In the Matter of Bruce Eric Baldinger, an attorney and counselor-at-law: Departmental Disciplinary Committee for the First Judicial Department, Petitioner, Bruce Eric Baldinger, Respondent.
Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Bruce Eric Baldinger, 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 5, 1985.
Jorge Dopico, Chief Counsel, Departmental Disciplinary Committee, New York (Jeremy S. Garber and Roberta N. Kolar, of counsel), for petitioner.
Scalise & Hamilton, LLP (Deborah A. Scalise, of counsel), for respondent.
Richard T. Andrias, Justice Presiding, David Friedman, Leland G. DeGrasse, Sallie Manzanet-Daniels, Judith J. Gische, Justices.
Respondent Bruce Eric Baldinger was admitted to the practice of law in the State of New York by the First Judicial Department on May 5, 1985 . At all times relevant to this proceeding, respondent has maintained an office for the practice of law within the First Department. 
In June 2008, respondent was reprimanded by the Supreme Court of New Jersey for engaging in a business transaction with two clients (Client No. 1 and Client No. 2) under circumstances which presented a conflict of interest and for failing to take the required safeguards to address the conflict. Respondent failed to inform the Departmental Disciplinary Committee of the discipline imposed in New Jersey as required by Rules of the Appellate Division, First Department (22 NYCRR) § 603.3(d). The Committee only learned of the discipline in January 2011 in connection with its investigation of an unrelated complaint which was ultimately dismissed.
By petition dated September 11, 2012, the Committee now seeks an order, pursuant to Judiciary Law § 90(2) and 22 NYCRR 603.3, imposing reciprocal discipline on respondent, to wit, a public censure (the equivalent of a reprimand in New Jersey).
In response, respondent explains that during the course of the New Jersey proceeding he was represented by three different counsels none of whom advised him of his obligation to report the discipline. According to respondent, he relied on his former attorneys to take the necessary steps to report his reprimand. Respondent further explains that he mistakenly assumed that the New Jersey Supreme Court would report his reprimand to the federal courts in New York and that the Committee would automatically be notified thereafter. 
In 2006, a District Ethics Committee (DEC) filed a disciplinary complaint which alleged that respondent improperly entered into a business transaction with Client No. 1 and Client No. 2 and failed to take the required safeguards to address an inherent conflict, in violation of New Jersey Rules of Professional Conduct (RPC) 1.7 and 1.8 (a).
Specifically, in 2003, respondent informed Client No. 1 and Client No. 2, each of whom were involved in real estate development and construction, that he needed to find a new home, but was short of funds because he was in the midst of a divorce. The clients orally agreed they would, using their own funds, purchase and renovate a house for respondent and allow him to reside there and pay the mortgage and property taxes while renovations were proceeding. Once renovations were completed, respondent was to purchase the house from these individuals at cost plus the renovations. They further agreed to subdivide the property with the intention of selling the subdivided portion and sharing any profit. 
Client No. 1 ultimately purchased the house for $400, 000 and took title in his own name because Client No. 2 did not qualify for a mortgage loan. Although another attorney employed by respondent on a per diem basis handled the closing, respondent himself negotiated the terms of the contract of sale and was listed as the buyer's attorney. At closing a dispute arose between Client No. 1 and respondent regarding who was responsible for paying $15, 000 in closing costs. Client No. 1, concerned about his potential liability under the contract if he did not close, immediately obtained a $15, 000 home equity loan, allowing the closing to be completed.
Respondent briefly resided in the house from April to June of 2004, but was forced to leave when housing code violations were discovered during the renovation process. In July 2004, Client No. 1 and Client No. 2 requested that respondent purchase the house from them for $600, 000 (the purchase price plus the purported cost of renovations), but respondent declined to do so. Once he moved from the house, respondent stopped paying the mortgage and carrying costs, resulting in Client No. 1 and Client No. 2 covering those costs until September 2006 when the bank holding the mortgage foreclosed on the note.
Between December 2006 and January 2007 a hearing was held before a DEC Hearing Panel at which respondent was represented by counsel. The DEC Hearing Panel issued a report dated May 22, 2007. In its report, the panel concluded that respondent had violated New Jersey RPC 1.7 and 1.8. The report recommended that respondent be suspended for an unspecified length of time because of his unethical conduct, representing Client No. 1 and Client No. 2 in a real estate transaction when he had a personal interest in the transaction, an inherent conflict of interest in violation of RPC 1.7(a)(2). The panel also found it was an ethical violation for respondent to have entered into an unwritten business transaction with his clients and that he should have, but failed to notify or encourage these individuals to seek independent ...