Explanation Please

The New Jersey Supreme Court has censured an attorney, rejecting without explanation the proposed three-month suspension of its Disciplinary Review Board.

The misconduct took place in the wake of the Respondent’s purchase of a law practice as described by the DRB

Specifically, respondent conceded that he failed to publish the required notices in connection with his purchase of Lewis’s law practice, in violation of RPC 1.17(c)(3), and that he failed to notify [inherited client] Bertin that he had assumed the representation of its matter, in violation of RPC 1.4(b). Additionally, respondent admitted that he failed to promptly notify Bertin of his November 2016 receipt of its judgment funds, in violation of RPC 1.4(b) and RPC 1.15(b).

Moreover, respondent conceded that he failed to perform three-way ATA2 reconciliations, as R. 1:21-6(c)(1)(H) requires, in violation of RPC 1.15(d). Respondent noted that his recordkeeping was limited to discussing the David E. Gray law firm’s finances with [inherited employee] Geiger and Arcaro and reviewing the firm’s monthly bank statements only to ensure that no checks were overdrawn and that money remained in the accounts. In that vein, respondent conceded that he had relinquished complete control of his recordkeeping responsibilities to Geiger, whom respondent believed was using a signature stamp, with respondent’s name, to issue ATA2 checks. Respondent, thus, admitted that he violated RPC 1.15(d) and R. 1:21-6(c)(1)(A) by allowing Geiger to serve as an authorized signatory of his ATA2, an account which respondent conceded he “had no control over.”

Respondent also conceded that he violated RPC 5.3(a) and (b) by failing to ensure that Geiger’s conduct was compatible with the professional obligations of a lawyer. Similarly, respondent acknowledged that he had direct supervisory authority over Geiger, in accordance with RPC 5.3(c)(2). In that capacity, respondent admitted that he was responsible for Geiger’s conduct because he knew that Geiger had signatory authority of his ATA2; yet, he failed to take any reasonable remedial action to prevent any misappropriation.

Finally, respondent conceded that he failed to promptly provide Bertin with its judgment funds, in violation of RPC 1.15(b), failed to appropriately safeguard Bertin’s judgment funds, in violation of RPC 1.15(a), and, as a result of Geiger’s misappropriation, negligently misappropriated Bertin’s judgment funds, in violation of RPC 1.15(a). Specifically, respondent conceded that, between January 31, 2017 and September 30, 2019, when Geiger finally reimbursed Bertin for the total amount of its judgment funds, plus accrued interest, respondent’s ATA2 balance routinely fell below the required amount respondent should have been holding, inviolate, on Bertin’s behalf.

Misplaced trust

In December 2018, Geiger, using the alias Bill Goldman, began communicating with Bertin regarding its outstanding judgment funds. On January 16, 2019, Bertin’s owner sent “Goldman” an e-mail, requesting an update on the status of Bertin’s funds.

On January 18, 2019, Geiger, again using the alias Bill Goldman, spoke with Bertin’s owner, via telephone, and falsely advised the owner: (1) that the closing agent for Patel’s Newark property was “under sanction” by the New Jersey Department of Banking and Insurance; (2) that the closing agent owed money to eight entities besides Bertin; and (3) that a “Special Coun[se]l” was “handling the case for the government.” Geiger also falsely informed Bertin’s owner that each of the entities purportedly owed money by the closing agent had agreed to a 38.7% “settlement” of their respective amounts due, and that “it would be better to cash in now” because the closing agent “may be in deeper problems in the near future.”

On January 28, 2019, Bertin’s owner sent “Goldman” an e-mail, requesting the name of the “Special Coun[se]l” and an update on Bertin’s outstanding judgment funds, which Bertin was willing to accept, “even if at a loss (if you believe that is the best option).”

On January 30, 2019, Geiger, again using the alias Bill Goldman, spoke with Bertin’s owner, via telephone, and claimed that respondent’s firm was “in a position to write a check.” Later that same date, Bertin’s owner sent “Goldman” an e-mail, requesting that respondent’s firm provide “some documentation” regarding the purported 38.7% “settlement” in light of the fact that he was “giving up” more than $120,000 in judgment funds. The record is unclear whether Geiger sent Bertin’s owner any documents in connection with the fictitious “settlement.” However, on February 1, 2019, Geiger issued a $62,451.60 ATA2 check, made payable to Bertin, and, on February 7, 2019, Bertin successfully negotiated the check.

On February 11, 2019, Bertin’s vice president of operations contacted the New Jersey Lawyers’ Fund for Client Protection stating that Bertin had received only $62,451.60 of its $189,130.69 in judgment funds.

Obviously it is within the power and authority of the court to adopt or reject a disposition proposed by the DRB. An explanation of the reasoning would be both appropriate and informative. (Mike Frisch)