In re Klein

231 A.D.2d 232, 660 N.Y.S.2d 136, 1997 N.Y. App. Div. LEXIS 7166
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 30, 1997
StatusPublished
Cited by4 cases

This text of 231 A.D.2d 232 (In re Klein) 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 Klein, 231 A.D.2d 232, 660 N.Y.S.2d 136, 1997 N.Y. App. Div. LEXIS 7166 (N.Y. Ct. App. 1997).

Opinion

OPINION OF THE COURT

Per Curiam.

The petition contains three charges of professional miscon[233]*233duct against the respondent. After a hearing, the Special Referee sustained all three charges. The Grievance Committee now moves to confirm, and the respondent cross-moves to disaffirm, the report of the Special Referee.

Charge One alleged that the respondent engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation, in violation of Code of Professional Responsibility DR 1-102 (A) (4) (22 NYCRR 1200.3 [a] [4]), conduct that adversely reflects on his fitness to practice law, in violation of Code of Professional Responsibility DR 1-102 (A) (8) (22 NYCRR 1200.3 [a] [8]), and conduct that is prejudicial to the administration of justice, in violation of Code of Professional Responsibility DR 1-102 (A) (5) (22 NYCRR 1200.3 [a] [5]), in connection with his handling of a bankruptcy matter in the United States Bankruptcy Court entitled In re Moses Stein, Debtor. The facts underlying Charge One are as follows:

1. In an "Extract of Bench Ruling Dismissing Chapter 13 Case and Imposing Sanctions on the Debtor’s Attorney” (hereinafter bench ruling) dated June 9, 1994, the Honorable Stuart M. Bernstein, United States Bankruptcy Judge, found that the respondent, the debtor’s attorney, engaged in improper conduct.

2. In the bench ruling, the court found that the respondent attempted to present an ex parte order to show cause to the court on or about March 28, 1994, which the court declined to entertain. The object of the order to show cause was to reimpose an automatic stay on the foreclosure sale of the debtor’s home.

3. The court further found that, when the respondent again presented the order to show cause in the presence of the bank’s attorney on or about March 30, 1994, he initially contended that a foreclosure sale of the debtor’s home was imminent, which was not the case since no sale had been scheduled.

4. The respondent then represented that the debtor’s confirmation hearing was scheduled for April 7, 1994, and that it was necessary to resolve the stay issue before then. Based on the respondent’s representation, the court scheduled the hearing on the debtor’s motion for April 6, 1994.

5. The court found that the respondent gave false testimony at the hearing on April 6, 1994, and that the respondent lied to cover his office's mistake in sending three checks for past-due mortgage payments to the bank’s attorneys rather than to the bank.

6. At the hearing on April 6, 1994, the court sanctioned the respondent for the aforementioned conduct, ordering him to [234]*234pay $500 to the bank. When the bench ruling was reduced to writing, some nine weeks later, the respondent still had not paid the sanction.

7. The court further found that, throughout the many proceedings in the Stein bankruptcy matter, the respondent failed to disclose that the chapter 13 trustee had moved before another United States Bankruptcy Court Judge, Judge Jeffrey Gallet, to dismiss or convert the matter pursuant to 11 USC § 1307 (c) (1) and (4) due to the debtor’s failure to appear at a "section 341” hearing and to deposit necessary funds with the trustee.

8. In the Bench ruling, the court noted that the trustee’s motion was returnable on April 7, 1994, the date that the respondent represented to the court as the date of the debtor’s confirmation hearing. On that date, however, neither the debtor nor the respondent appeared in response to the trustee’s motion or at the confirmation hearing. By an order dated April 7, 1994, Judge Gallet granted the trustee’s motion and dismissed the case.

9. The court also noted that the foreclosure sale was rescheduled for the end of April 1994. On April 26, 1994, on the heels of the previous dismissal and on the eve of the sale, the respondent, on behalf of the debtor, filed a second bankruptcy petition.

10. The court found that the second bankruptcy petition constituted an "abusive” chapter 13 filing that was not done in good faith, but to frustrate the legitimate rights of the bank. The court further found that the second petition flouted a prior order of the court granting conditional relief from the stay, caused the bank unnecessary expenses, and abused the bankruptcy process.

11. The court also found that the respondent falsely certified, in response to a question on the second bankruptcy petition, that the debtor had not filed a bankruptcy petition during the previous six years. The court found that the respondent knew, based on his personal knowledge, that the debtor was ineligible to file the second bankruptcy petition since he had filed a petition on the debtor’s behalf in November 1993, which was dismissed on April 7, 1994. Thus, the court found that the second petition was interposed to delay the foreclosure.

12. Based on the aforementioned violations, the court directed the respondent to pay, within 30 days, sanctions in the sum of $3,500: $2,500 to the Clerk of the United States [235]*235Bankruptcy Court and $1,000 to the bank as compensation for its expenses, including attorney’s fees.

Charge Two alleged that the respondent engaged in conduct that adversely reflects on his fitness to practice law, in violation of Code of Professional Responsibility DR 1-102 (A) (8) (22 NYCRR 1200.3 [a] [8]), and conduct that is prejudicial to the administration of justice, in violation of Code of Professional Responsibility DR 1-102 (A) (5) (22 NYCRR 1200.3 [a] [5]), in connection with his handling of a legal malpractice case entitled Eliezer Goldstock and American Jewish Society for Distinguished Children, Inc. v Shmuel B. Klein. The facts underlying Charge Two are as follows:

1. In a decision and order of the Supreme Court, Rockland County, dated October 6, 1994, the Honorable Anthony A. Scarpino, Jr., inter alia, dismissed 10 of the respondent’s affirmative defenses in the above-entitled action, finding that either they were not defenses to the alleged claim or they were wholly without merit. The court noted that, despite the plaintiffs challenge, the respondent failed to making any showing of merit to the dismissed defenses.

2. In the aforementioned decision and order, the court warned the respondent and opposing counsel "that the abusive nature of the pleadings, correspondence, and conduct in this action must stop here. The hyperbole, harassment, and histrionics will no longer be tolerated. Failure to heed this warning will result in sanctions and referral by the Court to the Grievance Committee.” The court also stated that no further motions could be made without prior court approval.

3. Upon information and belief, Justice Scarpino was reassigned on or about January 1, 1995, and the matter was transferred to the Honorable Kenneth W. Rudolph.

4. On or about March 16, 1995, Justice Rudolph sent the respondent and opposing counsel a letter in which he stated that the "stern warning” issued by Justice Scarpino, in his decision and order dated October 6, 1994 had "been ignored and had gone unheeded”.

5. Justice Rudolph’s letter also stated that, despite Justice Scarpino’s order that no further motions be made without prior court approval, counsel continued the behavior described by Justice Scarpino as if the prior order never existed.

6.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In Re Lite Ray Realty Corp.
257 B.R. 150 (S.D. New York, 2001)
In re Highgate Equities, Ltd.
257 B.R. 391 (S.D. New York, 2001)
In Re Klein
747 A.2d 1179 (District of Columbia Court of Appeals, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
231 A.D.2d 232, 660 N.Y.S.2d 136, 1997 N.Y. App. Div. LEXIS 7166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-klein-nyappdiv-1997.