On an order to show cause why respondent should not be disbarred or otherwise disciplined.
For suspension -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein join in this opinion. Opposed -- None.
This disciplinary matter arises from two separate reports and recommendations of the Disciplinary Review Board (DRB) that culminated in a recommendation of combined sanctions amounting to six years suspension, retroactive to the attorney's December 1980 suspension from practice.
The recommendation is based on the DRB's finding of multiple instances of misconduct involving neglect of certain clients' matters, misrepresentation of the status of other clients' matters, one instance of misuse of a client's funds as an attorney in a real estate matter, and one instance of misuse of a client's funds in the capacity of executor and a disregard of duty as executor to account when ordered to do so by the Superior Court. The DRB tempered its discipline because of extraordinary
circumstances that beset respondent during certain of the relevant periods. Specifically, the respondent bore the heavy burden of judicial duties imposed on him as municipal judge in a north Hudson County community beset by displaced persons, experienced severe illness in his family, and suffered the debilitating effects of alcoholism. In addition, the DRB found that the misuse of client funds was close in time to our decision in In re Wilson, 81 N.J. 451 (1979), warranting the exercise of leniency exhibited in In re Smock, 86 N.J. 426 (1981).
The DRB conditioned respondent's return to practice on (1) documentation of satisfactory proof that respondent had his alcohol-related disabilities under control; (2) submission of a plan for restitution of certain estate funds for which he was surcharged, and (3) completion thereafter of specified requirements of continued legal education.
Based on our independent review of the record, we are clearly convinced that respondent engaged in the described conduct and that the ethical infractions warrant the discipline recommended. We add an additional requirement that, on return, respondent practice under supervision in accordance with a plan to be approved by the DRB. The matters of gravest concern to us are the two instances of misuse of funds as attorney and executor. Yet, because, in our view, the proofs fall short of establishing a knowing misappropriation of funds, we accept the DRB's recommendation of discipline. We shall first discuss the other matters and return to the questions related to misuse of funds.
The other ethical complaints against respondent involve various matters dating back to 1978. One matter involved misleading a client to believe that respondent had settled a garnishment case for $75 when in fact he had not; another, accepting a $500 retainer to handle an estate matter without taking any action on it; another, failure to pay title insurance premiums
and record the deed after a closing; and the last, a mishandling of a closing in which he collected insufficient funds from the sellers to pay required taxes and caused his clients to incur added expenses in closing for his failure to get the taxes paid. The DRB found these matters clearly to evidence that respondent acted deceitfully in violation of DR 1-102, exhibited gross neglect in violation of DR 6-101, and failed to carry out contracts of employment in violation of DR 7-101.*fn1
The two critical matters that we shall consider involved the Schleuter estate and the Homequity matter. The former matter came to our attention while we were considering the discipline to impose for the first series of ethical infractions, including the Homequity matter. We suspended the respondent on December 23, 1980, because of the evidence of his misconduct that we had already received. However, in early 1983, we received the DRB's initial report concerning the Schleuter estate. In June 1983, we directed that final discipline on the Homequity matter be withheld pending resolution of complaints about respondent's mishandling of the Schleuter estate.
Respondent qualified as executor of the Schleuter estate in March 1981. He was then a suspended attorney and purported to act only as executor. The estate totalled approximately $315,000 and consisted primarily of savings bonds. The decedent's will divided the estate among numerous charitable beneficiaries with small portions going to respondent's children and his secretary's children. ...