## Facts

- Ernest H. Hammer was admitted to practice law in New York in 1959 and maintained an office within the First Department’s disciplinary jurisdiction.
- The Departmental Disciplinary Committee served Hammer with a notice and statement of nine charges alleging violations of the Code of Professional Responsibility, including neglect, serving a false document, misuse of an IOLA account, commingling funds, and failure to satisfy a judgment.
- A Hearing Panel conducted evidentiary hearings in early and mid-1997 and later issued findings and a recommended sanction.
- The Panel sustained three charges concerning Hammer’s handling of his IOLA account and dismissed the remaining charges (including one charge withdrawn after a witness died).
- Hammer admitted that his IOLA account contained both client escrow funds and his own funds.
- Based on admissions and account evidence, the Panel found that Hammer failed to maintain the IOLA account for the exclusive use of client-related funds, commingled personal and client funds, and failed to keep adequate records for the account.
- The Panel recommended public censure without conducting a separate sanction hearing.
- The Disciplinary Committee petitioned the Appellate Division to confirm the Panel’s findings and impose public censure.

## Issues

1. Whether the evidence supported findings that Hammer violated DR 9-102 by failing to keep his IOLA account exclusively for client funds, commingling funds, and failing to maintain required escrow-account records.
2. What sanction was appropriate for the sustained IOLA-related misconduct.

## Decision

- The court confirmed the Hearing Panel’s findings sustaining the IOLA-related charges and dismissing the remaining charges.
- The court held that Hammer violated DR 9-102(B)(1) by failing to keep the IOLA account for the exclusive use of funds belonging to others incident to the practice of law.
- The court held that Hammer violated DR 9-102(A) by commingling client funds with personal funds.
- The court held that Hammer violated DR 9-102(D)(1) and (2) by failing to maintain adequate records for the IOLA account.
- The court imposed public censure.

## Legal Principles

- Attorney escrow/trust accounts must be maintained for the exclusive use of client or third-party funds held incident to the practice of law (DR 9-102(B)(1)).
- Commingling client funds with an attorney’s personal funds in an escrow/trust account constitutes professional misconduct (DR 9-102(A)).
- Attorneys must maintain complete and accurate escrow-account records as required by the disciplinary rules (DR 9-102(D)(1)–(2)).
- In attorney-discipline matters, the court may confirm a hearing panel’s factual findings and impose discipline proportionate to the sustained misconduct.

## Conclusion

The Appellate Division confirmed findings that Hammer commingled funds and failed to maintain an IOLA account and records as required by DR 9-102, and it publicly censured him based on the limited scope of sustained misconduct and the Panel’s recommendation.


In re Hammer, 253 A.D.2d 226, 687 N.Y.S.2d 71 (N.Y. App. Div. 1st Dep’t 1999)