On an Order to Show Cause why respondent should not be disbarred or otherwise disciplined.
For suspension -- Chief Justice Wilentz, and Justices Sullivan, Clifford, Schreiber, Handler and Pollock. Opposed -- none.
The Disciplinary Review Board (DRB) considered two presentments filed by the local District Ethics Committee and determined that Leon Nigohosian had been guilty of misconduct in two matters involving his clients Stoecker and Tuncay. In addition the Board found various minor violations suggestive of "inadequate record keeping." The DRB was satisfied that the latter had been remedied by respondent's hiring of a bookkeeper to oversee his accounts. It likewise concluded that Nigohosian's entering into a business transaction with a client without sufficient disclosure and without informed consent did not, under the circumstances, rise to the level of an ethical violation.
The DRB recommended that respondent be publicly reprimanded for his misconduct concerning Stoecker and Tuncay. After examining the complete record, we agree with the DRB's findings but entertain a different view of the appropriate discipline. Our discussion is limited to those ethical transgressions that have been established by clear and convincing evidence.
William Stoecker was a defendant in proceedings brought against him in Superior Court, Warren County, by Panther
Valley, Ltd., on a lease agreement and note. On May 14, 1975 the parties through their attorneys (respondent did not then represent Stoecker) entered into a stipulation of settlement in open court. Under the terms of that stipulation Stoecker agreed to pay plaintiff $2500; if payment were not forthcoming by July 1, 1975, Stoecker was to give plaintiff a second mortgage for $3000 on certain real property owned solely by him, located in Guttenberg, New Jersey. The property was clearly identified on the record by reference to its date of purchase, the original purchase price, the amount of the first mortgage and balance remaining due thereon, the name of the mortgagee, and the present value of the property. Although Mrs. Stoecker was not a party to the Panther Valley litigation, she was in court at the time the case was settled. Inasmuch as her signature would be necessary on any mortgage instrument, to the end that her inchoate right of dower might be extinguished, Mrs. Stoecker expressed her agreement with the settlement, including specifically the requirement that she sign any mortgage.
However, rather than complete the settlement as agreed, Stoecker retained respondent to set it aside. On June 13, 1975 Nigohosian filed a notice of motion for that purpose, returnable June 27. The grounds alleged for setting aside the settlement were inadequate representation by Stoecker's former attorney and coercion in the effecting of the settlement. The motion was not heard until October 17, 1975. In the interim Stoecker neither paid the $2500 nor gave the mortgage.
Between the time the motion was filed and the time it was heard, Nigohosian, at Stoecker's behest, formed a corporation, M and M Realty Co., Inc., with Mr. and Mrs. Stoecker as the sole stockholders. Respondent retained all the stock certificates in his office. On August 20, 1975, two days after the corporation had been formed, respondent prepared a deed to M and M Realty Co., Inc., and arranged for its execution by William H. Stoecker and Marie Stoecker, his wife, conveying title to the Guttenberg premises that were the subject of the May 14, 1975 stipulation of settlement.
Respondent's motion to set aside the settlement was denied on October 17, 1975. At the hearing on the motion Nigohosian did not disclose to the court or plaintiff's counsel that the property in question had been conveyed. Hence the form of order prepared by plaintiff's attorney after the October 17 hearing still contained a provision for a mortgage to be given by Mr. and Mrs. Stoecker, individually, with no reference to M and M Realty Co., Inc. Respondent's subsequent letter to the court objecting to the form of this order again failed to indicate that Stoecker was not the record owner of the property.
Because of respondent's objection to the form of the order, still another court appearance was required, on November 21, 1975. At this hearing the trial court expressed reservation about the propriety and efficacy of any order that might compel Mrs. Stoecker to execute a mortgage, she not having been a party to the underlying litigation with Panther Valley. The attorney appearing in respondent's stead informed the court that Mrs. Stoecker would not voluntarily sign a mortgage, whereupon plaintiff's attorney abandoned his request for a mortgage provision. Up to this point there still had been no disclosure of the transfer of the Guttenberg property. The court disposed of the matter by ordering that judgment be entered in plaintiff's favor against Mr. Stoecker for $3000, "but a payment of ...