Court Opinion

ID: 4427795
Source: CourtListenerOpinion
Date Created: 2019-08-20 18:55:35.034345+00
Date Added: 2024-06-11T14:23:16.633624
License: Public Domain

SYLLABUS

This syllabus is not part of the Court’s opinion. 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
Court. In the interest of brevity, portions of an opinion may not have been summarized.

              In the Matter of Joseph Peter Barrett (D-126-17) (081035)

Argued June 11, 2019 -- Decided July 15, 2019

PER CURIAM

       In this ethics proceeding, the Court considers whether Joseph Peter Barrett, an
attorney who received a 150-day suspension for knowing misappropriation of law firm
funds in Utah -- a jurisdiction that applies a preponderance of the evidence standard and
recognizes no business dispute defense -- may, based only on the Utah record, be
disbarred under New Jersey’s clear and convincing evidence standard.

        In two separate law firm matters in Utah, respondent traded legal fees earned for
his law firm for construction work performed at his home in Utah. In disciplinary
proceedings in Utah, respondent, in order to explain and justify his conduct, sought to
testify about a business dispute he had with his law firm. The court determined the
evidence was relevant only to the motive and credibility of testifying law firm partners.
At the hearing’s conclusion, the Utah judge found by a preponderance of the evidence
that respondent had knowingly misappropriated law firm funds and imposed a 150-day
suspension from the practice of law. The Utah Supreme Court affirmed the 150-day
suspension. In re Discipline of Barrett, 391 P.3d 1031, 1037-38 (Utah 2017).

        Following entry of the Utah order, the New Jersey Office of Attorney Ethics
(OAE) moved before the Disciplinary Review Board (DRB) for reciprocal discipline and
requested respondent’s disbarment. Relying on In re Siegel, 133 N.J. 162, 170 (1993),
the DRB recommended disbarment. The Court dismissed without prejudice the OAE’s
motion for reciprocal discipline, noting that “the findings of the tribunal in Utah were based
on a preponderance of the evidence standard instead of the clear and convincing standard
applicable to New Jersey disciplinary proceedings.” 234 N.J. 81, 82 (2018). The OAE
filed a motion for reconsideration, which the Court granted. ___ N.J. ___ (2018).

HELD: Because the Utah court limited the presentation of evidence of a business
dispute between respondent and the law firm, and because evidence that may exist in
Utah cannot be compelled by respondent here, the Court cannot conclude that the OAE
has proven by clear and convincing evidence that respondent knowingly misappropriated
law firm funds under circumstances justifying greater discipline than that imposed in
Utah.

                                              1
1. In reciprocal discipline cases, the Court should impose the same discipline as the
foreign jurisdiction unless the matter is within one of five enumerated exceptions. One of
the exceptions is germane to this case -- that “the unethical conduct established warrants
substantially different discipline.” R. 1:20-14(a)(4)(E). To “argue that the law of this
state or the facts of the case do or should warrant the imposition of greater discipline than
that imposed in [the] other jurisdiction[],” the Director of the OAE must “establish[] such
contentions by clear and convincing evidence.” Id. § 14(a)(4). (pp. 5-6)

2. When a New Jersey attorney misappropriates law firm funds, the facts and
circumstances of the particular case determine the sanctions warranted, up to and
including disbarment. See Siegel, 133 N.J. at 170 (“[K]nowingly misappropriating funds -
- whether from a client or from one’s partners -- will generally result in disbarment.”
(emphasis added)); see also In re Sigman, 220 N.J. 141, 158 (2014) (explaining that
Siegel’s holding “is not, and has never been, absolute” and that “[t]he Court has
recognized in other settings that there are cases that warrant discipline short of
disbarment”). (pp. 6-7)

3. The only evidence produced by the OAE in support of sanctions greater than a 150-
day suspension is the record of proceedings before the Utah court. Importantly, in New
Jersey disciplinary proceedings, evidence of a business dispute may be a defense to the
misappropriation of law firm funds. Utah has no such business dispute defense, the Utah
record lacks facts necessary to establish a business dispute defense, and evidence of the
existence of a business dispute would be integral, in New Jersey, to defending against a
charge of knowing misappropriation of law firm funds. In Utah, respondent’s incentive
to produce evidence of a business dispute was far different than what his motivation to
produce such evidence in New Jersey would have been. (pp. 7-8)

4. Respondent claims that if permitted and motivated to do so, he could have produced
additional evidence of a business dispute in Utah. Any such evidence that may have been
available during the Utah proceedings remains in Utah, outside of respondent’s and the
OAE’s reach. It would therefore be fundamentally unfair and contrary to established
rules to disbar respondent in New Jersey -- a greater discipline than that imposed in Utah
-- based only upon the record of proceedings in Utah. (pp. 8-10)

       The Court imposes a 150-day retroactive suspension of respondent’s license to
practice law in New Jersey.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON,
FERNANDEZ-VINA, SOLOMON, and TIMPONE join in this opinion.

                                             2
                     SUPREME COURT OF NEW JERSEY
                         D-126 September Term 2017
                                     081035

                                 In the Matter of,

                             Joseph Peter Barrett,

                              an Attorney at Law.

              On an Order to show cause why respondent should
                  not be disbarred or otherwise disciplined.

                    Argued                         Decided
                 June 11, 2019                  July 15, 2019

            Charles Centinaro, Director, argued the cause on behalf
            of the Office of Attorney Ethics.

            John McGill, III, argued the cause for respondent
            (McGill Law Practice, attorneys).

                                 PER CURIAM

      In this ethics proceeding, we are called upon to consider whether an

attorney who received a 150-day suspension for knowing misappropriation of

law firm funds in Utah -- a jurisdiction that applies a preponderance of the

evidence standard and recognizes no business dispute defense -- may, based

only on the Utah record, be disbarred under New Jersey’s clear and convincing

evidence standard.

                                        1
      We conclude that in this case, Rule 1:20-14(a), which governs reciprocal

discipline, does not permit “substantially different discipline” from that

imposed in Utah. R. 1:20-14(a)(4)(E). While a lawyer’s misappropriation of

law firm funds may warrant disbarment in some cases, In re Sigman, 220 N.J.

141, 153 (2014), we determine that the New Jersey Office of Attorney Ethics

(OAE) did not demonstrate that the record of proceedings in Utah establishes

by clear and convincing evidence that the circumstances here warrant

respondent Joseph Peter Barrett’s disbarment. Therefore, like the Utah

Supreme Court, we impose a 150-day suspension of respondent’s license to

practice law in New Jersey, which we apply retroactively.

                                        I.

      We briefly summarize the facts and procedural history outlined in the

Disciplinary Review Board’s (DRB) decision, which relied upon the

disciplinary record developed in Utah. See R. 1:20-14(a)(5).

      In two separate law firm matters handled by respondent while engaged

in the practice of law in Utah, respondent traded legal fees earned for his law

firm in exchange for construction work performed at his home in Utah; he did

so without the knowledge or consent of his law firm and in violation of his law

firm’s employment contract. Respondent’s actions deprived his law firm of

more than $20,000 in legal fees.

                                        2
        In disciplinary proceedings before Utah’s District Court of the Third

Judicial District, respondent, in order to explain and justify his conduct, sought

to testify about a business dispute he had with his law firm. The court

questioned the relevancy of the evidence and determined that it was relevant

only to the motive and credibility of testifying law firm partners. As such,

respondent testified briefly regarding the business dispute.

        At the hearing’s conclusion, the Utah judge found by a preponderance of

the evidence that respondent had knowingly misappropriated law firm funds

and imposed a 150-day suspension from the practice of law. The Utah Office

of Professional Conduct appealed respondent’s 150-day suspension to the Utah

Supreme Court, and requested that respondent be disbarred -- the presumed

penalty for knowing misappropriation of client funds,1 but not for the knowing

misappropriation of law firm funds. The Utah Supreme Court clarified that

“not all misappropriation is created equal,” and declined the request “to hold

that disbarment is the appropriate sanction whenever an attorney

misappropriates firm funds.” In re Discipline of Barrett, 391 P.3d 1031, 1037-

1
    See In re Discipline of Babilis, 951 P.2d 207, 217 (Utah 1997).
                                         3
38 (Utah 2017). Relying upon Utah’s disciplinary rules, 2 the Utah Supreme

Court affirmed the 150-day suspension. Id. at 1038.

      Following entry of the Utah Supreme Court’s order, the OAE moved

before the DRB for reciprocal discipline pursuant to Rule 1:20-14(a) and

requested respondent’s disbarment. In response, respondent contended that the

Utah court deprived him of the opportunity to fully develop facts supporting

his claimed business dispute with the law firm. Respondent therefore argued

that because the OAE’s burden of proof in New Jersey disciplinary

proceedings -- clear and convincing evidence -- is greater than Utah’s

preponderance standard, Rule 1:20-14(a) precludes his disbarment in New

Jersey. The DRB acknowledged that Utah has eschewed adopting a bright-line

rule mandating disbarment for the knowing misappropriation of law firm funds

but, relying on In re Siegel, 133 N.J. 162, 170 (1993), recommended

respondent’s disbarment.

      This Court dismissed without prejudice the OAE’s motion for reciprocal

discipline, noting that “the findings of the tribunal in Utah were based on a

preponderance of the evidence standard instead of the clear and convincing

standard applicable to New Jersey disciplinary proceedings.” 234 N.J. 81, 82

2
  Utah RPC 8.4(c), like New Jersey RPC 8.4(c), states that a lawyer engages
in professional misconduct when he or she “engage[s] in conduct involving
dishonesty, fraud, deceit or misrepresentation.”
                                        4
(2018). The OAE filed a motion for reconsideration, contending that divergent

standards of proof do not operate as a bar to reciprocal discipline in this case.

We granted the OAE’s motion for reconsideration. ___ N.J. ___ (2018).

                                        II.

      In attorney disciplinary proceedings, we are obliged “to conduct an

independent review of the record, R. 1:20-16(c), and determine whether the

ethical violations found by the DRB have been established by clear and

convincing evidence.” In re Pena, 164 N.J. 222, 224 (2000). Here, we

undertake this task in the context of reciprocal discipline -- “the process by

which New Jersey applies its ethics rules to an attorney admitted in New

Jersey, following the imposition of discipline in an ethics proceeding

conducted by a sister jurisdiction.” Sigman, 220 N.J. at 153. As such, our

review involves “a limited inquiry, substantially derived from and reliant on

the foreign jurisdiction’s disciplinary proceedings.” Ibid.

      Consistent with that standard, our rules instruct that we should impose

the same discipline as the foreign jurisdiction unless the matter is within one

of five enumerated exceptions. One of the exceptions is germane to this case

-- that “the unethical conduct established warrants substantially different

discipline.” R. 1:20-14(a)(4)(E). To “argue that the law of this state or the

facts of the case do or should warrant the imposition of greater discipline than

                                        5
that imposed in [the] other jurisdiction[],” the Director of the OAE must

“establish[] such contentions by clear and convincing evidence.” Id.

§ 14(a)(4). Here, the OAE bears the burden of proving by clear and

convincing evidence that respondent knowingly misappropriated law firm

funds. Respondent is entitled to produce evidence that the purported

misappropriation was, in fact, a business dispute. We must then determine

whether the OAE has proven by clear and convincing evidence that the facts of

the case warrant the imposition of “greater discipline than that imposed in”

Utah -- namely, the sanction of disbarment. Ibid.

                                        III.

      The record of the Utah disciplinary proceedings shows that respondent

twice misappropriated funds that belonged to his law firm and thus violated

two New Jersey RPCs: RPC 1.15(a), which requires a lawyer to “hold

property of clients or third persons that is in [his or her] possession in

connection with a representation separate from the lawyer’s own property”;

and RPC 8.4(c), which prohibits a lawyer from “engag[ing] in conduct

involving dishonesty, fraud, deceit or misrepresentation.” When a New Jersey

attorney misappropriates law firm funds, the facts and circumstances of the

particular case determine the sanctions warranted, up to and including

disbarment. See Siegel, 133 N.J. at 170 (“[K]nowingly misappropriating funds

                                         6
-- whether from a client or from one’s partners -- will generally result in

disbarment.” (emphasis added)); see also Sigman, 220 N.J. at 158 (explaining

that Siegel’s holding “is not, and has never been, absolute” and that “[t]he

Court has recognized in other settings that there are cases that warrant

discipline short of disbarment”).

      The only evidence produced by the OAE in support of sanctions greater

than a 150-day suspension is the record of proceedings before the Utah court.

Importantly, in New Jersey disciplinary proceedings, evidence of a business

dispute may be a defense to the misappropriation of law firm funds. See, e.g.,

Sigman, 220 N.J. at 162 (concluding that disbarment is inappropriate where

the underlying misappropriation “arose in a business dispute between the

attorney and his firm”). As the OAE concedes, Utah has no such business

dispute defense.

      Although the Utah judge did not “see a huge amount of relevancy” in

testimony concerning respondent’s business dispute with the law firm, the

judge did allow respondent to touch upon such evidence for the limited

purpose of undermining the credibility of the testifying law firm partners.

Respondent thus argues that the Utah court excluded evidence relevant to

whether the misappropriation at issue arose in the context of a business dispute

with his law firm.

                                        7
      The OAE acknowledges both that the Utah record lacks facts necessary

to establish a business dispute defense and that evidence of the existence of a

business dispute would be integral, in New Jersey, to defending against a

charge of knowing misappropriation of law firm funds. It also concedes that it

cannot subpoena witnesses and produce evidence beyond the Utah record to

support its request for greater discipline. Nevertheless, the OAE claims that

those limitations do not preclude us from relying on the Utah record to support

a finding of knowing misappropriation of law firm funds warranting

respondent’s disbarment. We disagree.

      Central to our conclusion is that in Utah, respondent’s incentive to

produce evidence of a business dispute was far different than what his

motivation to produce such evidence in New Jersey would have been. In Utah,

the court permitted respondent to elicit testimony regarding a business dispute

with his law firm only to assist the court in assessing the testifying law firm

partners’ credibility. Here, evidence of a business dispute militates against

disbarment, notwithstanding an attorney’s misappropriation of law firm funds

in violation of RPC 8.4(c).

      Respondent claims that if permitted and motivated to do so, he could

have produced additional evidence of a business dispute in Utah -- the State

where the alleged business dispute occurred. The OAE and this Court agree

                                        8
that any evidence to establish a business dispute that may have been available

during the Utah proceedings remains in Utah, outside of respondent’s and the

OAE’s reach. We therefore believe it would be fundamentally unfair and

contrary to our established rules to disbar respondent here -- a greater

discipline than that imposed in Utah -- based only upon the record of

proceedings in Utah. See In re Gallo, 178 N.J. 115, 120 (2003) (finding that

the imposition of discipline premised on an incomplete record “would not be

fair” absent the opportunity for further testimony); cf. In re Gipson, 103 N.J.

75, 77 (1986) (imposing discipline where “the procedures afforded respondent

accorded with principles of fundamental fairness”).

      Our constitutional responsibility is to determine the fitness of lawyers to

practice law in New Jersey. See N.J. Const. art. VI, § 2, ¶ 3. In doing so, “we

cannot ignore relevant information that places an attorney’s conduct in its true

light.” Gallo, 178 N.J. at 120. Rather, “the details must be known, whether

supportive or destructive of respondent’s position.” Id. at 122. Here -- as in

every disciplinary matter before this Court -- respondent, the OAE, and

members of the public “are entitled to a disciplinary review process in which a

full, undistorted picture is the basis for disciplinary sanctions.” Id. at 120.

Since no such record exists here, we are without a basis for the imposition of

heightened discipline.

                                         9
      Because the Utah court limited the presentation of evidence of a

business dispute between respondent and the law firm, and because evidence

that may exist in Utah cannot be compelled by respondent here, we cannot

conclude that the OAE has proven by clear and convincing evidence that

respondent knowingly misappropriated law firm funds under circumstances

justifying greater discipline than that imposed in Utah.

                                       IV.

      For the foregoing reasons, we impose a 150-day retroactive suspension

of respondent’s license to practice law in New Jersey.

      CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in this
opinion.

                                       10