Opinion
2021-70464 Motion 2021-02733
08-20-2021
In the Matter of John Ferdinand Murphy III, an attorney and counselor-at-law. Grievance Committee for the Ninth Judicial District, petitioner; John Ferdinand Murphy III, respondent. Attorney Registration No. 2118693
Unpublished Opinion
MOTION DECISION
HECTOR D. LASALLE, P.J., WILLIAM F. MASTRO, REINALDO E. RIVERA, MARK C. DILLON, BETSY BARROS, JJ.
DECISION & ORDER ON MOTION
Motion by the Grievance Committee for the Ninth Judicial District to immediately suspend the respondent from the practice of law, pursuant to Judiciary Law § 90 and 22 NYCRR 1240.9(a)(1) through (5), upon a finding that he is guilty of professional misconduct immediately threatening the public interest, and to refer the issues raised to a Special Referee, to hear and report. The Grievance Committee served the respondent with a notice of petition and a verified petition both dated April 15, 2021. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on January 9, 1980.
Upon the papers filed in support of the motion and no papers having been filed in opposition or in relation thereto, it is
ORDERED that the motion is granted, and it is further, ORDERED that pursuant to 22 NYCRR 1240.9(a)(2) through (5), the respondent, John Ferdinand Murphy III, is immediately suspended from the practice of law in the State of New York, pending further order of this Court; and it is further, ORDERED that the respondent, John Ferdinand Murphy III, shall promptly comply with the rules governing the conduct of disbarred or suspended attorneys (see 22 NYCRR 1240.15); and it is further, ORDERED that pursuant to Judiciary Law § 90, during the period of suspension and until further order of this Court, the respondent, John Ferdinand Murphy III, is commanded to desist and refrain from (1) practicing law in any form, either as principal or agent, clerk, or employee of another, (2) appearing as an attorney or counselor-at-law before any court, Judge, Justice, board, commission, or other public authority, (3) giving to another an opinion as to the law or its application or any advice in relation thereto, and (4) holding himself out in any way as an attorney and counselor-at-law; and it is further, ORDERED that if the respondent, John Ferdinand Murphy III, has been issued a secure pass by the Office of Court Administration, it shall be returned forthwith to the issuing agency and the respondent shall certify to the same in his affidavit of compliance pursuant to 22 NYCRR 1240.15(f); and it is further, ORDERED that the issues raised are referred to Norma Giffords, c/o Randazzo Giffords, P.C., 700 White Plains Road, Suite 381, White Plains, NY 10583, to hear and report, with the hearing to be completed within 60 days of the date of this decision and order on motion, or as soon thereafter as practicable, and the report, which contains her findings on the issues and charges, to be submitted within 60 days after the conclusion of the hearing or the submission of post-hearing memoranda.
Discussion
We find, prima facie, that the respondent, John Ferdinand Murphy III, is guilty of professional misconduct immediately threatening the public interest based on his admissions under oath and other uncontroverted evidence that he misappropriated client funds entrusted to him incident to his practice of law, that he did not comply with the Grievance Committee's lawful demands for documents, that he failed to promptly disburse fiduciary funds, that he did not properly register as an attorney for the period 2020-2021, and that he did not maintain required bank and bookkeeping records.
The Colvin Special Needs Trust
The Grievance Committee for the Ninth Judicial District commenced an investigation against the respondent based upon a complaint dated September 9, 2020, received from the Honorable Michael G. Hayes, Surrogate's Court, Dutchess County (hereinafter the Surrogate's Court), pertaining to the respondent's conduct in a matter entitled Matter of the Nadja Colvin 2008 Special Needs Trust, commenced in that court under File No. 2016-818 (hereinafter the Colvin Trust).
The respondent was appointed successor trustee of the Colvin Trust on December 5, 2016, and was directed to file annual accountings with the Surrogate's Court pursuant to SCPA § 1719. After the respondent failed to file accountings for the years 2017 and 2018, the Surrogate's Court, on November 15, 2019, directed the respondent to appear in court on December 17, 2019, and appointed Kevin Wright guardian ad litem to represent the interests of Nadja Colvin. Wright submitted a report dated December 10, 2019, in which he recommended, inter alia, revocation of the respondent's trusteeship because of his failure to account.
At the December 17, 2019, appearance in Surrogate's Court, the respondent admitted that he issued a check payable to himself from the Colvin Trust in the sum of $80,000. He stated that the money was "waylaid," that he did not know where the funds went, and that he hoped he would be able to replace the missing funds with money from other projects. Wright also offered evidence of additional money that the respondent misplaced or misdirected, and the Surrogate's Court noted that the respondent was unable to credibly explain what happened to the money. Following this appearance, the Surrogate's Court directed the respondent to provide accountings for the years 2017 through 2019, on or before January 30, 2020. The respondent, however, did not file these accountings.
On July 27, 2020, the respondent failed to appear for a removal hearing and the Surrogate's Court proceeded with the hearing in his absence. The Surrogate's Court admitted into evidence Wright's report dated December 10, 2019. Wright also testified and provided Colvin Trust bank statements from 2017 through 2019. The Surrogate's Court took judicial notice of its records, including court filings and audio recordings.
By order dated July 29, 2020, the Surrogate's Court surcharged the respondent $189,439.34 and removed the respondent as successor trustee of the Colvin Trust, under SCPA §§ 719(1), (7), (10), and §§ 711(2), (3), (8), and (11). The Surrogate's Court ordered that the matter be referred to the appropriate prosecutorial agency and to the Grievance Committee, and directed Wright to file a claim seeking reimbursement of the "misappropriated funds" from the Lawyers' Fund for Client Protection.
Examination Under Oath
Pursuant to judicial subpoena and subpoena duces tecum, the respondent was directed to appear at the Grievance Committee's office to testify and to bring records pertaining to the Colvin Trust for the period December 1, 2017, through June 20, 2018. The respondent appeared on November 2, 2020, at the Grievance Committee's office for an examination under oath (hereinafter EUO). The respondent acknowledged that he had a bank account at Putnam County Savings Bank (account ending in 6070) designated for the Colvin Trust. The respondent testified that he deposited an $80,000 check drawn from the Colvin Trust bank account into his attorney escrow account at Hudson Valley Federal Credit Union and thereafter "lost track of it." He further testified that he never reconciled the Colvin Trust account and that he had no check register or ledger for this account. The respondent admitted that he owes a "considerable amount" of money to Nadja Colvin and is willing to pay her back $80,000. He also admitted that he had not filed accountings for the Colvin Trust as directed by the Surrogate's Court.
Notwithstanding the judicial subpoena duces tecum requiring the respondent to produce records pertaining to the Colvin Trust, he failed to produce all requested records at his EUO. The respondent stated that he had not received some of the Grievance Committee's correspondence, but admitted that he received the subpoenas. Although the respondent stated he would fully comply with the subpoena duces tecum, to date, the respondent has failed to provide the Grievance Committee with the requested documents.
The Nunez Complaint
The Grievance Committee received a complaint dated January 14, 2021, from Jimmy Nunez of Valley Capital Partners, LLC (hereinafter Valley Capital). According to the complaint, Valley Capital signed a contract to purchase a home located in Jamaica, New York, from the respondent's client, Marie T. Price. Valley Capital provided the respondent with a $10,000 down payment by check no. 1492, which the respondent endorsed. Thereafter, the respondent failed to respond to Valley Capital's communications with respect to setting a closing date or returning the $10,000 down payment.
The respondent's bank records show that the $10,000 down payment check was deposited on November 1, 2019, into the respondent's business account at Hudson Valley Credit Union (hereinafter business account). The business account was neither an attorney escrow, trust, special, or IOLA account. At the end of February 2020, the respondent's business account balance was -$621.40. The respondent has failed to provide the Grievance Committee with records for this matter, has not returned the $10,000 deposit, and has not explained why he deposited fiduciary funds into his business account.
Sua Sponte Complaint
By letter dated October 7, 2020, the Grievance Committee notified the respondent that it had initiated a sua sponte complaint for his failing to properly register as an attorney for the period 2020-2021. To date, the respondent has not properly registered for the period 2020-2021.
Conclusion
We find that the Grievance Committee has sufficiently demonstrated that the respondent poses an immediate threat to the public interest for his conduct based on his admissions under oath and other uncontroverted evidence that he misappropriated client funds entrusted to him incident to his practice of law; his noncompliance with the Grievance Committee's lawful demands for documents pertaining to the instant investigation; his failure to promptly disburse fiduciary funds which is demonstrated by his admissions under oath, judgment, and other clear and convincing and uncontroverted evidence; his failure to maintain required bank and bookkeeping records; and his failure to properly register as an attorney for the period 2020-2021.
Based upon the foregoing, the motion is granted, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 1240.9(a)(2) through (5), pending further order of this Court, and the matter is referred to a Special Referee, to hear and report.
LASALLE, P.J., MASTRO, RIVERA, DILLON and BARROS, JJ., concur.