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IN THE MATTER OF PHILIP F. McNALLY, AN ATTORNEY AT LAW

Supreme Court of New Jersey1979-10-23
81 N.J. 304

Summary

Holding. The court suspended McNally from the practice of law for two years, effective May 3, 1978, adopting the Disciplinary Review Board's recommendation.

Philip F. McNally, admitted to practice in 1964, forged a sheriff's signature on a foreclosure deed and fraudulently witnessed it in connection with a mortgage foreclosure matter. The forgery occurred after McNally negligently failed to complete legitimate foreclosure proceedings, then lied to his client (a bank) about having done so. When pressured to produce the deed, McNally created and recorded the forged document. The scheme unraveled when a title company discovered the foreclosure had never actually been completed. McNally resigned from his firm in May 1978 and has voluntarily ceased practicing law since then.

The Disciplinary Review Board found McNally's conduct violated multiple ethical rules and recommended a two-year suspension. Although forging official documents ordinarily warrants severe discipline, the court identified several mitigating factors: the underlying transaction was complex, McNally sought no personal financial gain beyond keeping his job, he showed genuine remorse, he fully cooperated with disciplinary proceedings, and this was his only infraction. The court emphasized that attorney discipline aims primarily to protect the public, and the evidence suggested this was an isolated incident unlikely to recur.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether forging a sheriff's deed and fraudulently witnessing it constitutes grounds for attorney suspension
  • What mitigating circumstances warrant leniency in disciplinary cases despite serious misconduct
  • The appropriate balance between protection of the public and individual rehabilitation in attorney discipline

Procedural posture

The Disciplinary Review Board recommended a two-year suspension, which the court reviewed and adopted.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

PER CURIAM.

Respondent Philip F. McNally is an attorney at law of this State, admitted to the bar in 1964. He has been charged with a serious disciplinary infraction growing out of his handling of a mortgage foreclosure.

The facts and circumstances surrounding the incident are summarized in the Decision and Recommendation of the Disciplinary Review Board (DRB) as follows:

The record reveals and respondent admits that respondent, then an associate in a Newark law firm, forged the name of the Sheriff of Mercer County to a deed of foreclosure and fraudulently witnessed the instrument. The deed was then recorded on April 26, 1978. Shortly thereafter on May 3, 1978 his employers learned of these events, and respondent resigned from his employment with the firm. He has voluntarily refrained from the practice of law since that time.

By way of extenuation respondent described the nature of the law practice carried on in the office in which he had been employed at the time of the incident. He asserted that he worked under great pressure at all times and felt unable to discuss his problems with his employers. He also asserted that by reason of an unusual chain of circumstances in the particular transaction out of which his difficulties arose, he had at first neglected to follow through on matters requiring his attention and then, to conceal this situation, falsely informed his client, a banking institution, that he had completed a necessary foreclosure action. He thereafter became obsessed with the fear that he would lose his position of employment with the firm if the facts became known and prepared and recorded the forged Sheriff’s deed.

THE DRB, in its decision, found that respondent’s admitted conduct constituted unethical activity in violation of DR1102(A)(1), (3), (4) and (5) and DR7-102(A)(5) and (8). It recommended that respondent be suspended from the practice of law for a period of two years, retroactive to May 3, 1978, the effective date of his self-imposed suspension.

Ordinarily, respondent’s conduct would call for the severest kind of discipline. However, there are mitigating circumstances which undoubtedly influenced the DRB’s recommendation.

The foreclosure proceeding in question was complicated. It involved large tracts of land on which was located a nursery farm with considerable nursery stock. Apparently the nursery had run into financial difficulties and was in default on its obligations. Respondent’s client, a bank, held a second mortgage on the property and also had a security interest in the nursery stock. Following meetings between representatives of the bank and the nursery, an auction sale of the nursery stock was scheduled. At this point the first mortgagee commenced foreclosure proceedings naming respondent’s client as a defendant. It also sought to enjoin the proposed auction sale on the ground that its mortgage lien embraced the nursery stock. During the foreclosure the client took an assignment of the first mortgage and instructed respondent to complete the foreclosure on its behalf. Respondent was uncertain as to how to proceed as the client was a named defendant in the foreclosure. He sought advice from his firm’s senior partner as to this uncertainty, which meeting led to a “difference of opinion” between the two. As a result, he let the matter lie.

In the interim, the client obtained a prospective purchaser for the property and was also eager to dispose of the nursery stock. It pressed respondent for completion of the foreclosure. Respondent became fearful that he might lose his employment if his superiors in the office learned of his inaction. He therefore told the client that the foreclosure was completed and that a Sheriff’s deed had been obtained. When the client demanded that the deed be produced, respondent prepared a purported deed on a foreclosure sale, signed the sheriff’s name to it and had it recorded.

The falsity was quickly exposed by a title company which, in examining the foreclosure proceedings, saw that they had not been completed and no sheriff’s sale held.

Respondent frankly admits that he panicked when confronted with a situation beyond his capabilities. He points out, however, that he sought no personal profit or gain from his actions other than retention of his employment. He has cooperated fully with the District Ethics Committee and the DRB in the hearings held by them. His remorse is clear. This is his only disciplinary infraction.

We have said on many occasions that the primary purpose of the discipline of attorneys is not punishment, but rather protection of the public. In re Sears, 71 N.J. 175, 200, 364 A.2d 777 (1976). On its face the incident involving respondent appears to be an isolated instance of aberrant behavior not likely to be repeated. The forging of the deed was the tragic culmination of an episode involving an attorney too insecure to admit his inadequacy in a legal matter assigned to him for handling and an employer perceived by him as too demanding to tolerate such an admission. Considering all of the circumstances, we conclude that the recommendation of the DRB should be adopted. Respondent is hereby suspended from the practice of law for a period of two years and until the further order of this Court, the suspension to be effective as of May 3, 1978.

So ordered.

For suspension —Chief Justice WILENTZ and Justices SULLIVAN, PASHMAN, CLIFFORD, SCHREIBER, HANDLER and POLLOCK—7.

Opposed —None.