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Attorneys File To Dismiss Remaining Defendants From Lawsuit
By Tina Traster
Will the Pearl River Chamber of Commerce suffer irrevocably due to ongoing litigation in a protracted lawsuit that began with a conflict between former directors and a former treasurer?
Attorney Don Feerick, who is representing the Chamber in the case, believes it might.
“They are collapsing under the weight of this burden,” said Feerick. “It is becoming increasingly difficult for the Chamber to focus on its mission.”
The case originated in February when former treasurer Michelle Worob filed a defamation suit in Rockland Supreme Court against four previous directors. Subsequently, former president of the Chamber and defendant Brian Campbell filed suit against the Chamber, citing its failed obligation to cover his legal expenses through the Chamber’s insurance carrier.
The case has been winding through the court slowly.
In October, a Supreme Court of Rockland County judge dismissed the case against one of the four defendants, Lisa Williams, and another defendant, Jenna Fabio, was released recently by stipulation between the attorneys representing both sides. But the Chamber is still in the thick of the suit.
New York Attorney G. Oliver Koppell, who is representing the four defendants, this week filed a motion to dismiss the two remaining defendants, Matthew Worgul and Brian Campbell. The attorney has relied on a recent ruling that says the plaintiff’s complaint does not meet defamation standards, as well as a copy of an audit of the Chambers’ books that he says reveals mismanaged bookkeeping.
“The clear standard of defamation was not met here,” said Koppell.
In dismissing Williams, Judge Paul Marx said the allegations against Williams were “inadequately drawn,” and the plaintiff Michelle Worob had not adequately alleged that Williams had said the words Worob claims defamatory. In addition, the judge said from the bench on Sept. 27th that Worob’s role as the Chamber’s treasurer made her a “public figure,” and that the bar for a defamation case is higher when a public figure brings a defamation suit.
Attorney Brian Condon, who is presenting Worob, has filed a notice of appeal.
“We have appealed Marx’s decision with regard to Ms. Williams in which my client was found to be a public person ,” said Condon. “We don’t believe she is. We are going to vigorously defend against their motion, and based on affidavits, I do foresee those motions will be denied.”
Condon is referring to potentially defaming statements the defendants allegedly made to individuals in the community including Orangetown Supervisor Teresa Kenny, Orangetown Director of Economic Development Carmel Reilly, Nanuet Chamber member George Mollo, North Chamber Commerce member Tom Ossa and other third parties.
In February, the Chamber hired forensic accountant James DeMinno CPA of New City to conduct an audit of Worob’s books.
The auditor concluded, in a report issued in July, “the financial position of Pearl River Chamber of Commerce for 2018, 2019, and 2020, and the results of its operating activities and its cash flows for the year then ended in conformity with accounting principles generally accepted in the U.S.”
However, in a separate section of the audit called “Notes to the Financial Statements,” the auditor says: “there were numerous checks (of small amount[s]) that were issued to “Cash”. We could not decipher the endorsement signature, verify who the payment was made to. No check should be issued to Cash. The recipient’s name and the purpose of the check should be reflected on each check.”
The notes also say reimbursement checks should not be issued without accompanying receipts, that anyone receiving a check of $600 or more should be issued a 1099. And the notes point out that “multiple checks written to different catering venues for gift certificates lacked names in the memos. The notes also question a $351 payment on July 31, 2018 to O&R.
Koppell said the audit confirms statements made by the defendants were accurate.
“The bookkeeping, at the very least, was sloppy,” said Koppell. “There were entries made to cash that should not have been made to cash. There were omissions that suggested a failure to submit certain receipts.”
Koppell said the audit’s results “did not rise to criminal activity, but the omissions should allow for the possibility of improper expenditures.”
In late September, the Chamber posted a statement on its Facebook page saying the audit cleared Worob’s name, though the Chamber did not release the audit.
Worob, who has spoken for the first time publicly, told RCBJ she feel exonerated by the audit, and that she is still saddened by the allegations of financial mismanagement.
“I was part of the Chamber for 20 years,” said Worob. “I volunteered my time tirelessly and effortlessly to build the chamber. It is a very important organization to me. I didn’t want to be treasurer. Nobody wanted the position. Nobody would step up. To be accused of misappropriating funds is so upsetting. It’s a stab in the back.”
Worob in February filed a lawsuit in the Supreme Court of Rockland County against four former directors, claiming their negative public characterizations of her work as treasurer amounted to defamation. In her defamation suit, Worob, owner of Luigi O’Grady’s Deli in Pearl River, alleges Campbell, Worgul, Williams, and Fabio made statements suggesting Worob, who was treasurer from 2011 to 2019, “misappropriated monies for her own benefit and gain.”
Worob, who is seeking $1 million in damages, disputes any allegations of wrongdoing in her role as treasurer and touts her accomplishments over many years with the Chamber in the suit.
In a “third-party complaint” filed by Campbell, the defendant and third-party plaintiff alleges that officers are entitled to two types of protection: indemnification under the bylaws for “claims, damages, losses and expenses arising out of, or resulting from the performance” of his duties as president. The suit also alleges the Chamber was required to secure insurance to protect officers for any claims of damaged not covered by the indemnification provision of the bylaws.
In response, the Chamber has asserted his acts, if proven to be true, were “a form of gross negligence,” that were beyond the pale of an officer’s behavior. The Chamber’s response essentially boils down to the notion that it is not obligated to cover an officer for “intentional torts” such as defamation and negligent infliction of emotional distress.
Additionally, the Chamber also says that if, indeed, there was inadequate insurance, it was Campbell’s fault because he was president at the time.
However, the filing also cites that Campbell’s successors have since obtained insurance.
Koppell said the Chamber has not been released from the case because there are still outstanding costs that have not been paid by the insurance carrier, Great American Insurance.
“The Chamber denied our clients the right to be indemnified under the policy,” said Koppell. “They ultimately agreed they have the obligation to pay for legal expenses, but the insurance company only began paying in April. My client Lisa Williams, who was sued in February, is out more than $10,000. We are seeking to recover these legal fees.”
Feerick, Chamber attorney and spokesperson, said, “The Chamber’s President provided prompt notice of lawsuit to the Insurance Carrier, when she first received news of the lawsuit. The Insurance Carrier undertook to investigate. It took time, as it often does. Ultimately, the Insurance Carrier opted to provide a defense, and is paying the defense costs. The Insurance Carrier also reserved its rights on the question of indemnity (as indemnity is only needed after trial, upon final judgment).”
Feerick acknowledged no settlement had been reached to release the Chamber from the suit, adding, “I hope this does not prevent the Chamber from going forward, from fulfilling its mission and doing the good work it does.”
Chamber President Susan Perzigian did not respond to requests for comment.