Filed September 13, 2017

In re William S. Bazianos
Respondent-Appellee/Cross-Appellant

Commission No. 2015PR00127

Synopsis of Review Board Report and Recommendation
(September 2017)

The Administrator charged Respondent in a one-count complaint with dishonestly misappropriating about $7,000 in escrow funds. Following a hearing at which Respondent was represented by counsel, the Hearing Board found that the Administrator had proven the charged misconduct, and recommended that, for his misconduct, Respondent be suspended for 60 days.

The Administrator filed exceptions, challenging the Hearing Board's sanction recommendation and asking the Review Board to recommend, instead, a six-month suspension. Respondent cross-appealed, challenging the Hearing Board's finding of dishonesty as well as its sanction recommendation, which he contends should be no more than censure.

The Review Board affirmed the Hearing Board's dishonesty finding, which was based largely on its credibility findings, to which the Review Board gave deference. The Review Board also found persuasive the Hearing Board's reasoning that the extensive and compelling evidence in mitigation indicated that Respondent would not engage in similar misconduct in the future. The Review Board thus concluded that a suspension of 60 days is commensurate with Respondent's misconduct, falls within the range of discipline that has been imposed for comparable misconduct, and is sufficient to serve the goals of attorney discipline; and that a longer period of suspension would be akin to punishment and would not benefit the public or legal profession.

BEFORE THE REVIEW BOARD
OF THE
ILLINOIS ATTORNEY REGISTRATION
AND
DISCIPLINARY COMMISSION

In the Matter of:

   WILLIAM S. BAZIANOS,

       Respondent-Appellee/Cross-Appellant,

No. 6210540

Commission No. 2015PR00127

REPORT AND RECOMMENDATION OF THE REVIEW BOARD

SUMMARY

The Administrator charged Respondent in a one-count complaint with dishonestly misappropriating about $7,000 in escrow funds. Following a hearing at which Respondent was represented by counsel, the Hearing Board found that the Administrator had proven the charged misconduct, and recommended that, for his misconduct, Respondent be suspended for 60 days.

The Administrator filed exceptions, challenging the Hearing Board's sanction recommendation and asking this Board to recommend, instead, a six-month suspension. Respondent cross-appealed, challenging the Hearing Board's finding of dishonesty as well as its sanction recommendation, which he contends should be no more than censure.

For the reasons that follow, we affirm the Hearing Board's findings of misconduct, and agree with its recommendation that Respondent be suspended for 60 days for his misconduct.

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FACTS

Respondent

Respondent was admitted to practice in Illinois in 1992, and concentrates in corporate law, transactional work, and real estate. In 2014, at the time of his misconduct, he was of counsel to the law firm of Roeser Bucheit & Graham LLC, and also had a separate solo practice. By the time of his hearing in 2016, Respondent had closed his solo practice and had become a non-equity partner at the Roeser firm. He has no prior discipline.

Respondent's Misconduct

In May 2014, Respondent agreed to represent the sellers in a home sale. At the closing on May 30, 2014, the buyers and sellers entered into an agreement, which Respondent drafted, that permitted the sellers to remain living in the home until June 30, with the option to extend the agreement until August 1 for an additional fee.

The agreement provided that the sellers would give Respondent $7,100 to be held in escrow until they delivered possession of the home to the buyers. If the sellers remained in the home until June 30, the buyers would receive $2,500 of the escrow funds as rent for June. If the sellers remained in the home after June 30, the buyers would be entitled to rent of $80.65 per day from the escrow funds. Per the agreement, after the sellers moved out and the buyers were paid the rent due them, Respondent would be paid $100 from the escrow funds for acting as escrow agent, and the sellers would receive the remaining escrow funds.

At the May 30 closing, Respondent received a check for $7,100 from the title company. On June 6, he deposited the $7,100 check into his IOLTA account, which, before the deposit, had a balance of $133.52. On June 11, Respondent transferred $1,500 from the IOLTA account to his operating account, which was overdrawn until he made the deposit. That same

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day, he took a $1,000 salary draw from his operating account. On June 13, he transferred $5,500 from his IOLTA account to his operating account, after which the IOLTA account had a balance of $233.52. That same day, he took a $2,000 salary draw from his operating account. He took another salary draw, this time for $4,000, from his operating account on June 24. Also in June and early July, he paid for vacation expenses and health insurance premiums from his operating account.

The sellers moved out of the house sometime in July. Respondent timely distributed the escrow funds to the buyers and sellers on July 17 by writing checks from his operating account: $4,500 to the sellers and $2,500 to the buyers. These funds came from fees Respondent had earned in other matters.

Respondent acknowledged that he should have been holding the $7,100 in escrow funds in his IOLTA account until mid-July when the sellers moved out of the house and the terms of the agreement had been met, and that neither the sellers nor buyers gave him permission to use the escrow funds for his own purposes.

Mitigation1

In mitigation of his misconduct, Respondent accepted responsibility and expressed remorse for his actions. Prior to his disciplinary hearing, he completed two ARDC online courses regarding operation of client trust accounts. In September 2014, he closed his IOLTA account because of the disciplinary proceeding against him. He now works only for a law firm, and he told the Hearing Board that he could use Chicago Title and Trust's or his firm's account if he needed to hold client or third-party funds. He has no prior discipline.

Respondent served for eight years on a school district board, spending ten to fourteen hours per month in connection with that volunteer commitment. He occasionally

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performed pro bono real estate closings and did some pro bono work for his church. Five character witnesses, including three lawyers and two sitting Cook County Circuit Court judges, testified about Respondent's good reputation for honesty in the Greek, church, and legal communities. All five testified that their opinions about Respondent would not change even if Respondent were found to have intentionally converted the escrow funds.

Hearing Board's Findings and Recommendation

The Hearing Board found that Respondent had committed the misconduct with which he was charged. It found that he commingled $7,000 that he was supposed to hold in escrow by transferring it to his operating account, and then misappropriated most of that amount by using it without permission for his own purposes, in violation of 2010 Illinois Rule of Professional Conduct 1.15(a).

It further found that Respondent's misappropriation of the escrow funds was dishonest, in violation of 2010 Illinois Rule of Professional Conduct 8.4(c). In so finding, it relied largely on the timing of Respondent's transfers from the IOLTA account to his operating account and use of the funds in his operating account. It found him not credible in his explanation for the transfer of funds from his IOLTA account to his operating account.

It found, however, that Respondent's misconduct was an isolated occurrence that would not be repeated, and that he posed no danger to future clients. It further found that the mitigating evidence was extensive. It thus found that a short suspension of 60 days would serve the purposes of discipline.

ANALYSIS AND RECOMMENDATION

The Administrator, as appellant, challenges only the sanction recommendation. Respondent, as cross-appellant, challenges the Hearing Board's dishonesty finding as well as its

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sanction recommendation. We address Respondent's challenge to the dishonesty finding first, as it impacts the sanction recommendation.

1.    The Hearing Board did not err in finding dishonesty.

On appeal, Respondent contends that there was insufficient evidence to meet the Administrator's burden of proving by clear and convincing evidence that he acted with dishonest intent, and therefore that the Hearing Board erred in finding that the Administrator met his burden. We find no error in the Hearing Board's determination that Respondent acted dishonestly.

On review, we give deference to the factual findings of the Hearing Board, and will not disturb them unless they are against the manifest weight of the evidence. In re Timpone, 157 Ill.2d 178, 196, 623 N.E.2d 300 (1993). A factual finding is against the manifest weight of the evidence where the opposite conclusion is clearly evident or the finding appears unreasonable, arbitrary, or not based on the evidence. Leonardi v. Loyola University, 168 Ill. 2d 83, 106, 658 N.E.2d 450 (1995); Bazydlo v. Volant, 164 Ill. 2d 207, 215, 647 N.E.2d 273 (1995). That the opposite conclusion is reasonable is not sufficient. In re Winthrop, 219 Ill. 2d 526, 542, 848 N.E. 2d 961 (2006).

We also defer to the Hearing Board's findings on witnesses' credibility. See In re Woldman, 98 Ill. 2d 248, 254, 46 N.E.2d 35 (1983) (credibility of witnesses "is to be determined by those who hear and observe them"); Winthrop, 219 Ill. 2d at 542 (Hearing Board's findings regarding the credibility of witnesses are entitled to great deference because the Hearing Board "is in the best position to observe the witnesses, to assess their demeanor and credibility, to resolve conflicting testimony, and to render fact-finding judgments").

Respondent argues that the evidence showed that he was not experienced in handling a client trust account, was not good at bookkeeping, was overwhelmed with work, and

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believed that his operating account held sufficient funds to pay his salary draws, vacation and insurance expenses, and the parties to the escrow agreement. He further argues that he and his wife were employed and had sufficient income to support their expenses, and also had wealthy families who could have loaned them money if necessary, which shows that he had no need and therefore no intent to misappropriate funds.

He also contends that the transfers from his IOLTA account did not correspond to his personal bills, but rather to the amounts he thought he would be disbursing to the buyers and sellers. He claims that he believed, based on a conversation with one of the sellers, that the sellers would be leaving the house before the end of June and therefore that he would be disbursing $1,500 to the buyers and $5,500 to the sellers. He claims that he transferred these amounts from his IOLTA account into his operating account in order to disburse them accordingly, but the sellers ended up staying longer than he was initially told, so that, when the funds were eventually disbursed in July, $2,500 went to the buyers and $4,500 to the sellers.

He thus argues that, at most, the Administrator has proven that the circumstances surrounding the transactions at issue were suspicious, which is insufficient to warrant discipline, citing In re Lane, 127 Ill. 2d 90, 111, 535 N.E.2d 866 (1989) (Moran, C.J., dissenting).

We disagree, and find that sufficient evidence supported the Hearing Board's findings of fact and of misconduct, which were based in significant part on its credibility findings. For example, the Hearing Board found "implausible" Respondent's claim that he did not know how much was in his operating account when he made the transfers from his IOLTA account to his operating account. It also observed that Respondent knew that he had an ethical obligation to segregate escrow funds from his own, and found it "unlikely" that an attorney with this understanding would act so carelessly in handling escrow funds. It found it more probable,

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and supported by the evidence, that Respondent had a short-term financial need in June 2014 and knowingly satisfied it by using the escrow funds. And it found "incredible" his claim that he made the transfers because he believed the sellers would be moving out of the property soon and he would have to disburse the escrow funds. (See Hearing Bd. Report at 10-11.)

Respondent has given us no reason to doubt the Hearing Board's credibility findings, nor has he shown that any of the Hearing Board's findings of fact are unreasonable, arbitrary, or not based on the evidence, or that the opposite conclusion is clearly evident. Consequently, we find no error in the Hearing Board's dishonesty finding, which we affirm.

2.    A 60-day suspension is an appropriate sanction for Respondent's misconduct.

In his challenge to the sanction recommendation, Respondent argues that censure is appropriate because he did not engage in dishonest conduct. He cites a litany of cases in which censure was imposed for conversion of a relatively small amount of money, and where no dishonesty was involved. Given our determination that the Hearing Board did not err in finding dishonesty, however, the authority cited by Respondent has no bearing on this matter.

In the alternative, Respondent argues that, even with a finding of dishonesty, censure is still within the range of acceptable sanctions, citing In re Lenz, 108 Ill. 2d 445, 484 N.E.2d 1093 (1985); In re Lauer, 97 CH 41, petition for discipline on consent, M.R. 14117 (Nov. 25, 1997); In re Knowles (f/k/a Scott), 2015PR00073 (Review Bd., April 5, 2017 (currently pending before Supreme Court on petition for leave to file exceptions); and In re Homyk, 2014PR00154, petition to impose discipline on consent allowed, M.R. 27728 (Jan. 21, 2016), in addition to several other cases. Again, those cases are inapposite to this one because they do not involve dishonesty or involve less egregious misconduct than is present here. Consequently, they do not persuade us that censure would be an appropriate sanction for Respondent's dishonest conversion.

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The Administrator, in turn, challenges the Hearing Board's recommendation of a 60-day suspension, contending that a six-month suspension would be more appropriate, based on the circumstances and relevant authority.

In urging a six-month suspension, the Administrator calls into question two fact-based findings made by the Hearing Board. First, the Administrator claims that Respondent was experiencing financial difficulties at the time of his misconduct. The Hearing Board, however, made no such finding. To the contrary, it specifically found that Respondent was financially stable at the time of his misconduct. (See Hearing Bd. Report at 4.) The Administrator has not shown that this factual determination was against the manifest weight of the evidence.

Second, the Administrator asks us to discount the testimony from Respondent's character witnesses because each witness testified that his or her opinion would not change even if the Hearing Board concluded that Respondent had dishonestly converted the escrow funds. The Administrator argues that the witnesses' testimony suggests that they refused to value Respondent's honesty objectively, or that they would not trust a Hearing Board finding of dishonesty. However, the Hearing Board specifically found the character witnesses' testimony to be "compelling," "convincing," and "significantly mitigating." (See Hearing Bd. Report at 17.) This amounts to a credibility finding as to the character witnesses that we will not disturb.

The Administrator contends that precedent supports a six-month suspension, citing In re Defourneau, 08 CH 50, petition to impose discipline on consent allowed, M.R. 23031 (May 18, 2009) (six-month suspension for dishonest conversion of $2,487 in escrow funds); In re Kanno, 97 CH 81, petition to impose discipline on consent allowed, M.R. 14949 (Sept. 25, 1998) (six-month suspension for dishonest conversion of $4,000 of client and/or third-party

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funds); In re Rumley, 95 SH 435, petition to impose discipline on consent allowed, M.R. 11433 (Sept. 29, 1995) (six-month suspension for dishonest conversion of $3,333 of client funds).

While the foregoing cases are like Respondent's in that they involve dishonest conversion of a relatively small amount of money in a single matter, that is where the similarities end. As the Hearing Board noted, the Administrator's authority involves more egregious misconduct, significant aggravation, or less mitigation than Respondent's matter. (See Hearing Bd. Report at 18.)

The authority relied upon by the Hearing Board, on the other hand, is sufficiently analogous to this matter, both factually and legally, to provide guidance as to an appropriate sanction for Respondent's misconduct. See In re Boyle, 2014PR00118, petition for discipline on consent allowed, M.R. 27316 (May 14, 2015) (60-day suspension for dishonest conversion of $1,900 that he was holding for possible Medicare lien); In re Faber, 00 CH 1, petition to impose discipline on consent allowed, M.R. 17050 (Nov. 27, 2000) (60-day suspension for dishonest conversion of $1,500 of his client's funds); In re Greenlee, M.R. 15670 (Sept. 15, 1999) (60-day suspension for dishonest misappropriation of $3,300 in three client matters); In re Ingles, 95 CH 520, petition to impose discipline on consent allowed, M.R. 10402 (Sept. 23, 1994) (60-day suspension for dishonest conversion of a $3,247 criminal court bond refund that should have been paid to client); In re Blanchard, 2015 PR 00025, petition to impose discipline on consent allowed, M.R. 27795 (Jan. 21, 2016) (90-day suspension for dishonest conversion of $3,500 in earnest money while attorney was in financial distress); In re Romer, 08 CH 19, petition to impose discipline on consent allowed, M.R. 23074 (May 18, 2009) (90-day suspension for dishonest conversion of $5,015 in escrow funds during time of financial distress); In re Peters, 2012PR00048, M.R. 26828 (Sept. 12, 2014) (30-day suspension for dishonest conversion of

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$1,300 in client funds, which attorney loaned to brother to pay medical expenses for brother's terminally ill child).

We believe that the Hearing Board's analysis of the unique circumstances of this case, as well as of relevant authority, is exceptionally thorough and well-reasoned. The Hearing Board gave significant weight to the "extensive and compelling evidence in mitigation," including that:

(See Hearing Bd. Report at 14-17.)

Based on these factors, the Hearing Board was convinced that Respondent would not engage in similar misconduct in the future. Id. at 21. We are hard-pressed to find a flaw in its thoughtful analysis that would cause us to depart from its recommendation.

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We thus conclude that a suspension of 60 days is commensurate with Respondent's misconduct, falls within the range of discipline that has been imposed for comparable misconduct, and is sufficient to serve the goals of attorney discipline. We believe that "any further period of suspension ? would impermissibly serve merely to punish, and it would benefit neither the public nor the legal profession." In re Odom, 01 CH 69 (Review Bd., Sept. 10, 2004), at 17, petition for leave to file exceptions denied, M.R. 19772 (May 19, 2005) (citing In re Leonard, 64 Ill. 2d 398, 356 N.E.2d 62 (1976)).

CONCLUSION

For the foregoing reasons, we affirm the Hearing Board's findings of misconduct and agree with its recommendation. Accordingly, we recommend that Respondent be suspended for 60 days.

Respectfully Submitted,

Johnny A. Fairman, II
Claire A. Manning
Keith E. Roberts, Jr.

CERTIFICATION

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 September 13, 2017.

Kenneth G. Jablonski, Clerk of the
Attorney Registration and Disciplinary
Commission of the Supreme Court of Illinois

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______________________

1 The Hearing Board found no aggravation. On appeal, the Administrator contends that Respondent was experiencing financial difficulties at the time of his misconduct, but the Hearing Board found to the contrary and, as discussed below, we see no error in its finding.