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Matter of Baker

Decided: August 3, 1990.


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.

Per Curiam

[120 NJ Page 496] This matter arises from a report of the Disciplinary Review Board (DRB) recommending that respondent, Dale W. Baker, be disbarred. The matter came before the DRB on a presentment filed by the District VIII Ethics Committee (DEC), as a result of a complaint filed by two former clients charging respondent with misappropriation of their funds. Respondent admits the misappropriations and recognizes that the normal

consequence of such conduct is disbarment. See In re Wilson, 81 N.J. 451, 409 A.2d 1153 (1979). He claims, however, that his conduct was occasioned by a loss of will of sufficient magnitude to excuse his otherwise admitted misappropriation, thereby making disbarment inappropriate. Our independent review of the record leads us to conclude that respondent failed to demonstrate that he suffered a loss of will sufficient to excuse his egregious conduct. We conclude that disbarment is the appropriate discipline.


Respondent was admitted to the bar in 1980. He was an associate in a law firm until April 1984, when he opened his own office in New Brunswick. In 1983 he began to represent his wife's parents, the Clementses, who were experiencing severe financial problems. In 1984 to avoid the foreclosure of their home, respondent arranged with the Clementses' mortgagee that the mortgage payments of approximately $880 per month would be paid to respondent, who in turn would forward his check to the mortgagee. At the time of the arrangement respondent knew that his in-laws would be unable to make the full monthly payment of $880 and anticipated that he would have to pay the $150 expected shortfall.

Between August 1984 until January 1986, respondent's in-laws failed to make eight to ten mortgage payments. Even though respondent did not have sufficient personal funds in his trust account, he nevertheless made the payments to the Clementses' mortgagee, invading other clients' funds then on deposit.

As set forth by the DRB in its Decision and Recommendation, respondent also invaded his trust account for other uses:

Shortly after respondent began to use trust funds to pay his in-laws' mortgage, he invaded the account for other uses. He paid approximately $1200 for the partial tuition costs for one of his wife's brothers. He purchased a fur coat for his wife in October, 1984 using $1400 in trust account funds. He also used client trust funds to purchase a $2300 emerald ring for his wife.

Beginning in October 1984, and continuing to November 27, 1985, respondent wrote a series of fourteen additional checks, drawn to and endorsed by himself. The amount of each check varied, from a low of $325 to a high of $4500. None of these trust account checks bore any case reference or other explanation. These fourteen checks, admitted into evidence as Exhibit J-2, totalled $24,025.

Respondent's misappropriations remained undiscovered until the former clients, Kathleen and Arthur Mangino, filed an ethics grievance against him. The Manginos had hired respondent to refinance their mortgage. At the closing held on October 29, 1985, respondent was to pay off I.R.H.T. Mortgage Company (I.R.H.T.), the original mortgagee, with the proceeds from the newly-recast mortgage. When the Manginos first were advised by I.R.H.T. that the mortgage had not been paid, they immediately called respondent. He advised them he would look into the matter but stated that he believed the mortgage payoff check had crossed in the mail with the late-payment notice. On being told by Mrs. Mangino of the receipt of a second late notice from I.R.H.T., respondent implied to Mrs. Mangino that he had taken care of the problem. On December 14, 1985, Mrs. Mangino was shocked to receive a notice that the mortgage was in default and that foreclosure proceedings were to begin. Respondent again assured Mrs. Mangino that he had taken care of everything. She, however, called I.R.H.T. who informed her that it had received neither the mortgage payment or any correspondence from respondent. She promptly filed an ethics grievance. Thereafter, respondent did pay off the I.R.H.T. mortgage.

The Mangino ethics complaint triggered an audit of respondent's books and records by an accountant retained by the Office of Attorney Ethics (OAE). The accountant concluded that as of January 1986 respondent's trust account was out of trust by $47,693.59, approximately $12,000 of which was attributable to the mortgage payments respondent had made for his in-laws. The remainder of the deficiency was attributed to payment of respondent's "personal expenses."

At the DEC hearing, respondent's accountants stated that he had reduced the $47,693.59 shortage in his trust account to $40,856.22 by May 31, 1986, but that the shortage had increased to $44,533.04 as of June 30, 1986.

The OAE retained David J. Flicker, M.D., who is Board-certified in both psychiatry and neurology, to examine respondent. At the ethics committee hearing Dr. Flicker testified that respondent had told him he knew at the time he misappropriated the funds that it was not his money and further knew that he could lose his license to practice law. Respondent had told Dr. Flicker that he began to use client trust funds in an effort to impress his wife "because she apparently had gone off with another man."

Dr. Flicker concluded that although respondent was somewhat depressed, he was able to understand the nature and quality of his acts, and knew the difference between right and wrong at the time he invaded his trust account. Dr. Flicker was unable to find a loss of competency or comprehension of a magnitude that would make respondent's invasion of the trust account other than knowing and purposeful. He concluded that respondent's mental capacity was never diminished to such a degree that he could not have conformed his behavior to the requirements of the law.

At the DEC hearing respondent testified to instances of knowing misappropriation of trust funds. He admitted to the unauthorized use of client trust funds to cover payments on the Clementses' mortgage. He further admitted that he had used trust funds, without client authorization, to pay his brother-in-law's tuition and to purchase a fur coat and ring for his wife. He did not recall what use he had made of the remaining misappropriated client funds.

In explanation, respondent stated:

I used funds from my trust account to attempt to aid my wife's family with their financial crisis and also to try to buy my wife's attention and loyalty. [Affidavit of respondent dated April 25, 1986, admitted into evidence as Exhibit P-12].

Respondent blamed much of his predicament on his marital difficulties. He and his wife, Gloria Clements Baker, first separated in 1979 after six years of marriage. Respondent, who had been raised by neighbors because of his now-deceased mother's alcoholism, was devastated by that separation, inasmuch as he regarded his wife as his only family. They reconciled more than a year later. During 1984, however, the marriage deteriorated. Mrs. Baker again left respondent in the fall of 1984. Respondent testified that he had been despondent over her departure and had begun to neglect certain aspects of his law practice and to lose clients because he had failed to complete his work in a timely manner.

At the DEC hearing, Carlo Joseph Baril, M.D., a psychiatrist, testified on behalf of respondent, who had sought counseling with him in March 1986 and had continued in therapy until November of that year. He did not return to Dr. Baril, however, until April of 1987, just prior to the first ethics committee hearing. Dr. Baril testified that at the time respondent began treatment, respondent was experiencing a "major depression with melancholia." The loss of his relationship with his wife triggered the major ...

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