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In re Hathaway

September 29, 2009


Motion by the petitioner, Grievance Committee for the Tenth Judicial District, pursuant to 22 NYCRR 691.3, in effect, to impose reciprocal discipline on the respondent based upon disciplinary action taken against him in the State of Connecticut. Cross motion by the respondent to confirm a report of a Special Referee dated December 10, 2008. Separate cross motion by the petitioner to disaffirm the report of the Special Referee and impose such discipline upon the respondent as the Court deems just and proper. By decision and order on motion dated May 15, 2007, this Court held in abeyance the Grievance Committee's motion, in effect, to impose reciprocal discipline pending a hearing pursuant to 22 NYCRR 691.3(d), and the issues raised were referred to the Honorable Joseph A. Esquirol, Jr., to hear and report "with respect to the findings of the Connecticut jurisdiction" and the respondent's defenses to the imposition of reciprocal discipline. The respondent was admitted to the New York State Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on January 17, 1990.

Per curiam.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.



The respondent's resignation from the Bar of the State of Connecticut was executed on August 26, 2005. In submitting his resignation from the Connecticut Bar, the respondent waived the privilege of applying for readmission to that Bar at any time in the future. He acknowledged that he was submitting his resignation and waiver knowingly, voluntarily, and of his own free will. After a hearing before the Honorable Chase Rogers of the Superior Court, Judicial District of Stamford/Norwalk at Stamford on November 1, 2005, the Superior Court accepted the respondent's resignation and waiver and appointed Richard Rafael as trustee, inter alia, to inventory the respondent's files, to take necessary action to protect the interests of the respondent's clients, and to provide an accounting to the court. The court further ordered the respondent to place into the trustee's possession and control all of his files, open and closed, all clients' funds accounts, "IOLTA or otherwise," all office operating accounts, and the keys to the respondent's office; and to make the respondent's office and staff fully available to the trustee to accomplish his duties.

The Grievance Panel for the Judicial District of Stamford/Norwalk found probable cause to believe that the respondent had violated Connecticut Rules of Professional Conduct 1.4(a), (b), 1.8(h), 1.15(a), (b), 8.3(a), and 8.4(3) and referred the file to the Statewide Grievance Committee for its determination.

According to the complaint, the respondent represented the complainant in the sale of real property in both his individual capacity and as executor of the Estate of K.F.S. The property sold for $1.3 million on May 24, 2004.

The respondent agreed to hold the Estate's net proceeds of $611,943 in escrow until the Estate established a bank account in New York. Although the complainant requested the funds in late June 2004, the respondent only delivered $111,943 to the Estate's bank account on November 9, 2004. The complainant received the remaining funds from the respondent only after the Estate retained counsel to collect the funds. That sum was not drawn on the respondent's trust account but, rather, from an account maintained by the respondent's friend in the Fairfield County Bank which allegedly had insufficient funds on deposit. Although the bank honored the check, two separate legal proceedings against the Estate were brought by the Bank in courts in Connecticut, which effectively froze the Estate's money and required it to retain an attorney to defend it in the legal proceedings. The respondent agreed to reimburse the Estate for lost interest and corresponding legal expenses conditioned upon the complainant's release of the respondent from all claims, including disciplinary proceedings.

In response to the notice pursuant to 22 NYCRR 691.3 of the Grievance Committee for the Tenth Judicial District (hereinafter the Grievance Committee ), the respondent submitted a verified statement setting forth each of the three enumerated defenses to the imposition of reciprocal discipline and requested a hearing. The hearing was conducted with the understanding that it was not a proceeding to relitigate the underlying merits of the misconduct.

The essence of the respondent's defenses is that he believed, based on his claims of off-the-record discussions with an assistant disciplinary counsel for the State Bar of Connecticut, that his resignation would end matters completely and that it would be as if the subject complaint and the Connecticut proceeding never existed. The respondent maintains that in order to reassure him, the disciplinary counsel indicated that only the resignation would be reported to other jurisdictions. From this, the respondent extrapolated that there could be no reciprocal discipline inasmuch as the underlying complaint had been completely erased. In effect, he analogized his resignation to a decision to retire from a corporation.

The Special Referee accepted the respondent's arguments and found that he had sustained his burden of proof with respect to all three of the enumerated defenses by a fair preponderance of the credible evidence.

While acknowledging that the respondent had notice of the Connecticut proceedings and an opportunity to be heard, the Special Referee found the respondent's account to be credible and found that misleading information given to him by the representatives of the Connecticut State Bar constituted a deprivation of due process.

The respondent originally executed the Connecticut resignation on August 26, 2005. The resignation states that it was submitted knowingly, voluntarily, and of his own free will, with a waiver of counsel. Although the resignation hearing did not take place until November 1, 2005, the respondent apparently failed to take time to familiarize himself with the Connecticut Practice Book or to inquire whether there was another way to resolve the grievance, such as by entering into a stipulation, as he had done with respect to a previous complaint. Even after being made aware at the hearing of the possibility that his resignation could be the basis of a reciprocal disciplinary proceeding, the respondent never expressed a desire to consult with counsel. Nor did he raise his alleged defenses at any time during the resignation hearing. Although the respondent claimed ...

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