On an order to show cause why respondent should not be disbarred or otherwise disciplined.
For disbarment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None.
This disciplinary proceeding results from a random compliance audit of the trust funds of respondent, John R. Lennan, by the Office of Attorney Ethics (OAE) pursuant to Rule 1:21-6(c). Upon receipt of the auditor's report, the OAE filed a Petition for Emergent Relief, which we granted on September 21, 1984, temporarily suspending respondent from the practice of law. Thereafter, the OAE filed a complaint charging that respondent misappropriated his clients' funds in violation of DR 9-102 and DR 1-102(A)(3), (4) and (6). Respondent filed an answer admitting the factual allegations of the complaint and setting forth mitigating circumstances.
After a hearing, the Bergen County District Ethics Committee (DEC) recommended that respondent's suspension from the practice of law be continued until such time as he shall petition for reinstatement and prove to the Court's satisfaction that he can be relied upon properly to manage his trust account.
Upon its review of the full record, the Disciplinary Review Board (DRB) found that the DEC's finding of unethical conduct was fully supported by clear and convincing evidence. The DRB concluded that respondent had knowingly misappropriated his clients' funds for his personal use in violation of DR 9-102
and DR 1-102(A)(3), (4) and (6).*fn1 A majority of the DRB members recommended that respondent be disbarred. Our independent appraisal of the records leads us to accept the majority's recommendation.
The DRB in its Decision and Recommendation (Decision) stated that the audit revealed the following:
1. BYRON AND MARGUERITE MARSH
A deposit of $16,700 was credited to this account on April 28, 1984. This amount was to be held by Respondent until the closing date for the sale of real estate which was scheduled for August 15, 1984. Respondent issued a check to his order for $5,000 on April 30, 1984. Respondent issued another check to his order for $5,000 on May 9, 1984. This latter check was posted to the ledger card of another client, Carl W. L. Reiks.
A deposit of $6,900 was credited to this account on July 5, 1984 as a partial real estate deposit. Respondent's check to himself for $5,000 of May 9, 1984 was charged against this account. This check was issued almost two months before the receipt of Reiks' deposit. The only funds in the trust account at the time this check was paid were funds for the Marsh closing. The $5,000 were replaced by a deposit by Respondent on September 4, 1984.
3. RONALD AND CHARLOTTE BOOTH
A real estate deposit of $9,900 was credited to this account on November 24, 1982. Respondent took $2,000 from that deposit by issuing three checks to his order: December 23, 1982, $1,000; January 13, 1983, $500; and February 3, 1983, $500. These funds were replaced on March 21, 1983 when Respondent deposited $1,550 into the trust account. This amount represented the $2,000 taken by Respondent less his fee of $450 on the Booth closing.
4. EDWARD AND ELLEN HEDLUND
The sum of $10,400 was credited to this account on June 24, 1983 as a deposit for real estate. Respondent issued two $500 checks to his order, one on June 24, and the other July 22. The checks were taken from the Hedlund deposit being held for the closing which took place on August 1, 1983.
The following auditor's schedule sets forth the number of days that respondent ...