Case Title: Matter of James

Citation: 112 N.J. 580, 548 A.2d 1125

Docket Number: 

State: new-jersey

Court: New Jersey Supreme Court

Date: 1988-10-14T00:00:00Z

Document:
112 N.J. 580 (1988) 548 A.2d 1125 IN THE MATTER OF CHARLES H. JAMES, AN ATTORNEY AT LAW. The Supreme Court of New Jersey. Argued January 4, 1988. Decided October 14, 1988. *581 Robyn M. Hill, Deputy Ethics Counsel, argued the cause on behalf of Office of Attorney Ethics. Joseph J. Rodgers, argued the cause for respondent (Fineberg & Rodgers, attorneys). PER CURIAM. This disciplinary proceeding arose out of a 1984 audit of respondent's accounts pursuant to the Random Audit Program. Respondent is charged with nine counts of ethical violations, including failure to maintain required records, failure to safeguard client funds, failure to pay promptly funds to a client, gross negligence in accounting for client funds, and misappropriation. The District XIV Ethics Committee (the Ethics Committee) returned a presentment, charging that respondent misunderstood the purpose of a lawyer's trust account, used his trust account as a second business account, used clients' trust account funds to advance costs to other clients, and used clients' funds to pay litigation expenses and payroll taxes, resulting in his trust accounts being "out of trust." The Ethics Committee also found that respondent failed to disburse money in a timely fashion, and that he misused clients' funds, but found that respondent's misuse of clients' funds did not result in a knowing misappropriation, that no clients were injured as a result of his conduct, that he freely acknowledged his violations, and took remedial measures to prevent a recurrence. In the eyes of the Ethics Committee, although respondent failed to safeguard his clients' funds, his conduct did not constitute a knowing misappropriation. Consequently, the Ethics Committee concluded that "were it not for the fact that this is a trust account matter, which is governed by specific cases, *582 we would recommend private discipline. However, since this is a trust account matter, we feel we must recommend public discipline." The Disciplinary Review Board (DRB) concluded that the evidence clearly and convincingly supported the finding that the respondent was "guilty of unethical conduct for his serious record keeping derelictions." Although the DRB unanimously recommended that public discipline was warranted, it was divided on the appropriate measure of discipline, the majority concluding that a public reprimand was sufficient, while the minority recommended an imposition of a one-year suspension. Our independent review of the record leads us to conclude that a suspension is required. As found by the DRB, the facts are: Based on these findings, the DRB concluded: *590 Accordingly, the Board recommended the prospective adoption of a rule requiring suspension of attorneys who fail to establish proper accounting procedures. Writing for herself and two other members of the Board, Elizabeth Buff dissented "from the majority's conclusion that a term of suspension is inappropriate." Mrs. Buff, who recommended a one-year suspension, concluded: Our independent review leads us to find, as did the Ethics Committee and all members of the DRB, that the record does not clearly and convincingly establish that respondent knowingly misappropriated client funds or that he intentionally designed or perpetuated a system preventing him from knowing whether he was using client funds. Instead, respondent in good faith perpetuated an inadequate system that led to negative balances in his trust account. In short, his misuse of trust funds was the product not of a knowing misappropriation, but of gross negligence. Lawyers remain obligated "to assure that their accounting practices are sufficient to prevent misappropriation of trust funds." In re Fleischer, 102 N.J. 440, 447 (1986). We cannot ignore the length of time spanned by respondent's misconduct or the degree of his negligence. Hence, we are persuaded that a period of suspension is required. Given the absence of injury to his clients, their continuing confidence in him, his otherwise unblemished record, excellent reputation, and good character, we conclude that the public interest in maintaining confidence in the bar is satisfied by a suspension for three months. *592 Respondent shall reimburse the Ethics Financial Committee for appropriate administrative costs, including the costs of transcripts. So ordered. For suspension Chief Justice WILENTZ and Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN 7. Opposed None. It is ORDERED that CHARLES H. JAMES of WILDWOOD, who was admitted to the bar of this State in 1959, be suspended from the practice of law for a period of three months, effective November 1, 1988, and until the further order of this Court; and it is further ORDERED that CHARLES H. JAMES reimburse the Ethics Financial Committee for appropriate administrative costs, including the production of transcripts; and it is further ORDERED that CHARLES H. JAMES be restrained and enjoined from practicing law during the period of his suspension; and it is further ORDERED that CHARLES H. JAMES comply with Administrative Guideline Number 23 of the Office of Attorney Ethics dealing with suspended attorneys. [1] The audit commenced on September 19, 1984; the audit report was filed on October 17, 1985.