by Structured Settlement Watchdog
"Anthony Chirico's Days Off"
New Jersey lawyer Anthony Chirico has been given 90 day suspension by the New York Appellate Division Second Department in a conflict of interest case over a petition for a structured settlement. See Matter of Chirico NY Slip Op. 04741.
The Appellate Division for the Second Depart
According to the New York State law Reporting Bureau, in 2014, Chirico was retained by Patriot Settlement Resources, LLC (hereinafter Patriot) a structured settlement factoring company, in an action pursuant to the New Jersey Structured Settlement Protection Act (NJ Stat. Ann. 2A:16-63 et seq.) seeking approval of the purchase of structured settlement payment rights from Richard Heckel. Heckel, who had been injured at birth due to medical malpractice and apparently suffered from cerebral palsy, "was awarded a settlement/annuity for his injuries**" and was seeking to sell a portion of the settlement. He had sold other portions of the settlement prior to the instant attempted sale. Heckel was represented in the transaction by Gregory K. Mueller.
Nobody is "awarded a structured settlement/annuity". A structured settlement is a compromise. That's why it's called a settlement and not a judgment. While a minor's settlement generally requires the approval of the Court, the Court's approval is just that, approval of a settlement negotiated by the parties.
Judge Craig Wellerson Was On The Ball in New Jersey Case in Review of Structured Settlement Transfer
Judge Craig L. Wellerson, who presided over the Patriot matter, denied Patriot's application after a hearing and then referred the matter to the New Jersey Office of Attorney Ethics (hereinafter OAE) for investigation. According to a subsequent decision of the Supreme Court of New Jersey Disciplinary Review Board (hereinafter DRB) agreeing with the findings and recommendations of a District II-A Ethics Committee (hereinafter DEC) hearing panel, Judge Wellerson was concerned by the size of the sale and its effect on Heckel's future quality of life, the fact that (the factoring company) Patriot's counsel (the respondent) and Heckel's counsel (Mueller) shared the same address, and, given Heckel's disability, his ability to communicate with counsel and navigate "this complex sale of life-contingent payments." Additionally, although the application had been filed in Ocean County, Judge Wellerson learned that Heckel resided in Atlantic County and noted that proceedings [*2]for the sale of settlements must be filed in the county where the seller resides. When Judge Wellerson inquired how Heckel came to be represented by Mueller's firm, the Mueller Law Group, which was located in Bergen County, Heckel replied "through the phonebook." Judge Wellerson then asked the respondent whether he had referred the matter to the Mueller Law Group, and the respondent denied having done so.
At the ethics committee hearing Attorney Chirico admitted that "in hindsight" his denial that he had referred the matter to the Mueller Law Group was not true. During an OAE interview, the respondent explained that he never intended to mislead the court; rather, he had been confused and "taken aback" when Heckel indicated that he obtained Mueller's name from the phonebook. The respondent later clarified that he never spoke to Heckel, but rather referred him to Mueller "indirectly through Patriot, with whom Heckel had been communicating at length" (emphasis omitted). The respondent further indicated to OAE counsel that he had at least one off-the-record discussion with Judge Wellerson in which he corrected his statement about the referral to Mueller and then "back on the record" as well. Yet, at the DEC hearing, the respondent testified that he did not correct the court on the record with respect to whether he had referred the case to Mueller.
The New Jersey DRB decision indicates that the respondent's relationship to Mueller dates to the mid-2000s
After its investigation, OAE filed a complaint dated December 17, 2015, against Attorney Chirico, alleging that he had engaged in a conflict of interest by representing Patriot in the transaction despite having an "of counsel" relationship with Mueller, in violation of New Jersey Rules of Professional Conduct (hereinafter RPC) rule 1.7(a)(2) (concurrent conflict of interest). Chirico was also charged with violating RPC rule 3.3(a)(1) and (5) (false statement of material fact or law to a tribunal and failure to disclose to the tribunal material facts, knowing the omission is reasonably certain to mislead the tribunal), RPC rule 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation) and (d) (conduct prejudicial to the administration of justice), and RPC rule 1.15(d) (failure to maintain New Jersey trust and business accounts).
New York Gives Chirico a Reciprocal Ban
The New York Supreme Court Appellate Division for the 2nd Department found that reciprocal discipline was warranted based on the findings of the Supreme Court of New Jersey. Contrary to the respondent's contention, the OAE established by clear and convincing evidence that he engaged in a conflict of interest by appearing opposite Mueller in the Patriot transaction, in violation of RPC rule 1.7(a)(2); that he knowingly misled the New Jersey Superior Court and engaged in conduct prejudicial to the administration of justice, in violation of RPC rule 3.3(a)(1) and (5), and RPC rule 8.4(c) and (d); and that he failed to maintain proper attorney trust and operating accounts, in violation of RPC rule 1.15(d). Under the circumstances, it found that a three-month suspension is warranted.
Apparently Chirico had a clean disciplinary record prior to this.