Opinion 05-130(A)

December 8, 2005

Digest:         A full-time judge must withdraw from client representation and cease accepting new clients before assuming office January 1 after the judge’s November election. The professional corporation constituting the judge’s solo law practice may remain in existence with the judge as shareholder, but solely for the purpose of winding up its affairs, including collecting fees, including contingency fees, sending periodic bills to former clients, maintaining an escrow account to process fees, and submitting final corporate income tax returns reflecting income earned before assuming office. The judge must dissolve the corporation as soon as practicable after assuming office and may not transact corporate business after December 31, except activities necessary for its dissolution. During that time, and notwithstanding consent, the judge may not preside over any matter in which the judge’s former associates appear. The judge may not retain or renew a real estate brokers license once he/she assumes judicial office. The full-time judge may not be an owner, corporate officer, a principal, or otherwise participate in a sandwich franchise business.

Rules:          NYS Constitution, Article 6, section 20 (b)(4); 22 NYCRR 100.4(G); 100.4(D)(2); 100.4(D)(3); 100.3(E)(1); Matter of Intemann, 73 NY2d 580 (1989); Opinions 04-137; 04-02; 99-151 (Vol. XVIII); 97-113 (Vol. XVI); 96-141, (Vol. XV); 95-100 (Vol. XIII); 95-74 (Vol. XIII); 95-12 (Vol. XIII); 94-113 (Vol. XIII); 94-18 (Vol. XII); 93-44; 89-38, (Vol. III); 89-34 (Vol. III); 88-118 (Vol. II).

Opinion:

         A newly-elected full-time judge asks a series of questions about winding-down his/her one person law practice, organized as a professional corporation, about the collection of fees after assuming office, about the propriety of continuing in certain family-held real estate and investment corporations, and about continuing a recently initiated business venture after assuming judicial office.

         As for winding down his/her law practice, the judge must withdraw from client representation and cease accepting new clients before assuming office on the January 1st after the November election. NYS Constitution, Article 6, section 20 (b)(4); 22 NYCRR 100.4(G); Matter of Intemann, 73 NY2d 580 (1989); Opinions 89-34 (Vol. III); 89-38 (Vol. III); 96-141 (Vol. XV), 04-137. While neither the judge nor the corporate entity comprising the judge’s solo law practice may continue practicing law, it is the opinion of this Committee that the professional corporation may remain in existence and the judge may remain a shareholder, but only to wind up its affairs. Permissible activities include collecting fees and contingency fees to the extent they were earned before January 1, sending periodic bills to former clients, and maintaining an escrow account to process fees earned prior to assuming office.

          Opinion 88-118 (Vol. II); 93-44 (Vol. XI); 94-18 (Vol. XII); 95-12 (Vol. XIII). After January 1, the judge may file a final corporate income tax return reflecting income earned by the judge prior to assuming office.

         The judge must dissolve the professional corporation as soon as practicable after assuming office and may not transact any business of the corporation after December 31 beyond those above-mentioned activities necessary to effectuate dissolution. Opinion 97-09 (Vol. XV). During that time, and notwithstanding consent, the judge may not preside over any matter in which the judge’s former associates appear. 22 NYCRR 100.3(E)(1); Opinion 04-137.

         Furthermore, the judge may not retain or renew a real estate brokers license once assuming judicial office. Opinion 95-100 (Vol. XIII). The Rules Governing Judicial Conduct, however, do allow a judge to hold and manage investments of the judge and members of the judge’s family, including real estate. 22 NYCRR 100.4(D)(2).

         Regarding the judge’s participation as an owner, corporate officer, a principal, or otherwise in a sandwich franchise business, the Rules Governing Judicial Conduct are clear: they prohibit a full-time judge from serving as an officer, director, manager, general partner, advisor, employee or other active participant of any business entity. The listed exceptions do not apply in the instant circumstances. 22 NYCRR 100.4(D)(3); Opinions 04-02; 99-151 (Vol. XVIII); 97-113 (Vol. XVI); 95-74 (Vol. XIII); 94-113 (Vol. XIII). Therefore, this full-time judge may not participate as an owner, corporate officer or otherwise as a principal in a sandwich franchise business.