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A decade-old practice that let lawyers cash in on rising real estate prices by steering business to lawyer-connected title companies seems to have ended, following a crackdown by state ethics authorities. Two lawyers were disciplined earlier this year and charges are pending against two others for what the Office of Attorney Ethics calls “Ocean City practice.” It began in and around Ocean City, N.J., in Cape May County about 1994, carried out by attorneys who owned or worked for title companies, ethics officials say. The lawyers provided real estate agents with boilerplate sales contracts that omitted the usual three-day attorney-review provision and specified that the lawyer’s company would provide title insurance. There was no charge for the contracts but the lawyers made money through the title companies. Realtors were happy because their commissions were locked in as soon as a contract was signed. The problem was not the lack of an attorney-review clause, which is not required unless a realtor draws up the agreement. Rather, the lawyer’s tie to the title company created a conflict of interest that in many cases was not disclosed to the buyers, who should also have been told it would be advisable to have independent counsel review the contract. One title company to benefit from the practice was Shore Title Agency, owned and run by Raymond Poling, a partner with the law firm of Josephson Poling & Wilkinson in Sea Isle City. On May 23, the Supreme Court reprimanded Poling after he admitted violations of New Jersey Rule of Professional Conduct 1.4(b), which requires lawyers to explain matters sufficiently so clients can make informed decisions on representation; RPC 1.7(b), which bars conflicts of interest; RPC 1.8(a), which bars business transactions with clients; and RPC 1.8(f), which prohibits payment of legal fees by someone other than the client. The Disciplinary Review Board had recommended a reprimand rather than a suspension because there was no indication any client was harmed. Cory Gilman, an associate at Poling’s firm who also drafted the contracts, was admonished on May 23 for an imputed conflict of interest under RPC 1.10 and failure to explain the transaction under RPC 1.4(b). His discipline was lighter because he was the junior lawyer and had no financial stake in the title company. Poling, who continues to run Shore Title and has a law office listed in Sea Isle City, did not return calls for comment. Neither did Gilman, now a partner with Avalon’s Josephson Wilkinson & Gilman. CHARGES PENDING Joel Mott III, who is scheduled for a hearing before the Disciplinary Review Board on Jan. 12, once practiced with Mott Vernon & Mott and owned Ocean Abstract Co., both in Ocean City. After moving to Fernandina Beach, Fla., in 1999, he continued a limited law practice in New Jersey. He also continued to operate Ocean Abstract, preparing contracts sans attorney-review clauses. In September, Mott stipulated to violating RPCs 1.4(b), 1.7(b), 1.8(a), as well as two opinions by the Advisory Committee on Professional Ethics: 532, which requires lawyers to keep their law practices separate from other business interests; and 682, which forbids lawyers who own title companies from referring law clients to them. The OAE is asking the DRB to reprimand Mott. Another attorney, Robert Laveson, is accused of the same violations as Mott for no-review contracts he wrote while employed in the Ocean City office of Congress Title. He is also charged with unauthorized practice under RPC 5.5(a) for drafting the contracts and related conduct between 2000 and 2002, when he was ineligible to practice law. Laveson admitted in his answer that he prepared the contracts but denies he did so for realtors or that he received a financial benefit, though he did anticipate buyers would buy title insurance from his employer. The ethics complaint against Laveson is scheduled for a hearing before a special master in January. Asked whether other lawyers have been implicated in the so-called Ocean City practice, OAE Director David Johnson Jr. said he is not at liberty to disclose whether there are additional grievances that have not yet moved to the public complaint stage or whether there were others that will never become public because the lawyers entered into an agreement in lieu of discipline. Johnson also declines to identify who originated the ethics cases against the four lawyers. A stipulation filed in the Mott case, however, says the case originated with James Cooper, chairman of the board of the Title Company of Jersey, based in Ocean City, where Laveson worked before getting the job with Congress Title. Cooper, who is a partner with Atlantic City’s Cooper, Levenson, April Niedelman & Wagenheim, could not be reached for comment. Michael Dowling, president of the Title Company of Jersey, says it lost a lot of business over the years to competitors who used the practice but in the past year or two, since the ethics cases began, the practice has largely ended. Edward Eastman Jr., executive director of the New Jersey Land Title Association and the vice chairman of the State Bar Association’s section on real estate, calls the practice “an aberration” that he never even heard of until the ethics cases were filed. Another lawyer who is familiar with the situation says the practice was “widespread” and “a few lawyers took the hit for everyone else. Just about every title company [in the area] was doing it.”

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