Archive | Escrow Funds

‘Law Firm’ Discipline and Other Noteworthy Cases; Attorney Discipline

The trend toward leniency in Second Department escrow fund misappropriation cases, which I identified in a previous column,1 continued in Matter of Francis.2 In the Francis case, the respondent Marc A. Francis admitted that he received $10,000 in a fiduciary capacity on behalf of a client, but then drew approximately 14 checks and made additional transfers against […]

Reprinted with permission from the February 4, 2015 edition of the New York Law Journal ©2015  ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 – reprints@alm.com or visit www.almreprints.com.

  1. Hal R. Lieberman, “Recent Developments in Disciplinary Case Law,” NYLJ, Nov. 10, 2014.
  2. 117 A.D.3d 212 (2d Dept. 2014).
  3. 116 A.D.3d 13 (2d Dept. 2014).
  4. In 1996, New York, by adding “or law firm” to the introductory phrase of DR 1-102, became the first jurisdiction in the United States-and still, with New Jersey, one of only two-that subjects law firms as entities to professional discipline.
  5. 118 A.D.3d 54 (2d Dept. 2014).

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Recent Developments in Disciplinary Case Law

In 2013-2014, the New York appellate courts handed down a number of noteworthy disciplinary decisions. The following is a summary and brief commentary with respect to several of those cases that, in the author’s view, deserve to be highlighted. Registration Requirement New York Judiciary Law §468-a (Biennial Registration of Attorneys) provides that attorneys admitted to […]

Reprinted with permission from the November 10, 2014 edition of the New York Law Journal ©2014 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 – reprints@alm.com or visit www.almreprints.com.

Endnotes:

1. Matter of Chin, 118. A.D.3d 61 (1st Dept. 2014).

2. New York Judiciary Law §90(2) provides in pertinent part:

2. The supreme court shall have power and control over attorneys and counsellors-at-law and all persons practicing or assuming to practice law, and the appellate division of the supreme court in each department is authorized to censure, suspend from practice or remove from office any attorney and counsellor-at-law admitted to practice who is guilty of professional misconduct, malpractice, fraud, deceit, crime or misdemeanor, or any conduct prejudicial to the administration of justice; and the appellate division of the supreme court is hereby authorized to revoke such admission for any misrepresentation or suppression of any information in connection with the application for admission to practice.

New York Judiciary Law §468-a (Biennial Registration of Attorneys provides:

5. Noncompliance by an attorney with the provisions of this section and the rules promulgated hereunder shall constitute conduct prejudicial to the administration of justice and shall be referred to the appropriate appellate division of the supreme court for disciplinary action.

NYCRR §1500.23 (Reporting Requirements) provides:

(a) Attorney obligations. Each attorney subject to New York’s continuing legal education requirements shall retain the certificate of attendance or other documentation required by the board for each approved education course, program or activity for at least four years from the date of the course, program or activity.

(b) Certification. Except as otherwise authorized by this Part, each attorney subject to New York’s continuing legal education requirements is required to certify along with the submission of his or her biennial attorney registration statement that the attorney has satisfactorily completed 24 credit hours of continuing legal education for the current biennial reporting cycle and that the attorney has retained the certificates of attendance or other documentation required by the CLE board for the accredited courses, programs or activities.

3. See, e.g., Matter of Attorneys in Violation of Judiciary Law §468-a, 64 A.D.3d 187 (1st Dept. 2009); see also Matter of Attorneys in Violation of Judiciary Law §468-a, 230 A.D.2d 366 (1st Dept. 1997); 240 A.D.2d 106 (1st Dept. 1998); 247 A.D.2d 158 (1st Dept. 1998); 257 A.D.2d 127 (1st Dept. 1999); 36 A.D.3d 34 (1st Dept. 2006); 51 A.D.3d 1 (1st Dept. 2008). The description of these suspensions as “administrative” in nature is the author’s. Technically, the aforesaid matters describe a “disciplinary” proceeding, but, as noted infra, the reinstatement process is perfunctory and there is no requirement of which the columnist is aware requiring any such suspension be reported as “discipline.”

4. Matter of Jones, 118 A.D.3d 41 (2d Dept. 2014).

5. Matter of Jones, 118 A.D.3d at 42-46.

6. Matter of Ehrenfeld, 992 N.Y.S.2d 569 (2d Dept. 2014).

7. See, e.g., Matter of Dobkin, 21 A.D.3d 23 (2d Dept. 2005) (five-year suspension for not preserving escrow funds in two real estate transactions, notwithstanding that no client suffered financially).

8. Matter of Ehrenfeld, 992 N.Y.S.2d at 570.

9. Matter of Dunn, 111 A.D.3d 1019 (3d Dept. 2013).

10. Matter of Dunn, 22 N.Y.3d 861 (2014).

11. However, “collateral estoppel” as a general concept is broadly applied in other attorney disciplinary contexts, namely, where a lawyer is convicted of a crime [see 22 NYCRR §603.12 (1st Dept.); 22 NYCRR §691.7 (2d Dept.); 22 NYCRR § 806.7 (3d Dept.); 22 NYCRR §1022.21 (4th Dept.)] or has engaged in parallel misconduct in a foreign jurisdiction, i.e., reciprocal discipline [see 22 NYCRR §603.3 (1st Dept.); 22 NYCRR §691.3 (2d Dept.); 22 NYCRR §806.19 (3d Dept.); 22 NYCRR §1022.22 (4th Dept.)]. Collateral estoppel in the attorney disciplinary context with respect to prior civil adjudications has evolved in three of the four Departments, to varying degrees, as a result of case law. See, e.g., Matter of Slater, 156 A.D.2d 89 (1st Dept. 1990); Matter of Ryan, 189 A.D.2d 96 (1st Dept. 1993); Matter of Klarer, 66 A.D.3d 247 (2d Dept. 2009); Matter of Duffy, 117 A.D.3d 124 (2d Dept. 2014); Matter of Babigian, 247 A.D.2d 189 (3d Dept. 1998); Matter of Capoccia, 32 A.D.3d 189 (3d Dept. 2000).

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The ‘Galasso’ Case and the Duty of Supervision

On Feb. 21, 2012, a unanimous panel of the Appellate Division, Second Department, suspended a Long Island attorney, Peter J. Galasso of Galasso, Langione, Catterson & LoFrumento, for two years due to his failure to adequately supervise his brother, who stole $4 million from the firm’s client escrow account.1 The decision has since garnered a […]

Reprinted with permission from the May 30, 2012 edition of the New York Law Journal ©2012 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 – reprints@alm.com or visit www.almreprints.com.

  1. Matter of Galasso, 94 A.D.3d 30 (2d Dept. 2012).
  1. See Karger, the Powers of the New York Court of Appeals, Scope of Review, §2(b), p. 10 (3d ed. 1997). The Court of Appeals generally is a court of limited jurisdiction. That jurisdiction is further limited with respect to disciplinary matters due to New York’s unique Constitutional scheme, in which the Appellate Divisions are designated courts of original jurisdiction for disciplinary cases. As a matter of comity, the Court of Appeals rarely hears discipline matters. Those cases it does hear involve very significant questions of law or of due process.
  2. Affirmation of Matthew Lee-Renert for the Grievance Committee for the Ninth Judicial District, Opposing Application for Leave to Appeal and for Stay of Enforcement.
  3. Matter of Linn, 200 A.D.2d 4 (2d Dept. 1994); Matter of Sykes, 150 A.D.2d 126 (2d Dept. 1989); Matter of Pollack, 142 A.D.2d 386 (1st Dept. 1989); Matter of Ponzini, 259 A.D.2d 142 (2d Dept. 1999), modified on reargument,  268 A.D.2d 478 (2d Dept. 2000).
  4. Matter of Linn, 200 A.D.2d at 5-6.
  5. Matter of Sykes, 150 A.D.2d at 127.
  6. Matter of Pollack, 142 A.D.2d at 389.
  7. Matter of Ponzini, 259 A.D.2d at 148, modified on reargument, 268 A.D.2d 478.
  8. Affirmation of Grace D. Moran, attorney for Peter Galasso, in Support of Motion for Leave to Appeal, ¶27.
  9. Id. ¶28.
  10. Affirmation of Matthew Lee-Renert, supra note 3, ¶26.
  11. Id. ¶27.
  12. Id. ¶28
  13. Id. ¶29.
  14. Matter of Gayle, NYLJ, Feb. 29, 2012, page 2, col 3.
  15. Matter of Tambini, 77 A.D.3d 143, 149 (2d Dept. 2010); Matter of Iaquinta-Snigur, 30 A.D.3d 67, 76 (2d Dept. 2006)Matter of Ryan, 264 A.D.2d 128, 135 (2d Dept. 2000).
  16. Matter of Galasso, supra note 1.
  17. Affirmation of Matthew Lee-Renert, supra note 3, ¶9.

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Challenges in Handling Other People’s Money

Managing Client or Third-Party Funds Requires Close Study of Fiduciary Accounting Rules One of the saddest things I have encountered during nearly 20 years of practice in the field of legal ethics and professional discipline is the demise of a career in law — literally, someone’s life work — because of sloppiness, ignorance, or the inability […]

Reprinted with permission from the November 10, 2003 edition of the New York Law Journal ©2003 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 – reprints@alm.com or visit www.almreprints.com.

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How to Avoid Common Ethics Problems

Small Firms and Solos Are Often Subject to Disciplinary Complaints and Malpractice Claims Every year literally thousands of New York attorneys are recipients of client disciplinary complaints, and many are also sued for malpractice. The vast majority of these respondents (to use the disciplinary parlance) are small firm and solo practitioners. Even more ominously, the numbers […]

Reprinted with permission from the October 28, 2002 edition of the New York Law Journal ©2002 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 – reprints@alm.com or visit www.almreprints.com.

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