Opinion
Docket No. DRB 19-170
12-11-2019
In the Matter of Michael J. Viscuso An Attorney at Law
Disciplinary Review Board
District Docket No. XIV-2018-0364E 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 the record filed by the Office of Attorney Ethics (OAE), pursuant to R. 1:20-4(f). The formal ethics complaint charged respondent with violations of RPC 1.1(a) (displaying gross neglect); RPC 1.3 (exhibiting a lack of diligence); RPC 1.4(a) (failing to inform a prospective client of how, when, and where the client may communicate with the lawyer), (b) (failing to communicate with the client) and (c) (failing to explain the matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation); RPC 1.5(b) (failing to set forth in writing the basis or rate of the fee); RPC 1.15(a) (negligent misappropriation of client funds); RPC 1.15(b) (failing to promptly notify clients or third parties of receipt of funds in which they have an interest and to promptly deliver those funds); RPC 5.5(a)(1) (practicing law while ineligible); RPC 8.1(b) and R. 1:21-1(a)(1) (failing to cooperate with disciplinary authorities and failing to designate a fixed physical location where process may be served in a disciplinary action); RPC 8.4(c) (engaging in conduct involving dishonesty, fraud, deceit or misrepresentation); and RPC 8.4(d) (engaging in conduct prejudicial to the administration of justice).
For the reasons set forth below, in light of respondent's license revocation, we determine that, if he ever applies for admission to the New Jersey bar, his readmission shall be withheld for one year and that he should not appear pro hac vice in New Jersey until further order of the Court.
Respondent earned admission to the New Jersey and Pennsylvania bars in 2008. He has no history of discipline in New Jersey. On July 22, 2019, however, respondent's license was administratively revoked, pursuant to R. 1:28-2(c), for his failure to pay the annual attorney registration fee for seven consecutive years. R. 1:28-2(c) states, in part, that "an Order of revocation shall not, however, preclude the exercise of jurisdiction by the disciplinary system in respect of any misconduct that occurred prior to Order's effective date." The misconduct under scrutiny in this matter occurred prior to the revocation of respondent's license. Accordingly, the Court has jurisdiction to address any unethical conduct by respondent.
Service of process was proper. On February 28, 2019, the OAE sent a copy of the complaint, by regular and certified mail, to respondent's last known office address of record. On March 21, 2019, the certified mail was returned to the OAE marked "Return to Sender." The regular mail was not returned.
On March 11, 2019, disciplinary notices were published in the New Jersey Law Journal and The Legal Intelligencer (a Pennsylvania periodical), stating that a formal ethics complaint had been filed against respondent. Those notices informed respondent that, unless he filed an answer to the complaint within twenty-one days after the date of publication of the notices, his failure to answer would be deemed an admission to the allegations of the complaint.
As of May 2, 2019, respondent had not filed an answer to the complaint, and the time within which he was required to do so had expired. Accordingly, the OAE certified this matter to us as a default.
We now turn to the allegations of the complaint.
On April 7, 2016, the Pennsylvania Office of Disciplinary Counsel (PODC) served respondent with a request for Statement of Respondent's Position in the Carlee Marie Cadden client matter. Respondent failed to reply. On July 14, 2016, the PODC filed a Petition for Discipline against respondent, and, in August 2016, served respondent with the petition at his last registered address in Pennsylvania. Because respondent did not answer the petition within the prescribed time, the facts of the PODC petition were deemed admitted.
In both New Jersey and Pennsylvania, a respondent's failure to file a verified answer to the complaint is deemed an admission that the allegations of the complaint are true and that they provide a sufficient basis for the imposition of discipline. See R. 1:20-4(f)(1) and Pa.R.D.E. 208(b)(3).
On September 21, 2016, despite proper notice, respondent failed to appear at a prehearing conference. Respondent then appeared at an October 27, 2016 disciplinary hearing, and asserted that he had been "participating in various forms of inpatient and outpatient drug and alcohol rehabilitation." He claimed that his rehabilitation efforts had affected his ability to attend the prehearing conference, but stated that he "wished to cooperate with the Board fully." That same date, respondent requested a continuance to explore the possibility of proceeding by way of discipline by consent, and agreed to enter into a Joint Petition to Temporarily Suspend an Attorney. On November 9, 2016, the Supreme Court of Pennsylvania accepted respondent's and the PODC's joint petition, and entered an order temporarily suspending respondent.
Finally, on January 9, 2017, respondent entered into a Joint Petition in Support of Discipline on Consent (the Joint Petition) with the PODC, wherein respondent admitted that he had "misappropriated $2,500 that his client entrusted to him to settle a civil action," and then "exacerbated his misconduct by failing to communicate with his client and neglecting to defend her in connection with opposing counsel's efforts to enforce the settlement."
In the Joint Petition, respondent admitted violating the following Pennsylvania Rules of Professional Conduct: RPC 1.1 (lacking competence); RPC 1.2(a) (failing to abide by a client's decision); RPC 1.3 (lacking diligence and promptness); RPC 1.4(a)(2) (failing to reasonably consult with client about legal objectives); RPC 1.4(a)(3) (failing to keep client reasonably informed about the status of the matter); RPC 1.4(a)(4) (failing to promptly comply with reasonable requests for information); RPC 1.4(b) (failing to explain a matter to the extent reasonably necessary to permit the client to make an informed decision); RPC 1.5(b) (failing to communicate basis or rate of the fee in writing); RPC 1.15(b) (failing to hold all fiduciary funds separate from the lawyer's own property and appropriately safeguard such property); RPC 1.15(e) (failing to promptly deliver any property to client or third party they are entitled to receive); and RPC 8.4(c) (engaging in dishonesty, fraud, deceit or misrepresentation).
Additionally, respondent admitted violating Pennsylvania Rules of Disciplinary Enforcement (Pa.R.D.E.) 217(b), 217(c)(2), and 217(e), which set forth requirements for attorneys placed on inactive status due to administrative suspension. Respondent also admitted violating Pa.R.D.E. 203(b)(7), in light of his failure to respond to the PODC's request for a statement of his position. On January 11, 2017, respondent executed an affidavit, in which he verified that he was guilty of all the misconduct set forth in the Joint Petition.
On February 14, 2017, the Disciplinary Board of the Supreme Court of Pennsylvania (PDB), approved the Joint Petition and respondent's consent to a one-year-and-one-day suspension, retroactive to November 9, 2016. On April 27, 2017, the Supreme Court of Pennsylvania granted the Joint Petition, and issued a corresponding order suspending respondent for one year and one day, retroactive to November 9, 2016.
On June 7, 2017, Pennsylvania disciplinary authorities notified the OAE of respondent's suspension. Respondent, however, failed to do so, as R. 1:20-14(a) requires.
On April 23, 2018, the OAE filed a Motion for Reciprocal Discipline with us, pursuant to R. 1:20-14, and recommended that we impose a three-month suspension for respondent's Pennsylvania misconduct. On June 26, 2018, following our review of the record and oral argument, we remanded the matter to the OAE for an investigation into whether respondent violated RPC 1.15(a) and the principles of In re Wilson, 81 N.J. 451 (1979), and, if appropriate, the filing of a complaint charging knowing misappropriation. Following our remand, the OAE could neither locate respondent nor obtain his financial records from any source. The OAE, thus, was unable to obtain proof in support of a charge of knowing misappropriation. The OAE returned the matter to us, on a certification of the record, for disposition. The facts of respondent's misconduct are as follows.
On April 12, 2013, respondent entered his appearance on behalf of his client, Carlee Marie Cadden, the defendant in litigation concerning an automobile accident. Respondent had not previously represented Cadden; yet, he failed to provide her with a written agreement explaining the rate or basis of his fee.
Seven months later, on October 8, 2013, at an arbitration hearing, respondent settled the matter. The terms of the settlement required a payment of $2,000 from Cadden to the plaintiff. Respondent represented to plaintiff's counsel, Phyllis Haskin, that he would collect $2,000 from Cadden and disburse it to Haskin.
In November 2013, Cadden provided $2,500 in settlement funds to respondent. Respondent subsequently failed to disburse the settlement money to Haskin, and thereby "converted, misapplied or misappropriated Ms. Cadden's $2,500." Haskin sent respondent letters on February 27, May 5, and June 27, 2014, asking him to contact her immediately to complete the settlement agreement. Respondent did not reply.
Nothing in the record explains the additional $500 Cadden provided to respondent. --------
On July 28, 2014, Haskin filed a Petition to Enforce Settlement, alleging that respondent had neither communicated with her nor provided her with a release or information about the status of the settlement funds. Respondent received Haskin's petition, but neither replied nor informed Cadden that he had received it. Two months later, by order dated September 23, 2014, Judge G. Michael Green, Delaware County Court of Common Pleas, granted Haskin's petition and directed Cadden to pay the settlement amount to the plaintiff within twenty days, or suffer sanctions. Respondent received the order, but failed to inform Cadden or to reply to the court or opposing counsel.
On October 2, 2014, Cadden sent a text message to respondent, informing him that the court had sent her the enforcement order, and asking him why she had received the order if the case had been settled with the funds she had provided to him. In reply, respondent texted that he "will deal with it. Don't worry." On November 7, 2014, Cadden again sent a text message to respondent, asking whether the case had been settled, and explaining that she needed to prove the case was settled "for the gaming control board to renew my license at work." Respondent replied that it "should be resolved by mid-November. Sometimes the court takes a while. I will call the court and the attorney."
On November 19, 2014, the Supreme Court of Pennsylvania administratively suspended respondent, effective December 19, 2014, for his failure to comply with his Continuing Legal Education (CLE) requirements. After his administrative suspension took effect, respondent failed to timely file a verified statement of compliance with the PDB, as Pennsylvania rules require; to inform Cadden, Haskin, or the court presiding over Cadden's matter of his administrative suspension; or to withdraw from the Cadden matter, as required.
On May 28, 2015, Haskin filed a Motion for Sanctions for Failure to Comply with the court's September 23, 2014 order enforcing the settlement. The court scheduled a hearing for July 9, 2015. Although respondent received notice of the hearing, he failed to notify Cadden. Consequently, neither respondent nor Cadden appeared.
On July 14 and 15, 2015, Cadden once again contacted respondent by text message, requesting an explanation for the correspondence she received from the court regarding her unpaid settlement debt. Respondent did not reply. On July 16, 2015, Judge Green granted the motion for sanctions, and ordered Cadden to remit the $2,000 settlement amount, plus $500 in sanctions, within twenty days of the date of the order. Respondent received that order, but failed to notify Cadden.
On September 1, 2015, Haskin filed a second motion for sanctions, for respondent's failure to comply with both the September 23, 2014 and July 16, 2015 orders. On November 23, 2015, Judge Green granted the motion, and ordered Cadden to pay a second $500 sanction.
On December 5, 2015, Cadden sent the following e-mail to respondent:
hey Mike I have been trying to reach you. I am getting letter after letter about this and I do not have any money to deal with this. I need you to help straighten this out. If [sic] is almost two years since it should have been taken care of. I completely understand you have been through a lot, as I have been through the same. I am not angry with you about that, but I need your help fixing this. Your [sic] family so we should be there for each other no matter what. Please call me.
Respondent did not reply to Cadden's e-mail. His last known communication with Cadden had been one year earlier, on November 7, 2014. On October 18, 2016, Judge Green entered a judgment against Cadden for $3,000.
On July 20, 2018, the OAE sent a letter to respondent, by regular and certified mail, at a Toughkenamon, Pennsylvania address, requesting a response to the allegations in this matter. The certified letter to respondent was returned by the post office marked "return to sender" and "unable to forward." The regular mail was not returned to the OAE. On August 10, 2018, the OAE sent a second letter to respondent, by regular and certified mail, at a Kennett Square, Pennsylvania address. The certified and regular letters were not returned to the OAE.
By letter to the PDB dated August 9, 2018, the OAE requested financial records for respondent. On August 21, 2018, the PDB replied that it did not have respondent's banking information.
On September 4, 2018, having received no reply from respondent, the OAE telephoned him and received a voice message stating "you have reached the Viscusos." The OAE left messages for respondent at this phone number on September 4, September 13, September 28, and October 3, 2018. Despite the OAE's efforts, respondent failed to contact the OAE.
On September 18, 2018, the OAE sent yet another letter to respondent, by regular mail and certified mail, at the Kennett Square address. The regular mail was not returned, and the certified mail was received and signed for by Deborah Viscuso. Investigation revealed that Joseph and Deborah Viscuso reside at respondent's Kennett Square address.
As of the date of the filing of the complaint, respondent had failed to reply to any of the OAE's letters or phone calls.
We find that the facts recited in the complaint support some of the charges of unethical conduct. Respondent's failure to file an answer to the complaint 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). Notwithstanding that Rule, each charge must be supported by sufficient facts for us to determine that unethical conduct has occurred.
After commencing the representation, respondent settled Cadden's case for $2,000. Then, after Cadden provided him with the funds necessary to complete that settlement, both respondent and the money ostensibly disappeared. Making matters worse, respondent then allowed several opposition motions for enforcement and for sanctions to proceed, unopposed; failed to notify his client of those motions; and eventually ceased all communications with her. He, thus, violated RPC 1.1(a), RPC 1.3, and RPC 1.4(b).
Next, respondent admitted that he failed to provide Cadden, whom he had not previously represented, a writing setting forth the rate or basis of his fee. He, thus, violated RPC 1.5(b).
As detailed above, the Joint Petition stated that respondent converted, misapplied, or misappropriated Cadden's funds. Based on the potential repercussions of that allegation, we denied the OAE's previous motion for reciprocal discipline and remanded the matter for a thorough investigation into whether respondent violated RPC 1.15(a) and the principles of In re Wilson in respect of his handling of Cadden's settlement funds. Despite the OAE's efforts to contact respondent and to obtain relevant financial records, the OAE was unable to ascertain information sufficient to support a knowing misappropriation charge. Accordingly, the OAE has reasserted its previous allegation that, based on the facts presented, respondent negligently misappropriated the $2,000 entrusted to him by Cadden to settle her matter.
As in the previous iteration of this matter, nothing in the record explains the disposition of Cadden's funds or what type of accounting reconciliation, if any, the Pennsylvania disciplinary authorities performed to determine whether those funds remained intact in respondent's trust account. Without evidence that the funds were invaded in one form or another, a finding that respondent negligently misappropriated funds, in violation of RPC 1.15(a), cannot be sustained. Nonetheless, after respondent received the settlement funds from Cadden, he failed to promptly deliver them to opposing counsel. He, thus, violated RPC 1.15(b).
Respondent also failed to cooperate with the investigation conducted by Pennsylvania ethics authorities, and, thus, violated RPC 8.1(b). He further violated RPC 8.1(b) by failing to comply with a lawful demand for information from New Jersey disciplinary authorities, and failed to designate and maintain a physical location where process may be served on him in a disciplinary action. Respondent was ultimately served by publication because the addresses on file with the OAE were no longer valid and respondent never updated these addresses as required by Court Rule.
As detailed above, respondent woefully failed to communicate with Cadden. When he did communicate with her, however, he misrepresented the status of her case, and blamed the court for the delay in resolving the matter, instead of admitting that he had yet to deliver her settlement funds to the opposition. He, thus, violated RPC 8.4(c).
Finally, respondent engaged in conduct prejudicial to the administration of justice by failing to appear at, or to inform his client of, multiple scheduled court hearings of which he had notice, resulting in a waste of judicial resources and the imposition of monetary sanctions on his client. He, thus, violated RPC 8.4(d).
We determine, however, to dismiss the remaining charges of the complaint. Specifically, the complaint alleges that respondent violated RPC 1.4(a) and (c) in respect of his representation of Cadden. RPC 1.4(a), however, applies to prospective clients and, therefore, is inapplicable to the instant matter. Further, we find insufficient evidence in the record for us to conclude that respondent failed to explain the matter to Cadden, or in any way prohibited her from making informed decisions regarding the representation. Rather, respondent brought the matter to the precipice of completion by settling the case, only to neglect to remit payment to the plaintiff. The ethics charges sustained above adequately address that misconduct.
Although, on November 19, 2014, respondent became administratively ineligible to practice law for failure to comply with his CLE requirements, the record is clear that, after he sent Cadden a November 7, 2014 text message, respondent ceased all communication with her. The record is bereft of any evidence that he practiced law, in any capacity, following his ineligibility. Therefore, we determine to dismiss the RPC 5.5(a)(1) charge.
In sum, respondent violated RPC 1.1(a), RPC 1.3, RPC 1.4(b), RPC 1.5(b), RPC 1.15(b), RPC 8.1(b), RPC 8.4(c), and RPC 8.4(d). We determine to dismiss the remaining charges that he further violated RPC 1.4(c), RPC 1.15(a), and RPC 5.5(a)(1). The only remaining issue for our determination is the appropriate quantum of discipline to be imposed for respondent's misconduct.
A misrepresentation to a client requires the imposition of a reprimand. In re Kasdan, 115 N.J. 472, 488 (1989). A reprimand still may be imposed even if the misrepresentation is accompanied by other, non-serious ethics infractions. See, e.g., In re Dwyer, 223 N.J. 240 (2015) (attorney made a misrepresentation by silence to his client, by failing to inform her, despite ample opportunity to do so, that her complaint had been dismissed, a violation of RPC 8.4(c); the complaint was dismissed because the attorney had failed to serve interrogatory answers and ignored court orders compelling service of the answers, violations of RPC 1.1(a), RPC 1.3, and RPC 3.2; the attorney also violated RPC 1.4(b) by his complete failure to reply to his client's requests for information or to otherwise communicate with her; the attorney never informed his client that a motion to compel discovery had been filed, that the court had entered an order granting the motion, or that the court had dismissed her complaint for failure to serve the interrogatory answers and to comply with the court's order, violations of RPC 1.4(c)); In re Ruffolo, 220 N.J. 353 (2015) (knowing that the complaint had been dismissed, the attorney assured the client that his matter was proceeding apace, and that he should expect a monetary award in the near future; both statements were false, in violation of RPC 8.4(c); the attorney also exhibited gross neglect and a lack of diligence by allowing his client's case to be dismissed, not working on it after filing the initial claim, and failing to take any steps to prevent its dismissal or ensure its reinstatement thereafter, violations of RPC 1.1(a) and RPC 1.3; the attorney also violated RPC 1.4(b) by failing to promptly reply to the client's requests for status updates); and In re Falkenstein, 220 N.J. 110 (2014) (attorney led the client to believe that he had filed an appeal and concocted false stories to support his lies, a violation of RPC 8.4(c); he did so to conceal his failure to comply with his client's request that he seek post-judgment relief, violations of RPC 1.1(a) and RPC 1.3; because he did not believe the appeal had merit, the attorney's failure to withdraw from the case violated RPC 1.16(b)(4); the attorney also practiced law while ineligible, although not knowingly, a violation of RPC 5.5(a)).
Here, respondent made misrepresentations to his client while also violating RPC 1.3, RPC 1.4(b), RPC 1.5(b), and RPC 8.4(d). In this regard, the combination of ethics violations is similar to the infractions addressed in In re Pocaro, 219 N.J. 320 (2014) (three-month suspension for attorney guilty of violating RPC 1.3, RPC 1.4(b), RPC 1.5(b), RPC 3.2, RPC 8.4(c), and RPC 8.4(d); the attorney failed to provide a client with a writing setting forth the basis or rate of his fee, lacked diligence and failed to expedite litigation by failing to move to dismiss a counterclaim filed against his client, failing to serve any non-party deposition notices, interview any witnesses, file timely motions, or add a party-defendant; failed to communicate with the client by not informing her that he had not conducted adequate discovery, did not have a proper expert for the case, and was not prepared for trial; misrepresented to the client that he had filed various motions to adjourn the trial, to extend discovery, and to recuse the judge; and was guilty of conduct prejudicial to the administration of justice by attempting to strong-arm his client to settle her case by leading her to believe that the judge had prejudged the case and did not want to try it, and failed to obtain the client's consent to file an appeal, which further delayed the case; attorney's ethics history included two censures and a one-year suspension).
Unlike the attorney in Pocaro, respondent further violated RPC 1.1(a), but did not violate RPC 3.2 (failure to expedite the litigation). By comparison, respondent's misconduct, while serious, was not as egregious as that of the attorney in Pocaro. Additionally, unlike Pocaro, respondent has no history of discipline. Therefore, on balance, respondent's misrepresentations to his client, when considered in combination with the other violations listed above, warrant at least a censure. Respondent, however, has several other violations that serve to further enhance the appropriate quantum of discipline.
Specifically, respondent also failed to promptly deliver Cadden's settlement funds to plaintiff's counsel, in violation of RPC 1.15(b). That conduct usually results in the imposition of an admonition or a reprimand, even if accompanied by other infractions. See, e.g., In the Matter of Brian Fowler, DRB 12-036 (April 27, 2012) (admonition; after the attorney had been retained to represent an estate, he was to collect funds due on a note given to the estate; for a three-year period, he collected the funds, but failed to deposit at least nineteen checks and did not supply a required accounting; he also failed to reply to more than a dozen inquiries from the client about the funds; violations of RPC 1.4(b) and RPC 1.15(b); the attorney's psychological/psychiatric difficulties, which had impeded his ability to represent his clients, were considered in mitigation; although the attorney had received two prior admonitions, an admonition was still imposed, in light of the mitigating factors) and In the Matters of Raymond Armour, DRB 11-451, DRB 11-452, and DRB 11-453 (March 19, 2012) (admonition imposed on attorney who, in three personal injury matters, neither promptly notified his clients of his receipt of settlement funds nor promptly disbursed their share of the funds; the attorney also failed to properly communicate with the clients; we considered that the attorney had no prior discipline).
In total, respondent would receive at least a censure for his misrepresentations to his client along with his gross neglect, lack of diligence, failure to communicate, failure to prepare a written fee agreement, and conduct prejudicial to the administration of justice. Standing alone, a reprimand would be warranted for his failure to promptly disburse settlement funds and his failure to cooperate with disciplinary authorities. Hence, at a minimum, the baseline discipline for the totality of respondent's misconduct is a three-month suspension.
To craft the appropriate discipline in this case, however, we must also consider both aggravating and mitigating factors. In aggravation, respondent's misconduct caused significant harm to his client. A $3,000 judgment was entered against Cadden for her $2,000 settlement, plus the additional $1,000 in sanctions. There is also reference to the potential withholding of her gaming license due to her outstanding debts. The record does not reveal whether she has paid the judgment, whether respondent has reimbursed her, or whether she was able to maintain her gaming license. Nonetheless, respondent caused her significant economic harm. Additionally, he failed to notify the OAE of his Pennsylvania suspension.
In respect of potential mitigation, respondent informed Pennsylvania disciplinary authorities that he was in and out of rehabilitation programs, and an e-mail from his client indicates that she was aware that respondent was going through personal struggles at the time of his misconduct. Although a drug or alcohol problem would certainly qualify as mitigation, we have no more than conjecture on the subject and without actual evidence, cannot find mitigation to meaningfully counterbalance the significant aggravating factors presented.
Moreover, even if the aggravating and mitigating factors were in balance, enhancement of the otherwise appropriate sanction is still required due to respondent's failure to answer the ethics complaint. See In re Kivler, 193 N.J. 332, 342 (2008) ("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"). We cannot suspend respondent because his New Jersey law license has been revoked. Accordingly, we determine that, should he seek readmission to the New Jersey bar, the readmission shall be withheld for one year. We also determine that he should be prohibited from appearing pro hac vice in New Jersey until further order of the Court.
Member Petrou did not participate.
Finally, we determine that respondent should be responsible for the payment of basic administrative costs and actually-incurred disciplinary expenses, as provided in R. 1:20-17 and as required by every Court order imposing discipline. Such payment is to be made following the entry of the Court's order of discipline, rather than following readmission.
Disciplinary Review Board
Bruce W. Clark, Chair
By:/s/_________
Ellen A. Brodsky
Chief Counsel
VOTING RECORD
Decided: December 11, 2019 Disposition: One-Year Suspension
| Members | One-YearSuspension | Recused | Did Not Participate |
|---|---|---|---|
| Clark | X | ||
| Gallipoli | X | ||
| Boyer | X | ||
| Hoberman | X | ||
| Joseph | X | ||
| Petrou | X | ||
| Rivera | X | ||
| Singer | X | ||
| Zmirich | X | ||
| Total: | 8 | 0 | 1 |
/s/_________
Ellen A. Brodsky
Chief Counsel