Opinion 12-160

October 25, 2012

Digest:         (1) A town/village justice who learns that the bank did not credit a deposit to the court’s account, and who believes there was no malfeasance on the part of court personnel entrusted with the deposit, may reimburse all or part of the missing court funds from personal assets, and also may accept the court clerk’s voluntary offer to do so. (2) The judge need not report that the missing funds were personally replenished, unless he/she is legally required to do so. (3) To the extent that the missing deposit included money orders or checks tendered by individual defendants, the judge may permit the court clerk to ask them to issue replacements.

Rules:          22 NYCRR 100.2; 100.2(A); 100.3(C)(1); 22 NYCRR Part 101; 22 NYCRR 214.9(a); State Finance Law §99-a(1); Town Law §27(1); Village Law §4-410(1)(b); Uniform Justice Court Act §2021(1); Opinions 12-89; 12-43; 10-93; 09-116; 08-99; 04-135; 1983 Ops St Comp No. 83-174; 1979 Ops St Comp No. 79-285.

Opinion:

         A town/village justice has learned that cash and checks tendered to the court as payment for fines and/or fees are missing. According to the judge, a court clerk prepared several deposits and transported them to the bank. However, the court clerk subsequently discovered that the bank did not credit one of the deposits to the court’s account, reported the deficiency to the judge, and has offered to reimburse the missing funds. The court clerk has prepared a list of the names and addresses of the defendants whose payments were included in the missing deposit.

         The Judge asks the following questions:

(1) May the judge permit the court clerk to reimburse the missing funds?

(2) May the judge reimburse the missing funds?

(3) May the judge reimburse a portion of the missing funds and permit the court clerk to reimburse the remainder?

(4) Is the judge required to notify any officer of the municipality that the funds are missing? Is the judge required to do so if the judge and/or the court clerk reimburse the missing funds?

(5) If the judge notifies the appropriate officer of the municipality that the funds are missing and the municipality does not replenish the missing funds, may the judge authorize the court clerk to contact the individuals who tendered the missing checks and/or money orders and ask them to issue replacements?

         A judge must respect and comply with the law, and always act in a manner that promotes public confidence in the judiciary’s impartiality and integrity (see 22 NYCRR 100.2[A]). Therefore, a judge must diligently discharge the judge’s administrative responsibilities without bias or prejudice (see 22 NYCRR 100.3[C][1]). Although this Committee cannot comment on legal questions (see generally 22 NYCRR Part 101), the Committee has previously recognized that town and village justices are subject to stringent legal requirements in accounting for funds received in their judicial capacity (see Opinions 12-89; 12-43; 10-93; 09-116; 04-135). Pursuant to the Uniform Rules for the New York State Trial Courts, every town and village justice must deposit all monies received in his/her judicial capacity as soon as practicable in a separate bank account in his/her name as a judicial officer in a bank or trust company within New York State no later than 72 hours, exclusive of Sundays and holidays, from the day the monies are received (see 22 NYCRR 214.9[a]). Thereafter, the judge must pay the monies to the New York State Comptroller (Comptroller) within the first ten days of the month following collection (see State Finance Law §99-a[1]; Town Law §27[1]; Village Law §4-410[1][b]; Uniform Justice Court Act §2021[1]).

         The Comptroller has opined that a town justice is personally liable for the theft of public funds (see 1979 Ops St Comp 79-285). The Comptroller also has opined that “only court personnel subject to the direction and control of the justice should receive, handle and deposit court moneys” (see 1983 Ops St Comp 83-174; accord, e.g., Opinion 10-93).

         In light of a town/village justice’s personal liability for public funds, it is ethically permissible for the inquiring judge to reimburse all or part of the missing court funds and to accept the court clerk’s offer to do so as well. However, a judge must not ever coerce a staff member to reimburse missing funds, as doing so would create an appearance of impropriety (see generally 22 NYCRR 100.2).

         Unless the inquiring judge is legally required to report the missing funds to a municipal official, e.g., based on statutory requirements or to comply with an insurance contract between the municipality and its insurer, the judge is not ethically obligated to report the missing funds to a municipal official. In addition, the inquiring judge indicates he/she believes the court clerk made an honest mistake and does not suspect any criminal or official misconduct that would require the judge to report the facts to his/her administrative judge (see Opinion 08-99). However, the Judge must account for the reimbursed funds as required by law (see State Finance Law §99-a[1]; Town Law §27[1]; Village Law §4-410[1][b]; Uniform Justice Court Act §2021[1]).

         Finally, unless prohibited by law or otherwise, the judge is not ethically barred from authorizing the court clerk to contact the individuals who tendered the missing checks and/or money orders to ask them to issue replacements.