-known legal negligence lawyer — already the subject of proceedings in state and bankruptcy courts — needs attention from the very top of the court system because the cleanup is casting doubts that the judiciary cares about clients. Last year, Stein and former partners sued each other, he went bankrupt, and was involuntarily committed to a mental hospital, sending clients with cases in disarray to lawyers like Acciavatti all over the state (see related chart). She asked Poritz for an amendment to the rules of civil practice to permit a 120-day stay in a proceeding that affects clients of a disabled lawyer. The rules require clients to find a replacement lawyer in what Acciavatti characterized as a “grossly inadequate” 20 days. She told Poritz she wanted to correct a systemic problem, not help a particular client. Her letter did, however, include illustrative pleadings from one case, Sher v. Kreiger, BER-L-3749-00, that Superior Court Judge Daniel Mecca dismissed with prejudice for lack of prosecution. That would not have happened if the rules allowed a stay like the one she is advocating, Acciavatti suggested. In other developments in the past two weeks: � U.S. Bankruptcy Judge Donald Steckroth said he would reconsider his plan to act as the sole authority of who gets legal fees in dozens of contingency cases taken over by lawyers like Acciavatti. Three lawyers argued during a March 25 hearing that fairness and the statutes require Steckroth to leave fee disputes to the state court judges in each of the cases. � Steckroth approved bankruptcy trustee Richard Honig’s determination that the estate had no right to an interest in a Stein family home in Lavallette that is in the name of Stein’s wife, Karen. The estate will, however, gain from an interest in a Stein family home in Kinnelon that is also in Karen Stein’s name. That residence is now on the market for $590,000. When it is sold and the mortgage is paid off, the wife and the estate will split the net proceeds, leaving about $150,000 for creditors, says Honig, a partner in Newark’s Hellring Lindeman Goldstein & Siegal. The chief creditors are likely to be clients who claim Stein took retainers and did little work. � Investigations continued into the possibility that assets were fraudulently conveyed. Honig’s inquiry under bankruptcy rules could wind up before the end of the month. But former partners who filed a $500,000 breach of contract suit against Stein in state court continued their private investigation, issuing 24 subpoenas in the bankruptcy proceedings. The partners dropped opposition to Honig’s abandonment of an interest in the Lavallette property, but one the former partners, Angela Roper of Roper & Twardowsky in Totowa, says the firm is preparing a separate state court suit against Karen Stein in which the Lavallette house could be a target. � Stein, who has characterized himself throughout the bankruptcy as a “fighter,” told a reporter during a lull in the bankruptcy proceedings that he missed the give and take of oral argument. When it comes to being a lawyer again, however, “I don’t think I’ll ever come back,” he said. That would be welcome news to New Jersey attorneys, hundreds of whom Stein has named as defendants since the late 1980s when he returned from a suspension for misconduct he blamed on a drug dependency that altered his judgment. He wrote the book How To Sue Your Lawyerand became the first New Jersey attorney to make a niche out of malpractice work for plaintiffs. Stein’s new adversaries are his former partners and some of the lawyers who cherry-picked his clients after he filed for protection under Chapter 11. Some of the pickings may be meager, or at least hard to chew on. Take, for instance, the case that prompted Acciavatti’s letter to Poritz. Plaintiff William Sher sued Leon Kreiger, now retired, for alleged malpractice as trustee of an estate that lost huge sums from bad investments. The case against Kreiger was dismissed long ago on statute of limitations grounds. That left, as sole defendant, a predecessor firm of what is now Kilstein & Kilstein of Elmwood Park, which served as counsel to Kreiger’s trusteeship. That claim fell, too. In February, Mecca dismissed the complaint with prejudice, saying Sher had “slept on his rights” and failed to pursue the case for much of 2002. Acciavatti has documented Sher’s attempt to find a new lawyer — three turned him down — but she blames the delay on a greater failure, the lack of a mechanism to aid the clients of suddenly disabled lawyers like Stein. She argued to Poritz that the court system has exhibited a “cavalier indifference to protecting the rights of clients such as Mr. Sher.” When Stein went on disability status, a lawyer he had been working with, Hackensack solo practitioner Joseph Meyers, was appointed trustee of his practice, an overwhelming task. According to Acciavatti, almost a month passed before clients were notified to find a new lawyer. The court system should have been more aggressive about making sure the clients’ interests were paramount. Current rules do not deal with such issues, she said. “While there are many procedural protections for the attorney, there are no procedures to protect the clients represented by the disabled attorney,” she said in her letter. When a lawyer wants to be relieved, a client can be heard in opposition, she said. “Yet, a client can lose his attorney without consent, and without any procedure to protect his rights, if the client has the misfortune to be represented by an attorney who becomes disabled.” Acciavatti told Poritz. Judiciary spokeswoman Winnie Comfort says she does not know whether Poritz received the letter and has no further comment. The defense lawyer in Sher, Christopher Carey, a partner in Morristown’s Graham, Curtin & Sheridan, says the problem is not the court system. He says Sher had trouble finding replacement counsel within the time allowed because he has a weak case. And he says Acciavatti still has not responded to discovery requests. “She’s asking for special treatment for Hilton Stein’s clients,” Carey says, but in Sher’s case, he adds, “a 120-day stay wouldn’t help.” In the bankruptcy court, meanwhile, lawyers are fighting over how to divide fees between the replacement counsel and Stein’s estate. Princeton solo practitioner Glenn Bergenfield, who took three Stein cases, says Stein’s work in those matters was shoddy and he deserves no fees. Indeed, Bergenfield says the estate owes some ex-clients refunds for overpayment of retainers as high as $35,000. Under normal circumstances, disputes over fees in contingency cases with multiple counsel are settled informally or decided by each trial judge on a quantum meruit basis when the case is concluded. Steckroth ruled last year, however, that in the interest of smooth administration he would decide all such fee disputes between Stein’s estate and any successor lawyers who won settlements, applying the relevant state law. Bergenfield and lawyers for two other plaintiffs’ firms argued that the vehicles trustee Honig is using to bring the fee issues under Steckroth’s tent — a complaint against almost 50 replacement counsel, followed by demands for discovery about the value of each case — were illegal and unfair to the malpractice clients. Bergenfield and Bloomfield solo practitioner Anthony Ambrosio told the judge that making the fee disputes part of the bankruptcy proceeding has interfered with their ability to represent clients whose faith in lawyers has already suffered. Ambrosio, who did not object to Steckroth’s role when it surfaced last year, changed his mind after Honig filed the complaint, followed by long interrogatories about the earnings potential of ongoing cases. Ambrosio argued that it’s legally upside down to make the successor lawyers explain what they may earn from the cases; the burden should be on Stein’s estate to argue, after each case is finished, that Stein deserves a cut. Bergenfield suggested that the bankruptcy court proceedings have become a dismal tale of four lawyers. The first lawyer’s work is bad enough to be actionable. The second lawyer, Stein, takes an advance for expenses and then goes bankrupt. Lawyer No. 3 is called in to sue lawyer No. 1. Now, lawyer No. 4, Honig, is suing lawyer No. 3 for fees that might materialize. “We’re going to have a horrible mess,” Bergenfield said. Ambrosio added, “the clients are beleaguered.” Under the procedure favored by Bergenfield and Ambrosio, the fee apportionment would be decided the normal way: by each case’s state court judge after the case is over. James Scarpone of Newark’s Scarpone Staiano & Savage said in a brief that he appreciated Honig’s desire to find a uniform solution to possible fee disputes. Honig has said the estate will save time and legal fees — he charges $350 per hour — if he does not have to appear in all the state court proceedings. But Scarpone, a lawyer for replacement counsel Robertson Freilich Bruno & Cohen in Newark, said bankruptcy law requires Steckroth to abstain in what are essentially ongoing state court proceedings. If Honig wants to claim fees for the estate, he is required to proceed under state lien laws, Scarpone concluded. While reserving decision on jurisdiction, Steckroth conceded he was concerned about the clients’ perception of the efficiency of the legal process. “I’m troubled by that,” he said. Pending a decision, he ordered a halt to the discovery Bergenfield and Ambrosio complained about. Honig sought to dismiss the idea that his complaint was a burden on clients. He said he has not pushed for answers to interrogatories and that the overwhelming majority of the fee apportionments would be settled amicably with the replacement lawyers. If Stein’s work on the cases is the estate’s chief asset, it’s also true that the chief creditors of the estate are the clients to whom Stein might owe refunds, Honig said after the hearing. Having the fee apportionment in bankruptcy court will save the estate’s expenses and that, in the long run, will benefit any client due a refund, he said. Honig expressed concern that the benefits will be dissipated if he has to make his case in state courts, where litigation can sometimes spin on expensively. “The fee applications will be so overwhelming it will erode any dividend,” he said.

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