Opinion ID: 2334156
Heading Depth: 1
Heading Rank: 4

Heading: The Ploshchansky Matter

Text: In July 1982, respondent was retained by Aida and Peisak Ploshchansky to represent them in connection with the purchase of a condominium unit. The purchase price was $130,000. A $90,000 loan was to be obtained either through a lending institution or by means of a purchase money mortgage held by the sellers. After the sellers' attorney prepared the contract of sale, respondent obtained the Ploshchanskys' signature thereon and forwarded a $13,000 deposit to the attorney. Pursuant to the terms of the contract, the transaction was to be contingent upon the Ploshchanskys' ability to obtain a conventional mortgage commitment from a mortgage lender in the amount of $90,000. Alternatively, the contract provided for a purchase money mortgage by the sellers in the amount of $90,000. The sellers, however, were unwilling to agree to either mortgage contingency clause. When their attorney returned the contract to respondent, both clauses had been stricken and initialed by the sellers. The attorney requested that the Ploshchanskys also initial the changes. By letter dated October 22, 1982, respondent returned the contract to the attorney, informing him that it had been initialed by Mrs. Ploshchansky and that Mr. Ploshchansky had verbally approved the omission of the clauses. Respondent also changed the closing date from November 15 to November 30, 1982. Although respondent agreed to assist the Ploshchanskys in arranging for a mortgage, she did not submit an application on their behalf until late December 1982. On December 2, 1982, the sellers' attorney sent a time-of-the-essence letter for a December 10, 1982 closing. Respondent did not inform the Ploshchanskys of that closing date. After several closing dates had gone by, the sellers' attorney announced directly to Mrs. Ploshchansky that it was the sellers' intention to declare the contract null and void and to retain the deposit monies. Understandably distressed by this significant development, the Ploshchanskys attempted to contact respondent on numerous occasions to determine the status of the transaction. Their calls were ignored. When they were finally able to reach respondent at her home, she told them not to worry. Pursuant to respondent's testimony, she paid $750 to the sellers out of her own funds, presumably as an increase in the purchase price, in order to obtain their consent to the extension of the first time-of-the-essence closing date from December 10, 1982, to January 14, 1983. Realizing the urgency of the matter, the Ploshchanskys retained new counsel, who commenced an action on April 5, 1983, to prevent a forfeiture of the deposit monies. On May 31, 1983, represented by new counsel, the Ploshchanskys took title to the condominium unit at an increased price of $138,000, financed by a mortgage of $90,000 and by a purchase money mortgage from the sellers in the amount of $10,500. The $13,000 deposit was fully credited to them. Thereafter, the Ploshchanskys filed a malpractice action against respondent, which resulted in a settlement of $13,000 in favor of the Ploshchanskys. By letter dated July 18, 1984, the committee investigator forwarded to respondent a copy of the Ploshchansky grievance, requesting a written reply. Not having received any response, the investigator sent a follow-up letter on October 1, 1984. On October 11, 1984, the investigator discussed the matter with respondent and sent her a copy of the July 18, 1984 grievance letter. By letter dated October 23, 1984, the investigator advised the committee that respondent had not been cooperative and recommended that a formal ethics complaint be filed. At the conclusion of the ethics hearing, the presentment found that respondent had exhibited gross negligence throughout the entire transaction, had failed to respond to the Ploshchanskys' numerous requests for information, and had failed to disclose to them the reality of the situation, once time-of-the-essence was declared. The committee did not find, however, that respondent's failure to cooperate with the committee investigator was such as to constitute an ethics violation.