Opinion
Docket No. DRB 17-093
09-11-2017
IN THE MATTER OF PAUL SPEZIALE AN ATTORNEY AT LAW
Disciplinary Review Board
District Docket Nos. XIV-2016-0030E; XIV-2016-0050E; XIV-2016-0181E; and XIV-2016-0183E Decision
To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey.
This matter was before us on a certification of default filed by the Office of Attorney Ethics (OAE), pursuant to R. 1:20-4(f). A five-count complaint charged respondent with having violated RPC 1.1(a) (gross neglect), RPC 1.2(a) (failure to abide by the client's decisions regarding the scope of the representation), RPC 1.3 (lack of diligence), RPC 1.4(b) (failure to keep the client reasonably informed), RPC 1.4(c) (failure to explain a matter to the extent reasonably necessary for the client to make informed decisions about the representation), RPC 1.15(a) (commingling), RPC 1.15(d) and R. 1:21-6 (recordkeeping), RPC 3.4(c) (knowingly disobeying an obligation under the rules of a tribunal), RPC 5.5(a)(1) (practicing law while ineligible), RPC 8.1(b) (failure to reply to a lawful demand for information from a disciplinary authority), and RPC 8.4(d) (conduct prejudicial to the administration of justice).
We determine to impose a three-month suspension.
Respondent was admitted to the New Jersey bar in 1984. On August 24, 2015, the Court entered an Order, declaring respondent ineligible to practice law, based on his failure to pay the annual attorney assessment to the New Jersey Lawyers' Fund for Client Protection (CPF).
Subsequently, respondent was temporarily suspended by Court Order, dated March 8, 2017. In re Speziale, 228 N.J. 124 (2017). Respondent remains suspended to date.
Service of process was proper in this matter. On January 5, 2017, the OAE sent a copy of the complaint to respondent, in accordance with R. 1:20-7(h), to his last known office and home addresses, as listed in the attorney registration records, by regular and certified mail.
The certified mail sent to respondent's office was returned to the OAE marked "not deliverable as addressed, unable to forward." The regular mail was not returned.
The certified mail receipt sent to respondent's home address was returned signed by respondent, indicating delivery on January 9, 2017. The regular mail was not returned.
On February 6, 2017, the OAE sent a second letter to respondent, at his home address, by both certified and regular mail. The letter notified respondent that, unless he filed an answer to the complaint within five days of the date of the letter, the allegations of the complaint would be deemed admitted; that, pursuant to R. 1:20-4(f) and R. 1:20-6(c)(1), the record in the matter would be certified directly to us for imposition of sanction; and that the complaint would be amended to include a charge of a violation of RPC 8.1(b).
The certified mail receipt was returned to the OAE signed, indicating delivery on February 9, 2017, but the signature is illegible. The regular mail envelope was not returned. The time within which respondent may answer the complaint has expired. As of March 13, 2017, the date of the certification of the record, respondent had not filed an answer to the ethics complaint.
We now turn to the allegations of the complaint. I. The Academy of Rock Matter — Docket No. XIV-2016-0181E
On February 8, 2016, Debra P. Ingrando-DeEntremont filed a grievance alleging that respondent had committed misconduct in her bankruptcy matter.
On August 4, 2011, DeEntremont and her husband, Stephen, retained respondent to draft a contract between them and Joel Vinolas, to loan Vinolas $60,000 toward the development of a commercial business. Vinolas sought funding from seven or eight families to open a "family entertainment center." According to DeEntremont's grievance, an exhibit to the ethics complaint, the DeEntremonts were eager to further their own son's interest in music, and Vinolas intended to employ him once the Academy of Rock opened.
Under the written fee agreement, respondent agreed to review investment documents, prepare loan-related documents, negotiate contract terms with Vinolas, review a commercial lease, and prepare and file Uniform Commercial Code (UCC) documents.
In August 2011, respondent prepared a contract between the DeEntremonts and Vinolas, under which Vinolas agreed to pledge certain commercial assets as collateral for the loan. Respondent, however, failed to perform a UCC search or take other action to confirm that Vinolas actually owned the pledged collateral. DeEntremont would later learn that Vinolas did not own any of the pledged assets.
In an effort to obtain additional funding for his project, Vinolas secured permission from the DeEntremonts and other families to open credit card accounts with business names on them, but using family members' social security numbers and names as the responsible parties. DeEntremont authorized Vinolas to open one such credit card account using her personal, financial information, including her social security number.
DeEntremont was unaware, until the credit card issuer sought payment from her in the summer of 2012, that Vinolas had charged over $80,000 to the Academy of Rock account, some of which he used for personal expenses unrelated to the venture, and had repaid nothing. Unbeknownst to DeEntremont, Vinolas also opened other Academy of Rock credit cards in her name.
On October 2, 2012, the DeEntremonts executed a second fee agreement with respondent to recover funds from Vinolas, to negotiate with the credit card companies, and to file an adversary proceeding in a bankruptcy action (presumably filed by Vinolas or his company) then pending in New York. The adversary proceeding was to be handled by another attorney of the firm, Randolph Frank Iannacone, Esq. The DeEntremonts gave respondent $10,000 toward the fee for their matters, for which they were to be billed at an hourly rate.
Although DeEntremont also directed respondent to "work something out" with the credit card companies to whom she was indebted, he failed to do so. Nevertheless, in April 2013, respondent required, and the DeEntremonts paid, an additional $3,500 for him to file a chapter 13 bankruptcy petition in their behalf. Prior to giving respondent those additional funds, DeEntremont telephoned, sent e-mails, and texted respondent, seeking information about the status of the couple's other outstanding matters, but he failed to reply.
Respondent also failed to explain to DeEntremont the advantages and disadvantages of filing a chapter 13, as opposed to a chapter 7 petition, telling her that a chapter 13 filing made sense because it involved only a "nominal" monthly payment pursuant to a plan of reorganization. Respondent failed to file anything until December 10, 2013, and did not disclose to DeEntremont the amount of the monthly payment she would be obligated to pay. Finally, at a February 2014 bankruptcy hearing, presumably the plan confirmation hearing, respondent told DeEntremont that her monthly payment was $938.34, an amount that far exceeded her ability to pay.
According to the complaint, respondent's failure to negotiate the credit card debt, prior to filing the chapter 13 petition, caused DeEntremont's plan payments to be "equal to what she would be required to pay had she not filed for bankruptcy." All told, the DeEntremonts lost their $60,000 investment, plus interest, and were obligated to satisfy over $80,000 in fraudulent credit card debt.
Count one charged respondent with having violated RPC 1.1(a), RPC 1.2(a), RPC 1.3, RPC 1.4(b) and RPC 1.4(c). II. Bankruptcy Court Contempt — Docket No. XIV-2016-0183E
On December 14, 2015, the Honorable Robert E. Littlefield, Jr., J.B.C., of the United States Bankruptcy Court for the Northern District of New York, alerted ethics authorities that he had found respondent in contempt and had suspended him from practicing law before that court, based on the following facts.
On October 1, 2014, DeEntremont sent Judge Littlefield a letter regarding respondent's lack of communication with her. Judge Littlefield issued an order scheduling a telephonic case conference, which respondent, DeEntremont, and the bankruptcy trustee attended. Afterward, the judge believed that the issues between respondent and his client were resolved.
On July 12, 2015, DeEntremont sent Judge Littlefield a second, similar letter, prompting him to order a second telephone conference for August 13, 2015. The order was served on respondent by first class mail and electronically by the bankruptcy court's "CM/ECF system". Respondent, however, failed to appear for that conference.
Thereafter, on August 17, 2015, Judge Littlefield issued an order to show cause why respondent should not be found in contempt and sanctioned for his failure to appear for the August 13, 2015 conference.
The order to show cause, returnable on September 3, 2015, was served on respondent by first class mail and electronically by the bankruptcy court's CM/ECF system.
Respondent failed to appear on September 3, 2015, prompting Judge Littlefield to issue a September 10, 2015 order to show cause for contempt, returnable September 24, 2015, and served on respondent by first class mail and electronically by the bankruptcy court's CM/ECF system. The order cautioned respondent that he could be sanctioned for failing to reply to the initial order to show cause. The potential sanctions included respondent's disgorgement of attorneys' fees paid by DeEntremont, his suspension in the bankruptcy court, and referral to disciplinary authorities.
Respondent again failed to appear for the September 24, 2015, order to show cause, resulting in a September 28, 2015 order from Judge Littlefield finding respondent in contempt, sanctioning him $1,000, and directing him to disgorge the entire $13,500 in fees paid by the DeEntremonts, no later than October 15, 2015.
The order was served on respondent by first class mail and electronically by the bankruptcy court's CM/ECF system. Respondent, however, failed to pay the sanction or return the $13,500 in fees.
On October 22, 2015, Judge Littlefield issued another order to show cause why respondent should not be held in further contempt and sanctioned for his failure to comply with the provisions of the court's September 28, 2015 order, including the entry of judgment for $13,500 in favor of DeEntremont and against respondent, termination of respondent's CM/ECF password, suspension from filing bankruptcy cases in the Northern District of New York, and the referral of respondent's actions to the appropriate disciplinary authorities.
Respondent failed to appear on the November 5, 2015 return date for the order to show cause. Therefore, on November 10, 2015, Judge Littlefield entered a judgment against respondent for $13,500, terminated his CM/ECF password, and suspended his bankruptcy filing privileges in the Northern District of New York.
Count two charged respondent with having violated RPC 3.4(c) and RPC 8.4(d). III. The Tax Court/Ineligible to Practice Matters — Docket No. XIV-2016-0050E
Respondent failed to pay the annual attorney CPF assessment for 2015 and 2016, resulting in Supreme Court Orders deeming him ineligible to practice law, effective August 24, 2015 and September 12, 2016, respectively.
Respondent also failed to comply with the IOLTA registration requirements in 2015 and 2016, resulting in October 27, 2015 and October 21, 2016 Orders of ineligibility.
Respondent further failed to comply with mandated continuing legal education (CLE) requirements, resulting in November 16, 2015 and November 21, 2016 Orders of ineligibility.
On January 28, 2016, the OAE received a referral from the Honorable Joshua D. Novin, J.T.C., reporting that respondent had practiced law in New Jersey Tax Court while ineligible.
On December 18, 2015, respondent had sent a letter, written on his attorney letterhead, to Judge Novin, in a matter then pending in New Jersey Tax Court entitled Palermo Pizzeria, Inc. v. Director, Division of Taxation. In the letter, respondent requested that a status conference, scheduled for December 21, 2015, be held telephonically.
Respondent also engaged in impermissible trust account activity while ineligible to practice. Specifically, on November 25, 2015, respondent deposited a $24,000 check from Yalile Puentes, payable to respondent, into his trust account. Respondent's deposit slip for the transaction was marked "Estate of Clara Petrowsky." Thereafter, on January 5, 2016, respondent wrote trust account check number 1652, payable to the Estate of Clara Petrowsky, for $22,600.
On December 10, 2015, 4G Construction & Maintenance, LLC (4G) retained respondent in connection with its purchase of real estate located at "266 Heckman Street." That same day, respondent deposited 4G's $1,000 check, payable to respondent, into his trust account. Noted on the check's memo line was "Dep 266 Heckman St." a notation on respondent's deposit slip for the transaction states "266 Heckman - Initial Deposit."
On December 9, 2015, the day prior to depositing the check from 4G, respondent issued trust account check number 1519, payable to "Jeffrey Perrun Attorney Trust Account," for $1,000. A notation on the memo line of the check states, "Initial Deposit 266 Heckman St." Respondent's check number 1519 posted to the trust account on December 29, 2015.
On February 1, 2016, Carolyn T. Willis retained respondent for her purchase of real estate located at "14 Warren Place." Toward that end, on February 1, 2016, respondent deposited her $40,000 (presumably deposit) check, payable to "Paul Speziale Attorney Trust Account," into his trust account. A notation on the memo line of the check states "14 Warren Pl., Waldock."
According to respondent's subpoenaed trust account statements, on February 16, 2016, respondent disbursed three checks on account of the transaction: (1) check number 1611, for $1,350, payable to respondent; (2) check number 1613, for $38,103.72, payable to "Joseph & Dona Ippolito;" and (3) check number 1614, for $546.38, payable to "A. Absolute Escrow."
These disbursements total $40,000.10 --------
Count three charged respondent with having violated RPC 5.5(a)(1). IV. Failure to Cooperate: All Matters — Docket No. XIV-2016-0030
On January 25, 2016, the OAE received a notice from TD Bank that an overdraft had occurred in respondent's trust account.
On February 1, 2016, the OAE sent respondent a letter, requesting his explanation and supporting documentation for the events surrounding trust account check number 1664, in the amount of $560, dated January 12, 2016. Although respondent was given until February 16, 2016 to reply, he failed to do so.
On February 11, 2016, the OAE sent respondent a letter, requesting his reply, by February 22, 2016, to the allegation that he had practiced law while ineligible. Respondent failed to do so.
On April 7, 2016, the OAE sent respondent a second letter in the overdraft matter, requiring his reply by April 11, 2016. Respondent did not do so.
On April 21, 2016, the OAE sent respondent a letter, directing him to provide his written reply to all four pending investigations by May 6, 2016.
On May 19, 2016, the OAE sent respondent a letter by facsimile, directing him to contact that office immediately about the pending investigations. Respondent did not reply to that correspondence.
On May 27, 2016, the OAE sent respondent a letter, directed to his home address via certified mail, again directing him to reply, in writing, to the four pending investigations, by June 10, 2016.
On July 19, 2016, OAE personnel traveled to respondent's home, where they hand-delivered a letter to him requiring his immediate written reply to all of the above matters. Respondent, however, failed to comply.
On August 11, 2016, the OAE sent respondent another letter, by certified and regular mail, notifying him that a demand audit had been scheduled for September 1, 2016. On August 16, 2016, respondent received the certified mail. Nevertheless, he failed to appear for the September 1, 2016 audit interview.
Count four charged respondent with having violated RPC 8.1(b) and R. 1:20-3(g)(3) and (4).
V. The Commingling and Recordkeeping Violations
The OAE's review of respondent's TD Bank account records, disclosed that his business account was closed as of June 30, 2014 with a bank charge-off of the negative $1,137.64 balance in the account at the time. The records also showed that respondent deposited personal funds into the trust account, which also contained client funds, on the following dates: August 25, September 11, and November 20, 2015. All of the deposits were in the form of checks payable to respondent in the same amount ($1,103.31), from Northern NJ Musicians Guild, and containing notations on the memo section of the checks: "P/BA Salary — August;" "Salary — September;" and "Salary — November."
Count five charged respondent with having violated RPC 1.15(a) and RPC 1.15(d) and R. 1:21-6.
* * *
The facts recited in the complaint support the charges of unethical conduct. Respondent's failure to file an answer is deemed an admission that the allegations of the complaint are true and that they provide a sufficient basis for the imposition of discipline. R. 1:20-4(f)(1).
In the Academy of Rock matter, respondent was retained to negotiate a contract between his clients, the DeEntremonts, and Vinolas. Respondent's role was to protect his clients' interests when they loaned Vinolas $60,000 for a venture that included a music school.
Instead of protecting the DeEntremonts' interests, respondent failed to perform a UCC search of the assets Vinolas pledged as collateral for the loan. Had respondent done so, he would have learned that Vinolas did not own the pledged collateral, and the DeEntremonts likely would have declined to participate in the venture.
Respondent then agreed to a second representation to recoup over $80,000 that Vinolas charged to credit cards bearing DeEntremont's name that she claimed were fraudulent in nature. The DeEntremonts gave respondent $10,000 to pursue state court and bankruptcy court actions against Vinolas, but respondent failed to do so. He also failed to negotiate the balance due on the credit card accounts with the issuers. In so doing, respondent grossly neglected and lacked diligence in the matters for which he was retained, violations of RPC 1.1(a) and RPC 1.3, respectively.
DeEntremont attempted to focus respondent's attention on aspects of the representation that were of the utmost importance to her, such as negotiating the credit card issues, but he did not do so, preferring to pursue just a bankruptcy filing instead. Respondent's failure to abide by his client's directives about the scope of the representation violated RPC 1.2(a).
Moreover, throughout the representation, the DeEntremonts telephoned, e-mailed, and texted respondent to request information about their matters. He failed to reply to those requests, leaving them in the dark about the status of the representation, a violation of RPC 1.4(b).
DeEntremont also retained respondent to file a personal bankruptcy petition for her, in order to obtain relief from the crushing credit card debt and loan losses associated with the Vinolas venture. DeEntremont paid respondent an additional $3,500 for that representation and, although he ultimately filed a petition for DeEntremont, he did so without explaining crucial details about chapter 13 and chapter 7 filings. Had he done so, DeEntremont would not have proceeded with the chapter 13 plan that he arranged for her, which required her to make payments in an amount equal to that she would have been required to pay had she not filed for bankruptcy. In this respect, respondent violated RPC 1.4(c).
In respect of the charges arising out of the Bankruptcy Court Contempt matter, DeEntremont involved Judge Littlefield in her quest for information from respondent, when she complained in a July 12, 2015 letter to the court about respondent's alleged lack of communication.
Thereafter, respondent participated in Judge Littlefield's August 13, 2015 court-ordered telephone conference about the letter, but failed to appear at Judge Littlefield's order to show cause for contempt of court and sanctions, returnable September 3, 2015. Respondent also ignored a second order to show cause returnable later that month, leading Judge Littlefield to order him to disgorge the $13,500 in fees from the DeEntremonts, and to pay a $1,000 sanction. The order required payment by October 15, 2015.
Respondent's failure to comply with the above orders prompted Judge Littlefield to issue a final order to show cause for further contempt. Because respondent failed to appear on the return date, the judge reduced the fee amount to a judgment against respondent, terminated his electronic filing privileges, and suspended him from practicing law in the Bankruptcy Court for the Northern District of New York.
Clearly, having been found in contempt of court for knowingly disobeying Judge Littlefield's numerous orders, respondent is guilty of having violated RPC 3.4(c). In addition, by his inaction and failure to comply with the court orders, prompting the expenditure of additional court resources, respondent prejudiced the administration of justice in the DeEntremonts' bankruptcy matters, a violation of RPC 8.4(d).
On August 24, 2015, the Court entered an Order declaring respondent ineligible to practice for failure to pay the 2015 annual assessment to the CPF. Thereafter, additional ineligibility Orders were entered in 2015 and 2016 for his failure to comply with IOLTA and CLE requirements. Respondent has remained ineligible to practice law in New Jersey ever since.
On December 18, 2015, while ineligible, respondent practiced law in New Jersey Tax Court by sending a letter to Judge Novin, in a client matter, using his attorney letterhead, and requesting that an upcoming conference be held telephonically, rather than in court.
In addition, respondent's trust account activities while he was ineligible demonstrate that he actively practiced law in other matters during his period of ineligibility. Between November 25, 2015 and February 16, 2016, respondent actively deposited funds into the trust account for the Petrowsky estate, and disbursed funds from the trust account to both the estate and himself, the latter presumably for legal fees.
Also, in two separate real estate matters (4G Construction and Willis), respondent accepted buyers' deposits, placed them in his trust account and then disbursed funds out of the trust account in connection with those transactions. In the Willis transaction, respondent also disbursed $1,350 to himself for his fee.
By conducting his law practice as though he were unencumbered by the Court's several Orders of ineligibility that were in place at the time, respondent engaged in the unauthorized practice of law, a violation of RPC 5.5(a)(1).
Respondent also failed to cooperate with ethics authorities in all four of the docketed matters above. His failure to cooperate was so complete that OAE personnel traveled to his home to hand-deliver demands for the production of information and written replies to their inquiries. Moreover, respondent has permitted these matters to proceed to us as a default. For these reasons, we find respondent guilty of having violated RPC 8.1(b).
Finally, respondent placed personal funds in the trust account at a time when he was holding client funds in that account. Specifically, in August, September, and November 2015, he deposited his salary checks from Northern NJ Musicians Guild into his trust account, thereby commingling personal and client funds, a violation of RPC 1.15(a).
Rule 1:21-6(a) requires New Jersey attorneys to maintain separate trust and business accounts in an authorized New Jersey financial institution. Respondent violated the Rule when, as of June 30, 2014, his business account at TD Bank was closed with a negative balance. From then on, he practiced law without an attorney business account specifically required of him. Thus, respondent violated the recordkeeping requirements of RPC 1.15(d) and R. 1:21-6.
In sum, respondent violated RPC 1.1(a), RPC 1.2(a), RPC 1.3, RPC 1.4(b) and (c), RPC 1.15(a), RPC 1.15(d) and R. 1:21-6, RPC 3.4(c), RPC 5.5(a)(1), RPC 8.1(b) and RPC 8.4(d).
Attorneys who fail to obey court orders, sometimes found as violations of RPC 3.4(c), RPC 8.4(d), or both, generally have been reprimanded, even if those infractions are accompanied by other, non-serious violations. See, e.g., In re Cerza, 220 N.J. 215 (2015) (attorney failed to obey a bankruptcy court's order compelling him to comply with a subpoena, which resulted in the entry of a default judgment against him; violations of RPC 3.4(c) and RPC 8.4(d); the attorney also violated RPC 1.15(b) in a related real estate transaction when he disbursed a $100 survey refund to the wrong party, failed to refund the difference between the estimated recording costs and the actual recording costs, and failed to disburse the mortgage payoff overpayment, which had been returned to him and held in his trust account for more than five years after the closing; prior admonition for recordkeeping violations and failure to promptly satisfy tax liens in connection with two client matters, even though he had escrowed funds for that purpose); In re Cooper, 218 N.J. 162 (2014) (six years after the attorney represented the former husband in a divorce, the former husband again retained him for the sale of a liquor license; the attorney, having forgotten in the intervening years that the divorce agreement provided that the former wife was entitled to a one-half share of the liquor license proceeds, released most of the net proceeds to his client ($54,500), leaving just $2,394 on account of the matter; a year after the former wife reminded the attorney of his obligation to release to her one-half of the sale proceeds, the attorney released the remaining $2,394 to his client; by releasing the remaining funds to his client after he became aware of the terms of the divorce judgment, the attorney violated RPC 3.4(c)); In re Mason, 197 N.J. 1 (2008) (with information he had gathered during his representation of Marx Toys, the attorney switched sides to represent a competing entity; he was found guilty of having violated a court order entered after the switch, directing him "not [to] perform any legal work which involves Marx Toys and [not to make] any disclosures regarding Marx," a violation of RPC 8.4(d); conflict of interest also found); In re Gourvitz, 185 N.J. 243 (2005) (attorney repeatedly disregarded several court orders requiring him to satisfy financial obligations to his former secretary, an elderly cancer survivor who sued him successfully for employment discrimination; the attorney had refused to allow her to return to work after her recovery from cancer surgery, because the medical condition had disfigured her face; the attorney was found to have violated RPC 8.4(d)); In re Carlin, 176 N.J. 266 (2003) (attorney failed to comply with two court orders (RPC 3.4(c) and RPC 8.4(d)); the attorney also violated mandatory trust and business recordkeeping requirements; failed to promptly deliver funds to a third party; made a false or misleading communication about the attorney; used misleading letterhead; and was guilty of gross neglect, lack of diligence, and failure to communicate with the client); and In re Kersey, 170 N.J. 409 (2002) (motion for reciprocal discipline; attorney failed to comply with orders of a Vermont family court in his own divorce matter, a violation of RPC 8.4(d)).
Respondent also practiced law while ineligible, which, without more, generally is met with an admonition, if the attorney is unaware of the ineligibility. See, e.g., In the Matter of John L. Conroy, Jr., DRB 15-248 (October 16, 2015), In re Fell, 219 N.J. 425 (2014), In the Matter of James David Lloyd, DRB 14-087 (June 25, 2014), and In the Matter of Adam Kelly, DRB 13-250 (December 3, 2013). Here, although there is no definitive information about respondent's knowledge, no fewer than five separate Orders of ineligibility were entered between August 24, 2015 and November 16, 2015 (respondent actively practiced while ineligible in these matters from November 25, 2015 to February 16, 2016). A sixth Order was effective November 21, 2016.
Finally, an attorney's failure to abide by the client's decisions regarding the scope of the representation has resulted in an admonition or a reprimand. See, e.g., In the Matter of John S. Giava, DRB 01-455 (March 15, 2002) (admonition imposed on attorney who was hired to obtain a wage execution against a defaulting real estate purchaser, but instead entered into a settlement agreement with the buyer without the clients' consent); In the Matter of Frederick M. Testa, DRB 00-218 (September 25, 2000) (admonition for attorney who was retained to represent a realty company in connection with its various claims for real estate commissions; one of the matters was the subject of an appeal filed by the attorney on February 23, 1998; notwithstanding the attorney's representation to the client that the appellate brief was finished and ready to be filed, he unilaterally decided not to file it, without first consulting the client, violations of RPC 1.2(a) and RPC 1.3)); In re McKenna, 172 N.J. 644 (2002) (reprimand by consent imposed on attorney who failed to act with diligence in a wrongful termination matter and then settled the case, despite his client's objections); and In re Kane, 170 N.J. 625 (2002) (reprimand imposed on attorney who was retained in connection with a lawsuit to recover damages from tenants; attorney settled the case without the client's knowledge or consent, received a check, put it in his file, and did nothing further; he then moved his practice without informing the client or giving her his new address; the attorney also misrepresented the status of the case to the client and failed to provide a retainer agreement; attorney's lack of prior discipline was considered as mitigation in imposing only a reprimand for these numerous infractions).
In re Carlin, supra, 176 N.J. 266, captures many of the same violations present in this matter. Carlin failed to comply with two court orders (RPC 3.4(c) and RPC 8.4(d)). Like respondent, Carlin also was found guilty of recordkeeping violations, gross neglect, lack of diligence, and failure to communicate with the client.
Here, however, two serious aggravating factors require consideration. Respondent has demonstrated an epic disdain for authority: he ignored several bankruptcy court orders (including orders to show cause, and orders for disgorgement of fees and for contempt sanctions), six Supreme Court Orders of ineligibility, numerous directives from the OAE, and most recently, he allowed this matter to proceed to us as a default. "A respondent's default or failure to cooperate with the investigative authorities operates as an aggravating factor, which is sufficient to permit a penalty that would otherwise be appropriate to be further enhanced." In re Kivler, 193 N.J. 332, 342 (2008).
In addition, respondent caused tremendous harm to the DeEntremonts alone - in excess of $153,500 ($60,000 loan, $80,000 credit card charges, and $13,500 in legal fees to respondent).
The default status of this matter warrants the imposition of a censure. When we include the additional aggravating factors of disdain for courts and disciplinary authorities, and the harm to clients, however, a term of suspension is appropriate.
In In re Avery 194 N.J. 183 (2008) the attorney received a three-month suspension for misconduct in four estate matters. In the one matter, Avery was retained to settle a decedent's estate, but took little action for two years, after which she was removed as executor. Thereafter, she failed to comply with the turnover requirements of a court order, and failed to cooperate with the estate administrator, violations of RPC 3.4(c) and RPC 8.4(d). Like respondent, she also failed to reply to ethics authorities' numerous requests for information during the investigation of the grievance, and allowed the matter to proceed to us as a default, in violation of RPC 8.1(b).
In that matter, as well as three other estate matters, Avery was found guilty of gross neglect, lack of diligence, and failure to communicate with clients. In one of the matters, the estate was charged over $160,000 in penalties and interest as a result of Avery's inaction.
Given respondent's disdain for authorities, the default status of this matter, and the similar harm to clients, we determine that a three-month suspension, the same sanction imposed in Avery, supra, is warranted for respondent's misconduct.
Chair Frost voted for a six-month suspension. Member Gallipoli voted for a one-year suspension.
Vice-Chair Baugh, and Members Rivera and Zmirich did not participate.
We further determine to require respondent to reimburse the Disciplinary Oversight Committee for administrative costs and actual expenses incurred in the prosecution of this matter, as provided in R. 1:20-17.
Disciplinary Review Board
Bonnie C. Frost, Chair
By: /s/_________
Ellen A. Brodsky
Chief Counsel
VOTING RECORD
Decided: September 11, 2017 Disposition: Three-month suspension
| Members | Three-monthSuspension | Six-monthSuspension | One-yearSuspension | Did notparticipate |
|---|---|---|---|---|
| Frost | X | |||
| Baugh | X | |||
| Boyer | X | |||
| Clark | X | |||
| Gallipoli | X | |||
| Hoberman | X | |||
| Rivera | X | |||
| Singer | X | |||
| Zmirich | X | |||
| Total: | 4 | 1 | 1 | 3 |
/s/_________
Ellen A. Brodsky
Chief Counsel