In re Fagan

58 A.D.3d 260, 869 N.Y.S.2d 417
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 11, 2008
StatusPublished
Cited by16 cases

This text of 58 A.D.3d 260 (In re Fagan) 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 Fagan, 58 A.D.3d 260, 869 N.Y.S.2d 417 (N.Y. Ct. App. 2008).

Opinion

OPINION OF THE COURT

Per Curiam.

Respondent Edward Fagan was admitted to the practice of law in the State of New York by the Third Judicial Department on February 23, 1988, under the name Edward Davis Fagan. At all times relevant to this proceeding, he has maintained an office for the practice of law within the First Judicial Department.

The Departmental Disciplinary Committee now seeks an order pursuant to 22 NYCRR 603.4 (d) and 605.15 (e) (1) confirming the report of the Hearing Panel and disbarring the respondent from the practice of law in the State of New York. Respondent has filed a cross motion to compel the Committee to produce the record of the disciplinary proceedings, and a separate motion seeking, inter alia, to disqualify the Hearing Panel.

This disciplinary proceeding arises out of respondent’s representation of the plaintiffs in a lawsuit filed in the United States District Court for the Southern District of New York entitled Association of Holocaust Victims for Restitution of Artwork & Masterpieces, Also Known as “AHVRAM, ” et al. v Bank Austria Creditanstalt AG. et al., No. 04 Civ 3600. Respondent filed that $6.8 billion action in 2004 against various corporations, governmental entities and financial institutions alleging theft, retention, and sale of artwork looted during the Holocaust.

On August 19, 2005, Judge Shirley Wohl Kram dismissed the amended complaint in the case on the basis that it failed to assert any basis for federal court jurisdiction and that it constituted “little more than an end run” around a separate action which ended in a comprehensive settlement against defendant Bank Austria (Association of Holocaust Victims for Restitution of Artwork & Masterpieces v Bank Austria Creditanstalt AG., 2005 WL 2001888, *2, 2005 US Dist LEXIS 17411, *6 [SD NY 2005]). Judge Kram also noted that the plaintiff organization AHVRAM did not exist.

Judge Kram granted Bank Austria’s motion to sanction respondent, finding that the lawsuit, being “entirely without col- or,” was frivolous and in bad faith in violation of Federal Rules of Civil Procedure, rule 11. Judge Kram commented on, among other things, respondent’s lack of preparation and professionalism, his “glaringly inadequate filings,” and the fact that he deceived the court of “critical facts” concerning the previous [262]*262class action settlement against Bank Austria in which he had substantially participated (2005 WL 2001888, *4, 2005 US Dist LEXIS 17411, *12). Judge Kram stated that the pleadings contained flagrant misrepresentations, that respondent falsely claimed that he was a member of the plaintiff organization AHVRAM, and that respondent attempted to circumvent the Bank Austria settlement. Judge Kram further noted that respondent, through AHVRAM, was prosecuting actions against at least six governments or entities, and stated that the findings were “bolstered by the fact that this case appears to be part of a pervasive and disturbing trend.” (2005 WL 2001888, *5, 2005 US Dist LEXIS 17411, *18.) Finally, Judge Kram stated that respondent engaged in champerty in violation of Judiciary Law § 488 and Code of Professional Responsibility DR 5-103 (22 NYCRR 1200.22), based on her conclusion that respondent purchased interests in stolen artwork solely for the purpose of bringing lawsuits involving that artwork (2005 WL 2001888, *5, 2005 US Dist LEXIS 17411, *17). Judge Kram fined respondent $5,000 to be paid immediately to the court, and ordered him to pay his adversary’s litigation costs and fees.

Respondent moved for reconsideration of and a stay of the court’s rulings, which the court denied on November 17, 2005. The court further determined that respondent owed Bank Austria a total of $345,520.64 in litigation costs and expenses, and ordered him to immediately pay the $5,000 fine or post a bond. On December 1, 2005, judgment was entered against respondent and in favor of the defendant in the amount of $345,520.64. On January 13, 2006, the United States Court of Appeals issued a mandate dismissing respondent’s appeal of Judge Kram’s August 19, 2005 sanction order and deemed any pending motions moot.

In her November 17, 2005 decision denying reconsideration, Judge Kram commented further on respondent’s “flagrant, repetitive, and blatant” conduct and “careless abdication of his duties as a lawyer” (2005 WL 3099592, *6, 8, 2005 US Dist LEXIS 28880, *21, 27 [2005]). The court believed the only way to deter respondent from “bringing baseless suits in the future” was to hold him liable for the litigation fees and costs of his adversary (2005 WL 3099592, *7, 2005 US Dist LEXIS 28880, *26).

On April 2, 2007, this Court granted the Disciplinary Committee’s unopposed petition giving collateral estoppel effect to the findings of Judge Kram and concluded that respondent [263]*263engaged in conduct that violated DR 1-102 (a) (4) (conduct involving dishonesty, fraud, misrepresentation or deceit), (5) (conduct prejudicial to the administration of justice) and (7) (conduct that adversely reflects on fitness to practice), DR 5-103 (acquiring a proprietary interest in the subject of the litigation) and DR 7-106 (a) (conduct in disregard of rulings of the court) and (c) (7) (violating established rules of procedure) (22 NYCRR 1200.3, 1200.22, 1200.37).

A Hearing Panel held hearings on December 7 and 17, 2007 and January 9, 2008 to determine the appropriate sanction for respondent’s misconduct. After several applications by respondent for adjournments and for recusal of Panel members were rejected, respondent appeared before the Panel pro se, testified on his own behalf and called one witness.

The Committee argued that respondent had produced no proof that he had paid the $5,000 sanction imposed by Judge Kram or any part of the attorney’s fees and costs. The Committee also offered respondent’s disciplinary history as evidence in aggravation: (1) in 2002, respondent received a public reprimand in New Jersey (the equivalent of a censure in New York) for making misrepresentations to a client regarding the status of her case (172 NJ 407, 799 A2d 497 [2002]); (2) in 1994, Judge Michael Mukasey of the United States District Court, Southern District of New York, sanctioned respondent, also under Federal Rules of Civil Procedure, rule 11, for filing frivolous counterclaims and fined him $500 plus the opposing party’s attorney’s fees and costs; (3) in February 2007, Judge Viktor Pohorelsky of the United States District Court, Eastern District of New York, sanctioned respondent under Federal Rules of Civil Procedure, rule 45 (c) (1) for improperly issuing an unduly burdensome subpoena to a nonparty witness and ordered him to pay more than $14,000 in attorney’s fees and costs; (4) in August 2007, Judge Shira Scheindlin of the United States District Court, Southern District of New York, disqualified respondent from representing the plaintiffs in an action in part because of his personal bankruptcy and his admission that his financial future was related to the outcome of the litigation, and found that he had made false representations to the court, obtained an order of confidentiality from the court under false pretenses, and fined him $5,000. In that case (In re Ski Train Fire in Kaprun Austria on Nov.

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Bluebook (online)
58 A.D.3d 260, 869 N.Y.S.2d 417, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-fagan-nyappdiv-2008.