Former Sussex County counsel says he was axed for calling out unlawful acts

The former legal counsel of Sussex County who was out of state when he was unknowingly "terminated" last year by the county's Board of Commissioners says it was an act of revenge after he opposed using county money to pay Sheriff Michael Strada's "personal" attorney for years — the same lawyer who now serves as legal counsel for the county.

Attorney Kevin Kelly, whose contract expired and was not renewed on June 30, 2021, a day before he was expected to return from his son's graduation from the U.S. Army's Ranger School in Georgia, also said the decision to abruptly remove him as counsel came after he and other county officials rejected an immigration-related ballot question intended to promote the Republican sheriff and commissioners' political agendas during an election year.

The county of Sussex and three of its commissioners, Chris Carney, Dawn Fantasia and Herbert Yardley, are accused of violating state law by retaliating against Kelly after he brought to light unlawful actions, according to a lawsuit filed in state Superior Court in Sussex County in late June. Although the suit does not name Strada and Douglas Steinhardt, who was hired last year to replace Kelly, as defendants, they are accused of benefiting from the county government's actions.

Steinhardt, a former Republican candidate for governor and state GOP committee chairman, said in a statement Wednesday that the allegations are "largely a product of Kevin's imagination."

"It is factually and legally devoid of truth or fact," Steinhardt said, adding that his statements are being made on his own behalf and not as county counsel. He said the defendants had not yet been served with the complaint — a purposeful move, he said, by Kelly's attorney, George Daggett, who knows the defendants can't respond because they have yet to acquire representation.

Kelly, who owns the law firm Kelly & Ward in Newton, was contracted by the county in June 2018 on a part-time basis for a three-year term via a resolution passed by the then-Board of Chosen Freeholders. Kelly, who is seeking unspecified damages and compensation for loss of earnings, cites in his lawsuit violations of the Conscientious Employee Protection Act (CEPA), which prohibits an employer from firing, demoting, harassing or passing up for promotion an employee because they objected to something they reasonably believed violated the law.

Steinhardt, in his communication with the New Jersey Herald this week, said that because Kelly was never an "employee" of the county, the statute does not apply, and he expects there will be an early motion to dismiss the suit once it is assigned an attorney representing the county's litigation insurance. But Daggett said Steinhardt's response "reveals that he does not know" about the 2007 New Jersey Supreme Court opinion in the case of "D'Annunzio v. Prudential Insurance Co." In that decision, the state's highest court affirmed an appeals court decision that the definition of CEPA "does not exclude persons who are designated as independent contractors performing services for remuneration." The definition of an employee under CEPA hinges more on their degree of control and direction exercised by the employer and less the lack of financial arrangements, the Supreme Court panel held.

A spokesperson for the Board of Commissioners confirmed Thursday the commissioners were aware of the lawsuit but had not yet been served and could not comment extensively.

"Unlike Mr. Kelly, the commissioners will not litigate his professional shortcomings to the newspaper; that is what the courts are for," said Christina Marks, who was hired in May to assist the board.

Echoing Steinhardt's statement, Marks said Kelly was never an employee of the county and was an independent contractor with a statutorily prescribed three-year term that expired. Kelly was not fired and "enjoyed no right to renewal" beyond the end of his term when the commissioners made the decision to move forward with a "larger, more responsive, and legally capable law firm to handle its complex legal needs," Marks said.

Kelly told a New Jersey Herald reporter last year he was not aware he was being replaced and had made a proposal at the time to stay on as county counsel.

The "frivolous" lawsuit, Marks said, has been turned over to the county's insurer, but it had not yet been assigned counsel as of Thursday evening.

Douglas Steinhardt, a former NJ Republican gubernatorial candidate, was hired as legal counsel for the Sussex County Board of Commissioners.
Douglas Steinhardt, a former NJ Republican gubernatorial candidate, was hired as legal counsel for the Sussex County Board of Commissioners.

Steinhardt's approval

The approval of Steinhardt, a Warren County-based attorney, by the Sussex County Board of Commissioners last year was an atypical move, since he is the first out-of-county lawyer to serve as Sussex county counsel in recorded history, Daggett said. Attorneys Dennis McConnell and John Williams served in the post previously.

Then-Commissioner Director Dawn Fantasia justified the hire during a commissioners' meeting last year by saying Steinhardt's firm, Florio Perrucci Steinhardt Cappelli Tipton & Taylor, is "large" with a "deep bench" that would reduce the need to call upon special counsel. Kelly's firm consists of him and partner Megan Ward.

The sudden move while he was out of state appeared to rub Kelly the wrong way: He had petitioned the all-Republican board to have him continue as county counsel, and aside from learning about his termination from a news reporter, he believed the decision to remove him was based on much more than his having a smaller firm than Steinhardt's.

Steinhardt ran a brief campaign for New Jersey governor in late 2020 and pitched himself as an eager pro-Trump, gun-toting Republican before abruptly exiting the race in early 2021, citing "unforeseen professional obligations." His exit cleared the way for Republican opponent Jack Ciattarelli to move on to the general election, but Gov. Phil Murphy won a second term, the first Democrat to do so in nearly five decades.

The former Lopatcong mayor and Belvidere resident's appointment as Sussex County's attorney came weeks after he and then-GOP Chairman Michael Lavery hosted an April fundraiser for Fantasia and Carney, who were running for reelection.

Steinhardt has served as Strada's personal attorney for several years, Kelly said. But Steinhardt, in response, said his firm was retained by Strada, in his capacity as sheriff, which was a lawful move by a duly elected constitutional officer of Sussex County.

Strada's 'personal' hires

Kelly's arguments weigh heavily on Strada's use of Steinhardt and his law firm for his own personal legal issues, and his further billing of the county for Steinhardt's bills. But Steinhardt said Strada, as a duly elected constitutional officer of Sussex County, lawfully retained Steinhardt and his law firm in his capacity as sheriff.

After his hire in 2018, Kelly said, he met with Strada to improve relations between the Sheriff's Office and the then-Freeholder Board. Strada had filed suit against the county — his then-personal attorney, Daggett, was removed by a state appeals court panel over a conflict of interest — but in 2020 agreed to dismiss the case after a new board was put in place.

Kelly said he had served as county conflict counsel for Strada in 2011 in a lawsuit against the county and was aware what services were needed for the Sheriff's Office. Kelly proposed several law firms to represent various matters, including general legal matters, foreclosures/real estate and labor/personnel/disciplinary matters. Kelly said Strada agreed with the arrangements and said he would not try to seek separate counsel for the Sheriff's Office outside Kelly and the named attorneys, none of whom were Steinhardt or his law firm.

But despite the agreement, Strada "secretly, and unilaterally, obtained legal services and political assistance from Steinhardt and other lawyers in his firm in May 2019," the suit claims.

And when he did use Steinhardt, he purportedly requested that the county pay for his services. So Kelly said he pushed back.

Months before his 2019 reelection, Strada used attorney Katharine Fina, a partner in Steinhardt's law firm, to file an intent to sue several law enforcement officers from Sussex, Morris and Bergen counties, saying they launched a malicious social media attack that cast him in a false light and slandered his good character, causing an exacerbation of Strada's post-traumatic stress disorder and disability from his time served in the U.S. Army. Records do not show that a lawsuit was ever filed.

The impetus behind the 63-page claim, obtained by the New Jersey Herald through a public records request, stemmed from a video in April 2019 that purportedly showed Strada inappropriately touching a uniformed female firefighter at a 2018 event in Stillwater. Strada and the woman both vehemently denied the actions and claimed the video was doctored. At the time, Strada said he referred the matter to his attorney but declined to say who it was.

Steinhardt allegedly handled personal and political problems stemming from the release of the video to over 150 media organizations, as well as an apparent dispute with NBC News, the suit says. Strada, via email in 2019, allegedly requested that the county pay for Steinhardt's services, claiming Yardley, then a freeholder, had granted approval, despite having no legal authority to do so.

While Steinhardt had purportedly never been granted authority to perform services on behalf of Strada, he referred to himself as "general legal counsel" and continued to send invoices to the county for payments, the suit says.

Kelly said he declined the payments and advised Strada to use his own funds or campaign funds to pay Steinhardt. Kelly said he spoke to Steinhardt, who agreed to stop sending his bills. Steinhardt's agreement was also memorialized in an email between Kelly and Strada, the suit says, but Strada also stated in the same email that Steinhardt "should be paid anyway because he is the head of the State Republican Party."

Steinhardt, Kelly said, was aware of the workings of the county's payment processes and use of counsel, since he was appointed just months shy of the November 2019 reelection of Strada to serve as special counsel for an immigration ballot question. In 2019, then-New Jersey Attorney General Gurbir Grewal established the state's Immigrant Trust Directive, which ended cooperation between state law enforcement and federal Immigration and Customs Enforcement (ICE), leading to the state's designation as a "sanctuary state."

The then-Board of Chosen Freeholders and Strada spearheaded efforts for a ballot referendum on whether the county should cooperate with ICE officials, despite the county's having no ICE detainees and having a jail that was nearing closure. County Clerk Jeffrey Parrott, on advice of his attorney, rejected the initial ballot question, finding that it did not comply with New Jersey law, because it was a federal and state issue and not the county's. The freeholders and Strada appealed to Kelly, who sided with the clerk.

The freeholders and Strada, allegedly "furious" with Kelly, hired Steinhardt as special counsel on July 24, 2019, at a cost of $30,000 — a move that angered several attendees at a 2019 freeholder meeting. Kelly said he and Parrott's attorney negotiated a ballot question that was acceptable to the attorney general, and although the referendum measure passed in the county, it had no legal binding effect.

Steinhardt said this week that his firm was brought in to rewrite the ballot question and that it was his rewrite — not that of Kelly or Parrott's attorney — that appeared on the ballot.

Kelly's refusal to accept the board's interpretation of the attorney general's directive left the freeholders and Strada upset, and they became determined to remove him as county counsel, the suit says. As a result, Kelly said, he was criticized in political circles, actions that caused his reputation to be tarnished.

"I do feel sorry for Kevin," Steinhardt said. "I suspect his decision to sue the county stems from two things, neither of which has anything to do with the merits of his frivolous complaint."

Steinhardt said the first decision was the "sting of being replaced" and the second the "precarious financial situation" Kelly has placed himself in over the years.

"I feel badly that he thinks a frivolous complaint aimed at the Sussex County taxpayers and commissioners is the way to solve his financial problems, because it isn't," Steinhardt added.

Strada, who did not respond to a request for comment, is serving his fourth three-year term as sheriff and has had only one challenger since 2010.

Lori Comstock can be reached on Twitter: @LoriComstockNJH, on Facebook: or by phone: 973-383-1194.

This article originally appeared on New Jersey Herald: Former Sussex counsel sues county, commissioners, citing retaliation