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10/25/89 In Re Bernard S. Neistein

October 25, 1989

IN RE BERNARD S. NEISTEIN, ATTORNEY, RESPONDENT; -- IN RE IRVIN F. RICHMAN, ATTORNEY, RESPONDENT


SUPREME COURT OF ILLINOIS

547 N.E.2d 198, 132 Ill. 2d 104, 138 Ill. Dec. 229 1989.IL.1672

Rehearing Denied December 4, 1989

APPELLATE Judges:

JUSTICE CALVO delivered the opinion of the court. JUSTICES WARD, CLARK and STAMOS took no part in the consideration or decision of this case.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE CALVO

On September 10, 1986, the Administrator of the Attorney Registration and Disciplinary Commission filed a complaint charging respondents with violation of Disciplinary Rules 7-110, 1-102(2), 1-102(4), and 1-102(5), and Canon 9 of the Illinois Code of Professional Responsibility (1977) (the Code). The Hearing Board filed a report finding both respondents had violated DR 7-110by making payments on Judge Holzer's loan and recommending the suspension of both respondents from the practice of law for a period of 30 months. The Review Board agreed with the Hearing Board.

Respondents filed their exceptions to the recommendation of the Hearing Board on January 20, 1988. The motion of respondents to have their exceptions to the Hearing Board report and recommendations stand as their exceptions to the report and recommendations of the Review Board was allowed September 28, 1988. The Administrator also filed exceptions to the findings of both the Hearing Board and the Review Board.

The issues presented for review are whether the conduct of respondents violated DR 7-110of the Code and, if so, what sanction, if any, should be imposed. Respondents were licensed to practice law in Illinois in 1937. After his admission, Bernard S. Neistein entered general sole practice in Chicago. He joined the Army in 1942 and served in the European Theatre in World War II. He resumed his practice after the war and established a partnership with respondent Irvin F. Richman in 1956. They have practiced law together since then.

Respondent Neistein is a former Illinois State Senator and Representative. During his tenure, he helped pass the Judicial Reform Bill. He also served as a master in chancery in the early 1960s.

Respondent Richman worked with several lawyers in private practice before he joined the United States Army and was stationed in Europe and North Africa. He worked for individual lawyers after the war until about 1950. He then joined a prominent Chicago law firm and was there until he joined respondent Neistein in 1956. Respondents' firm had grown to include approximately 15 attorneys by 1980.

Neistein's role in the firm has been to attract business, while Richman's role has been that of managing partner. He also considers himself as a transactional lawyer handling matters involving real estate, business law and corporations. The firm's business has concentrated in those areas, plus banking. The firm was involved in frequent litigation in the chancery division of the circuit court of Cook County due to the nature of the practice.

In 1980, the respondents and their firm owned 25% of the stock of Republic Bank of Chicago, 6501 South Pulaski, Chicago. Richman was a director of the bank commencing in the early 1970s and was given the task of negotiating a sale of the bank in 1977. He began negotiating with a prospective purchaser in April 1983 resulting in the sale of the bank on or about October 31, 1984. The respondents realized a profit of $325,000 or $345,000 each.

Neistein first met Reginald J. Holzer during the 1950s and would see him at the Bismarck Hotel coffee shop in the mornings and exchange greetings. Neistein never became a social friend and neither he nor Richman ever appeared in court before Holzer. Their partner, Harry Young, was responsible for litigation and appeared before Holzer and the other Judges in the chancery division. Between 1978 and 1982, the firm appeared as counsel of record before Holzer in 14 cases.

At the end of 1979 or early in 1980, Neistein met Holzer in the Civic Center and Holzer said he would phone him soon, as he wanted to talk. Holzer phoned Neistein and invited him to his chambers a week or two later. Holzer related he was not "liquid" and needed a $10,000 loan. Neistein said he would get back to him. Neistein went to the office and discussed the matter with Richman. They decided to have Holzer apply to the Republic Bank for a loan. Richman phoned Marvin E. Schatzman, president and chief executive officer of the Republic Bank, asking him to send the necessary paperwork to Holzer for a $10,000 loan. The bank sent the papers to Holzer for completion. After reviewing Holzer's net worth statement, Schatzman approved the loan and sent a note to Holzer for execution. Holzer phoned Neistein and said, "I've got a note." Neistein walked over, met Holzer and took an envelope from Holzer containing the note. Neistein placed the envelope on Richman's desk, who opened it and noted Holzer had signed it and listed his home address. Richman crossed out the home address and substituted "Richard J. Daley Civic Center" because businessmen usually like banking documents sent to their office. He then mailed the note to the bank on or about March 28, 1980.

Holzer failed to make the interest payment due June 28, 1980. Richman saw the delinquency on the bank's monthly report and ran to Neistein's office saying, "Hey, look at this. Holzer is already in default on that loan. You better get over there and tell him to make his payment." Neistein told the Judge he had not made the payment. Holzer replied, "Well, I'm still not liquid and I'm broke. Make the payment." Holzer then told Neistein to pay the principal and interest. Neistein did not respond and returned to his office. He and Richman decided to make ...


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