Case Title: CHARLES FREDERICK MERZ V. KENTUCKY BAR ASSOCIATION

Citation: 

Docket Number: 2018-SC-000208-KB

State: kentucky

Court: Kentucky Supreme Court

Date: 2018-06-14T00:00:00Z

Document:
TO BE PUBLISHED jBupretttr Cflttrf of 2018-SC-000208-KB 0 Z^TT IE 6^/7 k!thi 1 CHARLES FREDERICK MERZ V. IN SUPREME COURT KENTUCKY BAR ASSOCIATION MOVANT RESPONDENT OPINION AND ORDER Charle s Fre de ric k Me rz (Me rz), whose bar rost e r addre ss is 2817 Murray Hill Pike , Louisville , Ke nt uc ky 40242, Ke nt uc ky Bar Assoc iat ion (KBA) Me mbe r Numbe r 47393, de sire s t o t e rminat e KBA proc e e dings against him by moving t his Court for a public re primand. The KBA has no obj e c t ion t o Me rz’s re que st . I. BACKGROUND. On Oc t obe r 20, 2017, t he Inquiry Commission file d a Charge against Me rz alle ging violat ions of Supre me Court Rule (SCR) 3.130-1.15(d) (c ommingling funds) and SCR 3.130-8.4(c ) (e ngaging in c onduc t involving dishone st y, fraud, de c e it or misre pre se nt at ion). The Charge re sult e d from t he following fac t s. In June 2013, Me rz was sue d by t he Louisville /Je ffe rson Count y Me t ro Re ve nue Commission (Re ve nue Commission) for re c ove ry of de linque nt oc c upat ional t axe s. The Re ve nue Commission was awarde d $8,732.58, plus int e re st , and t he Re ve nue Commission obt aine d garnishme nt orde rs against Me rz’s PNC Bank ac c ount s. Me rz had pre viously st oppe d de posit ing c lie nt funds int o his t rust ac c ount . Howe ve r, Me rz le ft se ve ral t housand dollars of e arne d fe e s in t he ac c ount and be gan de posit ing addit ional e arne d fe e s in t he ac c ount in 2015. In lat e July 2015, PNC Bank not ifie d t he Offic e of Bar Counse l of an ove rdraft in Me rz’s t rust ac c ount . The non-suffic ie nt funds st at us of t he t rust ac c ount re sult e d from t hre e payc he c ks t o Me rz’s se c re t ary. The Inquiry Commission issue d a c omplaint on April 14, 2017. Me rz re sponde d t o t he c omplaint , indic at ing t hat he did not fe e l c omfort able de posit ing payme nt s from c lie nt s int o his ge ne ral ac c ount , or making payroll payme nt s from t he ge ne ral ac c ount , due t o t he Re ve nue Commission’s garnishme nt s. The pre se nt Charge was file d on Oc t obe r 20, 2017. Me rz, t hrough c ounse l, re sponde d t o t he Charge on Nove mbe r 22, 2017. Me rz’s prac t ic e foc use s on busine ss and c omme rc ial law, c onst ruc t ion lit igat ion and re lat e d mat t e rs. He maint aine d four bank ac c ount s, inc luding t he t rust ac c ount at issue he re . Me rz st oppe d using t he t rust ac c ount as a t rust ac c ount se ve ral ye ars ago, but t he re was se ve ral t housand dollars in t he ac c ount at t he t ime t hat was ot he rwise due Me rz. Be c ause Me rz was unc omfort able de posit ing on-going payme nt s from c lie nt s int o his ot he r 2 ac c ount s, he be gan de posit ing mone y int o t he ac c ount pre viously de signat e d as his t rust ac c ount . Me rz int e nde d t o e st ablish ne w bank ac c ount s not subj e c t t o t he garnishme nt s, but he faile d t o do so. Me rz ac knowle dge s t hat it was poor prac t ic e for him t o use t he t rust ac c ount for ot he r purpose s. Howe ve r, he maint ains t hat only his funds we re in t hat ac c ount during t he re le vant pe riod. Alt hough Me rz should have addre sse d t he proble m soone r, he has now se t up ne w ge ne ral ac c ount s and t he funds in t he t rust ac c ount we re t ransfe rre d t o t he ge ne ral ac c ount . Me rz now re que st s t hat t his Court impose t he sanc t ion of a public re primand, plus c ost s, in an e ffort and de sire t o dispe nse of any furt he r proc e e dings for t he se violat ions. II. ANALYSIS. Me rz admit s t hat his c onduc t violat e d t he re quire me nt s of SCR 3.130- 1.15(d) and SCR 3.130-8.4(c ). Me rz also re que st s a public re primand as t he appropriat e sanc t ion. The KB A has no obj e c t ion. Our rule s pe rmit t he KBA and a me mbe r of t he bar t o agre e t o a ne got iat e d sanc t ion. . . . Any me mbe r who is unde r inve st igat ion pursuant t o SCR 3.160(2) or who has a c omplaint or c harge pe nding in t his j urisdic t ion, and who de sire s t o t e rminat e suc h inve st igat ion or disc iplinary proc e e dings at any st age of it may re que st Bar Counse l t o c onside r a ne got iat e d sanc t ion. If t he me mbe r and Bar Counse l agre e upon t he spe c ific s of t he fac t s, t he rule s violat e d, and t he appropriat e sanc t ion, t he me mbe r shall file a mot ion wit h t he Court whic h st at e s suc h agre e me nt , and se rve a c opy upon Bar Counse l, who shall, wit hin 10 days of t he Cle rk’s not ic e t hat t he mot ion has be e n doc ke t e d, re spond t o it s me rit s and c onfirm it s agre e me nt .... The Court may approve t he sanc t ion agre e d t o by t he part ie s, or may re mand t he c ase for he aring or ot he r proc e e dings spe c ifie d in t he orde r of re mand. 3 SCR 3.480(2). The KBA c onse nt s t o a public re primand and c it e s t o t wo c ase s t o support t he ne got iat e d sanc t ion. In Markham v. Kentucky Bar Ass’n, 431 S.W.3d 426, 427 (Ky. 2014), t his Court impose d t he ne got iat e d sanc t ion of a public re primand whe n Markham allowe d a c lie nt t o de posit mone y int o one of Markham’s pe rsonal bank ac c ount s. Five ye ars lat e r, Markham borrowe d $12,000 from t he same c lie nt , and from t he same bank ac c ount , and c laime d he re paid t he mone y ove r t he ne xt t hre e ye ars. Id. In Kentucky Bar Ass’n v. Rowland, 962 S.W.2d 875 (Ky. 1998), t he Board re c omme nde d a public re primand. Rowland had ple d guilt y t o at t e mpt ing t o fail t o pay e mploye e wit hholding t ax and he was se nt e nc e d t o six mont hs in j ail and a $500.00 fine . Id. at 876. Rowland lat e r e xpe rie nc e d “a painful divorc e , a de c lining law prac t ic e , and a fire whic h de st roye d his offic e and for whic h he was not insure d.” Id. In light of Markham and Rowland, we agre e wit h Me rz and t he KBA t hat a public re primand is appropriat e he re . ACCORDINGLY, IT IS HEREBY ORDERED THAT: 1. Charle s Fre de ric k Me rz, is he re by public ly re primande d for unprofe ssional c onduc t ; and 2. In ac c ordanc e wit h SCR 3.450, Me rz is dire c t e d t o pay all c ost s assoc iat e d wit h t he se disc iplinary proc e e dings against him, whic h are 4 $82.30, for whic h e xe c ut ion may issue from t his Court upon finalit y of t his Opinion and Orde r. All sit t ing. All c onc ur. ENTERED: June 14, 2018. onyv justice / 5