In re Burton

200 A.D.2d 324, 615 N.Y.S.2d 24, 1994 N.Y. App. Div. LEXIS 8007
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 28, 1994
StatusPublished
Cited by2 cases

This text of 200 A.D.2d 324 (In re Burton) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Burton, 200 A.D.2d 324, 615 N.Y.S.2d 24, 1994 N.Y. App. Div. LEXIS 8007 (N.Y. Ct. App. 1994).

Opinion

OPINION OF THE COURT

Per Curiam.

Respondent, Robert J. Burton, was admitted to the practice of law in New York by the Second Judicial Department on October 1, 1980. At all times relevant herein respondent has maintained an office for the practice of law within the First Judicial Department.

On or about September 10, 1991 respondent was served with a notice and statement of charges. The facts adduced before a Hearing Panel showed that respondent participated in a closing as to cooperative apartments. He represented several buyers who were business partners and he himself also had an interest. Apparently, the sellers attempted to thwart the closing and respondent was hard-pressed to obtain funds necessary to complete the transaction which had a "time is of the essence” deadline.

As of July 24, 1985, respondent’s escrow account had a balance of nearly $30,000. That balance included the following sums:

(a) $7,250 given to "Robert J. Burton, as escrow agent”, by Frederick C. Dunbar and Plave Dunbar on June 28, 1985 in connection with their purchase of an apartment.

(b) $5,398 given to "Robert J. Burton, Attorney Escrow Account” on May 5, 1985 by Solomon Revich as down payment on an apartment.

(c) In excess of $3,000 belonging to tenants who had made security deposits to Burton as their landlord.

Thereafter, on July 25, 1985, the date of the closing with the seller, respondent initially deposited almost $7,000 of his personal funds into his escrow account. He then wrote three checks on the escrow account which Citibank, upon respondent’s request, certified. On the same day, two other checks drawn by respondent on the escrow account cleared through the account. As a result of the transactions which took place in the escrow account on July 25, 1985, at the close of [326]*326business on that date, the balance of the escrow account was reduced to less than $1,000.

As a result of these transactions, respondent effectively withdrew the Dunbars’, Mr. Revich’s and the tenants’ funds from the escrow account.

After receiving funds from a client and business partner, respondent deposited them into his escrow account on July 30, 1985. This fully replenished the funds which had been withdrawn.

As a result of respondent’s actions he was charged with intentionally converting clients’ funds to his own use during the period July 25, 1985 to July 30, 1985, thereby engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Code of Professional Responsibility DR 1-102 (A) (4), and in conduct that adversely reflects on his fitness to practice law, in violation of DR 1-102 (A) (6) (Counts One, Two and Three).

Respondent, by depositing his own funds into his escrow account and failing to maintain the escrow account intact, was further charged with failing to preserve the identity of clients’ funds, in violation of DR 9-102 (A), and engaging in conduct which adversely reflects on his fitness to practice law, in violation of DR 1-102 (A) (6) (Count Four).

In an unrelated matter, in late 1985, respondent began negotiations on behalf of Pesochinsky, his client, to sell an apartment owned by Pesochinsky to Ray Azoulay. Azoulay had retained an attorney in connection with the negotiations.

On December 12, 1985, respondent met with Azoulay, at the latter’s request outside the presence of and without the knowledge or consent of, Azoulay’s attorney. Specifically, Azoulay stated that he had retained new counsel but wished to proceed with the conversation in that attorney’s absence.

At that meeting, respondent secured Azoulay’s acceptance of respondent’s modification or "qualification” of contracts of sale drafted by Azoulay’s former attorney.

On or about December 16, 1985 respondent commenced an action against Azoulay to enforce the "qualified” contracts. On December 16, 1985 respondent also notified Azoulay’s former attorney of his meeting with Azoulay. Respondent did not communicate with Azoulay’s new attorney until after December 24, 1985.

As a result of these actions respondent was charged with intentionally communicating during the course of his repre[327]*327sentation of a client with a party he knew to be represented by counsel on the subject of the representation without the prior consent of that party’s counsel, in violation of DR 7-104 (A), and with conduct which adversely reflects upon his fitness to practice law, in violation of DR 1-102 (A) (6) (Count Five).

The Hearing Panel declined to sustain Counts One, Two and Three to the extent those charges allege "dishonesty, fraud, deceit or misrepresentation”, because they concluded that respondent acted without venal intent. The Hearing Panel sustained Counts One, Two and Three, insofar as they allege that respondent engaged in conduct that adversely reflects on his fitness to practice law, in violation of DR 1-102 (A) (6) (subsequently [7], now [8]). The Hearing Panel further sustained Count Four, which alleges a violation of DR 9-102 (A) (commingling personal funds with escrow funds), and Count Five, which alleges violation of DR 7-104 (A) and DR 1-102 (A) (6) (subsequently [7], now [8]), based upon respondent’s negotiations with Azoulay, a party known to be represented by an attorney, without the prior consent of the attorney.

While two of the three clients whose funds were improperly used indicated after the fact that they would have given respondent their consent to use their funds, if asked, the Hearing Panel pointed out that no such ratification was provided from the tenants. Further, the Panel pointed out that the clients could not consent to the use of their escrowed funds. When parties to a real estate transaction agree that the lawyer of one party or another will hold money in escrow it is not either party’s money to disburse at will.

The Departmental Disciplinary Committee is now seeking an order confirming the Hearing Panel’s findings of fact and conclusions of law and imposing the Panel’s recommended sanction of suspension for a period of four years.

In a cross motion, respondent seeks an order confirming the Hearing Panel’s findings of fact and conclusions of law but disaffirming the recommended sanction. Respondent requests a sanction of either public censure or a lesser period of suspension.

We find that a review of the record indicates that there is ample evidence to support the Hearing Panel’s findings that respondent engaged in conduct which adversely reflects on his fitness to practice law, in violation of DR 1-102 (A) (6) (subsequently [7], now [8]); failed to maintain client funds intact and preserve the identity of client funds, in violation of DR 9-102 [328]*328(A); and communicated with a party known to be represented by a lawyer without prior consent of the lawyer, in violation of DR 7-104 (A) and DR 1-102 (A) (6) (subsequently [7], now [8]). Respondent also concedes that he is guilty of the violations found by the Hearing Panel.

No evidence was presented, however, in this case to indicate that respondent converted any of the clients’ and tenants’ funds to his own use or acted with venal intent.

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Related

Krohn v. Burton (In re Swift)
496 B.R. 89 (E.D. New York, 2013)
In re Fong
308 A.D.2d 19 (Appellate Division of the Supreme Court of New York, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
200 A.D.2d 324, 615 N.Y.S.2d 24, 1994 N.Y. App. Div. LEXIS 8007, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-burton-nyappdiv-1994.