Filed September 21, 2018
In re Michael Glen Conrad
Commission No. 2015PR00030
Synopsis of Review Board Report and Recommendation
The Administrator charged Respondent with dishonestly converting the funds of three separate and unrelated clients. The Hearing Board found that Respondent had converted the funds of one client, though not dishonestly, and recommended that Respondent be suspended from the practice of law for six months, with the suspension stayed in its entirety by one year of probation with conditions designed to monitor Respondent's bookkeeping practices. The Hearing Board found no misconduct as to the other two clients.
The Administrator filed exceptions, challenging, as against the manifest weight of the evidence, the Hearing Board's determination that he had failed to prove that Respondent had dishonestly converted the funds of a second client. He also challenged the Hearing Board's sanction recommendation, and asked the Review Board to recommend at least a one-year suspension with no probation. The Administrator did not appeal from the Hearing Board's finding of no misconduct as to a third client.
The majority of the review panel concluded that evidence supported the Hearing Board's findings in connection with the second client, and thus affirmed the Hearing Board's finding of no misconduct with respect to that client. The majority also agreed with the Hearing Board's recommendation that Respondent be suspended for six months, with the suspension stayed in its entirety by a one-year period of probation with conditions, based upon Respondent's one instance of conversion.
A dissenting member of the review panel concluded that the Hearing Board's findings of fact and resulting finding of no misconduct as to the second client were against the manifest weight of the evidence, and therefore would reverse the finding of no misconduct as to the second client and recommend that Respondent be suspended for one year and until he completes the ARDC Professionalism seminar.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
MICHAEL GLEN CONRAD,
Commission No. 2015PR00030
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
The Administrator charged Respondent with multiple acts of misconduct involving conversion of the funds of three separate and unrelated clients (Barbara Bell, Matthew Weber-Mixon, and Frank Ting). As to Mr. Weber-Mixon, the Hearing Board found that Respondent had committed "one instance of technical conversion in violation of Rule 1.15(a)" (Hearing Bd. Report at 25), and recommended that Respondent be suspended from the practice of law for six months, with the suspension stayed in its entirety by one year of probation with conditions designed to monitor Respondent's bookkeeping practices. The Hearing Board found no misconduct as to Ms. Bell and Mr. Ting.
The Administrator filed exceptions, challenging, as against the manifest weight of the evidence, the Hearing Board's determination that he had failed to prove that Respondent had dishonestly converted Ms. Bell's funds. He also challenges the Hearing Board's sanction recommendation, and asks this Board to recommend at least a one-year suspension with no probation.1
The majority of this review panel believes that evidence supported the Hearing Board's findings and thus affirms the Hearing Board's findings of no misconduct with respect to Ms. Bell. The majority also agrees with the Hearing Board's recommendation that Respondent be suspended for six months, with that suspension stayed in its entirety by a one-year period of probation with conditions, based upon Respondent's misconduct in the Weber-Mixon matter. A dissenting member of the review panel would reverse the Hearing Board's finding of no misconduct as to Ms. Bell, on the grounds that the Hearing Board's findings were against the manifest weight of the evidence, and would recommend a suspension of one year and until Respondent completes the ARDC Professionalism seminar.
Respondent was admitted to practice in Illinois in 1995 and has had no prior discipline. He worked at a law firm until it disbanded, and then started his own firm. He is (and at the time of his misconduct was) a solo practitioner with a general practice in Des Plaines, Illinois.
Barbara Bell matter
Ms. Bell was a medical secretary for many years, but stopped working in 2005. She had undergone several spinal surgeries from car accidents, and was left suffering from depression and chronic and severe back pain, for which she takes morphine via a pump implanted in her stomach.
In 2007, Ms. Bell began receiving $603.04 per month in long-term disability benefit payments through her insurer, Sun Life. These payments were her sole source of income. In March 2009, Sun Life notified Ms. Bell that her disability benefits would end. When they did,
she fell behind on her mortgage payments and other bills, and then faced foreclosure. She was in her early 60s at the time.
After her bank filed foreclosure proceedings against her, Ms. Bell initially hired attorney Scott Skaletsky to represent her in the proceedings, and there met Pam Holby, Mr. Skaletsky's paralegal. In 2009, Ms. Holby left her employment with Mr. Skaletsky and began working for Respondent. At Ms. Holby's recommendation, Ms. Bell hired Respondent to represent her in the foreclosure matter. He represented her in a number of matters from late 2009 to 2012. (Report of Proceedings at 628, 630.)
The foreclosure matter was essentially resolved by September 2010, although work continued on a loan modification. In January 2010, Respondent also began representing Ms. Bell in an effort to have her long-term disability benefits restored. Respondent determined that Ms. Bell had a claim when he went through a bag of unopened mail Ms. Bell brought in. When Respondent began work on the Sun Life matter, he discovered the time for appeal had expired. Sun Life, however, agreed to reopen the matter. Ms. Holby did much of the work on the Sun Life matter.
In evidence are two retainer agreements - one for the foreclosure matter and the other for the disability benefits matter. Each sets forth an hourly attorney fee of $300 (or $350 for court time) and an hourly paralegal fee of $175. Also in evidence is a document titled "Payment Stipulation/Settlement Agreement," dated November 19, 2010 and purportedly signed by Ms. Bell and Respondent. The Payment Stipulation/Settlement Agreement states that Ms. Bell understood that her "legal bill incurred to date since the beginning of [her] representation now totals $152,785.00." It further states:
Therefore, I hereby agree that in complete satisfaction of the fees that I owe you I will tender the full amount of the lump sum
payment in the amount of $30,000.00 that I am to receive through the claim you have been pursuing with Sun Life Insurance Company on my disability claim.
(Admin. Exh. 4.)2
Ms. Bell did not, in fact, receive a $30,000 lump sum payment from Sun Life. Rather, Sun Life issued multiple disability payment checks, payable to "Barbara Bell C/O Conrad & Associates," as follows: one in November 2010 for $3,963.04; one per month from November 2010 through April 2011 and one in June 2011, each for $603.04; and a final one - a lump-sum settlement - in June 2011 for $8,521. Respondent received these checks, totaling $16,705.32, and had them deposited into his client trust account. Respondent returned $1,450 to Ms. Bell and kept the remaining $15,255.32. At various times in 2011 and 2012, his client trust account was overdrawn.
Ms. Bell testified that, toward the end of Respondent's representation of her, she became aware that Respondent claimed she owed him fees, and that she remembered discussing "something about $30,000" but was "not sure what that was for." (Hearing Bd. Report at 8 (quoting Report of Proceedings at 275).) She also testified that she understood that some of her disability benefit payments would be applied toward Respondent's fees, but that she never authorized Respondent to take all of the proceeds from Sun Life payments and apply them as his fees. (Report of Proceedings at 242-43, 300-01.)
Ms. Holby testified that Ms. Bell was in the office frequently and that she had many conversations with Ms. Bell about the fees Ms. Bell owed to Respondent. Ms. Holby further testified that she or the Respondent informed Bell whenever a Sun Life Payment came in. Ms. Holby stated that she and Respondent met with Ms. Bell in her office in November 2010 and discussed the fees Ms. Bell owed them. Ms. Holby testified that Ms. Bell agreed to pay the fees from her Sun Life settlement and Respondent agreed to cap the fees at $30,000. (Id. at 497-99.)
The Administrator presented Diane Marsh, a forensic document examiner, as an expert witness. Ms. Marsh testified about Ms. Bell's purported signatures on various documents, including two retainer agreements, some checks, and the Payment Stipulation/Settlement Agreement.
Ms. Marsh opined that the signatures on the two retainer agreements were identical and therefore not genuine because a person never signs his or her name exactly the same way. She thus testified that it was "highly probable" that the signatures on the retainer agreements were forged. (Hearing Bd. Report at 8-9 (quoting Report of Proceedings at 85).) Ms. Bell, however, directly contradicted Ms. Marsh as to one of the signatures, which Ms. Bell testified was in fact her true signature. (Id. at 289.)
Ms. Marsh also opined that the signatures on two checks were not genuine because they were entirely different from Ms. Bell's standard signature. On cross-examination, however, Ms. Marsh acknowledged that she was not aware that Ms. Bell sometimes signs her name differently because she is an artist. (Id. at 9.)
Regarding the signature on the Payment Stipulation/Settlement Agreement, Ms. Marsh opined that it was cut and pasted from another document and thus was not genuine. However, she acknowledged differences in size between the signature on the Payment Stipulation/Settlement Agreement and the allegedly cut and pasted signature and that the allegedly cut and pasted signature showed a visible tremor, but she attributed those differences to photocopying rather than to age or medication. (Id. at 100-01.)
Matthew Weber-Mixon Matter
In April 2011, Respondent agreed to present Matthew Weber-Mixon in a dispute with his uncle regarding trust funds belonging to Mr. Weber-Mixon. Respondent filed a lawsuit
to recover the trust funds, which settled in late 2011 for $28,000. From the settlement proceeds, Respondent eventually made two cash payments to Mr. Weber-Mixon, totaling $13,706. Respondent disbursed the remaining settlement funds to himself as fees for his handling of the trust dispute and two other matters in which he represented Mr. Weber-Mixon. From the time he received the settlement proceeds until the time he paid Mr. Mixon, Respondent should have been holding at least $13,706 in his client trust account, but the balance in his client trust account dropped to $5,009.75 during that time period.
HEARING BOARD'S FINDINGS AND RECOMMENDATION
The Hearing Board found, with respect to Respondent's representation of Ms. Bell, that the Administrator had failed to prove any of the charged misconduct. It found it clear from Ms. Bell's own testimony that she had agreed to tender at least a portion of her disability payments to Respondent, and therefore that the evidence did not establish that Respondent was obligated to hold all of the disability payments he received on her behalf, as the Administrator's complaint alleged. It also found it unclear from the evidence whether Respondent was obligated to hold any of the disability payments for Ms. Bell. Consequently, it did not find clear and convincing proof that Respondent was obligated to hold all or part of Ms. Bell's disability payments in his client trust account or that he had dishonestly used Ms. Bell's funds without authorization. (Hearing Bd. Report at 11-12.)
The Hearing Board found, with respect to Respondent's representation of Mr. Weber-Mixon, that Respondent had failed to keep Mr. Weber-Mixon's funds separate from his own, in violation of Rule 1.15(a). It found that Respondent testified inconsistently about where the cash payments to Mr. Weber-Mixon came from, giving three different explanations regarding
where that cash came from, but that Respondent mishandled Mr. Weber-Mixon's funds regardless of where he got the cash. (Hearing Bd. Report at 19-20.)
For Respondent's "one instance of technical conversion," (Hearing Bd. Report at 25), the Hearing Board recommended that Respondent be suspended for six months, with the suspension fully stayed by one year of probation, with conditions. It noted that the conditions set forth procedures for Respondent to follow in order to properly manage his client trust account, and provided for monitoring to ensure that he follows those procedures.
The Administrator contends that the Hearing Board's finding that the Administrator failed to prove that Respondent had dishonestly misappropriated Ms. Bell's disability benefits was against the manifest weight of the evidence.
On review, we defer 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).
Moreover, while we give deference to all of the Hearing Board's factual determinations, we do so particularly to those concerning the credibility of witnesses, because the Hearing Board is able to observe the testimony of witnesses - which we are not - and therefore is in a superior position to assess their demeanor, judge their credibility, and evaluate
conflicts in their testimony. In re Kleczek, 05 SH 24 (Review Bd., June 1, 2007), at 8, petitions for leave to file exceptions denied, M.R. 21745 (Sept. 18, 2007) (citing In re Spak, 188 Ill. 2d 53, 66, 719 N.E.2d 747 (1999); In re Wigoda, 77 Ill. 2d 154, 158, 395 N.E.2d 571 (1979)).
Based upon this standard of review, we affirm the Hearing Board's finding of no misconduct in the Bell matter, because we cannot find that the opposite conclusion - that Respondent dishonestly converted Ms. Bell's disability payments - is clearly evident, nor that the Hearing Board's findings are unreasonable, arbitrary, or not based on the evidence. We further note that this is largely a case that turns on the credibility of witnesses. Though the Hearing Board could have been more explicit about its credibility findings, it is clear that it found Respondent and Ms. Holby credible and Ms. Bell less so. The Administrator has given us no basis to overturn those credibility findings.
1. The Administrator failed to prove the charges in the complaint that Ms. Bell did not authorize Respondent to use any portion of her disability benefit payments for fees and therefore that Respondent was obligated to hold all of her funds
In each count of the complaint relating to Ms. Bell (Counts I through IV), the Administrator alleged that Ms. Bell did not authorize Respondent "to use any portion" of her disability benefit payments for Respondent's own business or personal use, and that Respondent's use of her disability benefit payments without authority constituted conversion of those funds. (Complt. pars. 26-27, 39-40 49-50, and 71-72 (emphasis added).) However, Ms. Bell acknowledged in her testimony that, as of November and December 2010, she understood that Respondent would be receiving funds from Sun Life, that at least some of those funds would be applied toward the outstanding fees, and that she was in agreement with that. (Report of Proceedings at 300-01, 304-05.)
Based on Ms. Bell's own testimony, the Hearing Board found that she had agreed to tender at least part of her disability benefit payments to Respondent, and therefore that, contrary to the allegations in the complaint, the evidence did not establish that Respondent was required to hold the disability benefit payments in their entirety and, by not doing so, had converted all of her funds. (Hearing Bd. Report at 12.) We agree with the Hearing Board's analysis and determination that, based upon the evidence in the record, the Administrator did not prove the misconduct that was charged in the complaint.
2. The Administrator failed to prove that Respondent was obligated to hold some portion of Ms. Bell's funds
Notwithstanding its finding that the Administrator had not proved the charged misconduct, the Hearing Board then analyzed whether the evidence showed that Respondent was obligated to hold at least some portion of Ms. Bell's disability benefit payments on her behalf. (See id.) It found that the evidence was ambiguous on this issue, and therefore that the Administrator, who bore the burden of proving misconduct by clear and convincing evidence, failed to prove that Respondent had converted any of Ms. Bell's funds. We agree with its analysis.
In reaching its conclusion, the Hearing Board found that the testimony of Respondent and Ms. Holby, as well as the Payment Stipulation/Settlement Agreement, supported Respondent's position that Ms. Bell had authorized him to use all of the Sun Life disability benefit payments toward his fees. (Hearing Bd. Report at 12.) It further found Ms. Bell's contrary testimony to be vague. (Id.) As noted above, the fact that the Hearing Board found Respondent and Ms. Holby credible was implicit in its analysis, because the Hearing Board clearly accepted their testimony on crucial issues. We have seen no evidence that would allow us to overturn these credibility findings, to which we defer.
It is true that the record contains no documentation of the hours worked and fees incurred by Respondent, nor of his billing of and accounting to Ms. Bell. However, Respondent testified, without contradiction, that a virus destroyed all of his computer records. We cannot simply assume this is untrue. If we are to disbelieve Respondent and Ms. Holby and reach a different credibility finding than the Hearing Board did, there must be evidence in the record proving their testimony was false. There was no such evidence. It was the Administrator's job to rebut Respondent's and Ms. Holby's testimony; the Administrator did not do so.
Given the Hearing Board's credibility findings, we agree with the Hearing Board that the testimony of Respondent and Ms. Holby support Respondent's position that Ms. Bell authorized him to use her funds to pay his outstanding fees. For example, Ms. Holby testified that, in November 2010, she, Respondent, and Ms. Bell met in her office and discussed the outstanding fees that Ms. Bell owed to Respondent. Ms. Holby also stated that Ms. Bell was aware of a bill every month. (Report of Proceedings at 498.) She also testified that Ms. Bell said that "anything she would get from [the Sun Life payments], because she knew that [her bill] was growing rapidly and she couldn't afford it, would be going to Mr. Conrad because she was under the impression that she was getting $30,000 back." (Id. at 499.) When asked whether there was a discussion regarding a cap on the total fees Ms. Bell would have to pay, Ms. Holby answered yes, and stated that "[w]hatever [Ms. Bell] received from Sun Life based on her $30,000 figure would be what would be paid ? [and] she wouldn't have to pay anymore. We would not go after her in any way." (Id.)
Similarly, Respondent testified that he provided Ms. Bell with a breakdown of the hours he spent on her matters when they entered into the Payment Stipulation/Settlement Agreement in November 2010. (Id. at 421-22.) He testified that he saw Ms. Bell sign the
Payment Stipulation/Settlement Agreement. (Id. at 423.) He testified that, in November 2010, he discussed his outstanding fees with Ms. Bell, and that "[t]he discussion basically was when [the Sun Life] settlement started happening she would apply this toward her fees on the matter." (Id. at 640-41.) He further testified that Ms. Bell was made aware of every check that his office received from Sun Life, contemporaneously with the receipt of the check; that she authorized him to apply the Sun Life funds toward the $30,000 in fees that she had agreed to; and that he never took funds out of the Sun Life payments that she had not authorized him to take toward his fees. (Id. at 645.)
There is no question that Respondent's and Ms. Holby's testimony, which the Hearing Board credited, supports Respondent's position that he did not take Ms. Bell's funds without authorization, and therefore also supports the Hearing Board's finding that Respondent did not dishonestly convert those funds.
Presumably to refute Respondent's and Ms. Holby's testimony, the Administrator presented forensic document examiner Diane Marsh, who testified that Ms. Bell's signature on the Payment Stipulation/Settlement Agreement was not authentic. However, the Hearing Board was "not persuaded" by Ms. Marsh's testimony (Hearing Bd. Report at 12), and with good reason. As previously noted, Ms. Marsh acknowledged that there were differences between the signature on the Payment Stipulation/Settlement Agreement and the signature which she had opined was allegedly cut and pasted onto that agreement. She also misidentified as a forgery another signature that Ms. Bell testified was her true signature.
Nonetheless, on appeal, the authenticity of the Payment Stipulation/Settlement Agreement is at the crux of the Administrator's argument. The Administrator contends that the Payment Stipulation/Settlement Agreement is the only evidence that Ms. Bell authorized
Respondent to take her disability payments as fees, and it is a phony document, and therefore that Respondent's tendering of the false Payment Stipulation/Settlement Agreement is proof of his dishonestly misappropriating Ms. Bell's funds. He asks us to overturn the Hearing Board's finding that Ms. Marsh's opinion was not sufficiently reliable to meet the Administrator's burden of proof. We decline to do so.
First, the Administrator is not correct that the Payment Stipulation/Settlement Agreement is the only evidence that Respondent had Ms. Bell's authorization to take and use her funds. As the Hearing Board found and as discussed in detail above, Respondent's and Ms. Holby's testimony, and to some extent, Ms. Bell's own testimony, also support Respondent's position that Ms. Bell authorized him to take and use her funds in payment of his fees.
Second, we believe that the Hearing Board had a sufficient evidentiary basis for not crediting Ms. Marsh's testimony and opinion. The Hearing Board had the benefit of listening to and observing the witnesses and assessing their credibility. After doing so, it chose not to accept Ms. Marsh's opinion that the signature on the Payment Stipulation/Settlement Agreement was not genuine, based in part on Ms. Bell's testimony as well as on Ms. Marsh's responses to questions on cross-examination, which gave the Hearing Board some doubt about the reliability of her conclusions.3
Even if no opposing expert testimony is offered, "it is still within the province of the trier of fact to weight the credibility of the expert evidence and to decide the issue." In re Glenville, 139 Ill. 2d 242, 251, 565 N.E.2d 623 (1990) (citation omitted). "However, the uncontradicted and unimpeached opinion of an expert cannot be rejected arbitrarily." Id. (citations omitted). The Hearing Board in this matter did not arbitrarily reject Ms. Marsh's opinion. Rather, it pointed to aspects of Ms. Marsh's testimony that cast doubt on the reliability
of her ultimate conclusions, and weighed her opinion accordingly, in light of the other evidence. It was within the Hearing Board's province, as trier of fact, to make these determinations, and we will not disturb them. See id. (expert's opinion is "to be accorded such weight that, in light of all the facts and circumstances of the case, reasonably attaches to it").
We cannot overturn the Hearing Board's findings unless they are unreasonable, arbitrary, or not based on the evidence, or an opposite conclusion is clearly evident. Those stringent criteria are not met here. The Hearing Board had a sufficient evidentiary basis for its factual findings, and clearly considered all of the evidence in reaching its finding that the Administrator did not prove that Respondent had dishonestly misappropriated Ms. Bell's funds. Accordingly, we affirm its findings.
The Hearing Board recommended that Respondent be suspended for six months, with the suspension stayed in its entirety by a one-year period of probation, with conditions. Its sanction recommendation is advisory. In re Ingersoll, 186 Ill. 2d 163, 178, 710 N.E.2d 390 (1999). In making our own recommendation, we consider the nature of the misconduct charged and 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), while keeping in mind that the purpose of discipline is not to punish the attorney but rather to protect the public, maintain the integrity of the legal profession, and protect the administration of justice from reproach. In re Timpone, 157 Ill. 2d 178, 197, 623 N.E.2d 300 (1993). We also consider the deterrent value of attorney discipline and "the need to impress upon others the significant repercussions of errors such as those committed by" Respondent. In re Discipio, 163 Ill. 2d 515, 528, 645 N.E.2d 906 (1994) (citing In re Imming, 131 Ill. 2d 239, 261, 545 N.E.2d 715 (1989)). Finally, we seek to
recommend a sanction that is consistent with sanctions imposed in similar cases. Timpone, 157 Ill. 2d at 197, while also considering the unique circumstances of each case. In re Witt, 145 Ill. 2d 380, 398, 583 N.E.2d 526 (1991).
The Administrator asks us to recommend a one-year suspension, but his request is based upon his contention that Respondent dishonestly misappropriated funds from Ms. Bell, in addition to misappropriating funds from Mr. Mixon, The Administrator further argues that probation is not appropriate here because Respondent's misconduct included dishonest actions, and probation is generally not appropriate for dishonest conduct. Because we affirm the Hearing Board's finding that the Administrator failed to prove that Respondent engaged in dishonest conversion of Ms. Bell's funds, we reject the Administrator's sanction request as inappropriate for the misconduct that Respondent was found to have committed.
Instead, we are persuaded by the Hearing Board's analysis and agree with its recommendation that Respondent be suspended but that his suspension be stayed in its entirety by a period of conditional probation. The cases cited by the Hearing Board are on point with this matter and therefore support its sanction recommendation. See In re Zaczek, 09 CH 81, M.R. 24836 (Nov. 22, 2011) (six-month suspension stayed in full by one-year of probation where attorney converted $8,404.32 in client funds in one matter and had no dishonest intent); In re Popper, 2011PR00146, M.R. 26067 (Sept. 25, 2013) (six-month suspension stayed in full by two years of probation where attorney converted $15,267.00 in settlement funds that belonged to his client when the balance of his firm's client trust account fell below the amount owed to the client, and where attorney handled his firm's books but did not reconcile the firm accounts or use good bookkeeping practices); In re Sweeney, 2013PR00101, M.R. 27143 (Mar. 12, 2015) (four-month suspension stayed in full by one year of probation where attorney mishandled funds in three
client matters, including one in which he held client settlement checks in his desk drawer and made payments to clients from his client trust fund prior to depositing their settlement checks, and where his misconduct was the result of poor bookkeeping).
Respondent's misconduct was serious, in that any conversion of client funds, whether "technical" or not, should be regarded as a significant breach of an attorney's duty to his client as well as a clear violation of the Rules of Professional Conduct. But Respondent has presented substantial evidence in mitigation, including no other discipline in 20 years of practice; his misconduct in this matter was an isolated incident; and he volunteers with the Knights of Columbus, Special Olympics and Illinois Kids Wrestling Foundation, and has coached wrestling for 20 years. In addition, four witnesses testified favorably about his honesty and integrity.
The Hearing Board also found that Respondent now regularly reconciles his client trust account and recognizes that it should not have a negative balance; no longer makes cash payments to clients; and acknowledges he should have kept better records with respect to cash payments that he made to clients in the past. We regard these facts as mitigating. See, e.g., In re Brejcha, 97 CH 108, petition to impose discipline on consent allowed, M.R. 15004 (Sept. 25, 1998) (noting as a factor in mitigation that respondent had changed his accounting practices by computerizing his financial records, reconciling his escrow account on a monthly basis, and keeping client ledgers that detailed deposits and disbursements).
In aggravation, the Hearing Board found, and we agree, that Respondent put client funds at risk by failing to use his client trust account properly, and that he testified untruthfully regarding the source of the cash payments to Mr. Mixon.
Based upon Respondent's serious misconduct and taking into account the mitigating and aggravating factors, we agree with the Hearing Board that a suspension, albeit one stayed by probation, is warranted.
Regarding the issue of probation, as noted above, it appears that Respondent has taken some steps to remediate the problems that caused him to convert Mr. Mixon's funds. There is authority for the proposition that, if a respondent has already corrected the deficiencies in his practice that led to his misconduct, probation is neither necessary nor appropriate. See, e.g., In re Tyler, 98 CH 74 (Review Bd., May 17, 2000), petition for leave to file exceptions denied, M.R. 16873 (Sept. 22, 2000) (no probation where Hearing Board found that respondent had already implemented proper office procedures and corrected the practices that may have contributed to the misconduct that resulted in misconduct charges, and there had been no recurrence of the behavior that led to the charges in years, and therefore that a probationary period designed to monitor and improve respondent's office practices and procedures would serve no useful purpose); In re Holley, 04 CH 37 (Hearing Bd., Oct. 1, 2005), approved and confirmed, M.R. 20560 (Jan. 13, 2006) (no probation where Hearing Board found that respondent had taken sufficient corrective actions to prevent any future rule violations and therefore that there was no need to either restrict or monitor his practice); In re Sternberg, 98 CH 117 (Review Bd., Nov. 8, 2001), petition for leave to file exceptions allowed, M.R. 17907 (Mar. 26, 2002) (no probation where both parties agreed that nothing would be gained by probation and where respondent had already made changes in his practice such that his mishandling of client funds was unlikely to recur and there was no evidence that any office management problems persisted).
In this matter, however, unlike in Tyler, Holley, or Sternberg, the Hearing Board made no finding that Respondent had fully corrected the deficiencies that led to his misconduct
in the Mixon matter, that there was no need to monitor his practice, or that probation would serve no useful purpose. To the contrary, it noted that the terms of probation provided procedures for Respondent to follow in order to properly manage his client trust account and required monitoring to ensure that he followed those procedures. It explained that its recommendation sought to protect the public and prevent Respondent from committing misconduct in the future.
We accept the Hearing Board's determination, implicit in its recommendation, that a period of monitoring is necessary to ensure that Respondent has fully implemented and continues to use the practice management skills necessary to keep him from committing misconduct and harming future clients. We therefore agree with its recommendation of probation. We also defer to the Hearing Board's findings regarding the conditions of probation, and therefore adopt and incorporate by reference the conditions of probation set forth in the Hearing Board's report.
For the foregoing reasons, we affirm the Hearing Board's findings of fact and of misconduct, and recommend that, for his misconduct, Respondent be suspended for six months, with his suspension stayed in its entirety by a one-year period of probation, with the conditions recommended by the Hearing Board.
Jill W. Landsberg
Claire A. Manning, dissenting:
I agree with the Administrator that the Hearing Board's finding that Respondent did not dishonestly misappropriate Ms. Bell's funds is against the manifest weight of the evidence, and I would therefore reverse it.
The sole question before the Hearing Board, and then this Board, was whether Respondent was authorized to take and use Ms. Bell's funds for his own purposes. While Respondent claims such authorization, and the Hearing Board agreed, Respondent's claims are noticeably unsupported by any record evidence documenting the hours he worked on Ms. Bell's matters - despite the fact that he and his assistant were to be paid on an hourly basis. Without such documents, Respondent's fee claim should have fallen on deaf ears. Instead, the Hearing Board credited Respondent's claim and, in doing so, ignored the evidence before it.
First, while the Administrator bears the burden of proving the charges he brings, the responsibility for supporting a claim for fees an attorney has taken from client funds must fall squarely upon the attorney making such claim, albeit in defense of charged misconduct. This should be especially evident when the charge being adjudicated is conversion of client funds. Here, there is no dispute that Respondent took money owed to Ms. Bell. The only dispute is whether he had a right to those fees.
Ms. Bell was a vulnerable client who was confused about what she owed Respondent in fees.4 Respondent is an attorney whose conduct is regulated by Supreme Court Rules and Rules of Professional Conduct, including Rule 769, which requires every attorney to maintain "all financial records related to the attorney's practice ? including but not limited to ? time and billing records?." In addition, Rule of Professional Conduct 1.15(a) states that "[c]omplete records of client trust account funds ? shall be kept by the lawyer." Ill. R. Prof.
Cond. 1.15(a) (2010) (emphasis added). These records include, among other things, "copies of all accountings rendered to clients ? showing the disbursement of funds to them ?, along with copies of those portions of clients' files that are reasonably necessary for a complete understanding of the financial transactions pertaining to them," and "copies of all bills rendered to clients for legal fees and expenses." Id.
Yet, the record is devoid of any documentary evidence supporting Respondent's claim that he had a right to disburse client funds to himself and his assistant for work performed. Respondent had no records whatsoever to show the work he and Ms. Holby performed on Ms. Bell's behalf, the amount of fees they earned, whether they sent Ms. Bell invoices for those fees and expenses, or how many payments, and in what amounts, Ms. Bell made to him. In addition, other than the Payment Stipulation/Settlement Agreement that was challenged by the Administrator and his handwriting expert, Respondent provided no documents to show that he first accounted to Ms. Bell for his attorney fees, and then sought and received her authorization to take the funds that he was holding on her behalf in payment of his attorney fees.
It was incumbent upon Respondent to show that Ms. Bell specifically released her funds to him as fees. But, without any contemporaneous records supporting his claim that he earned the fees he sought, informed Ms. Bell of those fees, and sought and obtained her permission to remove her funds from his client trust account in payment of earned fees, he did not and cannot do so. In In re Bernstein, 04 CH 54 (Review Bd., June 7, 2006), petition for leave to file exceptions allowed and sanction increased, M.R. 21049 (Sept. 21, 2006), this Board addressed the issue of an attorney who retained a portion of his client's funds because he believed he was owed them as fees, but where his billing statements and time records were not in evidence and the client testified that she did not know how much his fees were. While the
discussion was in the context of restitution, the general principles articulated in Bernstein hold true here:
An attorney is entitled to fees on a quantum meruit basis for legal services the lawyer actually performed on the client's behalf. However, an attorney cannot unilaterally decide on an amount and take it, without specific authorization, from funds the attorney is holding on a client's behalf, even if the attorney has a legitimate claim to a portion of the funds as fees. An attorney also cannot simply help him or herself to whatever client funds are in the attorney's possession and then claim the money was taken as fees. Instead, an attorney claiming fees from funds held on behalf of a client has a duty to provide the client with an accounting as to his or her services and a statement of the fees allegedly owed to the attorney.
Id. at 6 (citations omitted).
In accordance with Bernstein, even if Ms. Bell acknowledged that Respondent was entitled to some portion of her disability benefit payments as fees, it was still Respondent's obligation to support his claim that he was entitled to keep $15,250 of her funds as payment of his fees. See id. at 8 (noting that at least the burden of production, if not also the burden of persuasion, should have been placed on the respondent to support his claim that he was entitled to keep his client's funds as fees) (citing In re Melnick, 383 Ill. 200, 204, 48 N.E.2d 935 (1943)). He failed to do so.
The Hearing Board's analysis ignored Respondent's obligation to maintain appropriate records and, instead, placed the burden on the Administrator to demonstrate that Respondent's defense was inadequate, all with the disadvantage of having no documents because Respondent claimed that he "lost" them due to a computer virus - a claim that the Hearing Board did not appear to evaluate or consider in its analysis of evidence. But it was Respondent and not the Administrator who bore the burden of maintaining and producing records to show,
ultimately, that he earned the fees he claims to have earned and was authorized to take and keep Ms. Bell's disability benefits in payment of those earned fees.
Here, the Hearing Board's analysis does not properly consider Respondent's obligation under the rules to maintain proper records, and instead wrongly credits, I believe, his story that he could not do so - thus placing an impossible burden on the administrator, all in the context of requiring "clear and convincing evidence" of the Administrator's charges of conversion. I feel strongly that affirming the Hearing Board will send a tacit message to future respondents that they can successfully defend against a conversion charge by "losing" their records, thereby making it virtually impossible for the Administrator to prove his charge. Such an unintended consequence would render meaningless the Rules of Professional Conduct regarding record-keeping and misappropriation of client funds. I cannot condone or play a role in such an outcome.
Second, I believe the Hearing Board's analysis to be fundamentally flawed, and against the manifest weight of the evidence, as it ignores the following relevant and, in fact, critical evidence.
Respondent's wholly unbelievable claim that he earned $152,785 in attorney fees in Ms. Bell's matters
Respondent's claim in the Payment Stipulation/Settlement Agreement that he had earned $152,785 in attorney fees in Ms. Bell's various matters over a 12-month period, from November 2009 to November 2010, is simply ludicrous and impossible to believe. Respondent filed an appearance in Ms. Bell's mortgage foreclosure case, but never filed any other documents nor appeared in court on her behalf. As to the disability benefits matter, Respondent acknowledged that Ms. Holby did most of the work. Moreover, he provided no details about any additional work he did for Ms. Bell, other than referring her to an accountant for a tax issue,
counseling her on budgeting, and negotiating with credit card companies and her condo board. And, again, he had no records whatsoever to support his claim of having earned over $150,000 in fees from Ms. Bell.
A rough calculation shows that, even if Respondent had done all of the work on Ms. Bell's matters himself, he would have had to work more than 500 hours on Ms. Bell's matters to justify the fees he claims she owed him.5 The fact that Ms. Holby did most of the work on the disability benefits matter makes the fee that Ms. Bell purportedly owed even more preposterous and unbelievable, given that Ms. Holby would have had to work well over 800 hours - or more than 20 full work weeks - only on Ms. Bell's matters to justify those fees. Yet, other than excerpting a portion of the Payment Stipulation/Settlement Agreement, the Hearing Board did not even mention Respondent's ridiculous and wholly incredible claim of fees.
Ms. Bell's letters to Respondent and two attorneys, as well as Sun Life's internal notes about phone calls Ms. Bell made to Sun Life, all of which corroborate her testimony that Respondent never provided her with an accounting of the Sun Life settlement or of the fees he claimed she owed him
The record contains copies of five letters that Ms. Bell sent to two different attorneys between August 2011 and July 2012, in which she sought advice about how to obtain from Respondent an accounting of the fees and expenses he claimed she owed him, the amount of the Sun Life settlement, and the amount of her portion of the settlement. In the first letter, dated August 9, 2011, Ms. Bell stated that Ms. Holby texted her and said that she would be sending invoices and a new payment agreement for Ms. Bell to sign, notarize, and return. The subsequent letters indicate that Ms. Bell never received invoices, a new payment agreement, or any other information from Respondent or Ms. Holby. (See Admin. Ex. 3 at 000001-000005.)
Ms. Bell also wrote four letters to Respondent in August and September 2011. The first letter requested separate itemizations of the cases he had handled for her, including
receipts, court appearances, and contracts. The second and third letters, which are identical, stated that, although the Sun Life claim had settled, Ms. Bell had nothing in writing from Respondent. She asked him to send her, in writing, the amount of the settlement; the amount of attorney fees, including hours, dates, and what was done; the amount of expenses incurred and how they were paid; and her portion of the settlement. She also asked him to itemize the attorney fees in the mortgage foreclosure matter. The fourth letter stated that Ms. Bell had sent two previous certified letters; that Ms. Holby had contacted her by voice mail and text at the end of September and said that Respondent's office would be sending the statements and contracts; and that she so far had not received them. (See id. at 000005.)
These letters, most of which are contemporaneous with Respondent's alleged misconduct, corroborate Ms. Bell's testimony that Respondent never responded to her repeated requests for information about the Sun Life settlement, her portion of the settlement, the work he performed for her, and the attorney fees he charged her. It is a reasonable inference that Ms. Bell would not have continued to write and send letters asking for information if she had received it. But the Hearing Board made no such inference because, although it briefly referred to the letters in the fact section of its report, its analysis contains no mention of them.
In addition, Sun Life's internal records show that, in late July 2011, Ms. Bell contacted Sun Life and wanted to talk to someone regarding her payments. In August and September 2011, Ms. Bell asked Sun Life for information about her benefits and the payments that Sun Life had made, and for a copy of the settlement letter. In October 2012, Ms. Bell contacted Sun Life, requested copies of the checks that Sun Life had sent to Respondent, and told a Sun Life representative that "all the money [Sun Life] paid was stolen by her attorney." (Admin. Ex. 1 at 000001.) These records are consistent with Ms. Bell's testimony that she sought
information from Sun Life about the payments it had sent to Respondent because she could not get the information from Respondent.
Together, these documents lend credence to Ms. Bell's testimony about Respondent's actions. But it appears that the Hearing Board did not consider them in reaching its findings of fact and, ultimately, its finding of no misconduct.
Unrebutted expert testimony that, when viewed in its entirety, established that the signature on the Payment Stipulation/Settlement Agreement was not genuine
Notwithstanding that it expressly stated that it made no findings as to the genuineness of certain documents, the Payment Stipulation/Settlement Agreement among them, the Hearing Board nonetheless relied on the Payment Stipulation/Settlement Agreement as support for Respondent's claim that Ms. Bell had authorized him to take all of her disability payments as fees, and therefore as support for its finding of no misconduct. However, I believe that the evidence as a whole, some of which the Hearing Board disregarded, established that Ms. Bell did not sign the Payment Stipulation/Settlement Agreement.
Forensic document examiner Diane Marsh opined that the signature on the Payment Stipulation/Settlement Agreement was the "very same signature" as the signature on a notarized document dated January 20, 2009, which Ms. Bell had authenticated, and that the signature on the Payment Stipulation/Settlement Agreement was cut and pasted from the January 20, 2009 document. Ms. Marsh acknowledged slight differences in size and tremor between the signature on the Payment Stipulation/Settlement Agreement and the signature on the January 20, 2009 document, but explained that the differences were due to photocopying. Respondent presented no expert to counter Ms. Marsh's testimony.
Yet, the Hearing Board found it was "not persuaded" by Ms. Marsh's unequivocal and uncontradicted testimony "given Marsh's acknowledgement that there are some differences
between" the two signatures. (Hearing Bd. Report at 12.) The Hearing Board did not address Ms. Marsh's explanation that the minor differences were caused by photocopying, nor did it explain why it disregarded that portion of her testimony.
While it is within the province of the trier of fact to reject or give little weight to certain testimony, including expert testimony, "this power is not an unbridled one." People v. Baker, 253 Ill. App. 3d 15, 30, 625 N.E.2d 719 (1st Dist. 1993) (citation omitted). "[T]he uncontradicted and unimpeached opinion of an expert cannot be rejected arbitrarily." People v. Glenville, 139 Ill. 2d 242, 251, 565 N.E.2d 623 (1990) (citations omitted). Here, I believe the Hearing Board rejected Ms. Marsh's opinion arbitrarily and without reason, in that it based its finding on a portion of Ms. Marsh's testimony while utterly disregarding another crucial part of it.
On appeal, the Administrator asked us to compare the two signatures to determine whether the Hearing Board erred in not accepting Ms. Marsh's testimony. I agree with my colleagues that, ordinarily, this Board should defer to the Hearing Board on such a finding, but in this unique case, I find I cannot do so. There is absolutely no doubt - simply by looking at the signatures side by side - that the two signatures in question are identical, but for a slight, but proportional, difference in size. (See Admin. Ex. 4 at 10, 20.)
Moreover, Ms. Marsh's testimony was uncontroverted; Respondent presented no evidence or expert of his own to contradict Ms. Marsh's conclusion as to the signature on the Payment Stipulation/Settlement Agreement. And, significantly, Ms. Marsh's opinion corroborated Ms. Bell's testimony that the signature on the Payment Stipulation/Settlement Agreement was hers - because it was copied from another document that she actually signed - but that she did not put it there - because it was cut and pasted from the other document.6
In sum, this Board "is empowered to reject or modify such factual findings of the Hearing Board as the Review Board determines are not supported by clear and convincing evidence, and the Review Board may make such additional findings as it determines are supported by clear and convincing evidence." In re Ring, 141 Ill. 2d 128, 565 N.E.2d 983 (1990) (citing Ill. S. Ct. R. 753(e)(3)). Based upon the foregoing evidence, which the Hearing Board failed to consider, I believe that the Hearing Board erred in finding no misconduct as to Ms. Bell's matter. Any one of these pieces of evidence should have cast doubt on Respondent's credibility. Combined, they should have proved that Respondent's version of events was not to be believed. By failing to make findings and draw inferences based upon the totality of the evidence, the Hearing Board reached a result that was not supported by clear and convincing evidence. I would reverse that result and find, instead, that Respondent dishonestly misappropriated Ms. Bell's funds.
Based upon Respondent's serious misconduct and taking into account the mitigating and aggravating factors, I agree with the Administrator that a one-year suspension is warranted and supported by In re Solomon, 118 Ill. 2d 286, 515 N.E.2d 52 (1987) (nine-month suspension for commingling, conversion, and failure to render an accounting to clients, where, in three separate matters, respondent used client funds without authorization because he believed he was entitled to the funds as payment for fees and expenses); In re Doyle, 99 CH 100 (Review Bd., Jan. 22, 2002), approved and confirmed, M.R. 18071 (May 24, 2002) (suspension of one year and until restitution made for dishonestly taking estate funds for alleged fees without authority); and In re Kitsos, 127 Ill. 2d 1, 535 N.E.2d 792 (1989) (one-year suspension for dishonest conversion of over $4,000 in accrued interest on escrow funds, which respondent claimed he was owed as fees but which the client did not authorize him to withdraw).
I further believe that Respondent would benefit from a review of his ethical responsibilities to his clients, particularly his obligations to inform his clients of the work he is doing on their behalf; timely bill them for any fees he has earned; and maintain appropriate records regarding his work for and billing of his clients. I would therefore recommend that Respondent be required to complete the ARDC Professionalism seminar before he is reinstated to practice.
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 21, 2018.
Kenneth G. Jablonski, Clerk of the
1 The Administrator does not appeal from the Hearing Board's finding of no misconduct as to Mr. Ting, nor from its finding of no other misconduct as to Mr. Weber-Mixon or Ms. Bell.
2 We agree with our dissenting colleague that the $152,785 in fees that, in the Payment Stipulation/ Settlement Agreement, Respondent claims to have earned appears excessive. However, the fees that Respondent agreed to accept, capped at $30,000, amount to a fraction of the fees reflected in the Payment Stipulation/Settlement Agreement, and the fees he actually collected were half of what he agreed to. Moreover, to the extent our dissenting colleague believes that the claimed $152,785 in fees makes Respondent inherently not credible, we note that the Hearing Board had an opportunity to hear and observe his testimony and judged him to be credible, and, as discussed below, we have not seen sufficient evidence to overturn this credibility finding. And last, we note that the Administrator did not charge Respondent with collecting an excessive and unreasonable fee. Consequently, that issue is not before us, and we cannot find misconduct that was not charged in the complaint. See In re Chandler, 161 Ill. 2d 459, 470, 641 N.E.2d 473 (1994) (citing In re Doyle, 144 Ill. 2d 451, 581 N.E.2d 669 (1991); In re Ruffalo, 390 U.S. 544, 88 S. Ct. 1222 (1968)) ("Generally, an attorney may not be disciplined for instances of uncharged misconduct; to do so would violate the respondent's right to procedural due process and our own notions of candor and fairness.").
3 On appeal, the Administrator urged this Board to compare Ms. Bell's signature on the Payment Stipulation/Settlement Agreement to her signature on the document from which it was allegedly cut and pasted and see for ourselves that the signatures are identical. Reviewing signatures and making a judgment call as to whether they are identical or not strikes us as the epitome of fact-finding. Moreover, the Administrator asks us to make the same determination that, at hearing, he deemed required the testimony of an expert. Now he is effectively telling us that we do not need an expert; we can make the determination ourselves. We disagree. We note that even the Hearing Board did not decide the issue based upon its own comparison of the signatures. In addition, it is not at all clear that this panel could agree as to whether or not the signatures at issue are identical. In short, what the Administrator's counsel asks us to do is clearly outside the bounds of this reviewing body's responsibility, and would invade the province of the Hearing Board as trier of fact. Accordingly, we will not make our own independent finding regarding the signature on the Payment Stipulation/Settlement Agreement, but will defer to the Hearing Board's findings, which were supported by evidence.
4 Her confusion is evidenced by the fact that she consulted with two attorneys in a vain attempt to obtain from Respondent an accounting of the fees and expenses he claimed she owed him, as discussed at more length below.
5 Respondent's hourly rate was $300 for non-court work; Ms. Holby's was $175.
6 On direct exam, Ms. Bell testified as follows:
Q: If you could take a look at Administrator's Exhibit 4, Bates stamp 20. Is that your signature on that document? This is the payment stipulation settlement agreement.
A: Could be my signature, but I didn't sign it.
Q: So you didn't put the signature there?