Public Censure For Nonvenal Conversion: “The Only One Who Has Suffered Has Been Respondent”

The New York Appellate Division for the First Judicial Department rejected a proposed suspension in favor of a public censure of an attorney

The Attorney Grievance Committee commenced an investigation following notification from the Lawyers’ Fund for Client Protection that a check from respondent’s IOLA account had been dishonored in October 2015 due to insufficient funds. Respondent was charged with 18 counts of misconduct involving, inter alia, the misuse of his IOLA account, entering into business transactions with a client without written agreements, lying to the Committee, failing to provide a retainer agreement, and failing to maintain required bookkeeping records.

A referee was appointed

In his answer, respondent denied the charges. He raised affirmative defenses and factors in mitigation, including that any alleged misconduct was negligent not intentional, no identified client was harmed or lost money, and the Committee cannot state which client’s funds were allegedly converted.

Thereafter, respondent filed a motion to, inter alia, dismiss the charges or, in the alternative, dismiss certain charges.

By unpublished order entered March 16, 2018, this Court appointed a Referee to conduct a hearing and issue a report on liability and as to the appropriate sanction to impose, if any, and denied respondent’s motion to dismiss.

The Referee sustained the 18 charges of misconduct. She recommended a six-month suspension, finding that the record “demonstrates the folly of a busy solo practitioner attempting to manage a sizeable general practice without support” and that the respondent “suffered not only the common malady of poor memory but a medical history of anxiety.” The Referee also found that the record “does not show that anyone save respondent has suffered – by dint of his considerable expenditure of his time, energy and the stress involved in defending this proceeding [and] these charges.”

Now, the Committee seeks an order confirming the Referee’s findings of liability and imposing a sanction that this Court deems just and proper under the circumstances. The Committee points out, inter alia, that while nonvenal conversion cases can range from public censure to a four-year suspension, in the case at bar, a two-year suspension would be appropriate.

The court disagreed

However, as for sanctions, we find that a public censure is appropriate. We have consistently held that public censure is an appropriate sanction for escrow violations such as commingling and nonvenal conversion where the misconduct is aberrational, and the attorney has shown remorse and cooperation (Matter of Cardenas, 124 AD3d 123 [1st Dept 2014]; Matter of Guillorn, 114 AD3d 134 [1st Dept 2013]; Matter of Rosenberg, 109 AD3d 225 [1st Dept 2013]; Matter of Dyer, 89 AD3d 182 [1st Dept 2011]; Matter of Fisher, 43 AD3d 173 [1st Dept 2007]).

Here, respondent is a 64 year-old busy solo practitioner attempting to manage a sizeable general practice without support. In his 40-plus years of practice, he had never had a complaint filed against him and he had never bounced a check until the one that led to this proceeding. Respondent admitted to inadvertent mistakes, primarily sloppiness; that he immediately deposited money into his account to prevent any further loss; that he was under the care of a psychiatrist and neurologist and was being medicated for stress, anxiety, ADD and depression resulting from a physical condition that he suffers from known as “essential tremor”; his lack of focus and concentration might have caused the alleged misconduct; his voluntary completion of CLEs on the proper maintenance of IOLA accounts; the lack of intent and venality, and his expressions of sincere remorse.

Throughout this proceeding, respondent fully cooperated with the Committee by promptly providing information and documentation the Committee sought and appeared for three depositions. His conduct was nonvenal and, as the Referee noted, the only one who has suffered has been respondent (see Matter of Fisher, 43 AD3d at 175).

(mike Frisch)