SUPREME COURT OF NEW JERSEY

Decision

To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey.

This matter was before the Board by way of disciplinary stipulation between respondent and the Committee on Attorney Advertising ("CAA"). In the stipulation, respondent admitted violating RPC 7.1 (making false or misleading communications about the lawyer's services).

Respondent was admitted to the New Jersey bar in 1983. She maintains a law office in Haddon Heights, New Jersey. Respondent has no history of discipline.

According to the stipulation, in January. 1996 respondent had a flyer-published and. circulated in the Sunday Philadelphia Inquirer and other newspapers of general circulation. The flyer contained the headline: "New Jersey Law Firm Reveals Important Facts You Should Know About Living Trusts." The flyer provided general information about living trusts and gave notice of a free seminar. The following statement was included in the flyer:

Respondent stipulated that, contrary to the above statement, the process need not be time-consuming, and few probate matters are actually heard in Superior Court, Probate Part. According to the stipulation, normally the executor of an estate presents the application for probate of a decedent's will to the county surrogate's office. The executor may appear pro se. If there are no problems with the will, the surrogate will issue letters testamentary to the executor one to two weeks after the executor takes the oath of office. In addition, the costs associated with the probate process are relatively low. In some instances, as in the case with a living trust, there may not be any attorneys' fees involved. If the executor/executrix undertakes to probate the estate pro se, there will not be any attorneys' fees associated with the matter.

The stipulation further stated that, generally, an action to determine the validity of a will in Superior Court, Probate Part occurs only when a caveat has been filed, if there is an irregularity on the face of the will, or where formalities for the execution of the will were not satisfied by the decedent. Living trusts may also be subject to challenge. The stipulation also noted that neither the surrogate nor the Superior Court, Probate Part distributes assets. Rather; the executor of the estate distributes the assets, unless there is a challenge. If there is a challenge, then the distribution of assets may only be made pursuant to an order of the court.

Another statement contained in the flyer was also inaccurate. It warned that "[e]very curious neighbor, disgruntled relative, and con artist around is welcome to examine every detail of your finances - and what you left to whom."

According to the stipulation and contrary to the above statement, a probated will includes a limited amount of information about the finances of the decedent's estate as well as the decedent's wishes as to the disposition of the estate. Therefore, the details of the decedent's finances will rarely be found in the application to probate the decedent's will that is on file and available for inspection at the surrogate's office. Only if the will is contested and the court orders an inventory of the estate, or if an accounting is filed, are such details open to inspection.

The following misleading statement was also contained in the flyer: "When your beneficiaries finally get the property that's rightfully theirs, they may have to pay out a large percentage of it in lawyer's fees."

In this context, the stipulation explained that, in most cases, a will is part of an overall estate plan that will be subject to the probate process. Attorneys fees associated with the process may be limited to the amount of time spent by an attorney on the matter and the fees may vary.

The flyer also inaccurately stated: "However, if you're married and you create a living trust now, you can actually -double the amount you will be able to pass onto your children - - to $1.2 million."

According to the stipulation, the unified credit - or the exemption equivalent against the federal gift and estate tax - of $600,000 per person, is available to those individuals who execute wills as well as those who establish living trusts.

The flyer also stated that, in the event an individual should become disabled and unable to take care of him or herself, someone would have to be appointed as the individual's legal guardian through "a legal process called guardianship which, like probate can be extremely costly, time-consuming, and upsetting to all involved." The flyer advised the reader that "you can completely eliminate the chance of this ever happening to Your family by setting up a living trust."

As to this statement, the stipulation explained that the creation of a living trust or an execution of a power of attorney does not prevent any party-in-interest from filing a petition in Superior Court to have an individual declared incompetent. The proper mechanism to place control over one's assets in the person or person's of one's choice is to obtain a durable power-of-attorney, just as with a living trust.

The stipulation charged that the statements in the flyer violated RPC 7.1, which states in relevant part:

According to the stipulation, the advertisement as drafted had the potential to mislead prospective clients.

With the agreement of the presenter, respondent and respondent's counsel, the CAA recommended the imposition of an admonition, coupled with the requirement that, for a period of two years from the date of the stipulation, respondent must submit any and all advertisements, solicitations, flyers, and related communications to the CAA for prepublication approval pursuant to R. 1:19A-2(d) and R. 1:19A-3.

The CAA acknowledged that there is no caselaw addressing 'a similar set of circumstances. The CAA, however, relied on In the Matter of Ernest H. Thompson, Jr., Docket No. DRB 97-054 (June 5, 1997). There, the attorney was admonished for sending a targeted direct mail solicitation flyer to an individual whose residence was about to be sold at a sheriffs sale. The flyer contained several false and misleading statements that violated RPC 7.1(a)(1) and (2)(communications likely to create an unjustified expectation about results the lawyer can achieve). Likewise, in In the Matter of Bryan F. Ferrick, Docket No. DRB 97-307 (October 28,1997) and In the Matter of Ronald Aurzeja, Docket No. DRB 97308 (October 18, 1997), the attorneys were admonished for causing a targeted direct mail solicitation letter containing false and misleading communications to be sent to homeowners whose properties may have been over-assessed for tax purposes. The Board found violations of RFC 7.1(a)(1), (2) and (3) (prohibiting the comparison of the lawyer's service with other lawyers' services).

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Upon a de novo review of the record, the Board is satisfied that a finding of unethical conduct is clearly and convincingly supported by the record.

The flyer that respondent caused to be published in several newspapers included a number of statements that were inaccurate and may have misled individuals with regard to trust and estate practice. It is unquestionable, thus, that respondent violated RPC 7.1(a)(1). In recommending the imposition of an admonition, the CAA considered the fact that respondent has never before been charged with a violation of the rules governing attorney advertising and solicitation. The CAA also noted that much of the language in respondent's advertisement is currently being used by a "substantial" number of other attorneys in the state. There was no independent evidence presented though to substantiate this claim. The CAA believed that an admonition, coupled with the publication of a CAA advisory opinion, would constitute an. appropriate resolution of this grievance.

The Board has considered that respondent has no history of discipline, that this advertising practice was previously unregulated and that the CAA has agreed to review respondent's future advertisements, solicitations, flyers and related communications and has committed to issue an advisory opinion on this topic. In fact, the CAA has releasedd for publication Opinion 25 prohibiting the use of the above misleading language.

The Board does not, however, concur with the CAA's recommendation for discipline, nor does it summarily accept the statement in the stipulation, without proof, that this type of practice is widespread. The Board has grave concerns about the impact of such a solicitation. The fact that respondent's advertisement was published not only in the Philadelphia Inquirer but also other newspapers of "general circulation" underscores the potential widespread impact that such an advertisement may have. Moreover, the solicitation, geared toward the elderly, a vulnerable audience, is even more unpalatable because it preys on the fears of the aged.

Clearly this type of publication is more serious than the conduct in the Thompson matter, where only one individual was targeted, or, in the Ferrick and Aurzeja matters, where the attorneys were targeting homeowners whose properties may have been over assessed. Here, misrepresentations were circulated, perhaps to thousands, with the potential of misleading individuals about guardianships, court proceedings, estate taxes and attorneys' fees. The purpose of the advertisement was to lure the targeted audience to attend the seminar and perhaps to retain respondent as counsel. Attorneys who purchase advertisements written by others must be held accountable when those advertisements provide inaccurate or misleading information. Discipline must follow.

It is well settled that a reprimand is the minimum discipline for misrepresentations. See In re Kasdan, 115 N.J. 472 (1989). Respondent's flyer, replete with misrepresentations, was intentionally circulated to the general public. Based on the nature of the flyer and the scope of the audience targeted, seven members of the Board voted to impose a reprimand. One member voted for an admonition, based on the CAA's recommendation and in reliance on the representation that the CAA would soon issue an advisory opinion on the topic. One member did not participate.

The Board further determined that, for a two-year period, respondent be required to submit all advertisements, solicitations, flyers and related communications to the CAA for prepublication approval.

The Board further determined to require respondent to reimburse the Disciplinary Oversight Committee for administrative costs.