Opinion ID: 1959580
Heading Depth: 1
Heading Rank: 3

Heading: Harrogate

Text: IRM owned computer equipment, the purchase of which had been financed by Harrogate Corporation (Harrogate). IRM leased the equipment back to Harrogate which, in turn, subleased the equipment to the Ministry of Defense of the Netherlands. When IRM fell on hard times, it agreed that Harrogate should resell the equipment. The latter did so, producing net proceeds on the resale of $58,405. In April 1991 Tomaino deposited these funds in an investment account at PaineWebber in his own name and under his own social security number. The funds remained in that account after Tomaino moved to Rochester. By January 1992 the account had grown to $60,600. In that month Tomaino withdrew accumulated earnings of $2,257.38. In March 1992 he withdrew $8,780.12, leaving a balance of $50,165.29, well below the original $58,405. Thereafter, and no later than January 1993, he transferred the funds, then $51,807.58, to another account held in his own name at Merrill Lynch where it was invested in stocks. The funds remained in Tomaino's account until April 1995 when they totaled $65,494 and were delivered to Tomaino's present attorney who gave notice to potential claimants. Harrogate and MNC Credit Corp. claimed the funds based on respective security interests in the equipment. The funds were ultimately divided seventy-two percent to Harrogate and twenty-eight percent to MNC Credit Corp. Tomaino testified that the principal of Harrogate, James Carrier (Carrier), asked Tomaino to hold the funds in Tomaino's name. Carrier was said to be concerned over the effect of a European insolvency on Harrogate's claim. Tomaino denied that he assisted Carrier in hiding assets from creditors. Tomaino said that Carrier knew that the funds were invested in stocks and that Carrier had never made a demand for the money from April 1991 when the account was initially opened until April 1995 when the account was closed. Judge Angeletti found Tomaino had violated MRPC 1.15 and BOP § 10-306 by the misappropriation of trust money of Harrogate, and Judge Angeletti specifically found that Tomaino had kept the interest. For the reasons stated as to the IRM-Insurance Funds transaction, these findings are supported by the record.