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 practice in this state shall file a biennial registration statement with the administrative office of the courts. The biennial registration fee shall be $375. Generally speaking, lawyers who do not adhere to the registration and related requirements for several biennial periods will be suspended.
The case of Stanley L. Chin, however, was unusual. Chin, an 80-year-old lawyer, admittedly failed to register, pay his biennial registration fee, and earn the requisite CLE credits, for more than 30 years.1 In light of those undisputed facts, and Chin’s default in responding to the Departmental Disciplinary Committee’s (DDC) motion, on April 29, 2014, the First Department granted the motion, pursuant to Judiciary Law sections 90(2) and 468-a, and 22 NYCRR §1500.24,2 and suspended Chin indefinitely (“until further order of the Court”).
Heretofore, when New York attorneys practicing in the First Department disregarded their biennial registration obligations (and the CLE certifications that go with them), the court adopted a practice of periodic mass “administrative” suspensions with notice by publication.3 Frequently, the delinquent respondents are lawyers who have retired, moved out of state, become ill, or for whatever reason failed to notify the Office of Court Administration (OCA) of their change in status or location (and often mail is not forwarded).
Any such “administratively” suspended lawyers who wished to be reinstated could do so simply by re-registering with OCA, paying all past due biennial registration fees, completing CLE requirements, and then making a motion to the court accompanied by proof of re-registration, with an appropriate affidavit containing an explanation and/or an apology.
By contrast, Chin appears to constitute a suspension that will require—if he ever reapplies—a full-blown reinstatement proceeding in accordance with 22 NYCRR §603.14.
Misconduct and Defalcation
Two recent Second Department cases are noteworthy for their leniency with respect to conduct which that court had traditionally treated far more harshly. Matter of Alfred C. Jones5 involved 10 charges of professional misconduct, all of which were sustained. They included, inter alia: misappropriation of escrow funds; false representation to the Grievance Committee; failure to maintain proper accounting records and render appropriate accounts; neglect; engaging in a conflict of interest; and, improperly soliciting loans from a client. Alfred Jones was suspended for two years, a disciplinary sanction that, as noted, is historically quite lenient for such extensive misconduct.5
Matter of Samuel A. Ehrenfeld6 is also unusual in light of earlier Second Department conversion cases.7 Samuel Ehrenfeld concededly converted approximately $25,000 in client funds (entrusted to him as a real estate down payment) via a series of defalcations over a three-month period. The court considered “substantial mitigating factors” and, notwithstanding the seriousness of the misconduct and a prior Letter of Caution, imposed only a public censure.8
Even if Jones and Ehrenfeld are exceptions to the generally severe results of misappropriation cases, lawyers should nonetheless be reminded that the failure to maintain escrow funds intact and to properly account, even if a result of sloppy bookkeeping or negligence, can result in a substantial suspension in other Departments, and perhaps in future Second Department cases.
Collateral Estoppel
The Third Department imposed a public censure based upon a U.S. District Court’s prior determination that Jill Dunn made false declarations about the existence of a private annuity agreement which was critical to issues before the court.9 The Magistrate Judge had sanctioned Dunn pursuant to F.R.C.P. Rule 11, 28 U.S.C. §1927, and the court’s inherent power. When Dunn sought to appeal from the district court’s order imposing sanctions, the U.S. Court of Appeals for the Second Circuit dismissed her appeal as “premature.”
Subsequently, the matter was referred to the Third Department’s Committee on Professional Standards (COPS). When COPS asserted the doctrine of collateral estoppel, Dunn argued that COPS could not satisfy the “full and fair opportunity to litigate” prong of the collateral estoppel test because only final orders or judgments may be given collateral estoppel effect in subsequent proceedings, and that orders or judgments which cannot be appealed do not have preclusive effect.
Although the Third Department rejected that contention, the New York Court of Appeals granted leave to appeal by order dated Feb. 18, 2014.10 Thus, for the first time, the Court of Appeals will have an opportunity to broadly consider the doctrine of collateral estoppel in a disciplinary context.
Among other issues, the Court of Appeals may address whether the doctrine should apply at all to attorney disciplinary cases—given that collateral estoppel with respect to prior civil adjudications is not mentioned in the disciplinary procedural rules of any of the four Departments.11 As noted, the Court of Appeals will also decide more specifically whether the requirement of “full and fair opportunity to litigate” is satisfied where, as here, the lawyer was not afforded an opportunity to appeal from sanctions ordered in the earlier case (because the order was non-final) prior to the imposition of discipline. Stay tuned.