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In re Palmieri

Decided: April 25, 1978.

IN THE MATTER OF FRANK A. PALMIERI, AN ATTORNEY-AT-LAW


On order to show cause why respondent should not be disbarred or otherwise disciplined.

For reprimand -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. Opposed -- None.

Per Curiam

[76 NJ Page 52] Some twenty-three years ago Justice Jacobs mused that society might be "better served if practicing attorneys

were to remain full-time lawyers rather than become part-time businessmen." In re Carlsen, 17 N.J. 338, 346 (1955). Certainly respondent would have been better served had he considered that prescient observation, for he undoubtedly would thereby have avoided part of the entanglement with complainants which has resulted in unresolved civil litigation and in complaints to the New Jersey Bureau of Securities and the Essex County Prosecutor's office, as well as in these ethics proceedings. The present matter arose out of a presentment issued by the Essex County Ethics Committee. Respondent, Frank Palmieri, is now before this Court on an Order to Show Cause why he should not be disbarred or otherwise disciplined.

I

The presentment addresses two separate but, as will be seen, not entirely unrelated transactions. Complaints were filed with the Committee by Michael and Amil Frino, who asserted that during the time Palmieri was acting as their attorney in connection with the purchase of a supermarket business, Waybest Super Market, Inc., he borrowed large sums of money from them. They alleged further that in order to discharge this personal debt, respondent induced the complainants to enter into a stock purchase and voting trust agreement whereby they became stockholders in a hotel venture controlled by respondent. As a result of respondent's inducements the complainants invested "more than $180,000 the greater part of which has been lost." Complainants charged further that Palmieri represented them as sellers and at the same time represented the purchasers in the sale of their supermarket business, and that by reason of respondent's dual representation the Frinos were "damaged in an amount [estimated] at more than $250,000." Respondent, in his answer, denied any attorney-client relationship in the hotel transaction and in turn charged complainants, whom he characterized as "good and shrewd businessmen," with utilizing

the ethics committee as the medium through which they would "recoup their investment in a totally legitimate business proposition." He further asserted that his dual representation in the supermarket deal was simply an accommodation to the clients after full disclosure.

The Committee rejected respondent's denial of any wrong doing. It concluded that an attorney-client relationship existed between complainants and respondent during the period in which the transactions involving the hotel occurred, and that respondent's conduct surrounding those transactions amounted to an abuse of the attorney-client relationship. An ethical transgression was found also in respondent's representation of both the buyers and sellers of Waybest Supermarket, the conclusion being that respondent's dual representation involved an improper conflict of interest.

We have carefully scrutinized the record and transcript of the Committee's hearing for the purpose of making a de novo assessment of respondent's conduct, In re Logan, 71 N.J. 583, 586 (1976). Based thereon we conclude that the proof, in both quantum and quality, of any professional transgression in the hotel transaction falls short of the applicable standard of "clear and convincing." See, e.g., In re Gross, 67 N.J. 419, 424 (1975). On the other hand a disciplinary infraction does emerge from the record with respect to respondent's participation in the supermarket controversy.

II

What we have referred to as the "hotel transaction" actually involves a series of events taking place from about 1961 to 1973. It was in 1961 that the Frinos first began to spend their summer weekends at the Stockton Hotel in Sea Girt. In 1957 Palmieri, through a corporation controlled by him, had purchased the land, hotel building, and the liquor license for $400,000. His purpose was not to operate the hotel but rather to raze the structure and erect

a modern facility in its place. Because Palmieri was unable to secure a building permit from the municipality for this purpose, lengthy litigation ensued with the final resolution not forthcoming until this Court's decision in the matter, Kramer v. Board of Adjustment, Sea Girt, 45 N.J. 268 (1965). In the meantime, however, ...


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