Appellate Division: Second Judicial Department

M225557

E/ct

RANDALL T. ENG, P.J.

REINALDO E. RIVERA

MARK C. DILLON

RUTH C. BALKIN

JOHN M. LEVENTHAL, JJ.

2016-07227 In the Matter of Steven B. Cottler, admitted as Steven Bruce Cottler, an attorney and counselor-at-law. Grievance Committee for the Ninth Judicial District, petitioner; Steven B. Cottler, respondent. (Attorney Registration No. 2112761)

DECISION & ORDER ON MOTION

Motion by the Grievance Committee for the Ninth Judicial District, inter alia: (1) to suspend the respondent from the practice of law, pursuant to former 22 NYCRR 691.4(l)(1)(i) and (iii), upon a finding that he is guilty of professional misconduct immediately threatening the public interest; (2) to authorize the Grievance Committee to institute and prosecute a disciplinary proceeding against the respondent based upon the allegations set forth in a verified petition dated July 14, 2016; and (3) 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 April 22, 1987, under the name Steven Bruce Cottler.

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

ORDERED that pursuant to 22 NYCRR 1240.9(a), as now in effect, the branch of the motion which is to suspend the respondent, Steven B. Cottler, admitted as Steven Bruce Cottler, is granted and Steven B. Cottler, admitted as Steven Bruce Cottler, 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, Steven B. Cottler, admitted as Steven Bruce Cottler, shall promptly comply with the rules governing the conduct of disbarred and suspended attorneys (see 22 NYCRR 1240.15); 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, Steven B. Cottler, admitted as Steven Bruce Cottler, 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, Steven B. Cottler, admitted as Steven Bruce Cottler, 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 1240.15(f); and it is further,

ORDERED that the branch of the motion which is to authorize the institution and prosecution of a disciplinary proceeding is granted, and the Grievance Committee for the Ninth Judicial District is hereby authorized to institute and prosecute a disciplinary proceeding in this Court, against Steven B. Cottler, admitted as Steven Bruce Cottler, based on the verified petition dated July 14, 2016; and it is further,

ORDERED that Gary L. Casella, Chief Counsel, Grievance Committee for the Ninth Judicial District, Crosswest Office Center, 399 Knollwood Road, Suite 200, White Plains, NY 10603, is hereby appointed as attorney for the petitioner in such proceeding; and it is further,

ORDERED that the Grievance Committee shall serve Steven B. Cottler, admitted as Steven Bruce Cottler, with a copy of this decision and order on motion, together with a notice of petition and the verified petition dated July 14, 2016, pursuant to 22 NYCRR 1240.8(a)(1), and file the notice of petition and the verified petition dated July 14, 2016, as well as proof of service, with this Court, within 20 days after receipt of this decision and order on motion; and it is further,

ORDERED that the branch of the motion which is to refer the issues raised to a Special Referee, to hear and report, is granted, and the issues raised by the verified petition and any answer thereto are referred to the Honorable Arthur J. Cooperman, 125-01 Queens Blvd., Kew Gardens, NY 11415, to hear and report, with the hearing to be completed within 60 days of the date of this order, or as soon as practicable, and to submit a report, which contains his findings on the issues, within 60 days after the conclusion of the hearing or the submission of post-hearing memoranda; and it is further,

ORDERED that the motion is otherwise denied as unnecessary.

We find, prima facie, that the respondent is guilty of professional misconduct immediately threatening the public interest based on a finding by the Supreme Court, Bronx County, that he breached his fiduciary duty owed to a client, an incapacitated person, and his failure to cooperate with the lawful investigation of the Grievance Committee for the Ninth Judicial District with regard to two other complaints of professional misconduct.

Article 81 Proceeding

The respondent was the nominated health care proxy and attorney-in-fact for an elderly adult (hereinafter the IP). The Administrator of Bainbridge Nursing and Rehabilitation Center commenced a proceeding pursuant to CPLR article 81 which sought the appointment of a special guardian, after the respondent apparently stopped paying the IP's nursing home bills. Following a hearing, the Honorable Sharon A. M. Aarons, a Justice of the Supreme Court, Bronx County, determined that the IP was an incapacitated person, and that the IP was likely to suffer harm unless a special guardian of property was appointed for him, in an order dated March 30, 2015. The order was forwarded to the Grievance Committee, and with regards to the respondent, made the following findings:

"In the instant case, Mr. Cottler's inaction in failing to pay the IP's nursing home bill is unexplained and inexcusable. Mr. Cottler failed to advance any reason why the nursing home bill remained unpaid over the course of many months, even though there was no dispute as to the amount and the validity of the charges. Mr. Cottler's inexplicable failure to respond to valid requests for payment, and for failing to "spend down" the IP's assets, while collecting a monthly fee, indicates his willingness to place his own interests ahead of those of the IP.

"Not only did Mr. Cottler collect a monthly fee for acting as agent when he failed to carry out his duties as agent, but Mr. Cottler collected monthly fees of $700, when the power of attorney recited that Mr. Cottler was entitled only to collect $500 per month. This discrepancy was not explained by Mr. Cottler. The Court was not provided with any documentation or proof of the explicit language in the instrument permitting such an increase, when the increase took effect, and the IP's role in determining the amount of the increase.

"Due to Mr. Cottler's failure to perform his duties as agent while ostensibly collecting a fee, his failure to respond to requests for payment of nursing home bills over the course of many months, necessitating the commencement of this proceeding, his failure to provide a proper accounting of his management of the IP's finances to the Court or to the Court Evaluator, the Court finds that Mr. Cottler has breached his fiduciary duty, warranting revocation of the power of attorney. Moreover, as per his own testimony, Mr. Cottler has compensated himself for his role as attorney-in-fact, despite his failure to fulfill his duties, and at a rate above the $500 per month stated in the instrument.

"Mr. Cottler is directed to account to the special guardian appointed herein for all income, assets, expenditures, and debts, and shall promptly reimburse the guardian herein for all expenditures made in breach of his fiduciary duty."

Upon receipt of the order dated March 30, 2015, the Grievance Committee initiated a sua sponte complaint against the respondent. In a response to the complaint dated September 7, 2015, the respondent stated that he was endeavoring to revise his accounting and provide documentation for the seven-year period he served as attorney-in-fact for the IP. In another response dated January 8, 2016, the respondent stated that he was still working on the accounting.

Attorney Trust Account

Upon receipt of two notices from the Lawyers' Fund for Client Protection, dated January 31, 2014, and February 24, 2014, respectively, informing the Grievance Committee that two telephonic payments in the amounts of $500 and $322.38 were not paid due to insufficient funds in the respondent's attorney trust account, the Grievance Committee initiated sua sponte complaints against the respondent. Upon receipt of information provided by the respondent, the Grievance Committee requested clarification regarding certain transactions. Asked to identify the source of the deposits made into his account, the respondent indicated that the source were fees paid to him for services rendered in various matters. In some instances, the respondent could not recall the source and so indicated. Several deposits were identified as funds from his spouse for the payment of health insurance, which were made from the account. In a later submission to the Grievance Committee, the respondent acknowledged that various disbursements were payments for personal and business expenses, that he issued a check to cash, and that he disbursed funds via withdrawals. The respondent stated that he did not have an operating account, that the deposits were not client funds, and that he could not recall the last time he deposited client funds into his account.

The Grievance Committee thereafter requested that the respondent appear for an examination under oath, and provide the underlying files in several matters. When the respondent made repeated requests for an adjournment and did not provide the requested files, the Grievance Committee served the respondent with a judicial subpoena and a subpoena duces tecum, demanding his appearance on March 24, 2016. The respondent appeared but indicated that he was in the process of obtaining counsel and did not wish to testify without counsel. The respondent obtained counsel and a new date was set, but additional adjournments, including one due to the respondent's hospitalization, were sought. The Grievance Committee requested the respondent to provide proof of hospitalization and make arrangements to appear. To date, the respondent failed to do so and failed to submit the requested files.

In opposition to the motion, the respondent states that, prior to practicing law, he had a long career as a nursing home and hospital administrator in various health care facilities, and that, as an attorney, he devoted his practice to providing assistance to clients in need of Medicaid, long term care, wills, guardianships, and nursing home related issues. In terms of client care, he adopted a "hands-on" approach to caring for the elderly. The respondent claims that he faithfully served the IP for many years, and is in the process of preparing an accounting for the Supreme Court. As far as cooperating with the investigation, the respondent states that it has always been his intention to cooperate. He attributes his failure to arrange for a new date for his examination to that fact that he was hospitalized on four separate occasions for respiratory and cardiac problems.

Notwithstanding the respondent's good intentions and his various hospitalizations, we find that the respondent constitutes an immediate threat to the public interest based on the fact that he breached his fiduciary duty owed to an elderly and vulnerable client, found to be an incapacitated person by the Supreme Court, and that he failed to cooperate with the Grievance Committee with respect to two other complaints of professional misconduct.

Based on the foregoing, the respondent is immediately suspended from the practice of law, pursuant to 22 NYCRR 1240.9(a), 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.

ENG, P.J., RIVERA, DILLON, BALKIN and LEVENTHAL, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court