On order to show cause why the respondent should not be disciplined.
For reprimand -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall and Haneman. Opposed -- None. The opinion of the court was delivered by Proctor, J.
On July 27, 1962 a complaint was filed with the Bergen County Ethics and Grievance Committee against the respondent attorney, Daniel W. Kamp. Following a formal hearing, the Committee filed a presentment in this court charging respondent with violation of Canon 6 of the Canons of Professional Ethics.
At the hearing, the following facts appeared without substantial dispute. On June 5, 1962 Laura M. Cronk and Staben Custom Built Homes, Inc., entered into a written agreement whereby Mrs. Cronk agreed to purchase a certain parcel of real estate and a dwelling to be built thereon by the corporation. The contract provided for a down payment of $2,000, paid by Mrs. Cronk at the time of execution of the contract, and subsequent specified progress payments as construction proceeded. The total price was $20,700. The contract further specified:
"It is understood and agreed by all parties hereto that closing of title in this transaction shall be handled through the office of Daniel W. Kamp, Esq., 36 Central Avenue, Midland Park, New Jersey."
The following day John Staben, President of Staben Custom Built Homes, Inc, mailed a copy of the contract to the respondent. This was the first notice respondent received of
the sale to Mrs. Cronk, although he had been the attorney for the corporation and Mr. Staben for five years and had conducted a prior search of this property for Staben at the time of his purchase. Respondent testified that it was his belief that by virtue of the above-quoted clause in the contract, an attorney-client relationship was created between him and Mrs. Cronk with regard to the closing of title. However, he admitted that he had no contact with her at any time and did nothing to protect her interests.
Mrs. Cronk, without legal advice, proceeded to make progress payments pursuant to the contract, i.e., $2,000 upon completion of the foundation and $8,500 when the house was framed. Thereafter Mrs. Cronk was advised by friends "to get my own lawyer," and on July 12 she consulted Richard S. Huckin, an attorney who had previously represented her on other matters. She gave him her copy of the contract and asked him to represent her in the purchase of the property.
Mr. Huckin attempted to make a title search but was apparently unable to locate the property with sufficient accuracy. On July 24, 1962 he telephoned the respondent seeking information to assist him in locating the property. When Huckin said he intended to make a search of the property for Mrs. Cronk, the respondent objected vehemently, insisting that Huckin could not do so, but would have to go through him -- that he had an agreement with the builder. He refused to give Huckin any information about the property and said that since Mrs. Cronk had signed the contract, she would have to live up to it and pay him for the search. Huckin told respondent he considered such an arrangement improper and would report his actions to the ethics committee if he continued to maintain his present position. Respondent replied that this type of situation occurs frequently and that Huckin could report it if he felt so inclined. Respondent apparently believed that this contract provision was not only proper but created a binding obligation on the part of the buyer to accept his services.
Following this conversation with respondent, Huckin informed Mrs. Cronk that he could not represent her in connection with the purchase because he was unable to locate the property. Nevertheless, on August 9, 1962, Mrs. Cronk paid the remaining $8,200 to Staben and received a deed from him. Respondent did not attend the closing, which took place at Mrs. Cronk's new home, but he had prepared the deed and affidavit of title for Staben. Although the contract was executed by Staben Custom Built Homes, Inc., the grantor in the deed was John Staben, individually. No search had been made on the property for Mrs. Cronk, no title insurance was procured, and apparently to this day she has no assurance that her title to the premises is marketable.
Respondent submitted a bill dated August 8, 1962, to Staben Custom Built Homes, Inc., for certification and examination of title in the "Staben-Cronk" matter in the amount of $195 less a credit of $60. Mrs. Cronk was not billed for legal fees in connection with the conveyance.
During the course of the hearing respondent described his arrangement with Staben substantially as follows: When Staben purchased a tract, respondent would examine the title for him to determine its marketability. Staben would be billed only for out-of-pocket expenses incurred by respondent. When Staben subsequently sold the property, he would encourage the buyer to utilize the services of respondent as closing attorney with respect to the title work. If the buyer acquiesced, the contract provided that closing would be handled through the respondent, and the buyer would be billed by respondent "anywhere from $185 to $195 or $200, plus a few disbursements." The purpose of this arrangement was to permit Staben to price the property at a lower figure. When the buyer paid the respondent's fee, respondent would credit Staben for the expenses previously paid by him. In the Cronk purchase, although the contract, according to the respondent, established this arrangement, the dispute that arose interfered with the normal course of events. Mrs. Cronk was not billed (nor was any work done for her), but instead
Staben was billed as previously noted, the credit of $60 being allowed for respondent's expenses previously ...