Friday, December 9, 2011

Knowing

In a case with a rather tortured procedural history, the New Jersey Supreme Court has imposed a three-month suspension  of an attorney for his "failure to safeguard a legal fee that belonged to his former firm."

A stipulated disposition was submitted to the court in January 2008. The court heard argument and remanded the matter to the Office of Attorney Ethics (OAE) to charge the attorney with knowing misappropriation. OAE sought reconsideration.

The court again heard argument but rejected a reprimand sanction. The court reaffirmed its order of remand.

The Disciplinary Review Board (DRB) then "recommended that the court appoint a special prosecutor and a special master, both of whom should be well-versed in the law of knowing misappropriation." OAE again appealed.

The court rejected OAE's appeal and remanded the case with an order that OAE have a "special investigator" determine if the attorney should be charged with knowing misappropriation. OAE complied. The special investigator reported to the court that a formal complaint alleging additional misconduct was unwarranted and that the matter should be remanded to determine the sanction.

The DRB then proposed a six-month suspension, rejecting OAE's argument that there is a difference between misappropriation from a client and from a law firm:

Knowing misappropriation is knowing misappropriation, regardless of the character of the funds at stake...Simply stated, since 1993, knowing misappropriation of law firm funds and knowing misappropriation of client or trust funds is no different.

The attorney had worked at Ravin, Sarasohn and moved to Lowenstein Sandler. He gave advice in bankruptcy matters to Milberg Weiss while at the Ravin firm. After his move, he received a fee of $217,639.50 for work in a matter that was in part due to the Ravin firm. The disciplinary violations involved his handling of the fee. 

He deposited the fee into a personal account and paid the share due to Lowenstein Sandler. He did not advise the Ravin firm of the receipt of fees or pay them the amount to which the firm was entitled. He eventually paid the Ravin firm (which was aware of the ongoing reopresentation and its entitlment to share in fees) a portion of the fee it was due. (Mike Frisch)

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