Filed June 5, 2013
In re Ernesto Dos Reis Borges, Jr.
Commission No. 2010PR00154
Synopsis of Review Board Report and Recommendation
The Administrator filed a two count Complaint alleging that Respondent neglected two client matters and failed to deposit money given to him by a client for filing fees into a client trust account. In the Jennings matter, Respondent was retained by the client to place her property into a land trust. He failed to perform the services for which he was retained and deposited $123 for filing fees into his operating account. The Administrator alleged Respondent engaged in misconduct, including violations Rules 1.3, 1.15(a) and 8.4(a)(5) of the 1990 Rules of Professional Conduct. In the Steward matter, Respondent was retained to file a lawsuit on behalf of Steward alleging discrimination by his employers. Respondent delegated the case to associates who allowed the lawsuit to be dismissed. The Administrator charged Respondent with violating Rules 1.3 and 8.4(a)(5).
The Hearing Board found Respondent violated Rules 1.3, 1.15(a) and 8.4(a)(5) in the Jennings matter. In the Steward matter, the Hearing Board concluded there was no question that the case had been mishandled but a majority of the Board concluded that Respondent should not be subject to discipline, relying on In re Vrdolyak, 137 Ill.2d 407, 560 N.E.2d 840 (1990). The Hearing Board considered the mitigating evidence of Respondent's military service, his pro bono services, and his reputation in the community. The Hearing Board concluded that Respondent's prior discipline, a censure in 2008 for a failure to file a tax return, was not a significant aggravating factor. The Hearing Board recommended Respondent be censured and required to successfully complete the ARDC Professionalism Seminar within one year.
Upon review, the Administrator argued that the Hearing Board erred in failing to find Respondent violated Rules 1.3 and 8.4(a)(5) with respect to his representation of Mr. Steward. The Administrator contended that, unlike in the Vrdolyak case, Respondent had reason to know that his associates were not acting with reasonable diligence and were not keeping the client reasonably informed as to the status of the matter.
The Review Board distinguished the Vrdolyak case, and noted that an attorney cannot avoid his professional obligations by delegating work to others. Because Respondent had ample reason to know that the client's case was being mishandled, the Review Board concluded Respondent thereby violated Rules 1.3 and 8.4(a)(5). The Review Board concluded that Respondent demonstrated a need for law office management assistance. The Review Board recommended that Respondent be suspended from the practice of law for one year, with the suspension stayed after sixty days, by a two year term of probation subject to certain conditions.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
ERNESTO DOS REIS BORGES, JR.,
Commission No. 2010PR00154
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
The Administrator charged the Respondent with neglecting two client matters and mishandling funds. In the Jennings matter, the Respondent admitted facts demonstrating that he failed to act with reasonable diligence in violation of Rules 1.3, failed to properly safe keep client funds in violation of Rule 1.15(a), and engaged in conduct prejudicial to the administration of justice in violation of Rule 8.4(a)(5) when he agreed to prepare trust documents, failed to perform these services and deposited $123.00, given to him for filing costs for a trust deed, into his firm operating account. In the Steward matter, the Administrator also charged the Respondent with violating Rules 1.3 and 8.4(a)(5) for the neglect of a client's employment discrimination case. He denied the misconduct. The Hearing Board found the evidence was insufficient to prove these charges. The Hearing Board recommended that Respondent be censured.
The Administrator has filed exceptions to the Hearing Board's findings on the Steward matter and the Hearing Board's sanction recommendation. For the reasons explained below, we conclude that the evidence was sufficient to prove the violations charged in
connection with the Steward matter and recommend a sanction of suspension for one year with suspension stayed after 60 days followed by a period of probation for two years.
Respondent became a member of the bar in 1985. He operates the Law Offices of Ernesto D. Borges, Jr., P.C. ("the Borges firm"). Ordinarily, he employs six or seven associates. He has no partners and describes himself as the "face" and "rainmaker" of the firm. He meets with most, if not all, the potential clients of the firm, but appears in court only once or twice a year. At the time of the alleged misconduct, he claims that his firm had over 5,000 matters pending, most of them bankruptcy matters. He assigns one associate to supervise the bankruptcy matters, and another to supervise the non-bankruptcy matters. Associates do not report the status of any matters to him unless there's a problem. The Respondent conceded he did not have a good docketing system and entrusted the associates to monitor firm cases.
(b) Willie Steward's Case
On May 6, 2009 Willie Steward ("Steward") engaged the Borges firm. He signed a contingency fee agreement. Patrick Reda ("Reda") signed the agreement on behalf of the firm. On May 8, 2009 the Borges firm filed a complaint in the Circuit Court of Cook County on behalf of Steward against the United Armored Services and J.P. Morgan Chase Bank. The Borges firm was listed as the attorney of record for Steward.
Not long after filing the complaint, Reda was terminated by the Respondent and left the firm to take a position with the Illinois Industrial Commission. Thereafter someone at the firm gave Reda the file or a copy of it. Apparently Reda was going to attempt to find
successor counsel but he was unable to do so. Reda returned the file to the Borges firm within a month.
At some point thereafter the firm's office manager then gave the file to a firm associate to handle. The firm caused a summons to be issued and the defendants were served in August 2009.
In September 2009, the defendants removed the case to federal court. The notice was sent to Respondent at Respondent's firm but Respondent claims that he did not see it. In October 2009, the defendants filed motions to dismiss on various grounds. Notice of those motions were also sent to Respondent at his firm. No one on behalf of Steward responded to the motion or appeared in Court. Accordingly, the District Court Judge dismissed the case without prejudice giving time for Steward's attorneys to file a motion for reinstatement. When the time elapsed with no response, the case was dismissed with prejudice.
After Reda's departure from the firm, at least two other attorneys at the Borges firm had the file and one of them also left the firm. Between 2009 and 2010 Steward called the firm several times to find out about his case but no one ever got back to him. In 2010, Mr. Steward inquired about his case at the Daley center and was told his case had been dismissed. It was only after Mr. Steward contacted the ARDC, that he received a call from an associate at Respondent's office. The Borges firm made an unsuccessful attempt to have the case reinstated. It was too late. The Respondent, the only partner in the firm, testified that: "I simply trusted the attorneys who handled non-bankruptcy matters to keep track of their cases."
Respondent was charged with violating Rule 1.3, by failing to act with reasonable diligence and promptness in representing a client, and with violating Rule 8.4(a)(5), by engaging in conduct prejudicial to the administration of justice. The Hearing Board concluded that there
was "no question Mr. Steward's case was mishandled and he was not reasonably informed as to its status." However, a majority of the Hearing Board concluded that Respondent should not be subject to discipline, relying on In re Vrdolyak, 137 Ill.2d 407, 560 N.E.2d 840 (1990). A dissenting panel member disagreed.
(c) The Melva Lue Jennings Case
Respondent met with Melva Lue Jennings ("Jennings") in 2006 and agreed to represent her. Jennings, then in her eighties, wanted to transfer her Chicago residence to her two nieces upon her death. Respondent advised Jennings to place the property in a land trust and agreed to prepare the necessary documents and record the trust. He asked for and received a fee of $500 and $123 for the filing costs to record the trust deed. Respondent deposited the entire $623 cash he received from the client into his operating account.
Respondent did no work for Jennings and there are no records indicating he delegated the work to an associate. After Jennings died in 2009, one of her nieces contacted Respondent. Respondent could not find the client file and told the niece his office had flooded. He told the niece to get an estate attorney and open an estate. The niece retained an attorney who also attempted to contact Respondent, but Respondent stated he had no documents to give the attorney.
Respondent ultimately admitted that he performed no work for Ms. Jennings after agreeing to prepare documents to place her property in a land trust and record the trust. The Hearing Board concluded that Respondent violated Rule 1.3 because he failed to act with reasonable diligence and Rule 8.4(a)(5) because his conduct was prejudicial to the administration of justice because Respondent's neglect complicated Ms. Jennings estate. The Hearing Board also concluded that Respondent's failure to deposit the $123.00 for recording costs in a client
fund account violated Rule 1.15(a). The Respondent refunded $623.00 to the Jennings' estate shortly before the hearing in this disciplinary case.
LEGAL ANALYSIS OF STEWARD CASE
(a) Standard of Review
The Administrator was obligated to prove the charges made against the Respondent by clear and concurring evidence. In re Ingersoll, 186 Ill.2d 163, 168, 710 N.E.2d 390 (1999). The Hearing Board's findings should be overturned when they are clearly against the manifest weight of the evidence. In re Timpone, 157 Ill.2d 178, 196, 623 N.E.2d 300 (1993). A finding is against the manifest weight of the evidence when the opposite conclusion is clearly evident. In re Winthrop, 219 Ill.2d 526, 542, 848 N.E.2d 961 (2006).
We have concluded that the evidence presented clearly shows that Respondent had ample reason to know that the Steward case was being mishandled and thus he did violate Rule 1.3 by failing to act with reasonable diligence and that his failure was prejudicial to the administration of justice in violation of Rule 8.4(a)(5). The rationale for our conclusion follows.
(b) Application of In re Vrdolyak
The Administrator contends that the Hearing Board misapplied the Court's ruling in the Vrdolyak case. The Administrator notes that the charges in the Vrdolyak case were different. Vrdolyak was charged with failing to document a contingent fee agreement and the failure to deposit $594.00 into a client security account. Vrdolyak did not know about the client much less the failure to document the engagement by a written fee agreement or the failure to deposit money received from the client into a client trust account. The crux of the Vrdolyak case was the failure of the Administrator to prove that the respondent even had reason to know of the transgressions at issue.
The facts in the Vrdolyak case are substantially different than this case. In Vrdolyak the client engaged the firm without the respondent knowing it and essentially nothing more happened. In this case, the facts did not end at the engagement. The Borges firm filed a complaint and an appearance in the Circuit Court of Cook County. After Reda left, the Borges firm continued to represent Steward. An associate was assigned the case. The Borges firm caused an alias summons to be issued and United Armored Services and JP Morgan Chase Bank were served a copy of the complaint. The defendants removed the case to federal court. The notice of removal was sent to the Borges firm addressed to the Respondent. The defendants then filed motions to dismiss. Both motions were filed and a notice of motion served. One was addressed to Ernest D. Borges, Jr. and the other Ernest D. Borges, Law offices of Ernest D. Borges, P.C. When no one from the Borges firm showed up on the motion, the judge granted it. The order was without prejudice allowing the case to be reinstated by November 5, 2009. The Borges firm never did that and the dismissal became final with prejudice. Meanwhile, the Steward calls to the Borges firm were ignored and he only learned of its dismissal from a representative of the court. Having terminated the lawyer handling the Steward case, having notice after notice addressed to him about the demise of the Steward case, and knowing of the turnover of the few attorneys handling non-bankruptcy cases, Respondent clearly had reason to know that the Steward case was being mishandled.
Rule 5.1 in effect at the time of this case provided that a lawyer like the Respondent had a duty to "make reasonable effects to ensure that the other lawyer's conduct conforms to these Rules." While the Respondent was not charged with violating this Rule, the Court's decision in Vrdolyak recognizes that "there is authority for the proposition that an attorney, who is the sole shareholder of a professional partnership, is personally responsible for
the acts" of others even non-professionals. In re Vrdolyak, 137 Ill.2d at 428. This concept is an integral part of the practice of law and of course makes common sense. As the Court in Vrdolyak noted, "an attorney cannot avoid his professional obligations to a client by the simple device of delegating work to others." Id at 428, citing, In re Weinberg, 119 Ill.2d 309, 518 N.E.2d 1037 (1988). In Vrdolyak the Court said the connection to the respondent was "at most tenuous." Here it clearly was not.
The dissenting member of the Hearing Board panel also noted that Supreme Court made clear that an attorney cannot avoid his professional obligations by delegating to others citing the Vrdolyak case. C.123. He then went on to summarize reasons we have just explained that distinguish this case from Vrdolyak. We agree with his conclusion that the Respondent violated Rule 1.3 and because of his lack of reasonable diligence, the Steward case was dismissed with prejudice, a result clearly prejudicial to the administration of justice in violation of Rule 8.4(a)(5).
In determining the appropriate sanction recommendation, this Board considers the nature of the misconduct proved, and any aggravating and mitigating circumstances shown by the evidence. In re Gorecki, 208 Ill.2d 350, 360-61, 802 N.E.2d 1194, 1200 (2003).
At the hearing, Respondent offered evidence in mitigation. He called a number of character witnesses, including a retired judge and the pastor at his church. He has been a member of a number of bar organizations, civic organizations and fraternal organizations. He recently received a humanitarian award from his Mason's Lodge. He served in the United States Army in Vietnam and received two bronze stars, a purple heart, and a combat infantry badge. He has regularly represented bankruptcy clients pro bono.
In aggravation, the Respondent's misconduct caused harm. Steward lost his right to pursue his case. The Jennings' estate was complicated and he improperly deposited client funds into his operating account. In addition, Respondent has been previously disciplined. In 2008, he was censured as a result of his criminal conviction in 2006 for failure to file a federal income tax return for the year 2001.
In light of our conclusions on the Steward case, we believe that a sanction greater than a censure is warranted. Our recommendation also takes into account the fact the Respondent's firm handles a high volume of cases and the need to protect future Borges firm clients. To be sure that the serious nature of these violations are appreciated, we recommend a short period of suspension. The Court has imposed short suspensions from the practice of law for the neglect of more than one matter. See, e.g., In re Pechenik, 2011PR00086, petition to impose discipline on consent allowed, No. M.R. 25334 (Sept. 17, 2012) (attorney who neglected four matters suspended for 60 days followed by probationary period); In re Kofkin, 07 CH 23, petition to impose discipline on consent allowed, No. M.R. 22643 (Nov. 18, 2008) (attorney who neglected four matters and failed to refund unearned fees to clients suspended for 60 days followed by probationary period).
The Respondent has demonstrated a need for law office management assistance. At the time of his misconduct, Respondent handled a high volume caseload without a reliable docketing system or any reliable tracking system for client matters. Both Steward and Jennings' niece testified that they made numerous telephone calls to the firm and the calls were not timely returned.
The Administrator suggests the appropriate sanction recommendation is a suspension from the practice of law for one year, with the suspension stayed after 60 days by a
two-year term of probation subject to conditions designed to monitor improvement of his office management skills. We agree. Similar sanctions have been imposed when the Administrator has submitted evidence that law office management issues contributed to the attorney's neglect. See, e.g., In re Bates, 06 CH 68, petition to impose discipline on consent allowed, No. M.R. 21954 (Nov. 20, 2007); In re Taylor, 05 CH 11, petition to impose discipline on consent allowed, No. M.R. 21171 (Nov. 17, 2006). However, we are concerned that Respondent's clients be represented during the sixty day period of suspension when Respondent cannot practice law. Consequently, we recommend that Respondent be required to designate an attorney acceptable to the Administrator to oversee the operations of Respondent's law firm during Respondent's suspension.
We reverse the Hearing Board's findings that Respondent did not violate Rules 1.3 and 8.4(a)(5) with respect to Respondent's representation of Steward as set forth in Count I of the Administrator's Complaint. We recommend that Respondent be suspended from the practice of law for one year, with the suspension stayed after 60 days by a two-year term of probation subject to the following conditions:
Prior to Respondent's suspension from the practice of law, Respondent shall designate an attorney acceptable to the Administrator to oversee the operations of Respondent's law firm during the period of suspension;
Respondent shall, within the first thirty (30) days of probation, enroll in a law office management program approved by the Administrator and notify the Administrator of the name of the attorney with whom he is assigned to work. Respondent shall successfully complete the law office management program within a time frame acceptable to the Administrator. Through his participation in the law office management program, Respondent shall establish and utilize the following:
- a system for maintaining records as required by Supreme Court Rule 769;
- a diary and docketing system in accordance with therequirements established by the law office management program, including a mechanism by which approaching statutes of limitations are noted;
- a system by which telephone messages are recorded and telephone calls are returned in a timely manner;
- a system by which written requests by clients for the status of their legal matters are responded to, whether orally, or in writing, in a timely manner;
- for cases which the fee is to be calculated on an hourly basis, a system by which clients are provided with regular itemized billing statements provided at least quarterly, setting forth the services performed by Respondent, the date upon which each service was performed, the time spent by Respondent on each service and the amount to be charged to the client; and
- a system for handling of funds belonging to clients and third parties that conforms to the requirements of Rule 1.15 of the Illinois Rules of Professional Conduct.
disclose to the Administrator on a quarterly basis, by way of signed reports, information pertaining to the nature of Respondent's compliance with the law office management program and the above described conditions;
promptly report to the Administrator Respondent's failure to comply with any part of the above described conditions;
respond to any inquiries by the Administrator regarding Respondent's compliance with the above described conditions.
Respondent shall reimburse the Commission for the costs of this proceeding as defined in Supreme Court Rule 773 and shall reimburse the Commission for any further costs incurred during the period of probation;
Probation shall be revoked if Respondent is found to have violated any of the terms of probation. The remaining 10 month period of suspension shall commence from the date of the determination that any term of probation has been violated.
Jill W. Landsberg
I, Kenneth G. Jablonski, Clerk of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois and keeper of the records, hereby certifies that the foregoing is a true copy of the Report and Recommendation of the Review Board, approved by each Panel member, entered in the above entitled cause of record filed in my office on June 5, 2013.
Kenneth G. Jablonski, Clerk of the
1 The 1990 Rules of Professional Conduct apply to Respondent's conduct prior to January 1, 2010.