Saturday, December 24, 2016

Attorney Censured: Called Panel Chair "Grossly Overweight Big Firm Banking Lawyer" And On Trust Funds "If It's A Small Amount, Who Cares?"

The New Jersey Supreme Court has censured an attorney for mishandling the proceeds of a settlement.

The District Ethics Committee had proposed a reprimand

For the totality of respondent’s conduct, the panel recommended no more than a reprimand, observing that, although respondent committed only two recordkeeping violations, his attitude toward his misconduct was cavalier and that he was unapologetic for his actions, at one point asking, "if it’s a small amount, who cares?"

From the report of the Disciplinary Review Board that recounted  the hearing but found additional violations

" [The attorney] conceded that he had not informed [client] Valme of the full amount of the fee he took, but contended that he was not required to give his clients such notice. Respondent asserted that he is entitled to one-third of the workers’ compensation lien; that if full disclosure were provided, a client might challenge the amount of the attorney’s fee; that this was the way he was "taught and that’s the way most lawyers do it;" that he relied on books written by the Honorable James Healy, J.S.C., that contain different exhibits in the back; and that he has been using that closing statement format "on comp cases for at least twenty years...

At the close of hearing, the DEC hearing panel asked respondent to submit (i) the authority on which he relied, including, but not limited to, a textbook allegedly written by Judge Healy in support of the manner in which he prepared his closing statement in the Valme matter, which included deducting from the settlement amount the full amount of the workers’ compensation lien, rather than the amount of the compromised lien, and making that deduction before calculating his attorney’s fee; (2) the authority that entitled respondent to disburse to himself $750 in costs that the workers’ compensation carrier permitted to be reduced from its lien, even if respondent’s costs did not amount to $750; and (3) the amount that remains due to Valme and the calculation thereof. Additionally, the panel asked respondent to review the transcripts of his interviews by the OAE and to notify the panel whether they are, to the best of his knowledge, an accurate transcription of his statements.

Respondent provided the requested submission and stated, contrary to his testimony at the hearing, that the Valme closing statement was accurate.

...respondent submitted a brief to us arguing that the additional $410 he took for costs in accordance with the statute related to costs incurred in the prosecution of the workers’ compensation case and that the $590 he itemized on the closing statement related specifically to the personal injury matter. Respondent also complained that he was denied a "jury of his peers" because the panel chair is a "big firm banking lawyer who knows nothing about personal injury." He added that the panel chair is a "grossly overweight big firm banking lawyer and he and I couldn’t be more different. He finds me cavalier."

Findings by the DRB

The record contains clear and convincing evidence that respondent violated RPC 1.15(a) by overpaying himself legal fees in the Valme matter. The third-party personal injury claim settled for $40,000. From those gross proceeds, respondent satisfied the workers’ compensation lien of $11,779.39. Respondent, however, failed to account properly for the disbursement of monies for the workers’ compensation lien. On the closing statement he provided to Valme, respondent listed the lien as $18,794, although it had been reduced to only $11,779.39. This amount ($18,794) is correct only in a technical sense because the compensation earned, when it provided that lien amount to respondent, included the thirty-three percent attorney fee respondent was entitled to receive in accordance with N.J.S.A. 34:15-40(c).4 Respondent was entitled to up to one third of the total lien as his fee, which he did not disclose to Valme. By not accurately reflecting the true amount of the lien, respondent overpaid his legal fee according to the terms of his retainer agreement with Valme, which, in turn, resulted in an underpayment to Valme.

Respondent also admitted that he took an additional $410 in costs from the third-party settlement proceeds without listing those costs on the Valme closing statement. He argued that, in accordance with that same workers’ compensation statute, he was entitled to an additional $750 in costs. The statute, however, allows an attorney to receive up to $750 in costs. It does not allow him to receive $750 in addition to his actual costs. Respondent argued that he did not receive the full $750 but only the $410. Respondent, however, itemized and deducted only $590 on the Valme closing statement and submitted no evidence of having incurred any other costs. Hence, respondent overpaid himself $410 from monies to which Valme was entitled.

The attorney was admitted in 1980 and has a prior reprimand

From the prior case

This case illustrates the unfortunate consequences that result from attorneys’ representation of their own interests, particularly in family matters. All of the ethics charges stem from respondent’s actions in connection with his own child support and custody matters.

Among other aspects of the prior case, the attorney had described a judge in the case as "short ugly and insecure." 

Here there were what might be called "attitude issues"

Respondent shows no remorse for his misconduct. In fact, his attitude regarding his handling of client funds and obligations is cavalier and exacerbated by his defiant admission that he intentionally omits details regarding his fee from his client’s closing statements to foreclose any challenge his clients might pose. Respondent clearly harbors a serious disregard for his ethics obligations as an attorney. Thus, in fashioning the appropriate discipline in this case, we are particularly mindful of the need to protect the public.

Additionally, respondent’s demeanor at the hearing is worth noting. He was disrespectful toward the presenter and the OAE investigator. The panel found respondent to lack credibility and to be cavalier. Respondent’s poor attitude is on full display in his brief to us as he tried to minimize the panel chair’s ability to deliberate on this matter, based on the panel chair’s physical characteristics. In light of respondent’s behavior resulting in his previous reprimand, it appears to us that he has not learned from his prior mistakes. He was rude and disrespectful, demeanor that does not comport with the standards of our profession.

Hence, based on respondent’s conduct, his cavalier and defiant attitude regarding that conduct, and a need to ensure that respondent will learn from his mistakes, as well as a need to protect the public from his continued behavior in this regard, we determine that the appropriate quantum of discipline is a censure.

Four DRB members would imposed a three-month suspension.

I will not further beat my dead horse on the state of attorney discipline in the Garden State. (Mike Frisch)

Bar Discipline & Process | Permalink


Obviously the flying finger of fate reprimand is insufficient. However, we enjoy these stories of prime a..holes because their antics make us feel better about ourselves. A suspension would have been better - upped the schadenfreude?

Posted by: Rick Underwood | Dec 24, 2016 8:09:08 AM

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