Order of Supreme Court of Pennsylvania Dated May 28, 1986 Issuing a Rule on Respondent to Show Cause Why He Should Not Be Disbarred.
Marshall E. Anders, Stroudsburg, Martin Comisky, Philadelphia, for respondent.
Edwin W. Frese, Jr., Ass't. Disciplinary Counsel, Harrisburg, for petitioner.
Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Hutchinson, J., files a dissenting opinion which is joined by Larsen and Zappala, JJ.
This is a disciplinary case in which various charges of misconduct have been brought against a Pennsylvania attorney. Charge I concerns a real estate transaction in which Attorney Wittmaack failed to inform his clients, whom he represented in the matter of securing a construction mortgage, that he held a financial interest in and was counsel for a construction company which would receive the proceeds of the mortgage. Charge I also concerns Mr. Wittmaack's forgery of a document purporting to be signed by his clients in which the clients are said to acknowledge that Mr. Wittmaack represents both the purchaser and the contractor in the real estate transaction and that the clients consent to this dual representation. Charge II concerns another real estate transaction in which Mr. Wittmaack
represented both the buyers and the seller of real estate, but, until the closing was almost completed, failed to inform the buyers that he represented the seller.
The Hearing Committee which conducted evidentiary hearings in this matter submitted its Report and Recommendations on February 19, 1986, recommending a three month suspension. Both Petitioner (the Office of Disciplinary Counsel) and Respondent (Mr. Wittmaack) filed briefs on exceptions. On April 14, 1986 a panel of the Disciplinary Board heard oral argument, and on May 8, 1986, after the panel submitted its report to the entire Disciplinary Board of the Supreme Court of Pennsylvania, the Board unanimously recommended a two year suspension plus the payment of costs. This Court then issued a Rule to Show Cause why Mr. Wittmaack should not be disbarred. Because of the gravity of the offenses in this case, we view the penalties recommended by the lower tribunals as inadequate and hold that Mr. Wittmaack must be disbarred.
CHARGE I: FACTUAL BACKGROUND
Although this Court conducts its review of attorney disciplinary cases de novo and is not bound by the findings of fact made by the lower tribunals, nevertheless, this Court will be guided by their findings with respect to matters of credibility of witnesses. Office of Disciplinary Counsel v. Lucarini, 504 Pa. 271, 275, 472 A.2d 186, 188 (1983). After a review of the record, we are satisfied the facts in the case are substantially as the lower tribunals found them.*fn1
Charge I concerns Mr. Wittmaack's representation of clients who were in the process of securing a construction mortgage to cover the cost of building a house on land which they purchased on October 3, 1980 in Blooming Grove Township, Pike County, Pennsylvania. In November of 1980, the buyers, Dr. and Mrs. John D. Nelson, of New York City, entered into a construction contract with Heck
Builders for construction of a home on their lot in Pike County. Mr. Wittmaack had no involvement in this transaction and the Nelsons were represented by separate counsel when they selected Heck as their builder. One of the provisions of the construction contract was that the Nelsons, who made an initial payment of $2,500.00, could unilaterally cancel the contract and receive a full refund of their money.
In March of 1981 the Nelsons applied for and received a mortgage commitment. They inquired of a salesman for Heck Builders whether he could recommend a lawyer to represent them at closing, and he recommended Mr. Wittmaack. He did not tell them that Mr. Wittmaack was president, a director, and legal counsel for Heck Builders, nor did Mr. Wittmaack tell the Nelsons of his association with Heck Builders, although the Hearing Committee and the Disciplinary Board found that a third party had told the Nelsons of Mr. Wittmaack's connection with Heck Builders. Nor did Mr. Wittmaack tell the Nelsons that Heck Builders had failed to make a profit in its six years of existence, that Heck was owned by his father and himself, that the company owed the two of them $40,000 and that he had just loaned the company another $35,000. The closing was held in Mr. Wittmaack's office on May 24, 1981, at which time the Nelsons also executed a construction agreement with Heck Builders which, unlike the previous contract, could not unilaterally be cancelled.
Although construction on Nelsons' house began in August of 1981, in October 1981 the Nelsons were informed that Heck Builders would not be able to complete the contract because of financial difficulties. When Dr. Nelson phoned Mr. Wittmaack to ask for advice, Mr. Wittmaack suggested that he might use the services of one of the subcontractors or a new builder, but that in any event, he, Mr. Wittmaack would be unable to represent Dr. Nelson any further. Dr. Nelson then contacted another attorney from the same area who informed the Nelsons of Mr. Wittmaack's connection with Heck Builders and who represented
the Nelsons in a civil action against Heck Builders, John Wittmaack and others associated with Heck Builders. Prior to filing the civil action, attorneys for the Nelsons confronted Mr. Wittmaack with the Nelsons' claim that he had not informed them of his interest in Heck Builders. Mr. Wittmaack denied this claim, insisted that the Nelsons knew of his interest, and asserted that he had in his possession a Multiple Representation Agreement (hereinafter M.R.A.) signed by the Nelsons which would establish that the Nelsons knew of Mr. Wittmaack's interest in Heck Builders and agreed to his representation anyway.*fn2 He was, however, unwilling to produce the original or a copy of this agreement.
Ultimately, Mr. Wittmaack did produce a photocopy, but not the original, of the Multiple Representation Agreement purportedly signed by the Nelsons, dated June 6, 1981. Mr. Wittmaack testified under oath in the civil proceedings brought by the Nelsons and also in the disciplinary proceedings that the Nelsons signed this document in his presence
on June 6, 1981. Expert handwriting analysis, however, established that the signatures on this document were forgeries which were effected by xeroxing the Nelsons' signatures on the closing documents, pasting them on a copy of the M.R.A. and xeroxing the pasteup. Enlarged photographs of each signature establish conclusively that the signatures on the two documents have been forged by way of the process just mentioned. Further, the lower tribunals found, and we agree, that the closing was held May 24, 1981, not June 6, 1981. Mr. Wittmaack admits that he wrote the date 6/6/81 on the M.R.A. and he insists that the closing was actually conducted on that date. Dr. Nelson, a periodontist, testified that the closing occurred on May 24, 1981, and he produced office and medical records indicating that he was in New York City on June 6, 1981, treating patients.
As a result of Heck Builders' breach of the construction contract, the Nelsons were out-of-pocket $13,000, which they had paid to Heck and its subcontractors. However, in Nelsons' civil action against Heck Builders and Mr. Wittmaack, they received a $16,000 settlement, $15,000 of which was paid on behalf of Mr. Wittmaack.
CHARGE II: FACTUAL BACKGROUND
In May of 1982, Mr. and Mrs. Lester G. Freundlich, of New York City, retained Mr. Wittmaack to represent them in the matter of their purchase of property in Pike County, Pennsylvania. Mr. Freundlich is an attorney practicing in New York. Pursuant to his representation of the Freundliches, Mr. Wittmaack secured a building and termite inspection of the property, and after the inspection report came in, acting on instructions from Mr. Freundlich, negotiated with the seller, one Mr. Dandrow, a reduction of price between $400 and $2,000 to cover the cost of certain repairs to the property. Mr. Wittmaack negotiated a reduction of $600. During a telephone conversation with Mr. Dandrow in which this price reduction was negotiated, Mr. Dandrow requested Mr. Wittmaack to represent him as well as the
Freundliches at the closing. Mr. Wittmaack agreed, but he did not inform the Freundliches of this dual representation until near the end of the closing when, without explanation, he handed Mr. Freundlich a Multiple Representation Agreement for his signature.
Although the Freundliches signed this agreement, Mr. Freundlich stated that he did so because "everything seemed satisfactory in terms of the deal" and there was "nothing to be gained by raising a stink." He also stated that he had no prior knowledge of Mr. Wittmaack's representation of both parties to the transaction, and that if he had been aware of the dual representation, he would have objected. He testified: "[I]f at any time ...