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In re Smith

Supreme Court of New Jersey

February 28, 2019

In The Matter Of John Churchman Smith, Jr. An Attorney At Law

          Argued: November 15, 2018

          Johanna Barba Jones appeared on behalf of the Office of Attorney Ethics.

          Respondent appeared pro se.


          Disciplinary Review Board 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 motion for reciprocal discipline filed by the Office of Attorney Ethics (OAE), pursuant to R. l:20-14(a). The motion arises from respondent's one-year suspension in Pennsylvania, based on a Joint Petition in Support of Discipline on Consent, for respondent's admitted violations of Pennsylvania's RPC 1.3 (lack of diligence), RPC 1.4(a)(3) (failure to keep a client reasonably informed about the status of a matter), RPC 1.4(a)(4) (failure to promptly comply with reasonable requests for information), RPC 1.15(b) (failure to hold funds separate from the lawyer's property, failure to identify or safeguard funds), RPC 1.15(e) (failure to promptly deliver funds to clients or third parties), RPC 1.15(h) (commingling funds in the trust account), RPC 8.4(b) (criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer), RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation), and Pa. R.D.E. 203(b)(3) (failure to complete annual registration requirements). By Order dated January 25, 2019, he was reinstated to active status in Pennsylvania.

         The OAE urges us to recommend respondent's disbarment. For the reasons expressed below, we agree with the recommendation.

         Respondent was admitted to the New Jersey and Pennsylvania bars in 1990. He has no history of discipline in New Jersey. Respondent has been ineligible to practice law in New Jersey since 2016 for failure to pay the annual assessment to the New Jersey Lawyers' Fund for Client Protection.

         On January 18, 2017, the Pennsylvania Office of Disciplinary Counsel (ODC) filed a "Joint Petition in Support of Discipline on Consent Under Rule 215(d), Pa.R.D.E." (petition). The petition set forth the facts giving rise to respondent's admission that he violated the above rules. The facts are as follows.

         During the relevant time, respondent represented in his Pennsylvania registration that he had three law offices - one in Marlton, New Jersey with the firm of Donald F. Manchel, one in Philadelphia, and the third in Bala Cynwyd, Pennsylvania, with the firm of Lowenthal & Abrams, P.C.

         Manchel, who was not admitted in New Jersey, referred client Jennifer Harley to respondent for a personal injury matter. Respondent filed a lawsuit on Harley's behalf in New Jersey.

         On October 10, 2013, respondent appeared at an arbitration proceeding, at which Harley was awarded $22, 500. In November 2013, respondent settled Harley's matter for the amount of the arbitration award, which was to be paid evenly by two defendants (Hong Huynh, d/b/a Angel Nails, and Cedar Trust Realty). Respondent and Manchel were due 33 1/3 percent of the settlement, together with costs.

         In a November 12, 2013 letter, respondent informed Harley about the resolution of the matter and enclosed a release for the $22, 500 settlement, which Harley executed and returned.

         From the gross settlement, respondent and Manchel were entitled to $7, 500 in fees, $938 in costs to Manchel, and $176.88 in costs to respondent, for a total of $8, 614.88, leaving a balance of $13, 885.12 for Harley.

         On December 12, 2013, respondent received $11, 250 on behalf of defendant Angel Nails, and deposited the funds in his PNC Bank IOLTA account. On his 2014-2015 Pennsylvania Attorney's Annual Fee Form, respondent failed to identify the PNC account as one in which he held client or fiduciary funds. Instead, he identified Manchel's IOLTA account as an account in which he held such funds.

         On December 18, 2013, respondent issued two checks from his IOLTA account: one to himself for $3, 166.88; the other to Manchel for $4, 938, totaling $8, 104.88. Thereafter, respondent was entitled to an additional $510 from the balance of the settlement he was yet to receive. On January 15, 2014, respondent issued a $2, 500 check to Harley from his IOLTA account. She was still entitled to receive $11, 385.12.

         On April 2, 2014, after receiving $11, 250, the balance of the settlement from Cedar Trust Realty, respondent deposited the check into his IOLTA account. Prior to that deposit, the account had a balance of $756.42. Following the deposit, respondent had sufficient funds to cover the $11, 385.12 owed to Harley and the balance of his fee, which was $510. Nevertheless, on June 13, 2014, respondent issued a check to himself from the IOLTA account for $2, 000, even though he was entitled to only $510. His account was, therefore, out of trust in the amount of $1, 490. On July 2, 2014, respondent issued another $4, 200 check to himself from the IOLTA account, increasing the shortage to $5, 690, the amount he had "misappropriated" for his own use.

         Respondent admitted that, at the time he issued the checks to himself, he knew he was not entitled to the additional $5, 690. Therefore, his ...

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