January 2008, No. 1

January 2008, Vol. VI, No. 1

Happy New Year and Holidays!

Is a Passenger in a Stolen Car Eligible for PIP and UIM Benefits If an Accident Occurs? Well, maybe yes and maybe no. In Hardy v. Abdul-Matin, 2008 N.J. Super. LEXIS 1 (App. Div. 2008), the Appellate Division held that a passenger in a stolen car is prohibited from obtaining PIP and/or UIM benefits if the passenger knows that the car is stolen. On the other hand, if the passenger is unaware that the car is stolen, he or she is allowed to seek UIM/PIP benefits. The Appellate Division concluded that a passenger "cannot be expected to inquire . . . as to the status of the car and driver, unless existing facts place the passenger on notice that the use of the car is questionable." We agree with the Appellate Division's ruling because it interprets the statutes on PIP and UIM coverage broadly in favor of the insured, which is the law. Moreover, the PIP statute is designed to provide expansive coverage and this decision fosters that policy.

What Is the Appropriate Punishment for Partners Whose Firm Pays Fees to Non-Lawyers? According to the Disciplinary Review Board, it depends on the lawyer's involvement and knowledge. During the 1990s, the now defunct firm of Tomar Simonoff paid more than $1 million in referral fees to non-lawyers. The firm had 65 lawyers at one time before collapsing in 2000. Tomar Simonoff partners had been paying referral fees to non-lawyers for approximately fifty years, and the partners acted like it was unethical. As most of us know, RPC 5.4 prohibits fee-sharing with non-lawyers. Ultimately, the DRB determined that a partner, Michael Kaplan, should receive a one-year suspension for being involved in the fee-sharing, another partner should receive six months, and eight shareholders should receive NO punishment because they had suffered sufficiently from the downfall of the firm, had no prior ethical blemishes, and the events happened over seven years ago. Frankly, this recommendation is SHOCKING and far too weak. This unethical conduct is not far beyond the misappropriation of trust funds, and yet, the DRB is treating the lawyers leniently. Everyone knows that using runners is a huge no, but this firm and its shareholders blatantly ignored RPC 5.4 and profited handsomely from it for years. All of the shareholders should have received lengthy suspensions unless they are able to prove convincingly that they were not involved and did not receive money from the illegal practice. After we wrote this piece, we saw that the ethics prosecutors denounced the DRB decision and are urging the Supremes to impose more severe discipline. Let's hope that the Supremes are harder on the lawyers than the DRB was.

Is It Improper to Settle a Case the Day of Trial After Four Years of Litigation? For those of you who said, are you kidding me, I agree with you. However, U.S. District Court Judge William Martini disagrees. Recently, in World Finer Foods v. Archway Cookies, 2007 U.S. Dist. LEXIS 82581, (U.S.D.J. 2007), Judge Martini publicly rebuked two lawyers for settling a case the day of trial after four years of litigation where both sides indicated that the case could not settle. In relying on the attorneys' representations, the court had forty-one jurors waiting to start the voir dire, which irked the court because the court had to pay the jurors $40 each or $1,640. The lawyers in the case responded that their conduct was ethical, appropriate, and saved the court money and time. Judge Martini has indicated that he does not want to discuss the matter publicly. Something else must have happened in this case that angered the court because settlements are always welcome, and often times, a trial date with a jury present is required for a party (ies) to face the music and be reasonable regarding settlement. Would the court have been satisfied if the trial commenced and proceeded for two weeks and then settled? The bottom line is that parties may choose to settle at any point before a verdict, and the court's rebuke of the lawyers was inappropriate. I commend the lawyers for getting the case settled.

Contributions. If you have an interesting case, rule interpretation, ethics issue, or civil-related story, please contact me at 201-918-3560, (f) (201) 845-5973, or e-mail [email protected].