From our private database of 35,600+ case briefs...
In re Warhaftig
New Jersey Supreme Court
524 A.2d 398 (1987)
Attorney Warhaftig (defendant) ran a real estate practice. Warhaftig regularly withdrew money from clients’ trust account balances for himself, expecting to replace the money from fees he anticipated earning through closings for other clients. Warhaftig maintained a separate ledger of anticipated fees, identifying which fees were actually earned and which fell through as a result of transactions failing to close. When a transaction failed to close, Warhaftig would replace withdrawn trust account money with his own personal funds. Warhaftig received advance notice of an unscheduled financial-compliance audit and contacted his accountant. The accountant advised Warhaftig to replace missing trust account funds before the audit. Warhaftig withdrew money from his sons' trust accounts and deposited it into his trust account. The auditor discovered Warhaftig’s trust account withdrawals but could not discern which clients were affected due to the size of Warhaftig’s practice and the ongoing cycling of funds in and out of Warhaftig’s trust account. The compliance audit led to the filing of professional misconduct charges and a hearing before an ethics committee. At the committee hearing, Warhaftig testified that he began withdrawing client trust funds to compensate for financial strains resulting from a decline in his practice, his wife’s diagnosis with cancer, and his son’s need for costly psychiatric treatment. Warhaftig stated that he never caused anyone to lose money as a result of his trust account withdrawals and always covered required disbursements. Warhaftig also testified that he knew it was wrong to withdraw client trust funds without permission but did not feel that he was stealing, because he knew that his recordkeeping system would ensure that no clients were harmed by his conduct. Warhaftig’s case proceeded to review by the Disciplinary Review Board (Board). The Board departed from legal precedent that established disbarment as the mandatory penalty for knowingly misappropriating client funds. Instead, the Board recommended public discipline. The Board distinguished Warhaftig’s case on the premise that Warhaftig had a colorable interest in the funds he withdrew. The Board’s decision came under review by the Supreme Court of New Jersey.
Rule of Law
Holding and Reasoning (Per Curiam)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 618,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 618,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.