To Err Is Human

A Pennsylvania disbarment was ratcheted down to a one-year suspension with fitness by the New Jersey Supreme Court.

As is the custom, the court followed the recommendation of its Disciplinary Review Board.

The DRB rejected some findings of ethical violations admitted in the Pennsylvania case

The charges against respondent arose out of his participation in a mortgage debt relief scheme. He agreed to disbarment in Pennsylvania, after [ethics charges alleging numerous violations had been filed]

Background

The charges arose out of his association  with “A,” a nonlawyer, whose Ohio real estate license had been revoked in 2009, a fact unknown to respondent.

When respondent was admitted to the Pennsylvania bar, in January 2012, he was twenty-six years old, unemployed, and had accumulated more than $230,000 in student loan debt. In August 2013, respondent answered a Craigslist advertisement seeking an “associate attorney.” On an unidentified date, he was hired by Williams Legal Group (WLG), a law firm affiliated with “A,” which held itself out as a national mortgage debt relief entity. WLG operated in accordance with a business model, adopted and marketed by “A.”

After respondent was hired by WLG, he opened his own law practice, under the name Domenick Legal Group, and operated according to “A”’s business model. Respondent “mostly” represented clients who resided, and whose realty was located, in states other than Pennsylvania and and New Jersey, the only states  in which he was admitted to practice law.

The Pennsylvania disciplinary case alleged that the attorney had harmed 34 clients in 13 states and collected over $500,000 in illegal or excessive fees. He was found to have engaged in unauthorized practice of law in multiple jurisdictions, charged and collected illegal and/or excessive fees and failed to return unearned fees.

On the plus side

At some point, respondent understood “the situation in which he had placed himself,” which caused feelings of remorse and depression. In the fall of 2015, he obtained assistance from the Lawyers Concerned for Lawyers program. Toward the end of 2015, respondent took steps to extricate himself from his association with “A.”

However, he failed to appear for argument before the New Jersey Board. 

 The DRB on reciprocal discipline

Although we agree with many of the conclusions reached by the Pennsylvania disciplinary authorities, because the allegations of the Pennsylvania ethics complaint lack detail, we do not find that the record supports, to a clear and convincing standard, that respondent violated RPC 1.5(a) or RPC 1.15(b)…

As to fees

Although the complaint suggests that the fees collected by respondent were unreasonable, the allegations are insufficient to make that finding.

…with respect to those clients, in the absence of an analysis under RPC 1.5(a), there is simply no context for determining whether the fees charged were unreasonable. Thus, we dismiss that charge.

Perhaps the allegations lack detail and/or analysis because the accused attorney consented to disbarment?

Unlike Pennsylvania, we find that respondent should not be disbarred in New Jersey. The crux of his misconduct was the failure to return unearned fees to his clients for whom he had performed no services. In Pennsylvania, that conduct clearly warrants disbarment under its RPC 1.15(i)…

New Jersey RPC 1.15, which is vastly different from  Pennsylvania’s, does not have a paragraph (i), and no other provision of the Rule mirrors Pennsylvania RPC 1.15(i). Indeed, a New Jersey attorney is not required to safeguard an unearned fee in the trust account.

While I can see that the Rule 1.15(i) distinction is a valid basis to find that some of the admitted Pennsylvania misconduct is not misconduct in New Jersey, I read the DRB to minimize the serious misconduct that remains. 

And, it should be noted, the “vast difference” relied on here is one that allows a lawyer to treat unearned fees as his own on receipt.

This reflects a distinctly lawyer-friendly departure from ABA Model Rule 1.15

(c) A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.

From the New York Times in 2003. 

Mr. [Mark] Armitage, who is associate director of the legal disciplinary board in Michigan, said New Jersey’s reputation for stringent discipline comes from its random financial audits and harsh penalties. He said New Jersey was one of only 10 states that permanently disbar lawyers; most others allow offenders to apply for reinstatement.

”New Jersey has the reputation of being very, very tough,” he said.

A scholarly article needs to be written about how New Jersey went from a beacon of vigorous regulation to whatever it is now. (Mike Frisch)