Case Title: STATE ex. rel. OKLAHOMA BAR ASSN. v. PHILLIPS

Citation: 

Docket Number: SCBD-4650

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2002-10-29T00:00:00Z

Document:
STATE ex. rel. OKLAHOMA BAR ASSN. v. PHILLIPS  STATE ex. rel. OKLAHOMA BAR ASSN. v. PHILLIPS 2002 OK 86 60 P.3d 1030 Case Number: SCBD-4650 Decided: 10/29/2002 THE SUPREME COURT OF THE STATE OF OKLAHOMA STATE OF OKLAHOMA ex rel. OKLAHOMA BAR ASSOCIATION, Complainant v. DAVID C. PHILLIPS III, Respondent BAR DISCIPLINE PROCEEDING ¶0 The complainant, Oklahoma Bar Association (Bar Association), charged the respondent, David C. Phillips III, with four counts of professional misconduct: misappropriation; mismanagement of a trust account; misrepresentations in the investigative proceedings; and an unwillingness to cooperate in the grievance process. Finding clear and convincing evidence to support the charges of mishandling of the trust account and failure to make a full, fair and timely response to the investigation, the trial panel recommended that: the respondent be suspended for thirty days; publicly reprimanded; and costs be imposed. The trial panel found, and the Bar concedes, that there is insufficient evidence to support the charges of misappropriation and misrepresentation. We hold that: 1) there is clear and convincing evidence of the respondent's mismanagement of his trust account and his failure to cooperate in the grievance process; and 2) the respondent's misconduct, his lack of a prior disciplinary history and discipline administered in similar cases warrants: public censure, a thirty-day suspension and the payment of $1,758.91 in costs. RESPONDENT SUSPENDED; COSTS IMPOSED. Allen J. Welch, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, Oklahoma, for Complainant Allen M. Smallwood, Tulsa, Oklahoma, for Respondent KAUGER, J.: ¶1 The complainant, Oklahoma Bar Association (Bar Association), charged the respondent, David C. Phillips III, with four [60 P.3d 1031]counts of professional misconduct: misappropriation of funds;¶2 Upon a de novo review,6 we agree and determine that: 1) clear and convincing evidence7 supports the charges of mismanagement of a trust account and uncooperativeness in the investigative process by being untimely in responding and neglecting to make a full and fair disclosure; and 2) in consideration of the respondent's misconduct, his lack of a prior disciplinary history, and discipline administered in similar cases, we determine that the respondent should be suspended for thirty days and pay costs of $1,758.91.8 FACTS ¶3 All counts arise from a relationship with a single client, Dan Cates (Cates), and his medical provider, Kenneth R. Trinidad, D.O. (Trinadad), who filed the grievance. After being injured in an automobile accident on April 23, 1996, Cates retained the respondent who referred him to Trinidad for treatment. Cates incurred approximately $1,500 in medical bills associated with the accident -- $440.00 of which were for Trinidad's services. ¶4 The respondent settled Cates' personal injury case on November 14, 1996, for $3,500.009 and he deposited the settlement [60 P.3d 1032] check in his trust account. According to the respondent's settlement sheet, disbursals were to be made as follows: $1,038.50 to Cates; $1,166.65 retained for fees; and $1,294.85 withheld as the "total due providers." ¶5 Nevertheless, it is unclear how the settlement funds were actually distributed. Cates' testimony at the hearing was so confused and contradictory about the settlement transactions that the trial panel and the Bar Association agreed that it was not credible.10 Although Cates indicated that he only received $436.00 from the respondent, a check was produced which had been drawn on the respondent's trust account for $1,038.50 and which Cates had endorsed over to a used car dealer. When questioned about the events relating to his relationship with the respondent and the disbursal of funds, Cates admitted that his memory regarding the transaction was faulty.11 However, he did not allege that the respondent had retained any funds to which he was not entitled.12 [60 P.3d 1033] ¶6 The respondent testified that although the computations on the settlement sheet reflected the manner in which he intended to disburse the settlement funds, Cates insisted that he be given all funds not earmarked as attorney fees. The respondent agreed and extracted a promise from Cates that he would pay the medical providers. Although the respondent could not produce any documentation to support his testimony either in the form of a check drawn on his trust account or an updated settlement sheet, his version of the facts was bolstered by affidavits and testimony from two of his employees -- each of them indicated that the money originally earmarked for disbursal to the medical providers was given to Cates at his insistence and upon his promise that he would take responsibility for making the appropriate payments.13 ¶8 Trinidad filed a grievance with the Bar Association on November 23, 1999, based on the returned check. The Bar Association forwarded the complaint to the Tulsa County Bar Association (County Bar) for investigation. ¶9 With little cooperation from the respondent, the County Bar returned the respondent's file to the Bar Association which contacted him on January 17, 2001, advising him of Trinidad's complaint and again asking for a full and fair response within 20 days. The respondent answered the following day -- again with a letter simply stating that he thought the matter had been resolved, and that Trinidad had been paid. This letter was followed by two letters from the Bar Association dated February 13th and 15th, 2001. The February 15th letter specifically advised the respondent that his response did not satisfy the requirement for a full and fair disclosure and listed the specific items which the respondent should include in reply. ¶10 Because of his lack of diligence in responding, the Bar Association took the respondent's deposition on April 17, 2001. At that time, the Bar Association again requested trust account records and the respondent indicated that he would provide them. On June 5, 2001, the respondent wrote the Bar Association indicating that he had attempted to obtain the trust account records, but that he had been advised by a bank employee that the records were "illegible." Nevertheless, the Bar Association subpoenaed trust account records from the respondent's bank for the months of October through December of 1996. When received, the records were easily readable and revealed that the respondent had been using the trust account as his personal checking account and during the time period, four checks had been returned due to insufficient funds. The respondent did supply trust account records for the months of July and August of 1999. These records reflect that a total of fourteen checks were returned for insufficient funds during the two-month period. ¶11 The respondent's only reply of any substance is dated July 11, 2001 -- and was supplied only after almost eight months of inquiries and the taking of the his deposition. In the letter, the respondent explained that at least a portion of the checks denied in 1999 resulted from a $9,000.00 deposit which had been put on hold. He also stated that when he was originally contacted about the grievance, he was involved in a complex criminal trial and was out of the office for the majority of a four-month period. ¶12 On September 13, 2001, the Bar Association filed this cause as a Rule 6 proceeding. I. ¶13 CLEAR AND CONVINCING EVIDENCE SUPPORTS DETERMINATIONS OF MISMANAGEMENT OF A TRUST ACCOUNT AND FAILURE TO COOPERATE IN THE GRIEVANCE PROCESS. ¶14 The trial panel and the Bar Association recognize that there is insufficient evidence to support charges of misappropriation and misrepresentation. The respondent, the trial panel and the Bar Association agree that clear and convincing evidence supports the charges of mismanagement of a trust account and uncooperativeness in the investigative process by being untimely in responding and neglecting to make a full and fair disclosure. Upon a de novo review, we agree. ¶15 In disciplinary matters, this Court possesses exclusive original jurisdiction. ¶18 A review of bank records reveals clearly that the respondent used his trust account as a personal checking account -- commingling client monies with his personal funds and paying ordinary household and other expenses from the account and that he has -- with some regularity -- issued checks for which there were insufficient funds available. Further, despite a minimum of eight inquiries from investigating officials, the respondent repeatedly failed to respond with detailed facts and circumstances surrounding the grievance. He de-[60 P.3d 1036]-layed the provision of trust account records. His explanation that some delay was caused by "illegible" copies is unconvincing considering the Bar Association's success in retrieving readable records from his banking institution under subpoena. Therefore, we determine that there is clear and convincing evidence of the respondent's mismanagement of his trust account and his failure to cooperate in the grievance process. II. ¶19 THE MISCONDUCT WARRANTS A THIRTY-DAY SUSPENSION AND THE IMPOSITION OF COSTS. ¶20 Although the Bar Association originally sought a two-year suspension, it now is in agreement with the trial panel that the respondent should be publicly censured, suspended for thirty days and required to pay costs. The respondent asserts that suspension is unwarranted. We disagree. ¶21 Discipline is administered to preserve public confidence in the bar. Our responsibility is not to punish but to inquire into and gauge a lawyer's continued fitness to practice law, with a view to safeguarding the interest of the public, of the courts and of the legal profession. Discipline is imposed to maintain these goals rather than as punishment for the lawyer's misconduct. ¶23 In mitigation, we may consider that: no grave economic harm occurred and all medical care providers have now been paid; ¶24 This Court is the ultimate arbiter of appropriate sanctions in bar discipline cases. CONCLUSION ¶25 The nondelegable, constitutional responsibility to regulate both the practice and the ethics, licensure, and discipline of the practitioners of the law is solely vested in this Court. RESPONDENT SUSPENDED; COSTS IMPOSED. ALL JUSTICES CONCUR. [ 60 P.3d 1038 ] FOOT