New Jersey Supreme Court Rejects Disbarment Despite Recommendations And Findings Below
The New Jersey Supreme Court rejected a proposed disbarment from the Disciplinary Review Board after a earlier remand and ordered a two-year suspension of an attorney.
And the Court having heard the arguments of counsel and having considered the briefs of the parties and having concluded from its review of the matter that respondent did not violate RPC 1.15(a) (knowing misappropriation) or the principles of In re Wilson, 81 N.J. 451 (1979), and In re Hollendonner, 102 N.J. 21 (1985);
And the Court having determined that the appropriate quantum of discipline for respondent’s violations of RPC 1.15(b), RPC 1.2(d), and RPC 8.4(c) is a two-year suspension from the practice of law…
The court did not further enlighten the Bar and the public as to its reasoning in rejecting the contrary conclusions of the Special Master and the DRB.
From the DRB report
In his report, Judge Stern incorporated his determinations from his first decision in this matter. The only issue that remained was whether respondent had committed knowing misappropriation.
Judge Stern accepted respondent’s position that he expected additional financing for his client within thirty days. The only relevant issue for Judge Stern was whether Kiggundu’s assurance of additional funding was material to the charge of knowing misappropriation. Reframing the issue, Judge Stern asked, “what is the impact of the expectation on the conduct of Respondent in closing without paying off the Saxon mortgage as obligated by the closing documents and as he certified he had done, breaching his closing obligation and distributing money to his client as he did?”
Judge Stern noted that, on the one hand, respondent knew he was closing with proceeds with which he was obligated to pay off the Saxon mortgage. The money was meant to be safeguarded in escrow for that purpose. On the other hand, the closing proceeds went for the benefit of the Cheramis and Angela Cherami’s mother, incidental to the “rehab” of the East Hanover property, gained no benefit from his conduct perhaps, his client happy. Stern found that respondent believed, in good faith, that the additional proceeds with which to pay off Saxon would be forthcoming. But the facts were kept from both Emigrant and Saxon, and remained so with respect to Saxon, even after the additional financing was not forthcoming and after the Eastern loan had been arranged.
Judge Stern found the misappropriation was not negligent
Finally, Judge Stern recognized that the grievance in this case was filed in December 2010, and has remained unresolved for over six years. To protect the public and to maintain confidence in the bar, respondent should have been disbarred long before now.
Although, presumably, respondent committed no additional has learned a lot and has in the intervening six-year period, those facts are irrelevant at this point, as Hollendonner recognizes no mitigating circumstances.
The DRB on sanction
respondent failed to safeguard funds entrusted to him for particular purposes, thereby breaching his fiduciary duty to Emigrant; perpetrated a fraud on Emigrant, by disregarding its closing instructions and leading it to believe that the Saxon mortgage had been satisfied and that Emigrant had a first lien on the property pledged as collateral; assisted his clients in defrauding Emigrant; and made misrepresentations on the HUD-I form by listing a $153,000 sum as cash from borrowers, when the Cheramis brought no funds to the closing, and by listing $685,000 as earmarked for the satisfaction of the Saxon mortgage, when the mortgage was not paid off.
(Mike Frisch)