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James Carney was disbarred nearly five years ago, but the courts are still trying to compensate his former clients and the lawyers who took over his cases. On Sep. 13, the New Jersey Supreme Court was asked to decide whether its Lawyers’ Fund for Client Protection should compensate one of those lawyers, to the tune of $176,000 in fees for legal work he had done for Carney. The fund, which holds awards in disputed cases, has told the attorney, Robert Vort, of Hackensack’s Pearce Fleisig, that he should stand in line with others seeking compensation for Carney’s thefts and misuse of funds and that his share should be on the scale of other awards. Vort’s lawyer, Waldron Kraemer, told the court that Vort should be considered a creditor and that the court should consider the matter much as a federal bankruptcy court would. That would mean that Vort would move closer to the head of the line, ahead of clients and creditors. Kraemer, of Springfield’s Kraemer, Burns, Mytelka, Lovell & Kulka, said bankruptcy courts give priority to creditors and resolve their disputes ahead of others to whom money is owed. Justice Roberto Rivera-Soto disagreed to a point, saying the creditors in this case do not come first. “The fund should act like a trustee,” he said. “Its expenses have priority over everything else.” Kraemer argued that the fund was “just another creditor.” Vort did the work on Carney’s behalf and should be given the fees the judges awarded in the cases he handled. Vort has obtained a lien against the funds, but that does not necessarily mean he will receive them. The fund’s attorney, Daniel Hendi, said that while Vort should be awarded some money as compensation, it should be more in line with what other claimants, including former Carney clients, are given. “A pro rata distribution is proper,” said Hendi. Vort, he said, should receive about 26 percent, or about $45,000, based on what other claimants have received from the fund. Justice Barry Albin was skeptical. “If Mr. Vort had known about the rate, Mr. Vort may have thought twice about offering his services,” he said. Justice Virginia Long asked whether it was fair that the fund apply that rate now, years after Vort won the cases. Hendi replied that the clients had to be compensated as much as possible before other creditors are satisfied. “The funds were stolen from clients, and the clients have the superior position,” he said. Carney had a reputation as a top-notch litigator who won millions in jury awards for his medical malpractice and personal injury clients. Along the way, though, he secretly took about $1.75 million from those awards for his own use. After the misappropriations were uncovered in a routine audit in 1993, Carney was indefinitely suspended in 1999 and disbarred the next year. The Lawyers’ Fund for Client Protection has doled out about $908,000 in compensation to Carney’s clients since he was disbarred. The case is In the Matter of James Carney, D-182-02.

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