In re Kalpakis4/11/2005
Published by New York State Law Reporting Bureau pursuant to Judiciary Law ยง 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
OPINION & ORDER
The Grievance Committee served the respondent with a petition dated December 18, 2003, containing six charges of professional misconduct. After a pretrial conference on February 25, 2004, and a hearing on April 27, 2004, the Special Referee sustained all six charges. The Grievance Committee now moves to confirm the Special Referee's report and impose such discipline upon the respondent and restitution, if any, as the court deems just and proper. The respondent has neither cross-moved, replied to the Grievance Committee's motion, nor sought additional time in which to do so.
The petition alleges that prior to and as of June 1, 2000, the respondent maintained an IOLA checking account at the Bank of New York. From approximately June 1, 2000, through May 31, 2002, the respondent used that account incident to his law practice and deposited client funds therein.
Charge One alleges that the respondent breached his fiduciary obligations to a client by failing to preserve client funds entrusted to him, in violation of Code of Professional Responsibility DR 9-102 (22 NYCRR 1200.46) and Code of Professional Responsibility DR 1-102(a)(7) (22 NYCRR 1200.3 ).
On or before October 12, 2000, the respondent was retained by Fred Adelman on a one-third contingency fee basis, to represent him, as plaintiff, in a personal injury action (hereinafter the Adelman matter). The respondent settled that matter for $25,000 on or about October 12, 2000.
On or about October 12, 2000, the respondent received $16,667 from one of the defendants in the Adelman matter and deposited it into his escrow account. On or about October 31, 2000, he received $8,333 from a second defendant and deposited that into his escrow account. Between October 12, 2000, and December 28, 2000, the respondent withdrew $7,333 from his escrow account due to the contingent fee to which he was entitled.
On or about December 5, 2000, the respondent drew a check for $16,666.67 against the escrow account, payable to Fred Adelman as his share of the settlement. The check was not presented for payment until on or about January 17, 2001.
From approximately December 5, 2000, through January 17, 2001, the respondent should have maintained and preserved at least $16,667.67 in the escrow account for his client's benefit. During that interval, the balance in his escrow account fell below that amount on three occasions, falling to a low of $-4,003.77 on January 4, 2001.
Charge Two alleges that the respondent breached his fiduciary duty by converting client funds entrusted to him to a use other than that for which they were intended, in violation of
Code of Professional Responsibility DR 9-102 (22 NYCRR 1200.46) and Code of Professional Responsibility DR 1-102(a)(7) (22 NYCRR 1200.3 ).
On or about January 4, 2001, the respondent's escrow account was overdrawn, resulting in a balance of $-4,003.77. Between that date and January 17, 2001, the respondent made four deposits totaling $63,338 into the escrow account, which represented funds entrusted to him for specific clients. Between January 4, 2001, and January 17, 2001, the respondent did not draw any checks or otherwise disburse any funds from that account on behalf of those four clients. On or about January 17, 2001, the respondent's check payable to Fred Adelman, which had been outstanding since December 5, 2000, was presented for payment and debited against the funds then on
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