This opinion is uncorrected and subject to revision before

publication in the New York Reports.

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No. 176 

In the Matter of Donald William 

Leo, a Disbarred Attorney,

 Appellant.

John F. Clennan, for appellant.

Robert H. Cabble, for respondent Grievance Committee,

10th Judicial District.

PER CURIAM:

Donald William Leo was admitted to the New York bar in 1967. 

He tendered his resignation as an attorney in January 2004 in the

midst of a disciplinary investigation into alleged escrow

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violations. In connection with his resignation, Leo acknowledged

that he "failed to properly preserve the amount of funds which

should have been on deposit in his escrow account" and that he

would be unable to "successfully defend himself on the merits" of

any related disciplinary charges (Matter of Leo, 9 AD3d 218, 219

[2d Dept 2004]).

After tendering his resignation, Leo sold his law practice

to his son. According to their written agreement, the purchase

price "d[id] not include any accounts receivable" due for

"services rendered" by Leo prior to the sale. Instead, those

funds would be "promptly paid and delivered" to Leo as payment

was received on contingency fee cases. These pending matters --

more than 550 in total -- were listed in a schedule attached to

the purchase agreement, along with the corresponding percentage

of the fee to be allocated to Leo in each case. 

Shortly after the sale, Leo sent letters to all of his

clients indicating that he was "relocating" to Tennessee and that

he was "transferring [his] law practice and law office assets" to

his son. The letter stated, in relevant part: 

"If you decide to retain other counsel kindly

. . . have him or her contact our office 

. . .

If you wish to continue with Don and our new

team of associates there is no need for you

to contact us at this time." 

Three months later, the Appellate Division "accepted" Leo's

proffered resignation and Leo was formally disbarred (id. at

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219). Among other things, Leo was ordered to comply with 22

NYCRR § 691.10 -- the Second Department's rule governing the

conduct of disbarred, suspended, and resigned attorneys (id. at

220). 

Seven years after his disbarment, Leo applied for

reinstatement. The Appellate Division held the motion in

abeyance and referred the matter to the Committee on Character

and Fitness. A two-member Subcommittee was assigned to conduct

an investigation and a hearing was held. 

During the hearing, the Subcommittee members inquired into

the notification that Leo had provided to clients while his

resignation was pending. According to Leo, by the time the

Appellate Division accepted his resignation, all of his clients

had decided to either continue with his son or to retain new

counsel. Leo stated that, under the relevant rule, he did not

need to send a subsequent notice or otherwise notify his "former"

clients of his disbarment. 

Leo was also questioned about certain payments he received

from his son arising from the sale of Leo's law practice. Leo

was unable to provide an accounting of the amounts he had

received to date, and he was unable to specify which sums, if

any, remained outstanding. Leo testified that, for the first few

years following the sale, Leo's son was merely "reimbursing" him

for "out of pocket disbursements" that Leo had "laid out prior to

leaving." Leo estimated that these reimbursements -- which were

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not declared as income on his tax returns or mentioned in the

purchase agreement -- totaled "[c]lose to $500,000." With regard

to the remaining sums, Leo stated that he had "not made a

determination" whether to allocate those payments to the purchase

price or to the fees owed from contingency cases. Although 22

NYCRR § 691.10 requires that legal fees and disbursements

received post-disbarment must be "fixed by the court," Leo had

not applied for a court order fixing compensation. 

The Subcommittee was "troubled by the testimony" at the

first hearing and "decided to recommend against admission." 

However, shortly after the hearing, Leo's counsel requested a

continuance. A second hearing was held nearly 18 months later.

During the second hearing, Leo testified that he had met

with his son and reviewed all of the records relating to the

payments he had received. Leo then filed motions in various

counties seeking nunc pro tunc orders fixing legal fees and

recoverable disbursements. The motions were granted, and copies

of the orders were filed as exhibits at the second hearing. 

The Subcommittee thereafter concluded that Leo possessed

"the present character and fitness to practice law in New York." 

Although the Subcommittee noted that Leo's actions "did not

comply with the rules relating to personal injury cases and rules

relating to compensation to disciplined attorneys," it

nonetheless concluded that Leo had "shown, by his determined

actions, that he is willing to work hard to regain th[e]

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privilege" of practicing law. The Subcommittee recommended

reinstatement. 

The Full Committee on Character and Fitness disagreed and

voted to recommend that Leo's motion for reinstatement be denied. 

In its letter dated May 2, 2014, the Full Committee expressed

concerns that (1) Leo's letter notifying clients that he was

relocating did not conform to the applicable rules, and (2) Leo's

failure to seek court approval of fees and disbursements until

after the Subcommittee had noted the irregularity did not

demonstrate the requisite character and fitness for

reinstatement.

The Appellate Division subsequently denied Leo's motion for

reinstatement. After considering the entire record, including

Leo's papers and the report of the Committee on Character and

Fitness, the Appellate Division concluded that Leo did not

"demonstrate the requisite fitness and character to practice

law." 

We granted leave to appeal and now affirm. 

In the Second Department, an applicant seeking reinstatement

to the bar must show "by clear and convincing evidence that [the

applicant] has fully complied with the provisions of the order

disbarring or suspending him or her . . . and that he or she

possesses the character and general fitness to practice law"

(former Rules of App Div, 2d Dept [22 NYCRR] § 691.11). The

Appellate Division "is the fact finder on issues of character and

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fitness and its discretion is inclusive" (Matter of Anonymous, 79

NY2d 782, 783 [1991]; see Matter of Citrin, 94 NY2d 459, 465

[2000]). Indeed, the Appellate Division is best situated to

assess an applicant's compliance with the applicable disbarment

order and to determine whether, in light of the misconduct giving

rise to his or her disbarment, the applicant's subsequent conduct

demonstrates the requisite character and fitness for readmission. 

Accordingly, our standard of review is limited to whether the

Appellate Division abused its discretion in denying Leo's motion

for reinstatement. We discern no abuse of discretion here.

The record here includes evidence that Leo failed to comply

with the provisions of his disbarment order, including the

provision requiring compliance with 22 NYCRR § 691.10. 

Specifically, § 691.10(b) makes clear that, in the Second

Department, "[a] disbarred, suspended or resigned attorney" may

only be compensated "on a quantum meruit basis for legal services

rendered and disbursements incurred" prior to his or her removal

from the bar, and that "the amount and manner of payment" must be

"fixed by the court" (former Rules of App Div, 2d Dept [22 NYCRR]

§ 691.10[b]). Here, Leo received payment for legal fees and

disbursements incurred prior to his disbarment, but he did not

obtain the required court orders until his error was uncovered by

the Subcommittee. Moreover, at his first hearing, Leo was unable

to provide an accurate accounting of the payments he had

received, nor could he specify whether the sums constituted

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disbursement reimbursements, fees for legal services rendered, or

installments towards the purchase price of his firm. In the

absence of the required court orders and an accurate accounting,

Leo was not in compliance with section 691.10(b). 

Leo's argument regarding his pre-disbarment client

notification is also unavailing. Under section 691.10, "[a]

disbarred, suspended or resigned attorney" must provide notice to

"all clients being represented in pending matters . . . of his

disbarment, suspension or resignation and his consequent

inability to act as an attorney" (id. §§ 691.10[c]-[d]). In

this case, Leo informed his clients, in advance of his

anticipated disbarment, that he was "transferring" his law

practice to his son, but Leo did not send a subsequent notice or

otherwise inform clients of his eventual disbarment. Even if Leo

did not violate section 691.10 -- Leo had no "current" clients at

the time of his disbarment -- his notification could reasonably

be considered misleading to the extent it implied that Leo was

merely "relocating" and would remain involved in the practice.1

In sum, on this record, there is no basis to disturb the

Appellate Division's determination that Leo did not "demonstrate

1 We do not imply that Leo violated 22 NYCRR § 691.10 (c)

and (d), or "refuse[] to conclude" that he did not (concurring op

at 1). Rather, in reviewing the Appellate Division's assessment

of the entire record, we confine our decision -- in accordance

with our limited standard of review -- to issues that are

necessary to the resolution of this appeal. As the concurrence

necessarily concedes by joining in the result, this issue is not.

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the requisite fitness and character to practice law." 

We have considered Leo's remaining contentions and find them

to be without merit.

Accordingly, the order of the Appellate Division should be

affirmed, without costs. 

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Matter of Donald William Leo

No. 176 

FAHEY, J.(concurring):

I respectfully concur in the result only. The majority

refuses to conclude that Donald William Leo did not violate the

Special Rules of the Appellate Division, Second Department,

embodied in 22 NYCRR 691.10 (c) and (d) (see majority op at 7). 

To clarify: Leo did not breach those rules. 

The subject rules pertain only to the conduct of

attorneys who are "disbarred, suspended or [who have] resigned"

(22 NYCRR § 691.10). At the time Leo gave the client

notification in question, none of those classifications applied

to him. Although Leo had submitted his resignation to the

Appellate Division at the time the disputed notification had been

made, that Court retained the discretion whether to accept Leo’s

request to relinquish his law license, which it did not do until

months after the communication in question. 

If the submission of a letter of resignation was

sufficient there would be no need for the Appellate Division to

accept or reject it. The Appellate Division must clearly

maintain the authority to accept a resignation or issue an order

of disbarment.

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In any event, on balance I agree with the majority

"that there is evidence to sustain the decision of the Appellate

Division" (Matter of Anonymous, 79 NY2d 782, 783 [1991]; see

majority op at 7). "While one might disagree with the

determination made by that court in this case, [w]e may not

substitute our judgment on the merits for that of the Appellate

Division" (Anonymous, 79 NY2d at 783 [internal quotation marks

omitted]). 

* * * * * * * * * * * * * * * * *

Order affirmed, without costs. Opinion Per Curiam. Chief Judge

DiFiore and Judges Pigott, Abdus-Salaam, Stein and Garcia concur. 

Judge Fahey concurs in result in a separate concurring opinion. 

Judge Rivera took no part.

Decided November 22, 2016

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