Matter of Newman
This text of 2021 NY Slip Op 01259 (Matter of Newman) 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.
Opinion
| Matter of Newman |
| 2021 NY Slip Op 01259 |
| Decided on March 3, 2021 |
| Appellate Division, Second Department |
| Per Curiam. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and subject to revision before publication in the Official Reports. |
Decided on March 3, 2021 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
WILLIAM F. MASTRO, A.P.J.
REINALDO E. RIVERA
MARK C. DILLON
CHERYL E. CHAMBERS
ROBERT J. MILLER, JJ.
2019-13002
JOINT MOTION pursuant to 22 NYCRR 1240.8(a)(5) by the Grievance Committee for the Tenth Judicial District and the respondent, Scott Leonard Newman, for discipline on consent. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on September 16, 1998.
Catherine A. Sheridan, Hauppauge, NY (Stacey J. Sharpelletti of counsel), for petitioner.
Richard E. Grayson, White Plains, NY, for respondent.
PER CURIAM.
OPINION & ORDER
The Grievance Committee for the Tenth Judicial District served the respondent with a notice of petition dated November 14, 2019, and a verified petition dated October 25, 2019. The respondent filed an answer dated December 17, 2019. The Grievance Committee and the respondent now jointly move pursuant to 22 NYCRR 1240.8(a)(5) for discipline by consent, and request the imposition of a suspension from the practice of law for a period of one year. As provided for in 22 NYCRR 1240.8(a)(5)(i), the parties have submitted a joint affirmation dated July 13 and July 15, 2020, in support of the motion. In addition, the respondent has submitted an affidavit sworn to on July 8, 2020, attesting, inter alia, to various mitigating circumstances. By virtue of the stipulation of facts presented with the joint affirmation, the parties have agreed that the following factual specifications are not in dispute:
On May 19, 2015, the respondent, as attorney for the seller in a real estate transaction, deposited down payment funds in the amount of $28,000 into his attorney escrow account located at Citibank, account ending in 9562, entitled "The Newman Law Firm Attorney Trust Account" (hereinafter escrow account), and as part of this transaction, he was required to maintain those funds in his escrow account until the property's closing. The respondent, however, prior to the March 28, 2016 closing, disbursed funds unrelated to this transaction, causing his escrow account balance to fall well below what he was required to maintain, as follows:
On July 31, 2015, the respondent withdrew $22,000 from his escrow account and transferred those funds to Citibank account number XXXX2283, a personal checking account belonging to the respondent and his wife. This disbursement reduced the balance in the escrow account to $6,000, $22,000 below the amount the respondent was required to maintain.
On November 13, 2015, the respondent withdrew $5,500 from his escrow account, thereby reducing the balance to $500, which was $27,500 below the amount the respondent was required to maintain.
On March 15, 2016, the respondent made an ATM cash withdrawal of $250 from his escrow account, thereby reducing the balance to $250, which was $27,750 below the amount the respondent was required to maintain.
On March 17, 2016, the respondent deposited $16,000 in earned legal fees and expenses from an unrelated matter into his escrow account.
On March 17, 2016, the respondent made a $250 ATM cash withdrawal from his escrow account, thereby reducing the balance to $16,000, which was $12,000 below the amount the respondent was required to maintain.
On March 21, 2016, the respondent transferred $300, via ATM, from his escrow account to Citibank account number XXXX9386, his attorney operating account, and also withdrew $10,000 and deposited it into Citibank account number XXXX0819, which was a personal savings account belonging to the respondent and his wife.
Following these transactions, as of March 21, 2016, the balance in his escrow account was $5,700, which was $22,300 below the amount the respondent was required to maintain.
Subsequently, on March 28, 2016, the day the real estate transaction closed, the respondent withdrew $28,000 from his personal savings account and deposited those funds into his escrow account, raising the escrow account balance to $33,700. At the closing later the same day, the respondent issued six checks totaling $21,690 from his escrow account, leaving $6,310 of the down payment funds remaining on deposit. Of those remaining funds, the respondent was required to maintain $4,095 for payment of taxes related to the sale. Despite this, prior to the satisfaction of the tax liabilities, the respondent on July 18, 2016, withdrew $5,000 from his escrow account, reducing the balance to $2,010, below what he was required to maintain.
Thereafter, the respondent on or about March 23, 2017, issued a check in the amount of $4,095 in satisfaction of the outstanding tax fees, however, he did so from his attorney operating account.
In addition, throughout the relevant period, the respondent failed to maintain records of all deposits into and withdrawals from his escrow account, showing the date, source, and description of each item deposited, and the date, payee, and purpose of each withdrawal or disbursement; and failed to maintain a contemporaneous ledger book or similar record for the account, showing the source of all funds deposited into it, the names of all persons for whom the funds were held, and the description and amounts of all persons to whom these funds were disbursed.
As required by 22 NYCRR 1240.8(a)(5)(ii), the respondent has submitted an affidavit with this motion in which he conditionally admits the foregoing facts, and that those facts establish that he (1) misappropriated funds entrusted to him as a fiduciary incident to his practice of law; (2) commingled personal funds with funds entrusted to him as a fiduciary, incident to his practice of law; (3) failed to make or maintain required bookkeeping records for his escrow account; and (4) engaged in conduct that adversely reflects on his fitness as a lawyer, in violation of rules 1.15(a) and (d), and 8.4(h) of the Rules of Professional Conduct (22 NYCRR 1200.0), respectively. The respondent consents to the agreed discipline of a one-year suspension, which consent is given freely and voluntarily without coercion or duress. Lastly, the respondent states that he is fully aware of the consequences of consenting to such discipline.
In mitigation, the respondent asserts, inter alia, that this Court should consider his inexperience with escrow accounts and the subject transaction was his first and only real estate transaction; lack of client harm; that during the relevant period he experienced personal and professional stresses; his volunteer activities which include, among other things, pro bono legal assistance; his sincere remorse; the remedial measures implemented; his cooperation with the Grievance Committee's investigation; and his unblemished disciplinary record.
Free access — add to your briefcase to read the full text and ask questions with AI
Related
Cite This Page — Counsel Stack
2021 NY Slip Op 01259, 142 N.Y.S.3d 106, 194 A.D.3d 15, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-newman-nyappdiv-2021.