On an Order to show cause why respondent should not be disbarred or otherwise disciplined.
Chief Justice Poritz, and Justices Handler, Pollock, O'hern, Garibaldi, Stein, and Coleman join in this opinion.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In the Matter of Lewis B. Freimark, An Attorney at Law (D-75-97)
Argued October 20, 1997 -- Decided December 5, 1997
Lewis B. Freimark was admitted to the bar of New Jersey in 1980. His law office is in West Caldwell. A random compliance audit of his attorney records conducted by the Office of Attorney Ethics (OAE) disclosed multiple record-keeping problems. A proctor was appointed to supervise Freimark's practice. The proctor was given exclusive check-signing authority over Freimark's attorney accounts.
A Special Master heard the ethics complaints filed against Freimark. The Master recommended to the Disciplinary Review Board (DRB) that Freimark be disciplined for knowing misappropriation of client funds and for his failure to notify the OAE that he had been disciplined as an attorney in New York. The DRB recommended to the Court that Freimark be disbarred for knowing misappropriation of client funds.
The ethics complaints against Freimark involved clients Arlene Snyder, Amanda Alongi, George P. Caso, Felipe Leon, and Eleanor Markov. The Court found repeated instances in which Freimark improperly disbursed funds to himself from his trust account. Funds from one client were used to replenish funds for another client.
Freimark's explanations for the improper withdrawals included negligent record-keeping, unrecorded "loans" that were allegedly repaid through use of the client funds, and an attempt to "protect" the funds of one client by removing some of them from his trust account. All of Freimark's explanations were not found to be credible by the DRB or the Court.
HELD : In the light of respondent's knowing misappropriation of client funds, he must be disbarred.
1. Because the Court determined that Freimark should be disbarred for knowing misappropriation, it did not consider the count that dealt with Freimark's failure to notify the OAE of the imposition of discipline on him by New York. (pp. 15-16)
2. In re Wilson states that a misappropriation of client funds must be "knowing" to warrant disbarment of an attorney. That standard must be met by clear and convincing evidence. (pp. 16-17)
3. Although respondent is correct that shoddy record-keeping alone will not result in a Wilson disbarment, this case goes well beyond poor record-keeping. The record discloses a pattern--on depositing settlement proceeds into his trust account, respondent would advance sums to himself, thereby depleting that client's account. Subsequently, respondent replenished that client's account by invading trust funds received on behalf of other clients in unrelated matters. (pp.17-19)
4. Respondent's claim that no client was injured because all of the money was paid back does not exempt him from the application of Wilson. Even when a lawyer "borrows" trust funds without permission, disbarment must follow. (pp. 19-20)
It is ORDERED that respondent be DISBARRED from the practice of law.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in the Court's opinion.
This disciplinary proceeding results from a random compliance audit of the trust funds of respondent, Lewis B. Freimark, by the Office of Attorney Ethics (OAE) pursuant to Rule 1:21-6(c). As a result of the findings of that audit, the OAE conducted a demand audit. The audits covered the period between April 30, 1990 through May 31, 1992. The audits disclosed, among other things, that respondent kept no client ledgers, that there was no reconciliation of respondent's trust account bank statements with a schedule of client balances, and that respondent had been out of trust numerous times.
The OAE moved for respondent's temporary suspension, which the Court denied. We, however, ordered that a proctor be appointed to supervise respondent's practice and gave the proctor exclusive check-signing authority over respondent's attorney accounts.
A Special Master recommended to the Disciplinary Review Board (DRB) that respondent be publicly disciplined for four counts of knowing misappropriation and one count of failure to notify the OAE of discipline imposed by the New York disciplinary authorities.
Respondent does not dispute that he misappropriated client funds, but asserts that the OAE failed to prove by clear and convincing evidence that he misappropriated those funds knowingly. Instead, respondent contends that the evidence establishes only that the misappropriations arose from his negligence, specifically from his deplorable and shoddy recordkeeping. The DRB unanimously disagreed and recommended respondent's disbarment. Our review of the record leads us to conclude by clear and convincing evidence that respondent misappropriated clients' funds knowingly.
Respondent, a sole practitioner admitted to the bar in 1980, was charged with knowing misappropriation of four clients' trust funds: Snyder (First Count), Alongi (Second Count), Caso (Third Count), and Leon-Markov (Fourth Count).
Respondent represented Arlene Snyder in a personal injury action. He received $8,750.00 in settlement proceeds in February 1990, which he deposited in his trust account. On his checkbook stub, respondent immediately recorded the resulting available balance ("250 8,750 = 9000"). Respondent then issued a check to himself for $3,800.00 and deposited that check into his personal checking account. According to the retainer agreement, respondent was entitled to one-third of the settlement. He took approximately forty-three percent. In addition, he did not deposit the overdisbursed fee into his business account as required by R. 1:21-6.
Respondent then issued check number 1203, which, according to respondent's checkbook stub, was written for $1,000.00 to "Lewis Freimark - Dr. Viscounti on Snyder." The check, however, was not cashed by Dr. Viscounti. Instead, it was paid to respondent's order, who endorsed the check and deposited it in his personal account. The evidence supports the finding that respondent wrote the checkbook stub for check 1203 to give the erroneous impression that Dr. Viscounti's bill for client Snyder was being paid.
As a result of disbursing several other small checks in connection with the Snyder case, respondent overdrew his trust account by $30.49. He cured the overdraft by depositing $200.00 on March 26, 1990. From March 26, 1990 to April 30, 1990, respondent's trust account had no activity except for a monthly ...