Dead Man’s Statute Applies in Attorney Disciplinary Hearings – Sort Of

The Dead Man’s Statute (CPLR 4519) essentially prevents a witness from testifying in his own behalf against an estate as to conversations he had with the deceased person. Last Thursday (August 23rd), the First Department was confronted with the issue of whether the Dead Man’s Statute was applicable in attorney disciplinary hearings in Matter of Zalk, 2007 NY Slip Op 06505.

The attorney at issue, Richard Zalk, Esq., was accused of violating various disciplinary rules basically for misappropriating funds from his escrow account. The funds in the escrow account had come from the sale of a building owned by the attorney’s client. The client was a widow, and the attorney had represented both her and her husband’s estate over many years.

In his defense at the disciplinary hearing, the attorney testified that his now deceased client had told him shortly before her death that he could keep the money in the escrow account as his fee for the services he had performed over the many years. The estate of the client of course disputed that the monies held in escrow should belong to the attorney.

The Departmental Disciplinary Committee took the position that the Dead Man’s Statute precluded the attorney from relying on his testimony as to the alleged fee arrangement. The Referee however disagreed finding that the Dead Man’s Statute would only apply in an action brought by the estate.

The First Department agreed with the Committee and found that the statute (CPLR 4519) was applicable in attorney disciplinary hearings on the merits of the charges. Thus, because the attorney could not rely on his testimony as to his conversations with the deceased concerning the fee arrangement, it sustained the charges of misappropriation of funds.

However, the First Department went on to hold that such testimony by the attorney could be admissible in the context of determining the nature of the discipline to impose on the attorney. It stated that the punishment determination was separate and distinct from the hearing on the merits of the charges, and the estate of the deceased had no interest in the nature of the punishment imposed against the attorney. The Court did in fact consider the attorney’s testimony in imposing the punishment, and found the attorney’s testimony to be credible, and his actions to be non-venal. The Court found that the attorney honestly believed the funds in escrow to be his. Thus, the Court imposed the sanction of a two year suspension rather than a disbarment.

In short, the Dead Man’s Statute (CPLR 4519) applies in attorney disciplinary hearings on the merits of the charges, but not in the consideration of the appropriate punishment.

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