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In re Palfy

Supreme Court of New Jersey

September 19, 2018

In The Matters Of Marc Z. Palfy An Attorney At Law

          Argued: April 19, 2018 (DRB 18-011)

          District Docket Nos. IX-20 14-000IE, IX-2014-0010E, and IX-20 16-0002E

          Peter Gordon Licata appeared on behalf of the District IX Ethics Committee.

         Respondent waived appearance for oral argument.

          Ellen A. Brodsky Chief Counsel



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

         These matters were before us by way of two different procedures. DRB 18-011 was before us on a recommendation for an indeterminate suspension, filed by the District IX Ethics Committee (DEC). DRB 18-113 was before us by way of default filed by the DEC, pursuant to FL 1:20-4(f). We have consolidated these matters for disposition.

         The complaint in DRB 18-011 charged respondent with violating RPC 1.1 (presumably (a) (gross neglect)) and (b) (pattern of neglect); RPC 1.4 (presumably (b), (failure to communicate with the client)); RPC 3.2 (failure to expedite litigation); and RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation).

         The complaint in DRB 18-113 charged respondent with violations of RPC 1.1(a); RPC 1.3 (lack of diligence); RPC 5.5(a)(1) (practicing while temporarily suspended) and (2) (assisting a nonlawyer in the unauthorized practice of law); RPC 8.4(c); and RPC 8.4(d) (conduct prejudicial to the administration of justice).

         For the reasons set forth below, we recommend no further discipline.

         Respondent was admitted to the New Jersey bar in 1999. He has an extensive disciplinary record, including a history of ineligibility to practice law for failure to pay the annual fee to the New Jersey Lawyers' Fund for Client Protection (the Fund). His periods of ineligibility were September 25, 2000 to February 11, 2002; September 24, 2007 to April 21, 2009; and September 27, 2010 to June 23, 2011.

         Respondent was temporarily suspended twice for failure to comply with five fee arbitration determinations. In re Palfy, 212 N.J. 331 (2012) (effective October 26, 2012) and In re Palfy, 214 N.J. 110 (2013). He also was temporarily suspended for his failure to cooperate with disciplinary authorities. In re Palfy, 214 N.J. 105 (2013).

         Subsequently, on November 20, 2014, respondent received a censure for recordkeeping violations and for failing to cooperate with disciplinary authorities. In re Palfy, 220 N.J. 32 (2014).

         On March 26, 2015, respondent was suspended for three months for failing to file an affidavit of compliance, as required by IL 1:20-20, for failing to cooperate with disciplinary authorities, and for engaging in conduct prejudicial to the administration of justice. The Court ordered that respondent remain suspended until he complies with the fee arbitration determinations and pays the ordered sanctions. In re Palfy, 221 N.J. 208 (2015).

         Finally, on July 22, 2016, respondent was suspended for three years for grossly mishandling eight client matters; knowingly practicing while ineligible; lack of candor toward a tribunal; failure to obey court orders; failure to maintain a bona fide office; misrepresentations to clients and to the court; and conduct prejudicial to the administration of justice. In each of the eight matters, respondent was hired to handle bankruptcy petitions on behalf of his clients. He repeatedly allowed those petitions to be dismissed for failure to provide proper documents, succeeded in reinstating the petitions, and then allowed them to be dismissed again for the same deficiencies. In re Palfy, 225 NJ. 611 (2016).

         We now turn to the facts of each matter.

         DRB 18-011

         On February 15, 2017, respondent received notice that the DEC hearing would occur on March 18, 2017. On February 22, 2017, he requested an adjournment, representing that he would be unable to attend the hearing because of medical difficulties and pending doctors' appointments. On March 3, 2017, the hearing panel chair received a letter from respondent's health care provider, confirming that respondent's medical appointment was scheduled for March 9, 2017 - nine days prior to the scheduled hearing. The panel determined to deny respondent's request for an adjournment. Respondent did not appear for the hearing.

         The Leonardo Lengua Matter

         On September 28, 2012, Leonardo Lengua retained respondent to defend him in a New York civil matter. The fee agreement provided for a $3, 500 retainer. The record is unclear regarding the payment of that $3, 500. The complaint alleges that Lengua paid respondent in three installments on September 27, October 5, and December 10, 2012, but lists only the dates of payments without corresponding amounts. In a letter to respondent, Lengua's subsequent counsel, Neely Moked, claims that Lengua paid respondent a total of $2, 000.

         Respondent accepted the representation, although he was not a licensed attorney in New York. During that representation, effective October 26, 2012, respondent was temporarily suspended from the practice of law in New Jersey.

         Lengua did not appear at the ethics hearing. Instead, Moked testified about the events, based on information she had received from Lengua. Specifically, on September 28, 2012, during the initial consultation, respondent provided Lengua with a draft answer and affirmative defenses with counterclaims, but with an incorrect case caption. At some point, respondent also provided Lengua with a cover letter, dated December 27, 2012, with the correct case caption. That letter purported to enclose an answer, affirmative defenses, and counterclaims.[1] Respondent signed the letter and included the moniker, "Esq." The record contains no indication of any other work respondent may have performed for Lengua.

         Relying on his accountant for assistance, Lengua eventually filed a pro se answer to the complaint against him in New York. Lengua failed to plead potential affirmative defenses available to him. Subsequently, the plaintiff filed a summary judgment motion. At that time, in February 2013, Lengua retained Moked to replace respondent.

         Moked further testified that, after hiring respondent, Lengua had difficulty contacting him. Lengua also expressed his frustration that he had paid respondent a large amount of money, but had no communication with him.

         Moked attempted to assist Lengua in his defense of the summary judgment motion; however, the plaintiff was eventually awarded approximately $50, 000. Moked also attempted to contact respondent herself, in an effort to recover the monies Lengua had paid him. Upon reviewing respondent's papers, provided to her by Lengua, Moked became concerned that they were "sloppy" and that respondent "didn't know what he was doing." She attempted to contact respondent several times, via letters and telephone calls, to no avail.

         The complaint charged respondent with violations of RPC 1.1(a) and (b), RPC 1.4(b), RPC 3.2, and RPC 8.4(c).

         The ...

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