In re PRB Docket No. 2013.160, 2015 VT 54 (mem.)
By Andrew Delaney
In Living on a Prayer, Jon Bon Jovi sings, “We’ve got to hold on to what we’ve got.” If “what we’ve got,” however, are checks written to our firm from one of our trust accounts, then Mr. Bon Jovi better shut his damned yapper.
The SCOV’s opinion in this case is really just one paragraph. I’ve made the Beyoncé-says-put-a-ring-on-it joke too many times— including once before on a similar PRB decision—to try to play it off as something new, though I steadfastly refuse to stop finding it amusing. Basically, the SCOV says, “Publish it!” to the hearing panel’s decision in this case.
“So what’s the decision?” you might ask. Well, respondent gets admonished by disciplinary counsel “for holding uncashed checks in the amount of $124,797.40 drawn on her trust account for a period of seven months.” Thanks, Bon Jovi. Real good advice, there. Livin' on a prayer, indeed.
Respondent was admitted to the Vermont bar in 1984. She has a bunch of trust accounts, and one of ‘em she uses for title insurance. The only use of this account was to pay a portion of the premium to the title-insurance company and a portion to the firm as its commission.
Respondent was “randomly selected for a compliance examination as part of Disciplinary Counsel’s audit program.” This is like winning the $#!%%iest lottery in the world for lawyers. So a CPA stepped in and audited respondent’s trust accounts. During this process, it was discovered that respondent had an envelope of checks she hadn’t cashed (almost $125K in all). This represented seven months’ worth of title insurance premiums that respondent had saved up so that she’d be able to pay her malpractice premium in full and perhaps hire a new associate.
She knew she wasn’t supposed to commingle funds, but it didn’t occur to her that failing to cash checks payable to the firm would result in such commingling. When she was told it wasn’t kosher, she immediately rectified the situation and stopped piggy-banking checks. There was no improper use of funds and no clients or third parties were injured.
The hearing panel finds that respondent’s lack of selfish or dishonest motive, her lack of any prior disciplinary record, immediate good-faith effort to fix the problem, full and free disclosure to disciplinary counsel, cooperation, and remorse are all mitigating factors. The only aggravating factor is her substantial experience practicing law.
The hearing panel notes that Rule 1.15(a)(1) of the Rules of Professional Conduct prohibits commingling of funds—in other words, a client’s property (or a third party’s property) must be kept separately from the lawyer’s. The panel finds that respondent’s “practice of holding checks payable to her firm for premiums owed to the firm without cashing the checks resulted in commingling of her funds with those of a third party in violation of this rule.”
In fashioning an appropriate sanction, the panel looks at the parties’ recommended sanction, the ABA Standards for Imposing Lawyer Sanctions and previous panel decisions. Here the panel accepts the parties’ recommendation for admonition by disciplinary counsel.
Quoting the ABA Standards, the panel notes that “admonition is appropriate when a lawyer is negligent in dealing with client property and causes little or no actual or potential injury to a client.” Here, respondent didn’t mean to violate the rule, but was negligent in not recognizing how her practice created a prohibited commingling. There was no injury to anyone.
The panel also notes all the mitigating factors and where those are mentioned in the ABA Standards. I’m not going to do all that. Here, the panel concludes that the one aggravating factor—substantial experience in the practice of law—doesn’t outweigh the mitigating factor so as to bump up the sanction past admonition.
The panel also reasons that the sanction is “consistent with a number of recent cases in which the misconduct is brought to light by the random trust account audit program.” It really boils down to negligent maintenance of trust accounts with no ill intent and no actual harm to clients or third parties, and immediate rectification. In these cases, admonition by disciplinary counsel is appropriate.
So the sanction is private admonition, and the SCOV signs off on it as its own.
Now, I’m wondering what admonition actually is. Is it disciplinary counsel waggling a finger at you, a don’t-be-naughty-no-more-or-else letter, both, or something else entirely? Not that I’m eager to find out, just a little curious.
By Andrew Delaney
In Living on a Prayer, Jon Bon Jovi sings, “We’ve got to hold on to what we’ve got.” If “what we’ve got,” however, are checks written to our firm from one of our trust accounts, then Mr. Bon Jovi better shut his damned yapper.
The SCOV’s opinion in this case is really just one paragraph. I’ve made the Beyoncé-says-put-a-ring-on-it joke too many times— including once before on a similar PRB decision—to try to play it off as something new, though I steadfastly refuse to stop finding it amusing. Basically, the SCOV says, “Publish it!” to the hearing panel’s decision in this case.
“So what’s the decision?” you might ask. Well, respondent gets admonished by disciplinary counsel “for holding uncashed checks in the amount of $124,797.40 drawn on her trust account for a period of seven months.” Thanks, Bon Jovi. Real good advice, there. Livin' on a prayer, indeed.
Respondent was admitted to the Vermont bar in 1984. She has a bunch of trust accounts, and one of ‘em she uses for title insurance. The only use of this account was to pay a portion of the premium to the title-insurance company and a portion to the firm as its commission.
Respondent was “randomly selected for a compliance examination as part of Disciplinary Counsel’s audit program.” This is like winning the $#!%%iest lottery in the world for lawyers. So a CPA stepped in and audited respondent’s trust accounts. During this process, it was discovered that respondent had an envelope of checks she hadn’t cashed (almost $125K in all). This represented seven months’ worth of title insurance premiums that respondent had saved up so that she’d be able to pay her malpractice premium in full and perhaps hire a new associate.
She knew she wasn’t supposed to commingle funds, but it didn’t occur to her that failing to cash checks payable to the firm would result in such commingling. When she was told it wasn’t kosher, she immediately rectified the situation and stopped piggy-banking checks. There was no improper use of funds and no clients or third parties were injured.
The hearing panel finds that respondent’s lack of selfish or dishonest motive, her lack of any prior disciplinary record, immediate good-faith effort to fix the problem, full and free disclosure to disciplinary counsel, cooperation, and remorse are all mitigating factors. The only aggravating factor is her substantial experience practicing law.
The hearing panel notes that Rule 1.15(a)(1) of the Rules of Professional Conduct prohibits commingling of funds—in other words, a client’s property (or a third party’s property) must be kept separately from the lawyer’s. The panel finds that respondent’s “practice of holding checks payable to her firm for premiums owed to the firm without cashing the checks resulted in commingling of her funds with those of a third party in violation of this rule.”
In fashioning an appropriate sanction, the panel looks at the parties’ recommended sanction, the ABA Standards for Imposing Lawyer Sanctions and previous panel decisions. Here the panel accepts the parties’ recommendation for admonition by disciplinary counsel.
Quoting the ABA Standards, the panel notes that “admonition is appropriate when a lawyer is negligent in dealing with client property and causes little or no actual or potential injury to a client.” Here, respondent didn’t mean to violate the rule, but was negligent in not recognizing how her practice created a prohibited commingling. There was no injury to anyone.
The panel also notes all the mitigating factors and where those are mentioned in the ABA Standards. I’m not going to do all that. Here, the panel concludes that the one aggravating factor—substantial experience in the practice of law—doesn’t outweigh the mitigating factor so as to bump up the sanction past admonition.
The panel also reasons that the sanction is “consistent with a number of recent cases in which the misconduct is brought to light by the random trust account audit program.” It really boils down to negligent maintenance of trust accounts with no ill intent and no actual harm to clients or third parties, and immediate rectification. In these cases, admonition by disciplinary counsel is appropriate.
So the sanction is private admonition, and the SCOV signs off on it as its own.
Now, I’m wondering what admonition actually is. Is it disciplinary counsel waggling a finger at you, a don’t-be-naughty-no-more-or-else letter, both, or something else entirely? Not that I’m eager to find out, just a little curious.
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