December 17, 2019

By: Daniel M. Stolz

Trenk DiPasquale’s $6M Deal OK’d In Agency Malpractice Suit

Law360, Newark (December 17, 2019, 4:32 PM EST) — A New Jersey bankruptcy judge on Tuesday signed off on a $6 million settlement between a defunct Newark water agency and the former Trenk DiPasquale Della Fera & Sodono PC and two ex-firm attorneys over claims they enabled corruption at the organization, saying the deal “couldn’t be more reasonable” and “more hard-fought.”

During a hearing in Newark, U.S. Bankruptcy Judge Vincent F. Papalia said he approved with “no hesitation” the Newark Watershed Conservation and Development Corp.’s proposed agreement with Trenk DiPasquale and attorneys Elnardo J. Webster II and Jodi M. Luciani.
“If there’s ever a settlement that needs to be approved quickly and needed to be done and is well, well within the range of any kind of standard, then this is the one,” said Judge Papalia, adding, “It just needed to get done for the case.”

“It needed to get done for the parties. It needed to get done for so many reasons and I’m glad it finally got done,” the judge said.

In addition to the $6 million payment, the Trenk defendants have agreed to pay $15,000 to satisfy a $59,000 discovery-related sanctions ruling. The combined settlement is “to be funded by the Trenk firm’s primary and secondary malpractice carriers and the Trenk defendants,” according to the NWCDC’s motion seeking approval of the deal.

Trenk DiPasquale merged in 2018 with McManimon Scotland & Baumann LLC. Webster and Luciani are now with Inglesino Webster Wyciskala & Taylor LLC, according to that firm’s website.

The deal was reached Nov. 19 at the end of a third mediation session before retired U.S. District Judge Jose L. Linares, a partner at McCarter & English LLP, according to the settlement motion.

During Tuesday’s hearing, NWCDC attorney Daniel M. Stolz of Wasserman Jurista & Stolz PC cited “the complexity of this case” and “the risk not only that we might get an adverse decision, but no matter what the decision was, we’d be looking at years and years and years of appellate litigation, no matter how the case came out after a jury trial.”

“This was a well-thought-through and, in my mind, prudent and reasonable exercise of business judgment of the provisional [NWCDC] trustees in determining that they were going to settle this case,” Stolz added.

Trenk DiPasquale, Webster and Luciani were among the various defendants sued by the NWCDC over the financial mismanagement that led to the agency’s dissolution in 2013 and federal criminal convictions of former agency officials and contractors. The corporation filed for Chapter 11 protection in January 2015.

The latest version of the agency’s lawsuit alleged that professionals such as the Trenk defendants failed to provide oversight of the agency and “enabled the ongoing unlawful and wasteful and unauthorized conduct of management.”
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Trenk DiPasquale represented the corporation before April 2012, and Webster and Luciani were the firm attorneys primarily responsible for that representation, according to the settlement motion. In April 2012, when the two lawyers moved to the firm now known as Genova Burns LLC, the organization retained that firm to represent it, the motion said.

The corporation previously engaged in mediation with the Trenk defendants and Genova Burns, leading to a settlement with Genova Burns but not the Trenk defendants.

In 2016, Judge Papalia approved the NWCDC’s $1 million settlement with Genova Burns over related malpractice claims against the firm. That deal also involved the firm reducing its own claim for unpaid services from $1.1 million to $700,000.

The Trenk defendants later unsuccessfully tried to get out of the case after being added as defendants.

Judge Papalia denied their dismissal motion in January 2017, rejecting their argument that an affidavit of merit filed by the NWCDC was invalid. In November 2018, the judge nixed another dismissal bid from the Trenk defendants, who contended that the organization did not have enough trustees when it filed the claims.

The Trenk defendants are represented by William F. O’Connor Jr. and Daniel A. Malet of McElroy Deutsch Mulvaney & Carpenter LLP.

The agency is represented by James A. Scarpone, Bruce D. Vargo and John B. Nance of Scarpone & Vargo LLC and Daniel M. Stolz of Wasserman Jurista & Stolz PC.

The case is In re: Newark Watershed Conservation & Development Corp., case number 2:15-bk10019, in U.S. Bankruptcy Court for the District of New Jersey.
–Additional reporting by Jeannie O’Sullivan. Editing by Orlando Lorenzo.

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