June 3-4, 2009
Digest: A judge may open a court bank account in a bank for which his/her private law firm serves as legal counsel, in which he/she is a stockholder, from which he/she has an outstanding loan and in which he/she maintains three accounts, assuming that the court funds deposited in the bank will not substantially affect the value of the judge's interests in the bank and as long as using the bank ensures the judge's own safety and security and the safety of the public funds entrusted to the judge's care.
Rules: Civil Practice Law and Rules §1206; 22 NYCRR 100.0(D)(3); 100.2; 100.2(A); 100.3(E)(1)(c); 214.9(a); Opinion 97-38 (Vol. XV); 1983 Ops St Comp No. 83-174; 1979 Ops St Comp No. 79-285 (unreported).
A part-time town justice asks whether he/she may open a court bank account in a bank which his/her private law firm represents, in which he/she is a stockholder, from which he/she has an outstanding loan and in which he/she maintains three accounts. According to the judge, that bank offers more services than the bank the court currently uses, and he/she is more familiar with the staff at the new bank. Also, the new bank is geographically closer to the town court than is the court's current bank. The judge advises that his/her court collected over $1,000,000.00 in court funds during 2008 and as of March 2009 had already collected more than $160,000. Because town and village justices are personally responsible for all court funds, the judge personally travels to the bank after each court session to deposit the evening's receipts. Thus, the judge believes it safer to use the bank closest to the court.
A judge must avoid impropriety and its appearance in all the judge's activities (see 22 NYCRR 100.2) and must always act in a manner to promote public confidence in the judiciary’s integrity and impartiality(see 22 NYCRR 100.2[A]). A town or village justice is personally responsible for monies the court receives (see 1983 Ops St Comp No. 83-174; 1979 Ops St Comp No. 79-285 [unreported]), and must deposit all monies received in his/her judicial capacity in a separate bank account in his/her name no later than 72 hours, exclusive of Sunday and holidays, from the day of receipt (see 22 NYCRR 214.9[a]).
In the Committee's view, the inquiring judge may open a court bank account in the new bank despite his/her pre-existing relationships with the bank. While a judge must disqualify him/herself in a proceeding where the judge knows that he/she has an economic interest1 in a party to a proceeding or has any other interest that could be substantially affected by the proceeding (see 22 NYCRR 100.3[E][c]), the bank in the present inquiry is not a party to any proceeding in the judge's court. Rather, the relationship between the judge and the bank is purely administrative in nature and intended to ensure that the court receives the best services available and, perhaps more importantly, to ensure the judge's safety and security and that of the court funds.
The present inquiry differs from the one in Opinion 97-38 (Vol. XV) where a judge asked whether he/she could order the deposit of settlement funds of infants' claims pursuant to CPLR 1206 in an authorized financial institution in which the judge and family members maintained accounts. There, the Committee advised that such deposits are permissible as long as the deposits could not substantially affect the value of the judge's and family members' interests in the financial institution. In addition, the Committee relied on the fact that, given the nature of the inquiring judge's interest in the financial institution, the judge would not be required to disqualify him/herself in a proceeding involving the institution (see id.). While that reasoning was appropriate where the judge chose the financial institution in the context of litigation, it does not apply here where the judge's choice of financial institution is made in the context of the judge's administrative role in the court.
Given the inquiring judge's reasons for choosing the new bank, i.e., his/her own safety and security as well as that of the public funds entrusted to his/her care and assuming that the court funds deposited in the bank will not substantially affect the value of the judge's interests in the bank, the Committee sees no ethical impropriety in the judge's choice of a new banking institution to hold the court's funds on deposit.
1“Economic interest” denotes ownership of a more than de minimis legal or equitable interest, or a relationship as officer, director, advisor or other active participant in the affairs of a party, except that “a deposit in a financial institution . . . is not an economic interest in the organization, unless a proceeding pending or impending before the judge could substantially affect the value of the interest” (22 NYCRR 100.0[D]).