Title: IMO Lewis B. Freimark, 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). Argued October 20, 1997 -- Decided December 5, 1997 PER CURIAM Lewis B. Freimark was admitted to the bar of New Jersey in 1980. His law office is in West Caldwell. A random compliance audit of his attorney records conducted by the Office of Attorney Ethics (OAE) disclosed multiple record-keeping problems. A proctor was appointed to supervise Freimark's practice. The proctor was given exclusive check-signing authority over Freimark's attorney accounts. A Special Master heard the ethics complaints filed against Freimark. The Master recommended to the Disciplinary Review Board (DRB) that Freimark be disciplined for knowing misappropriation of client funds and for his failure to notify the OAE that he had been disciplined as an attorney in New York. The DRB recommended to the Court that Freimark be disbarred for knowing misappropriation of client funds. The ethics complaints against Freimark involved clients Arlene Snyder, Amanda Alongi, George P. Caso, Felipe Leon, and Eleanor Markov. The Court found repeated instances in which Freimark improperly disbursed funds to himself from his trust account. Funds from one client were used to replenish funds for another client. Freimark's explanations for the improper withdrawals included negligent record-keeping, unrecorded "loans" that were allegedly repaid through use of the client funds, and an attempt to "protect" the funds of one client by removing some of them from his trust account. All of Freimark's explanations were not found to be credible by the DRB or the Court. HELD: In the light of respondent's knowing misappropriation of client funds, he must be disbarred. 1. Because the Court determined that Freimark should be disbarred for knowing misappropriation, it did not consider the count that dealt with Freimark's failure to notify the OAE of the imposition of discipline on him by New York. (pp. 15-16) 2. In re Wilson states that a misappropriation of client funds must be "knowing" to warrant disbarment of an attorney. That standard must be met by clear and convincing evidence. (pp. 16-17) 3. Although respondent is correct that shoddy record-keeping alone will not result in a Wilson disbarment, this case goes well beyond poor record-keeping. The record discloses a pattern--on depositing settlement proceeds into his trust account, respondent would advance sums to himself, thereby depleting that client's account. Subsequently, respondent replenished that client's account by invading trust funds received on behalf of other clients in unrelated matters. (pp.17-19) 4. Respondent's claim that no client was injured because all of the money was paid back does not exempt him from the application of Wilson. Even when a lawyer "borrows" trust funds without permission, disbarment must follow. (pp. 19-20) It is ORDERED that respondent be DISBARRED from the practice of law. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in the Court's opinion. IN THE MATTER OF LEWIS B. FREIMARK, An Attorney at Law. Argued October 20, 1997 -- Decided December 5, 1997 On an Order to show cause why respondent should not be disbarred or otherwise disciplined. Lee A. Gronikowski, Deputy Ethics Counsel, argued the cause on behalf of the Office of Attorney Ethics. Kimberly A. Hintze argued the cause for respondent. PER CURIAM This disciplinary proceeding results from a random compliance audit of the trust funds of respondent, Lewis B. Freimark, by the Office of Attorney Ethics (OAE) pursuant to Rule I can say that this check here was written to me. There's a reference that it was for Dr. Viscounti. Beyond that, I don't know. And this check was deposited into one of my accounts. According to respondent, he was not even able to ascertain the amount of Dr. Viscounti's bill or how it was paid because of the poor records contained in the Snyder file. Respondent added that he did not keep a ledger card for the Snyder file. Respondent denied that he intentionally issued a check for $1,500 to Dr. Viscounti only after he had another client's funds deposited in his trust account, namely the DesReis funds. Respondent argued that he had made a mathematical error in the calculation of the amount payable to Snyder from the property settlement claim. In short, respondent contended, his actions in the Snyder matter were unmarked by any knowledge or intent to misuse trust funds and, therefore, not a knowing misappropriation. From a settlement of $8,750, respondent made checks totaling $10,883.24, of which he deposited 4,800 into his personal checking account. Those facts, combined with the minimal In its decision, the DRB found knowing misappropriation in the Alongi matter: [A]s the special master noted, even if Alongi had given respondent authority to keep the entire proceeds of the settlement for his fees and advanced expenses, there is no explanation for respondent's invasion of other client funds to pay for respondent's fees in Alongi. All in all, respondent kept $8,100 for himself as fees ($3,500, $800, $700, $2,000, $300, $400 and $400). He could not reasonably have expected to be entitled to $8,100 against a $7,000 settlement. The only explanation respondent offered was that he believed that there were enough funds in the Alongi account to cover the withdrawals and that he was unaware of the account balance because of poor records. Such alleged belief was against reason, however. Again, basic arithmetic had to make respondent aware that he was improperly overdisbursing funds for his personal benefit. Here, too, the evidence against respondent is so overwhelming as to support a finding of knowing misappropriation on his part by clear and convincing evidence. Based on our de novo review of the record, we agree and find that respondent violated RPC 1.15 (knowing misappropriation of funds), and RPC 8.4(c) (dishonesty, fraud, deceit or misrepresentation). The DRB found that respondent's defenses and claims of innocence in the Caso matter also strained credulity. It observed: Respondent received $1,700 on behalf of Caso on August 14, 1990. On August 22 and 24, 1990, respondent issued two checks to himself for $500 and $1,400 respectively. These disbursements totaled $1,900, against a $1,700 settlement. Respondent had to know that he was invading other client funds to the tune of $200, even if his claim that he was unaware of the balance in his trust account is to be believed. Regardless of whether respondent had a sufficient or insufficient balance in the trust account before he received the $1,700, he could not have reasonably believed that he had enough funds in the Caso account to support a There is another very serious aspect of respondent's handling of Caso funds. There is no evidence in the record that Caso authorized respondent to borrow $1,400 from the settlement proceeds. The letter from Caso that respondent introduced in evidence to establish such authority is silent about a loan. We conclude that respondent was not authorized to borrow $1,400 from the Caso account and that his disbursement to himself of $1,900 against a $1,700 settlement resulted in a knowing misappropriation of clients' funds. Again, as in the Snyder and Alongi matters, respondent violated RPC 1.15 and RPC 8.4(c). Later in the argument, Mr. Freimark was asked: You seemed to imply earlier though that you had knowingly used one client's funds to pay or make up another client's account. Did you say that? MR. FREIMARK: During the course of the summer, yes, because Miss Markov was calling me from Croatia and she was very urgent about this and again, I represented her family in Hoboken for a number of years. And Mr. Leon was likewise urgent, so, yes, I would say yes in that regard. I think, Justices, that you also in making your decision might keep in mind, my practice does not involve a lot of trust account activity. Maybe I Accepting respondent's explanation, he has clearly admitted the invasion of one client's funds for another client. We do not find, however, respondent's explanations of the Leon-Markov matters to be credible. No financial records substantiate his claims that he withdrew Mrs. Markov's money to protect it. He never offered any explanation as to why the checks were payable to him and were either cashed or deposited in his personal account. We find that the $21,000 shortage in respondent's trust account is attributable to the eight checks respondent issued to himself between May 4, 1993 and April 18, 1993, in amounts ranging from $500 to $9,000. Those funds were used for respondent's own personal benefit. Respondent in the Leon-Markov count violated RPC 1.15, RPC 8.4(c) and R. 1:21-6 (failure to maintain required records). [In re Noonan, 102 N.J. 157, 160 (1986) (emphasis added).] We have insisted, however, that proof of misappropriation, by itself, is not sufficient to result in disbarment. There must be clear and convincing evidence that an attorney knowingly misappropriated his or her client's funds. In re Barlow, 140 N.J. 191, 196 (1995). Respondent is correct that we have held that shoddy recordkeeping alone does not suffice for a finding of knowing misappropriation. In re Konopka, 126 N.J. 225, 228 (1991); In re Librizzi, 117 N.J. 481, 491-92 (1990); and In re Gallo, 117 N.J. 365, 373 (1989). In In re Fleischer, 102 N.J. 440, 447 (1986), however, we held that although poor accounting does not establish a knowing misappropriation, poor accounting is not a Wilson defense if evidence indicates knowing misappropriation. See also In re Skevin, 104 N.J. 476, 486 (1986), cert. denied, 481 Respondent further alleges in mitigation that, due to the illness of his wife who had maintained his files and books and the illness of his father, he was unable to maintain the books and records associated with his practice. He also notes that he fully cooperated with the OAE. Those factors are insufficient to warrant any departure from the Wilson rule. In re Noonan, supra, 102 N.J. Super. at 160. We, therefore, disbar respondent. Respondent shall reimburse the Disciplinary Oversight Committee for the appropriate administrative costs. So ordered. CHIEF JUSTICE PORITZ, and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in this PER CURIAM opinion. IN THE MATTER OF : LEWIS B. FREIMARK, : O R D E R AN ATTORNEY AT LAW : It is ORDERED that LEWIS B. FREIMARK of WEST CALDWELL, who was admitted to the bar of this State in 1980, be disbarred and that his name be stricken from the roll of attorneys of this State, effective immediately; and it is further ORDERED that LEWIS B. FREIMARK be and hereby is permanently restrained and enjoined from practicing law; and it is further ORDERED that all funds, if any, currently existing in any New Jersey financial institution maintained by LEWIS B. FREIMARK, pursuant to Rule 1:21-6, be restrained from disbursement except upon application to this Court, for good cause shown, and shall be transferred by the financial institution to the Clerk of the Superior Court who is directed to deposit the funds in the Superior Court Trust Fund, pending further Order of this Court; and it is further ORDERED that LEWIS B. FREIMARK comply with Rule 1:20-20 dealing with disbarred attorneys; and it is further ORDERED that LEWIS B. FREIMARK reimburse the Disciplinary Oversight Committee for appropriate administrative costs. WITNESS, the Honorable Deborah T. Poritz, Chief Justice, at Trenton, this 5th day of December, 1997. CLERK OF THE SUPREME COURT NO. D-75 Decided December 5, 1997 Order returnable Opinion by PER CURIAM