In The Matter Of Jack Barry Phillips An Attorney At Law
District Docket No. XIV-2017-0501E
A. Brodsky Chief Counsel.
C. Frost, Chair.
Honorable Chief Justice and Associate Justices of the Supreme
Court of New Jersey.
matter was before us on a certification of the record, filed
by the Office of Attorney Ethics (OAE), pursuant to R,
l:20-4(f). The two-count formal ethics complaint charged
respondent with the knowing misappropriation of "at
least $65, 146.84" in trust funds, a violation of
RPC 1.15(a) (failure to safeguard funds) and the
principles established in In re Wilson, 81 N.J. 451
(1979); RPC 1.15(c) (failure to keep disputed funds separate
and intact until the dispute was resolved); RPC
8.4(b) (committing a criminal act that reflects adversely on
the lawyer's honesty, trustworthiness, or fitness as a
lawyer in other respects); RPC 8.4(c) (conduct
involving dishonesty, fraud, deceit or misrepresentation; and
RPC 8.1(b) (failure to cooperate with disciplinary
recommend respondent's disbarment for his knowing
misappropriation of the funds at issue.
was admitted to the Florida bar in 1999 and to the New Jersey
bar in 2001. At some point, he maintained an office for the
practice of law in Haddonfield, New Jersey. Presently, he
resides in Arizona.
has no disciplinary history in New Jersey. In October 2009,
he was disbarred in Florida for abandoning a client and
failing to reply to inquiries from state disciplinary
2016, respondent became ineligible to practice law due to
nonpayment of the annual attorney assessment to the New
Jersey Lawyers' Fund for Client Protection. He retired
from the New Jersey bar in 2017.
of process was proper. Although the OAE had first attempted
service in May 2017, the United States Postal Service
returned all of the OAE's mailings, prompting the OAE to
withdraw the certification of the record. Subsequently, on
August 31, 2017, the OAE re-filed the disciplinary matter
under a new docket number and, once again, attempted to serve
respondent with the complaint.
September 8, 2017, Deputy Ethics Counsel HoeChin Kim
telephoned respondent after she had learned that he was in
"retired" status with the Judiciary. Presumably,
Kim asked respondent for a valid address for service of the
complaint, but he stated that he was "still working on
an address," and that he was currently residing in
Florida. Respondent stated that he would provide an address.
that day, respondent left a voicemail message, stating that,
because he had no address in Florida, the OAE should direct
its written communications to P.O. Box 91 in Haddonfield.
Respondent further stated that he would return to Haddonfield
"after Hurricane Irma."
September 11, 2017, the OAE sent respondent a copy of the
formal ethics complaint to the Haddonfield post office box
address, by regular and certified mail, return receipt
requested. On October 17, 2017, the certified letter was
returned to the OAE, marked "unclaimed,"
"unable to forward," and "return to
sender." The letter sent by regular mail was not
returned. Respondent did not file an answer.
October 20, 2017, the OAE sent a letter to respondent, at the
same Haddonfield post office box address, by regular and
certified mail, return receipt requested. The letter informed
respondent that, unless he filed an answer within five days,
the allegations of the complaint would be deemed admitted,
the record would be certified directly to us for the
imposition of a sanction, and the complaint would be deemed
amended to include a violation of RPC 8.1(b).
November 9, 2017, respondent sent an e-mail to Kim, in which
he detailed his history of physical and mental health
problems and homelessness. He claimed that, due to these
issues, he was unable to participate in his defense and
requested that the matter be continued until he could find a
lawyer to represent him. Because of respondent's
homelessness, he stated that "maybe the best place to
communicate" with him was the Haddonfield post office
replied to respondent's e-mail about three hours later.
She informed him, among other things, that a packet
containing the complaint was awaiting his pick-up at the post
office. She also informed respondent that, unless the OAE
received notice, by December 1, 2017, that he had retained
counsel or had applied for the appointment of pro
bono counsel, the OAE would certify the record to
us. The OAE heard nothing further from respondent.
December 13, 2017, the United States Postal Service returned
to the OAE the certified mailing of the November 9, 2017
service packet, marked "return to sender" and
"unable to forward." On December 21, 2017, the same
service packet sent by regular mail was returned to the OAE
with the same markings.
March 5, 2018, the OAE served respondent with notice of the
complaint via publication of a notice in the New Jersey
Law Journal and the Courier-Post.
March 29, 2018, respondent had not filed an answer to the
complaint. Accordingly, on that date, the OAE certified this
matter to us as a default.
to the facts alleged in the complaint. On June 28, 2010,
respondent's former wife, Deborah Catherine Peck,
signed articles of organization for CJ-VJ Realty Associates
(CJ-VJ), which were filed with the Florida Secretary of
State. On that same date, Peck signed an enabling resolution,
which authorized respondent "to take such action as is
necessary to authorize and execute documents."
29, 2010, Peck signed the CJ-VJ operating agreement, which
identified Peck as the initial member and represented that
she had made a $50, 000 capital contribution to CJ-VJ. In
addition, the agreement identified the ownership percentages
of CJ-VJ as follows: 39% to Peck, 30% to Catherine
Peck-Phillips (Catherine), 30% to Virginia Peck-Phillips
(Virginia), and 1% to respondent.
other things, paragraph 15 of the operating agreement
identified and described the fiduciary duties of CJ-VJ's
members. In respect of the duty of loyalty, the agreement
states, in pertinent part:
A member's and manager's duty of loyalty to CJ-VJ
REALTY ASSOCIATES, LLC is limited to the following:
(a) To account to CJ-VJ REALTY ASSOCIATES, LLC and to hold as
trustee for it any property, profit, or benefit derived by
the member or manager in the conduct or winding up of CJ-VJ
REALTY ASSOCIATES, LLC's business or derived from a use
by the member of the LLC's property, including the
appropriation of a LLC's opportunity
28, 2010, Peck signed an enabling resolution that empowered
respondent to "authorize and execute documents." On
an unspecified date, respondent replaced Peck as the
LLC's managing member.
September 27, 2013, the Florida Secretary of State
administratively dissolved CJ-VJ, for failure to file an
annual report or to pay the filing fee. On February 26, 2014,
Peck filed a voluntary Chapter 7 petition in the United
States Bankruptcy Court for the Southern District of Florida
(bankruptcy court), which was consolidated with thirty-three
other pending cases. Deborah C. Menotte, Esq., was appointed
trustee for the group.
Peck's bankruptcy petition, she represented that she
owned a 39% interest in CJ-VJ, which, in turn, owned certain
real property in Palm Beach County, Florida (Palm Beach
property). Nearly a year later, on February 4, 2015, Oleg
Ruddy and respondent, as the managing member of CJ-VJ,
entered into an "'AS IS' Residential Contract
For Sale And Purchase" of the Palm Beach property.
February 17, 2015, respondent sent the following e-mail to
the title agent and real estate broker, who had inquired
about an operating agreement for CJ-VJ:
Statement regarding operating agreement. Florida does not
require an operating agreement, and since this is just an LLC
within the family, we never made one. Deborah Peck is my ex