(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that,
in the interests of brevity, portions of any opinion may not have been summarized).
Argued November 28, 1995 -- Decided May 10, 1996
PER CURIAM
This is an attorney disciplinary case. The Disciplinary Review Board (DRB) concluded that Richard
W. Banas of Bloomfield should receive a six-month suspension from the practice of law for a violation of
RPC 1:15(b), which states that a lawyer shall promptly deliver to a client or third person any funds that the client
or third person is entitled to receive. Two members of the DRB voted to dismiss the complaint.
The factual background of the case follows. Carl Grant retained Richard Banas to represent him in the
retrial of a homicide case in which Grant's previous conviction had been reversed. Grant and Banas agreed on
a fee of $25,000, but the full fee was never paid. Instead, a codefendant of Grant, Tyrone Rush, paid Banas
$10,000.
Prior to the retrial, Grant asked Banas to file a bail motion on his behalf. Banas did not want to
undertake additional work without receiving another payment on his fee.
Mrs. Grant, Carl's mother, stated that a friend of Grant was willing to put up his house as collateral
provided he received a fee of $10,000. Mrs. Grant apparently wanted Banas to continue as Grant's attorney
while also seeking to have him released on bail. To effectuate the latter, Mrs. Grant borrowed $5,000 and paid
it to Banas, who gave her a receipt stating that the money was to be returned "if bail not obtained."
According to Mrs. Grant, she believed that her money would be returned if her son were not released
on bail. Banas, however, took the position that his only obligation was to see that bail was "set"; Grant's actual
release was not required.
The trial court set bail at $100,000. Grant could not post the bail because his friend did not post his
house as collateral. Banas applied the $5,000 he received from Mrs. Grant to fees owed to him by Carl Grant.
Mrs. Grant filed an ethics grievance against Banas, contending that he improperly and knowingly
retained her $5,000. The District Ethics Committee and the DRB concluded that the $5,000 payment was to get
Carl Grant out of jail on bail. By refusing to return that money after the bail hearing, Banas had violated RPC
1.15(b).
The Supreme Court issued an Order to Show Cause why Richard W. Banas should not be disbarred or
otherwise disciplined.
HELD: In light of the factual circumstances and respondent's prior good record as a member of the Bar, a
reprimand is the appropriate sanction to impose for respondent's violation of RPC 1.15(b) through his failure
to return monies paid to him by the mother of his client.
1. The Court is persuaded by clear and convincing evidence that respondent knowingly and improperly retained
Mrs. Grant's $5,000 payment as fees. Respondent has agreed to make restitution and must do so within thirty
days. (p.9)
2. Respondent has no history of ethical violations. His failure to clarify the conditions surrounding the payment
of the $5,000 appears to be aberrational. Before entering private practice, he served as an Assistant Essex
County Prosecutor. In that capacity, he helped develop a Central Judicial Processing System for the courts. (pp.
9-10)
It is Ordered that respondent is hereby REPRIMANDED.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN,
and COLEMAN join in the Court's opinion.
SUPREME COURT OF NEW JERSEY
D-
41 September Term 1995
IN THE MATTER OF
RICHARD W. BANAS,
An Attorney at Law.
Argued November 28, 1995 -- Decided May 10, 1996
On an Order to show cause why respondent
should not be disbarred or otherwise
disciplined.
John McGill, III, Deputy Ethics Counsel,
argued the cause on behalf of the Office of
Attorney Ethics.
Lawrence S. Lustberg argued the cause for
respondent (Crummy, Del Deo, Dolan,
Griffinger & Vecchione, attorneys; Mr.
Lustberg and Mark A. Berman, on the brief).
PER CURIAM
After a public hearing, the District VC Ethics Committee
(DEC) recommended public discipline of respondent, Richard Banas,
for violations of Rules of Professional Conduct (RPC) 1.15
(safekeeping property); 4.1 (truthful statements to others); and
4.4 (respecting legal rights of third persons).
The Disciplinary Review Board concluded that respondent had violated RPC 1.15(b), which states that "a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive." For
that violation, the DRB recommended a six-months' suspension.
Two members of the DRB voted to dismiss the complaint. We agree
with the DRB that respondent violated RPC 1.15(b), but we believe
that we will serve the interests of the disciplinary system
through a public reprimand.
From the record, the following facts emerge. Carl Grant
(subsequently identified as "Carl") retained respondent in August
1992 to represent him in the retrial of a homicide case in which
Carl's previous conviction had been reversed on appeal. Carl and
respondent agreed on a fee of $25,000, but neither Carl nor
anyone else ever paid the full fee. Instead, a co-defendant,
Tyrone Rush, paid respondent $10,000.
While respondent was preparing for the retrial, Carl, who
remained incarcerated, spoke to respondent about getting out of
jail. Respondent was interested in the payment of the balance of
the agreed fee. He did not want to undertake the additional work
required to obtain Carl's release until he received another
payment. Carl, however, had no money for either respondent's fee
or bail.
According to grievant, Carl's mother (subsequently identified as "Mrs. Grant"), a friend of Carl's, identified as "Paul," was willing to pledge as collateral a house that the friend and his girlfriend owned, provided that he receive a
$10,000 fee. Mrs. Grant apparently wanted both to seek Carl's
release from jail and to assure that respondent would continue to
represent Carl. Although unwilling to pledge her house as
collateral, she was willing to borrow from two banks the $5,000
that she ultimately paid to respondent. At that time, respondent
gave her a receipt stating that he had received the funds "on
behalf of Carl Grant to be held for bail application. Money is
to be returned to M. Grant if bail not obtained." The receipt
also bore the notation that the balance due was "zero."
The parties' conflicting goals may have affected their
recollection of the subsequent events. According to Mrs. Grant,
she indicated to respondent that she wanted a full refund if her
son's bail was not arranged. Carl's sister, who accompanied her
mother to respondent's office in September 1992, testified that
her mother specifically had asked whether the $5,000 would be
returned if Carl did not get out on bail. She testified further
that respondent replied "most certainly." Respondent's
understanding was that the $5,000 was for his continued
representation of Carl, not merely for the bail proceedings.
Respondent thought that "obtain" meant "set," and that the fee
would become earned once bail was set.
Ultimately, bail was set at $100,000. Carl, however, was unable to post bail because Paul's girlfriend would not agree to pledge their house as security. Respondent, who had placed the
$5,000 in his business account, applied the money to fees that
Carl owed him.
A further problem developed. Apparently, the $10,000 fee
that the co-defendant Rush had paid to respondent represented
proceeds from the sale of stolen bearer bonds. As respondent
explained:
[Another attorney] and I met with Judge Codey
to discuss the situation. He advised us to
make a motion to be relieved as Counsel due
to the fact that we both were, in effect,
potential witnesses against Mr. Rush and
therefore neither of us could participate in
a trial involving him. We both made the
motion and Judge Codey relieved us. I
subsequently met with [Carl] and discussed
his case with him and indicated I would help
his new counsel and himself with his case in
any way that I could. And I did have
meetings with both new counsel assigned to
the defendants.
Although respondent was relieved as Carl's counsel, in June 1993
he participated in negotiating a plea bargain for him.
The DRB describes the intervening events:
On December 2, 1992, after unsuccessful attempts to reach respondent by telephone, Mrs. Grant wrote to him requesting the refund of "my $5,000 which was to be used toward bail for my son Carl Grant." Mrs. Grant never received a return call or letter from respondent. She, therefore, filed a grievance against him on January 14, 1993. She stated that she did not speak with
respondent between the delivery of the funds,
on September 30, 1992, and the DEC hearing,
on July 16, 1994.
Furthermore, Mrs. Grant claimed that she
did not know about her son's affidavit,
discussed below, until just before the DEC
hearing. She did not know what promises her
son had made to respondent about the purpose
of the $5,000.
Respondent claimed that he did not know
that Mrs. Grant and her two daughters had
called his office. He denied knowledge that
Mrs. Grant wanted the money returned until he
received her December 1992 letter. He
acknowledged that he did not reply to her
letter. His stated reason was that he had
been relieved from the case almost six weeks
prior to the receipt of Mrs. Grant's letter.
Respondent contended that the $5,000 was
not returnable and was to be applied to his
$25,000 fee. In support of his position, he
offered an affidavit prepared by himself and
signed by Carl, dated June 8, 1993. (Carl
did not testify). The affidavit recites that
Carl had retained respondent for a fee of
$25,000 and that Tyrone Rush had paid the
initial amount of $10,000. The second and
sixth paragraphs stated: "I instructed my
mother to pay an additional $5,000.00 to my
attorney. . . . I informed [respondent] to
keep the $5,000 and credit it to his
retainer. I decided not to proceed with the
bail." (The affidavit is silent as to when
Carl allegedly so informed respondent.)
According to respondent, the affidavit was
signed by Carl on the second day of intensive
plea bargaining between respondent and the
prosecutor's office. Respondent explained
his re-involvement in the case as follows:
A. I went to the jail to see Mr. Grant
regarding the complaint made by his
mother. He discussed it. He indicated
that --
MR. WILKINSON: You are talking about the
grievance?
A. Yes. That it would be withdrawn. That
it was a misunderstanding. That he felt
abandoned when he was left having to be
back to a public defender. But that it
would all be straightened out.
I told him at that time, I said
well, I will prepare then an
affidavit for you based on what
you've said to me and I will bring
it back to you, and if it comports
with what you are representing to
me today, I will ask you to sign
that.
Following that, we continued plea
negotiations for Mr. Grant. Judge
Codey allowed me to reinvolve
myself as sort of co-counsel with
[the attorney] who was representing
Mr. Grant, and these negotiations
took carried [sic] over a week.
. . .
In support of his position that he
properly kept the $5,000, respondent pointed
to the language of the receipt given to Mrs.
Grant: funds "to be held for bail
application . . . returnable to M. Grant if
bail not obtained." Respondent contended
that the conditions set forth on the receipt
had been fulfilled: he had prepared the bail
application, had succeeded in having bail set
and the only reason why bail had not been
posted was that Paul's girlfriend had refused
to sign the necessary documents to place
their house as collateral for the bail.
Having accomplished what he had been hired to
do, respondent concluded, he was entitled to
keep the monies.
Respondent drew a technical distinction
between "obtaining bail" and "posting bail."
Respondent offered expert testimony from
Charles Truzzolino, a Newark bail bondsman,
who explained the terminology to the DEC
panel: "obtaining bail" is accomplished
through an attorney's application to the
court; "posting bail" is handled by a bail
bondsman.
According to the DEC, the agreement between Mrs. Grant and
respondent was that the $5,000 payment would be refunded if Carl
did not "get released from prison" and that respondent "seized on
a technical interpretation of the term `obtain' after the fact."
The DRB agreed:
[T]he finding that respondent improperly
and knowingly retained the $5,000 as fees is
unavoidable. Like the DEC, the Board finds
that, on the basis of the evidence presented
-- including the testimony of the witnesses
-- the logical conclusion is that the $5,000
was entrusted to respondent for the purpose
of obtaining Carl's release from prison;
otherwise, the $5,000 was to be returned to
Mrs. Grant. The Board's finding is grounded
on the same reasons expressed by the DEC in
its report.
Specifically, respondent's argument that he fulfilled his part of the bargain by obtaining a favorable result to the bail application is specious. The record leaves no doubt that Mrs. Grant understood that the funds were to be returned to her if her son was not released. Mrs. Grant so testified --as did her daughter, Carol Barclay-Peart, who also attended the meeting between Mrs. Grant and respondent. Mrs. Grant's understanding was based on her agreement with respondent, which was briefly memorialized in the receipt prepared at that time: "Received of Marita Grant (2) Bank drafts totalling $5,000 on behalf of Carl Grant to be held for bail application; money is returnable to M. Grant if bail not obtained." The language on the receipt is clear: get Carl out of jail or refund the $,5000. Mrs. Grant had every expectation to recover the advanced funds in
case her son was not released. If
respondent's understanding of the agreement
was different, he had an obligation to word
the receipt carefully and clearly so as to
eliminate any possible misunderstanding on
Mrs. Grant's part. Curiously, his claim that
the monies were to "obtain bail" and that he
did so surfaced only after Paul's girlfriend
withdrew her consent to placing their house
as security for the bail.
The circumstances surrounding Carl's
signing of the affidavit persuade the Board
that its preparation was belatedly contrived,
six months after Mrs. Grant wrote to
respondent seeking the return of the $5,000.
As properly found by the DEC, Carl would have
signed any document drafted by respondent if
respondent successfully obtained the plea
bargain Carl was seeking in his murder trial.
Particularly telling is the omission in the
affidavit of any reference that the $5,000
was Carl's money, specially taking into
account that respondent himself prepared it.
Also significant is the fact that respondent
made no reply to Mrs. Grant's December 1992
letter or otherwise communicated with her or
with her daughter concerning her request for
the return of the $5,000. As with the DEC,
the Board's suspicion is that respondent's
claimed interpretation of the term "obtain
bail" was the product of afterthought,
following his realization that his $25,000
fee was jeopardized by the discovery that the
previously received $10,000 was illegal
money.
For the foregoing reasons, the Board is
convinced that respondent knew from the
beginning that the purpose of the $5,000
payment was to obtain Carl's release from
prison and that, by refusing to return it to
Mrs. Grant, he improperly retained monies
that rightfully belonged to a third party, in
violation of RPC l.15(b).
Two members of the DRB would have dismissed the matter for lack
of proof that respondent knew that he was to return the $5,000 to
Mrs. Grant if Carl were not released from prison.
Respondent argues that the matter is simply a
misunderstanding about the conditions under which Mrs. Grant paid
him the $5,000. If so, he must bear the responsibility for that
misunderstanding, particularly the part attributable to the
ambiguity in the receipt.
Although we find some support in the record for respondent's
version of the facts, we remain persuaded by clear and convincing
evidence, as were the DEC and the DRB, that respondent improperly
and knowingly retained the $5,000 payment as fees. Furthermore,
respondent acknowledges his discourtesy in failing to communicate
with Mrs. Grant when she sought the return of the $5,000. His
counsel informed us at oral argument that respondent is willing
to make restitution of the money. We accept that representation.
Respondent shall notify the Clerk of the Court within thirty days
of the filing of this opinion that the repayment has been made.
Respondent has no history of ethics violations. His failure to clarify the conditions surrounding the payment of the $5,000 seems to be aberrational. Before entering private practice, he served as an assistant Essex County prosecutor. While in the prosecutor's office, respondent helped devise a Central Judicial
Processing System for the courts. In light of the foregoing
circumstances, we believe that we can maintain the public's
confidence in the legal profession without imposing a suspension.
On the facts of this case, a reprimand should suffice. In re
Pressler,
132 N.J. 155 (1993); In re Vaughn,
123 N.J. 576 (1991);
In re Gioia,
91 N.J. 378 (1982).
Respondent is reprimanded for knowingly and improperly
retaining Mrs. Grant's $5,000 payment.
We direct respondent to reimburse the Disciplinary Oversight
Committee for appropriate administrative costs, including the
costs of transcripts.
So ordered.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, O'HERN,
GARIBALDI, STEIN, and COLEMAN join in the Court's opinion.
SUPREME COURT OF NEW JERSEY
D-
41 September Term 1995
IN THE MATTER OF :
RICHARD W. BANAS, : ORDER
AN ATTORNEY AT LAW :
The Disciplinary Review Board having on August 16, 1995,
filed its decision in this matter with the Court, and respondent
having been ordered to show cause why he should not be disbarred
or otherwise disciplined, and good cause appearing;
It is ORDERED that RICHARD W. BANAS of BLOOMFIELD who was
admitted to the bar of this State in 1978, is hereby reprimanded
for violating RPC 1.15(b); and it is further
ORDERED that the entire record of this matter be made a
permanent part of respondent's file as an attorney at law of this
State; and it is further
ORDERED that respondent reimburse the Disciplinary Oversight
Committee for appropriate administrative costs incurred in the
prosecution of this matter.
WITNESS, the Honorable Robert N. Wilentz, Chief Justice, at
Trenton, this 10th day of May, 1996.
/s/ Stephen W. Townsend
CLERK OF THE SUPREME COURT
NO. D-41 SEPTEMBER TERM 1995
Application for
Disposition Reprimand
Decided May 10, 1996
Order returnable
Opinion by PER CURIAM