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In re Picciano6/18/1999
Argued March 29, 1999
On an Order to show cause why respondent should not be disbarred or otherwise disciplined.
This attorney discipline matter arises from a Report and Recommendation of the Disciplinary Review Board (DRB) that respondent be disbarred. Four members of the DRB concluded that respondent had knowingly misappropriated $17,000 in client trust funds following the settlement of a personal injury action. Three members Dissented concerning that issue, finding that the attorney had the permission of his client. All members found that respondent had knowingly invaded escrow funds retained from the same settlement. The funds had been placed in escrow pending an agreement with the client's physician regarding the amount of the physician's bill. Although we would hesitate to disbar respondent for the conduct surrounding the Disposition of the client's $17,000 share of the settlement proceeds, we find clear and convincing evidence, based on our independent review of the record, that respondent knowingly made an unauthorized use of the escrow funds held for the physician. Such an unauthorized use without the permission of the person for whom the escrow fund was held constitutes a knowing misappropriation of trust funds that warrants disbarrment under the rule of In re Wilson, 81 N.J. 451 (1979).
I.
The matter involves respondent's representation of Mary Milanese in connection with a personal injury that she sustained on August 5, 1991. An electrician dropped a metal ladder on her while she was shopping in an IGA supermarket. The case was settled in October 1993 for $27,000. The settlement was paid by three checks. Harleysville Insurance Company paid the electrician's share of $23,000 on October 29, 1993. Respondent did not receive two other checks for $3000 and $1000 from the IGA's agents until December 7, 1993.
On October 29, 1993, respondent deposited $20,000 of the $23,000 Harleysville check into his attorney business account with the notation "cash substitution." He did not make any distribution of the proceeds to his client. He took the remaining $3000 of the Harleysville check in cash. On December 7, 1993, respondent deposited the $1000 IGA check into his attorney trust account and the $3000 IGA check into his business account. On December 8, 1993, respondent deposited $17,000 in his trust account. The funds came from a corporation owned by his wife. The deposit replaced the $17,000 in client's funds that respondent had put into his attorney account in October.
Two days later, on December 10, 1993, Milanese and respondent signed a settlement statement itemizing disbursements of the $27,000. According to that statement, $17,000 of the settlement was to be disbursed to the client, $5000 was to be paid to respondent as his fee, and the remaining $5000 would be paid to the client's treating physician. Specifically, the Settlement Statement read as follows:
"Since it appears that at the present time Doctor Houck is willing to settle his claim for no less than $5000, I have held this amount and will continue, per your instructions, to see if he will lower his amount any more. I have also held and will be responsible for a medical bill in the approximate amount of $300. My attorney's fee is being set at $5000 less the amount that I have agreed to pay for that small remaining medical bill. If I can get Doctor Houck to agree to a lesser figure then you will receive the additional funds."
Respondent admitted that although he represented in the settlement statement that he was holding the $5000 in escrow, in reality the funds had, with the exception of the $1000 IGA check, gone into his business account.
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