Court Opinion

ID: 5748518
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:53:22.02806+00
Date Added: 2024-06-11T08:41:13.037347
License: Public Domain

OPINION OF THE COURT
Per Curiam.
Respondent Leah Larsen was admitted to the practice of law in the State of New York by the First Judicial Department on February 27, 1978 and, at all times relevant herein, has maintained an office for the practice of law within the First Department.
The Departmental Disciplinary Committee (the Committee) served respondent with a notice and statement of charges setting forth 35 counts of professional misconduct arising out of her representation of the husband in a contested matrimonial action. Respondent, in an unverified answer, denied all of the charges. Separate hearings were held as to liability and sanctions before a Referee, after which the Referee sustained 22 of the 35 charges and recommended that respondent be suspended for 18 months and make restitution to her client in the amount of $30,464. After oral argument, a Hearing Panel, by a four-to-one majority, affirmed the 22 charges sustained by the Referee, sustained four additional charges that had been dismissed by the Referee, and increased the recommended sanction to 21/2 years in addition to the restitution ordered by the Referee.
Respondent was charged with five separate violations of the Disciplinary Code (charges 1, 2, 4, 5 and 6) related to the circumstances surrounding her retention by the husband/client. The Referee and Hearing Panel did not sustain charges 1 or 4 through 6 because the signature on the retention agreement appeared to be that of respondent’s client. Charge 2, however, which asserted that respondent failed to provide her client with a statement of client’s rights and responsibilities, in violation of Code of Professional Responsibility DR 2-106 (f) (22 NYCRR 1200.11), was sustained, as respondent admitted that there was no proof that she had done so.
*43Charges 7 through 17 assert that respondent, on a number of occasions, either improperly notarized her client’s signature, or signed her client’s name, with the client’s consent, notarized that signature, and then submitted the documents to Supreme Court, Dutchess County. Although respondent acknowledged that she notarized her client’s signature without his presence, she explained that she did not intend to mislead the court. The Referee declined to sustain four of the charges because respondent had obtained her client’s permission prior to notarizing each signature and, therefore, found that her conduct did not involve dishonesty, fraud, deceit or misrepresentation in violation of DR 1-102 (a) (4) (22 NYCRR 1200.3). The Hearing Panel, however, correctly sustained those charges, as false signatures and false notarizations constitute violations of DR 1-102 (a) (4), even if done with the consent of the client (see Matter of Fauci, 28 AD3d 192 [2006]; Matter of Lazroe, 25 AD3d 263 [2005]).
Charges 18 through 26 relate to respondent’s failure to disburse escrow funds, which consisted of proceeds from the sale of the marital house, in accordance with court orders issued in the underlying matrimonial action. Supreme Court had ordered that $38,933 was to be used to pay the couple’s credit card debt, with the remainder of the funds, $44,347, to be used to pay respondent’s client’s retirement plan. Supreme Court restated its order after a motion for reargument. Charges 18 through 21 pertain to respondent paying $42,530.88 toward the marital credit card debt, which exceeded the amount ordered by the court by $3,597.88. The Referee and Hearing Panel, however, both found no liability because respondent had permission from her client to pay the larger sum, and the departure from the court order did not benefit her in any way.
Charges 22 through 26 arise out of respondent’s advice to her client that it was permissible for her to disregard the court’s ruling concerning the repayment of the retirement account and, instead, use those funds to pay her legal fees. The Referee and the Hearing Panel sustained the charges, with the Hearing Panel pointing out that the court’s order used mandatory language that could not be ignored and that while respondent maintained that she could have imposed a lien on the escrow account and commenced arbitration for payment of her fees, she failed to follow the procedures and safeguards set out to sustain such an action. Moreover, the Hearing Panel further opined that it was “highly unlikely” that respondent would have prevailed in an arbitration, given that she had failed to provide *44her client with itemized bills during the course of the proceeding; there was no document evidencing an agreement between respondent and her client concerning attorneys’ fees; and the record reflected a bitter dispute between respondent and her client regarding her fees.
Charges 3 and 27 through 31 assert that respondent failed to send regular itemized bills during the course of her representation; sent a single, nonitemized, excessive bill after the close of the case; and pressured her client to withdraw a complaint he had made to the court about her fees. Since respondent conceded that she had never sent her client a bill during the IV2 year divorce proceeding, respondent’s conduct was found in violation of DR 1-102 (a) (5) (charge 3).
Charges 27 and 28 concern respondent’s forwarding of a one-page, nonitemized bill for $168,400 in legal services, a fee more than eight times greater than that requested by the wife’s attorney, which was unsubstantiated by time records or periodic bills. Respondent’s client had originally proposed that respondent keep the remainder of the escrow funds, $40,964, as legal fees, provided that she forward $10,500 of the funds in order to repay a loan, and pay court-ordered fees to his wife’s attorney. Respondent refused, stating it was insufficient and, in response to her client’s request for a bill, sent the one-page, nonitemized bill for $168,400, claiming 842 hours of work at $200 per hour.
The wife’s attorney eventually filed a motion seeking a judgment against respondent’s client for failure to pay legal fees, in response to which the client forwarded a letter to the court which, inter alia, questioned his fee arrangement with respondent, and expressed his astonishment at the amount of the bill. The Committee contends that respondent, after reviewing the letter, telephoned her client and threatened to seek the full amount of the bill at arbitration unless he retracted the letter. The client then wrote a second letter to the court stating he wished to rescind the letter and “absolve” respondent, but the court attorney for the judge presiding over the divorce proceeding forwarded the matter to the Committee, commenting that respondent’s fees appeared “grossly exorbitant in light of the circumstances of the case, the income and assets of the parties involved, and the ultimate result.”
As a result, the Referee and the Hearing Panel sustained: charge 27, which asserted that respondent charged an illegal or excessive fee, in violation of DR 2-106 (a); charge 28, that such conduct adversely reflected on her fitness as a lawyer, in viola*45tion of DR 1-102 (a) (7); charge 29, which alleged that respondent’s conduct would serve merely to harass or maliciously injure her client, in violation of DR 7-102 (a) (1) (22 NYCRR 1200.33); charge 30, which asserted that respondent’s conduct in pressuring her client to withdraw his complaint was prejudicial to the administration of justice, in violation of DR 1-102 (a) (5); and charge 31, which conduct adversely reflected on her fitness as a lawyer, in violation of DR 1-102 (a) (7). In reaching his conclusion, the Referee credited respondent’s client’s testimony, finding the proof “overwhelming” that respondent had pressured the client into withdrawing the complaint, and discrediting respondent’s testimony that the client had already decided to withdraw the complaint.
Charge 32 asserted that respondent’s checking account was not identified as a client account, in violation of DR 9-102 (b) (2) (22 NYCRR 1200.46). Respondent contended that the bank improperly identified the account, and produced a letter from the bank supporting her argument. Accordingly, the Referee did not sustain this charge, the Committee did not seek reversal of that finding, and the Hearing Panel affirmed on the record.
Charges 33 and 34 allege that respondent failed to maintain complete and full records of her attorney accounts, in violation of DR 9-102 (d) (1) and (8), and failed to produce those records to the Committee as part of its investigation, in violation of DR 9-102 (i) and (j). Respondent faulted her inability to produce the records on a flood at the house where her files were stored, but the Referee concluded that sloppy bookkeeping, even if unintentional, was no excuse for her failure to properly maintain records. The Hearing Panel agreed.
Charge 35 asserted that respondent, in violation of DR 9-102 (a) and (b) (1), utilized escrow accounts opened exclusively for her client’s funds for other banking purposes. Respondent conceded that after paying the credit card debt as ordered by Supreme Court, she used the remainder of the funds for her own purposes, believing she had the authority to do so because they were her legal fees. The Referee opined that respondent should have realized that her conduct was not only improper, but could be deemed a conversion of funds, and the Hearing Panel, in sustaining the charge, agreed that respondent misappropriated or commingled funds held in a client account and failed to maintain client accounts separate from her own personal and business account.
Respondent, in mitigation, testified on her own behalf and produced four character witnesses who testified about her *46personal integrity and her excellent reputation in the legal community. The Referee found respondent “accepted responsibility for her actions and appears to be remorseful with respect to the charge[s] sustained.”
The Committee has submitted the entire record and now moves for an order, pursuant to 22 NYCRR 605.15 (e) (1), sustaining the charges and imposing such sanction as this Court deems just and appropriate. The Committee contends, among other things, that: respondent’s actions to gain control of the escrow funds were calculated and premeditated; she flagrantly violated the matrimonial rules and forwarded the exorbitant bill to the client in retaliation for questioning her fees; she intimidated and harassed her client by telling him she could prove her work at arbitration, knowing that assertion was false in light of the fact that she had no records to substantiate her work; and she never accepted responsibility for the most serious misconduct, including the willful disregard of court orders, the excessive legal fee, and her continued belief that she had a right to claim the remaining escrow funds.
Respondent requests this Court affirm the Referee’s findings on liability and restitution, disaffirm the additional misconduct found by the Hearing Panel, and impose public censure or, at most, a three-month suspension as a sanction. Respondent notes that she is a sole practitioner with no disciplinary history over a 28-year career, who admittedly made uncharacteristic errors in judgment. Respondent further maintains that she has expressed remorse and responsibility for her misconduct, and has already returned $10,500 to her client. The Committee, in reply, argued that respondent presents no new evidence of remorse or acceptance of her misconduct, and “continues to minimize her surreptitious scheming to circumvent a Court order for her own financial benefit as merely an uncharacteristic error in judgment.”
In view of the foregoing, we confirm the findings of fact and conclusions of law of the Hearing Panel, as they are fully supported by the record and, in most cases, admitted to by respondent. We note again that the Hearing Panel was correct in finding that respondent engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of DR 1-102 (a) (4), when she signed her client’s signature and then notarized those signatures as if they were genuine before filing them with the court, as well as when she notarized her client’s signature when he did not appear before her.
*47With regard to sanction, we note that the breadth of respondent’s misconduct is troubling, for at almost every turn throughout the matrimonial matter, respondent committed some form of misconduct, whether it be false notarizations, disregard of a court order, charging an exorbitant fee, threatening her client to pursue that fee, or using client funds that were in dispute. In light of this, we conclude that respondent should be suspended from the practice of law for a period of 2½ years (see generally Matter of Charles, 258 AD2d 60 [1999]; Matter of Morrissey, 217 AD2d 74 [1995]), and she is directed to make restitution to her client in the amount of $30,464.
We disagree with the dissent with regard to the severity of the sanction to be imposed, and in that vein, note the mitigating factors present, including respondent’s 28-year legal career, which was previously unblemished by any disciplinary history, and the fact that she is 68 years old, suffering from a variety of ailments, and is the sole means of support for her divorced daughter and grandson. We also take into account the Referee’s finding that respondent has accepted responsibility for her actions and is remorseful. More importantly, and as the dissent also notes, the Committee “did not characterize” respondent’s conduct as conversion; indeed, while the Referee’s report states that respondent’s actions “could be deemed a conversion of funds,” no finding of conversion, or venality, was made, a fact apparently not lost on the Referee, or the Hearing Panel, when their recommendations for sanctions were made. Given the totality of the circumstances presented and the absence of an opportunity to contest the allegation of intentional conversion, we disagree with the dissent’s recommendation of disbarment (see Matter of Zalk, 45 AD3d 42, 49-50 [2007], lv granted 9 NY3d 958 [2007]; Matter of Fong, 308 AD2d 19, 21 [2003]).
Accordingly, the Committee’s petition should be granted to the extent that the Hearing Panel’s findings of fact and conclusions of law confirmed, and respondent suspended from the practice of law for 2½ years and directed to pay restitution to her client in the amount of $30,464.

. Also on that date, respondent obtained a bank check in the name of Mr. Tebbetts in the amount of $10,500, but did not send it to him. In March 2005, approximately two months after the Committee served on respondent notice of this disciplinary proceeding, respondent sent a new check in the amount of $10,500 to Mr. Tebbetts. According to respondent, she sent the check after the Committee’s staff informed her that Mr. Tebbetts wanted the money returned.