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.
Respondent's conduct is before this Court on two unrelated complaints. In one, respondent attempted to commit a fraud on a federal district court and his clients in order to secure a larger legal fee than that to which he was entitled. In the other, he represented his client in a business matter in which he was personally involved. He counselled her to make a hopeless investment in a building in which he had an interest, and concealed material information from her, including the fact of a foreclosure and sheriff's sale on that building.
The attempted fraud -- a gross intentional exaggeration of services rendered -- was outrageous. The deceit and exploitation of a helpless, recently widowed client was inexcusable. The Disciplinary Review Board recommended disbarment. We agree.
This matter arose during a personal injury suit in federal court in 1973 and 1974. The suit arose from an incident in which a 400-pound steel beam was dropped from a truck, crushing an eight-year-old boy and permanently paralyzing him from the chest down. The boy's parents retained respondent, on a contingent fee basis, to represent both the child and them. Later, perceiving a possible conflict of interest between the interests of the infant and his parents as to the nature and management of a possible settlement, the district court relieved respondent as the child's attorney and appointed another attorney as guardian ad litem for the child. Respondent was distressed with that action, especially its impact on what he had assumed would be a lucrative contingent fee arrangement based on the child's recovery.
Respondent represented the parents at trial. The court-appointed guardian represented the child and served as trial counsel. After a jury had been selected and testimony had begun, defendant's insuror settled the claims of both parents and the child. The child received a gross settlement of $1 million in
cash, plus an undertaking by the insuror to pay all future accident-related medical expenses. The parents received a gross settlement of $177,800.
Following approval of the settlement, the district court directed respondent and the guardian ad litem to file affidavits of services so that the court might approve allowance of counsel fees to them from the infant's recovery. This written request was dated June 23, 1975.*fn1 The district court made it clear that the contingent fee arrangement (which would have resulted in about $130,000 in fees for respondent if, as the record suggests, the schedule in R. 1:21-7 were applicable) would have nothing to do with respondent's compensation for his services on behalf of the infant, although it did apply to his services for the parents. On August 13, 1975, respondent filed an affidavit in which he claimed a fee of $162,500. This claim was based on an asserted total of 3,000 hours spent on the case, of which 1,522 hours were itemized. The Disciplinary Review Board found that this affidavit contained misstatements of fact and exaggerations as to the quantum and value of respondent's services. For example, during one five-day period in April 1975, respondent claimed he worked a total of over 117 hours as follows:
Friday April 11, 1975 33 3/4 hours
Saturday April 12, 1975 17 1/2 hours
Sunday April 13, 1975 24 3/4 hours
Monday April 14, 1975 20 1/2 hours
Tuesday April 15, 1975 ...