On Wednesday, November 1, 2023, the Supreme Court of New Jersey issued an order reprimanding Attorney David L. Johnson. The reprimand stems from Johnson’s involvement in multiple business transactions with a client between 2002 and 2009 that did not comply with ethical rules governing such dealings.
The case is entitled “In the Matter of David L. Johnson,” with case no. 086295.
According to a September 27, 2021 determination by the Disciplinary Review Board (DRB) considering Johnson’s case, he entered into a series of loans and financing deals involving Destiny Plastics, Inc., a manufacturing company, and Paul Wiebel, a long-time client of Johnson’s law firm. Johnson admitted to providing seven loans totaling over $950,000 to Wiebel between 2002 and 2005 without properly documenting the loans or obtaining Wiebel’s fully informed consent in writing, as required by New Jersey Rules of Professional Conduct (RPC) 1.8(a).
The DRB found that the largest transaction was a July 2003 sale and lease agreement between Johnson’s newly-formed company, Jawbone LLC, and Destiny Plastics. Jawbone loaned $430,000 to Destiny Plastics to purchase plastic cutting molds, with Wiebel signing as a personal guarantor. However, Johnson failed to advise Wiebel in writing of the need for independent legal advice regarding the transaction or obtain Wiebel’s written consent to the essential terms, again violating RPC 1.8(a).
Destiny Plastics eventually defaulted on the Jawbone loan. To repay his outstanding debts to Johnson totaling over $950,000, Wiebel in 2009 assigned his ownership interest in another company, Silver Ridge Rocky Mountain LLC, to Johnson. The DRB determined Johnson’s conduct in these eight instances constituted violating the prohibition on lawyers entering into undisclosed business transactions with clients in RPC 1.8(a).
While noting the large total amount of loans at issue could warrant a censure, the DRB imposed a reprimand given Johnson’s otherwise clean disciplinary record spanning over 40 years, his acknowledgment of wrongdoing, and his lack of other ethics violations.
The New Jersey Supreme Court upheld the reprimand by order on November 1, 2023. Johnson will now have a published disciplinary sanction on his record as an attorney in New Jersey.
The Disposition states:
“It is ORDERED that David L. Johnson of Newton is hereby reprimanded, and it is further ORDERED that the entire record of this matter be made a permanent part of respondent’s file as an attorney at law of this State.”
According to avvo.com, Mr. Johnson is a litigation attorney in Newton, New Jersey. He attended the University of Maryland School of Law. He acquired his law license in New Jersey in 1975.
A copy of the original filing can be found here.