Opinion 13-127

September 12, 2013


Digest:         A court attorney referee who heard testimony in a matrimonial matter about an attorney’s personal use of client funds must determine whether he/she has substantial knowledge that the attorney committed a substantial violation of the Rules of Professional Conduct and, if so, must take appropriate action.


Rules:          22 NYCRR 100.2(A); 100.3(D)(2); 100.6(A); Opinions 10-122;10-86; 10-85 (Amended); 08-08; 07-82; 95-119 (Vol. XIII).


         A court attorney referee who recently completed a trial in a contested matrimonial matter states that one spouse testified that the other spouse, who is an attorney, used his/her Interest On Lawyer’s Account (IOLA) to pay personal expenses. The inquirer further states that the attorney/spouse did not testify about his/her IOLA either on direct or cross examination. In addition, while the inquirer reviewed the IOLA records, they were incomplete, and he/she could not determine the source of funds deposited or to whom checks were written. The inquirer also states that he/she has no evidence that any client funds were deposited into the IOLA. Also, the inquirer understands from one of the attorneys in the matter that the Attorney Grievance Committee is investigating the attorney/spouse’s conduct with respect to the IOLA. The inquirer asks whether he/she has any ethical obligation to address the attorney/spouse’s possible misuse of his/her IOLA.

         A court attorney referee exercises quasi-judicial functions and, therefore, is subject to the Rules Governing Judicial Conduct (see 22 NYCRR 100.6[A]; Opinion 95-119 [Vol. XIII]).

         A judge must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). Therefore, a judge who receives information indicating a substantial likelihood that a lawyer has committed a substantial violation of the Rules of Professional Conduct must take appropriate action (see 22 NYCRR 100.3[D][2]). The Committee generally has advised that the judge involved must determine whether there is a “substantial likelihood” that an attorney committed a “substantial violation” of the Rules of Professional Conduct, because that judge is in the best position to evaluate and assess all the relevant, known circumstances (see Opinion 10-85 [Amended]).

         The Committee has consistently advised that a judge need not investigate an attorney’s alleged misconduct, even to determine how serious or minor the misconduct may be (see e.g. Opinions 10-122; 10-86; 07-82). For example, a judge who believes that charges in a criminal complaint against a lawyer would, if proved, constitute a substantial violation of the Rules of Professional Conduct is not required to conduct an investigation of the charges but must determine, based on the information available to him/her, whether there is a “substantial likelihood” that the charges are true (see Opinion 10-86). Similarly, the present inquirer need not undertake any investigation but need only consider the information he/she has learned from the matrimonial matter to determine whether there is a “substantial likelihood” that the attorney/spouse engaged in misconduct with respect to his/her IOLA.

         Based on the facts presented, it appears to the Committee that the inquirer has no personal knowledge of any alleged misconduct and that the evidence offered during the matrimonial matter is, at best, inconclusive. Nevertheless, if the inquirer does conclude there is a substantial likelihood that the attorney/spouse committed a substantial violation of the Rules of Professional Conduct, he/she must take “appropriate action” (see 22 NYCRR 100.3[D][2]).

         Except in the unusual circumstances when the alleged misconduct is so egregious that it seriously calls into question the attorney’s honesty, trustworthiness or fitness as a lawyer (see Opinion 10-85 [Amended]), determination of what action is appropriate is left to a judge’s discretion. Thus, appropriate action “depends upon all the surrounding circumstances known to the judge” and may include counseling and/or warning a lawyer, reporting a lawyer to his/her employer and sanctioning a lawyer (see Opinion 10-85 [Amended]). The inquirer may also consider whether the lawyer shows genuine remorse, contrition, or ignorance of a rule; whether the lawyer has any history of unprofessional or other conduct in violation of the Rules; or any other relevant conduct or factor known to the judge (see Opinion 10-122). Moreover, if the inquirer is satisfied that the attorney’s alleged misconduct has actually been previously reported, he/she need not take any further action (see id.).

         Of course, the inquiring referee also has the discretion to report the attorney’s conduct even if the referee determines that the violation is not substantial (see 22 NYCRR 100.3[D][2]; Opinion 08-08).

         If the inquirer reports the attorney to a disciplinary authority, the inquirer is disqualified from presiding in matters in which the attorney appears during the pendency of the disciplinary proceeding and for two years after the proceeding is concluded (see Opinion 10-122).