Matter of Stepenskaya

Supreme Court, Kings County

Decided on May 11, 2026

Index No. 512573/2026

Aaron D. Maslow, J.

The following papers were used on this motion: notice of petition, verified petition, affirmation, exhibits.

Upon the foregoing papers, and having heard oral argument, the Court issues the within decision and interim order.

The Court is presented with a petition pursuant to 22 NYCRR § 1200.0 (Rules of Professional Conduct), Rule 1.15 (g) (1), seeking that Petitioner Regina Stepenskaya be appointed as a successor signatory on the bank account of Daniel E. Rausher, Esq., a deceased attorney, so that she can disperse to herself $60,000 which she maintains was deposited by him [*2]for her benefit as a result of settled lawsuits. Nobody has been named as a respondent.^FN1

Petitioner avers that two checks, one in the amount of $35,000 from Plymouth Rock Assurance and the other in the amount of $25,000 from GEICO General Insurance Co., made payable to her and Attorney Rausher, were deposited in his account at Citibank, Account No. [redacted], in 2024. Copies of the processed checks are submitted with Petitioner's petition. These represented settlements from her lawsuit resulting from a motor vehicle accident in 2012 in which she was injured, maintains Petitioner. The lawsuit bore Index No. 7123/2015. Attorney Rausher died on or about September 4, 2025, according to a death notice. It is alleged that as a result, there is presently no authorized signatory available to access and properly disburse the funds in the account in accordance with applicable law. Petitioner sent a copy of her submitted papers to the "Estate of Daniel Rausher," at 26 Court Street, Brooklyn, NY 11201, but the envelope was returned by the U.S. Postal Service as "Unable to Forward."

Rule 1.15 (g) of 22 NYCRR § 1200.0 (Rules of Professional Conduct) provides:

(1) Upon the death of a lawyer who was the sole signatory on an attorney trust, escrow or special account, an application may be made to the Supreme Court for an order designating a successor signatory for such trust, escrow or special account, who shall be a member of the bar in good standing and admitted to the practice of law in New York State.

(2) An application to designate a successor signatory shall be made to the Supreme Court in the judicial district in which the deceased lawyer maintained an office for the practice of law. The application may be made by the legal representative of the deceased lawyer's estate; a lawyer who was affiliated with the deceased lawyer in the practice of law; any person who has a beneficial interest in such trust, escrow or special account; an officer of a city or county bar association; or counsel for an attorney disciplinary committee. No lawyer may charge a legal fee for assisting with an application to designate a successor signatory pursuant to this Rule.

(3) The Supreme Court may designate a successor signatory and may direct the safeguarding of funds from such trust, escrow or special account, and the disbursement of such funds to persons who are entitled thereto, and may order that funds in such account be deposited with the Lawyers' Fund for Client Protection for safeguarding and disbursement to persons who are entitled thereto.

It is presumed that the subject two checks were deposited in Attorney Rausher's escrow [*3]account. As a purported "person who has a beneficial interest" in said account, Petitioner possesses standing to commence the instant special proceeding (see id. ¶ 1). The online attorney directory maintained by the N.Y.S. Unified Court System lists Attorney Rausher as deceased. However, this Court has not been made aware as to whether anyone has already been appointed as a successor signatory on his bank accounts. Petitioner is neither an attorney affiliated with Attorney Rausher nor the administrator of his estate (cf. Hynes v Citibank, 193 Misc 2d 806 [Sup Ct, Queens County 2002]), and thus lacks further information about Attorney Rausher to provide to the Court. Not being an attorney, she cannot by law be appointed successor signatory (see 22 NYCRR § 1200.0 [Rules of Prof Conduct], Rule 1.15 [g] [1]).

There is also the matter of what transpired with the records of Attorney Rausher. The Court is unaware of whether anyone has been appointed to take possession of them for the purpose of review and advising his clients to secure another attorney or take any other action necessary to protect their interests (see 22 NYCRR § 1240.21; Matter of Hickey, 142 AD3d 753 [3d Dept 2016]; Matter of Van Zandt, 53 AD3d 982 [3d Dept 2008]; Matter of Pawlik, 2024 NY Slip Op 30312[U] [Sup Ct, NY County 2024]). 22 NYCRR § 1240.21 (a) provides:

When an attorney is suspended, disbarred or incapacitated from practicing law pursuant to these Rules, or when the Court determines that an attorney is otherwise unable to protect the interests of his or her clients and has thereby placed clients' interests at substantial risk, the court may enter an order, upon such notice as it shall direct, appointing one or more attorneys to take possession of the attorney's files, examine the files, advise the clients to secure another attorney or take any other action necessary to protect the clients' interests. An application for such an order shall be by motion, with notice to the committee, and shall include an affidavit setting forth the relationship, if any, as between the moving party, the attorney to be appointed and the suspended, disbarred or incapacitated attorney.

The Court is concerned about the status of Attorney Rausher's records because there is a record of his censure for neglecting matters (see Matter of Rausher, 164 AD3d 182 [2d Dept 2018]). According to information on NYSCEF, several clients sued him for legal malpractice.

Petitioner did not name anyone as a respondent herein who might have information concerning Attorney Rausher and his records and bank accounts. Since the Lawyers' Fund for Client Protection is the residuary recipient of any attorney escrow account funds for the purpose of safeguarding and disbursement to persons entitled to them is, the Court deems it necessary that they be apprised of the pendency of this proceeding (see Matter of Lefkowitz v Lawyers Fund for Client Protection, 35 Misc 3d 1233[A], 2012 NY Slip Op 50985[U] [Sup Ct, Suffolk County 2012]).

An application for a court order to take possession of an attorney's files shall be made on notice to the respective attorney grievance committee (see 22 NYCRR § 1240.21 [a]). Although Petitioner seeks only to have a successor signatory appointed, such relief could be granted only if it is established that she is entitled to it, based on a review of Attorney Rausher's files. The Court not being aware if another attorney has taken possession of said files, it is deemed [*4]necessary to apprise the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts of the pendency of this proceeding.

According to the images submitted by Petitioner, the settlement checks were deposited in an account at Citibank. To facilitate ascertaining the status of the account, Citibank, N.A. should be also be apprised of the pendency of this proceeding. Moreover, the Court deems it in the interests of Attorney Rausher's clients to temporarily restrain the transfer or dispersal of the account's funds pending further inquiry into the matters which are the subject of this proceeding.

Finally, the Court deems it in the interests of Attorney Rausher's clients that the Brooklyn Bar Association be apprised of the pendency of this action. Hopefully, it can be a source for further information in this matter.

Accordingly, it is hereby ORDERED as follows:

(1) That branch of the petition seeking appointment of Petitioner Regina Stepenskaya as the successor signatory on the bank account of Daniel E. Rausher, Esq., deceased is denied.

(2) Determination of the remainder of the relief sought in this special proceeding shall await submissions and appearances from the entities named below.

(3) Citibank, N.A. is temporarily restrained from transferring or disbursing any funds in Account No. [redacted] and in any other accounts in the name of Charles E. Rausher, as an attorney, until further notice from the Court.

(4) By May 21, 2026, Petitioner shall serve a copy of this order placed above a complete copy of the papers she filed in connection with this special proceeding by both first-class mail (obtaining a postmarked certificate of mailing) and certified mail, return receipt requested, with the words "COURT ORDER" written on the envelopes, on the following:

(a) Lawyer's Fund for Client Protection

119 Washington Avenue

Albany, New York 12210

(b) Attorney Grievance Committee for the Second, Eleventh & Thirteenth Judicial Districts

Renaissance Plaza

335 Adams Street

Suite 2400

Brooklyn, New York 11201

(c) Citibank, N.A.

195 Montague Street

Brooklyn, New York 11201

(d) Brooklyn Bar Association

123 Remsen Avenue

Brooklyn, New York 11201

(5) By June 12, 2026, the Lawyer's Fund for Client Protection, the Attorney Grievance Committee for the Second, Eleventh & Thirteenth Judicial Districts, and Citibank, N.A. shall submit a response to the petition in the within special proceeding on the NYSCEF electronic case filing platform and take such action as they deem appropriate. Copies of papers shall be served on Petitioner. The Brooklyn Bar Association is invited to do so also.

(6) This matter is continued to Friday, June 26, 2026, whereupon the Lawyer's Fund for Client Protection, the Attorney Grievance Committee for the Second, Eleventh & Thirteenth Judicial Districts, and Citibank, N.A. shall appear.