Appellate Division: Second Judicial Department

M91726

E/cb

A. GAIL PRUDENTI, P.J.

REINALDO E. RIVERA

ROBERT A. SPOLZINO

PETER B. SKELOS

STEVEN W. FISHER, JJ.

2009-00303 In the Matter of Ethan E. Ellner, an attorney and counselor-at-law. Grievance Committee for the Tenth Judicial District, petitioner Ethan E. Ellner, respondent. (Attorney Registration No. 2024099)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Tenth Judicial District for an order: (1) suspending the respondent from the practice of law pursuant to 22 NYCRR 691.4(l)(1)(ii) and (iii), upon a finding that he is guilty of professional misconduct immediately threatening the public interest; (2) authorizing it to institute and prosecute a disciplinary proceeding based on allegations set forth in a verified petition dated April 1, 2009; and (3) referring any issues raised by the petition and any answer thereto to a Special Referee to hear and report. A previous ex parte application for authorization to institute and prosecute a disciplinary proceeding against the respondent was withdrawn by the Grievance Committee. By opinion and order of this court dated March 15, 1999, the respondent was suspended for a period of one year as a result of his conviction of attempting to evade or defeat tax, in violation of 26 USC § 7201 (see Matter of Ellner, 253 AD2d 103 [Appellate Division Docket No. 1997-06812]). He was reinstated by decision and order on application of this court dated November 28, 2001. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on February 26, 1986.

Upon the papers submitted in support of the motion and the papers submitted in opposition thereto, it is

ORDERED that the motion is granted, and pursuant to 22 NYCRR 691.4(l)(1)(ii) and (iii), the respondent, Ethan E. Ellner, is immediately suspended from the practice of law in the State of New York, pending further order of the court; and it is further,

ORDERED that the respondent shall promptly comply with this court's rules governing the conduct of disbarred, suspended, and resigned attorneys (see 22 NYCRR 691.10); and it is further,

ORDERED that on the court's own motion, pursuant to Judiciary Law § 90, during the period of suspension and until further order of this court, the respondent, Ethan E. Ellner, is commanded to desist and refrain from (1) practicing law in any form, either as principal or agent, clerk, or employee of another, (2) appearing as an attorney or counselor-at-law before any court, Judge, Justice, board, commission, or other public authority, (3) giving to another an opinion as to the law or its application or any advice in relation thereto, and (4) holding himself out in any way as an attorney and counselor-at-law; and it is further,

ORDERED that on the court's own motion, the Grievance Committee for the Tenth Judicial District is hereby authorized to institute and prosecute a disciplinary proceeding in this court against Ethan E. Ellner, based on the petition dated April 1, 2009; and it is further,

ORDERED that Rita E. Adler, Chief Counsel to the Grievance Committee for the Tenth Judicial District, 150 Motor Parkway, Suite 102, Hauppauge, N.Y. 11788, is hereby appointed as attorney for the petitioner in such proceeding; and it is further,

ORDERED that within 20 days after service upon him of a copy of this decision and order on motion, the respondent, Ethan E. Ellner, shall serve an answer upon the petitioner and the Special Referee, and shall file the original answer with this court; and it is further,

ORDERED that the issues raised by the petition and any answer thereto are referred to the Honorable Lewis L. Douglass, a retired Justice of the Supreme Court, Kings County, 166-25 Powells Cove Boulevard, Whitestone, N.Y. 11357, as Special Referee to hear and report within 60 days after the conclusion of the hearing or the submission of post-hearing memoranda; and it is further,

ORDERED that if the respondent, Ethan E. Ellner, has been issued a secure pass by the Office of Court Administration, it shall be returned forthwith to the issuing agency and the respondent shall certify to the same in his affidavit of compliance pursuant to 22 NYCRR 691.10(f).

We find, prima facie, that the respondent is guilty of professional misconduct immediately threatening the public interest based upon his substantial admissions under oath and other uncontroverted evidence of professional misconduct.

The basis for the motion for respondent's interim suspension consists of his admissions under oath and other uncontroverted evidence obtained during the course of the Grievance Committee's investigation, which allegedly establishes that respondent handled a legal matter without adequate preparation in that he failed to adequately prepare for a real estate transaction, in violation of DR 6-103(a)(2), and engaged in conduct that adversely reflects on his fitness as a lawyer by failing to protect his clients' interests in a real estate transaction, in violation of DR 1-102(a)(7).

Veola Shropshire and her two adult daughters were the owners of real property at 2439 East 15th Street in Brooklyn. In or about 2004, they were in default on the mortgage and sought to refinance. They were referred to Leslie Cuttino, an agent with Arb-Ing Associates, Inc., a property management firm, who advised them that Arb-Ing would be able to arrange a refinancing of the outstanding mortgage. They were unaware that their property was actually being sold.

The respondent admitted that he was contacted by Ms. Cuttino in or about March 2004 and asked if he would represent the owners in the sale of their property, which was in foreclosure and facing imminent auction. The purchaser was Thurston Culley. The respondent testified that the owners would assign the net proceeds to Ms. Cuttino or Arb-Ing in exchange for finding a purchaser who was willing to rent them the house and give them the option to buy it back. The respondent admitted that the owners were his clients but that he did not speak to them prior to agreeing to represent them. Although he asked Ms. Cuttino for the clients' telephone numbers on several occasions, the respondent did not speak with them prior to the closing. Inasmuch as he was given all the information, the respondent did not think a meeting was necessary. The respondent admitted that in some prior real estate transactions in which he was recommended by Ms. Cuttino, his sole meeting with the clients was at the closing. He also did not speak with the purchaser's attorney until the day of or the day before the closing.

The respondent's legal fee for this transaction was $1,000. He admittedly prepared the contract of sale based solely on information obtained from Ms. Cuttino. After preparing the contract, the respondent forwarded it to Ms. Cuttino rather than to his clients. He was not present when his clients signed the contract. The signatures on the contract are not dated. The respondent testified that he first learned that the contract had been signed when he was contacted to schedule the closing. The owners contended that they did not sign any papers prior to the closing.

Although the contract provided for the respondent to hold the $22,250 down payment in escrow, the respondent admitted that he never received the down payment. At the closing, Ms. Cuttino advised the respondent that the down payment was paid by the purchaser directly to the sellers. The respondent never requested documentation that his clients had received payment. The owners stated that they never received the funds.

The respondent maintains that Ms. Shropshire was not present at the closing but denies that he was ever made aware that she suffers from Alzheimer's disease. The other two co-owners deny that the respondent ever identified himself at the closing as their attorney. They contend that they were first made aware that the respondent represented them during the Grievance Committee's investigation.

The title closer went to Ms. Shropshire's home the next day to have her sign the necessary documents. The respondent did not believe that he had a responsibility to accompany the title closer inasmuch as he had explained everything to her two daughters/co-owners, who were present at the closing.

Although advised that a lease-back agreement had previously been prepared and signed by the parties, the respondent did not believe that he ever saw a copy of it.

At the closing, the respondent received a check drawn on Richmond Abstract Corporation Escrow Account, payable to Ethan Ellner, as attorney, in the sum of $122,419.25, representing the sale proceeds. According to the respondent, the parties agreed that he would take the money and disburse it to whatever entity Ms. Cuttino chose. The respondent deposited it into his IOLA account. He issued a check from that account, dated April 27, 2004, to Arb-Ing in the amount of $122,419.25. The clients were unaware of and did not authorize that disbursement, nor did they authorize the respondent's payment to himself at the closing of a $1,000 legal fee.

Approximately five days after the closing, the purchaser transferred the property to Arb-Ing. Some 11 months later, Arb-Ing transferred it to the husband of Ms. Cuttino.

The respondent testified that many of these things were being done by Ms. Cuttino behind the scenes without his knowledge.

The Grievance Committee concludes that the respondent's sworn testimony displays a fundamental and disturbing failure to understand his responsibilities to a client. It takes note of the respondent's attempts to deflect his responsibility as an attorney to Ms. Cuttino, the title company, and the co-owners of the property. Such efforts reflect the respondent's failure to properly and zealously represent a client. Had he adequately prepared, respondent would have spoken to his clients and reviewed documents prior to closing. His failure to properly advise his clients demonstrates "an appalling lack of adequate preparation and a cavalier attitude toward his responsibilities in representing clients."

The respondent has submitted an affirmation in opposition in which he vehemently denies that he has done anything improper or that he constitutes an immediate threat to the public. He maintains that the property was in foreclosure and was scheduled for auction in early May 2004. Had the closing not occurred quickly, the owners' judgments would not have been paid off and they would have faced eviction. The likelihood that there would have been any surplus money beyond what was owed to the second mortgagee and other creditors was remote. He maintains that the clients would have been in a worse position had the closing not occurred.

Per the respondent, the Grievance Committee's motion is predicated on hearsay, self-serving conclusions, and the manipulation of statements made during his November 13, 2007 examination under oath.

Notwithstanding the respondent's contentions, we find that the respondent constitutes an immediate threat to the public such that the Grievance Committee's motion is granted in its entirety.

PRUDENTI, P.J., RIVERA, SPOLZINO, SKELOS and FISHER, JJ., concur.

ENTER:

James Edward Pelzer

Clerk of the Court