Matter of Kunstlinger

Opinion

Matter of Kunstlinger

2026 NY Slip Op 04857

August 5, 2026

Appellate Division, Second Department

Per Curiam

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This decision is uncorrected and subject to revision before publication in the Official Reports.

In the Matter of Joseph Kunstlinger, an attorney and counselor-at-law. Grievance Committee for the Ninth Judicial District, petitioner; Joseph Kunstlinger, respondent. (Attorney Registration No. 2602217)

Supreme Court of the State of New York, Appellate Division, Second Judicial Department

Decided on August 5, 2026

2023-04676

Hector D. Lasalle, P.J.

Mark C. Dillon

Colleen D. Duffy

Betsy Barros

Carl J. Landicino, JJ.

Courtny Osterling, White Plains, NY, for petitioner.

Michael S. Ross, New York, NY, for respondent.

DISCIPLINARY PROCEEDING instituted by the Grievance Committee for the Ninth Judicial District. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on April 13, 1994.

Per Curiam. [*1]

Per Curiam.

OPINION & ORDER

The Grievance Committee for the Ninth Judicial

District commenced a formal disciplinary proceeding pursuant to 22 NYCRR 1240.8 against the respondent by serving and filing a notice of petition and a verified petition, both dated May 11, 2023. The respondent filed a verified answer dated June 27, 2023. The Grievance Committee served and filed a statement of disputed and undisputed facts dated July 18, 2023, to which the respondent provided a response, through counsel, dated August 7, 2023. By decision and order on application dated October 19, 2023, this Court, pursuant to 22 NYCRR 1240.8(b)(1), referred the matter to Kevin J. Plunkett, as Special Referee, to hear and report. In a report dated June 21, 2024, the Special Referee sustained all 36 charges in the petition. By notice of motion dated September 27, 2024, the Grievance Committee now moves to confirm so much of the Special Referee's report as sustained the 36 charges in the petition, to disaffirm so much of the Special Referee's report as made inaccurate factual findings with respect to the charges and certain findings regarding mitigation, and to impose such discipline upon the respondent as the Court deems just and proper. In response, the respondent opposes that branch of the Grievance Committee's motion which is to disaffirm so much of the Special Referee's report as made certain factual findings with respect to the charges and certain findings regarding mitigation and cross-moves to confirm so much of the Special Referee's report as sustained the 36 charges in the petition and the findings of fact set forth in the Special Referee's report with respect to the charges and certain findings regarding mitigation and to impose a sanction of a public censure. The Grievance Committee submits an affirmation in reply to the respondent's cross-motion.

The Petition

The verified petition alleges 36 charges of misconduct, most of which relate to the respondent's escrow account maintained at JP Morgan Chase Bank, entitled "Kunstlinger Law Firm [*2]LLC," with account number ending in 1596. Charges one to twenty-eight allege that the respondent misappropriated funds entrusted to him as a fiduciary incident to his practice of law in 28 client real estate/refinance matters, each in violation of rule 1.15(a) of the Rules of Professional Conduct (22 NYCRR 1200.0).

Charge One: Canaan Matter

On August 29, 2017, the sum of $304,364.77 was deposited into the respondent's escrow account in connection with a certain real estate matter referred to as the Canaan matter. Thereafter, between August 29, 2017, and September 11, 2017, the respondent disbursed all of the funds received in connection with the Canaan matter. Notwithstanding, on October 23, 2017, a check in the sum of $563.06 in connection with the Canaan matter cleared from the respondent's escrow account when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $563.06. On February 12, 2018, the respondent deposited the sum of $596.82 into his escrow account to cure the over-disbursement in the Canaan matter.

Charge Two: Francesca Matter

On August 29, 2017, the sum of $292,256.89 was deposited into the respondent's escrow account in connection with a certain real estate matter referred to as the Francesca matter. Between August 29, 2017, and September 25, 2017, the respondent disbursed all of the funds held in the escrow account for this matter. Notwithstanding, on October 23, 2017, a check in the sum of $1,100 in connection with the Francesca matter cleared from the respondent's escrow account when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $1,100. On July 17, 2019, the respondent deposited the sum of $1,100 into his escrow account to cure the over-disbursement in the Francesca matter.

Charge Three: Romersa Matter

On August 28, 2017, the respondent disbursed the sum of $589,796.76 from his escrow account in connection with a certain real estate matter referred to as the Romersa matter when there were no correlating funds on deposit. On August 29, 2017, the respondent deposited the sum of $645,653.61 into his escrow account in connection with the Romersa matter, leaving a balance of $55,856.85 in the escrow account for the Romersa matter.

Between August 30, 2017, and September 5, 2017, the respondent disbursed $53,174.85 in connection with the Romersa matter, thereby reducing the funds on deposit to $2,682. Notwithstanding, on September 13, 2017, three checks, totaling $3,877, in connection with the Romersa matter cleared from the escrow account when insufficient funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $1,195. On July 17, 2019, the respondent deposited the sum of $1,195 into his escrow account to cure the over-disbursement in the Romersa matter.

Charge Four: Five Lane Holdings Matter

On September 11, 2017, the respondent disbursed the sum of $65,800 from his escrow account in connection with a certain real estate matter referred to as the Five Lane Holdings matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On September 13, 2017, the respondent deposited the sum of $360,366.50 into his escrow account in connection with the Five Lane Holdings matter.

Charge Five: Champion Mortgage Company Matter

On October 19, 2017, the respondent deposited the sum of $73,500 into his escrow account in connection with a certain real estate matter referred to as the Champion Mortgage Company matter. On October 23, 2017, the respondent disbursed the sum of $129,402.37 for the Champion Mortgage Company matter when there were insufficient funds on deposit. On October 26, 2017, the respondent issued a wire transfer in the sum of $12,474.52 and a check cleared the escrow account in the sum of $15,000 in connection with the Champion Mortgage Company matter when there were no correlating funds on deposit. The over-disbursements cleared, at least in part, against other client and/or third-party funds, resulting in a deficiency of $83,376.89 in connection with the Champion Mortgage Company matter. On December 12, 2017, the respondent deposited the sum of $129,402.37 into his escrow account to cure the over-disbursements in the Champion Mortgage Company matter.

Charge Six: Green Mountain Matter

On December 29, 2017, the respondent disbursed the sum of $50,000 from his escrow account in connection with a certain real estate matter referred to as the Green Mountain matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On February 9, 2018, the respondent deposited the sum of $697,104.48 into his escrow account in connection with the Green Mountain matter.

Charge Seven: MKJA Matter

On May 30, 2018, the respondent disbursed the sum of $273,536.40 from his escrow account in connection with a certain real estate matter referred to as the MKJA matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On June 1, 2018, the respondent deposited the sum of $293,891.90 into his escrow account in connection with the MKJA matter.

Charge Eight: Lantzitsky Matter

Between May 15, 2018, and July 30, 2018, the respondent deposited the sum of $200,439.57 into his escrow account in connection with a certain real estate matter referred to as the Lantzitsky matter. Thereafter, the respondent disbursed $199,407.36 of those funds, leaving the sum of $1,032.21 on deposit in his escrow account. Notwithstanding, on August 9, 2018, a check in the sum of $1,282.21 cleared the escrow account in connection with the Lantzitsky matter, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $250. On July 17, 2019, the respondent deposited the sum of $250 into the escrow account to cure the over-disbursement in the Lantzitsky matter.

Charge Nine: 469 Holdings Matter

On July 23, 2018, the respondent deposited the sum of $550,658.78 into his escrow account in connection with a certain refinance matter referred to as the 469 Holdings matter. On July 24, 2018, the respondent disbursed the sum of $586,824.78 in connection with the 469 Holdings matter, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $36,166. On July 27, 2018, the sum of $40,000 was deposited into the respondent's escrow account in connection with the 469 Holdings matter, leaving the sum of $3,834 on deposit.

On March 8, 2019, the respondent disbursed the sum of $4,765.33 in connection with the 469 Holdings matter, causing another invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $931.33. On July 17, 2019, the respondent deposited the sum of $931.33 into his escrow account to cure the over-disbursement in the 469 Holdings matter.

Charge Ten: Goodhart Matter

On August 30, 2018, the respondent disbursed the sum of $123,248.94 in connection with a certain real estate matter referred to as the Goodhart matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On September 4, 2018, the sum of $125,448.94 was deposited into the respondent's escrow account in connection with the Goodhart matter.

Charge Eleven: Wicks Matter

On August 30, 2018, the respondent made a wire transfer in the sum of $239,977.54 in connection with a certain real estate matter referred to as the Wicks matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. Further, on August 31, 2018, two checks, totaling $3,768.75, cleared from the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third party-funds, resulting in a deficiency totaling $243,746.29. On September 4, 2018, the respondent deposited the sum of $318,468.19 into his escrow account in connection with the Wicks matter.

Charge Twelve: Sandel Matter

Between September 27, 2018, and October 3, 2018, the respondent deposited the sum of $507,110.65 into his escrow account in connection with a certain real estate matter referred to as the Sandel matter. Between September 28, 2018, and October 29, 2018, the respondent disbursed all funds held in the escrow account in connection with the Sandel matter. Notwithstanding, on November 29, 2018, a check in the sum of $1,050 in connection with the Sandel matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On July 17, 2019, the respondent deposited the sum of $1,050 into his escrow account to cure the over-disbursement in the Sandel matter.

Charge Thirteen: Woodbury Villas Matter

On September 18, 2018, six checks, totaling $6,232.07, cleared the respondent's escrow account in connection with a certain real estate matter referred to as the Woodbury Villas matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On September 27, 2018, the respondent deposited the sum of $381,153.19 into his escrow account for the Woodbury Villas matter, leaving the sum of $374,921.12 on deposit.

Thereafter, between September 28, 2018, and December 6, 2018, the respondent disbursed the sum of $369,142.83 in connection with the Woodbury Villas matter, leaving the sum of $5,778.29 on deposit. On December 24, 2018, the respondent deposited $2,136.90 in his escrow account in connection with the Woodbury Villas matter, leaving the sum of $7,915.19 on deposit. On the same day, the respondent disbursed $6,254 in connection with the Woodbury Villas matter, leaving the sum of $1,661.19 on deposit. Notwithstanding, on March 25, 2019, a check in the sum of $2,137.90 in connection with the Woodbury Villas matter cleared the respondent's escrow account, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $476.71. Further, on May 6, 2019, when there were no correlating funds on deposit in connection with the Woodbury Villas matter, the respondent disbursed the sum of $381,153.19 from his escrow account, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency totaling $381,629.90. On May 9, 2019, the respondent deposited the sum of $381,630.83 to cure the over-disbursements in the Woodbury Villas matter.

Charge Fourteen: Krug Matter

On October 3, 2018, the respondent deposited the sum of $458,333.35 into his escrow account in connection with a certain real estate matter referred to as the Krug matter. Thereafter, the respondent disbursed $448,123.40 of those funds, leaving the sum of $10,209.95 on deposit. Notwithstanding, on October 9, 2018, the respondent made a wire transfer in the sum of $12,526.28 in connection with the Krug matter, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $2,316.33. Further, on October 10, 2018, a check in the amount of $9,014.95 in connection with the Krug matter cleared the respondent's escrow account, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency totaling $11,331.28. On October 25, 2018, the respondent received a refund in the sum of $12,526.28 deposited in his escrow account in connection with the Krug matter.

Charge Fifteen: Rafferty Matter

On October 3, 2018, the respondent deposited the sum of $414,368.51 into his escrow account in connection with a certain real estate matter referred to as the Rafferty matter. On October 4, 2018, the respondent disbursed the sum of $383,595.18 to Federal Savings Bank from his escrow account, leaving the sum of $30,773.33 on deposit for the Rafferty matter. Notwithstanding, on October 5, 2018, the respondent made a wire transfer in the sum of $383,439.26 again to Federal Savings Bank when there were insufficient correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $352,665.93. Further, on October 9, 2018, four checks, totaling $7,446.78, cleared the respondent's escrow account in connection with the Rafferty matter when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency totaling $360,112.71. On October 12, 2018, the respondent received a refund in the sum of $383,439.26 from Federal Savings Bank in connection with the Rafferty matter.

Charge Sixteen: Jefferson Matter

On November 8, 2018, a check in the sum of $1,202,203.71 in connection with a certain real estate matter referred to as the Jefferson matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On November 9, 2018, the respondent deposited the sum of $1,279,529.18 into his escrow account in connection with the Jefferson matter.

Charge Seventeen: Garcia Matter

On November 13, 2018, the respondent deposited the sum of $410,851.86 into his escrow account in connection with a certain real estate matter referred to as the Garcia matter. Between November 13, 2018, and November 14, 2018, the respondent disbursed the sum of $394,104.17 in connection with the Garcia matter, leaving the sum of $16,747.69 on deposit. Notwithstanding, on November 19, 2018, a check in the sum of $265,944.53 in connection with the Garcia matter cleared the respondent's escrow account, causing an invasion, at least in part, of other [*3]client and/or third-party funds, resulting in a deficiency in the sum of $249,196.84. Further, between November 27, 2018, and November 30, 2018, five additional checks, totaling $16,747.69, in connection with the Garcia matter cleared the respondent's escrow account, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency totaling $265,944.53. On May 7, 2019, the respondent deposited the sum of $265,944.53 into his escrow account to cure the above over-disbursements in the Garcia matter.

Charge Eighteen: Rose Matter

On November 26, 2018, the respondent made a wire transfer in the sum of $310,261.98 from his escrow account in connection with a certain real estate matter referred to as the Rose matter when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On November 27, 2018, the respondent deposited the sum of $312,988.48 into his escrow account in connection with the Rose matter.

Charge Nineteen: Brisk Matter

On December 18, 2018, three checks, totaling $276,854.27, in connection with a certain real estate matter referred to as the Brisk matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On December 19, 2018, the respondent deposited the sum of $305,207 into his escrow account in connection with the Brisk matter.

Charge Twenty: Leidner Matter

On January 29, 2019, two checks, totaling $8,866.99, in connection with a certain real estate matter referred to as the Leidner matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On January 30, 2019, the respondent deposited the sum of $323,185.87 into his escrow account in connection with the Leidner matter.

Charge Twenty-One: Zwiebel Matter

On January 31, 2019, a check in the amount of $82,650.96 in connection with a certain real estate matter referred to as the Zwiebel matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On February 1, 2019, the respondent deposited the sum of $305,992.61 into his escrow account in connection with the Zwiebel matter.

Charge Twenty-Two: Hill Matter

On February 5, 2019, two checks, totaling $353,257.21, in connection with a certain real estate matter referred to as the Hill matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On February 6, 2019, the respondent deposited the sum of $374,372.46 into his escrow account in connection with the Hill matter.

Charge Twenty-Three: Carbone Matter

Between February 15, 2019, and February 20, 2019, eight checks, totaling $351,673.23, in connection with the Carbone matter cleared the respondent's escrow account when there were no correlating funds on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On February 21, 2019, the respondent deposited the sum of $375,376.75 into his escrow account in connection with the Carbone matter.

Charge Twenty-Four: Witriol Matter

On February 22, 2019, two checks, totaling $59,660, in connection with a certain real estate matter referred to as the Witriol matter cleared the respondent's escrow account when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On February 25, 2019, the respondent deposited the sum of $300,453.69 into his escrow account in connection with the Witriol matter.

Charge Twenty-Five: Messner Matter

On April 17, 2019, the respondent deposited the sum of $379,845.35 into his escrow account in connection with a certain real estate matter referred to as the Messner matter. Thereafter, the respondent disbursed the sum of $84,478.26 from the escrow account in connection with the Messner matter, leaving the sum of $295,367.09 on deposit. Notwithstanding, on April 19, 2019, the respondent made a wire transfer in the sum of $303,755.97 in connection with the Messner matter when insufficient funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency in the sum of $8,388.88. On May 3, 2019, the respondent deposited the sum of $12,500 in his escrow account to cure the over-disbursement in the [*4]Messner matter.

Charge Twenty-Six: Schnitzler Matter

On April 17, 2019, a check in the amount of $21,197.51 in connection with a certain real estate matter referred to as the Schnitzler matter cleared the respondent's escrow account when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On April 18, 2019, the respondent deposited the sum of $365,996.48 into his escrow account in connection with the Schnitzler matter.

Charge Twenty-Seven: Goldman Matter

Between April 19, 2019, and April 22, 2019, two checks, totaling $384,388.89, in connection with a certain refinance matter referred to as the Goldman matter cleared from the respondent's escrow account when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds. On April 25, 2019, the respondent deposited the sum of $399,274.61 into his escrow account in connection with the Goldman matter.

Charge Twenty-Eight: Kellner Matter

On April 19, 2019, the respondent made two wire transfers, totaling $532,918.49, in connection with a certain refinance matter referred to as the Kellner matter when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds. Further, on April 24, 2019, two ACH debits, totaling $2,143, in connection with the Kellner matter cleared from the respondent's escrow account when no correlating funds were on deposit, causing an invasion, at least in part, of other client and/or third-party funds, resulting in a deficiency totaling $535,061.49. On April 25, 2019, the respondent deposited the sum of $549,849.41 into his escrow account in connection with the Kellner matter.

Charge Twenty-Nine

On April 24, 2019, two checks issued from the respondent's escrow account, totaling $11,176.30, in connection with the Kellner matter were presented for payment when no correlating funds were on deposit. Both checks were dishonored. In connection with and in addition to the factual allegations supporting charges three, four, six, seven, ten, eleven, thirteen, sixteen, eighteen to twenty-four, and twenty-six to twenty-eight, the respondent was charged with engaging in conduct that adversely reflects on his fitness as a lawyer, in violation of rule 8.4(h) of the Rules of Professional Conduct.

Charge Thirty

As alleged, the respondent failed to promptly remove earned legal fees from his escrow account in 34 client matters. The respondent allowed his legal fees to remain in the escrow account for time periods ranging from 22 days to 912 days. Based upon the foregoing, the respondent was charged with commingling personal funds with funds entrusted to him as a fiduciary incident to his practice of law, in violation of rule 1.15(a) of the Rules of Professional Conduct.

Charge Thirty-One

In connection with and in addition to the factual allegations supporting charges one to thirty, the respondent was charged with failing to maintain the required bookkeeping records for his escrow account and failing to make accurate and timely entries of all financial transactions in his escrow account, in violation of rule 1.15(d)(2) of the Rules of Professional Conduct.

Charge Thirty-Two

In connection with and in addition to the factual allegations supporting charges one to thirty-one, the respondent was charged with failing to regularly reconcile his escrow account and engaging in conduct that adversely reflects on his fitness as a lawyer, in violation of rule 8.4(h) of the Rules of Professional Conduct.

Charge Thirty-Three

As alleged, the respondent's escrow account, entitled "Kunstlinger Law Firm LLC," failed to include one of the following three phrases,"Attorney Special Account"; or "Attorney Trust Account"; or "Attorney Escrow Account." The respondent's escrow account, entitled "Kunstlinger Law Firm LLC," also failed to include the phrase "IOLA account," as required by Judiciary Law § 497(6)(a). As a result, the respondent was charged with failing to maintain the proper title for an escrow account and engaging in conduct that adversely reflects on his fitness as a lawyer, in violation of rules 1.15(b)(2) and/or 8.4(h) of the Rules of Professional Conduct, respectively.

Charge Thirty-Four

As alleged, the respondent failed to enter into signed written retainer agreements with seven clients, where his fee was greater than $3,000, as required by 22 NYCRR 1215.1(c) and [*5]1215.2. As a result, the respondent was charged with engaging in conduct that adversely reflects on his fitness as a lawyer, in violation of rule 8.4(h) of the Rules of Professional Conduct.

Charge Thirty-Five

As alleged, the respondent failed to enter into signed, written conflict of interest waivers, where he collected fees for representation of either both the buyer and/or the seller and/or the bank in 17 matters, in violation of rule 1.7(b)(4) of the Rules of Professional Conduct.

Charge Thirty-Six

Pursuant to the factual allegations supporting charges one to thirty-five, the respondent was charged with engaging in conduct that adversely reflects on his fitness as a lawyer, in violation of rule 8.4(h) of the Rules of Professional Conduct.

The Hearing Record

At a hearing, the respondent admitted to all of the factual allegations contained in the petition and testified in mitigation. The respondent called one witness to testify about the remedial measures taken and three character witnesses and provided 18 character letters in support of his honesty, diligence, and integrity. The respondent testified that he began his law firm in 1996 and focused his law practice in the areas of real estate closings, bank closings, transactional work, and lender work. By 2023, his law firm was handling 60 to 70 closings a month.

The respondent testified at the hearing that given the fast-paced nature of his work and the pressure, "sometimes you just make—make human errors." He admitted that between 2017 and 2019 he had not been aware that funds were being disbursed from his escrow account prior to correlating funds being deposited and that although he was reviewing his escrow account records, he was only looking for fraud. The respondent testified that he was not in the practice of ensuring that checks had been deposited or cleared prior to issuing disbursements and only discovered that his law firm was not ensuring that checks had been deposited or cleared prior to issuing disbursements during the Grievance Committee's investigation. The respondent was also unaware how often his paralegal had been reconciling his escrow account and could not recall how the reconciliation was done.

As to charges one to three, eight, and fourteen to fifteen, the respondent admitted that he made double payments because he had failed to account for the initial payment, some of which occurred during the high holidays when he was extremely busy.

As to charges six, seven, thirteen, twenty to twenty-four, and twenty-six to twenty-nine, the respondent testified that he was holding client funds in two separate operating accounts but that he disbursed funds from his escrow account prior to transferring the correlating funds from his operating accounts or otherwise confirming that the correlating funds were available in his escrow account.

As to charge nineteen, the respondent testified that closing funds were sent to his brother's operating bank account instead of the respondent's escrow account. The respondent disbursed funds from his escrow account for the subject closing prior to receiving the wired funds from his brother.

As to charge thirty, the respondent provided several explanations, including that he was too busy to withdraw his legal fees, that the checks were lost or that he never received them (even though it would be his own law firm that issued the checks), and that he did not believe that allowing his legal fees to remain in his escrow account was considered commingling.

As to charge thirty-five, the respondent testified that he did not enter into written conflict of interest waivers because he did not believe his representation was a conflict of interest and believed that the buyers' and the banks' interests were aligned. The respondent testified that now, after the charges, he does not represent multiple parties.

As to other remedial measures that the respondent has taken, he testified that he has restructured his practice, slowed down, and shows respect to his employees by not overworking them. The respondent testified that even though these incidents occurred over the course of two years, he did not realize he had "a global problem" until the investigation brought everything together. The respondent testified that he has updated his bookkeeping practices, hired a bookkeeper, changed to a different bank that provides a more personalized experience, and no longer maintains multiple bank accounts.

As to community involvement, the respondent testified that he is actively involved in his synagogue, served as a board member of a Hatzoloh, and served as a board member of Tomchei Shabbos.

The respondent testified that he previously received a Letter of Advisement from the Grievance Committee dated June 9, 2017 (hereinafter the 2017 letter of advisement), concerning a dishonored check relating to his condominium practice, which should have alerted him that he needed to exercise more care in connection with his escrow account. The respondent testified that it is "double embarrassing" that he made the mistakes which led to the subject investigation. The respondent testified that after receiving the 2017 letter of advisement, he altered his practice regarding how he handled fiduciary funds specifically for his representation of condominiums, believing that that was sufficient, but that he did not implement safeguards throughout his practice. The respondent characterized the 29 charges of misappropriation herein as "outlier" cases where "it was Friday afternoon or my secretary who was supposed to transfer it didn't."

The Special Referee's Report

The Special Referee sustained the 36 charges in the petition. The Special Referee noted that the 2017 letter of advisement should have served as a warning that the respondent needed to be more vigilant in handling his escrow account but instead, the respondent became less vigilant. The Special Referee opined that the "Respondent's lack of attention to the many important matters set forth in the 36 charges he admits was not intentional and did not result in any financial gain or personal gain to the Respondent."

In mitigation, the Special Referee found that the respondent's character letters and live witness testimony provided that the respondent has a strong moral character and excellent reputation for honesty and integrity, and shows generosity in donating his time and resources to charitable causes in the community. The Special Referee found that the respondent showed acceptance, remorse, and contrition, and that the respondent instituted safeguards and bookkeeping practices to prevent future errors. The Special Referee also found that there was no financial loss to clients or third parties.

The Grievance Committee now moves to confirm so much of the Special Referee's report as sustained the 36 charges in the petition, to disaffirm so much of the Special Referee's report as made inaccurate factual findings with respect to the charges and certain findings in mitigation, and to impose such discipline upon the respondent as the Court deems just and proper. The Grievance Committee asserts that the extensive nature of the respondent's misappropriations evinces a pattern and practice of misconduct that is of a venal nature. The respondent failed to maintain accurate records of deposits and disbursements and failed to regularly reconcile his escrow accounts for years. The Grievance Committee asserts that the respondent had a number of red flags that should have alerted him to an issue with his escrow account practices, including the 2017 letter of advisement, which was issued to warn against the same practice of disbursing money from his escrow account prior to its availability. The Grievance Committee contends that the respondent committed serious professional misconduct in that he misappropriated over $6,100,000 from his escrow account between 2017 and 2019, as outlined in charges one to twenty-nine, with those deficiencies remaining for as few as 1 day to as many as 413 days. Further, the Grievance Committee asserts that the respondent had a practice of commingling his legal fees with fiduciary funds in more than 30 matters for as few as 22 days to as many as 912 days.

In response, the respondent opposes that branch of the Grievance Committee's motion which is to disaffirm so much of the Special Referee's report as made certain factual findings with respect to the charges and certain findings regarding mitigation and cross-moves to confirm so much of the Special Referee's report as sustained the 36 charges and the findings of fact set forth in the Special Referee's report with respect to the charges and certain findings regarding mitigation and to impose the sanction of a public censure. The respondent asserts that his conduct was unintentional, resulted from administrative oversights and inadequate supervision, and was not motivated by financial gain. Further, the respondent contends that the evidence presented shows that he is a competent, diligent, well-respected real estate attorney, who has admitted his escrow-related misconduct. The respondent asserts that in the course of representing thousands of clients, his staff occasionally disbursed funds from the incorrect account. The respondent's counsel also asserts that the 2017 letter of advisement should not be considered in aggravation, as it was the result of a clerical error and was unrelated to the instant matter.

Findings and Conclusion

We disagree with the Special Referee's findings that the respondent's misconduct was not intentional and did not result in any financial or personal gain, as these statements are unsupported by the record. The respondent testified in connection with several charges that he knew [*6]he was disbursing funds before having correlating funds on deposit and was intentionally depositing client funds in non-escrow accounts. Further, in connection with charges one to three, fifteen, and seventeen, the respondent admitted that he issued himself checks for his attorneys' fees and, thus, received direct personal gain of misappropriated funds. The respondent chose to engage in a high volume of real estate closings, which potentially increased the attorneys' fees generated by his law firm while neglecting his ethical duties. We find his assertion that he did not personally benefit from his misconduct disingenuous.

In view of the respondent's admissions and the evidence adduced at the hearing, we find that the Special Referee properly sustained the 36 charges in the petition. In determining the appropriate measure of discipline, notwithstanding the aforementioned mitigating factors, the respondent showed a wholesale abandonment of his fiduciary responsibilities and failed to abide by the rules governing the maintenance of an attorney escrow account for several years. The amount of client and/or third-party funds misappropriated in this matter is staggering and the respondent's testimony is replete with attempts to shift blame to others despite his fiduciary duty to safeguard his clients' and/or third party funds and ensure proper escrow account management. Additionally, and in aggravation, the respondent was warned of the same misconduct in the 2017 letter of advisement received approximately one month prior to the first charged misconduct herein. The respondent's misconduct shows a pattern of disregarding his fiduciary duties and adopting a mindset of willful ignorance until he was forced to acknowledge he had a "global problem" during the Grievance Committee's extensive investigation.

Under the totality of the circumstances, we find that the respondent's conduct warrants a suspension from the practice of law for a period of five years.

LASALLE, P.J., DILLON, DUFFY, BARROS and LANDICINO, JJ., concur.

ORDERED that those branches of the Grievance Committee's motion which are to confirm so much of the Special Referee's report as sustained the 36 charges in the petition and to disaffirm so much of the Special Referee's report as made inaccurate factual findings with respect to the charges and the finding that the respondent's misconduct "was not intentional and did not result in any financial gain or personal gain to Respondent" are granted, and the remaining branches of the Grievance Committee's motion are denied; and it is further,

ORDERED that the branch of the respondent's cross-motion which is to confirm so much of the Special Referee's report as sustained the 36 charges is granted, and the remaining branches of the respondent's cross-motion are denied; and it is further,

ORDERED that the respondent, Joseph Kunstlinger, is suspended from the practice of law for a period of five years, commencing August 29, 2026, and continuing until further order of this Court. The respondent shall not apply for reinstatement earlier than February 28, 2031. In such application (see 22 NYCRR 1240.16), the respondent shall furnish satisfactory proof that during the period of suspension, he (1) refrained from practicing or attempting to practice law, (2) fully complied with this opinion and order and with the terms and provisions of the rules governing the conduct of disbarred or suspended attorneys (see id. § 1240.15), (3) complied with the applicable continuing legal education requirements of 22 NYCRR 691.11(a), and (4) otherwise properly conducted himself; and it is further,

ORDERED that the respondent, Joseph Kunstlinger, shall comply with the rules governing the conduct of disbarred or suspended attorneys (see id. § 1240.15); and it is further,

ORDERED that pursuant to Judiciary Law § 90, the respondent, Joseph Kunstlinger, shall desist and refrain from (1) practicing law in any form, either as principal or as agent, clerk, or employee of another, (2) appearing as an attorney or counselor-at-law before any court, Judge, Justice, board, commission, or other public authority, (3) giving to another an opinion as to the law or its application or any advice in relation thereto, and (4) holding himself out in any way as an attorney and counselor-at-law; and it is further,

ORDERED that if the respondent, Joseph Kunstlinger, has been issued a secure pass by the Office of Court Administration, it shall be returned forthwith to the issuing agency, and the respondent shall certify to the same in his affidavit of compliance pursuant to 22 NYCRR [*7]1240.15(f).

ENTER:

Darrell M. Joseph

Clerk of the Court