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Matter of Breen

January 9, 1989



This matter coming before the Court on an order to show cause why JOHN P. BREEN of PLAINFIELD should not be disbarred or otherwise disciplined, and said JOHN P. BREEN having failed to appear before this Court on the return date of said order to show cause, and good cause appearing;

It is ORDERED that the report of the Disciplinary Review Board recommending that respondent be disbarred is hereby adopted; and it is

ORDERED that JOHN P. BREEN be disbarred and that his name be stricken from the roll of attorneys of this State, effective immediately; and it is

Ordered that JOHN P. BREEN be and hereby is permanently restrained and enjoined from practicing law; and it is further

Ordered that respondent reimburse the Ethics Financial Committee for appropriate administrative costs; and it is further

Ordered that respondent comply with Administrative Guideline 23 of the Office of Attorney Ethics dealing with disbarred attorneys.


Decision and Recommendation of the Disciplinary Review Board

This matter is before the Board based on 13 presentments filed by the District XII (Union County) Ethics Committee and one presentment filed by the District V-C (Essex County) Ethics Committee.

The Haupt Matter

This matter arose out of a Michigan judgment obtained by Marv Haupt ("grievant") against respondent. By way of background, on November 5, 1976, grievant filed an action in Michigan based upon a financing transaction with a certain corporation, whereby the latter was to obtain financing for a coal mining operation in West Virginia. Grievant paid the corporation the sum of $10,890.00, to be held in escrow by respondent, the corporation's New Jersey attorney. When the corporation failed to secure the financing, grievant requested the return of the monies in escrow. They were not returned. Grievant then filed an action against the corporation and respondent for restitution and damages based on fraud, conspiracy and other related grounds.

Upon being served with the summons and complaint, respondent forwarded them to the client corporation without further action because he "knew they had nothing to do with [me]." Respondent did not file an answer, thereby causing a default to be entered against him. Respondent then moved to set aside the default, but failed to appear on the return date of the motion. On May 18, 1977, a default judgment was entered in the Michigan action against respondent in the amount of $6,943,102.70, on proofs by expert testimony as to grievant's damages, including interests and costs. The basis for the judgment was fraud, conspiracy to defraud, material misrepresentation and breach of trust agreement.

Respondent next filed a motion to vacate the default judgment and to dismiss the matter for lack of jurisdiction. On October 6, 1977, the court granted the motion to set aside the default judgment and scheduled the matter for trial, subject to respondent's payment of $4,000.00 in attorney's fees which, the court found, resulted from respondent's "negligence and obtuseness in the case." Respondent never paid the counsel fees.

On November 9, 1977, the default judgment was reinstated and grievant sought to enforce the Michigan judgment in New Jersey. By order dated October 10, 1980, the New Jersey court ruled that the Michigan judgment was entitled to full faith and credit and entered a judgment against respondent in the amount of $6,943,102.70, together with interest from May 18, 1977. Respondent did not appeal said order.

On August 14, 1980, or less than two months before the entry of the New Jersey order recognizing the Michigan judgment, four mortgages were recorded against his Plainfield house. The first mortgage was given to Dorothy Hammer, believed to be respondent's female companion; the second was given to Donald Frandsen, an old friend of respondent's; the third was given to Theresa and Dominick Giordano, respondent's sister and brother-in-law; and the fourth was given to respondent's brother, Thomas Breen, Jr. Furthermore, a title search revealed

a deed from respondent to Dorothy Hammer, dated March 10, 1980 but recorded on September 29, 1980, only 21 days before the New Jersey judgment was docketed.

On December 4, 1984, the court ordered respondent to attend a supplementary proceeding and to produce all relevant documentation. Respondent did not appear.

On February 1, 1985, the court ordered respondent to appear before it on March 1, 1985, to show cause why he should not be held in contempt. Again, respondent did not appear. Whereupon the court signed a warrant for respondent's arrest.

Respondent was arrested on June 17, 1985. He was ordered to testify at the supplementary proceeding and to furnish all requested documents to grievant's attorney. Although he appeared, respondent failed to bring any documents. He testified that he had no office records, other than notes in his checkbook. He was unable to produce proof of any consideration for the mortgages and the deed. At a prior deposition, his sister and brother-in-law testified that they had no knowledge of a mortgage in their name against respondent's house.

A further hearing was scheduled for July 2, 1985. Once again, respondent did not appear. Although further warrants for his arrest have been signed, it appears that respondent has successfully evaded them.

The district ethics committee hearing was held on May 22, 1986. Respondent did not appear. The panel report found that respondent had violated R.P.C. 8.4 through acts of "misconduct of the most egregious nature," by committing fraud and conspiring to commit fraud against grievant in the Michigan matter; by failing to return grievant's deposit; by failing to respond to court orders and to appear at supplementary proceedings; by being arrested for breach of court orders; by failing to provide documents, pursuant to court orders; by illegally placing mortgages against his home in order to defraud

a judgment creditor; and by illegally transferring his house, for no consideration, to defraud a judgment creditor.*fn1

The committee submitted a unanimous presentment and recommended that, on the Haupt matter alone, respondent be disbarred.

The Berger Matter

Complainant, Daniel E. Berger, is an attorney-at-law of the State of New Jersey. On April 3, 1985, complainant represented his father's corporation, Lakechef, Inc. ("Lakechef"), as landlord, in a tenancy matter to evict respondent's client, Main Answer, Inc. ("Main Answer"), for failure to pay rent.

At the tenancy proceeding, respondent made false statements to the court concerning the amount of rent due by Main Answer. Specifically, respondent produced an agreement between Lakechef and Main Answer which purported to set off certain credits against the rent. The agreement, which was unsigned by Lakechef, was false. It was prepared by respondent or by someone at his direction, with his consent or approval. With the knowledge that it was false, respondent introduced it into evidence at the tenancy proceeding. Nevertheless, the court granted a judgment of eviction on that date.

On the next day, April 4, 1985, respondent filed a bankruptcy petition in behalf of Main Answer, thereby causing an automatic stay of the eviction. On May 22, 1985, complainant filed a motion in the bankruptcy court seeking a lift of the automatic stay, on the ground that the eviction had been ordered prior to the filing of the bankruptcy petition. The motion sought, also, to compel Main Answer to pay rent during the pendency of the bankruptcy.

On the return date of the motion, respondent misrepresented to the bankruptcy judge that the rent due was $275.00 per month when, in truth, Main Answer had previously made payments in the amount of $500.00 per month.*fn2 Respondent misrepresented, also, that Main Answer was entitled to certain credits.

In view of the conflicting statements concerning the amount of rent, the bankruptcy judge adjourned the matter in order to conduct a hearing on that issue. He ordered, however, that Main Answer continue to pay the least amount of rent due, $275.00 per month.

On July 13, 1985, a new bankruptcy judge heard the matter.*fn3 Once again, respondent made serious misrepresentations to the court. Specifically, he falsely stated that the prior bankruptcy judge had ruled on the matter and had denied the motion to lift the automatic stay. The new judge, however, had reviewed the record prior to the hearing. In spite of respondent's misrepresentation, the judge lifted the automatic stay and granted complaint's motion to have Main Answer evicted.

On August 6, 1987, respondent filed with the county clerk a false document purporting to be a Notice to Stay Execution of Removal Pending Appeal. Said document was designed to mislead the authorities and to prevent them from carrying out the eviction.

Nevertheless, the eviction began at 11:00 a.m. on August 21, 1984. At noon, respondent telephoned the clerk's and the constable's offices to advise them that he had obtained an order from a federal court staying the eviction. By the time the clerk's office contacted the constable, however, the eviction had been completed.

Respondent had, in fact, obtained a two-day stay of the eviction, at which time he misrepresented to the court that he had given notice of his application to the complainant, his adversary in the matter. The stay, however, was not granted until 4:30 p.m., hours after respondent telephoned the clerk's and constable's offices.*fn4

Thereafter, respondent filed a lawsuit in behalf of Main Answer against Lakechef for malicious prosecution in violation of civil rights, stemming from the municipal court complaint on the $500.00 bad check. Lakechef was represented by attorneys for its insurance carrier. Although aware that Lakechef was represented by counsel, respondent communicated directly with principals of Lakechef by sending letters and serving interrogatories on Lakechef.

The hearing before the district ethics committee took place on January 14, 1986. Respondent did not appear. Following the conclusion of the hearing, the committee found that respondent had been guilty of unethical conduct, in violation of R.P.C. 1.2(a), R.P.C. 3.2, R.P.C. 3.3(a), R.P.C. 3.4, R.P.C. 4.1, R.P.C. 4.2 and R.P.C. 8.4. Specifically, the committee concluded that respondent had made serious misrepresentations to three judges; had filed a fraudulent notice of appeal; had introduced false documents into evidence and made fraudulent statements on behalf of his client; had failed to make reasonable efforts to treat the court and other attorneys with reasonable courtesy and consideration; had knowingly made false statements of material fact or law and offered evidence which he knew to be false; had falsified evidence; had made false statements of material facts to third persons; had communicated directly with an adverse party represented by counsel; and had committed

numerous acts of misconduct. The committee recommended that a presentment be brought against respondent.

The Patria and Burrell Matter

In February 1984, Daniel Patria, Sr. and Darlene Burrell ("grievants"), uncle and niece, formed a corporation ("Darlynn"), the purpose of which was to operate a telephone answering service. Grievants were officers of Darlynn. Darlynn had signed an agreement with Atlantic Telephone Service, Inc. ("Atlantic") to install and lease an answering service system.

In March 1984, Darlynn entered into an oral agreement with Main Answer, Inc. ("Main Answer"), whereby the latter assumed all of Darlynn's liabilities and obligations, including those under the lease agreement with Atlantic. Grievants remained with Darlynn under an employment contract. The preparation of the written agreement was assigned to respondent, who was Main Answer's in-house attorney. Grievants were unrepresented by legal counsel.

In January 1984, Atlantic informed grievants that the lease was considered terminated for failure to make payments. Main Answer had not made the lease payments, as required by its oral agreement with Darlynn. Neither had respondent prepared the written agreement.

In October 1984, Atlantic served grievants with a summons and complaint, with Atlantic demanding payment and replevin of the equipment. Grievant then contacted respondent, who acknowledged that it was Main Answer's responsibility to make the lease payments and informed grievants that he would assume their representation in the litigation. Accordingly, grievants turned over to respondent the summons and complaint, relying on his promise to undertake their representation.

In January 1985, grievants discovered that respondent had failed to answer the complaint, thereby causing a default judgment to be entered against them, together with a writ of replevin. Grievants immediately contacted respondent, who acknowledged his failure to file an answer and assured grievants

that he would forthwith file a motion to vacate the default judgment against them.

In spite of his promise, respondent neglected to file the motion, as a result of which Atlantic recovered monies and equipment from grievants. Ultimately, grievants were forced to appear pro se before ...

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