Paul W. Bruzga (2010)

November 4,2009, and Supplemental Hearing Panel Report dated January 28,2010.

September 30,2009, and supplemental hearing on January 8, 2010, the Hearing Panel Report of

Answer, Jointly Submitted Exhibits, transcript of hearings on September 29,2009, and

The Committee reviewed the record, including the Notice of Charges, Respondent's

time and circumstance to warrant recusal.

After discussion, the Committee expressed the belief that the matter was too far removed in both

matter before the Committee and Ms. Parent was not involved in that prior matter at her firm.

represented Mr. Bruzga relating to a PCC complaint. That matter had no relation to the current

Prior to deliberation, Ms. Parent disclosed that in the mid 1990's, a member of her firm

Connair, Alan J. Cronheim, Gerald A. Daley, James R. Martin and Jennifer L. Parent.

Benette Pizzimenti, Vice Chair; Toni M. Gray, Vice Chair, Susan R. Chollet, Thomas P.

referenced matter. The following Committee members were present: Margaret H. Nelson, Chair;

On February 16,2010, the Professional Conduct Committee (PCC) deliberated the above

Gerald A. Daley* Holly B. Fazzino, Admin. Coordinator Alan J. Cronheim * non attorney member Thomas P. Connair David N. Cole Toni M. Gray, * Vice Chair 603-224-5828 • Fax 228-9511 Jennifer L. Parent Benette Pizzimenti, Vice Chair Concord, New Hampshire 03301 James R. Martin Margaret H. Nelson, Chair 4 Chenell Drive, Suite 102 Richard H. Darling*

interest bearing account and all interest earned shall be credited to Buyer provisions of this Agreement. The Deposit shall be deposited in an Bruzga, Esq. P.L.L.C., to be held in escrow in accordance with the Deposit. The Deposit shall be made with Seller's attorney, Paul W.

as follows:

6. Paragraph 16 of the P&S outlined the terms with respect to the buyer's $20,000 deposit,

Purchase and Sale Agreement ("P&S").

5. After extensive negotiations, on February 17,2006, the parties signed a nine page

York.

Richard S. Brovitz, Esquire, of Fix, Spindelman, Brovitz and Goldman of Fairpoint, New

("Morgan"), and they asked Mr. Bruzga to negotiate the sale. Morgan was represented by

4. The Denisons had a potential buyer of the campground, Morgan Acquisitions, LLC,

owned the campground.

3. The Denisons were the principals and owners of Danbe Realty, LLC ("Danbe"). Danbe

Buccaneer Bay Campground, valued in excess of $1 million.

Mr. Bruzga to represent them with respect to the sale of real property, known as

2. On January 30, 2006, Daniel C. and Betty J. Denison signed an hourly fee agreement with

New Hampshire 03046-4322.

operated his law office as Bruzga Law Offices, 36 Twist Hill Road, Suite C, Dunbarton,

admitted to practice in 1978. At all times material to this proceeding, Mr. Bruzga

1. Mr. Bruzga is an attorney licensed to practice law in New Hampshire. Mr. Bruzga was

were established by clear and convincing evidence, as follows:

The Committee determined that the factual findings, as described by the Hearing Panel,

I. FINDINGS OF FACT p. 3 Page 3 of 13

prompt return of the Deposit. notice to Seller prior to April 13, 2006 and Buyer shall be entitled to the lender, then Buyer shall have the right to cancel this Agreement by giving Buyer's lender. If the Audit is not satisfactory to Buyer and/or Buyer's ("Audit"), which Audit shall be subject to the approval of the Buyer and Buyer shall have until April 13, 2006 to obtain an Environmental Audit

dealing with the environmental audit, provided:

the sellers "prior to April 13, 2006." For instance, Paragraph 4(b) of the First Addendum,

In each instance, however, the First Addendum required that the buyers provide notice to

buyer had until April 13, 2006, to determine whether the contingencies had been satisfied.

11. There were many contingencies included in the First Addendum. In each instance, the

the P&S ("First Addendum").

10. After further negotiations, on March 30, 2006, the parties executed a First Addendum to

$20,000.00 check into an IOL T A trust account.

"interest-bearing" account, on or about February 27,2006, Mr. Bruzga deposited the

9. Despite the language in the P&S requiring Mr. Bruzga to deposit the money into an

escrow agent under the P&S.

8. On or about February 21, 2006, Morgan forwarded a $20,000.00 check to Mr. Bruzga, as

contingencies outlined in the P&S.

7. The closing was scheduled to occur within 15 days after the satisfaction of the various

to keep the Deposit and all earned interest. this Agreement fails to close due to Buyer's fault, Seller shall be entitled Agreement fails to close for any reason which is not the fault of Buyer. If upon closing or returned to Buyer along with the Deposit if this p. 4 Page 4 of 13

am beginning to grow increasingly uncomfortable. and I have been unable to reach you and my calls have gone unreturned. I contact you by fax and telephone numerous times over the last few weeks We have patiently waited for the deposit to be returned. I have tried to

L.L.C. ("Purchase and Sale Agreement"). my client terminated the Purchase and Sale Agreement with Danbe Realty, As I am sure you are aware, more than three (3) months have passed since

16. In a letter to Mr. Bruzga dated July 21,2006, Mr. Morgenstern wrote:

Escrow Account." That transfer was made without consulting the buyers or the sellers.

the trust account and placed it into an escrow account designated "Paul W. Bruzga,

15. On or about May 11,2006, Mr. Bruzga withdrew the deposit money ($20,000.00) from

return of the deposit. commence litigation against you, as escrow agent, and your client, for the If my client has not received the deposit by Friday, April 28, 2006, we will

return the deposit to my client immediately. Buccaneer Bay Campground. As escrow agent, it is your obligation to therefore have no intention of proceeding with the acquisition of the We terminated the Purchase and Sale Agreement on April 13, 2006, and

Morgenstern, Esq., demanded the return of Morgan's deposit money, stating:

14. In a letter to Mr. Bruzga dated April 25, 2006, counsel for Morgan, Jordan E.

and that the sellers wanted to close the sale promptly.

termination letter was ineffective because notice was not provided "prior to" April 13,

13. In a letter to Mr. Morgan dated April 20, 2006, Mr. Bruzga informed Mr. Morgan that his

paragraph 4.

copy to Mr. Bruzga, a letter indicating that it was terminating the P&S pursuant to

12. On April 13, 2006, Robert Morgan, a principal of Morgan, telefaxed the Denisons, with a p. 5 Page 5 of 13

Denisons for, what he referred to as, their "damages." Mr. Bruzga further wrote: "It will

his fees therefrom, and was enclosing the difference in a check ($8,564.26) to the

explained that he had withdrawn the deposit money from the escrow account, deducted

20. In a letter to the Denisons dated August 8, 2006, Mr. Bruzga enclosed his final bill and

account.

transfer the balance to his operating account. Rather, he kept the balance in the escrow

Mr. Bruzga considered the remaining balance ($11,547.21) earned legal fees, he did not

19. On August 8, 2006, Mr. Bruzga withdrew $8,564.26 from the escrow account. Although

you have any questions don't hesitate to call. Betty and I would appreciate your prompt attention to this matter and if

with using it to cover some of our expenses. When we receive the deposit money and interest we will then go forward

mountain Road Brookfield NH. 03872. (sic) Daniel and Betty Denison DBA Danbe Realty Located on 100 Moose deposit along with any interest earned should be mailed immediately to time has come to release the deposit and any interest earned. The entire We have endured tremendous expense up to this point and now feel the

located in Effingham NH. contract for which they were to purchase Buccaneer Bay Campground Morgan Acquisitions is now over 90 days in default of the binding

18. To that end, in an undated letter to Mr. Bruzga, Mr. Denison wrote:

they should write him a letter requesting the release of the deposit money.

Mr. Bruzga advised the Denisons that they were entitled to the deposit money, and that

17. At some point in July 2006, the Denisons discussed with Mr. Bruzga the deposit money.

deposit. litigation against you, as escrow agent, and your client, for the return of the If I do not receive the deposit by Friday, July 28,2006, I will commence p. 6 Page 6 of 13

in litigating the buyers' petition in equity for return of the deposit.

27. The Denisons paid an additional $5,070.00 in legal fees for the work the Respondent did

intention to keep the balance as his earned legal fee.

26. On June 25, 2007, the Respondent closed out the escrow account thus affirming his prior

25. On April 6, 2007, the case was ultimately settled through mediation.

Petition for Specific Performance, which the Court (Conboy, J.) treated as a counterclaim.

24. On or about November 3, 2006, Mr. Bruzga filed, on behalf of both himself and Danbe, a

naming Danbe and Mr. Bruzga as respondents.

Superior Court, on Morgan's behalf, a Petition in Equity for Return of the Deposit,

23. On or about September 5, 2006, James M. Cassidy, Esq., filed in Merrimack County

just waiting to receive word that we would like him to file. return of the deposit. The complaint has been prepared and Mr. Cassidy is our New Hampshire counsel, Jim Cassidy to commence our action for the If I do not receive the $20,000 deposit by August 30, 2006 we will instruct

deposit money. Mr. Morgenstern ended his letter as follows:

disagreement with Mr. Bruzga's argument that his clients were entitled to keep the

22. In a letter to Mr. Bruzga dated August 24,2006, Mr. Morgenstern expressed

that Morgan succeeded on any future claim to the deposit money.

21. Mr. Bruzga also advised the Denisons that they should put the money aside in the event

rebut any claims for return of the deposit. Please prepare such a list for your records."

be helpful to have a list of your damages totaling at least the above amount in order to p. 7 Page 7 of 13 (c) When in the course of representation a lawyer is in possession of property in

Rule 1.15(c) reads:

See ide at 606-07.

Ethical lawyering demands much more prudence and integrity. right or interest, and gave it to another for purposes unauthorized and undefined. took money belonging to a third person, entrusted to him, to which he had no legal in which the respondent was involved was not complex, subtle, or uncertain. He respondent explained his conduct, he could not justify it. The escrow transaction the funds as he did and in so doing violated his duties as a fiduciary. Although the without the knowledge or consent of the buyers. He possessed no right to transfer relinquishing control of funds expressly given to him for safekeeping. He did so He did, however, knowingly violate the express terms of an escrow agreement by

of Rule 1.15(a)(I):

See also Nardi's Case 142 N.H. 602-05, (1998), in which the court explained Nardi's violation

law firm's purposes. Such misuse is conversion." safeguard property means that "[a] lawyer may not use funds for his own or his client, promptly upon receipt; and (4) safeguard that property. The duty to Hampshire Supreme Court Rules; (3) identify all other property as property of the clearly designated trust accounts in accordance with the provisions of the New persons separate from the lawyer's own property; (2) deposit funds in one or more Rule 1.15(a)(I) requires an attorney to: (1) hold the property of clients or third

Douglas' Case 156 N.H. 613 (2007) deals specifically with Rule 1.15( a)(I) as follows:

account and the buyer and seller should have been notified prior to transfer. The language in

no authority in law to do so. Such funds should have been deposited in a clearly designated trust

When Mr. Bruzga transferred the deposit funds to an escrow account in his name he had

Panel, were established by clear and convincing evidence:

The Committee determined the following Rulings of Law, as described by the Hearing

II. RULINGS OF LAW p. 8 Page 8 of 13 aggravating or mitigating factors on the ultimate sanction. Id.

Coddington's Case, 155 N.H. 66, 71 (2007). The Committee then considers the effect of any

Committee first categorizes the respondent's misconduct, then identifies the appropriate sanction.

N.H. 503, 513 (2005) (internal quotation marks omitted). In applying these factors the

(d) the existence of aggravating or mitigating factors. Standards, supra § 3.0; Coffey's Case, 152

lawyer's mental state; (c) the actual or potential injury caused by the lawyer's misconduct; and

list the following factors to be considered in imposing sanctions: (a) the duty violated; (b) the

adopted the Standards the Court has considered them when imposing sanctions). The Standards

e.g., ShU/en's Case, 149 N.H. 132, 139 (2003) (noting that although the Court has never formally

Imposing Lawyer Sanctions (2005) (Standards), the Committee looks to them for guidance. See,

Although New Hampshire has not adopted the American Bar Association's Standards for

by clear and convincing evidence.

Having found the above violation, the Committee finds Mr. Bruzga violated Rule 8.4(a)

violations of the above rule.

interest in the remaining funds as payment for his attorney's fees. These actions are clear

an ongoing dispute between the parties as to the deposit fund. Furthermore, he claimed a personal

At the time Mr. Bruzga disbursed $8,564.26 to his clients on August 8, 2006, there was

See Douglas' Case 147 N.H. 538 (2002).

dispute shall be kept separate by the lawyer until the dispute is resolved. interests. If a dispute arises concerning their respective interests, the portion in kept separate by the lawyer until there is an accounting and severance of their which both the lawyer and another person claim interests, the property shall be p. 9 Page 9 of 13 1 Section 4.13 uses the term "Reprimand." The most analogous sanction in Hew Hampshire is a Public Censure.

by making the disbursement, the Respondent substituted his judgment for that of a court. Even if

The deposit language of the P&S was ambiguous and subject to different interpretations, and yet,

The buyers lost their $20,000.00 deposit before a definitive finding of breach was made,

C. Potential or Actual Injury

Mr. Bruzga's action demonstrates, at the least, a negligent state of mind.

B. State of Mind

interest in those funds as his earned legal fee.

retain the balance of those funds into the Paul W. Bruzga Escrow Account, claiming a personal

would not, in the midst of a dispute, disburse a portion of the deposit to his clients, and then

was no dispute between the parties. The buyers certainly were reasonable in expecting that he

reasonable expectation that the respondent would not disburse the deposit money unless there

in these types of matters. By agreeing to serve as escrow agent, Mr. Bruzga offered the buyers a

role of escrow agent. It was a role that he was familiar with from his extensive prior experience

entrusted the Respondent to safeguard the deposit money. The Respondent agreed to take on the

escrow agent for both the sellers and buyers. As escrow agent, both parties to the transaction

commercial real estate sale. The Respondent was acting both as an attorney for the sellers and as

The Committee considered the duty violated, that being the duty of a fiduciary in a

A. Duty Violated

The Committee considered the following factors, as found by the Hearing Panel.

section 4.13: Reprimand I.

The Committee identified the baseline sanction for the misconduct under the Standards in p. 10 Page 10 of 13

circumstances of this case, his long practice and limited disciplinary record, the Committee

While Respondent's conduct warranted the sanction of suspension, given the

is suspension.

Having considered all these factors, the Committee decided that the appropriate sanction

155, 161,872 A.2d 1023 (2005).

professional duty to cooperate with the committee's investigation," Richmond's Case, 152 N.H.

Mr. Bruzga evidenced a cooperative attitude toward the ADO, although "a lawyer has a

aggravator, as was his substantial experience in the practice of law.

Bruzga's selfish interest in claiming the remaining deposit fund for legal fees was considered an

this current matter. The Committee did not place great weight on his prior discipline. Mr.

1993, that arose in the context of his own divorce. There has been no subsequent discipline until

Mr. Bruzga's prior disciplinary record shows a 2000 suspension for conduct occurring in

D. Aggravating and Mitigating Factors

trust.

to the integrity of commercial real estate transactions when a trusted escrow agent betrays that

ethical obligations to safeguard those funds. Finally, there is the harm to the legal profession and

of the Respondent's disbursement of escrow funds in violation of his duty as fiduciary and his

Respondent in legal fees, some of which was presumably caused by litigation expenses as a result

personal interest in the balance of those funds. The sellers paid approximately $16,000.00 to the

seek clarity of the respective interests before disbursing funds to his clients and asserting his own

the Respondent's judgment was correct, the trust given to him by the buyers necessitated that he p. 11 Page 11 of 13

Counsel that the Committee impose the stayed six month suspension in this case. If Disciplinary

Conduct that may result from that complaint may provide a basis for a request by Disciplinary

the ADO on an expedited basis. Any final adjudication of a violation of the Rules of Professional

the Committee and are within the period of the one year stay, that complaint will be processed by

the period of the one year stay that arises out of events that post date adoption of this Order by

If the Attorney Discipline Office (ADO) receives a complaint against Mr. Bruzga during

proof sufficient to demonstrate compliance with this paragraph to Disciplinary Counsel.

registration, and description of the program(s) and copies of materials. Mr. Bruzga shall provide

maintain a record of his attendance and participation in said programming, including proof of

from the practice of law for a period of six (6) months is warranted. The Respondent shall

comply with said conditions will result in a hearing to determine if an immediate suspension

shall not be used as carry over credits in a subsequent NHMCLE reporting year. Failure to

credits beyond the annual ethics requirements, in a traditional classroom setting. Said credits

classroom setting and that the Respondent shall complete six (6) New Hampshire Bar CLE ethics

the Multistate Professional Responsibility Exam during a traditional proctored exam in a

under the following conditions: that during the stay, the Respondent shall successfully complete

The Respondent shall be suspended from the practice of law for six months, stayed for one year

sanction, which will maintain public confidence in the Bar and integrity of the legal profession.

Given the serious nature of the violations the Committee voted to impose the following

goal of preventing similar situations in the future.

staying it on condition that Mr. Bruzga undertake additional meaningful legal education with the

believed the fundamental goal of public protection could be met by imposing the suspension but p. 12 Page 12 of 13

37(3)(c).

appeal this decision to the New Hampshire Supreme Court. See also Supreme Court Rule

Pursuant to Supreme Court Rule 37(A)(III)(d)(2)(D)(4)(A), the parties have the right to

1.IS(a)(I), 1.IS(c), and 8.4(a).

for six months, stayed for one year, with conditions for violations ofNH. Rules Prof. Conduct

For all of the above reasons, Paul W. Bruzga is hereby suspended from the practice of law

this matter. See, N.H. Sup. Ct. R. 37(19).

The Respondent shall pay all costs associated with the investigation and prosecution of

days of final disposition of that complaint.

imposition of the stayed suspension that is based upon a complaint must be initiated within 30

motions are concluded after expiration of the one year period of the stay. Any request for

imposition of the stayed six month suspension even if the proceedings on such complaints or

complaints or motions are filed during such period, they can provide a basis for seeking

shall be permanently stayed provided that there are no complaints or motions pending. If such

At the conclusion of the one year stay described in this Order, the six month suspension

review by the Committee.

Counsel makes such a request, the Respondent shall be entitled to an evidentiary hearing and p. 13 Page 13 of 13

File Betty Denison Paul W. Bruzga, Esquire David A. Horan, Esquire Landya B. McCafferty, Disciplinary Counsel Distribution:

March.i!z.,2010 ,/ p. 14 #07-068

Betty Denison cc: David A. Horan, Esq.

JLK/ges

Please let me know if you need any further information.

suspension that was in effect from March 15, 2010 to March 15, 2011. Accordingly, Mr. Bruzga is no longer subject to the terms of the stayed

order issued by the Professional Conduct Committee. appears to have completed the requirements listed in the March 15, 2010, I am writing to inform the Committee that Paul W. Bruzga, Esquire,

Dear ~v1s. Fazzino:

Re: Bruzga, Paul W. advs. Betty Denison -

Concord, New Hampshire 03301 4 Chenell Drive, Suite 102 Professional Conduct Committee New Hampshire Supreme Court Holly B. Fazzino, Administrative Coordinator

Hand Delivered

Assistant General Counsel Staff Auditor Janet F. DeVito Craig A. Calaman, CPA Deputy General Counsel Assistant Disciplinary Counsel Thomas V. Trevethick www.nhattyreg.org James L. Kruse 603-224-5828 • Fax 603-228-9511 General Counsel Concord, New Hampshire 03301 Disciplinary Counsel James L. DeHart 4 Chene II Drive, Suite 102