On an order to show cause why respondent should not be disbarred or otherwise disciplined.
For disbarment -- Wilentz, C.J., and Clifford, Handler, Pollock, O'Hern, Garibaldi, and Stein. Opposed -- None.
[120 NJ Page 679] This case arises from a report and recommendation of the Disciplinary Review Board (DRB) that respondent be disbarred
for his conduct in the administration of the estate of Anna Baller. The attorney's problems stem in part from what might be regarded as too close a relationship between Mrs. Baller and the respondent's late law partner. That attorney (we shall call him Mr. A) had a relationship of unusual trust with Mrs. Baller. He borrowed money from her and arranged loans from her to a corporation in which he had an interest. That attorney died in 1969. Mr. Kelly, who was admitted to the bar in 1967, had done work for Mrs. Baller before Mr. A died. After Mr. A's death, respondent became Mrs. Baller's principal legal adviser. He became more than an attorney to her; he became, as had Mr. A become, a friend and confidant. Mrs. Baller was disabled, and when she had legal business, respondent went to her apartment in Asbury Park to transact it. They often spoke of their families, and Mrs. Baller became interested in the lives of the Kelly children.
That relationship continued after Mr. A's death and during the 1970s until Mrs. Baller's death in 1977. She left a will naming Mr. A's son (then a young attorney) as executor of her estate and dividing her estate (after various bequests) among her children and grandchildren. One of her sons was married to a lawyer, Margaret Baller, but that lawyer-relative had previously asked not to be named as executrix of her mother-in-law's will. After the testatrix, Mrs. Baller, died, Mr. A's son declined to serve as executor. Mr. Kelly qualified to administer the estate as alternate executor under the will.
Here arose one of respondent's problems. He was at once the executor of Anna Baller's estate and the attorney for Mr. A's estate. The problem stemmed from the fact that the principal assets in the $137,000 Baller estate were investments made to or through Mr. A:
$62,000 unsecured and past-due personal loans to Mr. A's estate, and
$35,000 loan to Costa Ice Cream Company, a business venture with which Mr. A had a relationship.
From the inception of Anna Baller's estate, respondent did not act to liquidate its assets. Rather, he chose a course (whether technically authorized for an executor or not we need not debate) that led to dissatisfaction on the part of the beneficiaries. That induced Margaret Baller to retain an attorney, who consulted with Mr. Kelly. According to Mr. Kelly, they reviewed the inheritance tax return and other documents, but when the estate had not been wound up within a four-year period, the heirs demanded a judicial accounting. The judicial accounting unraveled the details of the administration of the estate and led to the five specific complaints of misconduct that we shall review. Most of the details were revealed as a result of the investigative efforts of a court-appointed guardian ad litem (GAL) for the minor beneficiaries of the estate, and the family members. Together, they traced each known asset and raised exceptions to the account, which largely form the allegations of the ensuing ethical complaint.
Before reviewing the specifics of the allegations, we give a short procedural history. Following an initial complaint against respondent, a stipulation of facts was entered into between respondent and the Office of Attorney Ethics (OAE) reciting in general the matters that had become apparent in the course of the judicial accounting. The District Ethics Committee (DEC) forwarded to the DRB a report and recommendation for public discipline in which it dismissed various allegations of misconduct. The DEC found that respondent had not acted improperly by representing both the estates of Mr. A and Mrs. Baller. Also, the evidence did not support the allegation that respondent had acted improperly with regard to certain promissory notes due to Anna Baller and executed by Costa Ice Cream Company. Finally, the DEC found that respondent had had no intention of defrauding anyone when he drew a check for $4,921.67 from the Baller estate, payable to himself. The DRB referred the matter back to the DEC for a plenary hearing and, in a later ruling, clarified that even the originally-dismissed matters were to be subjects of the plenary hearing.
Without attempting to give details of each allegation, we list the five counts of the complaint:
1. That respondent altered an estate check for $4,921.67 to conceal the fact that it had been an early distribution to him of claimed commissions.
2. That he had had a conflict of interest in serving the two estates.
3. That he had taken some $1,600 in dividend checks of Mideast Aluminum Industries (MAI) (the checks) that were property of the ...