Released on April 26, 2013
Appellate Division, Fourth Department
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.
OPINION AND ORDER Order of suspension entered.
Respondent was admitted to the practice of law by this Court on February 20, 1974, and maintains an office in Mendon. The Grievance Committee filed a petition alleging five charges of misconduct against respondent, including misappropriating client funds, failing to comply with the Rules of Professional Conduct regarding financial record keeping and the maintenance of client funds, and failing to cooperate with the Grievance Committee. Respondent filed an answer denying material allegations of the petition, and a referee was appointed to conduct a hearing. The Referee has submitted a report, which the Grievance Committee moves to confirm. In response to the motion, respondent continues to deny certain allegations of the petition and he has submitted various matters in mitigation. Respondent appeared before this Court on the return date of the motion and was heard in mitigation of the charges at that time.
With respect to charge one, the Referee found that, in September 2008, respondent was retained to represent a client in an action for divorce and the related sale of certain real property that was jointly owned by the client and her then-estranged spouse. The Referee found that, on September 15, 2008, respondent deposited into his trust account funds in the amount of $116,537.19, constituting the gross proceeds of the sale of the real property. The Referee further found that, respondent converted a portion of those funds when they were deposited into his trust account inasmuch as the balance in the account at the time was at least $85,146.13 below that necessary to satisfy his obligations to others.
The Referee found that respondent thereafter made various disbursements on behalf of the client, resulting in a net balance owed to the client in the amount of $9,380.01. The Referee further found that, from September 2008 through November 2010, respondent failed to respond to numerous requests from the client for an accounting of the net proceeds of the real estate transaction. The Referee found and respondent admits that, with respect to the client's divorce matter, respondent over the course of the representation produced only one billing statement, which was provided to the Grievance Committee in November 2010 after the client discharged respondent and filed a disciplinary complaint against him. As found by the Referee, that billing statement indicates that, in September 2008, respondent disbursed from his trust account to a personal account funds in the amount of $9,380.01, and treated those funds as an advanced retainer fee in relation to the client's divorce matter.
The Referee found that, after the client discharged respondent, she proceeded on a pro se basis in the divorce action and, in February 2011, she contacted respondent and requested a copy of her file in order to prepare for a court appearance. The Referee found that respondent thereafter sent to the client an email message wherein he represented that, "as agreed," respondent was holding in his trust account the net balance of the proceeds of the real estate transaction, and he would release to the client a copy of her file if she authorized respondent to apply those funds to an alleged balance owed to respondent for legal fees. The Referee found that respondent's statement that he was holding the client's funds in his trust account was false inasmuch as respondent had transferred the funds to a personal account in September 2008.
In addition to the conduct detailed above, the Referee found in relation to charge one that respondent entered into a retainer agreement with the client that did not comply with the Appellate Division rules governing domestic relations matters inasmuch as the client was not afforded the right to receive itemized billing statements every 60 days or to cancel the agreement at any time. In addition, the Referee found that respondent failed to abide by the terms of the retainer agreement when he failed to provide to the client a copy of all documents and correspondence in relation to the divorce matter. Finally, the Referee found that respondent on behalf of the client prepared a qualified domestic relations order without providing to the client a written retainer agreement in connection with that separate matter.
With respect to charge two, the Referee found that, in response to an allegation in this proceeding that respondent was holding in his trust account funds in the approximate amount of $420,000 that did not relate to any client matter, respondent provided to the Grievance Committee copies of a deposit slip and deposit receipt indicating that, in October 2007, respondent had deposited into his trust account on behalf of an estate funds in the amount of $464,935.35. In addition, in his verified answer to the petition in this matter, respondent asserted that he was executor for the estate in question and had continuously held those funds in his trust account. The Referee found that respondent thereafter failed to respond to numerous requests from the Grievance Committee for an accounting of the funds belonging to the estate and financial records for all transactions involving estate funds. The Referee further found that, from December 2010 through the date of the hearing in this matter, respondent produced to the Grievance Committee only certain financial records regarding the other funds held in his trust account, and he failed to produce all financial records requested by the Grievance Committee.
The Referee found that, as of September 2008, based upon the information that was available in this proceeding, respondent had a deficiency in his trust account of at least $85,146.13. The Referee further found that, from September 2008 through December 2010, respondent transferred from his trust account to various personal accounts funds in the amount of $490,488. Although respondent testified that those funds primarily consisted of legal fees to which he was entitled, the Referee found that respondent failed to produce financial records that ...