In re Belge
75 A.D.2d 408, 429 N.Y.S.2d 808, 1980 N.Y. App. Div. LEXIS 11714 (1980)
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Rule of Law:
An attorney who alters legal documents without authority, neglects the administration of estates, charges excessive fees, and commingles or converts client funds for personal use commits serious professional misconduct in violation of the Code of Professional Responsibility, warranting suspension from the practice of law.
Facts:
- In 1966, respondent Belge was appointed trustee for the Sherman E. Walter trust, which held cash, stocks, and real property.
- The Walter trust will instructed Belge to sell the real property and make quarterly payments to a life beneficiary.
- In 1968, Belge was appointed executor of the Cedric Langdell estate, valued at approximately $59,600, with a simple will devising all property to the testator's brother and sister.
- From 1969 to 1978, Belge received approximately $4,000 in dividend checks payable to the Walter trust, which he deposited into his own personal account.
- Belge also sold gravel from the Walter trust's real property but kept no record of the sale or the proceeds, and he failed to pay property taxes, resulting in the property being sold.
- Belge acted as both executor and attorney for the Langdell estate, charging a $13,500 fee without court approval and failing to file a final accounting or distribute the assets to the heirs.
- In 1977, Belge represented the mortgagors in a foreclosure sale and bid on the property in his law partner's name, George T. Mahshie.
- After the referee's deed was prepared with Mahshie as the grantee, Belge erased Mahshie's name and inserted the name Winfred J. Smith before recording the altered deed.
Procedural Posture:
- The Grievance Committee for the Fifth Judicial District brought charges of professional misconduct against respondent, an attorney named Belge.
- The charges were referred to a Referee, the Honorable John R Murray, who conducted an evidentiary hearing.
- The Referee issued a report finding that Belge had engaged in professional misconduct on all three charges alleged in the petition.
- The Grievance Committee, as petitioner, moved in the Appellate Division of the Supreme Court of New York to confirm the Referee's findings.
- Belge, the respondent, submitted a brief and affidavits of good character to the Appellate Division in opposition to the motion.
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Issue:
Does an attorney commit professional misconduct warranting discipline by altering a deed without authorization, failing to properly administer multiple estates over many years, charging excessive fees, and converting estate funds for personal use?
Opinions:
Majority - Per Curiam
Yes, an attorney commits serious professional misconduct by engaging in these actions. The court found the evidence amply supported the Referee's determination of misconduct on all three charges. Regarding the first charge, altering the deed without permission was an improper legal procedure that 'caused a cloud on the title to the real property.' For the second charge, the court found Belge charged an excessive fee for a simple estate, failed to seek court approval for his commission, and neglected his duty by failing to distribute assets and close the estate in a timely manner. On the third and most serious charge, the evidence showed Belge appropriated estate funds for his own use by depositing dividend checks into his personal account, neglected to pay property taxes which led to the loss of an asset, and failed to properly account for trust funds. The court concluded these actions violated multiple Disciplinary Rules, constituted serious misconduct, and, in light of a previous censure, warranted a three-year suspension.
Analysis:
This decision reinforces the high fiduciary standards to which attorneys, particularly those administering estates and trusts, are held. It demonstrates that a pattern of misconduct, including neglect, self-dealing, and dishonesty, will result in severe disciplinary sanctions. The case serves as a precedent for the principle that even informal consent from a beneficiary does not excuse an attorney's duty to formally account for and avoid converting trust funds. The aggregation of multiple distinct violations across different client matters was a key factor in the court's decision to suspend the attorney, signaling that a history of unethical behavior will be heavily weighed in disciplinary proceedings.
