EMERSON—The legal firm representing Emerson Redevelopers Urban Renewal (ERUR) is not free to drop its client, the borough’s redevelopment partner and adversary, in a jury trial scheduled to start Nov. 4.
With less than a week to trial, the firm, Sills Cummis & Gross PC, petitioned Superior Court Judge John D. O’Dwyer “to relieve Sills of the unfairness of having to defend the suit during a two-to-three-week jury trial when Sills has not been paid” in nearly a year.
The firm also had moved that the case be adjourned, in light of the anticipated lack of representation for ERUR.
However, on Oct. 31 O’Dwyer said no, and so on Nov. 1, Sills Cummis & Gross PC withdrew their motion to be relieved as ERUR’s counsel.
The jury trial apparently is still on for Nov. 4.
The initial request from lead attorney Joseph Fiorenzo, of Sills Cummis & Gross PC, Newark, was posted on NJ ecourts at 5:40 p.m. on Tuesday, Oct. 29.
The twists in the nearly 4 1/2-year old case filed by Emerson against ERUR over reneging on a $500,000 payment for ambulance property deeded to the redeveloper came amid several recent reports of financial troubles for ERUR principal Jack Klugmann, owner of Accurate Builders.
See “Attorneys spar on zoning change request; eyes on ERUR trial Nov. 4,” Michael Olohan, Oct. 7, 2024, thepressgroup.net). ERUR was recently sued for $1.4 million by an Emerson Station subcontractor for unpaid invoices, is involved in an $8 million mortgage foreclosure lawsuit in Kenilworth; and let unpaid 2023 taxes of approximately $10,000 for 129 Kinderkamack Road be sold at an Oct. 1 borough tax lien sale.
“The attorney-client relationship between ERUR and Sills (Cummis & Gross) has reached a point where Sills can no longer represent ERUR in this matter due to its substantial failure to meet its agreed upon payment obligations to our firm for services rendered. Indeed, ERUR is in substantial arrears in its payments to Sills for legal fees in this matter and the other matters we are handling for Accurate,” stated Fiorenzo in one of his Oct. 29 court filings.
In his multiple Oct. 29 court filings, Fiorenzo declined to state exactly how much ERUR owed the firm, noting only one payment had been made in the last year. Fiorenzo said he would provide details to the judge if requested.
Fiorenzo said that only last week for the first time this year the law firm was paid by ERUR for 17% of its outstanding invoices.
However, he said Klugmann had been repeatedly warned over the last five months that Sills Cummis & Gross would ask to terminate its relationship with ERUR if it did not pay its invoices within 30 days or failed to reimburse its retainer funds per their legal agreement.
Borough Attorney John McCann said that the several prior trial delays and postponements requested by ERUR attorneys in the case over the last year indicated likely financial troubles.
“I’m not surprised by the admission that this builder (ERUR) is not paying its bills. It’s consistent with the other public reports in the media and I’m concerned for the taxpayers of Emerson,” McCann told us.
McCann said he was uncertain whether the trial judge would release Sills Cummis & Gross PC from representing ERUR at the scheduled Nov. 4 trial. He noted that the “failure of the prior administration to do its due diligence relating to this developer (ERUR)” has resulted in the downtown redevelopment’s ongoing delays and lawsuits.
Fiorenzo wrote, “Beginning in May 2024, and continuing until last week, I advised Mr. (Jack) Klugmann, the principal of the ERUR, on numerous occasions and on a continuous basis both orally and in writing that unless ERUR complied with our retainer agreement and brought ERUR’s account current, Sills would have no choice but to move to be relieved as counsel of record.”
Fiorenzo said, “The only reason we have not moved earlier is that we were advised by Mr. Klugmann that our fees would be brought current as a result of a large refinancing that Accurate (Builders) engaged in. Indeed, last week I was advised that a closing on the refinance would occur today (Oct. 29), out of which Sills’ fees would be paid. Once again, that commitment has not been fulfilled.”
McCann said the court filings by Sills Cummis & Gross “say a lot about their (ERUR’s) financial problems with other projects and more or less confirms that the builder is having financial troubles” in completing projects.
For his part, Klugmann emailed Pascack Press on Oct. 31, at press time, “Sills Cummis is a great firm and we understand the need for their filing. To explain our position, we are in the process of a much larger recapitalization. Due to all the litigation on this project, this has required the new lender to obtain assurance that we have a viable project and that we are ‘in the right’ with regards to our lawsuits with the town.”
He asserted, “That being the case the refinance is taking longer than expected as there are multiple moving parts. As such, Sills Cummis could no longer move forward with the trial until we conclude the closing, as they were to be made whole at the time of closing.” He noted that “With all this being said, we have every intention of continuing the lawsuits and seeking all damages that are due to us from the municipality.”
Klugmann followed up with a note several minutes later: “We paid Sills a lot of money a couple weeks ago.”