On an order to show cause why respondent should not be disbarred or otherwise discipline.
For disbarment -- Chief Justice Wilentz, and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. Opposed -- None.
[121 NJ Page 249] These ethics proceedings commenced in October, 1982, when the grievant, Margaret Calia, registered a complaint with the District VI Ethics Committee against respondent, John P. Russell, a member of the bar since 1964. Russell had represented Calia in connection with the sale of her residential property. She asserted that he was "unreasonably withholding a part of the proceeds of the sale." After extensive hearings the local Committee determined that respondent had misappropriated his client's funds in violation of DR 9-102(B)(4), and recommended public discipline. Concluding that respondent had knowingly misappropriated client's funds, the Disciplinary Review Board (DRB) unanimously recommended that he be disbarred. Our
independent review of the record leads us to accept that recommendation.
On May 26, 1982, respondent represented Margaret Calia, an elderly widow and long-time friend and client, in the sale of her Jersey City home. Because Calia had already moved to New York to be with her family, she did not attend the closing and therefore did not receive her proceeds from the sale that day. Respondent undertook to represent her interests at the closing in her absence, and agreed to pay her outstanding bills and send her the balance within a few weeks.
On the day following the closing, May 27, 1982, respondent deposited in his trust account the proceeds from that closing in the amount of $47,717. Prior to that deposit the balance in respondent's attorney trust account was $71.14. Because Russell confined himself generally to a criminal practice, there was little activity in his trust account, and only rarely did substantial amounts pass through it.
On May 28, 1982, respondent deposited two additional checks in his trust account, one for $795.57 representing additional proceeds from the Calia sale, and one for $14,000, for a total of $14,795.57. Russell claims that the $14,000 consisted of $10,000 from his sister, Kathleen E. Walsh, toward the purchase price of a new home she was about to buy, and $4,000 of respondent's own funds, which he needed to pay a $5,000 obligation to a disgruntled client, Ralph Sheprow. The Walsh real-estate transaction involved the sale of the home in Kearny owned by respondent's sister and her husband, John P. Walsh, and the purchase of a new home in Wayne. Russell was representing his sister and her husband in both transactions, although he did not attend the closing of either, being inexperienced in real estate matters. His friend, William J. Scheurer, Esq., appeared at the closings. The sale of the Kearny home was scheduled for June 3, 1982, and the purchase of the Wayne property was
scheduled for June 4, 1982. In addition, because Sheprow was pressing respondent, he knew he had to pay that $5,000 obligation promptly.
Respondent's car was totaled in an accident on May 29, 1982. He says, and Ms. Walsh confirms, that he asked his sister's permission to use some of the $10,000 that he was holding in trust for her toward the purchase of a new car. He wrote a check on May 31, 1982, on his personal account for $5,000 payable to Ableson Olds, Inc., for the new automobile. Because the balance in his personal account was just under $1,300, Russell drew a check on his trust account, dated June 2, 1982, payable to himself in the amount of $6,000 and deposited it in his personal account to cover the check for the car dealer. That check cleared on June 3, 1982, and the bank record shows that the $6,000 trust account check and the check to the automobile dealer were credited and debited respectively to respondent's personal account on June 3, 1982.
On the same date, Russell arranged for a certified check payable to Ralph Sheprow for $5,000, which was deducted from his trust account on that day.
To recapitulate: (a) The Calia closing took place on May 26, 1982, and produced net proceeds of about $44,000. (b) On May 27 and 28, 1982, respondent deposited $48,512 in his trust account on behalf of Calia. (c) On May 28, 1982, respondent also deposited in his trust account $14,000 -- $10,000 came from his sister towards the purchase of a new home, and $4,000 from respondent's own funds for part of the $5,000 he needed to satisfy a badgering Sheprow. (d) On June 2, 1982, respondent wrote to himself, as payee, a trust account check for $6,000, which he then deposited in his personal account on June 3, ...