On orders to show cause why respondents should not be disciplined.
For granting reprimands -- Chief Justice Weintraub, and Justices Burling, Jacobs, Francis, Proctor, Hall and Schettino. Opposed -- None. The opinion of the court was delivered by Hall, J.
The Bergen County Ethics and Grievance Committee filed separate presentments charging each respondent with unethical and unprofessional conduct "in recommending the transfer of properties in an attempt to defraud creditors and to file bankruptcy proceedings and in his participation in the actual transfer of properties * * *." The ethical problem involved has not previously been the subject of consideration by this court.
The matter originated from a self-prepared written complaint against both attorneys made by their clients, Mr. and Mrs. James Zuccarelli, and filed with the committee early in March 1957. At that time the Zuccarellis were engaged in a controversy with respondent DePamphilis, whom they had retained several months previously in connection with financial difficulties in the operation of their retail confectionery business and who had early brought respondent Friedman into the matter, concerning the amount of the fee to be paid for the services actually rendered. The burden of the rather vitriolic complaint was that the fee agreed upon at the inception with both attorneys, a small part of which was paid in cash and the balance represented by a series of monthly notes then given which had been discounted by DePamphilis at a bank, was excessive because all of the legal work contemplated when the amount was fixed was not performed by reason of a change in the course of events. It was further claimed in effect that considerable of the advice given amounted to misguidance and the services actually rendered were in large part unnecessary. The document
asserted that a reduction in the original amount had been agreed to, but that DePamphilis had subsequently changed his mind, refused to return the remainder of the notes and threatened suit when the one currently due was not met. The document said: "We would like a refund on the counsel fees paid and a return of the signed notes to us."
In detailing in the complaint the chronology of happenings to support their charges, the Zuccarellis mentioned that DePamphilis originally advised them that, since they owned real estate, "we should turn our property over to someone and later on go bankrupt," and that subsequently the real estate was transferred to Zuccarelli's uncle, Edward Curran, at Friedman's office. They contended, not that such was unethical conduct on the part of the attorneys, but rather that it was bad legal advice because, as they claimed: "We could not go bankrupt" and "Transfer of property must set for 2 years before filing bankruptcy."
Only DePamphilis was called upon to answer the complaint, since Friedman practiced in another county and the committee had no express jurisdiction over him. R.R. 1:16-2(a). The answer, beside asserting the necessity and soundness of the services and that the agreed fee was not excessive, denied any original advice to turn over the real estate to anyone and then to file a petition in bankruptcy. It did say, however, that the transfer came about when shortly thereafter the Zuccarellis appeared at a conference in Friedman's office with the uncle and suggested they would like to convey their real estate to him because they owed him money for loans, said to have been evidenced by withdrawals shown in the uncle's savings account pass book over a period of 17 years, approximately equal to the equity in the properties. Following preliminary investigation, in which the whole matter was explored with the complainants and the attorney, the committee determined that a hearing be held and all witnesses examined including Friedman. At the several sessions which followed, it most properly and in conscientious performance of its plain duty
went thoroughly into and considered not only the matter of the fee, but also the question of any unprofessional conduct relating to the services performed, especially the conveyance of the real estate. Friedman appeared at the hearings as associate counsel for DePamphilis, was called as a witness in his behalf and examined and cross-examined by the members of the committee and the designated prosecutor as thoroughly as if the charges against him were then being heard and considered.
The unanimous presentment against DePamphilis was dated October 4, 1957, charging him as to the property transfers as previously set forth, but finding that there was insufficient evidence of unethical or unprofessional conduct in connection with the complaint as to counsel fees. We are not therefore further concerned with that phase.
After the Bergen County presentment was filed, that committee referred the complaint as against Friedman for action in Essex County where he practiced. In due time he filed an answer and, at the request of that committee, a supplement thereto, the latter dated January 7, 1958. With respect to the question now before us, Friedman stated he advised the Zuccarellis bankruptcy would not lie because they were solvent and the real estate transfers were made at their request under circumstances similar to those related by DePamphilis. Friedman stressed, in his pleading, as had DePamphilis, that the complaint was motivated by a desire to avoid payment of agreed legal fees. We must comment that such a purpose in no way excuses unprofessional conduct disclosed on consideration of the complaint and appropriate disciplinary action if clear and convincing evidence establishes violation of the pertinent rules of conduct.
The Essex County Committee, after reviewing the Friedman case, quite correctly decided that it would be necessary to re-examine the witnesses who had testified in Bergen County and so sought the instructions of this court. To avoid ...