Devlin, Matter of

• Citation: 109 N.J. 135,536 A.2d 209
• Parties: In the Matter of Harry N. DEVLIN, An Attorney at Law.
• Decision Date: 15 January 1988
• Court: New Jersey Supreme Court

Page 135

109 N.J. 135

536 A.2d 209

In the Matter of Harry N. DEVLIN, An Attorney at Law.

Supreme Court of New Jersey.

Argued Sept. 28, 1987.

Decided Jan. 15, 1988.

William R. Wood, Deputy Ethics Counsel, Trenton, argued the cause on behalf of Office of Attorney Ethics.

J. Michael Nolan, Morristown, argued the cause for respondent (Pitney, Hardin, Kipp & Szuch and Joseph M. Nolan and Associates, attorneys; J. Michael Nolan, Joseph M. Nolan and Patricia B. Santelle, on the brief).

PER CURIAM.

This is an attorney-disciplinary case in which the Disciplinary Review Board (DRB or Board) determined that respondent, Harry N. Devlin, committed several ethics violations, including the knowing misappropriation of client's funds. The Board recommended that respondent should be disbarred.

The ethics charges were heard initially by the District XII (Union County) Ethics Committee (Committee). It determined that respondent had committed ethics violations, following which determination the matter was presented to the Board. There respondent acknowledged that he had made an improper withdrawal of escrow moneys but requested a remand to establish a meritorious defense and to develop mitigating evidence relating to alcoholism. The Board remanded the matter to the committee for such a supplemental hearing. Following the completion of the remand, the DRB heard the matter in light of the additional evidence. It concluded that respondent should be disbarred.

We have independently reviewed the record and are satisfied that clear and convincing evidence support the charges and the findings of fact made by the tribunals below, including particularly the misuse and misappropriation of clients' funds. Discipline in the form of disbarment, as recommended by the DRB, is appropriate under these circumstances.

I.

The facts as developed before the district ethics committee were fully and accurately summarized by the Board. These facts relate in detail the circumstances surrounding the ethics violations.

It appears that in June 1982, respondent represented Mr. Conklin in a real estate closing. Conklin was then involved in divorce proceedings in which he was represented by another attorney. Respondent was required to hold proceeds from the real estate closing in an interest bearing account. According to the DRB these events occurred:

On July 2, 1982, respondent deposited $20,000 in the Merrill Lynch Government Fund, Inc., account # 232216-3. The signature card respondent completed when he opened the account had several peculiarities. The account was for "Harry Devlin". The social security number on the account was respondent's. Respondent's wife's name was indicated. Reference was made to an account with the National Bank of New Jersey (neither respondent's trust nor business account was with this bank). Respondent checked "none" where the card requested "power of attorney". The lines for "name of agent" and "relationship to client" were left blank. Finally, the objective of the account was investment. There was absolutely no mention of the clients.

On July 7, 1982, Mrs. Conklin's attorney wrote to respondent confirming that respondent was to deposit $20,000 in an "interest bearing escrow account, preferably the Merrill Lynch Money Market Fund, until the final resolution as to the adjustments ... is resolved by the parties or the court." On July 8, 1982, respondent informed Mrs. Conklin's attorney that the $20,000 had been deposited into the Merrill Lynch Government Fund, Inc. The next day respondent advised him of the account number.

On February 8, 1983, respondent withdrew $13,000 from the Merrill Lynch account. On February 11, 1983, a $13,000 deposit was made into respondent's trust account. He never notified the Conklins or their attorneys of this withdrawal or deposit.

Following this withdrawal of the escrow moneys, the DRB determined that respondent engaged in the following course of conduct, viz:

In November the Conklins settled their differences in the divorce matter and agreed to the adjustments. On November 11, 1983, the attorney representing Mr. Conklin in his divorce action telephoned respondent and asked respondent to forward the escrow money. This request was confirmed by letter dated November 14, 1983. The next day respondent's secretary wrote to Mr. Conklin's attorney, explaining that respondent was attending the bar convention and would not return until November 21. On December 6, when Mr. Conklin's attorney still did not hear from respondent, he attempted to reach him. Still unsuccessful, Mr. Conklin's attorney attempted to contact respondent three more times: December 21, 1983, and January 4 and 19, 1984. Finally, on January 20, 1984, respondent telephoned Mr. Conklin's attorney and spoke simultaneously with the two attorneys representing the Conklins in their divorce. Respondent informed them he would immediately forward a check in the proper amount along with an explanation concerning the computation of interest.

Prior to telephoning the Conklins' attorneys, respondent appeared to take the steps necessary to be able to forward the escrowed money. On January 6, 1984, the Merrill Lynch account was closed. The shares were redeemed by wire for $8,754.48. A separate check for income dividends in the amount of $12.67 was made payable to respondent.

Respondent's trust account statement for January 1984 revealed an opening balance of $96,697.92. By January 11, that amount had dissipated to $281.79. On January 13, a deposit of $8,754.48 was made. Although several other deposits were also made during the remainder of that month, none was in the amount of $12.67.

On January 25, 1984, respondent issued a check for $22,817.84 drawn on his trust account. Respondent claimed this amount reflected the original $20,000 plus the interest the money would have earned had it been held in an interest bearing account from July 1982, which it clearly was not. When respondent issued that check, his trust account reflected a balance of $215,505.38. However, by the time the check was processed on February 1, the balance in respondent's account had been depleted to $7,775.63; hence, the check was dishonored and returned for insufficient funds.

When the Conklins' attorneys were informed on February 7, 1984, that the check had been dishonored, they again contacted respondent. Respondent immediately had a treasurer's check prepared and forwarded. He again promised counsel an explanation concerning the calculation of interest and additionally promised to document the banking arrangements in Boston that had allegedly caused the check to be dishonored. The treasurer's check was ultimately honored.

The Conklins' attorneys informed the Office of Attorney Ethics (OAE) of the dishonored check. The OAE requested respondent furnish records and an explanation concerning the dishonored check and the maintenance of his escrow and trust accounts. Respondent through his counsel then consented to a temporary suspension from the practice of law, which was ordered by this Court. The matter was transferred by OAE to the local district ethics committee. No response to the records request was ever received by either OAE or the district committee. Moreover, respondent never filed an answer to the formal ethics complaint and, after receiving notice of the hearing, respondent never contacted the committee or requested an adjournment.

Following its initial hearing the Committee determined:

(1) respondent's failure to indicate that the Merrill Lynch account was a fiduciary account violated DR 9-102(A); (2) respondent's failure to pay promptly the escrow fund to Mr. Conklin's attorney violated DR 9-102(B)(4); (3) respondent's withdrawal of $13,000 from the Merrill Lynch account without notifying the Conklins was unauthorized and in violation of DR 9-102 and DR 1-102(A)(3), (4) and (6); (4) respondent's issuance of a trust account check that was subsequently returned for insufficient funds violated DR 1-102(A)(6) and DR 6-101(A)(1); (5) respondent's failure to maintain adequate records violated R. 1:21-6 and DR 9-102(B)(3) and (C), and (6) respondent's failure to cooperate with either his own independent accountant or OAE's accountant violated DR 1-102(A)(1), (4), (5) and (6). The committee recommended public discipline.

As earlier noted, the DRB remanded the matter to enable respondent to present additional evidence. On the remand respondent claimed that poor bookkeeping practices and a lack of adequate supervision of the administration of his law office caused the deficits in his trust account. Respondent's further explanation, as recapitulated by the DRB, was:

For the first time respondent detailed a purported scam in 1977, whereby one Billy Carr, a former client, stole $30,000 from respondent. Respondent issued a trust check for $30,000, but Carr informed respondent the bank in Texas would not honor the New Jersey check. Respondent then wired $30,000 and orally placed a stop payment order on the trust account check. He failed, however, to execute the proper bank form and never signed the stop payment form. Approximately six months later, Carr cashed the original check. Respondent's bank honored the check. Moreover, because respondent had failed to sign the stop payment order, he was not able to obtain any satisfaction from the bank. He was also unsuccessful in his attempt to retrieve $30,000 from Carr. Carr is currently in jail for fraud. Respondent, thus, lost $30,000 from his trust account. He borrowed small amounts of money to cover some of the deficit, but since 1978 he never completely replenished his account.

The respondent also presented mitigation evidence relating to alcoholism. This was also recounted by the DRB, viz:

Respondent also discussed his alleged alcoholism with the psychiatrist. He claimed his "undisciplined behavior" due to his heavy consumption of alcohol was the cause of his failure to sign the stop payment form. He also...