On an order to show cause why respondent should not be disbarred or otherwise disciplined.
For disbarment -- Chief Justice Wilentz and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. Opposed -- None. The opinion of the court was delivered by Wilentz, C.J.
In this case, respondent knowingly used his clients' money as if it were his own. We hold that disbarment is the only appropriate discipline. We also use this occasion to state that generally all such cases shall result in disbarment. We foresee no significant exceptions to this rule and expect the result to be almost invariable.
Of the eight complaints filed against respondent with District Ethics Committee VIII (Middlesex County), two involved misappropriation. In one, respondent failed for almost two years to turn over $23,000 -- the proceeds from the sale of a house -- to the client. After the ethics complaint was filed, respondent paid the client but never accounted for the location or use of the funds in the interim. In the other, respondent obtained money for a client in the form of a $4,300 check to the client's order. Respondent then forged the client's endorsement, deposited the proceeds in his own trust account, and has yet to turn the funds over to the client.
Respondent's professional misconduct extends beyond these instances of misappropriation. In the other complaints, the Disciplinary Review Board found that respondent lied to clients, wantonly disregarded their interests, and advised them to commit fraud. Moreover, he was inexcusably uncooperative in the ethics proceedings. The Disciplinary Review Board recommended disbarment.
It is clear from all of this that respondent is unfit to be a lawyer. We do not, however, discuss any charges other than misappropriation since disbarment is mandated by that alone.
Misappropriation of clients' funds is both a crime (N.J.S.A. 2C:20-9 (superseding N.J.S.A. 2A:102-5, which was repealed by L. 1978, c. 95, 2C:98-2)) and a direct violation of Disciplinary Rule 9-102 of the Code of Professional Responsibility. Included in the specific commands of this rule is the requirement that "a lawyer shall * * * [p]romptly pay or deliver to the client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive." DR 9-102(B)(4). Our former Canon of Professional Ethics told the lawyer not only what he must do, but what he must not do:
Money of the client or collected for the client or other trust property coming into the possession of the lawyer should be reported and accounted for promptly, and should not under any circumstances be commingled with his own or be used by him. [Canon 11].
Like many rules governing the behavior of lawyers, this one has its roots in the confidence and trust which clients place in their attorneys. Having sought his advice and relying on his expertise, the client entrusts the lawyer with the transaction -- including the handling of the client's funds. Whether it be a real estate closing, the establishment of a trust, the purchase of
a business, the investment of funds, the receipt of proceeds of litigation, or any one of a multitude of other situations, it is commonplace that the work of lawyers involves possession of their clients' funds. That possession is sometimes expedient, occasionally simply customary, but usually essential. Whatever the need may be for the lawyer's handling of clients' money, the client permits it because he trusts the lawyer.
It is a trust built on centuries of honesty and faithfulness. Sometimes it is reinforced by personal knowledge of a particular lawyer's integrity or a firm's reputation. The underlying faith, however, is in the legal profession, the bar as an institution. No other explanation can account for clients' customary ...