Excessive Fee And Dishonesty Draws Suspension

A one year suspension has been imposed by the New York Appellate Division for the Second Judicial Department

The respondent is a partner in the law firm of Cronin & Byczek, LLP (hereinafter the Firm), and is the partner in charge of the Firm’s litigation practice. In or about early 2000, Jose Antonio Romero (hereinafter Romero), who was incarcerated at the Auburn Correctional Facility, contacted the respondent about bringing an action related to the death of his wife, Robin Denise Romero, who died sometime in 1999, shortly after giving birth to their child in a New York City hospital. Romero was serving an 18-year sentence of imprisonment following his conviction for manslaughter in the first degree.

Upon investigation, the Firm learned that Robin Denise Romero’s mother, Redell Willis, had retained the law firm of Danker & Milstein, P.C. (hereinafter the Milstein Firm), to bring an action in the Supreme Court, New York County, on behalf of her daughter’s estate, to recover damages for wrongful death (hereinafter the wrongful death action). On or about May 19, 2000, the Firm entered into a retainer agreement with Romero (hereinafter the retainer agreement), wherein it was agreed that the Firm would represent Romero’s interests with respect to his rights as a distributee of his wife’s estate. Pursuant to the retainer agreement, the Firm was entitled to receive one-third of any recovery it obtained on Romero’s behalf.

In or about April 2003, the wrongful death action was settled for $1,350,000, and the settlement was approved by the Surrogate’s Court, Bronx County, in a decree dated January 21, 2004 (hereinafter the Surrogate’s decree). Pursuant to Surrogate’s Court Procedure Act § 2222-a (hereinafter SCPA 2222-a), the Surrogate’s decree directed that Romero’s share of the settlement, which was $250,000, could not be distributed “until 30 days from the date of entry of [the] Decree.” In accordance with SCPA 2222-a, on or about March 4, 2004, the Chief Clerk of the Surrogate’s Court forwarded a copy of the Surrogate’s decree to the New York State Crime Victims Board (hereinafter the CVB) via facsimile transmission.

On or about March 12, 2004, the Firm received a check from the Milstein Firm representing Romero’s share of the settlement in the sum of $250,000 (hereinafter the settlement proceeds). At or about that time, the Firm deposited the $250,000 check into the Firm’s escrow account at the First Bank of Long Island (hereinafter the escrow account). On March 16, 2004, the Firm reimbursed itself for disbursements in the amount of $172.92 by check #12531, and issued check #12532 to the Firm in the sum of $83,275.70 for its fees under the retainer agreement. After issuing these checks, $166,551.38 remained on deposit in the Firm’s escrow account on behalf of Romero.

In April 2004, Eamonn Trainor, a senior attorney for the CVB, was contacted by a representative of the Firm and advised that the Firm was holding approximately $160,000 to $170,000 in settlement proceeds for Romero. After obtaining affidavits from Aida Quiles and Angela Gutierrez (hereinafter together the crime victims), Trainor contacted the Firm on April 27, 2004, to confirm that it was still holding the settlement proceeds, and to advise it that the CVB was getting an injunction to “start freezing that money.” An associate at the Firm, Kari Caulfield, informed Trainor that the Firm was still in possession of approximately $160,000 to $170,000 of the settlement proceeds, and that the money would be held for an additional 21 days. Later that day, in a second call, Caulfield informed Trainor that the Firm had decided that the settlement proceeds would be released forthwith. Trainor then sent Caulfield a letter, by facsimile transmission, dated April 27, 2004, in which he noted that the Firm was required to provide written notice to the CVB prior to disbursing the settlement proceeds, and asked the Firm not to disburse any of the settlement proceeds to Romero in accordance with Executive Law § 632-a (hereinafter the Son of Sam law). That evening, at the Firm’s weekly meeting of the litigation group, the Romero matter was discussed. The respondent, six of the Firm’s other attorneys, and one paralegal attended the meeting. Romero was billed for five hours for each of the attendees.

The next day, by letter dated April 28, 2004, the Firm notified the CVB for the first time in writing of the Firm’s receipt of the settlement proceeds. Also on that day, the respondent sent two attorneys from the Firm, James LeBow and Dominick Revellino, to the Auburn Correctional Facility to confer with Romero. At the conference, Romero signed a nondurable power of attorney and a retainer agreement (hereinafter the 2004 retainer agreement) with the Firm to represent him “regarding any and all motions, suits, actions, litigation and appeals to protect the corpus” of the settlement proceeds. Pursuant to the 2004 retainer agreement, the Firm was entitled to a $75,000 refundable deposit, and work would be billed at the rate of $350 per hour. Revellino did not discuss the terms of the 2004 retainer agreement with Romero before it was signed. Romero was billed 24 hours for this visit and conference, 12 hours for each attorney.

The funds were transferred after a Supreme Court order had restrained such a transfer.

The court sustained charges of dishonesty and excessive fees

As an experienced trial attorney and the partner in charge of the litigation practice for the Firm, the respondent was actively involved in directing the decisions made by the Firm in the communications with the CVB, the handling of the settlement proceeds, and in the Firm’s affirmation in opposition to the CVB OTSC. The Special Referee properly determined that the timing of the events between April 27, 2004, and April 30, 2004, e.g., the telephone communications between the CVB and the Firm, the exchange of correspondence with the CVB, the five-hour Firm litigation meeting, the visit to Romero at the Auburn Correctional Center, the transfer of the settlement proceeds from the Firm’s escrow account to the operating account, and the quick re-deposit of a portion of those funds into the escrow account, defies any claim that the respondent’s actions and those of her litigation group were unrelated to the CVB. Rather, they evidence a concerted effort to circumvent the CVB TRO. Although the Firm had control of the settlement proceeds when it was served by the CVB with the OTSC, the affirmation in opposition submitted by the Firm in response to the CVB OTSC contained a false affirmation that the settlement proceeds had only been held until April 12, 2004, and had been released to Romero before the OTSC was served. It appears that the clear purpose of these misrepresentations was to defeat the OTSC, and to mislead the Supreme Court, Albany County, by failing to reveal that the Firm had transferred the settlement proceeds into another account on the day it was served with the TRO. Indeed, that court relied upon the Firm’s misrepresentations in its denial of the application for a preliminarily injunction, as reflected in its decision and order dated September 15, 2004.

Concerning the fees charged to Romero, notwithstanding the respondent’s claims that the petitioner failed to produce expert testimony, the Special Referee properly concluded that “it is clear from any standpoint that the fees . . . were excessive,” in light of the Firm’s billing in advance of being retained by Romero for the constitutional challenge to the Son of Sam law, and the total amount of fees charged Romero, which were virtually the entire settlement proceeds received by him.

Based on the evidence adduced, and the respondent’s admissions, the Special Referee properly sustained the charges.

Sanction

In mitigation, the respondent asks this Court to consider the settlement of the contempt action and payment of $125,000 to the crime victims, the respondent’s unblemished disciplinary history, including that she has not been the subject of any other disciplinary action in the nearly 11 years that have elapsed since the events that are the subject of this proceeding, as well as the evidence of her charitable endeavors, pro bono legal service, and good character. Nevertheless, the respondent has engaged in serious misconduct in her representation of Romero, involving, inter alia, dishonesty, fraud, deceit, and misrepresentation, which conduct is prejudicial to the administration of justice and adversely reflects on her fitness as a lawyer.

Under the totality of the circumstances, we find that the respondent’s conduct warrants her suspension from the practice of law for a period of one year.

(Mike Frisch)