The New Jersey Appellate Division has ruled that it does not have jurisdiction to hear an appeal from a district fee arbitration committee matter, instead transferring the case to the Disciplinary Review Board.

Matthew Kenney, a California-based restaurateur, appealed the Middlesex County Superior Court's enforcement of a fee arbitration award in favor of his former attorney, according to the opinion. New Jersey attorney Robert D. Skene was retained by Kenney's company to obtain a liquor license for a department store in Illinois.

According to the opinion, the retainer agreement confirmed "the retention of the Skene Law Firm, P.C. by Matthew Kenney Global to advise and assist with obtaining a liquor license at an existing Sak's department store in Chicago, IL."

"The relationship soured after Skene had billed, presumably, the company more than $45,000 over the course of six months and had not secured the liquor license," stated the per curiam opinion of the court.

Kenney filed an Office of Attorney Ethics Attorney Fee Arbitration Request Form, which has no space for a business entity. The form only contains a space for a client's first and last name, which Kenney completed along with his California business address, according to the opinion.

An arbitration hearing scheduled for April 20, 2020, was delayed due to the pandemic, according to Kenney. But, alleged Keeney, all attempts to find out details on the new date were unsuccessful. Instead, he found out about a rescheduled virtual hearing date just hours before it was to take place. Kenney claimed at the time that he was trying to save his company and delegated his chief of staff to attend the arbitration hearing, according to the opinion.

"As reflected in the arbitration panel's written statement of reasons, however," stated the opinion, "the panel chair rejected the chief of staff's assertion that he was the only one with knowledge of the facts of the fee dispute and refused to let him testify on behalf of the company."

"We need not detail defendant's and the panel's differing views of what transpired thereafter," the opinion said. "Suffice it to say, the hearing went poorly, and we expect a few of the participants would likely look back and admit they could have behaved better."

According to the opinion, the panel chair stated that although the real complainant was a corporate entity, the complaint was signed by Kenney personally. As a result, the panel wanted to hear from Kenney directly and ultimately found that Kenney personally owed Skene the entire legal fee of $40,840.98, according to the opinion.

"When Kenney failed to pay, Skene filed an action in the Law Division to enforce the award," the opinion said. "Defendant retained New Jersey counsel and opposed Skene's application on several grounds, including that the panel entered an award against Matthew Kenney personally, over whom it lacked jurisdiction as he was not Skene's client."

The Middlesex County Superior Court judge enforced the award and stated that he had no authority to entertain arguments "that should have been raised on a proper appeal before the Disciplinary Review Board, which is the exclusive and only forum which can hear these appeals."

On appeal, Kenney argued that neither he nor his company were noticed of the fee panel's award until Kenney was served with the Law Division complaint and order to show cause. The order directed Kenney to file his answer in court, not before the DRB. According to the opinion, Kenney further argued that the Law Division had no subject-matter jurisdiction over him personally as he was never Skene's client.

Skene argued that in the fee arbitration complaint, Kenney filed in his individual capacity and that Kenney was personally served in California.

"Skene contends 'a legal complaint is not a meaningless "boiler-plate" form and the court disregarding a filed pleading as meaningless would offend nearly every bedrock tenet of the legal system,'" according to the opinion.

The per curiam opinion held that the Law Division was correct that it lacked jurisdiction to consider the merits of Kenney's challenge to the district fee arbitration committee's award. Likewise, the opinion stated, the appeals court has no jurisdiction.

The opinion stated that the court agreed with Kenney "that a corporation is a separate entity from its shareholders, and that a primary reason for incorporation is the insulation of shareholders from the liabilities of the corporate enterprise" and that those are "fundamental propositions."

But, according to the opinion, "the issues raised by this appeal—the Office of Attorney Ethics Attorney Fee Arbitration Request Form, the conduct of a district fee arbitration panel hearing, and the Rules of Professional Conduct regarding a lawyer's scope of representation, fees and duties in representing an organizational entity—are all matters within the court's plenary authority, and beyond ours, to consider."

The opinion stated that following the judge's lead in Linker v. Company Car, the court transferred the matter to the DRB to resolve Kenney's right to appeal the panel award.

"The DRB can determine whether defendant's answer in the Law Division preserved his appellate rights before the DRB, or whether it will consider the merits of the appeal in the interests of justice or otherwise," the opinion said. "Should the DRB determine not to hear Kenney's appeal, the Law Division's order enforcing the fee award will be final."

Judges Allison E. Acurso and Lisa Rose issued the per curiam opinion for the court.

"This matter is a cautionary tale that a client who demands arbitration and then flouts the hearing set up for him has only himself to blame when the arbitrators rule against him," stated counsel for Skene, Yelena C. Tsyrlin of Heitner & Breitstein.

Counsel for Kenney, Nicholas A. Duston of Norris McLaughlin, could not be immediately reached for comment.