Collusion Course

Is a “eureka moment” always a good thing? Is it always instantaneous? I had one that took several months to evolve and, when the light finally turned on, when the moment of clarity shown, when the flower finally bloomed, I felt like an idiot.

In 1983, only weeks into my career as a real estate lawyer in New Jersey, my boss (henceforth referred to as “F”) called me into his smoke-filled office and handed me a file.
“Go to the planning board hearing in Midland Park tonight,” he said, as though that meant anything to me.
“Ummmmm,” I said.
“Just be there at seven o’clock,” he continued, “and when they call the case, get up and introduce yourself, like, ‘I’m the Chen’s lawyer’ and y’know, take it from there.”
“Who are the Chens?” I asked.
“Our clients,” said F. “They bought a house a few months ago, and they applied to the planning board to open a restaurant there, that’s all. Should be a piece of cake. Just read the file.”
With that, F, who was always bustling, looked longingly at the lights blinking on his phone console and took a quick drag from his always-lit cigarette; I realized he wanted me to leave.

Working for F was an eye-opening experience. I’d spent my first year as a lawyer at a buttoned-down, conservative law firm in a neighboring town. There, I arrived early, researched banking regulations in the library, and stayed until the last partner went home in the evening. I was promised the opportunity to meet clients “within several years;” meanwhile, I worked exclusively with thick and tedious books, a pen and a pad of paper.
At the end of that year, I expressed an overwhelming sense of hopelessness and boredom to a friend who put me in touch with her uncle, who hired me without even an interview, to assist with his rough-and-tumble divorce practice. I immediately went from zero “client contact” to a soul-sucking abundance of client contact from which I began to believe the following: basically, everyone lies: the opposing party; the opposing lawyer; and, especially, your own client. Still single at the time, I couldn’t go on a date during my brief “family lawyer” phase, since I trusted no one.
Though my pay improved from my previous position, and boredom was no longer an issue, I perceived that being a “divorce lawyer” wouldn’t suit me. Excessive honesty on my part hurt several clients’ cases, and my boss also recognized my personality was unsuited to the task. He sought to hire a real SOB as his new associate, and offered my services to his brother, F, whose real estate closing practice was overwhelmingly busy. In our first meeting, F made clear his desire that I handle enough of his workload to free his afternoons for his true passion, golf.
My first few weeks as a “closing attorney” were delightful. I liked talking on the phone to generally happy clients, who were buying or selling their homes. Even cheerier were people refinancing their mortgages, since nothing makes a client happier than saving four or five hundred dollars a month. The work seemed clean, positive, and easy.
Several other aspects of real estate law were preferable, too. There were no court appearances, no crying clients and no need to keep a gun in the desk drawer, as F’s brother did. In addition, we didn’t keep track of time for billing purposes. Each transaction had a set fee and, as F often said: “If they don’t pay, they don’t close.”
Finally, real estate agents were overwhelmingly middle-aged women. They were usually pleasant to my mid-twenties self, even those who didn’t have a daughter at home they hoped to introduce to the “bright young lawyer in town.” F’s wisdom on real estate agents was, as follows: “Most lawyers treat them like dirt. Just return their calls and they’ll love you.” He was right.
Gifted at memorizing phone numbers of agents, mortgage lenders and the like, I also learned to negotiate on the fly. Most days, F went golfing by noon and I departed promptly at five. I felt HAPPY as a practicing lawyer for the first time, until….

Arriving thirty minutes early at the town hall “hearing room” to relax and read the Chen file, I sat in the front row of four wooden benches like pews in a church, except lacking bibles.
I learned F had represented Mr. and Mrs. Chen in the purchase of a small house several months earlier, for $120,000, which they intended to convert to a Chinese restaurant. F had charged them a legal fee of $3,500, 400% more than our usual residential closing fee at the time. A note on the file indicated, by way of explanation: “Commercial closing fee.”
“Wow,” I thought to myself. “F charges a ton extra when it’s not just a house.” Yet, I couldn’t figure out how this file differed from any other closing, at least up to where I found myself at that moment: at my first-ever planning board hearing. I felt a little queasy about my lack of preparation. Despite F’s assurance, how could it be that all I had to do was introduce myself, receive permission to open a restaurant on behalf of my clients, say “thank you,” and go home?
Right on time, seven individuals, six men and one woman, entered from a side door and sat behind a long table in front of the room. American and Midland Park flags stood on poles at both ends of their table. Cardboard nametags in front of each seat identified the board members. A stenographer followed them into the room and sat at a small desk between the table and a lectern. During the half hour I’d waited, several other lawyers or applicants had arrived and taken seats in the visitors’ benches, either silently, or whispering among themselves in hushed tones.
After intoning the pledge of allegiance and discussing several preliminary remarks about the previous month’s agenda, the chairman, sitting in the middle of the seven board members, scanned the room, and asked if anyone represented the Chen application.
“Yes, me,” I jumped up, dropping the file to the floor in my excitement.
“And you are?” said the chairman.
“Stuart Sanders, of the F law firm,” I said, as I retrieved the file and moved to the lectern in front of the board.
“Mr. F is not favoring us with his presence this evening?” he said.
Several of the board members and several people in the audience seemed to exchange knowing glances. I thought one man even snickered.
“Ummmm, no,” I said. “I’ve come to get approval to open the restaurant.”
More chuckles arose from around the room. I felt my face, already warm, become bright red.
“Well,” said the chairman. “Do you happen to have a magical explanation of where the parking spaces are supposed to go?”
I didn’t know what he was talking about.
“Mr. Chairman,” said the female member. “Clearly, Mr. F has chosen to dodge this meeting. He has not provided this board, or his associate, apparently, any basis to believe the property in question can support the eight parking spaces necessary for a restaurant under our ordinance.”
Another board member asked: “Should we allow the applicant one more month? Clearly, this young man is not prepared to address our concerns this evening.”
“I don’t think so,” said the chairman. “We were perfectly clear with Mr. F last month. I don’t understand how he let his clients buy this property with the expectation of opening a restaurant.
“Son,” he said, addressing me, “Do you think eight parking spaces can fit onto the footprint of this property?”
My mind was spinning. I didn’t know what sort of “footprint” he meant. All that came to mind was a footprint of a bear walking in snow. I had no idea how to respond. I shook my head.
“Motion to dismiss the application,” said one board member.
“Second,” said several simultaneously.
“All in favor of dismissal, raise your hand,” said the chairman.
Six board members raised their hands immediately. The one who had suggested a delay caught my eye, mouthed “sorry,” and raised his hand, too.

It ended so soon I hardly comprehended what had happened. With my file in one hand and my briefcase in another, I hurried out of the building and drove home.
I laid awake most of the night trying to figure out how I had failed. Should I have known from the file that there was an issue with parking? How could my first board hearing end in humiliation? Though I had no idea on what basis, I was certain F would be angry with me. Upon arrival at work, I gingerly approached his office .
As usual, he was hurriedly plowing through the previous afternoon’s phone messages so he could make his tee-time.
“How’d it go last night?” he asked, pausing with the phone in one hand and his cigarette in another.
“Terribly,” I said. “The application was dismissed. They said….” I started to explain, but he waved me off: “It’s not a problem,” he said.
“It’s not?” I said.
“I’ll talk to the Chen’s,” he said. “Don’t give it another worry.”

I went back to my own office relieved, but mystified. Why wasn’t F upset? Why didn’t he want to know what had happened? I dug into my own pile of phone messages, performed a closing and, gradually, managed to recover from the previous evening’s disaster.
The next day, when I went to lunch, I saw F in line at the sandwich shop across from our office, in an animated discussion with Alex Milano, a litigation attorney and golf buddy. When I entered to place my order, they glanced in my direction and I had the distinct impression they ceased talking because of me. I wondered if F had been telling him about the planning board. I nodded in greeting, and departed as soon as I received my food.
Several days later, I saw F usher an Asian couple into his office and shut the door. This was unusual, since he almost never shut his door.
“It’s probably the Chens,” I thought to myself. As soon as they left, I went down the hall and asked F: “Was that who I think?”
“Those were the Chens,” said F. “I told them how sorry I was.”
“What happens next?” I asked.
“We’ll see,” said F. “It’s not your problem.”
“It’s not?” I said.
He just shook his head and changed the subject: “You’ll do the Moran closing this afternoon. I’ll take care of the Worley’s tomorrow morning before golf.”
“Okay,” I said. But I was still anxious.

Approximately a month later, during a relatively quiet afternoon, while F was out, a middle-aged man appeared at our office and asked our receptionist, Cheryl, if I were available. Before she even finished gesturing in my direction, the man handed me a pile of papers and bounded back out the door. I looked down at a “Summons and Complaint.” On behalf of Mr. and Mrs. Chen, Alex Milano had filed a lawsuit against me for malpractice.
I trembled. I blanched. I felt a terrible combination of rage and humiliation.
“Are you okay,” asked Cheryl.
“Not really,” I said. I sat down glumly at my desk.
Throughout the remainder of the afternoon and evening, I was miserable. I had never been sued before. I had no idea what lay ahead. I couldn’t imagine how I was responsible for what happened. And why had F told me “not to worry?”
The next morning, I showed the documents to F. Again, he said: “Don’t worry.” He added: “I’ll handle it.”
“It says I committed malpractice,” I said. “Was I supposed to know about the parking spaces?”
“There was a mistake, but you had nothing to do with it,” he said. “Don’t even think about it again. Here, do you have time to return these calls? I gotta go.”
He handed me a sheaf of messages. It wasn’t easy, but over the next several weeks, the lawsuit receded from my mind. Yet, my attitude had changed; I couldn’t identify it yet, but something was amiss.

The next time I saw F with Alex Milano at lunch, they seemed happy like two men who’d won a small lottery. Indeed, I’d learned from F’s secretary that our firm’s insurance company had settled with the Chens by paying them back their entire purchase price, plus damages. A third of that, nearly $50,000, would have gone to Alex and the balance to the Chens who still owned the house, even though they couldn’t operate a restaurant.
Gradually, I realized how “the law” had worked in this instance: Alex Milano would have paid a “referral fee” of one-third of his fee to whoever referred him the clients. Thus, in addition to the $3,500 closing fee, F received $16,000 from Alex. I never learned whether F had bungled the transaction intentionally, or merely hatched this solution to salvage the situation, after he realized the Chens’ purchase should have been conditioned on the existence of sufficient parking spaces.
Yet, the experience was not worthless. Besides humiliation, I received several valuable lessons for the remainder of my twenty-five year career, namely:

1. If you specialize in residential real estate, don’t take a commercial client;
2. If you are not familiar with a file, don’t accept someone else’s client without asking a lot of questions;
3. Be wary of dealing with anyone who says “Don’t worry about it,” particularly F, forevermore; and
4. If all else fails, be mindful of human nature, and be certain the malpractice insurance is paid up-to-date.

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