DISCIPLINARY proceeding instituted by the Grievance Committee for the Tenth Judicial District. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on June 21, 1989. By decision and order on application dated March 28, 2008, the Grievance Committee for the Tenth Judicial District was authorized to institute and prosecute a disciplinary proceeding against respondent and the issues raised were referred to Norma Giffords, Esq., as Special Referee to hear and report.
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.
A. GAIL PRUDENTI, P.J., WILLIAM F. MASTRO, REINALDO E. RIVERA, PETER B. SKELOS and FRED T. SANTUCCI, JJ.
The Grievance Committee for the Tenth Judicial District (hereinafter the Grievance Committee) served the respondent with a petition containing three charges of professional misconduct. After a preliminary conference and a hearing, the Special Referee sustained charge two but failed to sustain charges one and three. The Grievance Committee now moves to confirm the Special Referee's report insofar as it sustained charge two, disaffirm the report insofar as it failed to sustain charges one and three, and impose such discipline as this Court deems appropriate. The respondent cross-moves to confirm the Special Referee's report to the extent that it failed to sustain charges one and three, disaffirm the report to the extent that it sustained charge two, and limit any sanction to an admonition.
Charge one alleges that the respondent neglected a legal matter entrusted to him in that he failed to timely submit, on behalf of his client, Richard Waxman, a sufficient and complete arbitration claim with the National Association of Securities Dealers (hereinafter NASD) and, after being notified of deficiencies, failed to cure them, resulting in the closing of the arbitration proceeding, in violation of Code of Professional Responsibility DR 6-101(A)(3) (22 NYCRR 1200.30[A].
The respondent was retained by Richard Waxman in or about December 2003 to represent him in an arbitration against AXA Advisors, LLP (hereinafter AXA), and certain individuals before NASD. By check dated December 24, 2003, the respondent received a legal fee of $5,200. By check dated February 3, 2004, Waxman gave the respondent $2,450 for filing fees and related costs. He signed a submission agreement in the AXA matter which was notarized on May 12, 2004. Although the respondent advised that the agreement would be filed with a statement of claim that week, he failed to do so until approximately October 22, 2004. On that date, the respondent filed undated documents. Although the submission agreement contained Waxman's signature, it was not notarized. Contrary to the respondent's representation, a check for NASD arbitration fees did not accompany the submission.
By letter dated October 27, 2004, NASD notified the respondent that the submission was deficient in that it failed to include a check to cover the cost of arbitration and the parties' pre- or postdispute agreement to arbitrate at NASD those claims alleging employment discrimination in violation of a statute. The letter advised that the case would be closed if the deficiencies were not corrected within 30 days. The respondent failed to remit a check or cure the deficiencies within 30 days.
By letter dated December 27, 2004, NASD notified the respondent that the case was closed. The respondent never submitted the arbitration fee and never filed a sufficient and complete claim with the NASD on behalf of Waxman.
Charge two alleges that the respondent failed to promptly pay or deliver at his client's request, funds in the respondent's possession which the client was entitled to receive, in violation of Code of Professional Responsibility DR 9-102(c)(4) (22 NYCRR 1200.46[c]).
After the respondent received the December 27, 2004, letter from NASD closing the case due to his failure to cure the deficiencies in his submission, the respondent did not return to his client the money given him for filing the arbitration. By letter to the respondent dated February 17, 2005, Waxman requested a refund of the $2,450 arbitration expenses for the AXA case. By letter dated March 21, 2005, the respondent advised his client that he did not believe he was entitled to any refund. By letter to the respondent dated April 13, 2005, Waxman again requested the return of the $2,450. The respondent did not return that sum until June 2006.
Charge three alleges that the respondent engaged in conduct that adversely reflects on his fitness as a lawyer by neglecting a legal matter entrusted to him and by failing to promptly return client funds in his possession, to which the client was entitled and which he had requested, in violation of Code of Professional Responsibility DR 1-102(A)(7) (22 NYCRR 1200.3[A]).
The respondent submitted a verified answer in which he denied the specific allegations of misconduct, requested the opportunity to respond in further detail in a prehearing or posthearing memorandum, and asserted eight affirmative defenses. Among the affirmative defenses raised were claims that the respondent maintained regular communications with Waxman, acted in good faith and without prejudice to the client's rights, that the filing delays were attributable to ongoing discussions with Waxman concerning the forum in which he wished to seek redress and numerous revisions to the statement of claim, that the NASD file was closed, in part, due to the refusal of the employer to sign a submission agreement whereby it would have consented to arbitration of the ...