MATTER OF ROBERT J. MULLER, AN ATTORNEY, RESPONDENT. GRIEVANCE COMMITTEE OF THE SEVENTH JUDICIAL DISTRICT, PETITIONER
Released April 11, 2014.
This decision is subject to revision before publication in the New York reporter.
[984 N.Y.S.2d 515] OPINION AND ORDER
Order of censure entered.
Respondent was admitted to the practice of law by the Appellate Division, Third Department in 1979. Since 2009, he has served as a Justice of the Supreme Court in the Fourth Judicial District. In June 2012, a petition was filed in the Third Department alleging that, in 2003, respondent misappropriated client funds in relation to the settlement of a medical malpractice action. By order entered June 25, 2012, the Third Department transferred the matter to this Court for disposition. Respondent subsequently filed an answer denying material allegations of the petition, and this Court appointed a referee to conduct a hearing. The Referee has filed a report, which the Grievance Committee moves to confirm. Respondent cross-moves for an order confirming in part and disaffirming in part the report of the Referee, and dismissing the petition. Respondent appeared before this Court on the return date of the motion and cross motion, and he was heard in mitigation at that time.
The Referee found that, in February 2002, respondent commenced a medical malpractice action on behalf of a client that included derivative claims asserted on behalf of the client's spouse. The Referee found that, from March 2002 through April 2003, respondent corresponded on numerous occasions with the United States Department of Health and Human Services and certain of its agents (collectively, Medicare) concerning a lien asserted by Medicare against any recovery in the medical malpractice action. The Referee found that, beginning in January 2003, respondent made several requests that Medicare reduce or waive its lien. The Referee found that, in March 2003, the clients agreed to settle the medical malpractice action for $500,000, and respondent thereafter deposited the settlement proceeds into an attorney trust account maintained by respondent's law firm. The Referee further found that, at the time of the settlement, respondent and the clients understood that
Medicare was asserting a lien against the settlement proceeds in the amount of $97,701.64.
The Referee found that, in late March 2003, respondent's law office prepared a settlement statement indicating that respondent's law firm had, inter alia, taken a legal fee from the settlement proceeds in the amount of $137,430.36, pursuant to Judiciary Law § 474-a, and set aside funds in the amount of $97,701.64, which were maintained in the law firm's trust account and earmarked for the Medicare lien. The Referee further found that Medicare thereafter agreed to compromise the lien and, on April 29, 2003, respondent remitted to Medicare funds in the amount of $60,000 in full satisfaction of the lien. The Referee found that, on May 27, 2003, respondent caused his law firm to receive an additional legal fee in the amount of $30,000 from the settlement proceeds that previously had been earmarked for the Medicare lien, and respondent remitted to the clients the residual balance of the earmarked funds, or $7,701.64.
The Referee found that the clients did not question the disposition of the settlement proceeds that had been earmarked for the Medicare lien until 2010, when a subsequent dispute between the clients and Medicare prompted the clients to request from respondent proof that the lien had been satisfied.
We confirm the factual findings of the Referee and conclude that respondent has violated the following former Disciplinary Rules of the ...