Title: Matter of Hollendonner

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

102 N.J. 21 (1985) 504 A.2d 1174 IN THE MATTER OF ANTON J. HOLLENDONNER, AN ATTORNEY-AT-LAW. The Supreme Court of New Jersey. Argued September 11, 1985. Decided October 17, 1985. David E. Johnson, Jr., Director, argued the cause for Office of Attorney Ethics. Robert A. Farkas, argued the cause for respondent (Marinari & Farkas, attorneys). *22 PER CURIAM. The District VII Ethics Committee (local Committee), acting on a complaint brought by the Office of Attorney Ethics, conducted a hearing and thereafter filed a presentment against Respondent, Anton J. Hollendonner, a member of the bar since 1955. The presentment charged Hollendonner with two instances of misappropriation of client funds, contrary to DR 9-102(A), (B), and (C), and DR 1-102(A)(1), (3), (4), and (6); mismanagement of his trust account contrary to Rule 1:21-6(b)(1); overdrawing his trust and business accounts, contrary to DR 9-102(A), (B), and (C); issuing checks against uncollected funds; and violating Canon One of the Code of Judicial Conduct ("A judge should uphold the integrity and independence of the judiciary."). The Disciplinary Review Board (DRB) conducted hearings on the presentment. It then issued its Decision and Recommendation, which summarized the charges and relevant evidence in pertinent part as follows: The facts recited above were developed at the hearing before the local Committee. That body found that because the contract of sale between the Elks Lodge and DeAngelo was silent regarding the escrow money, it was presumed that these funds were not to be released to the seller until closing of title. It concluded that the use of these funds by Respondent constituted a misappropriation under In re Wilson, 81 N.J. 451 (1979). It further found that Respondent had violated Rule 1:21-6(a)(2), in that if Respondent was entitled to these funds, they should have first been transferred to his business account before he used them. The Ethics Committee also found a violation of Rule 1:21-6(b)(1) because Respondent had failed to maintain records of this transaction. In addition, it found violations of DR 9-102(A), (B), and (C), and DR 1-102(A)(1), (3), (4), and (6). Concerning the Rampf Molds transactions, the Committee concluded that Respondent's records were totally inadequate to permit it to trace or determine the source of the funds. Noting Respondent's trust check register had falsely indicated that these checks had been voided, the Committee concluded that there was a misappropriation of these funds when the checks were drawn. It further observed that the allegations charging trust account mismanagement were essentially admitted and uncontested, and it found Respondent had failed to maintain the *26 receipt and disbursement journals for his trust account as required by Rule 1:21-6(b)(1). The Committee found the evidence to be clear that Respondent had overdrafts or shortages in both accounts as alleged, which constituted a violation of DR 9-102(A), (B), and (C). Regarding the charge of issuing checks against uncollected funds, the Committee found a violation of ACPE Opinion 454, which directs that an attorney shall not disburse funds until they have been collected by the bank. The Committee concluded further that the evidence clearly and convincingly disclosed that there had been a violation of Canon One of the Code of Judicial Conduct. Although it did not agree with all of the conclusions of the local Committee, the DRB determined that the Committee's findings of unethical conduct were fully supported by clear and convincing evidence. Its report expressed that conclusion as follows: The DRB then addressed the subject of its recommended discipline: We have carefully canvassed the record, mindful of our obligation to make independent findings of fact as judged by the requisite standard of clear and convincing evidence, and are in complete agreement with the findings of the DRB in respect of the Respondent's various ethical infractions. The findings recited above we adopt as our own. As to the appropriate discipline to be imposed, however, we must reject the recommendation of the DRB to impose a six-month suspension. The misuse of escrow funds and the appalling disregard of proper record-keeping procedures, both as recited at length above, demonstrate an entirely unacceptable insensitivity to basic ethical considerations. As the DRB observed, absent some extraordinary provision in an escrow agreement, absent here, it is a matter of elementary law that when two parties to a transaction select the attorney of one of them to act as the depository of funds relevant to that transaction, the attorney receives the deposit as the agent or trustee for both parties. Mantel v. Landau, 134 N.J. Eq. 194, 195 (Ch. 1943), aff'd, 135 N.J. Eq. 456 (E. & A. 1944); see Mathis v. Yarak, 71 N.J. Super. 234, 238 (App.Div. 1961). The parallel between escrow funds and client trust funds is obvious. So akin is the one to the other that henceforth an attorney found to have knowingly misused escrow funds will confront the disbarment rule of In re Wilson, supra, 81 N.J. *29 451. We do not apply that rule in these proceedings in view of the absence of clear and convincing evidence that Respondent invaded the escrow funds with knowledge that the use of those funds was improper. Moreover, this is the first occasion on which we have addressed the near identity of escrow funds and trust funds. Even as the proofs stand Respondent's professional derelictions are most serious. In our view they warrant nothing less than suspension for a period of one year. In addition, Respondent is to reimburse the Ethics Financial Committee for appropriate administrative costs. So ordered. For affirmance Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN 7. Opposed None. It is ORDERED that ANTON J. HOLLENDONNER of NORTH TRENTON, who was admitted to the Bar of this State in 1955, be suspended from the practice of law for one year, effective November 4, 1985, and it is further ORDERED that ANTON J. HOLLENDONNER be and hereby is restrained and enjoined from practicing law during the period of his suspension; and it is further ORDERED that respondent reimburse the Ethics Financial Committee for appropriate administrative costs; and it is further ORDERED that respondent comply with Administrative Guideline No. 23 of the Office of Attorney Ethics dealing with suspended, disbarred or resigned attorneys.