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In re Rabbat

Supreme Court of New Jersey

January 3, 2019

In The Matter Of Victor K. Rabbat An Attorney At Law

          Ellen A. Brodsky Chief Counsel

          DECISION

          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 certification of the record filed by the Office of Attorney Ethics (OAE), pursuant to R. 1:20-4(f). The formal ethics complaint charged respondent with violations of RFC 1.15(a), and the principles of In re Wilson, 81 N.J. 451 (1979) and In re Hollendonner, 102 N.J. 21 (1985) (knowing misappropriation); RFC 3.4(c) (knowingly disobeying a court order); RFC 8.1(b) (failure to cooperate with disciplinary officials); RFC 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) (engaging in conduct involving dishonesty, fraud, deceit or misrepresentation); and RPC 8.4(d) (engaging in conduct prejudicial to the administration of justice).

         For the reasons set forth below, we determine that respondent knowingly misappropriated client funds and recommend his disbarment.

         Respondent was admitted to the New Jersey bar in 1984. At the relevant times, he maintained an office for the practice of law in Totowa. On March 22, 2012, he received an admonition for gross neglect and lack of diligence, after he failed to serve a complaint on the defendant within the time prescribed by the court. In the Matter of Victor K. Rabbat, DRB 11-437 (March 22, 2012). Additionally, respondent was suspended for three years, effective April 8, 2017, for the negligent misappropriation of client funds. In re Rabbat, 228 N.J. 274 (2017). Respondent remains suspended to date.

         Service of process was proper in this matter. On May 1, 2018, the OAE sent a copy of the complaint, by certified and regular mail, to respondent's home address. The certified mail was returned on May 29, 2018, with the notation "return to sender, unclaimed, unable to forward." The regular mail was not returned. The OAE sent a follow-up letter on June 12, 2018, via certified and regular mail, informing respondent that, if he failed to file an answer to the complaint, its allegations 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 charge of a violation of RPC 8.1(b). The certified mail return receipt and regular mail were not returned. By letter dated June 17, 2018, respondent represented to the OAE that he would submit his answer by June 28, 2018. Respondent failed to file an answer to the complaint. On July 6, 2018, the OAE certified the record to us.

         We now turn to the allegations of the complaint.

         On June 4, 2016, Fannie Knight filed a complaint against respondent with the New Jersey Office of the Attorney General, Division of Consumer Affairs (DCA). She alleged that respondent received the settlement funds from her personal injury claim in connection with a January 2013 accident, failed to pay her medical obligations, and kept the entire settlement. On June 17, 2016, the DCA forwarded the complaint to the OAE.

         The OAE investigation revealed that respondent represented Knight in a personal injury matter. On March 2, 2016, during Knight's deposition, she agreed to settle with the insurance company for $12, 500. Respondent prepared the closing statement, which indicated that Knight owed $3, 843 in legal fees and $971 costs, totaling $4, 814, and that she was entitled to the $7, 686 balance. Respondent believed, based on discussions with one of Knight's medical providers, that the provider would be seeking $300 for Knight's failure to attend a medical examination. Thus, he included that expense in the closing statement. Respondent had not made an advance payment for this medical obligation.

         On April 1, 2016, respondent deposited a $12, 500 check, payable to Knight and his law office, into his trust account. He immediately disbursed $4, 814 to himself, which included the $300 medical provider fee. Respondent deposited this check into his business account. On June 13, 2016, he disbursed $7, 686 from his trust account to Knight, stating, in the cover letter, "I must still hold the $300 in the event I am contacted by [the doctor's office] demanding payment of the fee. I will wait until September 1, 2016." On returning the closing statement to respondent. Knight marked what she believed were the proper calculations and disputed respondent's retention of the $300. By letter dated May 18, 2016, respondent replied that he was obligated to continue to withhold the $300. Later, in his reply to the grievance, respondent acknowledged that he was holding the $300 "as a potential disbursement in the event a claim was formally made at a later time." On various dates between May 2016 and May 2017, respondent's business account reflected a negative balance. Ultimately, on May 15, 2017, after the grievance was filed, respondent returned the $300 to Knight. The complaint charged respondent with violations of RPC 1.15(a) and the principles of In re Wilson, 81 N.J. 451 and In re Hollendonner, 102N.J. 21, and RPC 8.4(c).

         The Knight matter prompted the OAE to conduct a thorough investigation of respondent's records in other matters. The investigation revealed that respondent represented Karen Ritacco in a workers' compensation matter. Horizon Blue Cross Blue Shield (BCBS) had a pending $13, 450.21 lien against Ritacco for medical treatment. Respondent told Ritacco that this obligation would need to be satisfied before the matter could be closed. After BCBS's claim was reduced, the trial court directed respondent to hold $12, 978.84, pending further compromise. The workers' compensation matter had settled for $37, 655.

         On April 11, 2016, respondent received a check made payable to "Trust Acct Victor Rabbat Esq" for $12, 978.84, which he deposited into his attorney trust account. Between May 25 and October 6, 2016, respondent issued five checks totaling $12, 500 to "Rabbat Law Office." Four of the five checks referenced "Ritacco/G-373-09" and all of the checks were deposited into respondent's business account. At each of the times respondent moved money to his business account, the balance in the business account was either low or negative. Further, one week after each of the deposits to the business account, respondent spent the funds, reducing the balance to less than $100. The OAE determined that these payments, totaling $11, 609.18, were made from the business account for respondent's "personal or business purposes." Ritacco did not consent to respondent's use of the $12, 500.

         On November 7, 2016, respondent deposited a $12, 500 check from his business account into his trust account with the ...


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