SUPREME COURT, APPELLATE DIVISION

FIRST JUDICIAL DEPARTMENT

Barbara R. Kapnick, Justice Presiding,

Marcy L. Kahn

Ellen Gesmer

Cynthia S. Kern

x

Nicholas A. Penkovsky,

Respondent.

x

Disciplinary proceedings instituted by the Attorney Grievance Committee for the First Judicial Department. Respondent, Nicholas A. Penkovsky, (who, as Nicholas Alexander Penkovsky was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the First Judicial Department on January 31, 1994).

Jorge Dopico, Chief Attorney,

Attorney Grievance Committee, New York

(Kevin P. Culley, of counsel), for petitioner.

Ronald B. McGuire, Esq. for respondent.

M–3095/CM–3699– July 17, 2017

In the Matter of Nicholas A. Penkovsky, An Attorney

PER CURIAM

Respondent Nicholas A. Penkovsky was admitted to the practice of law in the State of New York by the First Judicial Department on January 31, 1994, under the name Nicholas Alexander Penkovsky. At all times relevant to this proceeding, respondent has maintained an office for the practice of law within the First Department.

In 2015, the Attorney Grievance Committee (the Committee) brought disciplinary charges against respondent alleging violations of the Rules of Professional Conduct (RPC) (22 NYCRR § 1200.00) rules 1.3(b) (neglect), 1.3(c) (intentionally failing to carry out a contract of employment entered into with a client for professional services), 1.4(a)(2) (failure to reasonably consult with a client about the means by which the client's objectives are to be accomplished), 8.4(b) (illegal conduct that adversely reflects of one's honesty, trustworthiness or fitness as a lawyer), 8.4(d) (conduct prejudicial to the administration of justice), and 8.4(h) (other conduct that adversely reflects on one's fitness as a lawyer).

On June 23, 2016, respondent and the Committee stipulated to the facts and all of the charges of misconduct. On June 28, 2016, a hearing was held before a Referee, which focused on the appropriate sanction for respondent's misconduct.

The Committee did not call any witnesses but offered documentary evidence. Respondent testified in mitigation, called his counsel as a character witness,1 and introduced documentary evidence. Both parties submitted posthearing memoranda; the Committee argued that respondent should be suspended for six months, and respondent urged a private reprimand or Admonition, or a conditional Admonition requiring respondent to continue his efforts to satisfy his professional and financial obligations with a public censure to follow if respondent failed to adhere to the conditions.

By report dated September 15, 2016, the Referee sustained all the charges and recommended that respondent be publicly censured.

Now, by motion dated June 8, 2017, the Committee moves, pursuant to the Rules for Attorney Disciplinary Matters (22 NYCRR) § 1240.8(b) and the Rules of the Appellate Division, First Department (22 NYCRR) § 603.8–a(t), for an order affirming the Referee's liability findings and imposing whatever sanction this Court deems just and proper.

By cross motion dated July 10, 2017, respondent moves for an order affirming the Referee's liability findings, disaffirming the Referee's sanction recommendation of a public censure, and directing that respondent receive a private reprimand which has been replaced by Admonitions (22 NYCRR 1240.2 [b] ). In addition, respondent requests oral argument.

The facts of respondent's misconduct are not in dispute. In April 2009, a client retained respondent to pursue a copyright infringement case involving the alleged unauthorized use of his photographs. The client paid respondent an advance legal fee of $1,500 and agreed to an additional fee of one third of any net recovery after settlement or trial. Respondent took some minimal steps regarding the case but never commenced a lawsuit or took other significant action. Over a period of approximately three years, respondent was repeatedly unresponsive to the client's efforts to communicate with him in order to discuss the status of the case. Whenever the client was able to reach respondent, respondent misled the client to believe that the litigation was proceeding in the normal course when it was not.

Between February and April 2012, an attorney wrote to respondent on behalf of the client in order to request a case update. Respondent did not respond despite the attorney's warning that a disciplinary complaint would be filed if respondent continued to ignore his requests. In August 2012, the client filed a complaint against respondent with the Committee. At a May 29, 2014 deposition, respondent, then pro se, admitted that he failed to communicate with the client and had not properly pursued his case. As a result, some or all of the client's copyright infringement claims were time-barred.

The Referee found that respondent intentionally failed to fulfill his obligations under the retainer agreement, neglected the client's case, failed to reasonably consult with his client, and misled his client to believe that the litigation was proceeding when it was not, in violation of RPC rules 1.3(b), 1.3(c), 1.4(a)(2), and 8.4(d). Accordingly, the Referee sustained charges one through four, which were based on these actions.

In or about June 2007, respondent sublet office space from the law firm of Segan, Nemerov & Singer, P.C (Segan). Respondent stopped paying rent in or about January 2009 but continued to occupy the office space until October 2010. In 2011, Segan sued respondent for unpaid rent. Respondent served Segan with a motion to dismiss which alleged, inter alia, lack of jurisdiction due to improper service. The motion had a return date of August 31, 2011 but respondent never filed it with the court, nor did he inform Segan that it had not been filed. Segan, unaware that the motion had not been filed with the court, responded by way of a cross motion for summary judgment. Respondent did not respond to the cross motion nor did he appear on the return date. In September 2011, the court awarded Segan summary judgment against respondent for $26,695.30. Respondent did not appeal the judgment and never made any payment on it. In response to a disciplinary complaint filed by Segan against respondent, respondent raised similar arguments to those raised in his unfiled motion to dismiss. However, at his deposition, respondent conceded that Segan's judgment against him was valid.

The Referee found that respondent's conduct with respect to the motion to dismiss adversely reflected on his fitness as a lawyer, in violation of RPC rule 8.4(h). Accordingly, the Referee sustained charge five, which was based on these actions.

Respondent admittedly failed to file federal and New York State personal income tax returns for the tax years 2009 through 2014. Moreover, at his May 29, 2014 deposition, respondent misleadingly implied that he had been granted multiple extensions to file his tax returns which were still in effect, although they had in fact expired. Respondent admittedly failed to ascertain that the extensions were no longer in effect and correct his misstatements to the Committee.

The Referee found that respondent's failure to file his personal income tax returns constituted illegal conduct that adversely reflected on his honesty, trustworthiness or fitness as a lawyer, in violation of RPC rule 8.4(b). The Referee also found that his misleading testimony to the Committee regarding the status of his extensions reflected adversely on his fitness as a lawyer in violation of RPC rule 8.4(h). Accordingly, the Referee sustained charges six and seven, which were based on these actions.

In 2002, a judgment was entered against respondent for his unpaid law school loans, which included interest and penalties, for $116,606.71. In addition, between 2002 and 2015, other judgments and liens were entered against respondent which totaled approximately $59,321.71.

The Referee found that respondent's failure to satisfy the judgments and liens entered against him constituted conduct prejudicial to the administration of justice, in violation of RPC rule 8.4(d). Accordingly, the Referee sustained charge nine, which was based on these actions.

Lastly, the Referee found that respondent's overall conduct adversely reflected on his fitness as a lawyer, in violation of RPC rule 8.4(h).

Since the facts of respondent's misconduct are stipulated to and the parties both request that we affirm the Referee's findings of liability, we so affirm. We turn now to the issue of the appropriate sanction for respondent's misconduct.

In mitigation, respondent explained that he attended law school in pursuit of a career change after being laid off from work in the film production industry. Respondent graduated from law school at age 39 with $70,000 of loan debt. Respondent worked briefly for a small law firm before being let go; and, because he could not find other work, has been a solo practitioner since 1997. Since 2009, respondent's law practice has failed to generate sufficient income and respondent found it difficult to pursue business aggressively because of the breakdown of his marriage. Respondent and his estranged wife have been engaged in acrimonious divorce proceedings and lost their only significant asset, a cooperative apartment they owned together, because they failed to pay maintenance charges.

Respondent also explained that he has been participating in therapy and a support group, and submitted a letter from his current therapist. In addition, after stipulating to his misconduct, respondent went on to file tax returns for the years in which he was delinquent.

Respondent expressed remorse and acknowledged that he needed help to properly fulfill his professional responsibilities. He also noted his prior pro bono and other volunteer work. He submitted nine character letters from, among others, law school professors and members of the New York bar attesting to his good character, professionalism, and integrity.

Respondent's attorney, who has known respondent since 1991, testified to respondent's good character, professional competence, and commitment to public interest cases. Respondent's counsel testified that he would be comfortable referring clients to respondent, but, given respondent's professional and personal difficulties, he would take it upon himself to monitor how respondent handled those cases.

In aggravation, the Committee introduced a prior Admonition issued to respondent in 2013 for conduct prejudicial to the administration of justice in violation of RPC rule 8.4(d). Respondent had represented, in federal court, a group of tenured New York City public school teachers who had been suspended. Respondent filed a fourth amended complaint that had previously been found deficient by both a magistrate and a judge. Respondent was sanctioned for this with a $5,000 fine. Respondent delayed his payment of the fine by 16 months by raising frivolous challenges to the sanction.2

The Referee recommended that respondent be publicly censured. While the Referee viewed suspension as too harsh, the Referee acknowledged that a private Admonition would not be sufficient to protect future clients from possible inadequate representation by respondent.

We agree with the Referee that a private Admonition would not be appropriate in this case and therefore reject respondent's request, in his crossmotion, that we disaffirm the Referee's proposed sanction and impose an Admonition. Respondent neglected a client matter, prejudiced the administration of justice in litigation with his former landlord, did not file his taxes for several years, and was delinquent in his debts. He was also previously admonished by this Court. While respondent has expressed remorse, confronted personal and financial difficulties, and is taking steps to improve himself, his actions were serious enough that future clients should be on notice of them.

We find that, in this case, a three-month suspension is appropriate. We have previously imposed three-month suspensions where, like here, an attorney committed multiple acts of misconduct and was previously admonished, but expressed remorse and presented evidence in mitigation (see Matter of Bartley, 151 AD3d 1, 3–5 [1st Dept 2017]; Matter of Peralta–Millan, 141 AD3d 87, 89 [1st Dept 2016] ). We find that this sanction appropriately balances respondent's misconduct and the evidence in mitigation (Bartley, 151 AD3d at 4).

We have considered and reject respondent's request for oral argument.

Accordingly, the Committee's motion should be granted to the extent of affirming the Referee's findings of fact and conclusions of law and respondent suspended from the practice of law in the State of New York for a period of three months and until further order of this Court. Respondent's crossmotion should be granted to the extent of affirming the Referee's findings of fact and conclusions of law and otherwise denied.

All concur.

Order filed.

FOOTNOTES

1.   The Referee permitted respondent's counsel to testify as a character witness with the understanding that his testimony would be stricken in whole or in part if respondent raised objections based on the attorney-client privilege during cross-examination by the Committee or examination by the Referee. No such objection was raised.

2.   As additional evidence of aggravation, the Referee considered the testimony by respondent that he never filed the motion to dismiss in the Segan matter because he simply forgot, which the Referee did not find credible.