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In re Paglianite

June 14, 1982

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

ORDER

The Disciplinary Review Board having filed reports with this Court in October 1979 and March 1982 charging FRANK A. PAGLIANITE, formerly of West Caldwell, with unprofessional conduct; and

This Court having ordered said FRANK A. PAGLIANITE to show cause why he should not be disbarred or otherwise disciplined; and

Counsel appearing for respondent having been afforded an opportunity to submit additional written arguments in mitigation on or before May 14, 1982; and

Counsel having advised this Court that he could not submit additional papers due to the unavailability of the respondent; and

This Court having duly considered respondent's prior failures to cooperate in these proceedings and having determined that this matter should proceed to a final disposition on the merits, and good cause appearing;

It is ORDERED that the reports of the Disciplinary Review Board are hereby adopted and FRANK A. PAGLIANITE is

hereby disbarred and his name stricken from the roll of attorneys of this State, effective immediately; and it is further

Ordered that respondent is hereby permanently restrained and enjoined from practicing law; and it is further

Ordered that respondent comply with all the regulations of the Disciplinary Review Board governing disbarred attorneys.

Decision and Recommendation of the Disciplinary Review Board

July 18, 1979.

To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey:

This matter is before the Board based upon a presentment filed by the District Ethics Committee for the Counties of Morris, Sussex and Warren. The presentment is replete with allegations of unethical behavior and improper and careless recordkeeping on respondent's part. Upon a review of the full matter the Board is satisfied that the conclusions of the Committee are fully supported by clear and convincing evidence.

The record reveals that in December 1974 respondent assumed a major role in a loan transaction which can safely be described as usurious. It appears that in December 1974 Louis and Louise Nigro, who were longtime friends and clients of respondent, and their son-in-law, Joseph Dubicki, Jr., agreed to loan $16,300 to Anthony J. Costanzo, also a past client of respondent, and his corporation, Linco Affiliated Interests, Inc. The terms of the agreement provided that the full loan plus $4,000 in interest was to be repaid within forty days from the date of the loan. Thus the total amount to be repaid was $20,300.

On the morning of December 10, 1974 Messrs. Nigro, Dubicki and Costanza met at respondent's office. A discussion was held with reference to the legality of the proposed loan and the propriety of respondent's role concerning the loan transaction. Respondent assured Dubicki and Nigro that the loan was legal and that there was no conflict in his position. He first recommended

to Nigro and Dubicki that they not make the loan, but he later changed his mind and recommended that the monies be loaned. Respondent also suggested that security be given for the loan and as a result arrangements were made to obtain the deed to certain property in Roselle which was to serve as collateral for the loan.

Nigro and Dubicki left respondent's office and returned a short time later with a brown paper bag containing $16,300 in cash. At that time Costanza executed a Corporate Resolution and Promissory Note, prepared at respondent's direction, indicating he had borrowed $20,300 from Joseph Dubicki, Jr.

Although the loan was partially repaid, both Mr. Nigro and the respondent agree that a sum of $8,300 remains outstanding.

The Board finds that respondent's participation in the above matter clearly breached the bounds of ethical propriety. Firstly, respondent never disclosed to Nigro and Dubicki his previous representation of Costanza and never explained to them the possible conflict that might have affected the transaction. Furthermore, it is evident that respondent failed to properly investigate or advise Nigro and Dubicki as to the worth of the property which was being used as collateral by Costanza. The property was in fact virtually worthless and, further, respondent failed even to obtain from Costanza an Affidavit of Title. The above deficiencies, however, are overshadowed by the fact that respondent helped persuade his clients, Nigro and Dubicki, to participate in a clearly illegal loan transaction.

Thereafter in February 1975 respondent advised Mr. and Mrs. Nigro that he was in need of funds and wished to borrow money from them. In response to this request the Nigros loaned respondent the sum of $10,000, which Mr. Nigro personally delivered to respondent at his home. The money was then deposited in respondent's general business account.

Although this loan was eventually repaid, the Board finds that respondent's conduct in soliciting and receiving a substantial loan from clients whom he was then representing in another

transaction (the Costanza loan) placed him in an untenable position in regard to his clients. It seems apparent that no attorney should solicit a personal loan from a client whom he is presently representing in another matter.

In addition to his unethical involvement in the loan transactions described above, the Committee's examination of respondent's conduct was hampered by the fact that respondent's financial records were in a state of disarray and in total noncompliance with the requirements of R. 1:21-6. Respondent's ledgers were out of sequence; he had no method of identifying any particular client's funds in his trust account; and he was unable to adequately reconstruct his trust account and attorney account transactions. Because of this faulty bookkeeping respondent did not account accurately for disbursements made in another unrelated matter in which he represented the Nigros.

Adding to this confused situation is the fact that respondent's records reveal that he commingled personal and business funds together with clients' funds in his trust account.

The Board further observes that respondent's testimony before the Committee was fraught with contradictions and vagueness, which certainly compounded the Committee's and this Board's task in sifting through all aspects of this case.

Conclusion AND RECOMMENDATION

The findings above mandate the conclusion that respondent has committed serious violations of the Code of Professional Responsibility, i.e. DR 1-102(A)(4) and (6); DR 5-105(A) and DR 9-102 and that his recordkeeping methods were in total contravention of the dictates of R. 1:21-6.

The Board has also been advised that the District X Ethics Committee is presently processing approximately six other ethics complaints involving respondent, several of which, at least on their face, contain serious allegations of professional misconduct. This being the case, the Board has determined to ...


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