Opinion 22-157
October 27, 2022
Digest: Where the remaining tasks are essentially ministerial and do not involve legal work, a new full-time judge may complete their service as a referee in foreclosure, pursuant to a court appointment that was made before the judge assumed the bench. Thus, the judge may, if necessary, conduct closings after January 1st, hold the proceeds in escrow pending a court order directing their release, and seek a court order regarding disposition of unresolved monies remaining in an escrow account.
Rules: 22 NYCRR 100.2; 100.2(A); 100.3(A); 100.4(G); Opinions 20-178; 16-164; 13-164; 10-47; 10-183; 06-57; 03-37; 02-13; 96-89; 95-12.
Opinion:
The inquiring attorney is running unopposed for full-time judicial office and is starting to prepare for the transition. The attorney is currently serving as a referee in several foreclosure proceedings and expects to still have money in an IOLA account as of December 31st. The account will contain only the proceeds from two upcoming court-ordered auctions, plus a small sum remaining from an overpayment in an earlier transaction.1 The attorney first asks if it is permissible to continue to hold those specified funds in escrow after assuming judicial office. If so, the attorney then asks if it will be permissible to (a) complete their remaining duties as a referee at closings after December 31st, without compensation; and (b) seek a court order regarding disposition of the small refund, if it remains unclaimed by the purchaser.
A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2), and must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). A judge’s judicial duties “take precedence over all the judge’s other activities” (22 NYCRR 100.3[A]), and a full-time judge may not practice law (see 22 NYCRR 100.4[G]), and may not complete unfinished legal work after assuming the bench (see Opinion 96-89).
Although a judge is not eligible for appointment as a referee in foreclosure (see e.g. Opinions 10-183; 03-37), we have said a new judge may complete their responsibilities as a referee in a foreclosure, pursuant to a court appointment made before the judge assumed the bench (see Opinion 10-183). For a full-time judge, we have emphasized that because a referee in a mortgage foreclosure action need not be an attorney, serving in the position “would not necessarily constitute the practice of law,” especially where the remaining tasks are “merely ministerial, administrative functions” (Opinion 96-89). Accordingly, we have advised that a full-time judge may “perform various functions and ministerial acts” pursuant to such previously received foreclosure referee appointments (Opinion 10-47; see Opinion 03-37), but should complete such service within one year, or secure a substitute within one year after assuming the bench (see Opinions 16-164; 13-164). Relatedly, we said a judge may continue to hold funds in escrow, which were deposited in connection with the judge’s former role as a referee in foreclosure prior to assuming the bench, pending a court order directing their release (see Opinion 20-178).
Permissible ministerial functions that may be completed after assuming full-time judicial office have included execution of the referee’s deed and related papers necessary to accomplish transfer of title to the real property in question (see Opinion 96-89), executing new documents to replace those the judge previously signed as referee before assuming the bench (see Opinion 03-37), signing a Certificate of Deposit to effect the distribution of surplus monies (see Opinion 06-57), and collecting rents as receiver in a foreclosure matter (see Opinion 16-164). We have also said a full-time judge may sign a consent to discontinue and cancel a lis pendens, provided it is the judge’s last act as referee and there is no compensation for doing so (see Opinion 02-13).
With respect to the small refund that may potentially remain unclaimed after December 31st, we consider Opinion 95-12. In that opinion, a new full-time judge’s former client and the former client’s spouse had reached an impasse concerning the proper distribution of escrowed funds, thus preventing the judge from distributing the funds before assuming judicial office. If the parties refused to consent to the judge transferring the funds to another escrow agent, we said that the judge could commence an action on the judge’s own behalf to resolve the situation, whether as escrowee seeking appointment of a successor or as stakeholder asking the courts to decide the parties’ underlying dispute (see Opinion 95-12).
Here, too, to the extent that the remaining tasks are essentially ministerial and do not involve legal work, we conclude that the inquiring judge may complete their service as a referee in foreclosure, pursuant to a court appointment that was made before the judge assumed the bench. Thus, the judge may, if necessary, perform the duties of a referee at a closing which takes place after December 31st, hold the proceeds in escrow pending a court order directing their release, and seek a court order regarding disposition of unresolved monies remaining in an escrow account.
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1 The attorney hopes to conduct the closings and dispose of some or all of the proceeds before assuming judicial office, but recognizes this may depend on factors outside the attorney’s control.