Filed March 26, 2009
In re Brian Edward King
Commission No. 07 SH 118
Synopsis of Hearing Board Report and Recommendation
NATURE OF THE CASE: 1) conversion; 2) breaching a fiduciary duty; 3) engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; and 4) engaging in conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.
RULES DISCUSSED: Rule 8.4(a) (4) of the Illinois Rules of Professional Conduct; and Supreme Court Rule 770.
RECOMMENDATION: Suspension from the practice of law for two (2) years, with the suspension stayed after nine (9) months by a two (2)-year term of probation with conditions.
DATE OF OPINION: March 26, 2009
HEARING PANEL: Jack O. Asher, Claire A. Manning, Charles E. King, Sr.
RESPONDENT'S COUNSEL: William F. Moran, III.
ADMINISTRATOR'S COUNSEL: Gary S. Rapaport.
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
BRIAN EDWARD KING,
Commission No. 07 SH 118
REPORT AND RECOMMENDATION OF THE HEARING BOARD
The hearing in this matter was held on November 6, 2008, at the offices of the Attorney Registration and Disciplinary Commission, Springfield, Illinois before a Hearing Board Panel consisting of Jack O. Asher, Chair, Claire A. Manning, lawyer member, and Charles E. King, Sr., public member. The Administrator was represented by Gary S. Rapaport. The Respondent appeared at the hearing and was represented by William F. Moran, III.
On December 12, 2007, the Administrator filed a one-count Complaint against the Respondent. The Complaint alleged the facts and misconduct set out below.
The Respondent was an associate attorney at the law firm of Erwin, Martinkus and Cole, Ltd. (hereafter the "law firm") from 2000 to 2007. In 2002, the Respondent and the law firm entered into an employment agreement that established the Respondent's salary to be 50% of the legal fees he received in matters assigned to him and in matters he brought to the law firm. The Respondent was not permitted to practice law or represent clients independently of the law firm. The Respondent was required to deliver to the law firm all funds he received for legal fees. The law firm would deposit such funds into its bank account, and was required to make periodic
accountings and distributions. This employment agreement was in effect during the years 2006 and 2007.
During the period from January 19, 2006 to January 3, 2007, twenty-one individuals, identified by name in the Complaint, paid the Respondent legal fees that totaled $30,020. One-half of the foregoing funds, that is $15,010, belonged to the law firm. The Respondent received the legal fees on behalf of the law firm as its agent and fiduciary. However, the Respondent did not deliver any part of the foregoing funds to the law firm and did not notify the law firm that he had received the funds.
The Respondent deposited the $30,020 he received for legal fees into his personal checking account, held jointly with his wife. The Respondent then used all of the funds for his own purposes without the knowledge or permission of the law firm.
Based upon the above, the Administrator alleged that the Respondent committed the following misconduct: (a) conversion; (b) breached his fiduciary duty to Erwin, Martinkus and Cole, Ltd.; (c) engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct; (d) engaged in conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute, in violation of Supreme Court Rule 770.
The Respondent filed an Answer and an Amended Answer to the Complaint. In his Amended Answer, he admitted many of the factual allegations and that he "engaged in attorney misconduct in relation to his actions as described in the Administrator's Complaint." He neither admitted nor denied the specific misconduct charged, describing those charges as "conclusions of law" for the Hearing Panel to determine following a hearing.
The Administrator presented the testimony of Jim Martinkus and Sue Waller. The Administrator's Exhibits 1 through 19 were received into evidence. (Tr. 5) The Respondent testified in his own behalf. The Respondent's Exhibits 1 through 3 were received into evidence. (Tr. 5)
Jim Martinkus testified that he has been a licensed attorney since 1977 and is a partner in the law firm of Erwin, Martinkus and Cole. At the present time, the law firm has eight partners and five associates. (Tr. 15-16)
The Respondent worked at the law firm as a law clerk, an employee, and then as an associate attorney. He became an associate attorney in 2002, and remained in that position until he was terminated from the law firm in May 2007. As an associate attorney, the Respondent was an independent contractor. The compensation of an associate attorney, including the Respondent, was one-half of the money he brought into the firm and one-half of the money he received for working on other attorneys' files. There may have been some adjustments depending on costs and other factors. (Tr. 16-18)
Sometime prior to the end of May 2007, a client of the Respondent called the law firm and complained about receiving a bill that he had already paid. Apparently, the Respondent's secretary had absconded with the client's payment. In the process of investigating the secretary, it was discovered that a series of bills had not been sent to clients, but were written off by the Respondent. Mr. Martinkus said he found it "highly unusual that these services were being provided [by Respondent] and the bill was not being sent, it was being written off." Telephone
calls were made to three clients whose bills had been written off, and each client said the bill had been paid. At that point, Mr. Martinkus "knew what happened." (Tr. 18-19)
Mr. Martinkus acknowledged that an associate attorney had authority to tell the bookkeeper, Sue Waller, that he did not want to charge a client for certain services. For example, if an attorney was handling a case involving an area of law he was not familiar with, he may not bill for all the hours spent on the case because some of the time was for the attorneys "own learning." Also, bills have been written off when it appeared that they were not collectable. (Tr. 20-21)
On a Friday evening in May 2007, Martinkus confronted the Respondent. Martinkus told him that the law firm had discovered the Respondent had received and kept fees from clients after having indicated in law firm records that the bills had been written off and not collected. The Respondent admitted he had done it. Mr. Martinkus then knew that the Respondent could no longer practice with the law firm, and he was terminated from the law firm. (Tr. 18, 21, 26, 28)
Mr. Martinkus asked the Respondent to prepare a list of clients from whom he had received fees that were not submitted to the firm. In response, and "at a later point," the Respondent prepared a list containing the names of nine clients and the amount of the fees they paid to him. (Adm. Ex. 2, p. 2) The list showed that the Respondent received $12,650 in fees, and owed the law firm one-half thereof, $6,325. Mr. Martinkus said he asked the Respondent if there were any other clients whose fees he failed to turn over to the law firm, and the Respondent replied "this is the complete list." The Respondent did not offer any explanation to Martinkus for taking the fund. Also, the Respondent had not previously mentioned any financial problems or ask Mr. Martinkus for financial help. (Tr. 22-25, 29)
During their meeting in May 2007, Mr. Martinkus and the Respondent discussed their obligation to report this matter to the ARDC. As a result, both men contacted the ARDC. (Tr. 26, 28; Resp. Ex. 1)
In August 2007, the Respondent and the law firm of Erwin, Martinkus and Cole, Ltd., entered into an agreement regarding the repayment of fees taken by the Respondent. (Adm. Ex. 2) The agreement stated that the Respondent owed the firm $6,325 for fees he kept; that the firm owed him $2,664.88 for "various debts and credits;" and that the Respondent agreed to pay the firm the difference, which was $3,660.20. (Tr. 21-23; Adm. Ex. 2)
On the morning of the disciplinary hearing, November 6, 2008, the Respondent and the law firm of Erwin, Martinkus and Cole, Ltd., entered into another agreement regarding the repayment of fees. (Resp. Ex. 3) In this agreement, the Respondent agreed to pay the law firm $8,685, which was one-half of the fees he had kept from an additional twelve clients. (Resp. Ex. 3, p. 2) Martinkus explained that he learned of the additional twelve matters after looking at the Respondent's bank records, which had been obtained by the ARDC during the disciplinary investigation. The Respondent had not previously disclosed those twelve clients. (Tr. 24-25)
Mr. Martinkus said he reviewed a number of additional bills that had been written off by the Respondent. He decided not to attempt to collect "most of" those bills because he did not want to contact clients who may have paid their bill. He said "I didn't want to look like a fool, and it would have been an embarrassment." (Tr. 29-30)
Mr. Martinkus acknowledged that the law office maintains a trust account, which contains unearned fees, and that there is no evidence that the Respondent improperly took funds from the trust account. (Tr. 31-32)
Finally, Mr. Martinkus said that, aside from keeping the fees from the 21 clients in this matter, the law firm was satisfied with the Respondent's work. Also, there is no evidence that any client was harmed by the Respondent's conduct. (Tr. 30-31)
Ms. Waller testified that she has been the bookkeeper at the law firm of Erwin, Martinkus and Cole for twenty-two years. Her duties include running the bills and account receivables, and she pays the accounts payable. At the present time there are 14 attorneys at the law firm. (Tr. 33-34)
Ms. Waller explained the manner in which bills are approved and sent out. She said that billing is done through the 20th of each month. The secretaries, who are assigned to specific attorneys, enter the time for each attorney in the client's file. When Waller receives this information she prepares a "pre-bill" that lists the attorney's time and expenses on each case. She also prepares account receivable statements that show any past due amount by the clients. She sends the pre-lists to the secretaries, who then go over the pre-lists with the attorneys. The pre-lists are then marked, at the direction of the attorneys, to bill or not to bill. When she receives a direction to bill, she prepares the bill for the client and returns it to the secretary for final review by the attorney. The individual secretaries put the bills into the mail. (Tr. 35-37)
Ms. Waller identified and explained several accounting records of the law firm. The records pertained to clients who paid fees to the Respondent and who were identified in the Complaint (par. 4). She testified that the Respondent had directed in the records that fees of the foregoing clients be written off. (Tr. 37-53; Adm. Ex. 3, 6, 9-14, 16)
Ms. Waller also testified that during the period of about March 2006 to April 2007, the Respondent's secretary was found to have been taking funds from the law firm. After this was
discovered, the secretary was fired. Ms. Waller said she did not know if the Respondent was the person who reported the secretary's dishonesty. (Tr. 55-56)
Finally, Ms. Waller acknowledged that, aside from the 21 episodes in which the Respondent kept fees from clients after purportedly writing off the fees, she never had any problem with the Respondent's honesty or integrity. She said that no trust funds were involved in any of the 21 episodes, and that there was no evidence of any client being financially harmed. (Tr. 54-55)
The Respondent testified that he is 36 years of age, married, and resides in Champaign. He and his wife have a 6 year old child, and his wife's 12 year old child from a prior marriage also lives with them. He is the sole support of his family. His family members are in good health. (Tr. 58-61, 90)
The Respondent attended Illinois Wesleyan University. He then transferred to Illinois State University, and graduated in 1996. He attended law school at Northern Illinois University and graduated in 2000. He was admitted to the practice of law in November 2000. During the summers of his law school years, he worked as a clerk at the law firm of Erwin, Martinkus and Cole in Champaign. He continued to work at that law firm after he received his law license. (Tr. 63-67)
Initially, he was a salaried employee at Erwin, Martinkus and Cole. In about May 2002, he became an associate attorney. As an associate attorney, he was an independent contractor. The arrangement for him, and all such independent contractors, was to split the fees "50/50" with the law firm. He also would receive an additional amount for referring clients to the firm. He was to turn the fees over to the law firm, and then was paid twice a month. He noted that there was no
written agreement regarding independent contractors, but only a verbal agreement. He said that he was "doing okay" financially as an associate until the end of 2005 or beginning of 2006. At that time he noticed a decline in his income. (Tr. 67-71, 95-96, 99-100)
In January 2006, the Respondent received $500 for fees from a client named Robert Drake, and did not turn the money over to the law firm. Thereafter, until January 2007, he withheld from the law firm, and kept for himself, fees he received from twenty additional clients. The total amount of funds he kept was $30,020. The law firm of Erwin, Martinkus and Cole was entitled to one-half of those fees. (Tr. 71-72, 74-75)
When asked to explain why he took the funds that belonged to the law firm, the Respondent said "we were behind on our bills and our house payment, and I just made a bad choice . . . That's why I did it." He further explained that, at the time, he was not getting new clients, and was not earning enough money to pay his and his family's bills. He was repaying about $65,000 in student loans and had credit card debt "in the 30 to $40,000 range." In about January 2007, his income at the law firm "picked back up" and he was able to get "caught up" on his bills. (Tr. 72-75, 90, 93)
The Respondent testified that he also kept funds he received from another client, Alan Weinstein, in May 2006. This matter was not included in the disciplinary complaint. The Respondent represented Weinstein in a divorce case and received a fee of $1,500. The Respondent deposited the $1,500 into his personal checking account on May 12, 2006. (Adm. Ex. 1, p. 40) Later, the Respondent borrowed $1,500 from his brother, and repaid the $1,500 to the law firm by way of a check from his brother. The Respondent said that he discussed this matter with Mr. Martinkus, and told him that the Respondent "had diverted the funds or deposited the funds into [his] own account." The Respondent acknowledged that he did not
inform Martinkus of the other instances in which he had kept the fees he received from clients. When asked if Mr. Martinkus had "discovered independently that Mr. Weinstein's payment for fees had been diverted," the Respondent replied "I'm not a hundred percent certain . . . I don't recall all the details about how this, the timing I guess involved." (Tr. 77-79, 96, 100-03)
The Respondent asserted that, while he was taking the fee payments belonging to Erwin Martinkus and Cole, he "always intended" to "pay these monies back." He was asked how he expected to repay the funds when he made no record of the funds he took. He replied "that's a really great question. And again, I would have just done it as best I could reconstruct it." (Tr. 78, 97)
In about April 2007, the Respondent received a call from a client who questioned his bill. The Respondent investigated and discovered that his secretary had kept the payment from the client. The Respondent discussed the matter with Jim Martinkus, and the partners "took it from there." (Tr. 75-77)
Also in April 2007, Mr. Martinkus telephoned the Respondent at his home on a Friday evening and asked him to return to the office. When the Respondent returned to the office, he met with Mr. Martinkus and Rick Kirby, another partner. They asked him about diverting funds received for fees into his own account, and he admitted he had done so. It was decided that the Respondent would no longer be working for the law firm. At the request of Mr. Martinkus, the Respondent prepared a list of the client matters in which he diverted funds. He said he worked on the list later that Friday night, and gave the list to Martinkus on the following day. The list the Respondent prepared (Adm. Ex. 2, p. 2) contained the names of nine clients and stated that those clients paid $12,650, which the Respondent kept. The Respondent explained that those were the
only names "I could think of" at that time. He acknowledged that he had not kept a list of all the matters in which he had taken the fees. (Tr. 79-81, 94)
On May 23, 2007, the Respondent sent a letter to the ARDC. (Resp. Ex. 1) In his letter, he acknowledged that he breached his fiduciary duty to Erwin, Martinkus and Cole, Ltd. He said he kept the fees paid by nine clients, in the amount of $12,650, and did not share the fees equally with the law firm as he was required to do. (Tr. 82)
On August 13, 2007, the Respondent entered into an agreement with Erwin, Martinkus and Cole, Ltd. to repay one-half of the $12,650 in fees he kept, minus certain amounts that were owed to him by the law firm. Thus, he agreed to repay the amount of $3,660.20. (Adm. Ex. 2) The Respondent paid the foregoing amount by way of a credit card (Resp. Ex. 2) on the same date. (Tr. 82-83)
After the ARDC obtained the Respondent's bank records by subpoena during the disciplinary investigation, it was discovered that he Respondent had diverted into his account the fees paid by twelve other clients. The Respondent said he found out about those additional clients in about November 2007. On the day of this hearing (November 6, 2008), the Respondent signed an Agreement (Resp. Ex. 3) to repay $8,685, which is one-half of the amount of fees he kept from the additional twelve clients, to Erwin, Martinkus and Cole, at the rate of at least $500 per month. (Tr. 81, 84-85)
All of the fees that the Respondent kept were in "flat fee" cases. The Respondent explained that none of the clients lost any money by his diversion of fees. He completed all of the work for those clients. In fact, no partner at the law firm ever complained about the quality of the Respondent's work. (Tr. 85-86, 98-99)
After he was terminated from Erwin, Martinkus and Cole, the Respondent opened a solo practice in Champaign. His wife is his office manager and handles various tasks at his request. He has no other employees. He said he has about 100 to 200 active files. It is a general practice, but consists primarily of family law and criminal defense cases. He has malpractice insurance. He said the nature of his practice does not generate many funds that need to be deposited into a trust account. He also said that his solo practice has been financially successful. (Tr. 86-89, 93)
The Respondent said that he handles about five to ten pro bono divorces or traffic cases each year. He is a member of the Illinois State Bar Association and the Champaign County Bar Association. He volunteers at a moot court program and at a Lawyers in the Classroom program. (Tr. 89)
Finally, the Respondent said that he would not repeat his misconduct. He said he realizes he made a "bad choice" and what he did was "wrong." He emphasized that he never took any funds from a client or from a trust account. In fact, he said "I would never even consider doing anything with client funds." (Tr. 91-92, 94)
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In attorney disciplinary proceedings, the Administrator has the burden of proving the charges of misconduct by clear and convincing evidence. In re Winthrop, 219 Ill. 2d 526, 542 N.E.2d 961, 972 (2006). This is a heavy burden of proof that requires a high level of certainty, greater than a preponderance of the evidence but less than proof beyond a reasonable doubt. In re Dotson, 02 SH 37, Review Board Report at 7 (Petition to file exceptions to Review Board Report denied in M.R. 19938, March 18, 2005); In re Verett, 07 SH 105, Hearing Board Report at 24 (Hearing Board Report approved in M.R. 22567, September 17, 2008).
In determining whether the burden of proof has been satisfied, the Hearing Panel is to assess the credibility and believability of the witnesses, weigh conflicting testimony, draw reasonable inferences from the evidence, and make factual findings based upon all the evidence. In re Howard, 188 Ill. 2d 423, 435, 721 N.E.2d 1126, 1133 (1999); In re Ring, 141 Ill. 2d 128, 138-39, 565 N.E.2d 983, 987 (1991). The Hearing Panel is in a position to judge credibility and weigh conflicting testimony because it is able to "see the witnesses [and] observe their demeanor." In re Samuels, 126 Ill. 2d 509, 526, 535 N.E.2d 808, 814 (1989); In re Olton, 05 SH 27, Review Board Report at 10 (Review Board Report approved in M.R. 21597, May 18, 2007). In assessing testimony, the Hearing Panel is not required to be "naïve or impractical" or to believe testimony that is "beyond human experience," "an unreasonable story," or "an inherent improbability." In re Discipio, 163 Ill. 2d 515, 523-24, 645 N.E.2d 906, 910 (1994); In re Holz, 125 Ill. 2d 546, 555, 533 N.E.2d 818, 821 (1989)
Additionally, an admission in a pleading is a formal judicial admission that is binding on the party making it, may not be contradicted, has the effect of withdrawing the fact admitted from issue, and dispenses with the need for any proof of that fact. Thus, when a respondent in a disciplinary matter admits in his or her answer some or all of the facts alleged in a complaint, it is unnecessary for the Administrator to present evidence to prove the facts so admitted. In re Carlson, 98 CH 880, (Hearing Board Report at 11 (Hearing Board Report approved in M.R. 17398, June 20, 2001); In re Verett, 07 SH 105, Hearing Board Report at 24 (Hearing Board Report approved in M.R. 22567, September 17, 2008).
Conversion is the unauthorized action by an attorney that deprives another of property permanently or for an indefinite period of time. "The essence of an action for conversion is the
wrongful deprivation of property from the person entitled to its possession." In re Rosin, 156 Ill. 2d 202, 206, 620 N.E.2d 368, 370 (1993)
With the above principles in mind, we make the findings set out below.
The Respondent admitted, and the testimony of Jim Martinkus established, that the Respondent was an associate attorney, and an independent contractor, with the law firm of Erwin, Martinkus and Cole, Ltd. from mid 2002 to May 2007. In his position as an associate attorney, the Respondent agreed, and was required, to turn over to the law firm all fees he received from clients. The fees were then split equally, with some occasional adjustments, and the law firm paid the Respondent twice a month. (Tr. 16-18, 68-70; Complaint and Amended Answer, par. 2-3)
The Respondent also admitted the allegations in the Complaint (par. 4) that he failed to turn over to Erwin, Martinkus and Cole, Ltd. the amount of $30,020 in fees he had received from clients. The Respondent deposited the $30,020 into his personal checking account (Adm. Ex. 1) and used all of the funds for his own purposes. One-half of the foregoing fees, that is $15,010, belonged to the law firm. (Tr. 22-25, 71-75, 82-84; Adm. Ex. 2, p. 2; Resp. Ex. 3; Complaint and Amended Answer, par. 4-10).
Specifically, as charged in the Complaint, the Respondent admitted that he kept $30,020 in fees paid by the following twenty-one clients:
(1) $500 from Robert Drake on January 19, 2006;
(2) $1,000 from Craig Zeilenga on February 13, 2006;
(3) $2,500 from Justin Johnson on March 2, 2006;
(4) $500 from Trent Janssen on March 3, 2006;
(5) $500 from Jamie Ahn on March 6, 2006;
(6) $1,500 from Momodou Sallah on March 20, 2006;
(7) $2,500 from Bill Atkins on April 13, 2006;
(8) $2,500 from Ken Mattox on April 14, 2006;
(9) $750 from John Strode on April 27, 2006;
(10) $500 from Terry Bishop on May 4, 2006;
(11) $2,000 from Timothy Gillette on May 4, 2006;
(12) $270 from Lori Heatherton on May 15, 2006;
(13) $7,500 from Arian Clark on June 2, 2006;
(14) $1,500 from Catherine Larimore on June 27, 2006;
(15) $1,000 from Steven Stout on July 18, 2006;
(16) $1,500 from Larry Arnold on October 30, 2006;
(17) $1,000 from Amber Barrows on November 2, 2006;
(18) $350 from Ronald Harrison on November 20, 2006;
(19) $300 from Gary Muse on November 20, 2006;
(20) $1,500 from Jennifer Spears on January 3, 2007; and
(21) $350 from Brian Finkler on January 3, 2007.
It is clear that the Respondent knowingly and intentionally deposited into his own checking account, and then used for his own purposes, the amount of $15,010, one-half of the above fees, which belonged to the law firm of Erwin, Martinkus and Cole, Ltd. By doing so, the Respondent deprived the law firm of those funds for an indefinite period of time. Thus, the Respondent committed conversion. See In re Peters, 08 SH 61, Petition to Impose Discipline on Consent at 2-3 (Petition allowed in M.R. 22866, January 20, 2009); In re Johnson, 01 SH 106, Hearing Board Report at 2-4 (Hearing Board Report approved in M.R. 18480, January 23, 2003).
The Respondent was acting as the fiduciary and agent of Erwin, Martinkus and Cole, Ltd. when he accepted fees on behalf of the law firm. The Respondent admitted in his Amended Answer that he received fees from the above clients as the fiduciary and agent of the law firm. (Complaint and Amended Answer, par. 5) Also, in his letter to the ARDC on May 23, 2007, the Respondent acknowledged that the "misconduct I committed was the breach of a fiduciary duty to my prior firm, Erwin, Martinkus & Cole, Ltd." (Resp. Ex. 1) By failing to hold the funds he received from the clients separate from his personal funds and by intentionally spending those funds for his own purposes, the Respondent clearly breached his fiduciary duty to the law firm. See In re Peters and In re Johnson, supra.
We further find that the Respondent intentionally acted in a dishonest and deceitful manner toward the law firm of Erwin, Martinkus and Cole, Ltd. Without the knowledge or permission of the law firm, the Respondent took funds paid by clients for fees that belonged to the law firm. He then affirmatively acted to conceal his conversions by falsifying law firm records to show that the fees had been "written off." By indicating that the fees of certain clients were to be written off, the Respondent was also indicating that the fees had not been paid by the clients. (Tr. 19-20, 40-52) It is well established that fraud, dishonesty and deceit encompass any conduct, statement or omission, including the suppression of truth and the suggestion of what is false, that is calculated to deceive. See In re Gerard. 132 Ill. 2d 507, 528, 548 N.E.2d 1051, 1059 (1989); In re Dotson, 02 SH 37, Review Board Report at 8 (petition to file exceptions to Review Board Report denied in M.R. 19938, March 18, 2005). Clearly, the Respondent knowingly sought to deceive the law firm.
Therefore, we find that the Administrator proved by clear and convincing evidence that the Respondent committed the following misconduct as charged in the Complaint: (a)
conversion; (b) breached his fiduciary duty; (c) engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4); and (d) engaged in conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute, in violation of Supreme Court Rule 770.
The purpose of the attorney disciplinary system is not to punish the attorney for his or her misconduct, but "to protect the public, maintain the integrity of the legal profession, and protect the administration of justice from reproach." In re Winthrop, 219 Ill. 2d 526, 559, 848 N.E.2d 961, 981 (2006). In determining the appropriate sanction, we must 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). In addition, we may consider the deterrent value of the sanction, the "need to impress upon others the seriousness of the misconduct at issue," and whether the sanction will "help preserve public confidence in the legal profession." In re Twohey, 191 Ill. 2d 75, 85, 727 N.E.2d 1028, 1034 (2000); In re Gorecki, 208 Ill. 2d at 361, 802 N.E2d at 1200.
Although each disciplinary case "is unique and must be resolved in light of its own facts and circumstances," the sanction imposed should be "consistent with those imposed in other cases involving comparable misconduct." In re Howard, 188 Ill. 2d 423, 440, 721 N.E.2d 1126, 1135 (1999); In re Chandler, 161 Ill. 2d 459, 472, 641 N.E.2d 473, 479 (1994).
In this case, the Administrator requested that the Respondent be suspended from the practice of law for one year and be required to pay full restitution to the law firm of Erwin, Martinkus and Cole, Ltd. (Tr. 104, 114, 126) The Respondent urged that a suspension in the
range of forty-five days to five months, with an order that the Respondent pay full restitution, would be appropriate in this case (Tr. 115, 124)
The misconduct committed by the Respondent was extremely serious. He intentionally converted funds belonging to the law firm where he was an associate attorney. Instead of turning over to the law firm, as he was required to do, certain funds he received in fees the Respondent deposited such funds into his own account and used the funds for his own purposes. The Supreme Court has stated that intentional conversion involves "moral turpitude," is a "grievous departure from an attorney's ethical obligations," and "places the entire legal profession in disrepute." In re Feldman, 89 Ill. 2d 7, 10-11, 431 N.E.2d 388, 389 (1982); In re Merriwether, 138 Ill. 2d 191, 201, 561 N.E.2d 662, 666 (1990). The Court has also made it clear that every attorney, experienced or inexperienced, should understand the wrongfulness of taking funds belonging to another. See In re Rotman, 136 Ill. 2d 401, 420, 556 N.E.2d 243, 251-52 (1990). Moreover, the Respondent was charged with and admitted twenty-one separate conversions of client fees belonging to the law firm during a one-year period. Thus, the seriousness of the Respondent's misconduct is enhanced because he engaged in a pattern of conversions. See In re Feldman, 89 Ill. 2d at 12-13, 431 N.E.2d at 389-90; In re Lewis, 138 Ill. 2d 310, 342-43, 562 N.E.2d 198, 211-12 (1990).
According to the Respondent's own testimony, he deliberately took the law firm's funds, totaling $15,010, because he needed the money to pay his house payments and other personal bills. (Tr. 72, 90, 93) By wrongfully taking those funds that belonged to the law firm, the Respondent acted with a self-serving and dishonest motive. See In re Rotman, 136 Ill. 2d at 422, 556 N.E.2d at 252 (attorney acted with dishonest motive when he "took the [client's] money to pay debts he incurred from acting as a commodities trader"); In re Johnson, 01 SH 106, Hearing
Board Report at 2-4 (attorney engaged in conversion and dishonesty by keeping fees received from two clients instead of turning the funds over to the law firm) (Hearing Board Report approved in M.R. 18480, January 23, 2003).
In aggravation, the Respondent engaged in a pattern of dishonesty and deceit by submitting false information to the law firm in order to carry out and conceal his scheme of converting the fees he received from the clients. Specifically, he repeatedly falsified records to indicate that the fees had been "written off," and had not been paid by the clients. (Tr. 18-19, 37-53) In In re Levin, 04 SH 133, the attorney converted funds he was holding in escrow. The Hearing Board considered in aggravation that the attorney "attempted to conceal his actions by fabricating, or directing someone to fabricate, bank documents which grossly misrepresented the amount in the escrow account." (Hearing Board Report at 7) (Hearing Board Report approved in M.R. 20236, September 26, 2005). In In re Chandler, 161 Ill. 2d 459, 475, 641 N.E.2d 473, 480 (1994), the Court noted that "attorneys who participated in elaborate fraudulent schemes have received substantial suspensions from the practice of law for their misconduct."
Also in aggravation, the Respondent's testimony revealed that he converted fees he received from another client, named Weinstein, which was not charged in the disciplinary complaint. In May 2006, the Respondent kept $1,500 he received from Weinstein and deposited it into his personal bank account. (Adm. Ex. 1, p. 40) Later, "in the middle of the year 2006" the Respondent borrowed $1,500 from his brother and repaid the $1,500 to the law firm. The Respondent testified that, in repaying the funds to the law firm, he discussed the diversion of Weinstein's fees into his own account with Jim Martinkus, a partner in the law firm. However, he did not inform Martinkus that funds previously received from at least eleven other clients (See Complaint, par 4) had been converted. (Tr. 77-79, 96) Thus, not only was there an additional act
of conversion by the Respondent, but the Respondent led Mr. Martinkus to believe that the diversion of Weinstein's fees was an isolated incident. (Tr. 96)
We also consider in aggravation that the Respondent was not candid in his testimony before us. The Supreme Court has stated that "a lack of candor before the Hearing Board is a factor that may be considered in aggravation." (In re Gorecki, 208 Ill. 2d at 366, 802 N.E.2d at 1202; In re Lewis, 138 Ill. 2d at 342, 562 N.E.2d at 211) During his testimony, the Respondent was asked if Mr. Martinkus had "discovered independently that Mr. Wienstein's payment for fees had been diverted." The Respondent replied "I'm not a hundred percent certain, to be honest with you . . . I don't recall all the details about how this, the timing I guess involved." (Tr. 102-03) We find it impossible to believe that the Respondent did not know or recall whether Mr. Martinkus had discovered the Respondent's diversion of Weinstein's payment prior to any repayment or discussion about that matter. This was a significant incident, and anyone in similar circumstances would know whether his conversion of funds was discovered by his employer or whether he came forward himself to disclose the matter and repay the funds.
We also find that the Respondent testified falsely by claiming he "always intended . . . [to] pay all this money back" (Tr. 78, 96-97) while he was converting the payments received from the clients. It simply defies common sense for the Respondent to claim he intended to repay the law firm for the funds he converted when, as he acknowledged, he did not prepare or maintain any list or record of the clients whose payments he converted. (Tr. 80-81, 97) Furthermore, after Mr. Martinkus discovered that the Respondent had converted some funds, the Respondent prepared a list of the clients and the amount of funds converted from those clients. (Adm. Ex. 2, p. 2) However, the list prepared by the Respondent contained the names of only nine clients, which was less than one-half the actual number. The list also showed that only
$6,325 had been converted, which was also less than one-half of the actual amount converted. The Respondent represented to Mr. Martinkus that the foregoing list was the "complete list." (Tr. 24) Thus, it is apparent that the Respondent sought to conceal the extent of his conversions and did not intend to repay the funds he converted from the law firm.
Further, the Respondent did not, in good faith, believe the list of nine clients he prepared for Mr. Martinkus was a "complete" list of the funds converted. As mentioned above, the nine clients identified on the list were less than one-half of the actual total number. Also, the Respondent converted a $7,500 payment from a client named Clark in June 2006. The next highest payment he converted was $2,500. (See Complaint, par. 4) It is impossible to believe that the Respondent, in good faith, overlooked the conversion of such an unusually large amount or twelve other payments he converted, when preparing the list for Mr. Martinkus.
The Administrator pointed out in closing argument that the funds the Respondent converted came from checks that clients made payable to the Respondent, and asked us to infer that the Respondent directed the clients to prepare the checks in that manner. (Tr. 105) However, we decline to infer such a conclusion from the suspicious circumstances presented. If, in fact, the Respondent did direct clients to make the checks payable to him, rather than to the law firm, there should have been at least one client available to so testify.
There is also mitigation in this case. The Respondent has been licensed to practice law since November 2000, and has not been previously disciplined. It also appears that he was fully cooperative with the ARDC during the disciplinary proceedings. He admitted most of the factual allegations in the Complaint and that he engaged in attorney misconduct. (Amended Answer, Par. 1-12: Tr. 90-91) We believe the Respondent recognized the wrongfulness of his misconduct, accepted sole responsibility for it, and indicated sincere remorse for his actions. (Tr. 91-92, 94,
122-23) It has been stated that "[r]emorse is an important mitigating factor" and "[a]lthough remorse does not excuse Respondent's misconduct, it indicates that he will not repeat the misconduct." In re Sturgeon, 01 CH 44, Hearing Board Report at 16 (Hearing Board Report approved in M.R. 18711, May 22, 2003) Additionally, no client was harmed financially or otherwise by the Respondent's misconduct. (Tr. 30-31, 85-86)
The Respondent argued that the fact he self-reported his misconduct to the ARDC and made partial restitution for the funds he converted should also be considered in mitigation. (Tr. 122) We do not believe the foregoing matters weigh heavily in mitigation based upon the circumstances of this case.
The Respondent sent a letter to the ARDC regarding his misconduct on May 23, 2007. (Resp. Ex. 1) However, this letter, or self-report of misconduct, was made after Mr. Martinkus had advised the Respondent to do so and after Mr. Martikus indicated that he also had an obligation to report the Respondent's misconduct. (Tr. 25-26) In fact, in his letter to the ARDC, the Respondent pointed out that the law firm of Erwin Martinkus & Cole, Ltd. "is also aware of this misconduct and is reporting to you separately." (Resp. Ex. 1) Additionally, the Respondent's letter to the ARDC admitted only the misconduct of "breach of a fiduciary duty;" mentioned only "9 files" in which he "was paid by my client and did not share the receipt with [the law firm];" and said the total amount taken from the law firm was "$6,325.00." (Resp. Ex. 1) As discussed above, we simply do not believe that the Respondent actually thought his conversions were limited to merely nine clients or the amount of $6,325.
The partial restitution made by the Respondent, in the amount of $6,325 (Resp. Ex, 2; Adm. Ex. 2), was made only after some of his conversions were discovered by the law firm. (Tr. 18-19, 22-23) As discussed above, at the time the Respondent paid the foregoing restitution, he
was certainly aware that he had converted considerably more than $6,325, but he provided the law firm with only a partial list of the funds he converted (Adm. Ex. 2, p. 2), and failed to disclose the full extent of his conversions to the law firm (Resp. Ex. 3, p. 2; Tr. 24-25). The law firm discovered other conversions upon reviewing the Respondent's bank records, which were obtained by way of ARDC subpoena during the disciplinary proceeding. (Tr. 24-25) On the day of the disciplinary hearing, the Respondent signed an agreement to repay an additional $8,685 to the law firm at the rate of at least $500 per month. (Resp. Ex. 3) Obviously, none of the $8,685 was paid before the disciplinary hearing. In In re Ess, 04 SH 145, the Hearing Board (at 28) stated that the restitution paid by the respondent was not given substantial weight because it was "made only after his clients raised questions about his handling of their money." (Hearing Board Report approved in M.R. 20675, March 20, 2006). See also In re Ucherek, 07 SH 33, Hearing Board Report at 50-51 (Hearing Board Report approved in M.R. 22538, September 17, 2008). Similarly, in this case we do not find the payment of partial restitution and the agreement to pay additional restitution to be of great weight in mitigation.
The Respondent argued that he actually converted the amount of $12,345.20, rather than $15,010, because the law firm owed him $2,664.88 in various credits or set-offs. (Tr. 115; Adm. Ex. 2, p. 1, 3) We disagree. The Respondent was required to turn over all fees he received to the law firm. Even if the law firm owed him a certain amount of money, he had no authority to take fees whenever he wanted to do so. This is particularly true when he not only failed to disclose to the law firm that he was taking the finds, but affirmatively sought to conceal what he was doing by submitting fraudulent records.
We also note that the Respondent did not present any character witnesses or professional colleagues to testify about his reputation for honesty and integrity. See In re Lewis, 138 Ill. 2d at 344, 562 N.E.2d at 212; In re Merriwether, 138 Ill. 2d at 203, 561 N.E.2d at 667.
We have considered the cases cited by both the Administrator and the Respondent.
In In re Breaux, 98 CH 110, M.R. 15973 (September 29, 1999), cited by the Administrator (Tr. 110-11), a 29-year old attorney converted $990 from a law firm. He received the funds as fees from three clients and failed to turn the funds over to the law firm as he was required to do. After being discharged by the law firm for stealing the funds, he moved to Wisconsin and submitted an application to take the bar examination. A question on the application asked his reason for leaving the above law firm. In answering the question, he did not disclose that he had been fired, but falsely said he left because he had opened his own office. In mitigation, the attorney had no prior discipline (although he was licensed for less than a year before the misconduct occurred); he admitted his misconduct and expressed remorse; he disclosed the extent of his misconduct when questioned about it by a partner; he made full restitution; he cooperated in his disciplinary proceedings; and he had provided pro bono and community services. The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for one year and until he completed the program offered by the Illinois Professional Responsibility Institute.
We recognize, as pointed out by the Respondent (Tr. 116), that the misconduct in Breaux of making of a false statement on a bar application, which is not present in the current matter, is most egregious misconduct. In regard to such applications the Supreme Court has stated the "[f]ailure to answer truthfully and fully has been held tantamount to a fraud upon this court and has resulted in the imposition of severe disciplinary measures." (In re Ascher, 81 Ill. 2d 485, 499,
411 N.E.2d 1, 7 (1980); See also In re Chandler, 161 Ill. 2d at 474, 641 N.E.2d at 480) Nevertheless, in comparing the Breaux case with the Respondent's case, we find that the conversions by the Respondent involved over twenty incidents and more than $15,000, whereas in Breaux there were three conversions totaling $990. Also, there is considerably more aggravation and far less mitigation in this case than in the Breaux case. In Breaux, the attorney disclosed the extent his conversions when questioned by a partner in the law firm. In this case, the Respondent did not disclose the full extent of his conversions, but affirmatively sought to deceive the law firm by preparing a list of only nine incidents of conversion. The additional conversions were discovered by the law firm after examining the Respondent's bank records that had been obtained by the Administrator during the disciplinary investigation. The Respondent has agreed to make full restitution, but has not yet done so. In Breaux, the attorney made full restitution. Finally, unlike in Breaux, the Respondent gave false testimony in this matter.
In In re Alpert, 01 CH 13, M.R. 17749 (November 28, 2001), cited by the Administrator (Tr. 113), the attorney defrauded the law firm in which he was a partner. Over a two-year period he obtained about $35,000 by submitting expense vouchers that contained false information. When another partner inquired about two of the vouchers, the attorney made false statements. In mitigation, the attorney had not been previously disciplined in his "fifteen-year legal career;" he cooperated in his disciplinary proceedings; if there had been a hearing in the matter, the attorney would have presented "the testimony of several lawyers and judges as to his reputation for truthfulness and veracity;" he made full restitution; and no client was harmed by the attorney's misconduct. The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for one year.
In In re Solomon, 92 CH 159, M.R.9073 (May 21, 1993), cited by the Administrator (Tr. 113), the attorney defrauded the accounting firm where he was employed out of about $22,000 by making about 154 false entries on expense vouchers over an eight-year period. (Hearing Board Report at 3, 9) In mitigation, the attorney presented six character witnesses who testified about his reputation for honesty and integrity and about his "extremely active" charitable services. He raised "large sums of money for various causes and [has been] honored by various organizations. (Hearing Board report at 8-10) He also repaid the amount he had fraudulently obtained. (Hearing Board Report at 3) The Supreme Court approved the recommendation of the Hearing Board and suspended the attorney for one year.
In both Alpert and Solomon, the attorneys' converted more money from the law firms, and over longer periods of time, than the Respondent in this case. However, neither of those cases involved the aggravating factor of giving false testimony. Also, in both Alpert and Solomon, full restitution was made, several character witnesses would testify favorably as to the attorneys' reputation for honesty and integrity, and the attorneys had lengthy legal careers without prior discipline.
In In re Kleinmuntz, 98 CH 30, M.R. 15045 (September 28, 1998), cited by the Respondent (Tr. 118-19), the attorney settled a case for $75,000 and submitted documents to the law firm falsely representing that the case had settled for only $15,000. As a result, the attorney turned over fees of $1,125 to the law firm instead of the $5,625 that the firm should have received. In mitigation, the attorney had practiced law for about twelve years prior to his misconduct without being disciplined; he was involved in a "substantial number of civic, charitable and pro bono activities;" he made full restitution; he cooperated fully during the
disciplinary process, and he apologized and showed remorse. The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for forty-five days.
In In re Morse, 99 CH 82, M.R. 17319 (March 22, 2001), cited by the Respondent (Tr. 119-20), the attorney converted a referral fee of $30,000 and cost reimbursement of $4,059 that he was required to turn over to the law firm. When a partner in the law firm inquired about the matter, the attorney acknowledged that he had kept the funds and explained that, at the time, he thought he was entitled to the referral fee. The attorney had no previous discipline during his sixteen years of practice; he made restitution; he expressed remorse; and he was involved in bar association activities for fifteen years. Additionally, the administrator noted the attorney's "candor and willingness to admit his misconduct." The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for five months and until he completed the program offered by the Illinois Professional Responsibility Institute.
In In re Hilliard, 04 CH 58, M.R. 19967 (March 18, 2005), cited by the Respondent (Tr. 120-21), the attorney converted a fee of $15,000 from the law firm at which he was a partner. He used the money to pay his gambling debt. When another partner asked him about the fee, the attorney falsely stated that it had not been paid by the client. The misconduct was related to the attorney's gambling and he obtained treatment for this problem. He made restitution; he had no prior misconduct in about 19 years of practice; he cooperated with the Administrator; and, if there had been a hearing, three character witnesses would have testified as to his good reputation. The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for five months, with the condition that he continue the treatment for his gambling problem during the period of suspension and submit monthly reports from the treating doctor.
In Kleinmuntz, Morse, and Hilliard, the conversion by each attorney from the law firms arose out of a single incident. Each of the attorneys had practiced law for a lengthy period (12 years, 16 years, and 19 years) without having prior discipline, and they made full restitution. In Kleinmuntz and Morse there was substantial community or bar activities, and in Hilliard character witnesses were available to testify. Additionally, in Morse, the Administrator specifically noted the attorney's "candor." Unlike in the foregoing cases, the Respondent engaged in a pattern of conversions; he testified falsely at the hearing; he prepared an incomplete list for the law firm in order to conceal the extent of his conversions; he has not made full restitution; he practiced law for about five years before the misconduct without prior discipline; he did not present any character witnesses; and the only testimony as to his community, bar, or pro bono activities came from the Respondent. (See In re Rotman, 136 Ill. 2d at 418-19, 556 N.E.2d at 251)
Two other case cited, In re Holcomb, 03 CH 75, M.R. 19443 (October 12, 2004) and In re Bertrand, 06 SH 22, M.R. 21281 (January 12, 2007)(Tr. 11-12, 121) involved misconduct that is significantly different than the misconduct in the case before us. In both Holcomb and Bertrand, the attorneys converted funds from a law firm, but they neglected cases and made false statements to the clients. In this case, the Respondent's misconduct was not directed at or harmful to clients.
We also note the case of In re Gillespie, 03 SH 111, M.R. 191391 (January 20, 2004). Gillespie was a 76-year old attorney who had practiced law for 50 years without prior discipline. His misconduct pertained to a fee of $126,000 he received in one case. He failed to turn the fee over to the law firm where he was employed, as he was required to do. Also, he had a written agreement with another attorney in the case, whereby the other attorney was to receive one-third
of the fee. However, Gillespie did not inform the other attorney that the fee had been received. Gillespie had not paid restitution at the time the Petition to Impose Discipline on Consent was considered by the Hearing Board. He was cooperative in the disciplinary process, and "several attorneys and judges would testify to [his] good reputation" if the case went to hearing. The Supreme Court imposed a suspension for two years and until restitution is paid.
After considering the nature of the Respondent's misconduct, the aggravating and mitigating factors, the purpose of a sanction, and the cases discussed above, we believe that a lengthy suspension is appropriate in this matter.
In concluding that a suspension is the appropriate sanction, we are concerned about the Respondent returning to practice after a fixed period of suspension without supervision of his bookkeeping procedures or handling of third party funds. On the other hand, we do not believe a suspension until further order of the Court is necessary. A suspension until further order of the Court requires an attorney to spend considerable time preparing a petition and to meet a "very heavy burden of proof" before being allowed to resume the practice of law. (In re White, 04 CH 137, Review Board Report at 11 (Petition to file exceptions to Review Board Report denied in M.R. 21606, May 18, 2007). Rather, we believe a term of probation with conditions would adequately protect the public and provide assurance that the Respondent is able and willing to handle financial aspects of his practice properly.
We recognize that the Respondent's misconduct included dishonesty. However, "a finding or admission of intentional dishonesty does not always preclude probation." (In re Laz, 05 CH 114, Review Board Report at 6 (Petition to file exceptions to Review Board Report denied in M.R. 22484, September 17, 2008). The following cases illustrate situations in which probation was imposed when the misconduct included both conversion and dishonesty. Also, the
following cases do not involve any medical, mental or addiction problems that needed to be addressed with treatment.
In In re Williams, 03 CH 124, M.R. 19903 (January 14, 2005), the attorney's misconduct included the conversion of funds from three clients and conduct involving dishonesty. (Hearing Board Report at 15-16) The attorney was suspended for nine months, stayed after five months by a one-year term of probation, provided that restitution was paid prior to the beginning of the probationary period. The conditions of probation included that the attorney establish and utilize a certain system for handling client and third party funds; meet with counsel for the Administrator at least quarterly and provide all records requested; and complete the Professionalism Seminar conducted by the Illinois Professional Responsibility Institute.
In In re Bleiman, 05 CH 84, M.R. 209 77 (September 20, 2006), the attorney converted about $17,000 from a client's settlement proceeds and engaged in conduct involving dishonesty. (Petition to Impose Discipline on Consent at 2-3) The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for one year, stayed after four months by a one-year period of probation. The conditions of probation included that the attorney complete the course conducted by the Illinois Professional Responsibility Institute; establish and utilize a certain system for handling client and third party funds; and meet with counsel for the Administrator at least quarterly and provide all records requested.
In In re Robertson, 07 CH 3, M.R. 22326 (May 19, 2008), the attorney commingled and converted about $14,000 from escrow funds he was holding in twelve different real estate matters. He also engaged in conduct involving dishonesty. (Petition to Impose Discipline on Consent at 2-4) He was previously censured and required to complete the professionalism program of the Illinois Professional Responsibility Institute for other misconduct involving a real
estate transaction. (Petition to Impose Discipline on Consent at 4) The Supreme Court allowed the Petition to Impose Discipline on Consent, and suspended the attorney for one year, stayed after ninety days by a one-year period of probation. The conditions of probation included that the attorney enroll and continue to participate in the Chicago Bar Association's Law Practice Management Program; obtain a mentor who will submit quarterly reports to the Administrator; establish and utilize a certain system for handling client and third party funds; and make reasonable efforts to locate and repay individuals whose funds he converted.
The Respondent's misconduct did not involve the conversion or improper handling of any funds belonging to a client, or any act that was to the detriment of a client. As noted above, the Respondent showed that he understands the seriousness of his misconduct, and he expressed genuine remorse. We also found the Respondent sincere when he testified that he would not act contrary to the interests of his clients. (Tr. 91, 93-94)
In In re Jordan, 157 Ill. 2d 266, 623 N.E.2d 1372 (1993), the Supreme Court stated that the "ultimate objective in attorney discipline is not to be harsh or to punish the respondent, but to impose a sanction that is uniquely tailored to the precise facts of each particular case." (157 Ill. 2d at 274, 623 N.E.2d at 1377) The Court also made the following observations about probation:
"Both the public and the legal profession benefit from our use of probation as a form of attorney discipline under Rule 772 … the public benefits because it does not lose the opportunity to be served by able counsel. Moreover, probation permits the attorney to continue his legal practice; the lawyer does not forfeit all gainful employment or valuable experience in his chosen field.
Probation, by its very nature, reminds both the bar and the public that professional misconduct by attorneys will not be countenanced. By placing conditions on the respondent's term of probation, the errant attorney is constantly reminded that his actions were unethical." (157 Ill. 2d at 273, 623 N.E.2d at 1376-77)
The Court in Jordan imposed a suspension, stayed for a period of probation, after finding that the "respondent's right to practice should be monitored rather than revoked" and that "probation will
adequately protect the public and the reputation of the legal profession." (157 Ill. 2d at 275-76, 623 N.E.2d at 1377-78)
As in Jordan, we believe the Respondent's right to practice law needs to be monitored rather than revoked, and that a suspension, stayed in part by a term of probation, would adequately protect the public, serve as a deterrent, and uphold the reputation of the legal profession.
Therefore, we recommend that the Respondent, Brian Edward King, be suspended from the practice of law for a period of two (2) years, with the suspension stayed after nine (9) months by a two (2)-year term of probation subject to the following conditions:
Respondent shall attend and successfully complete the course conducted by the Illinois Professional Responsibility Institute;
Respondent shall make restitution to Erwin, Martinkus and Cole, Ltd. in the amount of $8,685, at the rate of not less than $500 per month, pursuant to the agreement he signed on November 6, 2008 (Resp. Ex. 3);
Respondent shall establish and utilize a system for handling of funds belonging to clients and third parties and the maintenance of records that conforms to the requirements of Rule 1.15 of the Illinois Rules of Professional Conduct and instructions provided to Respondent by the Administrator, including:
Trust Account Procedures
Account Check Register- List sequentially all trust account deposits and trust account checks and maintain a current and accurate daily balance on the trust account.
Account Receipts Journal- list chronologically all deposits into the trust account. Each deposit will list the date of the deposit, the source of each deposit, the client matter, the deposit number and the amount of the deposit. Maintain a copy of each item deposited.
Account Disbursement Journal- list chronologically all trust account disbursements. Identify each disbursement with the date of the disbursement check, the trust account check number, the payee, the purpose of the disbursement, the client matter and the amount of the disbursement check.
Client Ledger Journal- list chronologically for each client matter all receipts, disbursements and remaining balances. Prepare a separate page for each client matter and list chronologically all receipts and disbursements and remaining balances for each client matter.
Source Documents, which must be saved for seven years:
Cancelled checks - all trust account checks must have a named payee (no checks written to "cash") and the memo portion of the check must contain a reference to a client matter.
Time and Billing Records
Copies of records from client files that are necessary for a full understanding of the lawyer's financial transactions with the client: e.g., retainer and engagement agreements; settlement statements to client showing the disbursement of the settlement proceeds; bills sent to clients and records of payment to other lawyers or non-employees for services rendered.
There must be a running balance maintained for all ledger and account books. The balances in the client ledger journal must be reconciled each month with the balances in the trust receipts and disbursement journals, the account checkbook register and the bank statements. Records of each reconciliation must be maintained for seven years.
During the period of probation, Respondent shall meet with the Administrator's representative on at least a quarterly basis and shall provide the Administrator with any and all documentation and records requested in order to verify his compliance with Condition (c);
Respondent shall notify the Administrator within fourteen days of any change of address;
Respondent shall comply with the Illinois Rules of Professional Conduct and shall timely cooperate with the Administrator in providing information regarding any investigation relating to his conduct;
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 period of suspension shall commence on the date of the determination that any term of probation has been violated.
Date Entered: March 26, 2009
|Jack O. Asher, Chair, with Panel Members, Claire A. Manning and Charles E. King, Sr., concurring|