## Facts

- Larry Blumenstyk was admitted to the New Jersey bar in 1977 and practiced as a solo attorney, maintaining an attorney trust account for client funds.
- Blumenstyk made significant personal financial plans, including a family vacation and his son’s Bar Mitzvah, expecting a $100,000 distribution from his parents’ trust.
- The anticipated trust distribution was delayed, and Blumenstyk felt unable to discuss his financial situation with his parents or his wife.
- Rather than canceling the planned events or obtaining a loan, Blumenstyk withdrew and used approximately $85,000 from his attorney trust account for personal expenses without client authorization.
- The funds he used belonged to clients (and/or third parties with interests in client matters) and were required to remain in the trust account until properly disbursed.
- After Blumenstyk later received the distribution from his parents’ trust, he replenished the trust account and repaid the amounts he had taken.
- Disciplinary authorities charged Blumenstyk with knowing misappropriation of client trust funds, including violations of RPC 1.15 (safekeeping property) and RPC 8.4(c) (dishonesty).
- The Disciplinary Review Board recommended disbarment, and the matter came before the Supreme Court of New Jersey for final action.

## Issues

1. Did Blumenstyk’s unauthorized use of client trust funds constitute knowing misappropriation in violation of RPC 1.15 and RPC 8.4(c)?
2. If so, did repayment after the fact and claimed personal financial pressure justify discipline less than disbarment?

## Decision

- The Supreme Court of New Jersey reviewed the record de novo in the attorney-discipline proceeding.
- The Court found clear and convincing evidence that Blumenstyk knowingly misappropriated client trust funds by intentionally using money he was required to hold intact and had no authority to spend.
- The Court held that later repayment did not change the nature of the misconduct.
- Applying New Jersey’s mandatory sanction for knowing misappropriation, the Court accepted the recommendation for disbarment and ordered Blumenstyk disbarred.

## Legal Principles

- Knowing misappropriation occurs when a lawyer intentionally uses client trust funds, knowing the funds belong to a client (or another entitled person) and knowing the lawyer has no permission to use them.
- A lawyer’s intent to “borrow” and later replace trust funds does not prevent a finding of knowing misappropriation.
- Repayment, even if complete, does not erase the violation or convert knowing misappropriation into a lesser offense.
- Under New Jersey’s disciplinary doctrine, knowing misappropriation of client trust funds results in disbarment absent truly exceptional circumstances; ordinary personal or financial stress is not enough.

## Conclusion

In *In re Blumenstyk*, the Supreme Court of New Jersey disbarred an attorney who, facing a delayed family trust distribution and personal financial demands, took roughly $85,000 from his client trust account without authorization and used it for personal expenses; the Court found knowing misappropriation by clear and convincing evidence and ruled that later repayment and personal pressures did not justify a sanction short of disbarment.


In re Blumenstyk, 704 A.2d 1 (1997)