Grievance Comm. for the Second, Eleventh, & Thirteenth Judicial Dists. v. Thomas (In re Thomas)

211 A.D.3d 21

177 N.Y.S.3d 169

In the MATTER OF Audrey A. THOMAS, admitted as Audrey A. Watson, an attorney and counselor-at-law.

Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts, petitioner;

v.Audrey A. Thomas, respondent.

(Attorney Registration No. 4050548)

2018–11989

Supreme Court, Appellate Division, Second Department, New York.

November 9, 2022

Diana Maxfield Kearse, Brooklyn, NY, for petitioner.

The Law Offices of Wynton Sharpe, P.C., Brooklyn, NY, for respondent.

HECTOR D. LASALLE, P.J., MARK C. DILLON, COLLEEN D. DUFFY, BETSY BARROS, FRANCESCA E. CONNOLLY, JJ.

OPINION & ORDER

PER CURIAM.

The Grievance Committee served the respondent with a verified petition dated October 9, 2018, containing three charges of professional misconduct. The respondent served and filed an answer dated December 6, 2018. Subsequently, the Grievance Committee submitted a statement of disputed and undisputed facts dated January 3, 2019, which the respondent did not challenge. By decision and order on application of this Court dated March 1, 2019, the matter was referred to Roger Bennet Adler, as Special Referee, to hear and report. Following a prehearing conference held on March 27, 2019, and a hearing spanning 15 separate dates between July 12, 2019, and December 10, 2020, the Special Referee filed a report dated April 21, 2021, in which he sustained all three charges. The Grievance Committee now moves to confirm the Special Referee's report and impose such discipline upon the respondent as the Court deems just and proper. The respondent moves to disaffirm the Special Referee's report and requests that this matter be remitted for further proceedings before a newly appointed Special Referee, or alternatively, that she be granted leave to supplement the record, or in view of the mitigating circumstances presented, a sanction no greater than a public censure be imposed.

The Petition

Charge one alleges that the respondent misappropriated funds entrusted to her as a fiduciary incident to her practice of law, in violation of rule 1.15(a) of the Rules of Professional Conduct ( 22 NYCRR 1200.0 ) as follows:

The respondent was retained by Rhea Murray to represent her in the sale of real property located at 456 Madison Street, Brooklyn (hereinafter the Madison Street property). On May 15, 2013, the respondent deposited a down payment in the amount of $50,000, received from the buyer of the Madison Street property, into an IOLA account that she maintained at Bank of America, account number ending in 5589, entitled, "New York IOLA Trust Accounts Audrey A. Thomas Atty at Law Trtee" (hereinafter the BOA escrow account). The balance in the BOA escrow account before the deposit of the down payment was $25, which was the respondent's personal funds.

Pursuant to a rider to the contract of sale, the buyer authorized the release of $25,000 from the down payment to Murray, and $4,500 to the respondent to commence and finalize eviction proceedings against tenants of the Madison Street property. On May 23, 2013, the respondent withdrew the sum of $29,500 from the BOA escrow account. From the $29,500 withdrawn, the respondent paid Murray the sum of $23,000 via a cashier's check from Bank of America, and she kept $6,500 ($2,000 more than what was authorized in the rider).

Before the closing, the respondent made four cash withdrawals from the BOA escrow account in June 2013, totaling $20,500. As a result of those cash withdrawals, by the close of business on June 21, 2013, the BOA escrow account balance was $25, well below the $20,500 she was required to hold for this transaction.

At the closing on November 21, 2013, the respondent received a check for a portion of the sale proceeds of the Madison Street property from Seyfarth Shaw, LLP, in the amount of $480,173.47. On November 22, 2013, the respondent deposited that check into the BOA escrow account. The balance in the BOA escrow account after this deposit was $480,198.47.

Between November 22, 2013, and February 11, 2014, the respondent disbursed the sum of $102,413.94 from the BOA escrow account at the direction of Murray. During that same period, without Murray's authorization or knowledge, the respondent withdrew $85,340.10 of Murray's funds, as evidenced by the BOA escrow account bank statements.

On February 11, 2014, the respondent deposited a check for the balance of the sale proceeds of the Madison Street property from Seyfarth Shaw, LLP, in the amount of $240,000, bringing the balance in the BOA escrow account to $532,444.43.

Between February 11, 2014, and May 8, 2014, the respondent disbursed the sum of $3,620.91 from the BOA escrow account at the direction of Murray. During that same period, without Murray's authorization or knowledge, the respondent withdrew $271,181.13 (including several cash withdrawals) of Murray's funds, as evidenced by the BOA escrow account bank statements.

On May 8, 2014, the respondent closed the BOA escrow account and withdrew the balance of the Murray funds ($257,642.39) by certified check, and the next day she deposited those funds into an account at JPMorgan Chase Bank, account number ending in 1013, entitled, "Law Office of Audrey Thomas, PLLC Attorney Trust Account IOLA" (hereinafter the Chase escrow account). The Chase escrow account had a zero balance before the $257,642.39 deposit. Between May 9, 2014, and November 17, 2014, the respondent disbursed the sum of $3,620.91 from the Chase escrow account at the direction of Murray. During that same period, the respondent disbursed the sum of $253,996.48 from the Chase escrow account via electronic transfers, cash withdrawals, and checks payable to herself and various individuals and companies, without Murray's authorization or knowledge. By November 17, 2014, the balance in the Chase escrow account was $25, well below the amount the respondent should have been holding on behalf of Murray.

Charge two alleges that the respondent made 12 improper cash withdrawals from the BOA escrow account between June 7, 2013, and May 8, 2014, totaling $64,000, in violation of rule 1.15(e) of the Rules of Professional Conduct ( 22 NYCRR 1200.0 ).

Charge three alleges that the respondent failed to maintain the required bookkeeping records for the BOA escrow account and the Chase escrow account, in violation of rule 1.15(d) of the Rules of Professional Conduct ( 22 NYCRR 1200.0 ) as follows: The respondent failed to maintain a contemporaneous ledger or similar record showing the date, source, and description of each item deposited, and the date, payee, and purpose of each withdrawal or disbursement for both escrow accounts.

Hearing Evidence

The respondent has admitted that she represented Murray in the sale of the Madison Street property, and that she received the proceeds of that sale. The respondent's escrow bank records confirm that she deposited the proceeds of the Madison Street property sale, in the approximate amount of $770,000, into her escrow account. Although the respondent disbursed some of the sale proceeds at the direction of Murray, the respondent's escrow bank records confirm that the remaining funds in excess of $630,000 did not remain on deposit in the respondent's escrow account. The respondent concedes that she used Murray's escrow funds to promote the respondent as an author and radio show host. The respondent claims that such use of the escrow funds was authorized by Murray, with whom she had a longstanding personal relationship, as an investment and to reimburse the respondent for legal services she claims to have rendered to Murray's family members. Breanna Rochelle Coy, the respondent's daughter, testified that she recalled the respondent getting oral authorization from Murray to use Murray's funds. As to the purported...