For suspension for six months -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. Opposed -- None.
After service of a complaint and specification of ethical charges by the Middlesex County Ethics Committee on respondent and the filing of an answer by the latter setting forth a categorical denial of the charges, the Committee conducted an extended hearing and entered a formal presentment against respondent.
The presentment in substance makes five charges against respondent:
1. Failure to make timely payments out of buyers' funds to persons entitled thereto after closing a realty sale and mortgage transaction.
2. Failure to maintain adequate attorney's trustee account records as required by R. 1:21-6(b)(2).
3. Chronic deficiencies in the trustee checking account at least from July 10, 1974 to October 7, 1974.
4. Use of $5,583.22 from the trustee checking account to purchase an automobile for personal use.
5. Failure to distribute trust funds within a reasonable time.
The only specific rule violation (in addition to R. 1:21-6(b)(2)) cited in the presentment in connection with the substantive charges mentioned above is DR 9-102, dealing generally with preserving the identity of funds and property of clients.
We consider the proofs concerning and the merits of each of the charges seriatim.
In July and August of 1974 respondent represented a Mr. and Mrs. Modelfino in connection with their purchase of a dwelling in Montville. The Glen Ridge Savings and Loan Association was to provide a $36,000 mortgage. The Modelfinos were anxious to move into the property, and the closing of the title and mortgage was fixed for August 16, 1974 although respondent was to be away on vacation at that time. Respondent delegated the handling of the closing to his associate Russell Wojtenko, then employed by him on a per diem basis. However, the savings and loan association withheld the mortgage funds on August 16 because of defects in the survey and corrections required in the mortgage. The parties nevertheless consented to a "dry" closing to permit the purchasers to take possession. The buyers delivered their check made out to the sellers for $30,479,61 (they had previously paid a deposit of $5300) to the attorney for the sellers on the understanding he would retain it in escrow until the mortgage funds were forthcoming.
The title problems having been satisfactorily resolved, the mortgage check was made available and the transaction was concluded on the evening of August 22, 1974. Respondent attended on that occasion and was in charge of matters for the Modelfinos although Wojtenko participated because of his initial handling of the matter. It is clear beyond doubt that the Modelfinos regarded Rabb, not Wojtenko, as their responsible counsel in the transaction. Further, only Rabb was authorized to sign checks for his office. Shortly after the closing on August 22 the Rabb office arranged for issuance of a $5,934.92 check in discharge of a second mortgage and one for $78.50 to the Morris County Clerk.
Other obligations required to be paid out of buyers' funds (including the mortgage proceeds) in consummation of the
closing, together with the dates when in fact paid by respondent, are as follows:
Title Company $297.50 10-11-74
Attorney for mortgagee ...