Palisades Medical Center (theharborage.org)
A New Jersey labor lawyer’s alleged romantic involvement with the president of a union his firm represents is adding fuel to a lawsuit charging the president breached her fiduciary obligation to the union.
The lawyer, Richard Loccke, and the president, Hannah Twomey, have lived together for several years in a house Loccke owns, according to Kathleen Fonti, who is suing Twomey and the Health Professionals & Allied Employees union under ERISA.
Loccke’s firm, Loccke Correia Limsky & Bukosky in Hackensack, has collected about $1.4 million in legal fees from the union since July 2006, as shown by annual reports filed with the Department of Labor, Fonti alleges.
She claims the award of the legal work on a no-bid basis, which directly benefits Twomey, is a conflict of interest that violates her fiduciary duty to the organization.
The allegations are made in a proposed amended complaint in Fonti v. Health Professionals and Allied Employees. Fonti, a union member and former president of HPAE Local 5030, which represents workers at Palisades Medical Center, filed the suit in Bergen County in May 2012 and it was removed to federal court in Newark last July.
Fonti sued Twomey, the union and a retiree medical trust set up by the union in 2006, claiming Employee Retirement Income Security Act violations.
The suit alleged flaws in the trust itself, namely that the benefits are not worth the time value of the money members pay, and in the process, saying the union provided members with insufficient information before the vote on the plan. For example, there was no summary plan description, just advertising literature and a website with little content, according to the suit.
The plan pays such a paltry benefit, no more than $150 per month, that it enables accumulation of a large amount of money that serves as a “purse for employment of HPAE-related employees and professionals to obtain income and fees for the implementation and administration of the plan,” Fonti alleged.
Further, the board of trustees for the benefit plan is skewed toward the union, contrary to claims in the plan literature that labor and management would be equally represented, with the result that management representatives and employers have no say in selecting the lawyers and accountants who perform services for the trust, she added.
Twomey counterclaimed against Fonti for defamation, accusing her of a personal vendetta because Twomey went to federal prosecutors about Fonti’s personal use of Local 5030 funds. Fonti was charged in 2009 with borrowing more than $14,600 by using the local’s American Express credit card to pay her son’s wedding expenses without telling anyone first or documenting the loan.
Fonti pleaded guilty to a misdemeanor and was sentenced to two years’ probation and a $1,000 fine. The deal included a three-year ban on serving a union as officer, trustee, employee, consultant or in any other capacity.
Twomey asserted that Fonti has retaliated by disparaging her through various means, setting up a Facebook page for that purpose and a website called “Boss Twomey’s Family,” which portrays her as the leader of a “Mafia-like crime organization.” In an apparent reference to Loccke, the website allegedly says Twomey “spends money on her attorney boyfriend.”
Fonti moved in February to amend her complaint to add a count about the Loccke firm, saying it did almost all the union’s legal work, which it got “on a no-bid basis, benefited Twomey and was paid without question.”
Twomey had a conflict of interest which she failed to disclose to HPAE or the Department of Labor and she paid the legal bills as submitted without allowing HPAE members to question their size or propriety, Fonti claimed.
She further alleged that she approached Twomey about it and also HPAE’s governing body, the State Executive Council, but nothing was done.
Neither Loccke nor his firm were named as a defendant in the amended complaint but Fonti asked for an accounting of the legal fees paid, copies of the itemized bills, and determinations on whether the firm should have been chosen to do the work and whether its fees were reasonable.
Before the motion was decided, Fonti’s lawyer, A. Ross Pearlson, tweaked the amended complaint by adding four more union members as plaintiffs, leading U.S. Magistrate Judge Joseph Dickson to order additional briefing, to be done by May 20.
Pearlson, of Wolff & Samson in West Orange, who took over the case from Hackensack solo Thomas Romans on Jan. 30, called Fonti’s criminal conviction “absolutely irrelevant” to her claims but said he wants to add other plaintiffs to “avoid this distraction.”
During discovery, he plans to look into how Loccke’s firm came to work for the union and whether the fees charged were appropriate or “were their bills just rubber stamped because of the relationship between Twomey and Mr. Loccke.”
Loccke did not return a phone call.
Also not returning calls were Louis DiLuzio of The Choi Law Group in Rutherford, who represents HPAE and Twomey, and Elizabeth Lorell of Gordon & Rees in Florham Park, attorney for the medical trust.
The HPAE, based in Emerson and affiliated with the American Federation of Teachers, represents approximately 12,000 nurses and other health-care workers at New Jersey and Pennsylvania facilities, including Englewood, Meadowlands and University hospitals and Cooper University and Jersey Shore medical centers.
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