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In re Tobolsky

Supreme Court of New Jersey

March 12, 2018


          Argued: November 16, 2017

          HoeChin Kim appeared on behalf of the Office of Attorney Ethics.

          Ellen A. Brodsky Chief Counsel.

         Respondent waived appearance for oral argument.


          Bonnie C. Frost, Chair

         To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey.

         This matter was before us on a recommendation for disbarment, filed by the District IV Ethics Committee (DEC), based on respondent's knowing misappropriation of $32, 500 in escrow funds, a violation of the principle established in In re Hollendonner, 102 N.J. 21 (1985).[1] The DEC rejected respondent's defense, under In re Jacob, 95 N.J. 132 (1984), based on his gambling addiction and depression.

         For the reasons set forth below, we adopt the DEC'S finding on the Jacob defense and, thus, recommend respondent's disbarment.

         Respondent was admitted to the New Jersey and Pennsylvania bars in 1987. He was admitted to the Florida bar in 1988. At the relevant times, he maintained an office for the practice of law in Merchantville and Philadelphia.

         Although respondent has no disciplinary history, he is ineligible to practice law in all three states due to his failure to comply with mandatory continuing legal education requirements. In New Jersey, respondent also has been ineligible to practice since September 2016, based on his failure to pay his annual registration fee to the Lawyers' Fund for Client Protection.

         In a single-count formal ethics complaint, dated July 22, 2014, the Office of Attorney Ethics (OAE) charged respondent with knowing misappropriation of $32, 500 in escrow funds. In his answer, respondent admitted every factual allegation.

         On February 16, 2006, grievants (siblings Andrew Ross, Jr. and Zulaikha Nelson) entered into an agreement of sale with Taylor woods, LLC, regarding the latter's purchase of the formers" Winslow Township property. The agreement is not a part of the record.

         After several amendments, the closing date was extended to October 31, 2012, Respondent had undertaken the representation of Ross and Nelson in the summer of 2011 and negotiated the final two amendments to the agreement of sale.

         The closing did not take place until November 7, 2012. A few days earlier, respondent learned that his clients might have owed a brokerage commission to Candid Realty, Inc. (Candid Realty). Consequently, the parties and the title company agreed that respondent would hold $32, 500 of the proceeds in escrow, in his trust account, pending resolution of the brokerage commission issue.

         On November 7, 2012, the title company issued a $32, 500 check to "Frank N. Tobolsky, Esquire Attorney Trust Account," containing the notation "Escrow of Real Estate Commission." Respondent deposited the check in his attorney trust account the next day.

         By March 1, 2013, respondent's trust account balance was $5. A March 29, 2013 maintenance fee zeroed out the trust account. Respondent had depleted the $32, 500 in escrow funds by removing $45, 580 from the trust account between November 30, 2012 and January 10, 2013.

         Respondent expended the escrow funds by transferring $10, 000 from his trust account to his business account, on November 30, 2012; $34, 500 in December 2012 (via eleven transfers in even dollar amounts); and $700 in January 2013 (plus a $380 cash withdrawal). Prior to each disbursement, respondent neither requested or obtained permission from Candid Realty or his clients to use the $32, 500 in escrow funds.

         On March 15, 2013, the parties to the real estate transaction authorized the disbursement of $12, 333.33 in escrow funds to Candid Realty, in satisfaction of the commission dispute. The remaining $21, 166.67 was to be disbursed as follows: $5, 839.52 each to Ross and Nelson (for a total of $11, 679.04), representing their shares of the proceeds, and $8, 487.63 to respondent, representing his fees and expenses. By this point, however, the trust account balance was $5.

         Respondent did not disburse any funds until April 30, 2013, when he issued a $12, 333.33 personal bank account check to Candid Realty's attorney's trust account. On May 7, 2013, he issued separate personal bank account checks to Ross and Melson, each in the amount of $5, 839.41.

         Based on the above facts, the OAE charged respondent with knowingly misappropriating "funds entrusted to his care" (RPC 1.15(a) and Wilson and Hollendonner), failing to keep separate funds in his possession that both he, as lawyer, and another person claim interests (RPC 1.15(c)), and engaging in conduct involving dishonesty, fraud, deceit or misrepresentation (RPC 8.4(c)). Despite respondent's admission of the factual allegations in the complaint, he denied the specific RPC Charges.

         In his answer, respondent asserted that he is a compulsive gambler, who also suffers from depression and anxiety, all causing him to be "literally . . . 'out of' [his] mind.'" Consequently, he "often did not know or appreciate the consequences of [his] actions." He described his mental illness as "crippling" and "debilitating" and asserted that the allegations against him were "inextricably linked" to his "diminished capacity," stress, duress, and "mental defects and incapacities."

         In addition to respondent's gambling addiction, depression, and anxiety, the answer identified eleven mitigating factors, including, but not limited to, his admission of guilt and t- rehabilitation. Based on these factors, respondent seeks discipline "less punitive" than disbarment, such as a censure. Alternatively, he "beg[s]" permission to resign from the bar.

         In light of respondent's admission to the facts alleged in .the ethics complaint, the hearing was limited to the issue of respondent's assertion of the Jacob defense. Only respondent testified. Neither the OAE's expert, Daniel P. Greenfield, M.D., M.P.H., M.S., nor respondent's expert, Frank M. Dattilio, Ph.D., testified. Rather, counsel for the parties agreed that their reports "could be considered by the hearing panel without the need for testimony."

         Respondent, who was born in October 1961, testified that his introduction to gambling occurred at age six, when his father took him to the race track. At age nine or ten, respondent's father introduced him to football pools. Respondent invariably lost each week, resulting in "an awful feeling," which he now recognizes was depression. At age eleven, 'respondent attended overnight camp where he and other campers played poker after "lights out."

         In middle school, respondent was stripped of an unidentified award when the school administration learned that he had been distributing football pools. In high school, he and his father attended horse races all along the east coast. Respondent even gambled in Puerto Rico casinos, despite being . underage, because his grandfather was able to gain him entry.

         Respondent funded his gambling with his allowance and earnings from his newspaper route.

         When respondent began dating, he took his dates to the race track, describing the experience as "the best of both worlds." His senior paper was on the subject of compulsive gambling.

         Respondent's gambling continued through college. He worked with a "dormitory bookie," gambling his earnings from a campus job. By this point, respondent was subject to "awful mood swings" due to his gambling. When two of his girlfriends demanded that he choose between them or gambling, respondent chose gambling.

         Despite the time and energy that respondent devoted to gambling, he managed to do well academically. In the fall of 1984, respondent entered the University of Pennsylvania Law School, where he found a professional bookie. He was now gambling "very large amounts" and still losing. Respondent considered suicide, but called Gamblers Anonymous (GA) instead, in November 1984. He described GA as "a lifeline."

         Respondent spent the next twenty-two years free of gambling and living a healthy lifestyle. He attended GA meetings regularly, had a sponsor and sponsored other GA members, held offices, and worked on his defects.

         Upon graduation from law school, in 1987, respondent became an associate attorney at a large national law firm, where he worked in the field of commercial real estate. In 1988, respondent was married for six months, in 1992, he re-married and, ultimately, had two children.

         Between marriages, respondent suffered from depression, but did not seek medical treatment. He did, however, attend GA meetings regularly. Sometime in 1996 or 1997, respondent was "physically and emotionally exhausted." He had started his own law practice and was the sole financial support for his family. He received "little affection" and "felt like ... an ATM and gerbil on the wheel, just work, work, work, work." The obsessive thoughts returned, as did "some" suicidal ideation.

         Upon the recommendation of a GA fellow, respondent sought treatment with psychiatrist Michael Shore, M.D., who prescribed an antidepressant, which he continued to take for two or three years. Although the drug helped respondent's depression, he felt lethargic and lacked ambition. Thus, respondent found another doctor, Edwin Castillo, M.D., who treated him for the next six or seven years.

         While under Dr. Castillo's care, respondent was prescribed a number of different drugs to treat depression and anxiety. Yet, respondent testified, he "never felt good." He was "down" and "flat," and the anti-anxiety medication either did not help or, if the dosage were increased, rendered him "almost catatonic." Similarly, his depression "never went away."

         Respondent continued to maintain his law practice while under Dr. Castillo's care. By 2005 or 2006, however, respondent sensed that the real estate economy was declining. His' marriage ended in the winter of 2006. He also felt overwhelmed by the knowledge that he would not be able to pay for his children's college education. He decided to invest in a few stocks to raise the funds, and the stocks did well. His gambling compulsion resurfaced, and he became involved in day trading. During this time, respondent's former wife was denying him visitation with their children.

         In 2006 or 2007, respondent returned to GA, saw a therapist, and had his medication changed. He was able to maintain a ninety-day period of ...

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