IN THE MATTER OF RICHARD EUGENE EHRLICH AN ATTORNEY AT LAW
Argued: January 18, 2018
Docket No. XIV-2017-0198E
Johanna Barba Jones appeared on behalf of the Office of
Respondent waived appearance for oral argument.
W. CLARK, VICE-CHAIR
Honorable Chief Justice and Associate Justices of the Supreme
Court of New Jersey.
matter was before us on a motion for reciprocal discipline,
filed by the Office of Attorney Ethics (OAE), pursuant to
R. 1:20-14, following respondent's three-month
suspension in Florida for ethics infractions stemming from
interstate solicitations for loan modification work by
nonlawyers acting on behalf of his firm, charging illegal
fees, failing to act diligently in respect of the loan
modification clients, failing to supervise his nonlawyer
employees, and practicing law in Maryland, a state in which
he was not admitted to the bar.
seeks the imposition of a three-month suspension, based on
respondent's violation of New Jersey RPC 1.3
(lack of diligence), RPC 1.4 (failure to communicate
with the client), RPC 1.5(a) (unreasonable fee),
RPC 5.3(a) (failure to make reasonable efforts to
ensure that the conduct of nonlawyers is compatible with the
lawyer's professional obligations), RPC
5.5(a)(1) (practicing law in a jurisdiction where doing so
violates the regulation of the legal profession in that
jurisdiction), RPC 7.3(b)(5) (initiating unsolicited
direct contact with a prospective client when a significant
motive is pecuniary gain), RPC 7.3(d) (compensating
or giving something of value to a person for recommending the
lawyer's services), and RPC 8.4(a) (violating or
attempting to violate the RPCs, knowingly assisting
or inducing another to do so, or doing so through the acts of
another). Respondent agrees with the discipline the OAE
determined to grant the motion for reciprocal discipline and
impose a three-month prospective suspension on respondent for
his violation of all of the above RPCs, except
RPC 1.3, RPC 1.5(a), and RPC
was admitted to the New Jersey and New York bars in 1986, the
Washington, DC bar in 1988,  and the Florida bar in 1991. At
the relevant times, he maintained an office for the practice
of law in Coral Springs, Florida, which operated under both
the names Ehrlich, Franz, & Harris, as well as Ehrlich
& Franz (the Ehrlich firm).
has no disciplinary history in New Jersey.
facts are taken from two sources. The first is the December
7, 2016 conditional guilty plea for consent judgment (consent
judgment), which was tendered to the Florida Bar prior to the
filing of a formal ethics complaint. The Florida Bar approved
respondent's plea and submitted it to the Supreme Court
of that state (Florida Court). On February 16, 2017, the
Florida Court approved the consent judgment and imposed a
ninety-day suspension on respondent.
second source is respondent's sworn statement, given to
Florida Bar Counsel, Michael Soifer, on May 17 and June 30,
2016 (sworn statement). Given the lack of detail in the
consent judgment, we found it necessary to supplement the
facts with information from respondent's sworn statement.
to the formation of the Ehrlich firm, respondent previously
worked in the mortgage and title industries. In the spring of
2011, one of his former colleagues suggested that respondent
take on loan modification work.
August 2011, respondent and his partners formed Ehrlich,
Franz & Harris. When Harris left in late 2012, the firm
changed its name to Ehrlich & Franz. In January 2014,
respondent and Franz split the practice.
the Ehrlich firm was formed, the bulk of respondent's
practice was wills, trusts, and estates, along with
occasional transactional work. Harris handled general
litigation matters, and Franz worked on personal injury
addition, from its inception until mid-2014, the Ehrlich firm
offered services to individuals seeking modification of their
residential mortgage loans. The partners decided to take on
loan modification work, as a way "to join the
practices." For example, Franz would increase his
caseload by representing clients in bankruptcy and
was charged with researching the proper way to take on such
work. According to respondent, Franz's research "was
fairly vast," and, based on his advice, communications
with the Florida Bar's ethics department, and the review
of both state and federal loan modification rules and
statutes, the firm proceeded with the loan modification work.
and his partners employed nonlawyers to perform the loan
modification work. "For the most part," the
nonlawyer employees communicated with the clients. Indeed,
respondent stated to Florida Bar counsel that he never met
with, or even talked to, the twenty-six grievants, all of
whom spoke Spanish. The Spanish-speaking clients communicated
with employees Joe Sagarra; Claudia Perrera, whom respondent
identified as a "processor;" and, to a lesser
degree, Sylvia Montero, "a kid that worked for us for a
played a large role in the firm's representation of loan
modification clients. He solicited many of them, some of whom
resided in Maryland. The Maryland clients were charged
upfront retainer fees, which was improper, as respondent was
not licensed to practice law in that state.
addition to Maryland residents, Sagarra solicited Florida
residents. He obtained a multitude of clients for the firm
via "referrals through his system of people."
Sagarra's "people" included several churches,
from at least one of which he secured the "entire"
congregation as respondent's clients. Another source was
Nelly Gerson, a loan modification client.
clients filed grievances with Florida Bar Counsel. When the
Ehrlich firm learned of the grievances, it fired Sagarra and
began winding down the loan modification operation.
Respondent made full restitution to the grievants, totaling
on the above facts, respondent admitted having violated the
following Florida RPCs:
• 4-1.3 [Diligence];
• 4-1.4 [Communication];
• 4-1.5(a) [Fees and Costs for Legal Services];
• 4-5.3(b) [Responsibilities Regarding Nonlawyer
• 4-5.5 [Unlicensed Practice of Law; Multijurisdictional
Practice of Law];
• 4-7.18 [Direct Contact with Prospective Clients]; and
• 4-8.4(a) [Misconduct].
consent judgment, respondent asserted the following
mitigating factors: (a) absence of a disciplinary record; (b)
absence of a dishonest or selfish motive; (c) timely
good-faith effort to make restitution or to rectify the
consequences of misconduct; (d) full and free disclosure to
the disciplinary board and cooperative attitude toward
proceedings; and (e) character and reputation.
stated above, on February 16, 2017, the Florida Court
approved the consent judgment and suspended respondent for
ninety days, effective March 1, 2017. On March 7, 2017,
respondent's counsel in the Florida ethics proceeding
notified the OAE of the suspension.
a review of the record, we determine to grant the OAE's
motion. Reciprocal discipline proceedings in New Jersey are
governed by R. l:20-14(a)(4), which provides in
The Board shall recommend the imposition of the identical
action or discipline unless the respondent demonstrates, or
the Board finds on the face of the record on which the
discipline in another ...