Figliola, Matter of

Citation652 A.2d 1071
Decision Date05 January 1995
Docket NumberNo. 303,1994,303
Parties. FIGLIOLA, Jr., Respondent. Supreme Court of Delaware. Submitted:
CourtUnited States State Supreme Court of Delaware

Upon appeal from the Board on Professional Responsibility. AFFIRMED IN PART; REVERSED IN PART.

Jeffrey M. Weiner, Wilmington, for respondent.

David Curtis Glebe and Matthew F. Boyer (argued), Office of Disciplinary Counsel, Wilmington, for Board on Professional Responsibility.



This matter is before the Court pursuant to Rule 9(e) of the Rules of the Board on Professional Responsibility. Respondent, Anthony A. Figliola, Jr. ("Figliola"), is a member of the Bar of this Court who was admitted to practice in 1978. Figliola seeks review of a report dated August 9, 1994 (the "Report"), issued by the Board on Professional Responsibility (the "Board"). 1 In the Report, the Board found that Figliola violated four rules of the Delaware Lawyers' Rules of Professional Conduct (the "DLRPC"), and recommended that Figliola be suspended for thirty days and agree to submit to four corrective conditions. 2

Figliola does not challenge the Board's findings concerning the DLRPC violations. Rather, he maintains that the Board failed to consider certain mitigating evidence in recommending its sanction. Figliola further contends that the Board-recommended sanction is too harsh given his lack of prior disciplinary record, his willing cooperation with the Office of Disciplinary Counsel ("ODC"), and his complete restitution of the funds taken. For the reasons set forth below, we sustain the Board's finding that Figliola violated four rules of the DLRPC. We determine, however, that the Board-recommended sanction of thirty days neither reflects the severity of Figliola's violations, nor serves the DLRPC purposes of fostering public confidence in the Bar, preserving the integrity of the profession, or deterring other lawyers from similar misconduct. Accordingly, we have concluded that the appropriate sanction is a six month and one day suspension with requirements for reinstatement in addition to those imposed by the Board.


Figliola operated as a sole practitioner from the date of his admission to the Bar until 1985. In April 1985, Figliola and Philip J. Facciolo, Jr. ("Facciolo"), formed a two-person law partnership (the "Firm"), agreeing that they would share equally Firm profits generated from the practice of law. Figliola maintained all three of the Firm's accounts--the attorney's account (also known as the operating account), the client escrow account and the real estate account--from the Firm's inception until late 1986.

In late 1986, Facciolo discovered that Figliola was not maintaining these accounts properly. At that point, Facciolo took responsibility for the operating and escrow accounts, spending several months reconstructing transactions and correcting records. Facciolo left the responsibility for the real estate account with Figliola, assuming that, with the reduced administrative burden, Figliola could correct the deficiencies in the account and properly maintain it thereafter.

Between August 1986 and July 1992, Figliola issued from the real estate account, for his personal benefit, over 150 checks totalling more than $24,500. 3 This money represented funds earned by the Firm with regard to real estate transactions. Additionally, accountants retained by the Clients' Security Trust Fund ("CSTF"), 4 performed a compliance check on the Firm's accounts in December, 1987. The accountants found that Figliola had failed to perform the required monthly bank reconciliation of the real estate account and had neglected to prepare a monthly real estate fiduciary fund reconciliation to a list of escrow funds held. 5

Facciolo discovered the diversion of Firm fees in July, 1992. He then compiled a list of suspect transactions and discussed his concerns with Frederick R. Funk, Esq. ("Funk"), a real estate attorney and friend of both Facciolo and Figliola. Facciolo and Funk confronted Figliola at the end of July, 1992. Figliola retained counsel and an accountant and ultimately reimbursed the Firm for personal payments totalling $24,500. Figliola did not pay any interest on this reimbursement, nor, apparently, was interest required by Facciolo.

In December 1992, Figliola informed Facciolo of certain checks that he had written from his personal Wilmington Savings Fund Society drawing account ("WSFS Account"), to advance client costs. 6 Figliola claimed that he had advanced more than $12,000 in personal funds and asked for credit for these advances. Figliola was unable to establish, however, that more than $6,000 of the $12,000 were legitimate disbursements relating to Firm matters. 7

Despite the fact that disbursements were four times as great as advancements, Figliola maintained that he believed that he was entitled to the Firm fees that he withdrew, claiming that these fees offset client costs previously advanced by him. He admitted, however, that he never kept any type of record of amounts advanced or disbursed. Further, Figliola's descriptions of certain disbursements in the Firm's ledger tended to disguise personal disbursements as legitimate payments related to real estate transactions.

In addition to Figliola's unauthorized withdrawal of certain real estate account funds, Facciolo also discovered that Figliola had used client funds in an unauthorized manner. Figliola used funds belonging to Campbell Young ("Young") 8, a client, to help satisfy a judgment for the benefit of another client. Although Figliola admitted that he did not obtain the necessary authorization, he stated that "it was just easier to do it [this way]." Figliola eventually restored the funds, but only after Facciolo confronted him.

Figliola also withdrew $21,831 from the real estate account and placed this money in his nonfiduciary drawing account. Although this money belonged to his in-laws, and they had asked him to move the money from the escrow account to an interest-bearing account Figliola's deposit of the funds in his noninterest-bearing drawing account did not satisfy his in-laws' request. 9 Figliola returned $13,689 to the escrow account after Facciolo questioned him in December 1992. 10

After conducting a hearing and considering post-hearing submissions by both parties, the Board issued its Final Report on August 9, 1994. The Board found clear and convincing evidence that Figliola "realized that he had withdrawn from the Firm real estate account far more than he had advanced for client costs from his [drawing] ... account," noting that Figliola disguised payments he made to himself to make them look as though they were legitimate payments dealing with real estate settlements. Respondent's Appendix at 105, In re Figliola, Bd. Case No. 14, 1993, slip op. at 3 (August 9, 1994) (Final Report of the Board). The Board found that Figliola's "pattern of taking Firm funds from the Firm real estate account to pay his personal bills shows at least a reckless disregard for his partner's interest in the Firm funds and constituted more than sloppy bookkeeping." Appendix for Respondent at 105, In re Figliola, slip op. at 4. The Board also found that Figliola had disbursed $8,000 in funds belonging to a client without that individual's permission, for the benefit of another client, and failed to invest $21,831 belonging to his in-laws in an interest-bearing account, as per their instructions.

Based on these findings the Board found that Figliola had violated DLRPC Rules 1.15(a), 1.15(d), 8.4(c) and 8.4(d). It recommended that Figliola: (1) be suspended no more than thirty days; (2) submit to periodic audits of the real estate account over the next two years without prior notice; (3) discontinue using his drawing account in connection with his practice, or bring it into conformity with DLRPC 1.15(d); (4) change the name of the real estate account to reflect its fiduciary nature, or discontinue using it in connection with Firm business; and (5) pay the costs of this investigation pursuant to Board Rule 29. On August 29, 1994 Figliola filed Objections to the Report with the Court.


Figliola alleges that the Board erred in failing to consider four possible mitigating factors when it determined his sanction: (1) The impact of the 1986-88 CSTF compliance check; (2) Figliola's proof of client advances; (3) Figliola's father-in-law's affidavit; and (4) Figliola's ability to "cover" Young's funds.

In cases charging violations of the DLRPC, this Court independently reviews the Board's findings of fact and conclusions of law. In re Agostini, Del.Supr., 632 A.2d 80, 81 (1993). The scope of review is whether the record below contains substantial evidence to support the Board's findings. Id.; In re Brewster, Del.Supr., 587 A.2d 1067, 1069 (1991). " 'Findings by the Board relating to disputed issues of fact and credibility will not be reversed by the Court so long as they are supported by substantial evidence.' " In re Tos, Del.Supr., 610 A.2d 1370, 1372 (1992) (quoting In re Green, Del.Supr., 464 A.2d 881, 887 (1983)). The Court reviews the Board's conclusions of law de novo. In re Barrett, Del.Supr., 630 A.2d 652, 656 (1993). This case requires the Court to consider Figliola's allegation that the Board erred in failing to consider certain mitigating circumstances. We conclude that Figliola's contentions are without merit.

A. CSTF Compliance Check

Figliola claims that the CSTF compliance check, which revealed that Figliola had failed to perform the required monthly bank reconciliation, lulled him into a false sense of security with regard to his personal withdrawals from the real estate account. Since the accountants did not call these withdrawals to his attention, Figliola believed that th...

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