BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
Commission No. 2012PR00163
FILED - December 17, 2012
Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission, by his attorney, Wendy J. Muchman, pursuant to Supreme Court Rule 753(b) complains of Respondent James E. Pancratz, who was licensed to practice law in Illinois on May 5, 1983, and alleges that Respondent has engaged in the following conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute, and which subjects Respondent to discipline pursuant to Supreme Court Rule 770:
(Conversion of client funds-McAllister)
1. On January 17, 2003, while being treated at Provena St. Mary's Hospital, Keyanna McAllister suffered hypoxia from acute chest syndrome secondary to sickle cell disease and died along with her unborn male fetus.
2. On January 18, 2005, attorney Joseph A. Leonardi filed a wrongful death action in the Circuit Court of Cook County on behalf of Keyanna's husband, Matthew McAllister, as well as the estates of Keyanna McAllister and John Doe McAllister (Matthew's unborn son), against Riverview OB/GYN and Renuka Ramakrishna, M.D. The clerk of the court assigned the matter case number 2005 L 575. The complaint was later amended on multiple occasions to add the McAllisters' minor children, Jamari and Janasia McAllister, as plaintiffs and to add various other defendants.
3. On February 4, 2005, Respondent filed his appearance as trial lawyer in case number 2005 L 575.
4. Prior to September 17, 2008, the defendants agreed to settle the plaintiffs' claims in case no. 05 L 575 for $2,750,000, with a net distribution to Matthew McAllister in the amount of $890,291.75, with Jamari and Janasia each to receive the amount of $445,145.85.
5. On September 17, 2008, Judge Thomas Hogan entered an order of settlement approval, distribution and dismissal in case number 05 L 575, which provided for distribution of settlement funds as set forth in paragraph four above. The order further provided that Respondent was entitled to fees in the amount of $916,667 and costs in the amount of $52,749.55.
6. On September 17, 2008, Respondent deposited Cambridge Integrated Services Group, Inc. check number 139389, which had been made payable to "Matthew McAllister, as Special Administrator of the Estate of Keyanna McAllister, Deceased, and James Pancratz, Ltd.," in the amount of $2,750,000 ("McAllister settlement funds"), into his BMO Harris Bank account number ending in the four digits 6734. That account was entitled "James E. Pancratz, Attorney at Law Client Funds Account," hereinafter "client fund account."
7. On September 22, 2008, Respondent drew check number 2461 from the client fund account payable to himself in the amount of $969,416.55, constituting the amount of the McAllister settlement funds to which he was entitled in fees and costs.
8. On October 21, 2008, Respondent drew check number 2462 on his client fund account, payable to Matthew McAllister in the amount of $790,291.75, as McAllister's portion of the McAllister settlement funds, less $100,000 in costs previously incurred by Respondent.
9. As of September 14, 2008, Respondent had not distributed the $890,291.70 of the McAllister settlement funds that was due to the minors Jamari and Janasia McAllister.
10. As of September 14, 2011, prior to any disbursement on behalf of Jamari or Janasia McAllister, the balance of Respondent's client trust fund account fell to $3,721.29, as Respondent drew checks on the account, transferred funds, withdrew cash without authorization from the father, the children or their guardian, or Judge Hogan, and used the money for his own business or personal purposes,
11. As of September 14, 2011, without authorization from the father, the children or their guardian, or Judge Hogan, Respondent had used at least $886,570.41 of the McAllister settlement funds intended for Jamari and Janasia McAllister for his own business and personal purposes.
12. By reason of the conduct described above, Respondent has engaged in the following misconduct:
breach of fiduciary duty;
conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct (1990); and
failure to promptly deliver to a client or third person any funds or other property that the client or third person is entitled to receive, in violation of Rule 1.15(b) of the Illinois Rules of Professional Conduct (1990.)
(Abandonment of law practice)
13. Prior to June 23, 2012, Respondent was a sole practitioner with a registered business address of 203 N. Wabash Avenue, Suite 2200, Chicago, Illinois.
14. On or about June 23, 2012, Respondent crossed the border into Mexico in a car registered to a third party. Since June 23, 2012, Respondent has not communicated with his family members or office staff. Border authorities were requested by law enforcement to report any attempt by Respondent to return to the United States but as of the date the complaint was voted, have not reported any such attempt.
15. On or about June 23, 2012, Respondent abandoned his law practice. At no time prior to departing for Mexico did Respondent take any action to return files to his clients, to notify them of his departure, or to take reasonable steps to avoid any resultant prejudice to those clients. In addition, Respondent did not seek permission to withdraw from representation in those matters that were pending before various tribunals in which Respondent had filed his appearance.
16. By reason of the conduct described above, Respondent has engaged in the following misconduct:
failing to take steps to the extent reasonably practicable to protect the client's interests in violation of Rule 1.16(d) of the Illinois Rules of Professional Conduct;
conduct that is prejudicial to the administration of justice in violation of Rule 8.4(d) of the Illinois Rules of Professional Conduct; and
conduct which tends to defeat the administration of justice, or to bring the courts or the legal profession into disrepute.
WHEREFORE, the Administrator respectfully requests that this matter be assigned to a panel of the Hearing Board, that a hearing be held, and that the panel make findings of fact, conclusions of fact and law, and a recommendation for such discipline as is warranted.
Wendy J. Muchman