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 matter comes before us on the recommendation of the Disciplinary Review Board (DRB or the Board) that respondent, Sanford R. Gudger, be disbarred. The Board found that respondent knowingly misappropriated clients' funds contrary to DR 9-102 and In re Wilson, 81 N.J. 451 (1979). The Board found further "that respondent was guilty of gross negligence, contrary to DR 6-101(A)(1) and that his misconduct exhibited a general pattern of neglect, contrary to DR 6-102(a)(1), (3), (4), (5), and (6), and DR 3-101(b)." Although we entered an order on January 30, 1980, suspending respondent from the practice of law, he continued to practice, and during the period of suspension even used clients' funds for his own purposes. Consequently, the DRB concluded that "[d]isregard of the Court's order of suspension would in itself require severe discipline. See Matter of Goldstein, 97 N.J. 545 (1984)."
We need not relate the details supporting the charges of gross negligence or misconduct exhibiting a general pattern of neglect. Similarly, with respect to the charge of practicing law while under suspension, we note only that respondent was convicted on April 9, 1981, by a jury of theft by deception, contrary to N.J.S.A. 2C:20-4, for falsely representing himself as a licensed attorney. We do not dwell on those matters because, as the DRB recommended, respondent's admitted knowing misappropriation of trust funds compels his disbarment.
In early 1979, respondent was retained by Mr. and Mrs. Reddick in connection with the purchase of a home. The purchase was financed by a first mortgage of $35,300. At the closing in February 1979, respondent held in escrow $25,000 from the $35,300 to pay off a prior mortgage on the property. This mortgage could not be paid at that time because its closing costs had not been calculated. Two weeks later, respondent received the closing figures with interest. However, he did not issue a check to clear this lien. Chicago Title was required to pay this amount to satisfy the earlier mortgage.
In July 1979 a bank placed a lien on respondent's trust and personal accounts because he owed at least three creditors about $4,000. He issued a trust account check to Chicago Title on March 6, 1980 for $24,257.30. However, this check was dishonored because of insufficient funds. Chicago Title later obtained a judgment by default against respondent.
Respondent was suspended from the practice of law on January 30, 1980. During the ethics committee hearing, respondent admitted using clients' funds for his own purpose. When respondent was asked what he did with the rest of the money in the trust account, he replied
Well, when I was suspended as of January, I kept dipping into my trust account illegally.
[Panel Chairman]: Did you keep dipping, or did you just take it out in toto right away?
[Respondent]: No, I kept dipping. I -- well, I don't know whether anybody here realizes, you know what it takes to operate a law office as a private practioner [sic]. Ever since I've been in practice, it quite truthfully it's been a dollar-to-dollar proposition. Somebody -- a client would bring in $200, and I'd probably have to pay that out to my secretary, or a client would bring in $300, and I'd have to pay off my book bill. When I first went into practice, I went in, quite candidly, I didn't try to borrow any money from anybody.
Respondent stated that he had used about $20,000 of clients' funds. During the Spring of 1980 he paid his son's tuition of $4,500 from his trust account. When ...