On an Order to Show Cause why respondent should not be disbarred or otherwise disciplined.
For suspension -- Chief Justice Wilentz and Justices Clifford, Schreiber, Handler, Pollock, O'Hern and Garibaldi. Opposed -- None.
After considering three complaints against respondent, the District IV Ethics Committee for Camden and Gloucester Counties issued a presentment. The Disciplinary Review Board (Board) agreed that respondent had engaged in unethical conduct. After a hearing, the Board recommended that respondent be suspended for a period of three years; that his readmission be conditioned upon successful completion of a Skills and Methods training course or similar courses concerning legal ethics, legal accounting and New Jersey practice; and that his readmission be limited to practice with a law firm in which respondent would receive adequate supervision and training. The Board directed reimbursement for administrative costs.
Our independent review of the entire record leads us to the conclusion that respondent has been guilty of unethical conduct in the matters charged. However, it is our view that a one year suspension with the conditions stated appropriately reflects the seriousness of respondent's misconduct and will adequately protect the public.
Respondent initially represented Chelano in connection with a claim for the value of a stolen motor vehicle against his insurer. Their initial conference in September of 1981 covered the insurance claim and other legal matters including a possible bankruptcy petition and medical malpractice action.
Respondent negotiated a $6,517 settlement of the auto claim. He invested considerable personal effort. On November 18, 1981, respondent drove to Murray Hill and picked up a check in the amount of $3,305 made out to a creditor bank to satisfy the
bank's lien on the vehicle. On the following day, respondent and Chelano drove again to Murray Hill and picked up the remaining proceeds of the settlement in the form of a $1,500 cashier's check made to the order of Chelano and his wife and a check for $1,711.70, payable to Chelano, his wife, and the respondent. Chelano was in pressing need of funds. He took the $1,500 check immediately and endorsed the $1,711.70 check, signing both his name and that of his wife. (His wife has raised no objection to this procedure and it is not part of the ethical complaint against respondent.) Chelano gave the $1,711.70 check to respondent, who deposited it in his attorney account. The principal dispute centers about the disposition of these proceeds. Chelano claims that he was entitled to everything except for a $600 fee. Respondent claimed he was entitled to a $1,000 fee.
Respondent, acting pursuant to this understanding, on November 24, 1981 withdrew $750 in cash, which he calculated was due to Chelano after various deductions for gas and expenses and a credit of $50 paid on the $1,000 fee. Respondent claimed that he attempted to reach Chelano to give him the $750 but was unable to do so. A bizarre chain of circumstances followed. Having been advised by Chelano that he wanted payment only in cash, respondent found himself in the possession of $750 in cash when he had to leave for Florida, on November 26, to assist his ill mother. He took the cash with him to Florida where he had his mother place it in a safe deposit box held jointly in his and his mother's names. He returned with the cash in mid-December. The funds were, however, not paid to Chelano at that time. Chelano claimed that repeated efforts to reach the respondent were unsuccessful and that he had to get respondent's wife to type a letter that could be presented to a bank to enable Chelano to obtain a loan to tide him over. The letter, dated December 22, 1981, stated that Chelano was owed $1,500 less attorney's fees pursuant to a settlement of a claim with Allstate and would receive the funds within 30 days. On the strength of this letter Chelano obtained a $1,000 loan for a 30-day period.
Respondent, on the other hand, contended that when he returned from Florida, Chelano wanted action to be taken on other pending matters and that Chelano initially agreed to utilization of the money by respondent to pursue these other cases; thus the loan. Respondent actually arranged with the bank for a 6-month extension of Chelano's loan. Notwithstanding the loan extension, Chelano still called, leaving messages with respondent's wife and mother-in-law demanding the money. Respondent said that he was unable to reach Chelano in return and gave the money to his mother-in-law to place in her safe deposit box. The ...