Title: In the Matter of Angel R. Pena, An Attorney at Law

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). PER CURIAM This is an attorney disciplinary case in which respondent, Angel Pena, who was admitted to practice in 1985, is charged with misconduct. The record in this case is not clear due to substantial conflicting testimony and to the seven-year delay between the sale of the property giving rise to the grievance against Pena and the filing of the grievance itself. In 1985, Pena was retained by Esther and Lorenzo Perez for various purposes, including the sale of their house on 48th Street in Union City. On December 24, 1985, Pena prepared a contract of sale for the property initially identifying Frank and Maria Scifo as the purchasers. Frank Scifo was Pena's longtime friend and college roommate. The contract showed a sale price of $100,000 and a closing date of March 10, 1986. At some point, Pena whited out the names of Frank and Maria on the contract, replacing them with Kathleen and John Scifo - Frank's parents, with whom Pena also enjoyed a close relationship. Pena maintained that John and Kathleen agreed to purchase the property hoping that Pena, whom they considered as their third son, and Frank would relocate their professional offices into the building. The only signatures on the contract were those of the Perezes. In March 1986, John and Kathleen Scifo loaned Pena $30,000. Respondent signed a promissory note on March 1, 1986, which provided that on Pena's repayment of the loan, the Scifos would convey the 48th Street property to Pena or his assigns. Although there was some dispute as to whether a closing actually occurred on the property, Pena prepared a deed signed by the Perezes conveying the 48th Street property to John and Kathleen for the stated consideration, which included either the assumption or satisfaction of the outstanding HUD mortgage on the property. That deed was not recorded until July 1, 1986. Soon after March 1986, Pena began making repairs to the 48th Street property. In December 1987, he moved his law office into the building. Pena's partner questioned the wisdom and propriety of the renovations on property not even owned by the firm. However, Pena assured his partner that it would benefit the practice to present a nice building. With the exception of the first two rent checks, which were made payable to and cashed by Kathleen and John Scifo, all rent checks were made payable to John Scifo, but endorsed by Pena and turned over to Pena's parents. Although disputed, Pena maintained that those funds were given to his parents to reimburse his father, Alejandro Pena, for expenses he incurred in his capacity as general contractor for the renovations on the 48th Street property. He further maintained that John Scifo had lost interest in the property when it became clear to him that his son, Frank, would not relocate his medical practice from New York to the 48th Street property. Therefore, he asked Alejandro to serve as general contractor on the renovations. On June 28, 1988, Pena's parents refinanced their residence, which had an outstanding mortgage balance of $414.32, for the sum of $186,079.82. From those proceeds, John and Kathleen Scifo were paid $25,000, and the remaining HUD mortgage on the 48th Street property ($76,982.81) was satisfied. In May 1990, Pena and his then law partners formed the 1590 Anderson Partnership to serve as the managing agent for the 48th Street property. To date, the partnership collects the rent, pays the property taxes, utility bills, and monthly mortgage payments on Pena's parents' mortgage, and makes repairs to the property. The 48th Street property was transferred by deed dated October 31, 1991 from the Scifos to Pena's parents for the sum of $1.00. In his cover letter to the Scifos, respondent's partner instructed them to transfer title to Mr. and Mrs. Pena, who would transfer the title to us. Although John Scifo admitted to signing the deed, he maintained that he did so only after Pena repaid the $30,000 loan in full. Title to the property remains in Pena's parents' name. The Office of Attorney Ethics (OAE) filed a formal complaint charging Pena with multiple violations of the Rules of Professional Conduct (RPCs), including a conflict of interest and conduct involving dishonesty, fraud, deceit or misrepresentation. The matter was tried before a Special Master. During trial of the matter, there was much conflicting testimony from many witnesses regarding the nature of the transaction, the identity of the true purchaser(s), and the extent and nature of Pena's involvement and/or interest in the property both before and after the sale thereof. Some who served as subcontractors on the renovations testified that they were paid either by Scifo in cash, by Alejandro Pena in cash, or by Pena's trust or business account checks. Some witnesses testified that Scifo visited the project and even selected certain building materials. In addition, Pena himself denied having borrowed any money from the Scifos to purchase the building or for any other reason, and maintained that he signed the note only as a favor to the Scifos, who were being audited by the IRS and who needed to account for the funds. Finally, Scifo's testimony before the Special Master and the information he gave the OAE during its early interview of him were substantially inconsistent, with him admitting to the OAE that he had indeed purchased the building for his son's medical office. His testimony was similarly inconsistent with his OAE interview in other respects. Despite the conflicting statements and the credibility issues, the Special Master filed a report finding respondent guilty of misconduct. Subsequently, the Disciplinary Review Board (Board) sustained the special master's findings, indicating that there was strong evidence that respondent in fact purchased the property from the Perezes and engaged in certain dishonest conduct to conceal that purchase. The Board unanimously determined that Pena should be suspended for a period of eighteen months for his misconduct. Subsequently, Pena filed a Petition for Review of the Board's determination, challenging its findings of dishonesty as not clearly and convincingly supported by the record. The Supreme Court granted Pena's Petition for Review. HELD: Pena's conflict of interest, compounded by his own self-interest and economic benefit, warrants a term of suspension from the practice of law for a period of six months. 1. The record does not establish by clear and convincing evidence that Pena engaged in dishonest conduct and created two sham transactions. (pp. 15-16) 2. Pena's conduct clearly indicates that he did not appreciate the importance of avoiding conflicts of interest and thereby violated RPC 1.7(b). (p. 16) 3. Although Pena's clients suffered no economic harm by his conflict, his self-interest and own economic benefit justify a term of suspension, as opposed to a reprimand. (pp. 16-18) 4. Pena's misconduct is mitigated by his youth and inexperience at the time of his representation of the Perezes and merits a term of suspension from practice for a period of six months. ((pp. 17-18) CHIEF JUSTICE PORITZ and JUSTICES O'HERN, GARIBALDI, STEIN, COLEMAN, LONG, and VERNIERO join in the Court's opinion. IN THE MATTER OF ANGEL R. PENA, An Attorney at Law. Argued September 14, 1999 -- Decided October 22, 1999 On an Order to Show Cause why respondent should not be disbarred or otherwise disciplined. Tangerla Mitchell Thomas, Deputy Ethics Counsel, argued the cause on behalf of the Office of Attorney Ethics. Bernard K. Freamon argued the cause for respondent. PER CURIAM This matter arose from a grievance filed by Esther Perez, her husband, Lorenzo Perez, and grandson, Jorge Collar (the grievants), alleging that respondent sold their home located at 314 48th Street, Union City (the 48th Street property) without their authorization or knowledge, and that they had never received the sale proceeds. Additionally, the grievants complained that respondent misappropriated certain proceeds from a fire insurance settlement relating to a 1984 fire at the 48th Street property. After an investigation by the District Ethics Committee (DEC) and the Office of Attorney Ethics (OAE), a formal complaint was filed against Pena. The complaint charged respondent with violating the following Rules of Professional Conduct (RPC): sections 1.7(b) (conflict of interest), 1.15(a) (knowing misappropriation of client funds), 8.1(b) (false statement of material fact in connection with a disciplinary matter), 8.4(a) (violation of the Rules of Professional Conduct), and 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation). A Special Master was appointed who found respondent had violated RPC 1.7(b), RPC 8.1(b), and RPC 8.4(a) and (c). The Special Master found, however, that there was not clear and convincing evidence that respondent had misappropriated any insurance proceeds. The Disciplinary Review Board (DRB) sustained the Special Master's findings and recommended that respondent be suspended from the practice of law for eighteen months. We observe that both the Special Master and DRB found that respondent did not misappropriate the grievants' insurance proceeds. Based on our independent review of the record, we agree. There is no evidence that respondent took client funds or that any client funds had been entrusted to him. The sellers received all of the funds to which they were entitled. As the DRB stated in its Decision: "Simply put, there is no evidence, let alone clear and convincing, that respondent took his clients' money." CHIEF JUSTICE PORITZ and JUSTICES O'HERN, GARIBALDI, STEIN, COLEMAN, LONG, and VERNIERO join in this opinion. IN THE MATTER OF : ANGEL R. PENA, : ORDER AN ATTORNEY AT LAW : It is ORDERED that ANGEL R. PENA of FORT LEE, who was admitted to the bar of this State in 1984, is hereby suspended from the practice of law for a period of six months, and until the further Order of the Court, effective November 17, 1999; and it is further ORDERED that respondent be restrained and enjoined from practicing law during the period of his suspension and that he comply with Rule 1:20-20 which governs suspended attorneys; and it is further ORDERED that respondent reimburse the Disciplinary Oversight Committee for appropriate administrative costs incurred in the prosecution of this matter. WITNESS, the Honorable Deborah T. Poritz, Chief Justice, at Trenton, this 22nd day of October, 1999. /s/ Stephen W. Townsend CLERK OF THE SUPREME COURT NO. D-113 Decided October 22, 1999 Order returnable Opinion by PER CURIAM