NEW JERSEY LAW JOURNAL - MAY 20, 1996

JUDGE APPOINTS MONITOR TO SUPERVISE EMBATTLED LAWYER'S TRUST ACCOUNT

By Henry Gottlieb

A judge appointed former Essex County Counsel Stephen Edelstein on Thursday to supervise the trust account of James Careny, a Roseland personal injury lawyer pursued by ethics investigators, malpractice claimants and creditors.

Essex County Superior Court Judge Conrad Koch's order says that Carney can't draw checks on the trust account without Edelstein's co-signature, and Careny can't disburse fees to himself without a court order. If Carney and Edelstein disagree on a disbursement, they must ask Koch to resolve the dispute.

The fees for Edelstein's work will come from Carney.

Edelstein, of Florham Park's Schwartz, Simon, Edelstein, Celso & Kessler, said on Friday he didn't know the details of his assignment by Koch, including how much work will be involved and his hourly rate. He said he doesn't know Carney.

Appointment of an overseer for the account was requested by Princeton solo practitioner Glenn Bergenfield on behalf of a disgruntled former Carney client, Donna Berger of Bricktown.

Berger's suit says Carney misappropriated a $55,000 portion of a $775,000 medical malpractice award he obtained for her in 1991. She also alleges that Carney committed malpractice that cost her an even bigger award than the $775,000.

Koch agreed to Bergenfield's request for judicial intervention in Carney's trust accounting after examining pleadings that suggest Carney's debts---including more than $1 million owed to First Union Bank---outstrip his present ability to pay his creditors.

Bergenfield says he is preparing an accounting that shows the debt to Berger has been swollen by interest to about $77,000.

Carney has acknowledged in pleadings that he owes money to Berger, but he has insisted that if he is left in peace to continue practicing, he will earn enough money to satisfy her and other creditors. Evidence that he has the talent and brains to make good n that promise is a series of million-dollar verdicts over the past two decades and praise for this litigation skills from other lawyers, notably insurance company lawyers he has bested.

The Office of Attorney Ethics is investigating allegations that Carney withheld portions of personal injury awards form a number of clients, not just Berger.

Last November, in a deal that would have cost him a three-month suspension, Carney stipulated to three instances of improper use of client funds, but the Disciplinary Review Board rejected the agreement and asked the OAE to keep looking into Carney's business.

One of Carney's lawyers, Timothy Donohue, a partner in Chatham's Arseneault & Krovatin, says "Jim Carney has cooperated fully with the Office of Attorney Ethics in their investigation and he will cooperate fully with the court appointed fiscal agent. We have nothing to hide and we welcome Mr. Edelstein's assistance and supervision. We hope it will free up Jim Carney to do what he does best: try cases."

Edelstein was county counsel under former County Executive Thomas D'Alessio, who in 1994 was sent to federal prison for four years from peddling his influence on behalf of a trash hauler seeking a state contract.

Edelstein earned $50,000 in legal fees on the project and prosecutors named him as an unindicted co-conspirator, but Edelstein had bills to support the legitimacy of his work. Prosecutors said there was no issue as to whether he had done the work.