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In re La Russo

Supreme Court of New Jersey

July 15, 2019

In the Matter of Anthony J. La Russo An Attorney at Law

         District Docket Nos. XIV-2017-0475E and XIV-2018-0325E.

          Ellen A. Brodsky Chief Counsel


          Bonnie C. Frost, Chair Judge.

         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 having violated RPC 1.5(a) (unreasonable fee), RPC 1.5(b) (failure to set forth, in writing, the basis or rate of the fee), RPC 1.7(a)(2) (concurrent conflict of interest), RPC 1.15(d) (failure to comply with the recordkeeping requirements of R. 1:21-6), RPC 1.16(d) (failure to notify the client, in writing, of termination of representation), RPC 4.1(a)(1) (false statement of material fact or law to a third person), RPC 8.1(a) (false statement of material fact to a disciplinary authority), and RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation).

         For the reasons set forth below, we recommend respondent's disbarment. In our view, respondent is a serial self-dealer who preys on and exploits the bereaved. Moreover, it is clear that he is unwilling to learn from prior mistakes and, thus, refuses to conform his conduct to that required of a member of the New Jersey bar.

         Respondent was admitted to the New Jersey bar in 1969. At the relevant times, he maintained an office for the practice of law in West Caldwell.

         In 2007, the Court censured respondent for engaging in conflicts of interest in approximately forty-five matters, from 2000 through 2004. In re La Russo, 190 N.J. 335 (2007) (La Russo I). As detailed below, the facts in LaRusso I are nearly identical to the facts of this case.

         In 2012, the Court censured respondent for gross neglect, pattern of neglect, lack of diligence, and conflicts of interest in respect of four real estate loan transactions. In re La Russo, 212 N.J. 108 (2012) (La Russo II).

         On January 10, 2019, the Court temporarily suspended respondent from the practice of law. In re La Russo, __ N.J.__ (2019). He remains suspended to date.

         Service of process was proper. On August 30, 2018, the OAE sent a copy of the formal ethics complaint to respondent's office address, by regular and certified mail, return receipt requested. On September 7, 2018, the OAE received the return receipt, which had been signed by L. Leven. The letter sent by regular mail was not returned.

         Also, on September 7, 2018, Larry Leven, Esq., who shared office space with respondent, told the OAE that he had been taking respondent's office mail to respondent at his home on a weekly basis.

         On October 12, 2018, the OAE sent a letter and a copy of the complaint to respondent at his home and office addresses, by regular and certified mail, return receipt requested. The OAE informed respondent that, unless he filed an answer to the ethics complaint by October 19, 2018, the matter would be certified directly to us for the imposition of discipline.

         On October 15, 2018, C. Ruanne accepted delivery of the mail sent to respondent's home address. The letter sent by regular mail was not returned.

         On October 31, 2018, Leven informed the OAE that, for the past four weeks, respondent had been going to his office one day per week. By the following day, respondent still had not filed an answer, and the time within which he was required to do so had expired. Accordingly, the OAE certified this matter to us as a default.


         This case arises from respondent's attempt to continue engaging in the unethical conduct for which he received a censure in La Russo I. In short, respondent, who performed collection work for several New Jersey funeral homes, perpetrated a scheme whereby the beneficiaries of deceased members of the State-administered Public Employees' Retirement System (PERS) paid respondent to ensure that his funeral home clients received payment for undertaking the funeral arrangements of the deceased PERS members.

         In La Russo I, we found that, from 2000 to 2004, respondent had been performing collection work for several New Jersey funeral homes, including the Perry Funeral Home (Perry) in Newark. In the Matter of Anthony J. La Russo, DRB 06-343 (March 30, 2007) (slip op. at 2-3). During that time, the funeral homes - notably Perry - referred to respondent forty-five beneficiaries of deceased PERS members. Id. at 3. The referrals were made while the beneficiaries were at the funeral homes making final arrangements for their loved ones. Once it became known that a beneficiary did not have the means to pay for the arrangements, a funeral home representative called respondent, who then faxed to the funeral home for the beneficiary's signature a retainer agreement and a form letter of representation addressed to the State. Ibid.

         The retainer agreement provided that the beneficiary was hiring respondent to process a claim for life insurance or death benefits in order to "secure payment of the balance due" to the funeral home and that, if the benefits were not promptly paid, the beneficiary would pay the funeral bill with personal funds. Id., at 4. The agreement contained an acknowledgement that the beneficiary was entitled to retain an attorney of his or her choice but that the beneficiary had chosen respondent to whom the beneficiary would pay $350 for his services. Id. at 4-5.

         The letter of representation, which purportedly was written by the client and notarized by funeral home personnel, stated that the beneficiary had retained respondent to process and receive payment of the "life insurance or death benefits" for the purpose of securing payment of the funeral bill and that the State was authorized to remit payment of the benefits to respondent, albeit payable to the beneficiary. Id. at 4. The letter concluded by stating that "this arrangement may not be revoked by me without written consent of my said attorney." Id. at 4. Respondent admitted that the "non-revocability clause" was not legally binding but stated that he had used it "for effect." Ibid.

         We found that respondent's representation of the PERS beneficiaries for the sole purpose of obtaining their benefits to pay for funeral expenses, while respondent also served as attorney for the funeral homes, constituted a conflict of interest under RPC 1.7(a)(2). Id. at 11. Specifically, his representation of the PERS beneficiaries was materially limited by his responsibilities to the funeral homes, as well as by his own interests - the collection of a legal fee. Ibid.

         Further, we found that respondent did not comply with the requirements of RPC 1.7(b)(1), which permits an attorney to proceed with a representation proscribed by RPC 1.7(a) if, after full disclosure and consultation, the attorney obtains informed, written consent from the client. Id. at 13. In this regard, we found that the "waiver" language in the retainer agreement was "wholly insufficient." Ibid.

         We concluded our decision in La Russo I by cautioning respondent against engaging in these types of conflicts in the future. Id. at 15. Rather than heed our warning, respondent merely modified both the retainer agreement and letter, and continued the practices that we and the Court had condemned in La Russo I. We are now called upon to assess the propriety of his modifications.

         Specifically, respondent replaced the retainer agreement with an "Authorization and Waiver of Conflict of Interest" form (waiver form). He replaced the letter of representation with an "Authorization Letter." Although the documents varied in some respects, they were nearly identical to the documents in La Russo I, except that respondent was no longer identified as the beneficiary's lawyer; no legal fee was mentioned; and the "waiver" no longer purported to be irrevocable.

         In the matter now before us, the OAE investigated respondent's representation of Perry, in addition to the Chapels of Eden Funeral Home (Eden) and Churchman Funeral Home (Churchman). According to the formal ethics complaint, for some time, Prudential Insurance Company (Prudential) had been the life insurance carrier for the State Division of Pensions and Benefits (Division). PERS beneficiaries often received their benefits in the form of a book of Prudential Alliance checks, which designated the account holder as follows:

[Name of the beneficiary] C/O Anthony J. La Russo, Esquire 175 Fairfield Ave. Unit 5-A West Caldwell, N.J. 07006


         The OAE interviewed thirteen beneficiaries who had made funeral arrangements with the Eden, Perry, and Churchman funeral homes. The complaint details the experiences of six of them. We now turn to the facts pertaining to each of the three funeral homes.

         The Eden Matter

         In 2014, respondent provided a waiver form to Eden's owner, Robert Brown. Brown presented the form to PERS beneficiaries who had contracted with Eden to undertake their decedents' funeral arrangements. The form stated that the beneficiary had authorized respondent to process the beneficiary's claim to the Division in order to secure payment of the balance owed to Eden for the decedent's funeral and burial.

         The waiver form continued:

I agree to cooperate to allow for prompt processing of my claims. I agree to pay the funeral bill from my personal funds, if these benefits are not sufficient, or if the benefits are not promptly paid to me for any reason.
I am aware that Mr. La Russo is attorney for the Chapels of Eden Funeral Home, LLC, and that he does not represent me. I agree that I will immediately give written notice to Mr. La Russo and to the Chapels of Eden Funeral Home, LLC if I wish to revoke this authorization. I agree that, upon written demand, with or without cause, Chapels of Eden Funeral Home, LLC is entitled to immediate payment.
I have had sufficient opportunity to consult an attorney of my choice, and to make other arrangements for payment of the bill, or to arrange ...

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