New Jersey Reaffirms Mandated Disbarment For Knowing Misappropriation But Will Reconsider Possible Reinstatement

Despite the existence of compelling character evidence, the New Jersey Supreme Court accepted the disbarment recommendation of its Disciplinary Review Board in a matter where the attorney – a sole practitioner admitted in 2002 without prior discipline – had failed to adhere to trust account obligations.

In an unusual lengthy opinion, the court reaffirmed the principle that knowing misappropriation invariably warrants the ultimate sanction but observed

Respondent Dionne Larrel Wade has been a solo practitioner since she was admitted to the New Jersey bar in 2002. Her remarkable personal and professional accomplishments are clear from the record. She overcame obstacles early in life and persevered with her studies. Throughout her legal career, she volunteered her time and skill and provided pro bono legal services to underserved clients. She also conducted free legal clinics at her church. She has no prior disciplinary history.

Notably

Although it declines to revisit the Wilson rule, the Court finds it is time to reevaluate the current approach to permanent disbarment. The question –and the challenge — is whether and how to create a rigorous system that can determine if a lawyer disbarred for those reasons deserves a second chance years later. The Court will establish a broad-based committee to analyze whether disbarment for knowing misappropriation should continue to be permanent, or whether New Jersey should join the majority of jurisdictions that allow for reinstatement. If the Court revises the current approach to permanent disbarment, Respondent and others would be able to reapply for admission in accordance with a new court rule.

The sad affair was triggered by a random audit as told in the DRB report

We feel compelled to first acknowledge that it is beyond dispute that respondent is a remarkable person who has overcome tremendous personal obstacles, through diligence and perseverance, to become a pillar of her church and local community and what appeared to be an excellent member of the New Jersey bar. However, despite the record being replete with evidence of respondent’s demonstrably stellar personal reputation, the record is equally replete with overwhelming evidence that she repeatedly and knowingly misappropriated client and escrow funds, from 2002 through 2017, through her systematic “lapping” of funds entrusted to her by clients and third parties. Indeed, prior to the filing of the formal ethics complaint, respondent openly admitted having done so, claiming only that her conduct was “ignorant,” versus knowing, and seeking mercy.

Moreover, respondent admitted, without reservation, having borrowed client and escrow funds, for the entirety of her career, and specifically in the Eason and Anderson Estate matters, “without the knowledge or permission” of her clients. The OAE’s investigation also revealed a third such instance, the Clayton matter.

In our view, following the filing of the formal ethics complaint, respondent shifted tactics.

Respondent’s asserted defenses to the charges of knowing misappropriation are of no moment, and constitute, at best, willful blindness, as described below. Simply put, respondent used her attorney trust account as she saw fit, with no regard to the bright-line ethics rules governing attorney trust accounts.

As to bright line rules

Over the years, respondents, our own colleagues, and even some Justices have attempted to persuade the rest of the Court that, in special situations, it should carve out an exception to the Wilson rule.  The Court, however, has consistently declined. 

Oral argument linked here.

The presentation to the court by the Respondent is compelling, to put it mildly. (Mike Frisch)