An Error In His Favor
The Illinois Administrator has filed a complaint that alleges, among other things, misuse of a settlement overpayment
In 2023, a client with the initials L.K. and Respondent agreed that Respondent and various contract attorneys he may employ would represent L.K. in connection with an employment termination matter against her former employer, NuEra East Peoria (“NuEra”).
After several weeks of negotiations, on November 18, 2023, L.K. entered into a settlement agreement with NuEra in connection with the employment matter. The parties agreed that NuEra would pay L.K. $13,333.34, and NuEra would pay HR Law Counsel $6,666.66 in attorney’s fees.
In connection with that settlement, NuMed Chicago LLC, the parent company of NuEra, issued check #00009995004, which was dated November 30, 2023, and mistakenly made payable to the order of “HR Law Counsel LLC” in the amount of $66,666.66. This error by NuEra resulted in the check being made payable for $60,000.00 beyond what was set forth in the settlement agreement with L.K.
The check was allegedly deposited in Respondent’s firm operating account
Between December 6, 2023, and December 13, 2023, Respondent disbursed at least $6,500 in funds from the operating account. Those disbursements included but were not limited to: Serra International for Respondent’s insurance premiums ($5,000), AT&T ($880), and Lexington Law ($139.95), in payment of Respondent’s business or personal obligations.
The overpayment was noticed and return was sought
On December 13, 2023, in response to Vance’s request, Respondent told Vance that he was unable to return the overpayment because Chase Bank had frozen the operating account. According to Respondent, Chase Bank was conducting an “investigation” because check #00009995004 had been flagged for “suspicious activity.”
Respondent’s December 13, 2023, statements to Vance were false because Chase Bank had not frozen the operating account nor were they conducting an “investigation” based on check #00009995004 having been flagged for “suspicious activity.”
Respondent knew his December 13, 2023, statements to Vance were false at the time he made them because he had access to the overpayment from NuEra and was actively spending those funds on business and personal expenses.
Despite further demands for return
Between December 13, 2023, and December 18, 2023, Respondent disbursed at least $44,000 in funds from the operating account. Those disbursements included but were not limited to: American Express ($23,047.65), Capital One ($2,296.14), Newrez-Shellpoint ($5,508.63), Ruby VR ($850.63), a transfer of funds to a personal account he shared with his spouse ($5,000), a payment to Apple Card ($1,917.60), Gamestop ($627.41), Guitarcenter.com ($407.72), and Target ($407.72) in payment of Respondent’s business or personal obligations.
On December 18, 2023, Respondent told Vance via text message that the operating account had been “unlocked,” but also that Respondent was unable to return the $60,000 overpayment to NuEra due to the fact that the funds had not been credited to his account because “Chase [was] continuing its investigation.”
Respondent’s December 18, 2023, statement to Vance regarding Chase Bank’s purported unlocking of the operating account and “continuing investigation” was false, because Chase Bank had never locked the operating account or conducted an investigation into the account.
In an unrelated federal court matter
On July 26, 2024, Judge Sison entered an order holding the Respondent in civil contempt of court for Respondent’s failure to participate in no less than three court proceedings and for his disregard of court orders. The Court’s July 26, 2024 Order stated, in part:
“More disturbing, however, is Attorney Zelizer’s pattern of ignoring the Court and failing to participate in this case. Two status conferences have been held in this case so that Defendant [B.K.] can obtain new representation because it appears that Attorney Zelizer has abandoned his clients… Attorney Zelizer’s conduct is in direct opposition to his ethical obligations as an attorney- obligations which are not only owed to his clients, but also to the Court.”
The July 26, 2024 order was served on Respondent via the Court’s CM/EFC system.
Respondent did not appear for the previously scheduled status hearing on August 19, 2024, and in his absence the Court entered an order sanctioning him $25.00 per business day, made payable to the Clerk of the Court, until he either filed the consent form and took the steps needed to become either generally admitted to the Southern District of Illinois or to be admitted pro hac vice or filed a motion to withdraw from representing the defendants.
As of November 1, 2024, Respondent had not paid any of the accumulated sanction, which by then amounted to approximately $1,700.
(Mike Frisch)