Opinion 05-130(B)

December 8, 2005

Digest:         A full-time judge may accept rent from the lawyer who assumed the judge’s law practice and office housed in a building owned by the judge. However, the judge must disclose the relationship and exercise recusal (subject to remittal) for two years after receiving the final payment from the sale or assumption of the practice. As long as the aforesaid lawyer maintains a landlord/tenant relationship with the judge, the same rule of disclosure, recusal, and remittal applies. A judge may manage a family-owned corporation in which the judge and the judge’s children are the sole shareholders, but may not appear in any court representing that corporation.

Rules:          22 NYCRR 100.4(D)(1)(c); 100.4(D)(2); 100.4 (D)(3)(b); Opinions 00-67 (Vol. XIX); 99-84 (Vol. XVIII); 97-44 (Vol. XV); 95-11 (Vol. XIII); 94-05 (Vol. XII); 91-143 (Vol. VIII); 91-108 (Vol. VIII); 89-37 (Vol. III).

Opinion:

         A full-time judge asks 1) whether it is ethically permissible to accept rent from the lawyer who assumed the judge’s law practice and office, which is housed in the judge’s building; and 2) whether it is proper to remain a principal in a corporation in which the judge and the judge’s children are the sole shareholders and principals. This corporation’s sole function is to hold and manage the family investments, including real estate.

         Regarding the first question, the judge may accept rent from the lawyer. However, the judge must disclose the relationship and exercise recusal, subject to remittal, in proceedings involving that lawyer for two years after the final date of payment arising out of the sale or assumption of the practice. The same restrictions also apply for as long as the lawyer and judge continue their landlord/tenant relationship. 22 NYCRR 100.4(D)(1)(c); Opinions 00-67 (Vol. XIX); 97-44 (Vol. XV); 95-11 (Vol. XIII); 94-05 (Vol. XII); 91-143 (Vol. VIII); 91-108 (Vol. VIII); 89-37 (Vol. III).

         As for the family owned corporation, this Committee has previously opined that a Family Court Hearing Examiner (now renamed Support Magistrate) may own stock in, and be an officer of a family-owned corporation in which the Hearing Examiner and his/her spouse were the sole shareholders, but the Hearing Examiner may not represent the corporation in any court.. Opinion 99-84 (Vol. XVIII); 22 NYCRR 100.4(D)(2); 100.4 (D)(3)(b). The Committee thus observed that a Hearing Examiner is held to the same standards of ethical conduct as a judge in this situation. Applying these provisions here, this Committee concludes that the inquirer is also covered by this very limited exception, and thus may manage and participate in this family-owned corporation unless and until a non-family member becomes a shareholder, at which point the judge may not participate beyond stock ownership. Opinion 99-84.