Appendix — Garner v. Grievance Committee for the Ninth Judicial District

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SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE DIVISION—SECOND DEPARTMENT

—-

In the Matter of Geraid J. Garner,

a suspended attomey and counselor-at-law,

GRIEVANCE COMMITTEE FOR THE

NINTH JUDICIAL DISTRICT,

Petitioner,

GERALD J. GARNER,

Respondent.

REPORT OF REFEREE,

W. BERNARD RICHLAND

Gary L. Casseila,

Chief Counsel, Grievance Committee, Petitioner

by Sondra S. Holt,

Of Counsel

Morrison & Foerster, Attomeys for Respondent,

by Barrington D. Parker, Jr.,

Of Counsel

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SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE DIVISION—SECOND DEPARTMENT

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In the Matter of Geraid J. Garner,

a suspended attorney and counselior-at-law,.

GRIEVANCE COMMITTEE FOR THE

NINTH JUDICIAL DISTRICT,

Petitioner,

GERALD J. GARNER,

Respondent.

i

Gary L. Casseila,

Attomey for Petitioner,

by Sondra S. Holt,

Of Counsel

Morrison & Foerster,

Attomeys for Respondent,

by Barrington D. Parker, Jr.,

Of Counsel

> * ee

REPORT OF REFEREE

W. BERNARD RICHLAND, Referee-

By order dated February 1, 1991, the Court designated the

‘undersigned as a successor Special Referee “to hear and report”

in a proceeding to discipline Respondent who was admitted to

practice as an attorney and counselor at law by the Court on

March 29, 1961. The Special Referee originally designated was

relieved on his request when he became a Justice of the

Supreme Court. The subject matter of the proceeding is two

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charges of professional misconduct. each of which will be con-

sidered separately.

Before that. a special note:

A TROUBLESOME ASPECT OF THIS PROCEEDING

In this proceeding, a straightforward question of fact has

transformed a 1-year suspension ordered by this court into—io

this date—an almost 7 year suspension. It has engaged the

efforts of three major law firms and, as counsel, a former

Justice of this Court, two specia! referees and the staff of the

Grievance Committee; all in what might appear to be an

improvident use of judicial attention and legal energy and tal-

ent—particularly since respondent's present counsel noted at

one stage in the hearings before the predecessor Special

Referee, “Mr. Garner is a suspended attorney. He is not living

or residing here, he is not practicing law in this or any other

jurisdiction. As I understand it, he has really no intention of

returning to New York or of reapplying.” (43)' This proceed-

ing, it is recommended, should be brought to a prompt con-

clusion.

The Proceeding

(1)

By order dated October |, 1984, this Court found respondent

“guilty of serious professional misconduct” Matter of Garner,

103 AD 2d 390 (1984), and suspended him from the practice of

law “for a period of one year, commencing November |, 1984,

and continuing until the further order of this Cour, with leave

to respondent to apply for reinstatement after said period of one

year.” (Pet'r Exh. 6).

l Reference to Minutes of Hearing.

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(2)

The proceeding which resulted in the suspension order was

instituted by the Grievance Committee by petition verified

March 31, 1981 and served on respondent Apni 15, 1981 (Pet’r

Exh. 1). That petition was amended by Amended Petition ver-

ified July 2, 1981 and served on respondent August 12, 1981

(Pet’r Exh. 3). The Amended Petition set forth ten charges, five

of which were later withdrawn. Hon. Aaron Kooter, the Special

Referee appointed by the Court to hear and report on the

charges, filed his report with the Court dated January 25, 1984,

sustaining Only a portion of one charge and one entire charge—

all relating to a single transaction in regard to an infant adop-

tion which took place in California. (Pet’r Exh. 5).

(3)

While the Gnevance Committee proceeding was going on.

respondent, who had moved to California, was invoived in the

organization of the American Commerce National Bank, to be

located in Anaheim Hills, California, and applied to the Office

of the United States Comptroller of the Currency (hereinafter

“O.C.C.") for approval as “organizer” and “director” of the

proposed National Bank, in connection with which the matter

he submitted a “Confidential Biographical and Financial

Report”, dated June 30, 1983. (Pet’r Exh. 7).

That report contained the following under Part A, section 4,

(d) (/d. at page 6):

“(d). Provide the following information regarding each

disciplinary proceeding or action of which you are, or

have been, the subject, with respect to any professional

license you hold or have held. Examples: Disbarment.

censure of conduct, revocation of license. etc.

Name of Nature of Disposition

Authority Proceedings and Date

NONE—except for nominal fee disputes inquires and a

1975 question of whether or not there was a violation of

compact law, all of which have resulted in no action.”

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(4)

By letter to O.C.C. in connection with an application to add

to his status in the Bank dated September 24, 1984, respondent

submitted a purportedly “re-dated and resigned biography”

(attached to Pet’r Exh. 9A) in which xeroxed signature page 14

of Pet'r Exh. 7 was amended in handwriting by respondent,

“resigned and up to date 9/23/84;" and xeroxed page 1 of Pet’r

Exh. 7 was amended delete the “X” from the word “Organizer”

and insert an “X” in the space for “officer.” Page 6. item d of

Exh. 9A is not identical with page 6, item d of Pet’r Exh. 7.

quoted above; the entire text of the response in item d in

Exhs. 9, 9A and 14 is, “NONE,” the qualifying language,

“except for” etc. is omitted.

(5)

On November 12, 1985, a Senior Attorney in the Securities

and Practice Division of O.C.C. telephoned the Office of the

Grievance Committee and spoke to an Assistant Counsel. He

apparently had come across the 1984 decision of this Coun

suspending respondent, reported in Matter of Gerald J. Garner,

480 N.Y.S.2d 127, and asked to see the record on the basis of

which the suspension was ordered. (Resp. Exh. F).

Apparently, because of what the Assistant Counsel learned

in that conversation, the Grievance Committee “opened a sua

sponte complaint in December of 1985 against the respondent

based on the filings with the Comptroller of the Currency,” but

was unable to prepare a formal petition in disciplinary pro-

ceedings until April, 1988, because respondent said he did not

have copies of the “filings,” that is, “documents submitted

. . . by Mr. Gamer in connection with his application for a

(bank] charter. . . which contained false information,” and the

O.C.C. did not release such copies until May, 1987 (45-46, and

Resp. Exh’s. G, H and I).

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The Petition and Answer

The Petition, venfied April 4, 1988, was served on respon-

dent May 26, 1988. An unvenfied answer dated August 19,

1988 was. on that date, served on petitioner.

The petition asserted that, in two separate instances, respon-

dent was guilty of filing a false written statement. In each

charge, petitioner alleged the earlier 1983 disciplinary pro-

ceedings, its origin, development, heanngs, Referee’'s report.

and decision of the Cour suspending respondent.

In Charge I, the petitioner alleged that, in a “Confidenual

Biographical and Financia! Repom” dated June 30, 1983, sub-

mitted to the U.S. Comptroller of the Currency, respondent

falsely made the answer set forth in item 3 of The Proceeding,

Supra at pp. 3-4, and that he knew or should have known that it

was false, thereby violating Disciplinary Rule 1-102 A(4) and

(6).

In Charge II, the petitioner alleged that in a “Confidenual

Biographicai and Financial Report” dated September 23, 1984,

submitted to the U.S. Comptroiler of the Currency, respondent

falsely made the answer set forth in item 4 of The Proceeding,

supra at p. 4, and that he knew or should have known that it was

false, thereby violating Disciplinary Rule 1-102 A(4) and (6).

The unvenfied Answer denied the conclusionary allegations and

denied knowledge or information sufficient to form a belief as to

the allegations that the identified “Confidential” etc. “Reports”

were submitted by him to the O.C.C., and admitted the 1981 dis-

ciplinary proceeding and his one-year suspension from the prac-

tice of law.

PRIMA FACIE PROOF OF THE CHARGES

The “Confidential Biographical and Financial Reports” admit-

tedly submitted by respondent to the office of the United States

Compwroller of the Currency and the uncontroverted record of the

1981 disciplinary proceeding, taken together, constitute prima

facie proof of Charge I and, a fortiori, Charge II.

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CHARGE II

We first address Charge II, which relates to a flat answer

“NONE” to a request for information in regard to any “disciplinary

proceeding” in which respondent was or had been “subject in

respect to any professional license you hold” Pet’r Exh. 9, Part A,

Section 4,(d), at p. 6.

Plainly, there was and had been a “disciplinary proceeding” of

which respondent had been “the subject.” Indeed, that proceeding

had been on since 1981, it reiated to a series of-significant charges

of professional misconduct, there had been hearings over several

days before a Special Referee who had then filed his Report to this

Court and a copy of it was in respondent's hands. That Report

found respondent guilty of some of the charges and the Report was

under consideration by this Court at the time when that

“Confidential” etc., “Report” was submitted to the United States

Compwoller of the Currency by Respondent in September, 1984.

“Biographical and Financial Reports” substantially identical to

Pet’r Exh. 9 were then submitted to two Field Offices of the

Comptroller of the Currency (Pet'’r Exh. 9A and Pet’r Exh. 14).

The response “NONE” to Part A, Section 4 (d) in each of the

“Confidential and Biographical and Financial Reports”, Pet'r

Exhibits 9, 9A, and 14, is false, and those Reports were submitted

to a United States Government Agency in connection with the

establishment and the operation of a National Bank.

CHARGE |

Charge I relates to Part A, section 4, (d) of the “Confidential

Biographical and Financial Report” submitted to the Compwroller

of the Currency in June, 1983 and is set forth in subdivision 3 of

The Proceeding, supra. In response to request for information in

regard to any “disciplinary proceeding” in which “you are or have

been the subject in respect to any professional license you hold”

(Pet’r Exh. 7 at page 6), respondent answered “NONE—except for

nominal fee disputes inquiries and a 1975 question of whether or

not there was a violation of a compact law, all of which have

resulted in no action.”

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Although at the time respondent submitted the “Confidenuai

Biographical and Financial Report.” there was and had been pena-

ing against him for more than two years an attorney “disciplinary

proceeding” in which respondent was and had been “subject in

respect” to his “professionai license” as an attorney, he answered

“NONE-except,” made no reference to the “Nature of

Proceedings” in which he was involved, and, after making an

unenlightening description “nominal fee disputes inquiries” ana.

similarly unenlightening, “question of whether or not there was a

violation of a compact law,” stated “all of which has resuited in no

action,” when in fact there had been a great deal of “action” in an

ongoing “disciplinary proceeding” and a Special Referee had sub-

mitted a Report to this Court finding him guilty of professionai

misconduct.

The response by respondent to the request for information in

Part A, Section 4, (d) of the “Confidenual” etc. “Report” made to

a United States regulatory agency in connection with the estab-

lishment of a National Bank, was so lacking in candor, so arch and

unenlightening as to amount to misleading and grossly inaccurate.

Legal and Factual Defense

(a)

Respondent offers as a legal defense to the Charges that he was

not required to disclose the 1981 disciplinary proceeding because

under Judiciary Law section 90, subd. 10, it was sealed and

deemed confidenual. (Respondent's Post-Trial Memorandum Point

I) But respondent claims that he disclosed the pending disciplinary

proceeding by his grossly misleading answer in the 1983

“Confidenual” etc. “Report” and flatly and falsely denied the exis-

tence of any disciplinary proceeding in the 1984 “Confidenually”

etc. “Report.” Judiciary Law section 90, subd. 10, does not grant

an attorney a license to mislead, falsify and lie.

(b)

Respondent offers as a legal defense to the Charges that because

an employee of the Office of the Comptroller of the Currency,

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called as a witness, refused to go beyond the extent to which the

Comptroller of the Currency authorized him to respond to the

Subpoena Duce Tecum served on that office (121-123), the O.C.C.

as a Federal agency being not subjeci to the State Court Subpoena,

Sharon v. F.E.R.C., 691 F.Supp. 381 (1988), and cases therein

cited.

Significantly, respondent made no objections to the receipt in

evidence of the certified copies of relevant “Confidential” etc.

“Reports” which the witness produced (91, 94, 96) and which sup-

port the charges. Nevertheless, he asks that they be excluded.

(c)

Respondent offers as justification for the false and misleading

statements contained in the “Confidential” etc. “Reports” sub-

mitted by him to the Office of the Comptroller of the Currency in

connection with the organization and operation of a National

Bank, that he did so on advice of his long-dead counsel. He tes-

tified that in 1983 he discussed the “Confidential” etc. “Reports”

(Pet’r Exh) with his counsel who advised him that the “appropri-

ate answer” to the request for information as to any “disciplinary

proceeding . . . of which you are or have been subject with

respect to any professional license you hold” was “NONE” but

that he should send him the question “so he could inspect it” (223-

24). And, “I sent him the whole confidential report. . . finally,

several days after. . . he called back to my secretary and said that

to tell me that the ‘NONE’ was the appropriate answer” (224).

We have long been taught to be most dubious of the accuracy of

statements attributed to a person who is no longer alive, (2

Wigmore, Evidence section 578 and old CPA section 347 and 5

Weinstein Korn & Miller New York Civil Practice, p.p. 45-451 to

45-461), and the late Erwin Shapiro, a former Justice of this Court

is the lawyer who supposedly gave respondent that peculiar

advice. Significantly, Mr. Shapiro cautioned that he would have to

see the document—the “Confidential” etc. “Reports” —before

making up his mind, and respondent did not hear from Mr. Shapiro

himself on the matter, but said he relied upon what his secretary

said she had been told by Mr. Shapiro. Moreover, respondent him-

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self had some reservations on the correctness of the “NONE”

response; “! was not totally comfortable with adding ‘NONE’ and

a dictation followed with my secretary where these additional

words were put in” (224-25). Ana, “! would like to add a little

more information. | am not comfortable with just putting in

‘NONE’ " (171).

The 1983 feeling of discomfort “with just putting in ‘NONE’ ”

seems to have moderated by 1984 when respondent filed the “re-

dated and re-signed” “Confidential” etc. “Reports” in which the

flat answer “NONE” appears in response to a request for infor-

mation on any “disciplinary proceeding. . . of which you are or

have been subject in respect to any professional license you hold.”

But in this regard, respondent testified that he really did not intend

(0 delete the additional text after the word “NONE” (249),

“Somebody took out everything after ‘NONE’ " (251), But there

are Uee 1984 “Confidential Biographical, . , Reports,” not en:

(ial WIth each Other in Several Minor respects, bul each giving ihe

flat anawer "NONE" to the “disciplinary proceeding" informauon

requeat, (Pet'r Ratha, 0, 04, 14)

Matier in Mitigation

This Court, in Matter of Garner, 103 AD 2d 390, wrote of

respondent's “impressive record Of past and present community

activities and ampie evidence of good character,” And, respondent

has continued in that regard over the years since that decision.

There is also another aspect which may be considered by this

Court in making its decision: the very significant fact that the

Comptroller of the Currency has not found the circumstances

which led to the present charges of sufficient gravity to offset

respondent's character and quality to be the chief executive office

of what has grown to be a significant and successful National

Bank. And under his leadership.

Moreover, as noted at the outset, respondent's one year sus-

pension from practice imposed by this court has grown-——so far—

to almost seven years. Whether respondent shares with petitioner

responsibility for this unfortunate fact is of limited significance.

The lengthy suspension has already imposed great hardship on

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respondent and vastly extended the punishment imposed by this

court without its knowledge or consent.

CONCLUSION

The Charges are sustained.

Respectfully submitted,

is/ W_ BERNARD RICHLAND

W. Bernard Richland,

Referee

July, 1991

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State of New York

Grievance Committee for the

Ninth Dudtctal District

Crosswest Office Center

399 Knollwood Road - Suite 200

White Plains, N.Y. 10603

CONFIDENTIAL December 13, 1990

Donald Lamson, Esq.

Director

Securities & Corporate Practices

Division

Office of the Comptroller of the

Currency

490 L'Enfant Plaga §,W,

Washington, D.C, 20219

Re: Gerald J, Gamer

Dear Mr, Lamaon!

This Committee had previously been provided with

certified copies of two filings made by Mr, Garner, one in

1983 and one in 1984, in which he sought approval to

become director, and later, Chief Executive Officer of a

National Bank in Anaheim, California. These certified copies

were provided to the Committee, after our formal request for

them, to be used in a Disciplinary Hearing regarding Mr.

Garner’s license to practice law in New York. The gravamen

of the charges pending against Mr. Garner is that he

submitted false answers to the O.C.C. in two Confidential

Biographical and Financial Reports in which he maintained

that he was not, and had not been, the subject of any

disciplinary proceeding, when in fact he was.

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These certified copies were irreparably damaged in a

recent fire in the Committee's offices. Prior to the fire, I was

directed by the Judge in this case to contact the O.C.C.

regarding a discrepancy betWeen the signature page on an

uncertified copy of the 1984 ifling and the certified copy of

the same document. As a resullt of my inquiry, I have learned

that the O.C.C. was in possession of more than one copy of

the 1984 filing.

Please consider this letter the Committee’s formal

request to you to provide us with certified copies of both

filings and of all correspondence , notes, memoranda etc.,

pertaining to Mr, Garner's “Pplications to the O.C.C. with

reference to the American Commerce National Bank of

Anaheim, California, Additionally, we are formally

requesting your office © provide us with a witness,

preferably yourself, Who Ould explain the circumstances

surrounding the existence Of two copies of Mr. Garner’s

1984 filing and the differences between the two, as well as

testimony on the procedures for seeking approval from the

O,€,€ to be a director or C.8.0. of a national bank, and the

documentation involved in such an application.

Since a question has been raised as to the authenticity

of the 1984 documents by Mr. Garner’s attorney, the

testimony of one who is familiar with the O.C.C’s

procedures is essential in establishing these documents as

credible evidence in our case. The information to be provided

in this testimony is unavailable from any other source, and

written explanations would not be competent evidence under

the rules against hearsay.

We anticipate the hearing to be rescheduled sometime

after the beginning of January, 1991. I am grateful for your

consideration of this request and hope that you will be able

to comply,

SSH/Ir

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Very truly yours,

S/

Sondra S. Holt

Associate Counsel

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MORRISON & FOERSTER

Attorneys at Law

1290 Avenue of the Americas

New York, New York 10104

(212) 468-8000

April 10, 1991

CONFIDENTIAL

BY TELEFAX AND MAIL

James Gillespie, Esq.

Assistant Director of Litigation

Office of the Comptroller of the Currency

490 L’Enfant Plaza

Washington, D.C. 20219

Re: In re Gerald J. Garner,

(N.Y. App, Div., 2d Dep’t)

Dear Jeff:

On November 7, 1990, we served a subpoena duces

tecum issued by the New York State Appellate Division for

the Second Department upon the Office of the Comptroller

of Currency ("OCC") on behalf of our client, Gerald J.

Garner, the respondent in an attorney grievance proceeding

now underway before that Court. A hearing in this matter is

now outstanding and we expect compliance at or before the

hearing.

Sincerely yours,

S/

David Z. Seide

DZS: cd

cc: Mr. Donald Lamson