Interim Suspension Imposed

An interim suspension has been imposed by the New York Appellate Division for the First Judicial Department on grounds of insuficient cooperation with an ongoing investigation

On August 29, 2017, respondent was the Referee in a foreclosure action in which the complainant’s company had entered the winning bid. A down payment of $79,000 was tendered to respondent as Referee, consisting of two cashier’s checks, one for $50,000, another for $25,000, with the memo portion of each check bearing the complainant’s name, and the remainder of the funds in cash. The foreclosure sale was never completed. On November 1, 2021, Supreme Court, Nassau County issued an order vacating the sale, and ordering that respondent return the down payment to the complainant’s company.

The complainant unsuccessfully sought to have respondent return the $79,000 and on May 19, 2022, filed a complaint against respondent with the Second Judicial Department’s Grievance Committee for the Tenth Judicial District, which was transferred to the Committee on or about June 1, 2022.

By letters and emails dated August 10, 2022, August 31, 2022, September 30, 2022, October 12, 2022, November 7, 2022, December 6, 2022, December 8, 2022, and December 28, 2022, the Committee requested that respondent answer the complaint and warned her that failure to answer could result in her interim suspension from the practice of law. Respondent sought multiple extensions to answer (which were granted by the Committee) alleging that a medical condition prevented her from answering. On December 8, 2022, Committee staff called respondent and emailed her the same day to remind her that she was to submit an answer by December 12, 2022 “or medical documentation supporting your need for an extension of time to provide her answer.” Respondent was warned that if her answer or medical documentation was not received by the due date of December 12, 2022, “the Committee will obtain a subpoena to compel your appearance at an examination under oath.” On December 12, 2022, respondent did not answer but submitted a letter from a physician assistant which, in relevant part, stated that “[respondent] has been a regular patient of this office and [was] treated at our office on December 12, 2022 . [Respondent] suffers from recurrent Migraine Headaches causing work limitations [and] is waiting for an upcoming Neurologist appointment for evaluation and treatment.” The Committee found the physician assistant’s letter insufficient and on December 28, 2022, gave respondent a final extension to answer by January 25, 2023.

On January 25, 2023, respondent submitted an answer asserting that she had been attending to sick family members, had a death in her family, and was ill herself. Respondent also stated, in relevant part, that she did not recall being assigned to any cases by “that particular judge”; she had not handled referee matters “for quite some time”; the lapse of time placed her at a disadvantage because she had been displaced from her office and files had been damaged “due to flooding/smoke etc.”; and that she had changed electronic devices.

On January 26, 2023, the Committee sent an email directing respondent to forward copies of all her escrow account bank statements “between November 1, 2021, and the present,” by January 27, 2023. If she did not have the statements respondent was directed to provide the name of her bank and the escrow account number. On January 27, 2023, respondent sent an email to the Committee stating she did not feel well and needed additional time “to seek advice and counsel in this matter.“ On the same date, the Committee notified respondent by email, that she must produce bank statements and/or bank account information. Respondent did not reply to the Committee’s email.

On March 1, 2023, respondent was personally served with a judicial subpoena, directing her to appear before the Committee on March 10, 2023, for an examination under oath. Respondent did not appear and failed to comply with the subpoena.

The Committee through its exhaustive independent investigation found the necessary information and obtained respondent’s escrow account records directly from her bank. The records show that respondent deposited the complainant’s $79,000 down payment into her escrow account on August 29, 2o17. Thereafter, respondent made improper ATM withdrawals and debit card purchases from her escrow account that repeatedly invaded the client’s down payment. As of December 10, 2019, the balance in the escrow account was $6.53.

The Committee maintains that respondent’s interim suspension is warranted pursuant to 22 NYCRR 1240.9(a)(1), (3), and (5), as respondent’s escrow bank account records and the November 1, 2021 court order directing [*3]respondent to return the $79,000 downpayment, constitute uncontroverted evidence that she failed to safeguard and maintain the funds and instead converted them by making repeated ATM withdrawals and debit card purchases. The Committee also maintains that respondent’s failure to cooperate with its investigation after being provided with multiple opportunities and extensions to do so, and her failure to appear for an examination under oath despite being served with a judicial subpoena, is sufficient grounds for an immediate suspension pending a hearing before a referee.

Respondent, represented by an attorney, opposes the relief sought by the Committee admitting she failed to respond to its requests, but asserts that she does not have a negative disciplinary history and is currently in good standing. Respondent asks this Court to permit her to remain licensed pending a hearing as the practice of law is her sole source of income.

The asserted medical issue

Respondent’s opposition papers refer to a “medical issue,” but this does not explain how she was prevented from cooperating with the investigation while at the same time being capable of practicing law. To the extent respondent’s “medical issue” is asserted as a mitigation to formal charges, it is not sufficient to avoid an interim suspension as it does not address the merits of the Committee’s motion (Matter of Afilalo, 139 AD3d 175, 180 [1st Dept 2016]).

(Mike Frisch)