In re Van De Loo

240 A.D.2d 940, 659 N.Y.S.2d 899, 1997 N.Y. App. Div. LEXIS 7057
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 24, 1997
StatusPublished
Cited by7 cases

This text of 240 A.D.2d 940 (In re Van De Loo) 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 Van De Loo, 240 A.D.2d 940, 659 N.Y.S.2d 899, 1997 N.Y. App. Div. LEXIS 7057 (N.Y. Ct. App. 1997).

Opinion

Per Curiam.

Respondent was admitted to practice by this Court in January 1983. He was employed by an Albany law firm until his resignation from the firm on July 25, 1995. He maintained a solo practice in Albany for about eight months after his resignation.

[941]*941Petitioner, the Committee on Professional Standards, filed a petition and supplemental petition of charges against respondent. After a hearing, a Referee sustained most of the charges and specifications. Petitioner moves to confirm the Referee’s report and respondent opposes the motion.

By decision dated March 8, 1996 (Matter of Van De Loo, 225 AD2d 885), we suspended respondent pending consideration of the disciplinary charges set forth in the petition; respondent has remained suspended since that time.

It is apparent from the record that respondent converted and mishandled client, firm and other funds commencing in 1993. In April 1993, he received a check payable to the firm for legal fees from Chris Abele Builders in the amount of $16,231.61. Respondent bought two cashier’s checks, both payable to his firm, with the moneys and delivered one check, for $12,811.61, to the firm, and deposited the other check, for $3,240, into his personal checking account at Troy Savings Bank. He used the latter amount to advance legal fees to another firm client, Fitzgerald. The deposit into his personal checking account constituted a diversion of legal fees due the firm, as alleged in specification 1 of charge IV of the supplemental petition and violated the cited disciplinary rule (Code of Professional Responsibility DR 1-102 [A] [4], [5], [8] [22 NYCRR 1200.3 (a) (4), (5), (8)]). The payment to Fitzgerald was an improper advance of legal fees as alleged in specification 1 of charge V of the supplemental petition and violated the cited disciplinary rules (Code of Professional Responsibility DR 1-102 [A] [5] [22 NYCRR 1200.3 (a) (5)]; DR 5-103 [22 NYCRR 1200.22]).

By equal checks dated May 25 and July 8, 1994, both payable to respondent’s law firm, respondent accepted $25,000 from firm client Cristo and deposited the moneys into his personal checking account. It appears from firm records that Cristo owed the firm only $8,015.75 in legal fees at that time. Despite request therefor by Cristo, respondent did not provide the client with bills. In July 1994, respondent remitted about $20,000 of the Cristo funds to a California law firm representing another firm client, Fretto. The deposits constituted conversion as charged in specifications 4 and 5 of charge II of the supplemental petition. However, because it appears that Fretto would be "ultimately liable” for the payment on her behalf, we find that the Referee should not have sustained specification 2 of charge V of the supplemental petition and that the payment did not violate the cited disciplinary provisions (Code of Professional Responsibility DR 1-102 [A] [5]; DR 5-103 [22 NYCRR 1200.3 (a) (5); 1200.22]).

[942]*942On October 19, 1994, respondent deposited into his personal checking account two checks payable to the law firm from firm clients in the amounts of $1,172.75 and $395. The deposits constituted conversion of funds as alleged in specification 6 of charge II of the supplemental petition.

From April 1994 to February 1995, respondent received about $26,109.80 in checks payable to the law firm from firm client Abele; respondent deposited the checks into his personal checking account. He claims the deposits represented partial recoupment of $86,000 in firm legal fees he paid (from personal moneys) on behalf of Abele in 1991. Respondent can document two payments totaling $86,000 but has not documented any client or firm agreements relating to the payments. Firm records indicate the Abeles owed the firm $25,469.65 in February 1995. The deposits constituted a diversion of legal fees due the firm as alleged in specifications 2 and 3 of charge IV of the supplemental petition and violated the cited disciplinary provision (Code of Professional Responsibility DR 1-102 [A] [4], [5], [8] [22 NYCRR 1200.3 (a) (4), (5), (8)]).

In December 1994, during the course of his representation of client Carey on behalf of his firm, he took possession of over $100,000 in closing funds which Carey claimed was due her as a brokerage commission. Because ownership of the funds was disputed by a debtor in bankruptcy, respondent agreed by letter dated December 15, 1994, to place the funds in escrow and not to disburse them without authorizing court order. In March 1995, respondent established an account in his own name at Key Bank and deposited the escrow funds in the account. Thereafter, and without authorizing court order, he made the following disbursements from the account: $6,040 to Rezek on March 21, 1995 (she may have been entitled to closing proceeds but not from the escrow account); $10,000 payments to Carey on May 4 and June 4, 1995, and $30,000 to Carey on June 30, 1995; and $12,500 and $38,000 to himself on June 27 and 30, 1995, respectively. He used the June 27 disbursement to make a payment of $12,500 to Cristo. It appears he used the $38,000 disbursement to settle a dispute between himself and the Abeles concerning real estate he had purchased with them in 1989 and that his total payment to the Abeles was $60,800. By order dated October 12, 1995, Carey was awarded $96,140 and the debtor in bankruptcy was awarded $10,000 of the escrowed funds. Because respondent was not then present in the State, the order permitted Key Bank to make the payments directly, which it did on October 16, 1995, by debit memos to the Key Bank account. Respondent’s disbursements from the Key Bank [943]*943account violated the letter escrow agreement and constituted conversion of the funds of third parties, as alleged in charges I and II of the petition and violated the cited disciplinary rules (Code of Professional Responsibility DR 1-102 [A] [4], [5], [8] [22 NYCRR 1200.3 (a) (4), (5), (8)]; DR 9-102 [22 NYCRR 1200.46]). That Key Bank, rather than respondent, issued checks to Carey and the debtor in bankruptcy did not constitute conversion and we therefore find that the Referee should not have sustained specification 3 of charge II. The account at Key Bank established by respondent failed to initially bear one of the titles required by Code of Professional Responsibility DR 9-102 (B) (22 NYCRR 1200.46 [b]) and, therefore, as alleged in charge IV of the petition, was in violation of that disciplinary rule and Code of Professional Responsibility DR 1-102 (A) (5) (22 NYCRR 1200.3 [a] [5]).

Twenty thousand dollars of the payment to the Abeles was given to respondent on June 30, 1995, by the Schmidts in the form of two $10,000 checks, one on Mr. Schmidt’s account and the other on Mrs. Schmidt’s account. The Schmidts also gave him a $6,000 check on July 10, 1995. The Referee found that the Schmidts intended that the moneys be used to pay legal fees of another firm client, the Hotalings. Respondent had been representing the Hotalings, who were facing foreclosure on their farm property in Schoharie County. The Hotalings had bought the farm from the Schmidts in the early 1990s; it had been in the Schmidt family since the 1700s. Firm records indicate the Hotalings owed the firm about $26,000 in legal fees at about the time the Schmidts issued the checks to respondent and that no portion of this amount has been paid. Respondent converted the Schmidt funds, as alleged in specifications 2 and 3 of charge II of the supplemental petition.

On July 17, 1995, the firm refunded $12,500 to Cristo.

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Cite This Page — Counsel Stack

Bluebook (online)
240 A.D.2d 940, 659 N.Y.S.2d 899, 1997 N.Y. App. Div. LEXIS 7057, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-van-de-loo-nyappdiv-1997.