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The Florida Bar v. John T. Carlon, Jr.; The Florida Bar v. Mark Haller Zilberg


THE NEXT CASE ON THE COURT'S ORAL ARGUMENT CALENDAR IS THE FLORIDA BAR VERSUS CARLON AND ZILBERBERG. MR. BOGGS.

GOOD MORNING, YOUR HONOR. MY NAME IS TONY BOGGS. I AM DIRECTOR OF THE BAR'S LEGAL DIVISION. WITH ME THIS MORNING AT MY FAR LEFT IS EDWARDITY YOU ARE ALLEGED, HERE ON THE CARLON -- EDWARD ITURRALDE, AND MR. ZILBERBERG IS HERE ON THE ZILBERBERG CASE. MR. CHIEF JUSTICE

LET ME LAY OUT MY UNDERSTANDING OF RESTITUTION, SO EVERYONE CAN SPEAK TO IT. UNDER THE RULE THAT WAS ADOPTED IN 1992 OR '93, THERE DOES APPEAR TO BE A PROVISION FOR RESTITUTION IN THE RULE. HOWEVER, THIS COURT'S CASE LAW SEEMS TO BE KIND OF ALL OVER THE MAP THIS MORNING, AND -- ALL OVER THE MAP BEFORE AND AFTER, AS TO WHEN THE RESTITUTION WILL BE CONDITIONED, AND MY CONCERN IS THAT THE ONLY WAY, WHEN WE PUT IT IN THE ORDER, THAT IT CAN BE ENFORCED, IT APPEARS TO BE, TO ME, THROUGH CONTEMPT, WHICH WOULD REQUIRE THE FLORIDA BAR TO BRING ACTIONS OF CONTEMPT, IF THERE IS NOT RESTITUTION PAID, AND, BUT, THERE DOESN'T APPEAR TO BE ANY BASIS TO EXECUTE ON JUDGMENTS IN BEHALF OF THE PERSON WHO IS CLAIMING RESTITUTION, COULDN'T GET GARNISHMENT, AND SO AREN'T WE, HAVEN'T WE SET UP A MATTER WHICH IS ACTUALLY CONFUSING, AS TO RESTITUTION, BECAUSE OF THE FACT THAT, ONE, THERE IS, THE BAR HAS TO DO SOMETHING FURTHER TO ENFORCE IT, AND SECONDLY, IT LOOSE TO THE CLIENT, LIKE THE BAR IS GOING TO GO GET THEIR MONEY FOR THEM, WHICH CANNOT BE DONE.

IN MOST RESPECTS, I AGREE WITH WHAT YOU JUST SAID. FIRST OF ALL, I DO AGREE THAT CONTEMPT IS THE BASIS FOR THE ENFORCEMENT OF A RESTITUTION PROVISION. IN TERMS OF CONFUSING, I THINK IT IS SOMEWHAT ACTUALLY MORE CONFUSING TO LIMIT RESTITUTION AS AN ISSUE OF REINSTATEMENT OR READMISSION, BECAUSE IN MANY CASES IT BECOMES A LOSSRY. THEN, FOR -- A LOSERY THEN. FOR EXAMPLE IF I WAS SUSPENDED AND SEEKING REINSTATEMENT, I WAS ORDERED TO MAKE RESTITUTION --

BUT PLAINLY THE CLIENT CAN FILE A CIVIL ACTION FOR UNJUST ENRICHMENT OR BREACH OF CONTRACTOR SOMETHING.

AT ALL TIMES, EITHER WITH THE CONDITION OF REINSTATEMENT OR OTHERWISE, AND, ALSO, THERE IS SOME CASE LAW THAT SEEMS TO SUGGEST, AND I AM NOT SUGGESTING THAT THE COURT NEEDS TO GO HERE, BUT IT DOES SEEM TO SUGGEST THAT AN AGGRIEVED PARTY, A SUCCESSOR TO AN AGREED PARTY OR A PERSON WHO -- AN AGGRIEVED PARTY OR A PERSON WHO HAS A PECUNIARY INTEREST THAT WAS VIOLATED, MAY BRING AN ACTION THEMSELVES. I DO NOT SUGGEST THAT THE COURT GO THROUGH IN -- GO THERE IN THESE PROCEEDINGS. I THINK AN APPROPRIATE REMEDY FOR COMPLIANCE WITH THE COURT'S ORDER IS A CONTEMPT RULE IN ACCORDANCE WITH RULE 311 SUBPARAGRAPH F, AND I THINK THE BAR WOULD BE AN APPROPRIATE PARTY TO BRING THAT ACTION.

HAS THE FLORIDA BAR REGULARLY DONE THAT?

NO, SIR, AND I THINK THAT ELIMINATES, IN LARGE PART, THE FACT THAT IT IS NOT A PROBLEM, HAS NOT BEEN A PROBLEM. YOU DON'T SEE A LOT OF CASES. THERE WAS ONE CASE. THERE WAS AN UNREPORTED DECISION IN THE CASE OF FLORIDA BAR VERSUS WALL, THERE WAS A RESTITUTION ARRANGEMENT ORDERED TO BE ENTERED INTO, AND THE RESPONDENT DID NOT DO SO. IT WAS ORIGINALLY ORDERED BY THE REFEREE A 60-DAY JAIL TERM WITH A 60-DAY PURGE PROVISION, AND BEFORE THE MATTER WAS BEFORE THIS COURT, THE RESPONDENT, IN FACT, MADE THE RESTITUTION AND PURGED THE CONTEMPT ISSUE, AND SO IT WAS NEVER RULED ON FORMALLY BY THIS COURT. THAT IS THE ONLY CASEY HIM AWARE OF IN WHICH WE ATTEMPTED TO BRING CONTEMPT TO FORCE A RESTITUTION ISSUE.

DO YOU SEE ANY DISTINCTION BETWEEN WHEN THE RESTITUTION ORDER CONCERNING THE FEE THAT IS EXORBITANT, VERSUS WHERE THERE HAS BEEN A CONVERSION OF TRUST FUND PROPERTY, VERSUS THE CASES WHERE THERE HAS BEEN A FROZEN TRUST FUNDS AND THEN WE AUTHORIZE DISTRIBUTION AND THERE IS QUESTIONS OF AMOUNTS? ARE THOSE ALL, IF THE COURT HAS POWER IN ONE, DOES THE COURT HAVE POWER IN THE OTHER? OR IS THERE A, SHOULD THERE BE A LINE DRAWN, LIKE THERE USED TO BE, WHEN, BETWEEN NOT ORDERING ANYTHING IN THE EXORBITANT FEE AND LEAVING THAT TO THE CIVIL LITIGATION, BUT YET WITH CONVERSION OF TRUST FUND PROPERTY, HANDLING THAT DIFFERENT, OR DO YOU SEE THOSE ALL AS THE SAME TYPE OF SITUATION?

MOSTLY I SEE THEM AS A COMMON ELEMENT. FIRST OF ALL, THEY ARE FUNDS THAT ARE ARGUABLY THE LAWYERS LAWYER IS NOT ENTITLED TO. SURELY IN THE AREA OF RESTITUTION, WHERE THERE HAS BEEN A FINDING THAT THERE HAS BEEN A THEFT FROM A TRUST ACCOUNT, THAT IS NOT A LAWYER'S MONEY, AND SO CLEARLY THAT IS MONEY TO WHICH THE LAWYER IS NOT ENTITLED, AND LIKEWISE, IN THE FORFEITURE FEES, IF THE FEE IS CLEARLY EXCESSIVE, ILLEGAL, OR PROHIBITED, THEN THAT IS SOMETHING THE LAWYER HAS NO ENTITLEMENT TO, EITHER, AND SO I THINK THE ANSWER FROM THE BAR WOULD BE THAT WE WOULD SEE THOSE TYPES OF MATTERS ASSESS ESSENTIALLY THE SAME FOR PURPOSES OF THIS ANALYSIS.

IF THE RESTTITUTION IS ORDERED IN THE AMOUNT OF -- IS THERE, IS THERE SOMEONE ELSE ARGUING ON YOUR SIDE OR IS THIS YOUR REBUTTAL? YOUR TIME IS UP?

I THINK MY FIRST FIVE MINUTES IS UP.

YOU ARE GOING TO SHARE.

YES.

OKAY. IS THERE A, DOES THE PRIVATE CITIZEN WHO IS NOT A PARTY, DO THEY STILL HAVE, THEY HAVE THE SAME RIGHT TO GO TO COURT AND ASK FOR THAT?

CORRECT. UNDER BOTH CIRCUMSTANCES. IN FACT, I WOULD SUBMIT TO YOU THAT A PERSON THAT, WHO IS THE BENEFICIARY, IF YOU WILL, OF AN ORDER OF RESTITUTION IN A BAR DISCIPLINARY PROCEEDING, COULD, IN FACT, TAKE THAT FINDING, ALONG WITH OTHER COMPETENT EVIDENCE, AND ENTER INTO A CIVIL COURT AND ATTEMPT TO HAVE IT REDUCEED TO JUDGMENT AND COLLECT IN A CIVIL PROCESS BUT NOT IN THE BAR'S DISCIPLINARY PROCESS. THE ONLY WAY THAT I THINK THE COURT SHOULD PROCEED IS TO ALLOW THE BAR TO PROCEED IN CONTEMPT THROUGH THE PROVISIONS OF THE RULE 3.7.11 SUBF.

YOU ARE NOT HERE ADVOCATING ON A POSITION WHERE YOU HAVE THOSE TRUST ACCOUNT SITUATIONS WHERE YOU HAVE A CERTAIN AMOUNT OF MONEY AND, SAY, FIVE CLAIMANTS, AND YOU GIVE EACH OF THEM A PROPORTIONATE SHARE OF WHAT IS LEFT IN THE TRUST ACCOUNT, AND, OF COURSE, EACH CLAIMANT STILL HAS A CERTAIN AMOUNT THAT IS DUE THEM. SO DO YOU THINK OF -- DO YOU TAKE A POSITION AS TO HOW WE SHOULD HANDLE THOSE KINDS OF SITUATIONS?

IN TERMS OF REPAYMENT, THERE SHOULD BE CIVIL REMEDIES AVAILABLE OUTSIDE THE DISCIPLINARY PROCESS, BUT I, ALSO, WOULD LIKE TO REMIND THE COURT THAT THE BAR'S CLIENT SECURITY FUND IS AVAILABLE TO TRY TO MAKE UP FOR THOSE UNREIMBURSED RESTITUTION AMOUNTS WHETHER IT HAS BEEN --

DO YOU GET A LIEN IN THOSE SITUATIONS, IF THEY GO TO CIVIL COURT?

YES. WE TAKE ASSIGNMENT OF WHATEVER RIGHT AND OBLIGATION AND ENTITLEMENT THEY HAD, AND WE DO, FROM TIME TO TIME, ATTEMPT TO COLLECT ON THAT, BUT WE SUBROGATE, SUBROGATE OUR -- SUBJOGATE OUR POSITION TO ANY CLIENT IN THAT POSITION.

WOULD YOU ADDRESS THAT A LITTLE FURTHER. THAT IS WE HAVE A CONCERN THAT, IN INSTANCES WHERE YOU ARE TAKING MONEY THAT MAY WE REMAIN IN A TRUST ACCOUNT AND TRYING TO ALLOCATE IT AMONGST A GROUP, THAT THERE MAY BE OTHER CLAIMANTS OUT THERE THAT ARE OUR PROCEDURES MAY NOT BE AS THOROUGH AND COMPLETE, TO BE SURE THAT EVERYBODY MAY BE A POTENTIAL CLAIMANT TO THESE FUNDS IS PUT ON NOTICE, AND THAT WE ARE LEFT, YOU KNOW, IN THE UNSETTLED FEELING. COULD YOU ADDRESS THAT ISSUE BROADLY.

YES, SIR. THERE IS ALWAYS SOME ERROR OF POSSIBILITY THAT YOU CANNOT IDENTIFY PHI EVERY DEPOSIT AND EVERY ENTITLEMENT IN A TRUST ACCOUNT, BUT WHAT WE DO IS RECREATE, WHERE APPROPRIATE, BIAS EMBLINK THE RECORDS AND BUYING THEM FROM THE BANKS AND RECEIVING THEM FROM EVERY SOURCE AS MAY BE AVAILABLE. WE RECREATE THE TRUST ACCOUNT AND THE OBLIGATIONS THAT ARE THERE AND TRY TO RECREATE, AS WELL, THE INDIVIDUAL CLIENT LEDGER BALANCES, SO WE CAN GET A PICTURE OF WHO IS ENTITLED TO WHAT. THEN YOU MAKE AN ANALYSIS OF HOW MUCH MONEY IS REMAINING IN THE TRUST ACCOUNT, AND THEN WHEN THE PREFERRED METHOD IS TO USE A PRO RATA DISTRIBUTION BACK TO THOSE INDIVIDUALS, ASSUMING THERE IS NOT ENOUGH MONEY IN THE TRUST ACCOUNT TO COVER ALL IDENTIFIED OBLIGATIONS.

IS THERE ANY DANGER THAT THERE CAN BE A SUBSEQUENT CIVIL PROCEEDING, FOR INSTANCE, WHERE THE LEGAL RIGHTS OF OTHERS WILL, REALLY, CONFLICT, THEN, WITH DECISIONS THAT HAVE BEEN MADE TO DISPERSE FUNDS ON A PRO RATA BASISA? IN OTHER WORDS -- BASE? IN OTHER WORDS TO RUN INTO PEOPLE THAT CAN DEMONSTRATE A SUPERIOR OR EQUITABLE CLAIM TO THOSE THAT HAVE BEEN ADJUDICATED BY THE REFEREE?

I THINK THERE IS ALWAYS A CHANCE, WHEN YOU HAVE MORE THAN ONE TRIBUNAL ADJUSTING AN ISSUE, OF SOME INCONSISTENCY. I THINK, HOWEVER, THAT WE USE THE COURT'S PROCEEDINGS AND THE DISCIPLINARY PROCESS, TO IDENTIFY THE AMOUNTS AND MAKE PRO RATA DISTRIBUTIONS, THAT THE POSSIBILITY OF THAT ERROR, I THINK, IS DIMINISHED BUT NOT, IN FACT, VOIDED. MR. CHIEF JUSTICE

ARE THE OTHER COUNSEL GOING TO TALK ABOUT THIS SUBJECT? THIS IS THE SUBJECT THE COURT IS CONCERNED ABOUT.

THEY ARE HERE TO ANSWER QUESTIONS ABOUT THE FACTS OF THE INDIVIDUAL CASES, SHOULD YOU HAVE QUESTIONS ABOUT HOW WE MADE DETERMINATIONS IN THE ZILBERBERG CASES AND HOW DETERMINATIONS WERE MADE IN THE CARLON CASE. MR. CHIEF JUSTICE

OKAY. WELL, EITHER YOU OR OTHER COUNSEL CAN ANSWER, BUT MY QUESTION ON THE TRUST ACCOUNTS IS, AS JUSTICE ANSTEAD SAYS, IT IS A MATTER OF NOTICE, BUT HOW DOES IT WORK, DO WE ALWAYS DIVIDE THOSE FUNDS ON PRO RATA, AS OPPOSED TO A SENIORITY BASIS?

YES, SIR. THAT SEEMS TO BE THE PREFERRED METHOD IN CASE LAW, ALSO. FOR EXAMPLE, JUST AS AN EXAMPLE, THE COURT ASKED SOME QUESTIONS ABOUT HOW BANKRUPTCY MIGHT AFFECT SOME OF THESE ISSUES. NDIN THE CASE OF GOLDBERG VERSUS THE NEW JERSEY'S LAWYER FUND FOR CLIENT PROTECTION, WHICH IS 32 FED SECOND 273 AND 1991, THE COURT ACKNOWLEDGED THE PREFERENCES TO MAKE A PRO RATA DISTRIBUTION OF CLAIMS OF ALIKE KIND AND NATURE. THERE THE ISSUE IS WHETHER OR NOT THEIR CLIENT'S SECURITY FUND HAD ANY PRIORITY CLAIM OR STATUS TO THE ACCOUN. I THINK I HAVE ANSWERED THAT QUESTION, AS FAR AS THE WAY THE FLORIDA BAR USED ITS CLAIMS FOR THE CLIENT SECURITY FUND. WE, IN FACT, PUT THOSE IN A LOWER CATEGORY. WE WOULD PREFER TO SEE CLIENTS REIMBURSED TO THE FULLEST EXTENT THAT THEY CAN BE, BEFORE THE CLIENT FUND LOOSE FOR ANY REIMBURSEMENT OF FUNDS, BUT GENERALLY SPEAKING, I THINK MOST FUNDS IN A TRUST ACCOUNT SHOULD BE OF THE SAME CLAIM CATEGORY. THEY SHOULD BE JUST CLAIMANTS, AND UNLESS YOU CAN SHOW THAT THE BALANCE IN THE TRUST ACCOUNT WAS FOR EXAMPLE, ZERO, WHEN YOU MADE YOUR $10,000 DEPOSIT, AND THE VERY NEXT DAY THE $10,000 IS ALL THAT IS IN THAT ACCOUNT, THEN THERE WOULD BE NO ENTITLEMENT OF A SPECIAL NATURE TO THAT SUBSEQUENT DEPOSIT. IF YOU HAD, FOR EXAMPLE, $5,000 AFTER YOU MADE THAT $10,000 DEPOSIT, THEN I WOULD THINK YOU WOULD HAVE TO LOOK TO MAKING A PRO RATA RETURN TO EVERY CLIENT WHO IS IN THE SAME OR SIMILAR CATEGORY, AND I THINK PRO RATA IS THE ONLY FAIRWAY THAT YOU CAN MAKE THAT ANALYSIS, BECAUSE THERE IS FIRST -- THE ONLY FAIR WAY TO MAKE THAT ANALYSIS, BECAUSE FIRST IN AND FIRST OUT DOESN'T WORK. YOU COME MINK HE THE FUNDS. YOU CAN'T TELL -- YOU COMINGLE THE FUNDS. YOU CAN'T TELL IF IT WAS CLIENT NUMBER ONE OR NUMBER TWO FORREY REIMBURSEMENT PURPOSES.

CAN YOU ESTABLISH A PROCEDURE IN WHICH SOMEONE HAS CLAIMED THAT THE PRO RATA DISPOSITION OR ANY OTHER DISPOSITION IN THAT REGARD WAS VIOLATIVE OF THEIR RIGHTS? IN OTHER WORDS THAT THEY HAD SOME SECURED OR EXTRA CLAIM THAT WOULD SUPERSEDE THE WAY THAT IT WAS DONE?

IN THE 22 YEARS THAT I HAVE BEEN WITH THE FLORIDA BAR, I AM NOT AWARE OF A SINGLE CLAIM IN THAT RESPECT.

I GUESS, DO YOU SEE THIS ISSUE AS TO WHETHER THE COURT CAN APPROVE AN ORDER OF RESTITUTION AS OPPOSED TO IT BEING A CONDITION OF REINSTATEMENT BEING AN ISSUE OF WHAT THIS COURT'S POLICY OR IS IT THIS COURT'S AUTHORITY? AS FAR AS ON BOTH SCORES, HOW CAN YOU INFORM OUR DISCUSSION?

I THINK IT S POLICY NOW, BECAUSE CLEARLY I THINK RULE 3-5.1-H AND I, GIVE YOU THE AUTHORITY.

IS THAT WHY THAT WAS PASSED, FOR THE REASON THAT THERE WAS CONFUSION ABOUT WHETHER THIS COULD BE ORDERED AS AN EXTRA ELEMENT OF DISCIPLINE?

YES, MA'AM. IT WAS A DIRECT RESPONSE BY THE BAR TO SEVERAL CASES LIMITING THE RESTITUTION TO REINSTATEMENT AND READMISSION CONDITIONS ONLY. THE BAR BELIEVED THAT IT WAS AND IS AN EFFECTIVE TOOL FOR REMEDIAL ACTION, AND DISCIPLINARY PROCESS, TO HAVE ESTITUTION IN LIMTED CIRCUMSTANCES, AND WE PROPOSED A RULE FOR THOSE REASONS.

NOW, AGAIN, I JUST WANT TO MAKE SURE. YOU SAID THAT, AN AGGRIEVED CLIENT COULD, YOU MIGHT BE ABLE TO GO TO COURT AND GET THE RESTITUTION ORDER ENTERED AS A JUDGMENT, BUT IF THE CLIENT IS NOT A PARTY TO THE FLORIDA BAR PROCEEDINGS, FEELS THAT THE AMOUNT OF RESTITUTION THAT THEY WERE ACTUALLY, IT WAS OTHER ELEMENTS OF THEIR CLAIM, THERE IS NOTHING THAT WOULD BIND THE CLIENT, EITHER THE AMOUNT AS EITHER BEING THEIR CLAIM WAS TOO LOW ON AN AMOUNT, CORRECT?

THAT'S CORRECT. THERE IS THAT POSSIBILITY THAT THIS COURT COULD ORDER, TO DETERMINE THAT RESTITUTION TO A PARTICULAR CLIENT WAS CERTAIN AMOUNT OF MONEY, THAT THEY WERE ENTITLED TO A CERTAIN AMOUNT OF MONEY, AND THERE IS ALWAYS THE POSSIBILITY THAT ANOTHER TIB YUNL LOOKING INTO THAT SAME ISSUE WOULD REACH A DIFFERENT CONCLUSION. MR. CHIEF JUSTICE

MR. BOGGS, I THINK THAT WE ARE ALREADY INTO REBUTTAL TIME, AND I THINK THE COURT IS CONCERNED ABOUT THESE POLICY MATTERS. IF THERE ARE ANY QUESTIONS THAT COME UP AFTER MR. CARLON, AS TO THE INDIVIDUAL CASES, THEN WE WOULD CALL ON OTHERCOUNSL. WE APPRECIATE YOUR. MR. CARLON.

IF THE COURT PLEASE, I AM JOHN KARL ONE. -- JOHN CARLON, RESPONDENT IN TWO OF THESE CASES. I AM HERE BASICALLY TO ANSWER QUESTIONS, BECAUSE I DON'T THINK THAT EITHER OF THE TWO SPECIFIC ISSUES THAT YOU, THAT THE COURT DELNEATED IN ITS DECMBER 26 ORDER, APPLIES TO MY CASE. SPECIFICALLY, NUMBER ONE, THE COURT WAS CONCERNED ABOUT A SITUATION WHERE AN ORDER OF RESTITUTION IS NOT STATED, TO BE A CONDITION OF REINSTATEMENT. IN MY CASE, IT WAS. IN BOTH OF MY CASES REINSTATEMENT IS CONDITIONED UPON RESTITUTION.

BUT, NOW, THE BAR HAS TAKEN A POSITION ON REHEARING, THOUGH, THAT THAT, THAT THE COURT SHOULD DELETE THAT CONDITION AND USE THE RULES INSTEAD, WHICH PERMITS THERE TO BE AN ORDER OF RESTITUTION NOT CONDITIONED ON READMISSION.

WELL, I DON'T THINK THERE IS ANY QUESTION THAT THE COURT CAN DO THAT. BUT THE QUESTION IS, IT IS A MATTER OF A POLICY, AND UNDER WHAT CIRCUMSTANCES SHOULD THE COURT DO IT. THE COURT HAS SPOKEN, IN MY CASES, CONDITIONING THE, CONDITIONING REINSTATEMENT ON RESTITUTION. SO I DON'T, YOU KNOW, I REALLY DON'T HAVE ANYTHING TO ARGUE. MR. CHIEF JUSTICE

OKAY.

BUT WHAT ABOUT THE BAR'S ARGUMENT, THOUGH, THAT, OR DO YOU TAKE NO POSITION ON THAT? THAT IS THAT, AS OPPOSED TO LIMITING, CONDITIONING THE RESTITUTION AS A MATTER THAT WOULD BE CONSIDERED UPON REINSTATEMENT, THAT THERE SIMPLY BE A REQUIREMENT THAT YOU MAKE RESTITUTION?

I DON'T THINK THAT THAT SHOULD BE AUTOMATIC. I THINK THAT IT DEPENDS UPON THE FACTUAL SITUATION IN EACH CASE. THERE ARE INSTANCES WHERE IT MIGHT OR MIGHT NOT BE APPROPRIATE.

WHAT IS THERE ABOUT THIS CASE THAT WOULD MAKE IT INAPPROPRIATE? THAT IS WHAT, WOULDN'T THIS CASE ISN'T THIS A PRETTY STRAIGHTFORWARD INSTANCE IN WHICH RESTITUTION WOULD BE MERITED, UNDER THE WAY THE RULE WAS AMENDED?

IT IS CERTAINLY PERMISSIBLE FOR THE COURT TO DO IT. THE COURT DID NOT DO IT.

WELL, I AM ASKING, THEN, WHAT FACTORS IN THIS CASE, AND CERTAINLY I AM, IN A WAY I AM SAYING I CAN'T SEE ANY FACTORS THAT HAVE BEEN POINTED OUT THAT WOULD NOT CALL FOR RESTITUTION TO BE MADE, PERIOD. AND ARE THERE ANY SITUATIONS THAT I AM NOT AWARE OF HERE OR ANY CIRCUMSTANCES THAT I AM NOT AWARE OF THAT, WHERE YOU WOULD SAY RESTITUTION WOULD NOT BE APPROPRIATE?

I DON'T THINK OF ANY OFFHAND. INSOFAR AS WE ARE DEALING WITH THE AUTHORITY OF THE COURT TO ORDER IT, SURE, THE COURT DOES HAVE AUTHORITY TO ORDER IT.

WELL, I APPRECIATE YOUR CANDOR VERY MUCH. THANK YOU.

ALL RIGHT, SIR. MR. CHIEF JUSTICE

THANK YOU, MR. CARLON. THE BAR.

MAY IT PLEASE THE COURT. I AM RONNA FRIEDMAN YOUNG. SIMPLY TO CLARIFY THE RECORD --

EXCUSE ME. ARE YOU GOING TO TALK ABOUT MR. CARLON'S CASE OR THE OTHER ONE?

MR. CARLON'S CASE.

OKAY.

JUST TO CLARIFY THE RECORD IN THAT CASE, THE REFEREE IN MR. CARLON'S ACTUALLY TWO CASES, RECOMMENDED RESTITUTION, PERIOD. THIS COURT, THEN, IN ITS OPINION WITHOUT BEING RAISED BY EITHER PARTY, STATED THAT THE RESTITUTION MUST BE A CONDITION OF REINSTATEMENT OR READMISSION, AND THE BAR CONTESTED THAT IN ITS MOTION FOR REHEARING.

WHY ISN'T THAT APPROPRIATE, UNDER THE CIRCUMSTANCES OF THAT CASE?

IT IS THE BAR'S POSITION THAT RESTITUTION SHOULD JUST BE MADE, PERIOD, REGARDLESS OF WHETHER OR NOT MR. CARLON EVER PETITIONED FOR REINSTATEMENT OR READMISSION  READMISSION.

IS THE BAR GOING, IF MR. CARLON DOES NOT, IS THE BAR GOING TO PURSUE A CONTEMPT PROCEEDING?

I ANTICIPATE THAT THE BAR WOULD. HOWEVER, BEFORE DOING THAT, THE BAR WOULD INVESTIGATE WHETHER OR NOT MR. CARLON HAD THE ABILITY TO PAY THAT RESTITUTION. IT IS THE BAR'S POSITION THAT, IF AN ATTORNEY CANNOT AFFORD TO PAY THE RESTITUTION, THAT WOULD NOT BE AN INTENTIONAL VIOLATION OF THE COURT'S ORDER.

YOU WOULD AGREE THAT, BY THE COURT DOING THAT, THAT THAT, THAT MR. CARLON, IF MR. CARLON, IF MR. CARLON OR ANY SIMILAR-SITUATED LAWYER, SHOULD THEREAFTER TAKE BANKRUPTCY, THAT THIS COURT'S RESTITUTION ORDER WOULD HAVE NO IS HE NOT YORT POSITION IN THE BANKRUPTCY -- WOULD HAVE NO SENIORITY POSITION IN THE BANKRUPTCY. WOULD YOU AGREE WITH THAT?

IT MAY NOT HAVE A SENIORITY POSITION. HOWEVER, IT MAY NOT BE DISCHARGEABLE IN BANKRUPTCY. THE BAR'S UNDERGO OF THE -- UNDERSTANDING OF THE FEDERAL LAW IN THAT REGARD IS THAT GENERALLY ORDERS RELATING TO FRAUD, DEFALCATION, ARE NOT DISCHARGED IN BANKRUPTCY.

BUT THE CLIENT, IF HE WENT AND HAD A CIVIL JUDGMENT, THEN THAT CIVIL JUDGMENT WOULD HAVE SOME SENIORITY BY DATE, WOULD IT NOT?

COULD BE, YES. ABSOLUTELY.

DO YOU THINK WE OUGHT TO PUT SOME SORT OF ADVICE TO CINTS IN THESE RESTITUTION ORDERS, IF WE JUST ORDER THEM PURSUANT TO THAT RULE, AS TO THE LIMITATIONS  LIMITATIONS?

I DON'T KNOW THAT THAT WOULD REALLY BE NECESSARY. THE COURT HAS BEEN ORDERING RESTITUTION FOR CLIENTS FOR MANY MANY YEARS, AND IN FACT, IN THE PRIOR CASES INVOLVING MR. CARLON HE WAS ORDERED PUBLICLY REPRIMANDED AND ORDERED TO PAY RESTITUTION. THAT MATTER DID NOT RESULT IN ANY FURTHER PROCEEDINGS. SUBSEQUENT TO THAT ORDER, THERE WAS A FINDING OF MINOR MISCONDUCT, WHERE HE WAS, AGAIN, ORDERED TO PAY RESTITUTION. THAT DID RESULT IN A SUBSEQUENT PROCEEDING FOR CONTEMPT, AND IT WAS RESOLVED WITH A CONSENT JUDGMENT FOR PROBATION. IT IS THE BAR'S POSITION THAT THESE RESTITUTION ORDERS CAN BE A STEP DOWN A ROAD THAT MAY HAVE SOME TERMS ALONG -- SOME TURNS ALONG THE WAY.

I WANT TO MAKE SURE I UNDERSTAND SOMETHING. I WAS CONCERNED THAT, IF IT WAS SIMPLY A CONDITION OF REINSTATEMENT, THAT FOR THOSE LAWYERS WHO DECIDE, THEN, THEY ARE NOT GOING TO PRACTICE AGAIN, THAT IT IS EFFECTIVELY NOT MUCH OF A REMEDY FOR THE CLIENT, BUT WHAT I, IS THE BAR'S POSITION THAT, IN THOSE CASES, WHERE THERE IS AN AMOUNT OF MONEY THAT WOULD, COULD BE ESTABLISHED AS OWED, THAT IT SHOULD NOT EVER BE MADE A CONDITION OF REINSTATEMENT? OR THAT IT IS, BECAUSE I GUESS I DIDN'T REALLY -- IT SEEMS TO ME THAT WOULD BE VERY EFFECTIVE. A LAWYER, YOU KNOW, YOU GOT $5,000, WHATEVER, AMOUNT, AND THEY ARE GETTING READY TO REINSTATEMENT -- TO REINSTATE, WHY COULDN'T WOONT THAT BE A GOOD POLL -- -- WHY WOULDN'T THAT BE A GOOD POLICY TO SIMPLY HAVE IT AS A CONDITION OF REINSTATEMENT?

IF IT IS ESSENTIALLY A CONDITION OF REINSTATEMENT, THEN I WOULD ASSUME THAT WOULD BE THE ENFORCEMENT MECHANISM, BUT IF THE LAWYER DID NOT REAPPLY. HOWEVER, IF IT IS ORDERED PERIOD IT IS THE BAR'S POSITION THAT, UNDER RULE 3-7.10, THAT CAN STILL BE AN ELEMENT OF REHABILITATION THAT MAY BE CONSIDERED BY THE REFEREE, SHOULD THAT LAWYER EVER REAPPLY. BUT WE HAVEN'T FORECLOSED THE POSSIBILITY THAT WE MAY HAVE GIVEN THE REFEREE SOME DISCRETION IN THAT REGARD.

SO THE BAR WOULD PREFER THAT IT NOT BE STATED AS AN EXPLICIT, I MEAN, IS THAT IN THE DISCIPLINARY PROCEEDINGS, IS THAT WHAT YOU ARE TELLING THE REFEREES, NOT TO INCLUDE IT AS A CONDITION OF REINSTATEMENT?

THE BAR WOULD LIKE TO GIVE THE REFEREE SOME DISCRETION IN SOME CASES WHERE THE LAWYER MAY REAPPLY, THAT THAT MAY BE LIKELY. THEN IT IS A VERY USEFUL TOOL, BUT IN OTHER CASES, THE BAR SUBMITS THAT IT SHOULD BE ORDERED, PERIOD, FOR EXAMPLE PUBLIC REPRIMAND CASES, SUSPENSION CASES OF LESS THAN 91 DAYS, WHERE THERE IS NO FORMAL PROCEEDING TO BE READMITTED. THE BAR WOULD LIKE TO HAVE THE REFEREES HAVE DISCRETION IN THAT REGARD. MR. CHIEF JUSTICE

THANK YOU, MS. YOUNG. THANK YOU, COUNSEL, FOR YOUR ASSISTANCE IN THE MATTER. APPRECIATE YOUR COMING. MR. ZILBERBERG DID NOT APPEAR IN REGARD, AND WE APPRECIATE YOUR ASSISTANCE IN THE MATTER. THANK YOU, MR. CARLON.