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In re Gallop

Decided: March 3, 1981.

IN THE MATTER OF DANIEL G. GALLOP, AN ATTORNEY AT LAW


On an Order to Show Cause why respondent should not be disbarred or otherwise disciplined.

For suspension -- Chief Justice Wilentz and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. Opposed -- None.

Per Curiam

This matter involves questions concerning the propriety of actions by respondent as a member of the bar of this State in failing to segregate trust monies and to avoid conflicts of interest in dealings with his own clients. District IX Ethics Committee issued a presentment and the Disciplinary Review Board agreed substantially with its findings. We have made an independent examination of the record and our findings are based on that review.

The incidents grew out of an employment relationship as a domestic between Kathleen Brownlee and the respondent's family. Unfortunately Kathleen Brownlee and her husband, Milton Brownlee, Sr., who were parties to some of the transactions, are deceased, and we have had to rely upon various documents and the testimony of respondent, his wife, Milton Brownlee III (son of Kathleen and Milton Brownlee, Sr.) and William Kohl for the factual details. The picture which emerges follows.

Kathleen Brownlee came to work in December 1961 for respondent and his wife as a domestic in their home in Little Silver. In addition to doing general housework two days a week, she would babysit in the evenings. Mrs. Brownlee became a friend of the family. When she had some financial problems relating to the foreclosure of her home, she turned to respondent for assistance. He arranged for temporary and, subsequently, permanent refinancing of her home. He submitted no bill and "was prepared to receive" no compensation.

Respondent asserts that prior to October 28, 1964 he performed other legal services for her and advanced certain funds on her behalf. However, he kept no time records of the legal services rendered up to October 28, 1964. Nor did he estimate the value of these services. Respondent testified that Mrs. Brownlee had been desirous of conveying her home in Lincroft,

New Jersey, to respondent in payment of respondent's legal services, but that he did not believe this was fair. On October 28, 1964, Mrs. Brownlee entered into a trust agreement with respondent. The value of the services before that date is claimed to be the consideration paid by respondent for the interest he received in the trust agreement.

At that time respondent was fully aware that Mrs. Brownlee "had absolute confidence and trust" in him. He did not advise her to seek independent counsel. Instead respondent prepared the trust agreement.

The agreement acknowledged receipt by respondent as trustee of the deed to the Lincroft property. The agreement provided that Mr. and Mrs. Brownlee or the survivor could occupy the property, provided that they maintained the property and paid the taxes, assessments and insurance. In the event the Brownlees died, their son was entitled to live in the home for one year or until his 25th birthday, whichever was later. The son was also given the option to purchase the premises.

Upon expiration of all these conditions the trustee was authorized to sell the property. After deducting all costs and expenses in connection with the title transfer, one-half of the net proceeds was to be paid to the trustee "as compensation for moneys advanced" to Kathleen Brownlee and for legal services rendered. Of the balance $1,000 was to be paid to Mr. Brownlee and the remainder either in a lump sum or in installments of no less than $1,000 per year was to be paid to Milton Brownlee III. The Trustee also had the option, in lieu of selling the property to a stranger, to retain title and pay one-half of the highest offer received. The trust was irrevocable.

At the time the trust was executed, Mr. and Mrs. Brownlee executed and delivered a deed to their home to respondent. No reference was made in the deed to respondent's status as trustee. Respondent testified, "There was no need to." The deed recited that no revenue stamps were required, ...


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