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.
Richard T. Andrias, Justice Presiding, James M. Catterson, Dianne T. Renwick, Leland G. DeGrasse, Sheila Abdus-Salaam, Justices.
Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Clarence Jordan Ball, III, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the First Judicial Department on May 17, 1993.
Respondent Clarence Jordan Ball, III, was admitted to the practice of law in the State of New York by the First Judicial Department on May 17, 1993. At all times relevant to this proceeding respondent has lived and practiced law in the Commonwealth of Virginia, where he was also admitted to practice as an attorney. Respondent has not appeared on this petition.
The Departmental Disciplinary Committee now seeks an order, pursuant to 22 NYCRR 603.3, censuring respondent predicated upon similar discipline issued by a Virginia Court, or, in the alternative, sanctioning respondent as this Court deems just and proper. By order entered December 13, 2007, a three-judge Court impaneled by the Virginia Supreme Court, held that respondent had violated Rule 1.15(c)(4) of the Rules of Professional Conduct, which requires a lawyer to promptly deliver to the client or another person the funds in the possession of the lawyer which such person is entitled to receive.
Respondent's misconduct is predicated upon acts occurring between August and November 2003. On August 4, 2003 respondent and Jennifer C. Yates, Esq. formed a partnership, Ball & Yates, LLP, in Norfolk, Virginia and opened a partnership checking account in which each deposited $12,500 in capital contributions. Before the partnership commenced operations, respondent and Yates decided to dissolve the partnership and respondent withdrew from the partnership on October 8, 2003. On October 23, 2003, respondent, without notifying Yates, withdrew the remaining partnership funds, totaling $10,679.32. He placed them in the client trust account of his new law firm, Ball and Manger, LLP, where Yates had no access to them.
In October and November 2003 respondent sent three checks to Yates totaling $7,767.16, which respondent claimed was the remainder of Yates's capital contribution. Rather than negotiating these checks, Yates commenced a lawsuit against respondent in November 2003. Respondent reciprocated by drawing and negotiating checks to himself totaling $7,167.16. Although Yates's lawsuit was against respondent individually, respondent paid the legal expenses incurred in defending himself with the disputed partnership funds drawn from his new escrow account. He also ordered a stop-payment on the checks that he had issued to Yates.
In March and April 2004 respondent removed the disputed partnership funds from his firm's escrow account and paid them to the order of Ball and Manger, LLP. He provided written notice to Yates of these disbursements, stating that "a deposit is being made on your behalf," although the "deposits" represented a reduction in the amount of partnership funds held in his trust account. In addition, Ball & Manger, LLP, charged $600 in legal fees against the disputed funds for simply preparing the written notices of respondent's disbursements, at $50 each.
Following respondent's answer to the charges, a three-judge court impaneled by the Supreme Court of Virginia convened to hear the matter. Respondent appeared with counsel and contested the charges.By order entered December 13, 2007 the three-judge panel of the Virginia Court found that respondent had violated Rule 1.15(c)(4) of the Rules of Professional Conduct by:
(1) removing disputed Ball & Yates partnership funds to the client trust fund account of the Respondent's new law firm, thereby denying a Ball & Yates partner access to the funds and granting the new firm's partners access, without prior or proper authorization from or notice to the Ball & Yates partner, (2) disbursing funds and property without the prior authorization of or notice to the partner, and/or in breach of the partnership agreement, and/or with knowledge of disputes related to the funds and property, (3) ordering a stop-pay on the checks issued to the partner, without prior notice to the partner, and then using the funds without prior notice to or authorization from the partner, and (4) conveying essentially all disputed assets to Respondent's and Respondent's new law firm.
The three-judge court sanctioned respondent with an "Admonition Without Terms." Respondent's counsel objected to the court's findings upon the ground that, inter alia, "[t]he factual findings of the court do not constitute a violation of RPC 1.15(c)(4)" Thereafter, respondent appealed the Virginia court's December 13, 2007 order to the Virginia Supreme Court, but subsequently withdrew it. As a result, by final order entered June 6, 2008 the Virginia Court reinstated its December 13, 2007 order of admonition. These two orders provide the basis for the Committee's reciprocal discipline petition.
In a proceeding seeking reciprocal discipline pursuant to 22 NYCRR 603.3, respondent is precluded from raising any defenses except: (1) lack of notice or opportunity to be heard in the foreign jurisdiction constituting a deprivation of due process; (2) an infirmity of proof establishing the misconduct presented to the foreign jurisdiction; or (3) that the misconduct for which the ...