For public reprimand -- Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None.
This matter emanates from a four count complaint filed by the District X Ethics Committee, which came on for hearing before Special Master Alexander P. Waugh, who sat in lieu of a hearing panel by designation of Chief Justice Wilentz. The Special Master found that respondent, Joseph W. Urbanick, had engaged in illegal conduct that adversely reflected on his fitness to practice law, DR 1-102(A)(3); conduct that involved dishonesty, fraud, deceit, or misrepresentation, DR 1-102(A)(4); and other conduct that adversely reflected on his fitness to practice law, DR 1-102(A)(6). Based on his findings, the Special Master recommended a temporary suspension of six to nine months. The Disciplinary Review Board (DRB) found "that the conclusions of the Special Master are fully supported by clear and convincing evidence." Concluding, however, that under the circumstances of the case suspension was not necessary, the DRB recommended a public reprimand. We agree.
Around 1975 respondent and his former law partner, Ivan White, became interested in real estate speculation. Together with a client, Thomas Ferguson, they formed several corporations, including Beacon Hill Estates, Inc. (Beacon Hill), which owned a tract in Washington Township known as Fairmount Farms. In its Decision and Recommendation, the DRB summarized the relevant facts:
In order to finance the Beacon Hill Estates development, in February, 1979, Beacon Hill Estates, Inc., obtained a loan of $275,000 from Capital Savings and Loan Association. This loan was secured by mortgages on various lots, including lot 9-5. On or about February 22, 1979, American National Bank lent to the same principals $120,000 to finance the purchase and improvement of a tavern in Chester, New Jersey. American National Bank was granted a mortgage on both the Chester property and the Washington Township properties. The tavern was purchased by Chester Park Partnership, owned by Messrs. Ferguson and Urbanick, individually. Beacon Hill Estates, the owner of the Washington Township properties, received no consideration as a result of this mortgage. In addition, various lots in Washington Township were secured
by loans made by First National Bank of Northwest Jersey and Hudson United Bank.
During mid-1979, Paul and Anna Maioriello contacted Thomas Ferguson, Jr. and Joseph W. Urbanick, officers of Beacon Hill Estates, Inc., the builders of the Beacon Hill Estates development in Washington Township. The Maioriellos entered into a contract of sale on November 5, 1979, for the purchase of a residence to be constructed on Lot 9-5 in the Beacon Hill development, one of the lots secured by the Capital Savings & Loan funds. The contract was in the amount of $109,500. The Maioriellos were represented at the time by D. Joseph Mone, Esq., with respect to this transaction.
On or about December 3, 1979, the Maioriellos paid $1,000 to Beacon Hill Estates, Inc. as a binder, pursuant to the sales contract. This check was deposited on December 6, 1979, into Beacon Hill Estates, Inc.'s account with First National State Bank in Succasunna, New Jersey. In addition, pursuant to the contract, the closing was scheduled to take place at the offices of Urbanick and White, Esqs. in Gladstone, New Jersey, on June 1, 1980. The closing information contained in the contract made the Maioriellos aware that they were dealing with lawyers who were also developers/builders.
In January 1980, the Maioriellos obtained an equity loan on their existing home in the amount of $9,950. Again pursuant to their sales contract, this was paid to Beacon Hill Estates, Inc., as the balance of their deposit.
By the summer of 1979, however, the financial condition of Beacon Hill had deteriorated. As a result of this deteriorating financial condition, respondent's mother lent Beacon Hill money in late 1979. Respondent attempted to protect his mother by agreeing to transfer to her the liquor license associated with the Chester Tavern but held by another corporation of Respondent, Eleventh Hour, Inc., should the loan not be repaid within six months.
During late 1979, Hudson United Bank brought suit to foreclose on its various lots. The complaint was served upon all defendants, including respondent. At the same time, Hudson United Bank brought suit on a promissory note against various defendants, including respondent. As no answer to the complaint was filed, a final judgment by default was entered in the Law Division on January 10, 1980.
In an attempt to protect Beacon Hill Estates' property from the lending institution, in early 1980, Beacon Hill Estates, Inc. conveyed various lots, including that under contract to the Maioriellos, to a new entity entitled Five-Four-Five Development Corp. Respondent was listed as the registered agent for Five-Four-Five Development Corp. A portion of the Maioriello deposit was used to finance this real estate transfer.
In February or March 1980, the Maioriellos became concerned, as there had been no activity on their home. Although Mr. Maioriello made repeated attempts to contact respondent, these attempts were without success. According to Mr. Maioriello, respondent never responded to these telephone inquiries.
None of the seven homes contracted to be built by Beacon Hill Estates, Inc. between September 11, 1979 and November 5, 1979, was ever completed. The project was eventually subject to a series of foreclosures; as a result, purchaser
deposits in the amount of $78,600 were lost. In April 1981, the Maioriellos filed a lawsuit for breach of contract, consumer fraud, and other relief against Beacon Hill Estates, Inc., and Messrs. Urbanick and Ferguson.
In June 1981, Joseph and Janet Urbanick filed a joint petition in bankruptcy. The Maioriellos thereafter sought to have their claim against respondent declared non-dischargeable, on the basis of fraud. On December 14, 1982, the Bankruptcy Court entered judgment in favor of the Maioriellos in the amount of $10,950 against respondent and designated this award non-dischargeable. Although Mr. Urbanick was present at the hearing on November 18, 1982, when his request for an adjournment was denied, he left the court. In addition, state court proceedings resulted in a judgment being entered, on July 30, ...