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Court Decides Lawyer Malpractice Case

The Grievance Committee served the respondent with a petition, dated 20 November 2007 containing 10 charges of professional misconduct. After hearings in April 2008, the Special Referee sustained all 10 charges. The Grievance Committee now moves to confirm the Special Referee’s report and impose such discipline as the Court deems appropriate. The respondent also moves to confirm the Special Referee’s report, having admitted the 10 charges of the petition, and asks the Court to take mitigating evidence into account when determining the sanction.

The 1st , 2nd 3rd, 4th and 5th charges allege that the respondent converted to his own use funds entrusted to him as a fiduciary, incident to his practice of law, on behalf of his clients in violation of the Code of Professional Responsibility.

According to a New York Injury Lawyer, on the 1st charge, the respondent maintained a checking into which he deposited client funds and other funds entrusted to him as a fiduciary. On or about 26 October 2005, the respondent deposited the sum of $6,250 into his attorney escrow account on behalf of his client as the proceeds of a personal injury settlement (personal injuries may refer to broken bones, or as a result of car accidents or medical malpractice). A Suffolk Personal Injury Lawyer said that on or about 9 November 2005, the respondent drew a check in the amount of $4,083.34 payable to the order of his client as her share of the settlement. From approximately 26 October 2005 until approximately 9 November 2005, the respondent was required to maintain a balance of at least $4,083.34 in his attorney escrow account on the client’s behalf. By 28 October 2005, the balance in the respondent’s attorney escrow account was depleted to $253.68.

On the 2nd charge, on or about 28 October 2005, the respondent deposited the sum of $6,500 into his attorney escrow account on behalf of his 2nd client as the proceeds of a personal injury settlement. On or about 20 November 2005, the respondent drew a check in the amount of $4,226.67 from his attorney escrow account payable to his 2nd client as her share of the settlement. From approximately 28 October 2005 until November 20, 2005, the respondent was required to maintain a balance of at least $4,226.67 in his escrow account on the 2nd client’s behalf. By 10 November 2005, the balance in the respondent’s escrow account was depleted to $4,083.34.

On the 3rd charge, on or about 10 November 2005, the respondent deposited a check in the amount of $3,125 into his attorney escrow account on behalf of his 3rd client as the first proceeds of a personal injury settlement. On or about 21 November 2005, the respondent deposited a check in the amount of $7,500 into his attorney escrow account on the 3rd client’s behalf as the second portion of her personal injury settlement. A Long Island Personal Injury Lawyer said that on or about 1 February 2006, the respondent drew a check on his attorney escrow account in the amount of $6,337.75, payable to the order of his 3rd client as her share of that settlement. From approximately 21 November 2005 to 1 February 2006, the respondent was required to maintain a balance of at least $6,337.75 in his attorney escrow account on behalf of his 3rd client. By 27 December 2005, the balance was depleted to $2,798.33.

On the 4th charge, on or about 14 March 2006, the respondent deposited the balance of $25,000 into his attorney escrow account on behalf of his 4th client as the proceeds of a personal injury settlement. On or about 26 May 2006, he drew a check in the amount of $15,920.68 payable to the order of his 4th client as her share of that settlement. From approximately 14 March 2006 until 26 May 2006, the respondent was required to maintain a balance of at least $15,920.68 in his attorney escrow account on the 4th client’s behalf. By 23 March 2006, the balance in the respondent’s attorney escrow account was depleted to $14,173.34.

On the 5th charge, on or about 11 May 2006, the respondent deposited a check in the amount of $8,000 into his attorney escrow account on behalf of his 5th client as the first portion of the proceeds of a personal injury settlement. On or about 25 May 2006, he deposited a check in the amount of $4,000 into that account on the 5th client’s behalf as the second portion of the personal injury settlement. On or about 14 July 2006, the respondent drew a check on his attorney escrow account in the amount of $6,907.82 payable to his 5th client as his share of that settlement. From approximately 25 May 2006 until 14 July 2006, the respondent was required to maintain at least $6,907.82 in his attorney escrow account on the 5th client’s behalf. By 21 June 2006, the balance was depleted to $6,711.27.

The 6th charge alleges that the respondent failed to safeguard funds entrusted to him as a fiduciary, incident to his practice of law, on behalf of his 6th client in violation of the Code of Professional Responsibility.

On or about 23 March 2006, the respondent received a check in the amount of $22,000 from his 6th client as payment for legal services provided. Inasmuch as the 6th client disputed the exact amount owed, the respondent agreed to hold that check in escrow pending resolution of the fee dispute. That check was not deposited into the respondent’s attorney escrow account until approximately 18 September 2006.

The 7th charge seven alleges that the respondent paid himself legal fees for two personal injury matters before depositing the corresponding settlement checks into his attorney escrow account, in violation of the Code of Professional Responsibility.

On or about 28 October 2005, the respondent withdrew the sum of $6,000 from his attorney escrow account to pay himself legal fees for personal injury matters for three clients. However, he did not deposit the settlement checks for one of the three clients (3rd client) into his attorney escrow account until approximately 10 November 2005 and 21 November 2005. Between approximately 10 November 2005 and 20 December 2005, the respondent made four withdrawals from his attorney escrow account totaling $8,270.34 to pay himself legal fees for personal injury matters for four clients (8th client). The respondent did not deposit the settlement checks for another one of the four clients matter into his attorney escrow account until approximately 26 January 2006.

The 8th charge alleges that the respondent engaged in a pattern and practice of failing to promptly pay his clients the shares of the proceeds of the personal injury settlements to which they were entitled, in violation of the Code of Professional Responsibility.

On or about 28 October 2005, the respondent deposited the sum of $6,500 into his attorney escrow account on behalf of his 2nd client as the proceeds of a personal injury settlement. He failed to pay her share of the settlement ($4,226.67) until approximately 20 November 2005.
On or about 10 November 2005, the respondent deposited a check in the amount of $3,125 into his attorney escrow account on behalf of his 3rd client as the first proceeds of a personal injury settlement. On or about 21 November 2005, he deposited a check in the sum of $7,500 on behalf of his 3rd client as the second portion of the settlement proceeds. The respondent failed to pay his 3rd client her share of that settlement ($6,337.75) until approximately 1 February 2006.

On or about 27 March 2006, the respondent deposited the sum of $4,250 into his attorney escrow account on behalf of his 9th client as the proceeds of a personal injury settlement. The respondent failed to pay his 9th client his share of the settlement ($2,416.67) until approximately 15 May 2006.

On or about 11 May 2006, the respondent deposited the sum of $15,000 into his attorney escrow account on behalf of his 10th client as the proceeds of a personal injury settlement. The respondent failed to pay his 10th client her share of that settlement ($9,506.67) until approximately 20 July 2006.

On or about 18 July 2006, the respondent deposited the sum of $25,000 into his attorney escrow account on behalf of his 11th client as the proceeds of a personal injury settlement. The respondent failed to pay his 11th client her share of that settlement ($7,810) until on or about 2 October 2006.

The 9th charge alleges that the respondent failed to maintain the required bookkeeping records for his attorney trust account, in violation of the Code of Professional Responsibility.
The respondent failed to maintain records of all deposits into and withdrawals from his attorney trust account, showing the date, source, and description of each item deposited and the date, payee, and purpose of each withdrawal or disbursement. The respondent failed to maintain a ledger book or similar record for his attorney trust account, showing the source of all funds deposited into it, the names of all persons for whom those funds were held, the description and amounts of those funds, and the names of all persons to whom those funds were disbursed. The respondent failed to maintain the required checkbooks, check stubs, bank statements, prenumbered canceled checks, and duplicate deposit slips for his attorney trust account.
The 10th charge alleges that the respondent engaged in a pattern of failing to file closing statements with the Office of Court Administration (OCA), in violation of NYCRR and the Code of Professional Responsibility.

The respondent filed 143 retainer statements with OCA on behalf of his law firm between July 2001 and November 2006. However, he filed only 10 closing statements between July 2001 and 31 December 2002. Since 1 January 2003, the respondent did not file any closing statements.
Inasmuch as all of the factual allegations have been admitted and the respondent has joined in the Grievance Committee’s motion to confirm, the Special Referee properly sustained all 10 charges and the Grievance Committee’s motion to confirm the Special Referee’s report is granted.

In determining an appropriate measure of discipline to impose, we note that the respondent has no prior disciplinary history. The court considers mitigating factors, as requested by the respondent, which are – the absence of economic harm to any client; his abandonment of the Quikbooks system in favor of personally reconciling his accounts with his banking statements; his excellent reputation in the legal community; his sincere remorse; and his full cooperation with the Grievance Committee. The respondent has admitted from the outset of the investigation that he unreasonably relied upon others to manage his accounts. He notes that the conversions were not motivated by venality. The respondent was unaware that his father, upon whom he relied to manage his account, had delegated that responsibility to his brother or that his brother suffered from a psychiatric disorder which prevented him from focusing on his accounting duties. The respondent belatedly discovered, to his detriment, that during his brother’s management of his accounts, the Quikbooks entries had not been reconciled with bank statements. It became evident from continued communications with the Grievance Committee that the accounting errors went beyond the error which caused the subject check to be dishonored. Upon ascertaining that fact, the respondent instructed both his brother and his father to cease working on his accounts.

Thus, the respondent’s misconduct warrants his suspension from the practice of law for a period of one year.

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