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In re Klatch

Supreme Court of New Jersey

January 15, 2019

In The Matter Of Keirsten Klatch An Attorney At Law

          Argued: October 18, 2018

          Hillary K. Horton appeared on behalf of the Office of Attorney Ethics.

          Respondent's counsel 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.

         This matter was before us on a motion for reciprocal discipline, filed by the Office of Attorney Ethics (OAE), pursuant to IL 1:20-14, following the Supreme Court of Florida's March 9, 2017 imposition of a three-year suspension, retroactive to June 16, 2016, the effective date of respondent's suspension for contempt of court, by failing to comply with a subpoena issued by The Florida Bar. The three-year suspension was based on respondent's conditional guilty plea for consent judgment in which she admitted having violated the following Rules Regulating the Florida Bar: 4-1.2(a) (requiring a lawyer to abide by a client's decisions); 4-1.4(a) (informing a client of the status of the representation); 4-8.4(a) (violating or attempting to violate the Rules of Professional Conduct), 4-8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation), 4-8.4(g) (failing to respond to a disciplinary agency), 5-1.1 (a) (failure to hold in trust, separate from the lawyer's own property, funds and property of clients or third persons that are in the lawyer's possession in connection with a representation), 5-1.1(b) (application of trust funds or property to specific purpose), and 5-1.2(b) (minimum trust accounting records).

         The above Florida Rules correspond to the following New Jersey RPCs: 1.2(a) (abiding by a client's decisions concerning the scope and objectives of the representation); 1.4(b) (keeping the client reasonably informed about the status of a matter); 8.4(a) (violating, or attempting to violate, the RPCs); 8.1(b) (failure to cooperate with disciplinary authorities); 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation); 1.15(a) (failure to safeguard funds and commingling); and 1.15(d) (recordkeeping violations). No New Jersey RPC corresponds to Florida Rule 5-1.1(b). In addition, although Florida did not charge a violation of RPC 1.8(a) (business transaction with client), the OAE found the facts to fall within that Rule and, therefore, included it as a charged violation.

         Counsel for respondent has filed a motion to supplement the record with documents that were not part of the Florida record, discussed in more detail below. The OAE does not object to the motion. We determined to grant the motion.

         The OAE urges the imposition of a reprimand or censure for respondent's violation of all New Jersey RPCs, except RPC 8.4(a). Respondent seeks a reprimand.

         For the reasons set forth below, we determined to grant the motion for reciprocal discipline and impose a reprimand on respondent for her violation of the New Jersey RPCs identified above, except RPC 1.2(a) and RPC 8.4(a) and (c).

         Respondent was admitted to the New Jersey bar in 2004, the New York bar in 2008, and the Florida bar in 2011. She has not maintained an office in this state.

         Respondent has no disciplinary history in New Jersey. However, her license to practice law was revoked, on June 4, 2018, for her failure to pay the annual attorney assessment to the New Jersey Lawyers' Fund for Client Protection for seven consecutive years.[1]

         On November 1, 2017, following respondent's Florida suspension, the Supreme Court of New York, Appellate Division, Second Judicial Department, imposed reciprocal discipline of a three-year suspension, retroactive to June 16, 2016. In re Klatch, 62 N.Y.S.3d 536 (N.Y.App.Div. 2017).

         On October 1, 2018, Office of Board Counsel received respondent's motion to supplement the record. On October 3, 2018, the OAE informed Office of Board Counsel that it had no objection to the motion.

         The documents subject to the motion are (1) respondent's September 7, 2018 affidavit, which explains her version of the facts underlying the ethics charges, offers facts in mitigation of her conduct, and updates her compliance with the Supreme Court of Florida's suspension order; (2) a transcript of grievant Jose Carrasquillo's December 19, 2016 deposition in the Florida disciplinary proceeding; (3) a June 8, 2017 letter from respondent's treating psychologist, Robert Karpas, Psy.D.; and (4) a June 26, 2017 letter from Carol Mooshian, attesting to respondent's character. Because the additional information is illuminating in some respects, benign in others, and will not prejudice the OAE or this proceeding, we determine to grant the motion.

         The facts are as follows. During an unidentified period between 2010 and 2011, respondent was a paralegal with The Littlefield Law Group, a Florida law firm. Also, during the unidentified period, she became acquainted with Jose Carrasquillo, whom the firm represented in a wrongful death case, arising from his wife's August 2007 death during childbirth.

         In 2010, Carrasquillo asked respondent to assume his representation because, according to the Florida ethics complaint, his prior attorney, Linda Littlefield, had been disbarred. At the time, he was incarcerated in Florida, after having served time in New York for another offense. Carrasquillo wanted respondent to represent him because she had met with him "regularly" in both prisons and, thus, was familiar with the matter. At the time of Carrasquillo's request, respondent was a member of the New York bar. Although she had taken and passed the Florida bar examination, she had not yet been admitted to practice law in that state.

         On an unidentified date, respondent filed an appearance in the wrongful death action as Carrasquillo's attorney, p_ro hac vice. Thereafter, the case was settled for an amount not identified in the record.

         According to Carrasquillo, his net recovery was $100, 000. Because the Florida Department of Corrections did not permit inmates to keep or receive more than $5, 000 at any given time, respondent agreed to hold Carrasquillo's funds in trust.

         Over the years, on Carrasquillo's instruction, respondent made the following disbursements: $25, 000 to Carrasquillo's prison account; $30, 000 to cover respondent's legal fees in the contested guardianship proceeding, as well as legal fees owed to the attorney who represented Carrasquillo in his criminal matters; and an unspecified amount to cover certain expenses of his children.[2]

         In approximately 2013, Carrasquillo, who knew that respondent was "struggling outside," told her that, if she ever needed to borrow money, he would let her use his trust funds, but that she would have to let him know so that he would be aware of how much money was available to him. Carrasquillo also told respondent that she would have to repay him upon his release from prison. According to Carrasquillo, respondent declined the offer, stating that she was "good" and that she "cannot do that," and that she, nevertheless, would need his specific authorization before borrowing any of his funds.

         Carrasquillo testified that, after their discussion about the loan, respondent "disconnected," leaving him unable to communicate with her. Thus, in 2013, he filed a grievance with The Florida Bar. Once Carrasquillo learned that respondent was still holding his funds, he apologized for the "misunderstanding," they agreed that she would continue to hold the monies in trust until he was released from prison, and he withdrew the grievance.

         Sometime in October 2014, Carrasquillo asked respondent to e-mail some money to his prison account, as he needed the funds for his daughter. Respondent replied that she was out of town but that she would do so when she returned home. Carrasquillo heard nothing more from respondent and could not contact her. He, thus, filed another grievance with The Florida Bar.

         After Carrasquillo filed the second grievance, he and respondent agreed that she would disburse the trust funds to him in $5, 000 increments, as permitted by the Florida Department of Corrections. Thus, "the file was closed."

         In late 2015, Carrasquillo again complained that he had lost contact with respondent and that he "had no idea about his money." When The Florida Bar asked respondent to reply to Carrasquillo's allegations, she first stated that his funds were in her New York trust account, but that she would be transferring the monies to the Florida trust account. She then stated that the funds would remain in the New York trust account.

         On January 6, 2016, The Florida Bar asked respondent to provide both trust account numbers. Although she provided information pertaining to the Florida trust account, she failed to provide any information regarding the New York trust account. Further, respondent did not provide "any New York trust account records."

         Due to respondent's non-compliance with the Bar's request for the above information, on May 17, 2016, the Supreme Court of Florida (the Florida Court) held respondent in contempt of court and temporarily suspended her, effective June 16, 2016. Two days later, The Florida Bar filed an ethics complaint against respondent. She defaulted.

         Nearly six months later, on January 4, 2017, respondent entered a conditional guilty plea for consent judgment. Two days later, she testified at a final sanction hearing.

         At the hearing, respondent acknowledged that she had failed to provide The Florida Bar with the New York trust account information. According to respondent, she was uncertain whether she could disclose information pertaining to her New York clients.

         Respondent did provide The Florida Bar with a hand-written ledger for Carrasquillo, which, purportedly, recorded activity from 2011 until August 2014. The last notation, dated August 2014, reads: "total funds left: $21, 540.85." Despite the August 2014 notation, in 2012 and 2013, respondent had borrowed the full amount. According to respondent, when she borrowed the funds, she "misunderstood" that she first needed to ask Carrasquillo and/or inform him. Thus, she did neither.

         Carrasquillo admitted that there may have been a "misunderstanding" on respondent's part, that he bore her "no ill will," and that he did not want her to be disbarred. Loyal and devoted to respondent, Carrasquillo testified that, on many occasions, he told her that, if she "need[ed] anything," she should just ...

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