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State v. Stroger

Decided: July 31, 1984.

STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
HOWARD STROGER, DEFENDANT-APPELLANT



On certification to the Superior Court, Law Division, Morris County.

For affirmance -- Chief Justice Wilentz and Justices Clifford, Schreiber, Handler, O'Hern and Garibaldi. Not participating -- Justice Pollock. The opinion of the Court was delivered by Clifford, J.

Clifford

[97 NJ Page 396] Defendant, Howard Stroger, is a member of the bar of this state. Following the Law Division's denial of his pretrial motion to suppress evidence, 185 N.J. Super. 124 (1981), defendant pleaded guilty to embezzlement. With the consent of the State and approval of the trial court, the plea was conditioned on defendant's right to appeal the denial of his motion. The appeal centers around the voluntary transfer by the Disciplinary Review Board (DRB) to a county prosecutor of records tending to demonstrate defendant's guilt of a criminal offense, those records having been acquired in the course of an ethics investigation. Pursuant to Rule 2:12-1 we granted direct certification

of the appeal on the Court's own motion, 93 N.J. 321 (1983), and now affirm.

I

Defendant was retained by Genevieve Radziewicz to represent her in her capacity as Executrix of the Estate of Robert Paczkowski, who died in January 1978. The decedent's estate was valued at $129,000. The will provided Mrs. Radziewicz with a specific bequest of $15,000 and left the residue of the estate to the American Red Cross. After allowance for various deductions and the specific bequest, there remained approximately $84,600 available for the Red Cross.

Considerable delay occurred in the handling of the estate, for it was not until February 1979 that the inheritance tax was paid, the waivers from the Transfer Inheritance Tax Bureau were received, the specific bequest was paid to Mrs. Radziewicz, and the estate bank accounts were closed and deposited in Stroger's trust account. The total deposit to the trust account on February 5, 1979 was $100,999.37, an amount sufficient to pay all outstanding claims, including that of the Red Cross.

During the summer of 1979 Stroger informed Mrs. Radziewicz that the Paczkowski estate had been settled. When Mrs. Radziewicz inquired about the Red Cross's share, defendant told her that the money would be paid when the Red Cross attorneys were satisfied with the accounting. The money never reached the Red Cross, however, because defendant expended it for his personal use, embezzling the funds from his trust account. By 1980 Mrs. Radziewicz's concerns were heightened to the point at which in April she notified the District X Ethics Committee (Committee), whose secretary, Lawrence Litwin, promptly informed the Morris County Prosecutor and the Division of Ethics and Professional Services (DEPS) of the complaint and its criminal overtones.

Coincidentally, in response to unrelated complaints, Colette Coolbaugh, Assistant Director of DEPS, had called upon Stroger

to produce for review and audit the records required to be kept by Rule 1:21-6. This request of DEPS was first made on March 12, 1980, before the Radziewicz complaint had surfaced, was repeated on April 18, 1980, and the inspection was finally scheduled for May 1, 1980.

In the meantime, on April 21, 1980, the Committee's Vice-Chairman, Thomas Curtin, who had been assigned to investigate the facts after receipt of the Radziewicz complaint, interviewed Mrs. Radziewicz and obtained from her the informal accounting that Stroger had prepared in the estate matter, the complaint letter, and correspondence with the Red Cross. Curtin thereafter confirmed with the Red Cross that the funds had not been received.

On April 26, 1980, Curtin and a Committee member interviewed Stroger at his office. Stroger said he had retained counsel, who had instructed him not to discuss the substance of the complaint. Stroger showed Curtin his trustee account statement of March 30, 1980, which revealed a balance of about $16,000. When asked by Curtin, Stroger acknowledged that he maintained no other account for client funds.

Curtin thereupon prepared an affidavit reciting the facts uncovered by his investigation, filed the affidavit with DEPS, sent it to Mrs. Radziewicz and the Red Cross, and furnished a copy of his transmittal letter to the Morris County Prosecutor. On the basis of the information contained in the affidavit this Court temporarily suspended Stroger from the practice of law on May 1, 1980. With the consent of Stroger's attorney we entered an order on May 6, 1980, continuing the temporary suspension until resolution of the various ethics complaints.

The inspection of Stroger's records, previously requested by DEPS, took place on May 1, 1980. Present were Stroger, Curtin, Committee Chairman David Cramp, and Samuel Gerard, Chief Accountant for DEPS. After an initial review of Stroger's checks, bank statements, and trust-account ledger book, Gerard asked Stroger's permission to transport those items to

Trenton so he could conduct a more comprehensive examination. Stroger objected at first, but after consulting with his attorney agreed to the removal of the records. Thus on May 1, 1980 DEPS had in its possession Stroger's bank records and his file on the Paczkowski estate (the latter apparently secured by Curtin from Stroger during the May First meeting).

Pursuant to requests made by Assistant Prosecutor Gilbreth, DEPS released most of the foregoing documents and records to the Prosecutor's office in two batches, on August 4, 1980 and October 16, 1980. The August Fourth release was in response to a telephone request from Gilbreth, followed by a letter from Gilbreth dated July 2, 1980 to the DRB asking for "any and all records, memoranda and other documents in [DRB's] possession which contain facts relating to alleged criminality and defalcation" by Stroger. A copy of Gilbreth's letter went to Stroger's attorney "so that notice of this request is provided." On July 16, 1980 DRB, relying on its Regulation 2, granted the Prosecutor's request "if no objection [is] received from [Stroger's attorney] by August 1st." A copy of the DRB's letter to Gilbreth did not go to Stroger or his attorney; and when the August First date passed with no objection to the release of the documents having been received, DRB turned over the following: the informal accounting, the inheritance tax return, Stroger's affidavit of services, correspondence from the Paczkowski file, statements from the Morris County Savings Bank, four savings account books of Robert Paczkowski's estate, the will and letters testamentary, the safe-deposit box inventory, a statement from the Transfer Inheritance Tax Bureau, affidavits of Curtin and Gerard, and the May 6, 1980 Order of Suspension.

After receiving the above, the Prosecutor requested additional documents in the posession of DEPS. Under the authority of DRB's prior order, DEPS transmitted the following records on October 16, 1980: trust-account bank statements from April 1978 to March 1980, trust checkbook and check register, trust-account ledger book, and cancelled checks from Stroger's trust account.

Defendant moved before trial to suppress all the records and documents that he and Mrs. Radziewicz had voluntarily furnished to DEPS and that had, in turn, been released by order of DRB to the Prosecutor. He argued that the release violated the confidentiality requirements of Rule 1:20-5 and Rule 1:21-6, and that he had not received the notice to which he was entitled before the Prosecutor could obtain the records. Stroger further contended that his consent for Gerard to remove records to Trenton was not voluntary because he had not been informed of his right to refuse to relinquish them. Finally, he urged that he had been deprived of his rights under the fourth, fifth, and sixth amendments to the United States Constitution. Following the trial court's denial of Stroger's suppression motion "in all respects," 185 N.J. Super. at 136, defendant took this appeal.

II

In 1978 this Court adopted Rule 1:20, which governs the discipline of members of the bar. It is pursuant to Rule 1:20-1 that District Ethics Committees, the DRB, and DEPS have their origin. Those bodies are empowered to conduct inquiries with respect to alleged unethical conduct, and the DRB engages in a review process, all in accordance with Rules adopted by the Court. The functions of those ethical arms of the Court are subject to those DRB regulations, promulgated pursuant to Rule 1:20-3(c), that receive the prior approval of this Court. Of particular significance in this case are the Rules and regulations pertaining to the requirement that attorneys maintain financial records and to the assurance of confidentiality that attaches to those records, as well as to the proceedings conducted pursuant to Rule 1:20.

Rule 1:20-5(d)*fn1 mandates that "[a]ll proceeding[s] conducted and records made pursuant to R. 1:20 ...


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