Appellate Division: Second Judicial Department

M114593

E/ct

A. GAIL PRUDENTI, P.J.

WILLIAM F. MASTRO

REINALDO E. RIVERA

PETER B. SKELOS

RANDALL T. ENG, JJ.

2010-09953 In the Matter of Edward J. Martz, an attorney and counselor-at-law. Grievance Committee for the Tenth Judicial District, petitioner; Edward J. Martz, respondent. (Attorney Registration No. 2051506)

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)(i), (ii), and (iii), upon a finding that he is guilty of professional misconduct immediately threatening the public interest in that he has failed to cooperate with the lawful demands of the Grievance Committee in its investigation, made substantial admissions under oath, and other uncontroverted evidence of professional misconduct; (2) authorizing it to institute and prosecute a disciplinary proceeding based upon the allegations set forth in a petition dated August 16, 2010; (3) directing the respondent to submit an answer to the petition; and (4) referring the issues raised to a Special Referee to hear and report. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the First Judicial Department on March 31, 1986.

Upon the papers filed in support of the motion and no papers having been filed in opposition or in relation thereto, it is

ORDERED that the motion is granted; and it is further,

ORDERED that pursuant to 22 NYCRR 691.4(l)(1)(i), (ii), and (iii), the respondent, Edward J. Martz, 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 pursuant to Judiciary Law § 90, during the period of suspension and until further order of this Court, the respondent, Edward J. Martz, 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 the Grievance Committee for the Tenth Judicial District is hereby authorized to institute and prosecute a disciplinary proceeding in this Court, against Edward J. Martz, based on the petition dated August 16, 2010; and it is further,

ORDERED that the Grievance Committee for the Tenth Judicial District shall serve the petition upon the Special Referee and file the original petition in the office of the Clerk of this Court within 20 days after receipt of a copy of this order; and it is further,

ORDERED that Robert A. Green, Chief Counsel, Grievance Committee for the Tenth Judicial District, 150 Motor Parkway, Suite 102, Hauppauge, New York 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 order, the respondent, Edward J. Martz, 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 Hon. Arthur J. Cooperman, a retired Justice of the Supreme Court, Queens County, 125-01 Queens Boulevard, Kew Gardens, New York 11415, as Special Referee to hear and report, together with his findings on the issues, and to submit a 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, Edward J. Martz, 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 failure to cooperate with the lawful demands of the Grievance Committee for the Tenth Judicial District in its investigation, substantial admissions made under oath, and other uncontroverted evidence of professional misconduct.

Complaint of Robyn Williams

The Grievance Committee received a complaint dated March 9, 2009, from Robyn Williams alleging that the respondent failed to remit to Williams the proceeds from the sale of her condominium property. In or about 2007, Williams retained the respondent to represent her in the sale of her condominium property located in Warwick, New York. On or about April 21, 2008, the respondent received a down payment of $9,750 in connection with the sale and deposited the funds into a general business operating or "business advantage checking" account maintained at Bank of America, denominated "Edward J. Martz DBA Edward J. Martz Esquire" account (hereinafter the checking account). This account had overdraft protection provided by another account maintained by respondent at Bank of America, denominated "Edward J. Martz DBA Edward J. Martz Esquire Trust Account" (hereinafter the trust account).

Although the Williams real estate transaction closed on or about July 21, 2008, the respondent did not disburse the $9,750 to Williams until or about June 19, 2009.

On the day after the $9,750 down payment was deposited into the checking account, the balance at the end of the day had been depleted to $7,835.25. Between April 21, 2008 and July 21, 2008, the balance in the checking account fell below the amount the respondent was required to maintain and preserve, with the exception of a brief time period. The balance fell to a low of -$1,064.80 on July 21, 2008. The down payment funds had been completely depleted.

At the closing, which took place on or about July 21, 2008, the respondent was entrusted with a check in the amount of $27,795.30, payable to Edward J. Martz, as attorney FBO Robyn Williams, representing the proceeds from the sale of the Warwick property. On or about August 1, 2008, he deposited $27,295.30 into the checking account, and the remaining $500 he received as cash from the deposit of the check. At the end of August 1, 2008, after the deposit of the sale proceeds, the balance in the checking account fell below the amount the respondent was required to preserve and maintain on behalf of Williams.

Between April 21, 2008, and June 19, 2009, the respondent drew checks from the checking account to pay for personal expenses, such as liquor store purchases, groceries, insurance premiums, telephone charges, restaurants bills, gas, pet store items, Cablevision, home center items, and cash withdrawals.

Between the title closing in July 2008, and February 2009, Williams made repeated requests to the respondent to disburse to her the sale proceeds. In numerous replies to her requests, the respondent made misleading statements in his e-mails to her. He deliberately continued to mislead her promising to deliver her funds, but failing to do so each time. Throughout the period of these e-mail exchanges, the balance in the checking account was continually below the amount he was required to maintain on Williams' behalf.

On or about May 20, 2009, the respondent deposited into the checking account $54,000 from another matter unrelated to the Williams transaction.

On June 3, 2009, the respondent caused a wire transfer of $45,986.76 from the checking account to another account he maintained at Bank of America, denominated "Edward J. Martz Esquire CUS Escrow Account" (hereinafter escrow account). On or about June 19, 2009, the respondent caused a wire transfer of $46,023.61 from the escrow account to the trust account, which was linked to the checking account. On June 19, 2009, the respondent caused a wire transfer of $45,998.61, the amount owed to Williams, to be made from the trust account to an account maintained by Williams.

The respondent admitted at his appearance before the Grievance Committee that he failed to preserve the Williams funds and misappropriated them for purposes other than which they were intended.

The respondent failed to timely cooperate with the Grievance Committee in the investigation of the Williams complaint. To date, the respondent has not submitted an answer to the Williams complaint.

On November 13, 2009, the respondent was personally served with a subpoena duces tecum, directing him produce bank and bookkeeping records pertaining to five separate bank accounts related to his law practice, including the checking account and the trust account; all records relating to seven other identified matters - Torr, Caporaso, Ubertini, Fuchs/Calandro, Rambo, Williams, and Cronley Estate. To date, the respondent has failed to provide any of the subpoenaed records.

On or about November 13, 2009, the respondent was personally served with a judicial subpoena directing his appearance for examination under oath on December 8, 2009 in connection with the Williams complaint and as well as two other complaints. The examination was conducted on December 9, 10 and 14, 2009. On each day, the respondent was requested to submit supplemental information related to his examination and the investigation. The information was reduced to a handwritten list. By letter dated March 4, 2010, the Grievance Committee reminded the respondent of the information which was outstanding, and requested that he submit it no later than March 22, 2010. To date, the respondent has failed to comply.

Attorney Trust Account

The Grievance Committee received a complaint dated October 10, 2007 from Francine Ubertini alleging the return of a check in the amount of $56,961.83, drawn on the respondent's attorney trust account, due to insufficient funds. Also, the Grievance Committee received a complaint dated January 29, 2008, from Thomas A. Rambo alleging the return of a check in the amount of $1,731.55, drawn on the respondent's attorney trust account, due to insufficient funds.

The Ubertini and Rambo complaints raised questions concerning the respondent's management of his attorney trust account. As a consequence, the Grievance Committee subpoenaed from Bank of America the records of both the trust account and the checking account, which were linked. In addition, it was discovered that the respondent had six other accounts at the same bank, and the records for these accounts were subpoenaed as well. In the course of the investigation, the respondent could only produce 12 pages of handwritten ledger entries. These records did not reflect all the transactions in the bank accounts. Based on the bank records, available ledger information and the respondent's examination under oath before trial, the Grievance Committee found that the balance in the respondent's trust account fell below that which he was required to maintain on numerous occasions with respect multiple client matters. The respondent has admitted under oath that he used funds from the trust account to make mortgage payments on his personal residence.

Although personally served with a copy of this motion on October 6, 2010, the respondent has not filed a response or a request for additional time in which to file a response.

Based on the foregoing, the Grievance Committee's motion is granted, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 691.4(l)(1)(i), (ii) and (iii), pending further order of this Court, the Grievance Committee is authorized to institute and prosecute a disciplinary proceeding against him, and the matter is referred to a Special Referee to hear and report.

PRUDENTI, P.J., MASTRO, RIVERA, SKELOS and ENG, JJ., concur.

ENTER:

Matthew G. Kiernan

Clerk of the Court