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Jul 20, 2011 1:08 PMPublication: The Southampton Press

State Bars Westhampton Beach Attorney From Practicing Law For Five Years

Jul 20, 2011 1:28 PM

Starting on August 4, Westhampton Beach attorney Peter Price will have to find another way to make a living, at least for the next five years.

A five-member state judicial panel this month suspended Mr. Price—a local attorney who sued Westhampton Beach for $10 million in 2009 and served legal papers to the village earlier this year regarding its ongoing legal battle over the proposed creation of a religious boundary—from practicing law for five years after it found him guilty of 11 of 12 counts of legal misconduct, according to court papers.

Mr. Price, who did not return messages left at his Library Avenue law office, was slapped with the charges based on two separate incidents, one in 2005 and another in 2007, according to the 12-page ruling handed down earlier this month.

Six of the charges were filed over the 2005 sale of an automotive business in Oakdale to another firm. Records show that Mr. Price, who represented SDLH Automotive in the transaction, in which it was being acquired by Great South Bay Automotive, misappropriated funds entrusted to him in an escrow account, failed to abide by the terms of the escrow agreement, and engaged in conduct adversely reflecting his fitness as a lawyer.

In the second incident, the panel ruled that Mr. Price should have recused himself from a 2007 transaction in which he represented Frederick and Carolyn Rosenthal of Eastport, who were trying to sell their home in Westhampton Beach that was being leased by Mr. Price’s mother, Mirra Price, at the time. Records show that Mr. Price withdrew from representing the couple in the sale of their home on February 7, 2008, and six days later sued the Rosenthals for breach of contract on behalf of his mother.

This month’s ruling found Mr. Price guilty of five of six charges related to that incident, stating that he failed to disclose to the Rosenthals that he could not represent them due to the conflict of interest, violating the state ethics code for lawyers. The ruling does not state what charge was dismissed. The lawsuit filed on behalf of his mother was dismissed by the Southampton Town Justice Court in September 2008, though Mr. Price is appealing that ruling in county court. The case was still pending as of October 2009.

In its July 5 ruling, the panel, which is part of the New York Supreme Court’s Appellate Division, agreed to bar Mr. Price from practicing law for five years, effective Thursday, August 4. He is eligible to apply for reinstatement on February 4, 2016.

Mr. Price has been involved with two lawsuits filed against Westhampton Beach in recent years. He sued the village in 2009, and is seeking $10 million in damages, after village officials tried to force him to legalize his law office, which is located behind his home on Library Avenue. That case is still pending in U.S. District Court in Central Islip, according to Village Attorney Richard Haefeli.

Earlier this year, Mr. Price had served subpoenas to several village officials, all defendants in a lawsuit filed by the East End Eruv Association. The nonprofit is seeking permission to establish a symbolic Jewish religious boundary in western Southampton Town, which would encompass most of Westhampton Beach. Robert Sugarman of Weil, Gotshal & Manges LLP, the Manhattan firm representing the association in the lawsuit, said the firm asked Mr. Price to serve the legal papers, but emphasized that he did not handle any other tasks concerning the lawsuit. “He never did any legal work or participated in any legal proceedings in the case,” Mr. Sugarman said.

Regarding the 2005 transaction involving the two automotive parts firms, the panel determined that Mr. Price mishandled funds entrusted to him by his client, SDLH Automotive. In the sale, which was executed on October 21, 2005, Mr. Price was listed as the escrow agent in charge of distributing $82,393 in escrow funds. A portion of those funds was to be used to pay off state taxes that would be owed by his client.

The ruling, however, states that Mr. Price failed to pay the tax liability that SDLH Automotive owed the state, meaning that the purchaser, Great South Bay Automotive, was responsible for paying $58,890 in state taxes from the transaction. In April 2006, Great South Bay Automotive sued Mr. Price and SDLH Automotive. The outcome of that suit was not immediately clear.

Rob Despres, a former principal in Great South Bay Automotive, declined to discuss the recent ruling when reached on Tuesday. He said he was no longer involved with the company. “I don’t think it’s appropriate for me to comment,” Mr. Despres said. “But they ruled against him for a reason.”

Attempts to reach officials at SDLH Automotive for comment were unsuccessful.

The Rosenthals, the couple involved in the 2007 incident, also could not be reached for comment.

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