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In re Hollendonner

Decided: October 17, 1985.


For affirmance -- Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None.

Per Curiam

The District VII Ethics Committee (local Committee), acting on a complaint brought by the Office of Attorney Ethics, conducted a hearing and thereafter filed a presentment against Respondent, Anton J. Hollendonner, a member of the bar since 1955. The presentment charged Hollendonner with two instances of misappropriation of client funds, contrary to DR 9-102(A), (B), and (C), and DR 1-102(A)(1), (3), (4), and (6); mismanagement of his trust account contrary to Rule 1:21-6(b)(1); overdrawing his trust and business accounts, contrary to DR 9-102(A), (B), and (C); issuing checks against uncollected funds; and violating Canon One of the Code of Judicial Conduct ("A judge should uphold the integrity and independence of the judiciary.").

The Disciplinary Review Board (DRB) conducted hearings on the presentment. It then issued its Decision and Recommendation, which summarized the charges and relevant evidence in pertinent part as follows:


Respondent was a member of the Trenton Lodge 105 of the Benevolent and Protective Order of Elks. As its Justice of the Subordinate Forum, he rendered legal advice to his lodge. When the lodge purchased a new building in West Trenton, he donated his legal services to it in lieu of a contribution to its fund-raising drive. However, neither he nor the Elks anticipated that this would become so time-consuming as a result of unanticipated litigation in opposition to the purchase. Informal discussions occurred with lodge members concerning the possibility of Respondent's receiving a fee when the lodge's former building in Trenton was sold. Respondent represented the lodge in its negotiations with Philip T. DeAngelo and his attorney for the sale of the Trenton property for $27,000. Respondent received a $2,000 check from Mr. DeAngelo's attorney on April 2, 1980, and was advised to hold this in escrow pending completion of the sale agreement. Respondent wanted to buy a used car but lacked sufficient cash in hand to do so without borrowing the money. In a discussion with lodge officers, he proposed that he take the deposit money as his fee since the lodge expected to receive about $6,000 or $7,000 in cash from the sale of the property. The lodge officials agreed to this. He failed to explain in detail that the deposit was subject to the sales contract. Instead, Respondent indicated that no problem was anticipated regarding the completion of the transaction. Realizing that escrow monies might not be used without the consent of both parties, he believed that this money might be used because it was nonrefundable. He issued a check for $1,6000 to the car dealer on April 23,

1980, which was drawn against the escrow account for the lodge; the balance was used for other personal expenses.

At some point, Respondent learned the City of Trenton had removed the lodge property from its tax-exempt status since it was vacant and not used for charitable purposes. Approximately $5,000 in real-estate taxes was assessed against it. Respondent was not sure if he learned of this before or after he withdrew the escrow monies. However, he believed that the lodge would prevail since the City admitted that the lodge property was originally tax-exempt. He believed that he could get the City to waive the taxes, but he was unsuccessful in that regard. Respondent maintained that had he known that the City would not waive the taxes, he would not have taken the $2,000 because the lodge would have had to pay the tax lien before the property could be sold. Since the lodge had to pay the lien, Respondent decided to return the $2,000 fee and absorb the loss. The $2,000 was returned to the Elks by a check from Respondent's trust account dated July 9, 1980. This check was not cashed until August 19, 1980. Respondent maintained that he used his fee from an unrelated appeal matter to reimburse the lodge.

By letter dated February 13, 1984, Edward Davis, past-Exalted Ruler of the Elks, informed the Office of Attorney Ethics that Respondent had been authorized to withdraw the $2,000 from the account.


Respondent had been retained since 1980 as corporate attorney for Rampf Molds Industries, Inc. During 1982-83, when the company decided to close its Florida plant and relocate in Rocky Hill, New Jersey, Respondent handled the legal aspects. He received a $5,000 fee on December 10, 1982, and deposited it in his trust account for the company. On December 13, 1982, he withdrew $1,170 from this account as part of his fee.

Respondent was randomly selected for a compliance audit of his books and records. An office visit was conducted on March 29, 1983. During that office visit, the auditor photocopied various account ledger sheets that showed significant balances. Respondent was not aware of this. On April 21, 1983, during a follow-up visit, the auditors discovered that the ledger card for Rampf Molds in Respondent's office contained additional entries. At the Committee hearing Respondent ultimately conceded that he had made the additions on the ledger card after being informed by the auditor that three checks marked "void" in the check book had been issued. After the March 29, 1983, audit, Respondent went through his accounting records and located the sources of some checks that could not be determined during that audit visit. After reviewing the Rampf Molds records, Respondent concluded that the three "void" checks had been drawn against this retainer account and used by him for personal obligations. He decided to rewrite the ledger sheet to include these checks because he felt that this omission could be construed as improper record keeping. He added to the ledger sheet check number 4045 for $1,200 dated January 18, 1983; check number 4047 for $666.41, and check number 4049 for $422.06, both dated January 13, 1983. When the auditors returned for the second visit, which Respondent had not anticipated, he did not inform them of what he had done. He later claimed that he kept silent because he was reluctant to admit that he

had made a mistake. After adjusting this ledger sheet and withdrawing $2,359 for legal fees, Respondent ended up with a deficit balance of $859.95 in this account. To bring it back into the black, Respondent requested and received his $2,400 retainer from the company. This was recorded March 30, 1983.


Respondent was notified March 4, 1983, that he had been selected for a random audit of his records. His office was visited on March 29, and April 21, 1983. After reviewing Respondent's records, the auditor in charge concluded:

Mr. Hollendonner did not have good accounting records. In fact, his records were poor for his trust account. He just had a check book, which was kept in a very poor state. He had this client ledger book, in which these ledger sheets were kept in a rather poor state.

The auditor discovered that Respondent kept no receipts or disbursement journals. Respondent did not routinely reconcile his check book and had not reconciled his client ledger balances with funds on deposit ...

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