Court Opinion

ID: 2762308
Source: CourtListenerOpinion
Date Created: 2014-12-18 15:12:58.497864+00
Date Added: 2024-06-11T09:32:36.225157
License: Public Domain

SYLLABUS

(This syllabus is not part of the opinion of the Court. 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 Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

                   In the Matter of Scott P. Sigman, An Attorney at Law (D-126-13) (074489)

Argued September 9, 2014 -- Decided December 18, 2014

PATTERSON, J., writing for a unanimous Court.

         In this attorney disciplinary matter, the Court considers the appropriate level of discipline for respondent
Scott P. Sigman, who, as a result of misconduct involving the misappropriation of law firm funds, was brought
before New Jersey disciplinary authorities on a motion for reciprocal discipline following imposition of a thirty-
month suspension in Pennsylvania.

          Respondent was admitted to the bars of New Jersey and Pennsylvania in 2001 and, prior to the proceedings
that gave rise to his Pennsylvania suspension, had no history of discipline in either jurisdiction. This matter arose
from respondent’s employment as an associate in the Philadelphia firm of Bochetto & Lentz, P.C., between July
2005 and March 2009. Under the terms of his employment, respondent could not handle independent client matters
or matters not approved by George Bochetto, Esq. Respondent also was prohibited from: (1) referring clients to
other attorneys; (2) declining referrals without his employer’s consent; and (3) charging retainers or fees to clients or
prospective clients without Bochetto’s approval. Respondent was entitled to certain percentages of the firm’s fees
depending on what type of case or fee arrangement existed and whether the client was a referral or had been
originated by respondent. For matters referred by an attorney outside the firm, the referring attorney also would
receive a percentage of the firm’s fees.

          Respondent’s Pennsylvania suspension, and the New Jersey Office of Attorney Ethics’s (OAE) petition for
reciprocal discipline, derive from seven allegations of misconduct. Five of the alleged instances of misconduct
involved respondent’s violation of his firm’s referral and fee terms. Specifically, respondent allegedly: (1) handled
a matter referred by a former firm attorney without Bochetto’s permission and without sharing the $600 fee with the
firm; (2) referred a prospective client to a non-firm attorney without Bochetto’s knowledge; (3) instructed a client to
pay $5,000 to him personally and then lied to Bochetto about the payment; (4) promised a referring attorney a fee
without obtaining Bochetto’s permission and lied to the firm’s bookkeeper that he had originated the client; and (5)
referred a client to another attorney without Bochetto’s approval and failed to share the referral fee with the firm.
The sixth instance of misconduct arose from respondent’s misrepresentation to Bochetto regarding his role in a real
estate purchase, which caused the firm to misstate certain facts in a letter to the property buyers, and respondent’s
false testimony in an affidavit and deposition arising from a related insurance dispute. Finally, the seventh instance
of misconduct concerned respondent’s disclosure of the firm’s Westlaw password to an acquaintance who accrued
over $3,000 in unauthorized charges.

          After respondent’s employment with the firm was terminated, he filed a civil lawsuit alleging that the firm
had wrongfully retained funds owed to him as referral fees for legal work he had generated. An arbitrator
determined that the firm owed respondent $123,942.93. During the disciplinary proceedings, respondent stipulated
that the firm lost $25,468.18 as a result of his misconduct and conceded that it was entitled to deduct that amount, as
a setoff, from the funds escrowed as part of the arbitration.

          The Pennsylvania disciplinary authorities agreed that several mitigating factors applied in respondent’s
case, including his admission of misconduct and cooperation with authorities, as well as his remorse, lack of a prior
disciplinary history, and active involvement with various professional and community organizations. The
Pennsylvania Disciplinary Board recommended a thirty-month suspension, which was imposed by the Pennsylvania
Supreme Court on February 28, 2013.

         On December 20, 2013, the OAE petitioned the Disciplinary Review Board (DRB) for reciprocal
discipline, based on respondent’s admitted violation of Pennyslvania disciplinary rules, and New Jersey RPCs

                                                           1
1.15(a), 1.15(b), 3.4(a), 8.4(c), and 8.4(d). Reasoning that respondent’s conduct constituted a lengthy and
premeditated fraud in which he misappropriated funds belonging to his employer and falsely testified in legal
proceedings, the OAE sought an order of disbarment. Following a de novo review of the record, the DRB accepted
as conclusive the Pennsylvania Disciplinary Board’s factual findings, as per Rule 1:20-14(a)(4). A majority of the
DRB reasoned that respondent’s knowing misappropriation of law firm funds constituted an offense warranting
disbarment under New Jersey law. One dissenting member voted to impose a three-year suspension.

       Because of the DRB’s disbarment recommendation, this Court ordered respondent to show cause on
September 9, 2014, why he should not be disbarred or otherwise disciplined.

HELD: Respondent’s unethical conduct, consisting of repeatedly breaching the trust that must exist between a law
firm and the professionals whom it employs, warrants the imposition of a prospective thirty-month suspension of his
license to practice law, as reciprocal discipline under Rule 1:20-14.

1. In attorney disciplinary proceedings, the Court is obligated to conduct an independent review of the record and
determine whether the violations found by the DRB have been established by clear and convincing evidence. 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, the
inquiry is limited and generally results in the same discipline as that imposed in the foreign jurisdiction, unless the
matter falls within the five exceptions established in Rule 1:20-14(a)(4). In order to serve the interest of judicial
economy and promote the imposition of consistent sanctions for the misconduct of an attorney admitted in multiple
states, Rule 1:20-14(a)(5) mandates deference to the factfinding of the foreign jurisdiction. (pp. 15-18)

2. This case does not involve the misappropriation of client funds held in a trust or escrow account, and is therefore
not governed by In re Wilson, 81 N.J. 451 (1979) or In re Hollendonner, 102 N.J. 21 (1985). Rather, in several
matters in the OAE complaint, respondent admittedly misappropriated law firm funds in violation of New Jersey
RPCs 1.15(a) and 8.4(c). These violations unquestionably involve serious misconduct warranting substantial
discipline, but the Court disagrees with the DRB’s conclusion that In re Siegel, 133 N.J. 162 (1993) and similar
cases mandate disbarment whenever an attorney knowingly misappropriates law firm funds. In both Siegel and In re
Greenberg, 155 N.J. 138 (1998), the Court held that knowing misappropriation of funds, whether from a client or
one’s partners, will generally result in disbarment. In the wake of those cases, the Court has adopted the DRB’s
recommendation of disbarment in several disciplinary matters involving lawyers found to have misappropriated law
firm resources. However, the rule of Siegel and Greenberg is not absolute, and, in settings involving significant
mitigating factors or disputes with law partners, the Court has imposed discipline short of disbarment, ranging from
a reprimand to a six-month suspension. (pp. 19-27)

3. The rule of Siegel and Greenberg does not compel diversion from the discipline imposed by Pennsylvania.
Rather, the imposition of discipline consistent with that administered by Pennsylvania is particularly appropriate
here. The Pennsylvania disciplinary authorities have significant experience with respect to the adjudication of
disciplinary matters involving referral fees, a practice that is generally permitted under Pennsylvania’s ethical rules
but authorized only in limited circumstances in New Jersey. Moreover, compelling mitigating factors in the record,
including respondent’s lack of a disciplinary history and admission of his wrongdoings, warrant a sanction short of
disbarment. Also, there is no allegation or finding that respondent stole client funds, having instead misappropriated
referral and legal fees in the context of conflicting payment practices and a deteriorating relationship with his firm.
The Court sees no distinction between this case and other cases involving misappropriation from the respondent’s
firm in which the Court imposed sanctions other than disbarment. In such cases, the sanction of disbarment should
not turn on whether an attorney contends that his misappropriation of firm resources is justified, as a form of self-
help in an ongoing dispute with his partners about compensation, or candidly admits that his conduct was wrong.
Here, respondent admittedly repeatedly breached the trust that must exist between a law firm and the professionals
whom it employs, and his misconduct warrants the imposition of a significant sanction. Consequently, respondent is
prospectively suspended for a period of thirty months, as reciprocal discipline under Rule 1:20-14. (pp. 27-30)

         So Ordered.

     CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-VINA and
SOLOMON; and JUDGE CUFF (temporarily assigned) join in JUSTICE PATTERSON’s opinion.

                                                           2
                                       SUPREME COURT OF NEW JERSEY
                                        D-126 September Term 2013
                                                 074489

IN THE MATTER OF

SCOTT P. SIGMAN,

An Attorney at Law

           Argued September 9, 2014 – Decided December 18, 2014

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

           Jason D. Saunders, Deputy Ethics Counsel,
           argued the cause on behalf of the Office of
           Attorney Ethics.

           Kenneth D. Aita argued the cause for
           respondent.

    JUSTICE PATTERSON delivered the opinion of the Court.

    In an ethics proceeding conducted by the Pennsylvania

Office of Disciplinary Counsel (ODC), respondent Scott P. Sigman

admitted to violating several Pennsylvania Rules of Professional

Conduct.   Respondent’s disciplinary proceedings arose from his

misappropriation of referral and legal fees that should have

been paid, in whole or in part, to the law firm that employed

him, his misuse of other resources belonging to his employer,

and his false testimony regarding insurance proceeds issued in a

real estate matter.   With respondent’s consent, and based on his

                                 1
admissions of wrongdoing, the Supreme Court of Pennsylvania

suspended his license to practice law in that state for a period

of thirty months.

    Following the suspension of respondent’s Pennsylvania law

license, the New Jersey Office of Attorney Ethics (OAE) moved

before the Disciplinary Review Board (DRB) for reciprocal

discipline pursuant to Rule 1:20-14(a).    A majority of the DRB

recommended disbarment, reasoning that respondent had knowingly

misappropriated law firm funds and that such misconduct mandates

disbarment in New Jersey.   A dissenting DRB member voted for a

three-year suspension.

    Applying the standard of Rule 1:20-14(a), which governs the

imposition of reciprocal discipline following disciplinary

proceedings conducted by another jurisdiction, we do not find

that respondent’s misconduct warrants “substantially different

discipline” from the sanction imposed by Pennsylvania

authorities for conduct that took place during and after his

employment with a Philadelphia law firm.   Notwithstanding our

longstanding rule that a lawyer’s misappropriation from a law

firm may warrant disbarment, we conclude that the circumstances

of this case warrant discipline short of the ultimate sanction

of disbarment.   Respondent has presented a significant showing

of compelling mitigating factors, including his prior record of

no disciplinary proceedings, his contribution to the legal

                                 2
profession and his community, his candid admission of

wrongdoing, his cooperation with disciplinary authorities, and

the ongoing business dispute between respondent and his former

law firm, during which his misconduct was reported to

Pennsylvania ethics authorities.     We do not find in this case

compelling reasons to depart from the discipline imposed by our

sister jurisdiction.

    Thus, in accord with the determination of the Supreme Court

of Pennsylvania, we impose a thirty-month suspension of

respondent’s license to practice law in New Jersey.

                                I.

    We rely on the stipulated summary of the record set forth

in the joint petition in support of discipline on consent, filed

by the ODC before the Disciplinary Board of the Supreme Court of

Pennsylvania, which was the basis for the DRB’s decision and

recommendation in this case.   See R. 1:20-14(a)(5).

    Respondent was admitted to the bars of New Jersey and

Pennsylvania in 2001.   Prior to the proceedings that led to his

suspension in Pennsylvania, he had no history of discipline in

either jurisdiction.

    This matter arose from respondent’s employment as an

associate in the Philadelphia law firm of Bochetto & Lentz,

P.C., from July 5, 2005 through March 6, 2009.     Although the

record does not reflect that respondent had a written employment

                                3
agreement, he has admitted that he was aware that certain terms

governed his employment with Bochetto & Lentz.    Respondent

understood that he was barred from handling client matters that

were independent of the firm or were not approved by George

Bochetto, Esq. (Bochetto), of Bochetto & Lentz.    Respondent was

also aware that he was prohibited from referring actual or

prospective client matters to other attorneys, was not permitted

to decline referrals from other lawyers without his employer’s

consent, and was barred from charging retainers or fees to

clients or prospective clients without Bochetto’s approval.

Respondent understood his obligation to record his time spent on

firm-client matters and non-client activity that was related to

his employment.

    The stipulated record includes a summary of the fee-

allocation rules that governed respondent’s arrangement with

Bochetto & Lentz.   For purposes of allocating shares of fees,

the law firm evidently considered client matters “originated” by

an associate to be distinct from client matters “referred” to

that associate by attorneys from other firms; it is unclear what

precisely distinguished those two categories.     With respect to

cases “originated” by an associate, respondent was entitled to

receive twenty percent of the fees received by the firm if the

matter involved criminal defense or was in the “hourly-paid”

category, and thirty-three and one-third percent of the fees

                                 4
received by the firm if the matter was handled on a contingent-

fee basis.   If the matter was referred by an attorney outside

the firm, and the client approved a referral fee arrangement,

the referring attorney typically would receive twenty percent of

the fees received by the firm and respondent would receive eight

percent of the fees.   The record does not indicate whether those

billing arrangements were memorialized in writing, or whether

the basic terms were varied for particular cases.

     Respondent’s Pennsylvania suspension, and the OAE’s

petition for reciprocal discipline, derive from seven

allegations of misconduct, in violation of several Pennsylvania

Rules of Professional Conduct (Pennsylvania RPCs).1

     The first allegation concerns a representation undertaken

by respondent in early 2007.   Respondent was retained by a

former Bochetto & Lentz attorney to handle a hearing involving

the suspension of the client’s driver’s license.    Respondent

handled the matter without obtaining permission from Bochetto,

and did not share the $600 fee with his firm.2   Respondent

1 Three of the seven Pennsylvania RPCs violated in this case,
3.4(a), 8.4(c), and 8.4(d), are virtually identical to their New
Jersey counterparts. Pennsylvania RPC 1.15(c) was not adopted
in New Jersey. The remaining three, Pennsylvania RPCs 1.15(b),
1.15(d), and 1.15(e), have no direct New Jersey counterparts but
were incorporated, in substance, in different provisions of New
Jersey RPC 1.15.
2 Under respondent’s arrangement with the firm, Bochetto & Lentz

was entitled to either $480 generated by the representation if
                                 5
contends that the firm was aware of his representation of the

client because he recorded his time, and notes that only a small

amount of money was at issue.    However, as he stipulated in his

Pennsylvania disciplinary proceedings, and as the Pennsylvania

ODC found, respondent’s conduct violated Pennsylvania RPCs

1.15(a) (duty to keep property of others in identified bank

account), 1.15(b) (duty to notify third person of receipt of

funds in which third person has interest), and 8.4(c) (conduct

involving dishonesty, fraud, deceit or misrepresentation).

    The Pennsylvania ODC’s second allegation involved

respondent’s September 2007 referral of a prospective client to

another attorney without Bochetto’s knowledge or permission.

Respondent stipulated, and the ODC found, that he violated

Pennsylvania RPCs 1.15(a), 1.15(b), and 8.4(c).    Respondent

admits in this proceeding that he referred the client without

notifying his employer, but he contends that the matter was

merely a business dispute between him and his employer.

    The third allegation in the Pennsylvania ODC proceedings

against respondent arose from his representation of a client in

three matters in early 2008.    In accordance with the firm’s

requirements, respondent recorded his time on the file and

the matter was considered “originated” by him, or $432 if it was
considered a “referral” matter.

                                 6
arranged for the initial legal fees to be paid by the client’s

father to Bochetto & Lentz.    However, respondent admittedly

instructed the client’s father to write a $5000 check payable to

respondent personally, as payment for a portion of the legal

work performed on the client’s behalf.    He deposited the check

in his account and spent the money on personal expenses.

    The diversion of the $5000 legal fee was discovered by

Boccheto & Lentz after respondent’s departure from the firm,

when the client’s father requested that the money be refunded.

Confronted by Boccheto about the disputed funds, respondent lied

to his former employer, claiming that the client’s father had

never sent a check for $5000, and then instructed the client’s

father not to contact his former firm.    Eventually, respondent

refunded $4000 of the $5000 paid and retained the remaining

$1000, eighty percent of which was payable to Bochetto & Lentz

under the fee arrangements that governed his employment.

Respondent stipulated, and the ODC found, that this conduct

violated Pennsylvania RPCs 1.15(a), 1.15(b), and 8.4(c).

    The Pennsylvania ODC’s fourth allegation against respondent

involved another attorney’s referral of a client to respondent

in April 2007.   Although respondent obtained Bochetto’s approval

to represent the client, he neglected to advise his firm that he

had promised the referring attorney that the firm would pay a

referral fee.    Moreover, respondent represented to the firm’s

                                  7
bookkeeper that he was the originating attorney, entitled to

twenty percent of the firm’s fees, rather than the recipient of

an outside lawyer’s referral, which “typically” entitled him to

only an eight-percent share of the billings.      Respondent admits

that, as a result of his misrepresentations to Bochetto & Lentz

regarding the origin of the matter, he received $3,988.18 to

which he was not entitled under the firm’s referral fee

procedures, and the referring attorney did not receive the

referral fee authorized by Pennsylvania RPC 1.5(e).      Respondent

stipulated, and the ODC found, that his conduct violated

Pennsylvania RPCs 1.15(a), 1.15(b) and 8.4(c).      He asserts in

this proceeding that the referring attorney would not have been

entitled to a referral fee under New Jersey’s RPCs, and that

this incident constituted a business dispute that did not affect

the legal services that he provided on his clients’ behalf.

    The Pennsylvania ODC’s fifth allegation arises from yet

another dispute over a referral fee.       In June 2007, respondent

consulted with a potential client interested in asserting a

slip-and-fall claim against a Philadelphia hotel and referred

that client to another attorney.       Although respondent stipulated

that he did not obtain Bochetto’s approval before referring the

matter to the other attorney, he contends that Bochetto told him

that “it was a bad case” and instructed him to “get rid of” the

case.

                                   8
    In April 2009, a month after respondent left his employment

at Bochetto & Lentz, the attorney to whom the slip-and-fall

matter had been referred settled the matter, and paid respondent

$28,800, representing one-third of the legal fee that he had

been paid for his work on the matter, as a referral fee.      As

respondent acknowledges, his agreement with Bochetto & Lentz

entitled the firm to $19,200 of that fee.     However, respondent

retained the entire $28,800 for his own use.     Respondent

stipulated, and the ODC found, that his handling of this

referral fee violated Pennsylvania RPCs 1.15(b), 1.15(d) (duty

to promptly notify third party of receipt of funds), 1.15(e)

(duty to promptly deliver property to which third party is

entitled), and 8.4(c).

    The sixth allegation concerned respondent’s representation

of a client whose home in New Jersey had been destroyed in a

fire during a foreclosure, raising the possibility of an

investigation of arson.     In an arrangement approved by Boccheto,

respondent and the client agreed in writing in December 2005,

that the client would pay a $5000 non-refundable retainer prior

to any criminal investigation that might be instituted for an

alleged arson.   As the originating attorney, respondent was paid

$750 by Boccheto & Lentz.    After being retained for purposes of

the arson investigation, Boccheto & Lentz also represented the

                                  9
client in connection with two charges of driving under the

influence.

    Following his retention to represent the client in the

arson investigation, respondent communicated with attorneys

representing potential buyers of the property and their lender,

who were attempting to forestall a sheriff’s sale and privately

acquire the property.   The buyers purchased the property, paying

off the balance of a mortgage held by a local bank.      The real

estate purchase agreement entitled the buyers to any insurance

proceeds obtained as a result of the fire loss.

    Following the sale, the insurance company that had provided

coverage for property damage sent to the bank that had held the

mortgage of the property a check in the amount of $130,727.45,

in satisfaction of its obligation to compensate the bank for the

loss of the improvements on the property that had served as

collateral for the mortgage loan.      Having no remaining interest

in the property, the bank endorsed the check and sent it to

respondent’s client, who in turn directed that respondent

deposit it in Boccheto & Lentz’s escrow account, evidently

without notifying the property’s new owners that insurance

proceeds had been received.

    Several months later, at the client’s direction, respondent

distributed the escrowed funds.     In addition to paying the

client’s outstanding tax liability in the amount of $13,498,

                                  10
respondent distributed $60,000 to Bochetto & Lentz in payment

for the firm’s defense of the client’s driving-under-the-

influence charges, and returned the remaining $57,228.62 to the

client.   Bochetto & Lentz then paid $12,000 to respondent, who

was the attorney credited with originating the representation of

the client in the driving under the influence charges.    The firm

retained the remaining $48,000 of its legal fee.   Respondent did

not notify the purchasers of the property that the insurance

proceeds had been received and disbursed.

    Thereafter, the property’s new owners asserted a claim to

the disbursed insurance proceeds, based on the purchase

agreement.   Despite his prior involvement with the real estate

transaction, respondent claimed that he had not reviewed the

purchase agreement and that he was uncertain whether his client

had been entitled to the insurance proceeds that had been held

in escrow.   Following a meeting with respondent, Bochetto

advised the purchasers in writing that respondent had been

unaware of the purchasers’ claim to the insurance proceeds

because he had not reviewed the purchase agreement, and that

respondent’s only legal advice to his client, the seller,

regarding the property was that the pending arson investigation

did not preclude the sale of the property.

    Respondent admitted in the Pennsylvania disciplinary

proceeding that he misrepresented to Bochetto his role in the

                                11
real estate purchase, and that, on the basis of those

misrepresentations, Bochetto’s letter to the property buyers

misstated certain facts.   Respondent also admitted that in an

affidavit and a deposition given in litigation arising from the

insurance dispute, he falsely testified regarding the history of

the transaction, his representation of the client and his

disbursement of the insurance proceeds.3   Respondent stipulated,

and the Pennsylvania ODC found, that this conduct violated

Pennsylvania RPCs 3.4(a) (obstruction of access to evidence),

8.4(c) and 8.4(d) (conduct prejudicial to administration of

justice).

     The Pennsylvania ODC’s seventh and final allegation

concerned respondent’s disclosure of the Westlaw password

assigned to him by Boccheto & Lentz to an acquaintance, who

accrued unauthorized Westlaw charges in the amount of $3,662.80.

Respondent stipulated, and the Pennsylvania ODC found, that he

violated Pennsylvania RPC 8.4(c).

     After his employment with Boccheto & Lentz was terminated,

respondent filed a civil lawsuit in a Pennsylvania court,

alleging that the firm had wrongfully retained funds that were

owed to respondent as referral fees for legal work that he had

3 Respondent later characterized the misstatements in his
deposition as the result of his faulty memory, and his counsel
sought a further deposition to correct “certain mistakes” in
respondent’s testimony.
                                12
generated as a firm employee.   An arbitrator eventually

determined that the firm owed respondent $123,942.93, and the

firm held that amount in escrow.       Prior to the arbitration

award, respondent stipulated during the Pennsylvania

disciplinary proceedings that as a result of his misconduct,

Boccheto & Lentz lost a total of $25,468.18.       He conceded that

the firm was entitled to deduct that amount, as a setoff, from

the funds escrowed as part of the arbitration; that setoff was

incorporated in the arbitration award.

    In the joint petition, the ODC and respondent agreed that

the following mitigating factors applied in respondent’s case:

respondent’s admission of his misconduct and his violations of

the relevant Pennsylvania RPCs; his cooperation with

disciplinary authorities; his remorse for his conduct and

understanding that he should be disciplined; his lack of a prior

disciplinary history; and his active involvement with the

Philadelphia Bar Association, a Philadelphia anti-drug community

group, and various other legal and volunteer organizations.       The

joint petition also noted letters written on respondent’s behalf

from members of the local community and by prominent members of

the Philadelphia bar, including a former Philadelphia District

Attorney and a law school dean.    In accordance with the

stipulations set forth in the joint petition, the Pennsylvania

Disciplinary Board recommended a thirty-month suspension, and

                                  13
that discipline was imposed by the Pennsylvania Supreme Court by

order dated February 28, 2013.

    Following the suspension of respondent’s Pennsylvania

license, his New Jersey disciplinary proceedings commenced.     On

December 20, 2013, the OAE petitioned the DRB for reciprocal

discipline based on respondent’s admitted violation of

Pennsylvania disciplinary rules, and New Jersey RPCs 1.15(a),

1.15(b), 3.4(a), 8.4(c), and 8.4(d).    The OAE did not advocate

for a suspension corresponding to the discipline imposed in

Pennsylvania.   Instead, reasoning that respondent’s conduct

constituted a lengthy and premeditated fraud in which he

misappropriated funds belonging to his employer and testified

falsely in an affidavit and a deposition, the OAE sought an

order of disbarment.

    The DRB conducted a de novo review of the record, which

consisted of the joint petition filed in the Pennsylvania

proceedings and the parties’ written submissions, and issued its

recommendations in a Decision dated June 13, 2014.    As required

by Rule 1:20-14(a)(4), the DRB accepted as conclusive the

Pennsylvania Disciplinary Board’s factual findings.    It

determined that respondent had:    failed to promptly notify third

persons upon receiving funds in which the third persons had an

interest, in violation of New Jersey RPC 1.15(b); failed to

separately retain funds in which a third person had an interest

                                  14
pending an accounting and severance of their interests, in

violation of New Jersey RPC 1.15(c); unlawfully obstructed

another person’s access to evidence, in violation of New Jersey

RPC 3.4(a); converted or knowingly misappropriated law firm

funds, in violation of New Jersey RPCs 1.15(a) and 8.4(c); and

engaged in conduct prejudicial to the administration of justice,

in violation of New Jersey RPC 8.4(d).

    A majority of the DRB reasoned that, by virtue of his

knowing misappropriation of law firm funds, respondent had

committed an offense mandating disbarment under New Jersey law,

and did not consider the appropriate sanction for the remaining

offenses.   A dissenting member of the DRB voted to impose a

three-year suspension, noting a concern that, notwithstanding

the terms of his employment with Bochetto & Lentz, respondent

may have believed that he had a colorable claim to the funds

that he retained.

                                II.

    “Our obligation in an attorney disciplinary proceeding is

to conduct an independent review of the record, Rule 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) (citing In re Di Martini, 158
N.J. 439, 441 (1999)).   Here, that inquiry occurs in the context

of reciprocal discipline, the process by which New Jersey

                                15
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.

    Our court rules set forth the procedure for reciprocal

discipline.   A New Jersey attorney who is disciplined “as an

attorney or otherwise in connection with the practice of law in

another jurisdiction,” must promptly inform the Director of the

Office of Attorney Ethics (Director) of the discipline imposed.

R. 1:20-14(a)(1).   The Director is authorized to file with the

DRB, and serve on the respondent, a motion for reciprocal

discipline, supported by proof of the judgment or order imposing

discipline in the other jurisdiction.   R. 1:20-14(a)(2).

    In contrast to Rules 1:20-3 through -9, which prescribe a

detailed procedure for investigations, formal hearings and

appellate review in attorney ethics matters originating in New

Jersey, our reciprocal discipline rule envisions a limited

inquiry, substantially derived from and reliant on the foreign

jurisdiction’s disciplinary proceedings.   Those proceedings

result in the same discipline that the foreign jurisdiction has

imposed, unless the matter is within one of the five exceptions

set forth in Rule 1:20-14(a)(4):

         [The DRB] shall recommend the imposition of
         the identical action or discipline unless the
         respondent demonstrates, or the [DRB] finds on
         the face of the record on which the discipline

                                16
         in another jurisdiction was predicated that it
         clearly appears that:

              (A)   the [disciplinary order] of the
                    foreign    jurisdiction      was   not
                    entered;
              (B)   the [disciplinary order] of the
                    foreign jurisdiction does not apply
                    to the respondent;
              (C)   the [disciplinary order] of the
                    foreign    jurisdiction     does   not
                    remain in full force and effect as
                    the     result       of      appellate
                    proceedings;
              (D)   the procedure followed in the
                    foreign disciplinary matter was so
                    lacking in notice or opportunity to
                    be   heard   as   to    constitute   a
                    deprivation of due process; or
              (E)   the unethical conduct established
                    warrants substantially different
                    discipline.

    The Rule permits the Director 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, and assigns to the Director “the burden of

establishing such contentions by clear and convincing evidence.”

R. 1:20-14(a)(4).   Absent such a showing, “the discipline

accorded in New Jersey will ordinarily correspond with that

imposed in the other jurisdiction.”   In re Kaufman, 81 N.J. 300,

303 (1979); see also In re Harris, 115 N.J. 181, 187 (1989).

    Rule 1:20-14(a)(5) mandates deference to the factfinding of

the foreign jurisdiction in reciprocal discipline proceedings,

limited only by the exceptions identified in Rule 1:20-14(a)(4):

                                17
          In all other respects, a final adjudication in
          another court, agency or tribunal, that an
          attorney admitted to practice in this state .
          . . is guilty of unethical conduct in another
          jurisdiction as an attorney or otherwise in
          connection with the practice of law, shall
          establish conclusively the facts on which it
          rests   for   purposes   of   a   disciplinary
          proceeding in this state.

          [Rule 1:20-14(a)(5).]

Thus, “[w]hen a New Jersey attorney who also is admitted to

practice in another jurisdiction is disciplined in that

jurisdiction, the other jurisdiction’s findings of misconduct

will be accepted by the New Jersey Supreme Court in a proceeding

under the New Jersey Disciplinary Rules.”   In re Pavilonis, 98
N.J. 36, 40 (1984) (citing Kaufman, supra, 81 N.J. at 302); see

also Harris, supra, 115 N.J. at 187.   New Jersey’s reliance on

the factual findings of the foreign jurisdiction’s disciplinary

authorities under Rule 1:20-14(a), and its application of

discipline identical to that imposed by the foreign jurisdiction

absent a showing by clear and convincing evidence that an

exception applies, serves the interest of judicial economy and

promotes the imposition of consistent sanctions for the

misconduct of an attorney admitted to practice in multiple

states.

    In that setting, we consider whether the OAE has proven by

clear and convincing evidence that New Jersey law or the facts

of respondent’s case warrant the imposition of “greater

                                  18
discipline than that imposed in” Pennsylvania -- in this case,

the sanction of disbarment.   R. 1:20-14(a)(4).    As respondent

has admitted, by misappropriating funds that belonged to his law

firm as alleged in the first, third, and fifth matters in the

OAE complaint, he violated two New Jersey RPCs:     RPC 1.15(a),

which requires a lawyer to “hold property of clients or third

persons that is in a lawyer’s possession in connection with a

representation separate from the lawyer’s own property,” and RPC

8.4(c), which provides that it is professional misconduct for a

lawyer to “engage in conduct involving dishonesty, fraud, deceit

or misrepresentation.”    Respondent’s violations of these Rules

unquestionably involved serious misconduct warranting

substantial discipline.   The question is whether the sanction

for that misconduct must be disbarment.

    This case does not involve the misappropriation of client

funds held in a trust or escrow account, and is therefore not

governed by In re Wilson, 81 N.J. 451 (1979) or In re

Hollendonner, 102 N.J. 21 (1985).     However, the OAE contended,

and the DRB concluded, that In re Siegel, 133 N.J. 162 (1993)

and similar cases mandate disbarment in all cases involving an

attorney’s knowing misappropriation of funds owed to his or her

law firm.

    The Court first explored the quantum of discipline imposed

on attorneys who misappropriate their employers’ resources in In

                                 19
re Spina, 121 N.J. 378 (1990).   There, the respondent, a member

of the New Jersey and District of Columbia bars, was employed by

an academic entity affiliated with the Georgetown University Law

Center.   Id. at 379-80.   Spina admitted to misappropriating

thousands of dollars in donors’ contributions to his employer to

replenish his chronically low bank balance, using the

misappropriated funds for extravagant personal expenses, and

submitting fraudulent claims for reimbursement.    Id. at 380-83,

390.   He pleaded guilty to the offense of taking property

without right in violation of the D.C. Criminal Code, the

equivalent of a disorderly persons offense under New Jersey law.

Id. at 379.   Accepting the DRB majority’s recommendation of

disbarment, the Court rejected Spina’s psychiatric defense:

               The   quirk   of   mind   that   bedevils
          respondent, however, did not, by his own
          admission, prevent him from a full realization
          that his misuse of ILI’s money was wrong. So
          flagrant were the ethical violations that we
          would not hesitate to disbar          had the
          misconduct arisen out of a lawyer-client
          relationship.    Nor do we believe that we
          should hesitate here, where the relationship
          was fiduciary in nature.
               There is no escaping the fact that Spina
          knowingly misused substantial amounts of his
          employer’s funds over a two-and-one-half-year
          period, taking quantities of money when his
          personal checking account ran low, and then
          lied when confronted by his employer.       No
          discipline   short   of  disbarment    can  be
          justified.

          [Id. at 390.]

                                 20
Thus, the respondent in Spina was disbarred for a protracted

scheme by which donors’ intended charitable gifts were diverted

for the attorney’s personal use.

    Three years later, the Court considered attorney

misappropriation of funds belonging to a law firm in Siegel,

supra, 133 N.J. at 163.   The respondent in Siegel, a partner at

a large law firm, violated RPC 8.4 by submitting to his firm

thirty-four false requests for disbursements in the course of

several years.   Id. at 163-64.    Rejecting the recommendation of

a majority of the DRB that it impose a three-year suspension,

the Court stated that it was “impressed by the DRB dissent,

which saw no ethical distinction between the prolonged,

surreptitious misappropriation of firm funds and the

misappropriation of client funds.”     Id. at 168.   The Court

rejected Siegel’s contention that his conduct was justified by

his “[f]rustration and disillusionment with [his] ‘firm[’s]

culture’ and dissatisfaction with [his] pay.”     Id. at 172.

Citing Spina as well as authority from other jurisdictions, the

Court held:

              These opinions make clear that knowingly
         misappropriating funds -- whether from a
         client or from one’s partners -- will
         generally result in disbarment. Although the
         relationship between lawyers and clients
         differs   from    that   between    partners,
         misappropriation from the latter is as wrong
         as from the former. A plainly-wrong act is

                                  21
          not immunized because the victims are one’s
          partners.

          [Id. at 170.]

    The Court discussed and refined the principle of In re

Siegel in another matter involving the misappropriation of law

firm funds, In re Greenberg, 155 N.J. 138 (1998).   There, the

DRB found that the respondent, Joel Greenberg, signed over two

settlement checks to a client that should have been maintained

in the trust account of Greenberg’s firm.   Id. at 141.   He then

instructed the client to issue a check payable to Greenberg

personally in payment of legal fees.   Ibid.   The DRB also found

that Greenberg falsified disbursement requests, using the

proceeds to pay his mortgage and other personal expenses.     Id.

at 141-43, 158.   Greenberg asserted a psychiatric defense,

contending that he suffered from a form of depression and that

he had not intended to misappropriate his firm’s funds.     Id. at

145-47.

    Rejecting Greenberg’s argument that mitigating factors

justified a sanction short of disbarment, the Court reaffirmed

its holding in Siegel, which it characterized as an application

of the Wilson rule regarding misappropriation of client funds.

It recognized “‘no ethical distinction between a lawyer who for

personal gain willfully defrauds a client and one who for the

same untoward purpose defrauds his or her partners.’”     Id. at

                                22
153 (quoting Siegel, supra, 133 N.J. at 167).   The Court

construed the “Wilson rule, as described in Siegel,” to mandate

the disbarment of lawyers found to have misappropriated firm

funds “‘[i]n the absence of compelling mitigating factors

justifying a lesser sanction, which will occur quite rarely.’”

Ibid. (quoting Siegel, supra, 133 N.J. at 167-68 (citations

omitted)).

    In the wake of Siegel and Greenberg, the Court has adopted

the DRB’s recommendation of disbarment in several disciplinary

matters involving lawyers found to have misappropriated law firm

resources.   See In re Leotti, 218 N.J. 6 (2014) (ordering

disbarment of attorney who diverted to personal accounts client

payments to his law firm for legal fees in several matters, In

re Leotti, DRB No. 13-344 (Apr. 11, 2014) (slip op. at 4-7)); In

re Denti, 204 N.J. 566, 567 (2011) (ordering disbarment of

attorney who maintained protracted scheme to defraud two law

firms with which he was affiliated, In re Denti, DRB No. 09-346

(Feb. 16, 2011) (slip op. at 2-3)); In re Staropoli, 185 N.J.
401 (2005) (on motion for reciprocal discipline, ordering

disbarment of attorney who personally retained legal fee derived

from settlement proceeds, two-thirds of which belonged to his

firm, In re Staropoli, DRB No. 04-319 (Feb. 25, 2005) (slip op.

at 2-3)); In re Epstein, 181 N.J. 305 (2004) (ordering

disbarment of attorney who diverted for personal use client

                                23
checks written to law firm in payment of legal bills, In re

Epstein, DRB No. 04-061 (May 19, 2004) (slip op. at 1-3)); In re

Le Bon, 177 N.J. 515 (2003) (ordering disbarment of attorney who

instructed client to pay him personally for legal fees owed to

his firm, In re Le Bon, DRB No. 02-432 (May 2, 2003) (slip op.

at 3)).

    The rule of Siegel and Greenberg, however, is not, and has

never been, absolute.      Greenberg, supra, 155 N.J. at 153;

Siegel, supra, 133 N.J. at 167-68.     The Court has recognized in

other settings that there are cases that warrant discipline

short of disbarment.

    For example, the Court reprimanded, rather than disbarred,

the respondent attorney in In re Bromberg, 152 N.J. 382, 383

(1998), despite its conclusion that he had violated RPC 8.4(c).

The attorney in Bromberg, a non-equity partner in a small law

firm, was engaged in a dispute with his partners about the terms

of their financial arrangement and Bromberg’s disappointing

volume of business.     In re Bromberg, DRB No. 97-129 (Dec. 16,

1997) (slip op. at 5-7).    Experiencing financial pressures due

to the termination of his salary, the attorney instructed a

client to send a payment for legal fees to him personally,

rather than to the law firm.    Id. at 7-8.   The attorney

intercepted client checks made out to his firm, forged

endorsements, deposited the checks into an attorney business

                                  24
account that he kept separate from the firm’s accounts, and used

the funds to pay personal expenses.      Ibid.   He did not dispute

that he appropriated the checks without the firm’s permission,

but claimed that he had the right to the checks because of the

firm’s suspension of his salary, which he contended was a breach

of the partnership agreement.    Id. at 10.

    The DRB found a violation of New Jersey RPCs 1.15(b) and

8.4(c).    Id. at 20.   However, it cited the confused state of the

partners’ business arrangement as an important factor and

concluded that the attorney’s belief that he owned a partnership

interest in the firm “led him to understand that he was entitled

to receive the checks” from the client.       Id. at 19.   The DRB

found substantial mitigation under the circumstances of that

case and recommended a reprimand.      Id. at 24.   The Court

concurred.   Bromberg, supra, 152 N.J. at 383.

    In another law firm misappropriation matter, In re

Paragano, 157 N.J. 628 (1999), the Court imposed a six-month

suspension on the respondent attorney, who admitted that he

violated New Jersey RPC 8.4(c) when he spent $83,954 in law firm

money on his personal expenses during a dispute with his

partner.   In re Paragano, DRB No. 98-093 (Sept. 28, 1998) (slip

op. at 3).   The attorney contended that the expenditures were

proper, based on an agreement with his partner when they formed

their firm, and conceded nothing more than that he improperly

                                  25
recorded, as law firm expenses, personal expenditures that he

was authorized to make with firm resources.    Id. at 8.     Based on

the absence of any concession by the respondent that his conduct

had been improper, the DRB distinguished Siegel and Greenberg,

and declined to disbar the respondent.    Id. at 8-10.

    In a third case involving misappropriation from a law firm,

In re Glick, 172 N.J. 319, 320 (2002), the Court reprimanded,

but did not disbar, a respondent who violated New Jersey RPC

1.15(b) and RPC 8.4(c) by personally collecting legal fees owed

to his firm as a “form of self-help” following a dispute over

his profit share.   In re Glick, DRB No. 01-151 (Jan. 29, 2002)

(slip op. at 4).    In reasoning adopted by the Court, the DRB

concluded that the respondent’s conduct in Glick was less

serious than that of the respondent in Bromberg, because Glick

did not forge endorsements on checks or misrepresent the status

of the fees to his firm.   Id. at 6.   Similarly, in In re

Spector, 178 N.J. 261 (2004) the Court reprimanded, but did not

disbar, an attorney who violated New Jersey RPC 1.15(b), RPC

1.15(c), and RPC 8.4(c) by retaining fees that he had earned

while at his previous firm in the setting of a dispute with his

former partners regarding an employment agreement.    In re

Spector, DRB No. 03-041 (Oct. 2, 2003) (slip op. at 2-8).

    Finally, in In re Nelson, 181 N.J. 323 (2004), the Court

concurred with the DRB’s recommendation of a reprimand as the

                                 26
appropriate discipline for an attorney who misappropriated law

firm funds in the midst of a dispute with his law partners over

a range of issues, including the partners’ concealment of

malpractice suits from him, improper referral fees, and attempts

to appropriate the lawyer’s clients.     In re Nelson, DRB No. 04-

057 (May 19, 2004) (slip op. at 3-6).     Notwithstanding his

violations of New Jersey RPC 8.4(c), the respondent in Nelson

retained his license to practice law.     Nelson, supra, 181 N.J.

at 323.

    Thus, the Court has recognized circumstances that warrant a

lesser sanction than that imposed in Siegel and Greenberg.

                                 III.

    In light of the special rules that govern reciprocal

discipline, and the circumstances of this case, we consider

whether the DRB correctly concluded that disbarment was mandated

here.   We do not conclude that the rule of Siegel and Greenberg

compels us to diverge from the discipline imposed by our sister

jurisdiction and disbar respondent.

    The imposition of discipline consistent with that

administered by Pennsylvania is particularly appropriate in this

case.     Much of the misconduct at issue in this case involves the

payment and receipt of referral fees, a practice that is

authorized only in limited circumstances in New Jersey, but is

generally permitted under Pennsylvania’s ethical rules.     Compare

                                  27
New Jersey RPCs 1.5(e), 7.2(c), 7.3(d), with Pennsylvania RPCs

1.5(e), 7.2(c), 7.3.     Long experienced in the adjudication of

disciplinary matters involving referral fees, the Pennsylvania

disciplinary authorities compared respondent’s ethical

violations with misconduct committed by other Pennsylvania

attorneys in referral-fee matters, and determined that a thirty-

month suspension was the appropriate discipline here.

    Our jurisprudence does not compel divergence from the

Pennsylvania authorities’ determination of discipline in this

case.   We find “compelling mitigating factors” in this record

that warrant a sanction short of disbarment.     Respondent had no

prior history of discipline in either Pennsylvania or New

Jersey.   As his supporting letters attest, he has made

significant contributions to the bar and to underserved

communities for many years.     He cooperated with disciplinary

authorities and admitted his wrongdoing.     There is no

allegation, let alone a finding, that respondent stole funds

belonging to a client.     Instead, respondent’s misappropriation

of referral and legal fees occurred in the context of

conflicting fee payment practices and a deteriorating

relationship with his law firm -- a relationship that ended in

litigation over a different referral fee, in which he ultimately

prevailed.   Indeed, it was only after respondent’s conflict with

his former firm over referral fees that his misconduct was

                                  28
reported to ethics authorities.    These factors distinguish this

case from the circumstances of Siegel and Greenberg.

    We do not share the DRB’s view that the misconduct in this

case is fundamentally different from the misconduct found in

Bromberg, supra, DRB No. 97-129 (slip op. at 5-7), Glick, supra,

DRB No. 01-151 (slip op. at 4), Spector, supra, DRB No. 03-041

(slip op. at 2-8), and Nelson, supra, DRB No. 04-057 (slip op.

at 3-6) -- each involving misappropriation from the respondent’s

law firm -- in which we imposed sanctions other than disbarment.

The DRB distinguished this case from those four matters on the

ground that the respondent in each of those cases reasonably

believed that he was justified in converting the firm’s

resources for personal use because he was embroiled in a dispute

with his law firm over compensation issues.   The DRB stated that

no such justification was attempted here.

    We are not persuaded by that reasoning.     We conclude that

the sanction of disbarment should not turn on whether an

attorney contends that his misappropriation of firm resources is

justified, as a form of self-help in an ongoing dispute with his

partners about compensation, or candidly admits to disciplinary

authorities that his conduct was wrong.    The underlying

misappropriation at issue in Bromberg, Glick, Spector, and

Nelson is not inherently different from that of respondent here.

Moreover, as in Bromberg, Glick, Spector, and Nelson, the ethics

                                  29
matter in this case arose in a business dispute between the

attorney and his firm.   As in those cases, we conclude that

disbarment is not the appropriate sanction for the misconduct at

issue.

    Respondent’s misconduct was unquestionably serious.      By his

own admission, he repeatedly breached the trust that must exist

between a law firm and the professionals whom it employs.    He

diverted referral fees and legal fees that were owed to his

firm, and devoted them to his personal use.    His conduct

warrants the imposition of a significant sanction, namely the

thirty-month suspension of his license to practice law, as

reciprocal discipline under Rule 1:20-14.     We conclude that this

discipline is sufficient in this matter.

                                IV.

    Based on our independent review of the record, and

consistent with the determination of the Pennsylvania

disciplinary authorities, we prospectively suspend respondent’s

license to practice law in New Jersey for a period of thirty

months.   Respondent is also ordered to reimburse the

Disciplinary Oversight Committee for appropriate administrative

costs.

     CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, ALBIN, FERNANDEZ-
VINA and SOLOMON; and JUDGE CUFF (temporarily assigned) join in
JUSTICE PATTERSON’s opinion.

                                30
                SUPREME COURT OF NEW JERSEY

NO.     D-126                                   SEPTEMBER TERM 2013
APPLICATION FOR
                  Order to Show Cause Why Respondent Should
DISPOSITION
                Not be Disbarred or Otherwise Disciplined

IN THE MATTER OF

SCOTT P. SIGMAN,

An Attorney at Law

DECIDED                   December 18, 2014
OPINION BY                  Justice Patterson
CONCURRING OPINION BY
DISSENTING OPINION BY

  CHECKLIST                           SUSPEND
  CHIEF JUSTICE RABNER                     X
  JUSTICE LaVECCHIA                        X
  JUSTICE ALBIN                            X
  JUSTICE PATTERSON                        X
  JUSTICE FERNANDEZ-VINA                   X
  JUSTICE SOLOMON                          X
  JUDGE CUFF (t/a)                         X
  TOTALS                                   7

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