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In re Murphy

Supreme Court of New Jersey

April 30, 2019

In the Matter of Stephen Robert Murphy An Attorney At Law

         District Docket No. XIV-2017-0160E

          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 RPC 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), RPC 1.15(a) (failure to safeguard funds), RPC 1.15(d) and JL 1:21-6 (recordkeeping violations), RPC 8.1(b) (failure to cooperate with an ethics investigation), and RFC 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation).

         For the reasons set forth below, we recommend disbarment.

         Respondent was admitted to the New Jersey bar in 1999 and the Pennsylvania bar in 1998. On September 8, 2017, he was temporarily suspended from the practice of law for failure to cooperate with the ethics investigation in this matter. In re Murphy, 230 N.J. 346 (2017). He remains suspended to date.

         On August 25, 2014, respondent was declared ineligible to practice law for failure to pay the annual attorney assessment to the New Jersey Lawyers' Fund for Client Protection (CPF). He remains ineligible to date.

         Service of process was proper in this matter. On July 31, 2018, the OAE sent a letter and a copy of the complaint to respondent, by certified and regular mail, at his last known home address appearing in the attorney registration records. The certified mailing was returned marked "Return to Sender, Unclaimed, Unable to Forward." The regular mail was not returned.

         On September 7, 2018, the OAE sent a letter to respondent, to the same home address, also by regular and certified mail, informing him that, if he did not answer the complaint within five days of the date of the letter, the allegations of the complaint would be deemed admitted, the record in the matter would be certified directly to us for imposition of sanction, and the complaint would be amended to include a charge of a violation of RPC 8.1(b). The certified mail return receipt card was returned, signed on September 10, 2018, but the signature is illegible. The regular mail was not returned.

         The time within which respondent may answer the complaint has expired. As of September 27, 2018, the date of the certification of the record, respondent had not filed an answer.

         At all relevant times herein, respondent maintained the following accounts at TD Bank: an attorney trust account (ATA) and two attorney business accounts (ABA1 and ABA2).

         In April 2015, Jason James Maddonni and his partner, Ryan Macartney (also spelled "McCartney" in the record), retained respondent to represent them in the purchase of the "Shore Road Tavern." The sale documents identified the seller as Michael Fiedler, Executor for the Estate of Kathleen Woelfel-Fiedler.[1]

         On April 28, 2015, Maddonni issued a personal check for $20, 000, payable to "Law Offices of Stephen R. Murphy, Esq.," representing the required ten percent deposit for the transaction. On May 5, 2015, respondent deposited the check into his ATA. The $20, 000 deposit consisted of a bifurcated escrow; $6, 500 toward the purchase of the tavern real estate and the remaining $13, 500 for the purchase of the business and liquor license.

         On August 28, 2015, Fiedler sent respondent an e-mail withdrawing the offer of sale, after which Maddonni requested the return of his $20, 000 deposit. Respondent, however, informed Maddonni that he was required to maintain the funds in escrow for potential litigation over Maddonni's alleged failure to complete the purchase. Thus, respondent was required to maintain the $20, ...


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