Appellate Division: Second Judicial Department

M165294

E/ct

RANDALL T. ENG, P.J.

WILLIAM F. MASTRO

REINALDO E. RIVERA

PETER B. SKELOS

MARK C. DILLON, JJ.

2011-07463 In the Matter of Joseph G. Scali, admitted as Joseph Girard Scali, an attorney and counselor-at-law. Grievance Committee for the Ninth Judicial District, petitioner; Joseph G. Scali, respondent. (Attorney Registration No. 1041797)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Ninth Judicial District: (1) to suspend the respondent from the practice of law pursuant to 22 NYCRR 691.4(l)(1)(i) and (iii), pending further order of the Court, upon a finding that he is guilty of professional misconduct immediately threatening the public interest, based upon his failure to cooperate and other uncontroverted evidence; (2) for leave to file a supplemental verified petition dated July 25, 2013, containing 16 additional charges of misconduct; (3) to direct the respondent to submit a written answer to the supplemental verified petition within 20 days; and (4) to refer the issues raised by the supplemental verified petition, and any answer thereto, to Marc S. Oxman, who previously was designated in this matter as 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 March 20, 1974, under the name Joseph Girard Scali. By decision and order on application of this Court dated November 2, 2011, the Grievance Committee was authorized to institute and prosecute a disciplinary proceeding against the respondent, based upon a verified petition dated July 22, 2011, and the matter was referred to Marc S. Oxman, as Special Referee, to hear and report.

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

ORDERED that the branch of the motion which is to suspend the respondent from the practice of law pursuant to 22 NYCRR 691.4(l)(1)(i), based upon his failure to cooperate with the Grievance Committee, is granted, and the respondent, Joseph G. Scali, admitted as Joseph Girard Scali, 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, Joseph G. Scali, admitted as Joseph Girard Scali, 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, Joseph G. Scali, admitted as Joseph Girard Scali, 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 if the respondent, Joseph G. Scali, admitted as Joseph Girard Scali, 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); and it is further,

ORDERED that the branch of the motion which is to suspend the respondent from the practice of law pursuant to 22 NYCRR 691.4(l)(1)(iii), based upon uncontroverted evidence of misconduct, is denied; and it is further,

ORDERED that the branches of the motion which are for leave to file a supplemental verified petition, to direct the respondent to submit a written answer to the supplemental verified petition, within 20 days, and to refer the issues raised by the supplemental verified petition and any answer thereto to Marc S. Oxman, as Special Referee, to hear and report, are granted; and it is further,

ORDERED that the issues raised by the supplemental verified petition and any answer thereto are referred to Marc S. Oxman, c/o Oxman, Tulis, Kirkpatrick, Whatt & Geiger, LLP, 120 Bloomingdale Road, White Plains, N.Y. 10605, as Special Referee, to hear and report, and to submit a report, which includes his findings on the issues, within 60 days after the conclusion of the hearing on the issues raised by the supplemental verified petition or the submission of post-hearing memoranda; 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, Joseph G. Scali, admitted as Joseph Girard Scali, shall serve a copy of his answer to the supplemental verified petition upon the Grievance Committee and the Special Referee, and file the original with the Court.

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 Ninth Judicial District. This motion arises from the Grievance Committee's receipt of five new complaints of professional misconduct.

Complaint of Beatriz Hernandez

In a complaint dated May 23, 2012, Beatriz Hernandez alleged that she had discharged the respondent as her attorney in a matrimonial action, but that he had failed to refund the unearned portion of a $5,000 retainer. In response, by letter dated July 20, 2012, the respondent stated that he would be "happy to transfer [Hernandez's] file to another attorney and refund to Mrs. Hernandez any unused retainer." However, no refund was made. By letter dated August 27, 2012, sent to the respondent via fax and regular first class mail, the Grievance Committee requested, inter alia, copies of all billing statements issued to Hernandez in accordance with 22 NYCRR 1400, as well as copies of all correspondence from her file. In the absence of a response, the Grievance Committee sent a follow-up letter to the respondent, via certified mail, on or about September 18, 2012. The letter was returned to the Grievance Committee, marked "refused." On or about September 27, 2012, the Grievance Committee sent the respondent, via fax and regular first class mail, a letter memorializing its prior attempts to contact the respondent, requesting an explanation for his failure to cooperate, and reiterating the prior request for billing statements and correspondence. By letter dated October 4, 2012, sent via fax, the respondent advised the Grievance Committee that he was "in the process of attempting to answer [the Committee's] inquiry," but, he appeared to have "misplaced" the Hernandez complaint. Later that day, the Grievance Committee faxed another copy of the Hernandez complaint to the respondent. On or about October 11, 2012, the respondent submitted a supplemental response. However, he failed to provide any of the requested billing statements and correspondence, and did not explain his failure to cooperate. He has failed to provide this information to date.

On or about October 24, 2012, the Grievance Committee served the respondent with a judicial subpoena directing him to appear at its office for an examination under oath (hereinafter EUO) on October 26, 2012, and a subpoena duces tecum directing him to produce certain records with respect to the Hernandez complaint. By letter dated and faxed October 25, 2012, the respondent advised that he intended to retain counsel, but that he would not be able to do so until after the return date of the subpoenas. The Grievance Committee agreed to adjourn the respondent's appearance for the EUO until November 7, 2012, but declined to adjourn the date for the production of documents. The respondent failed to produce the required records on October 26, 2012, or appear at the Grievance Committee's office on November 7, 2012. In the interim, no appearance was received from any counsel on the respondent's behalf. By letter dated November 12, 2012, the respondent asked the Grievance Committee to "set forth in detail the specific sections of the Disciplinary Rules so I may frame an appropriate response, " and stated that "[a]s soon as I receive this information, I can respond." To date, the respondent has neither appeared for an EUO nor produced the requested records.

Hernandez subsequently provided the Grievance Committee with a copy of correspondence from the respondent, dated October 25, 2012, regarding fee arbitration, which included a copy of a bill dated October 17, 2012, in the amount of $3,600. The bill failed to reflect the $5,000 retainer paid in advance by Hernandez to the respondent.

Complaint of Carol Croci

By letter dated September 24, 2012, Carol Croci alleged that the respondent failed to turn over her file to her new attorney in a matter entitled Croci v. United States Postal Service. On or about September 27, 2012, the Grievance Committee forwarded a copy of the Croci complaint to the respondent, via certified mail and regular first class mail, along with a request that he submit a written answer within 10 days. The certified letter was returned "unclaimed." However, the letter sent by regular first class mail was not returned. On or about October 24, 2012, the Grievance Committee served the respondent with a subpoena duces tecum directing him to produce correspondence and legal papers concerning the turnover of the Croci file. In the letter dated November 12, 2012, the respondent reiterated that "I need to know what sections of the Disciplinary Rules I am alleged to have violated before I can respond." No answer to the Croci complaint has been received to date.

Sua Sponte Investigation

From at least January 1, 2011, through October 31, 2012, the respondent maintained an account at TD Bank identified as "IOLA/Joseph G. Scali Esq PC Attorney Trust Account" or "Joseph G. Scali Esq IOLA Trust Account." On or about April 27, 2012, the respondent attempted to disburse $42,089.82 by "ACH Debit" payable to "American Express." However, the "ACH Debit" was returned as a result of insufficient funds, triggering a dishonored check notice from the Lawyer's Fund for Client Protection (hereinafter Lawyer's Fund). The Grievance Committee advised the respondent, by letter dated June 4, 2012, that a sua sponte investigation had been commenced, based upon the notice from the Lawyer's Fund, and asked him to submit a written answer, and provide certain bank and bookkeeping records, within 20 days. By letter dated June 28, 2012, a request was made, on the respondent's behalf, for an extension of time to respond due, inter alia, to the fact that certain records had been requested by the respondent from the bank, and the response deadline was extended until July 23, 2012. However, no answer or records were received. The Grievance Committee also sent a letter dated August 2, 2012, by certified mail, which demanded a written answer, the bank and bookkeeping records previously requested, and an explanation for the respondent 's failure to cooperate. The letter was returned "unclaimed." On August 27, 2012, the Grievance Committee sent the respondent a letter, via fax and regular first class mail, reiterating its demand for an answer and the records previously requested. By letter dated September 6, 2012, the respondent advised that he "chose in late 2011 to discontinue using the account [in question] as [an escrow account]." He indicated, further, that no clients' funds were on deposit after that time, and that he believed the Grievance Committee had no right "to investigate a personal account used for non-legal and business matters." On or about September 12, 2012, by letters sent via fax and regular first class mail, the Grievance Committee advised the respondent that he had failed to provide any bank records with his September 6, 2012, letter, despite its request. The Grievance Committee reiterated its request for the records, and also requested an explanation for the continued identification of the subject account as an attorney IOLA account. No records or other response was received. Records received from the bank by the Grievance Committee reflect multiple deposits in 2012, payable to the respondent as attorney and/or "escrow agent," and checks issued by the respondent from the subject account in 2012, which identified the account as an "Escrow Account."

Complaint of Javid Sakhaee

On or about November 15, 2012, the Grievance Committee received a complaint from Javid Sakhaee, alleging that the respondent was holding $850,000 in escrow which he had failed to return, upon request, in May 2012. By letter dated December 5, 2012, the Grievance Committee forwarded a copy of the Sakhaee complaint to the respondent via certified mail, return receipt requested, directing him to submit a written answer within 10 days, and to provide copies of his banking records for the subject transaction. Neither the return receipt, nor the letter, was returned. However, no answer or banking records were received. On February 5, 2013, the Grievance Committee sent the respondent a follow-up letter via regular first class mail and fax, demanding his written answer and banking records. Additionally, the Grievance Committee's investigator attempted to deliver a copy of the complaint, along with the Grievance Committee's demand for an answer and records, to the respondent's office, on February 5, 2013, and February 7, 2013. However, he found the respondent 's office closed on both occasions. When the Grievance Committee's investigator returned to the respondent's office on February 14, 2013, he affixed a copy of the Sakhaee complaint to the door, as the office was, once again, closed. To date, the respondent has failed to answer the Sakhaee complaint and failed provide the banking records requested.

Complaint of Dawn Ehrenberg

In November 2012, the Grievance Committee received a complaint from Dawn Ehrenberg alleging that the respondent had failed to pay her the sum of $2,000 within 10 days, pursuant to a written agreement dated August 15, 2012, which had settled her fee arbitration proceeding against him. By letter dated November 5, 2012, the Grievance Committee sent the respondent a copy of the Ehrenberg complaint via regular first class and certified mail, and requested that he provide a written answer within 10 days. Although the certified letter was returned "unclaimed," the letter sent via regular first class mail was not returned. However, the respondent failed to answer. By follow-up letter dated February 5, 2013, sent via regular first class mail and fax, the Grievance Committee demanded an answer to the Ehrenberg complaint. As with the Sakhaee complaint, the Grievance Committee's investigator attempted to deliver a copy of the Ehrenberg complaint and demand for an answer on February 5, 2013, and February 7, 2013, and affixed a copy of the Ehrenberg complaint to the door of the respondent 's office, on February 14, 2013. No answer to the Ehrenberg complaint has been received to date.

In opposition to the motion, the respondent's counsel argues that the respondent ought not be suspended, pending further proceedings, in the absence of admissions and/or uncontroverted evidence of misconduct demonstrating that he poses an "immediate threat to the public," pursuant to 22 NYCRR 691.4(ii) and/or (iii). The respondent's counsel further asserts that he communicated with the Grievance Committee in an effort to adjourn the respondent's EUO, but acknowledges that he had not been retained to represent the respondent in the matter at that time. In an affirmation, the respondent denies that he failed to cooperate with the Grievance Committee. However, the respondent does make several concessions. Regarding the Hernandez complaint, the respondent admits that he did not respond to the Grievance Committee's supplemental request for billing statements issued to Hernandez, as well as for copies of all correspondence from her file, and that he has yet to refund the unearned portion of her retainer. Regarding the Croci matter, the respondent does not deny that he failed to answer the complaint. Regarding the Ehrenberg matter, the respondent admits that he has yet to pay the $2,000 due and owing to Ehrenberg, and effectively admits that he failed to respond to the Grievance Committee. Although the respondent claims that he was unaware of Ehrenberg 's complaint in November and/or December 2012, when his office was closed, and that he received mail only "sporadically," he offers no explanation for failing to answer the complaint after it was affixed to the door of his office in February 2013. Regarding the Grievance Committee's sua sponte investigation, as well as the Sakhaee matter, the respondent asserts that he was under no obligation to produce the banking records for the account labeled "IOLA/Joseph G. Scali Esq PC Attorney Trust Account" or "Joseph G. Scali Esq IOLA Trust Account" because the records were not within the Committee's "jurisdiction," inasmuch as no clients' funds purportedly were maintained therein. The respondent admits that he failed to answer the Sakhaee complaint. He also reiterates that his counsel sought an adjournment of his EUO, to no avail, while acknowledging that counsel had not been retained in the matter at that time.

In reply, the Grievance Committee argues that the respondent should be suspended based upon his failure to cooperate pursuant to 22 NYCRR 691.4(l)(1)(i), and that the respondent's opposition papers support their contention. For example, the respondent explicitly admits that he failed to submit an answer to the Sakhaee complaint. Moreover, with respect to both the Sakhaee complaint, and the Committee's sua sponte investigation, wherein banking records were requested to be produced, the respondent's unilateral determination that the Grievance Committee lacked jurisdiction over the same, because the Sakhaee transaction was a personal business transaction, fails to excuse his admitted failure to comply. Additionally, the Grievance Committee asserts that the respondent's "bad faith" and "disregard of his obligation to cooperate" is further demonstrated by his failure to appear for an EUO and/or produce records, pursuant to so-ordered subpoenas. While the respondent acknowledged receipt of a judicial subpoena and subpoena duces tecum, and was aware that records were required to be produced on October 26, 2012, and that there would be no further adjournment of the return date for his personal appearance on November 7, 2012, he "simply failed to appear." The respondent's assertion that the Grievance Committee was "unreasonable" in its decision not to adjourn the return date of his appearance is unavailing, as the request was made by the respondent's counsel, whom the respondent had not even retained in the matter as of that date. In fact, the Grievance Committee asserts that counsel was not retained with respect to these matters until it made this motion. Moreover, the respondent failed to move to quash the subpoenas.

The Grievance Committee contends that the respondent's assertion that he was "unaware" of the Ehrenberg complaint, lacks credibility, and notes that the complaint was mailed and faxed to his office, and affixed to the door of his office. The respondent's excuse that mail sent to his law office was being picked up only "sporadically" in or about November and December 2012 cannot excuse his failure to answer. Moreover, the respondent's suggestion that this occurred during an isolated period, is belied by numerous certified mailings, which were returned by the Postal Service "unclaimed" or "refused," in months other than November and December 2012. Similarly, the respondent's "explanation" regarding the Hernandez complaint, acknowledges both his failure to respond to supplemental requests for billing statements, and copies of all correspondence from her file, as well as his continued failure to refund the unearned retainer balance due Hernandez for $1,400. He makes similar admissions relative to the Ehrenberg matter, wherein he has yet to refund $2,000 to the client, as agreed, as well as the Croci complaint.

Based upon the foregoing, the respondent is immediately suspended from the practice of law pursuant to 22 NYCRR 691.4(l)(1)(i), based upon his failure to cooperate with the Grievance Committee, pending further order of this Court. Also, the Grievance Committee is granted leave to serve and file the supplemental verified petition dated July 25, 2013, the respondent is directed to submit a written answer to the supplemental verified petition, within 20 days, and the issues raised by the supplemental verified petition and any answer thereto are referred to Marc S. Oxman, as Special Referee, to hear and report.

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

ENTER:

Aprilanne Agostino

Clerk of the Court