In re Sukhdeo

47 A.D.3d 6, 845 N.Y.S.2d 803

This text of 47 A.D.3d 6 (In re Sukhdeo) 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 Sukhdeo, 47 A.D.3d 6, 845 N.Y.S.2d 803 (N.Y. Ct. App. 2007).

Opinion

OPINION OF THE COURT

Per Curiam.

The Grievance Committee served the respondent with a petition dated April 28, 2006, containing 18 charges of professional misconduct. After a hearing on November 29, 2006, the Special Referee sustained all 18 charges. The Grievance Committee now moves to confirm the Special Referee’s report and to impose such discipline as the court deems just and proper. The respondent cross-moves to disaffirm the Special Referee’s report and dismiss the charges and, if the court decides to impose public discipline in this matter, to limit any sanction to a public censure.

Charges one through seventeen of the petition are escrow related.

Charge one alleges that the respondent misappropriated funds entrusted to him as a fiduciary, incident to his practice of law, and/or failed to safeguard funds entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102 (a) (22 NYCRR 1200.46 [a]).

On November 7, 2003, the sum of $273,239.83 was wired into the respondent’s escrow account at North Fork Bank from Flag-star Bank in connection with the Montalvo real estate matter. The bank assessed a $15 wire fee. The respondent was required to retain that balance until the Montalvo closing.

On November 12, 2003, before the Montalvo closing, the balance fell below the amount the respondent was required to be holding in connection with that matter. The balance fell below zero.

[8]*8On November 13, 2003, the bank paid two checks totaling $209,586.24 related to the Montalvo matter. These checks were drawn against funds wired into the escrow account for another matter.

Charge two alleges that the respondent misappropriated funds entrusted to him as a fiduciary, incident to his practice of law, and/or failed to safeguard funds entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102 (a) (22 NYCRR 1200.46 [a]).

On November 18, 2003, the sum of $278,460.21 was wired into the escrow account from Flagstar Bank in connection with the Malave real estate matter. The bank assessed a $15 wire fee.

From November 19, 2003, through November 21, 2003, the bank paid checks totaling $36,800.78 relating to the Malave matter. The respondent was required to maintain the balance of $241,644.43 until the matter closed. On November 21, 2003, before the Malave closing, the balance in the respondent’s escrow account relating to that matter fell below zero.

On November 26, 2003, the respondent’s escrow check number 7388 in the amount of $231,461.41 was presented to the bank for payment in connection with the Malave matter and was returned due to insufficient funds.

The check was re-presented and paid by the bank on December 2, 2003. It was drawn against funds which had been deposited in connection with several other matters.

Charge three alleges that the respondent misappropriated funds entrusted to him as a fiduciary, incident to his practice of law, and/or failed to safeguard funds entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102 (a) (22 NYCRR 1200.46 [a]).

At the close of business on September 11, 2002, the balance on deposit in the respondent’s escrow account was $68,649.39. On September 12, 2002, a check in the amount of $81,383.50 in connection with the De Cruz matter and a check in the amount of $9,978.09 in connection with the Munoz matter were presented for payment. The bank honored both checks, even though the balance on deposit in the account was insufficient to cover them, leaving a balance of-$22,712.20.

On September 13, 2002, the sum of $155,631.46, of which $90,260 related to the Munoz matter, was deposited into the account to cure the negative balance. None of the deposited sum relates to the De Cruz matter. One or both of the checks honored [9]*9by the bank were drawn, in whole or in part, against funds deposited into the account for other matters.

Charge four alleges that the respondent misappropriated funds entrusted to him as a fiduciary, incident to his practice of law, and/or failed to safeguard funds entrusted to him as fiduciary, in violation of Code of Professional Responsibility DR 9-102 (a) (22 NYCRR 1200.46 [a]).

At the close of business on November 10, 2003, the balance on deposit in the escrow account was $638,104.30. There was no activity in the account on that date.

On November 12, 2003, the account was debited $5,010 for an unpaid deposit item, and 11 checks, totaling $660,127.02, were presented for payment in connection with several separate matters. The bank honored the checks even though the balance on deposit was insufficient to cover them. This resulted in a balance of -$27,032.72.

On November 13, 2003, $319,638.46 was wired into the account by Argent Mortgage Company to cure the negative balance. Inasmuch as the respondent’s records do not identify the client to whom the November 13, 2003, deposit was attributable, it is impossible to determine whether the deposited funds related to any of the checks presented for payment on November 12, 2003.

Charge five alleges that the respondent misappropriated funds entrusted to him as a fiduciary, incident to his practice of law, and/or failed to safeguard funds entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102 (a) (22 NYCRR 1200.46 [a]).

At the close of business on November 20, 2003, the balance on deposit in the respondent’s escrow account was $856,088.65. On November 21, 2003, the sum of $346,047.86 was wired into the account for an unidentified matter and a $15 fee was debited. This brought the balance to $1,202,121.51. Twenty-one checks totaling $1,274,847.86 were presented for payment. The bank honored those checks even though the balance on deposit was insufficient to cover them. This left a balance of -$72,726.35.

On November 22, 2003, two deposits totaling $348,000 were made into the account to cure the negative balance. One of those deposits included $15,000 relating to one of the 21 checks presented for payment on November 21, 2003. One or more of the remaining 21 checks were drawn in whole or part against funds deposited in connection with other matters.

[10]*10Charge six alleges that the respondent misappropriated funds entrusted to him as a fiduciary, incident to his practice of law, and/or failed to safeguard funds entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102 (a) (22 NYCRR 1200.46 [a]).

At the close of business on November 25, 2003, the balance on deposit in the escrow account was $24,420.20. Between November 26, 2003, and November 28, 2003, 15 checks totaling $596,084.38 and relating to several separate matters were presented for payment. The balance dropped to -$383,829.60. The bank returned 11 checks totaling $408,249.80 as unpaid. It honored the remaining 4 checks even though the balance on deposit in the account was insufficient to cover them.

On December 1, 2003, three deposits totaling $1,311,930.30 were made to cure the negative balance. None of the deposited funds related to any of the 15 checks presented for payment between November 26, 2003, and November 28, 2003. One or more of the four checks paid by the bank was drawn in whole or in part against funds deposited in the account with respect to other matters.

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§ 90
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Bluebook (online)
47 A.D.3d 6, 845 N.Y.S.2d 803, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sukhdeo-nyappdiv-2007.