Appellate Division: Second Judicial Department

M138574

E/ct

WILLIAM F. MASTRO, A.P.J.

REINALDO E. RIVERA

PETER B. SKELOS

MARK C. DILLON

LEONARD B. AUSTIN, JJ.

2012-01513 In the Matter of Diana Bronstein, an attorney and counselor-at-law. Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, petitioner; Diana Bronstein, respondent. (Attorney Registration No. 4409850)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts (1) to suspend the respondent from the practice of law, pursuant to 22 NYCRR 691.4(l)(1)(ii) and (iii), upon a finding that she is guilty of professional misconduct immediately threatening the public interest in that she knowingly converted client funds; (2) to authorize the Grievance Committee to institute and prosecute a disciplinary proceeding against the respondent based upon the allegations set forth in a petition dated February 14, 2012; (3) to direct the respondent to answer the petition; and (4) to refer 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 Second Judicial Department on September 20, 2006.

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

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

ORDERED that pursuant to 22 NYCRR 691.4(l)(1)(ii) and (iii), the respondent, Diana Bronstein, 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, Diana Bronstein, 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, Diana Bronstein, is commanded to desist and refrain from (1) practicing law in any form, either as principal or agent, clerk, or employee or 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 herself out in any way as an attorney and counselor-at-law; and it is further,

ORDERED that the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts is hereby authorized to institute and prosecute a disciplinary proceeding in this Court, against Diana Bronstein, based on the petition dated February 14, 2012; and it is further,

ORDERED that Diana Maxfield Kearse, Chief Counsel, Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, Renaissance Plaza, 335 Adams Street - Suite 2400, Brooklyn, N.Y. 11201-3745, is hereby appointed as attorney for the petitioner in such proceeding; and it is further,

ORDERED that within 20 days after service upon her of a copy of this order, the respondent, Diana Bronstein 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 Harry E. Seidell, a retired Justice of the Supreme Court, Tenth Judicial District, 10 Thorn Grove Lane, Dix Hills, N.Y. 11746-6709, 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, Diana Bronstein, 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 her 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 on uncontroverted evidence that she converted client funds.

In or about August 2008, Juan Sanchez retained the respondent in an attempt to sell property located at 2474 85th Street, Brooklyn, N.Y., to Hussain Fayaz. On September 3, 2008, the respondent deposited a down payment in the amount of $50,000 into her attorney escrow account at JP Morgan Chase Bank, entitled "Diana Bronstein Attorney at Law PC, IOLA Trust Acct." (hereinafter the escrow account). The deal fell through, and to recover his down payment, Fayaz commenced an action in Kings County Supreme Court. By order dated August 12, 2009, the respondent was directed to return the full amount of the down payment to Grant Pudalov, Fayaz's attorney. The respondent issued check no. 1674 dated December 10, 2009, for $50,000 to Pudalov.

The respondent should have been holding the $50,000 down payment in her escrow account from the time of deposit, September 3, 2008, through the time she released the funds to Pudalov on or about December 10, 2009. Subpoenaed bank records revealed that during the intervening period the balance in the respondent's escrow account fell below $50,000 on eight occasions.

On August 31, 2009, the respondent deposited $20,000 from Sheldon Mar, an intended buyer of property owned by the respondent's clients, Leopold Servakh and Sofiya Sosnovskaya. On October 6, 2009, the respondent deposited $17,750 from Geico General Insurance Co., representing settlement funds, on behalf of her client Edward Samuylin. On October 6, 2009, the balance in the respondent's escrow account was $74,837.48 when she should have been holding at least $87,750 in escrow ($50,000 plus $20,000 plus $17,750) as no disbursements were made to any of the four individuals to whom these funds belonged.

On November 23, 2009, the escrow balance was $38,944.98. Before issuing check no. 1674 to Pudalov on December 10, 2009, the respondent made two deposits in escrow to bring her escrow balance above $50,000. On November 27, 2009, the respondent deposited a $54,399 down payment check from Ryan Tang, on behalf her client Yanina Ilan, in her escrow account, bringing the balance to $93,343.98. On December 8, 2009, the respondent deposited a $25,000 down payment from Lazar Shabshaikhes, on behalf of her client Beta Kozlovsky, in her escrow account, bringing the balance to $118,343.98. Since no other deposits were made between November 23, 2009, and December 15, 2009, the payment of check no. 1674 on December 15, 2009 resulted in the invasion of the Tang and Shabshaikhes down payments. On December 15, 2009, the escrow balance dropped to $68,343.98, when the respondent should have been holding at least $79,399 as no disbursements were made from the Tang and Shabshaikhes down payments.

On December 24, 2009, the respondent deposited an additional $5,000 down payment in her escrow account from Shabshaikhes, on Kozlovsky's behalf, bring the total deposit for this client to $30,000. On April 1, 2010, the escrow balance was $18,444.98, well below the amount she should have been holding for Kozlovsky. On April 2, 2010, the respondent issued check no. 1696 in the amount of $21, 987.20 to Kozlovsky from her escrow account, causing her balance to fall below zero to -$3,542.22. The respondent should still have been holding $8,012.80 on behalf of Kozlovsky.

Subpoenaed bank records showed that the respondent used client funds from her escrow account to pay personal expenses.

Prior to returning the $50,000 down payment, Pudalov repeatedly requested assurances that the funds were intact. On May 18, 2009, the respondent sent Pudalov a fax transmission in which she stated that the escrowed funds were in her account. However, on May 18, 2009, the escrow balance was less than $50,000. On October 23, 2009, and October 30, 2009, the respondent wrote to Pudalov: "[p]lease be assured that the $50,000 down payment regarding the above referenced case still remains in my Escrow Account." On both those dates, the escrow balance was $61,744.98, with $20,000 of that sum being held as a down payment for another client.

The respondent admittedly failed to maintain for her escrow account a contemporaneous ledger or similar record showing the date, source and description of each item deposited, and the date, payee, and purpose of each withdrawal or disbursement. She testified that she did not have an accounting system, and moreover she was "not really familiar with . . . accounting techniques, unfortunately."

Between 2006 and 2011, the respondent handled four personal injury matters where retainer and closing statements were required to be filed with the Office of Court Administration. She failed to do so. She testified that she did not know she had to file such statements.

The respondent opposes an interim suspension, claiming that it is not justified inasmuch as she poses no immediate threat to the public. She acknowledges that she made errors with regard to her escrow account, but asserts that they were unintentional or the result of mistakes. In mitigation, the respondent attributes her errors to the fact that during the relevant time period she was "distracted and unfocused" owing to personal circumstances in her life. She asserts that her errors will not be repeated and that she has implemented remedial measures. Lastly, the respondent contends that interim suspension is too severe as "there is a distinct possibility that the end result of this disciplinary process could result in the issuance of a public censure or some lesser sanction."

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

MASTRO, A.P.J., RIVERA, SKELOS, DILLON and AUSTIN, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court