### THE STATE OF SOUTH CAROLINA In The Supreme Court

In the Matter of Kenneth Philip Shabel, Respondent.

Appellate Case No. 2021-000268

Opinion No. 28059 Submitted September 3, 2021 – Filed September 22, 2021

PUBLIC REPRIMAND

Disciplinary Counsel John S. Nichols and Assistant Disciplinary Counsel Julie K. Martino, both of Columbia, for the Office of Disciplinary Counsel.

Kenneth Philip Shabel, of Spartanburg, Pro Se.

PER CURIAM: In this attorney disciplinary matter, Respondent and the Office of Disciplinary Counsel (ODC) have ente red into an Agreement for Discipline by Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary Enforcement (RLDE) contained in Rule 4 13 of the South Carolina Appellate Court Rules (SCACR). In the Agreement, Res pondent admits misconduct and consents to the imposition of a confidential admoniti on or a public reprimand. We accept the Agreement and issue a public reprima nd. The facts, as set forth in the Agreement, are as follows.

I.

Matter A

In 2007, Client A retained Respondent fo r assistance with obtaining visitation with his daughter. Client A lived in Virginia and the child lived in South Carolina with her mother and step-father. Respondent was successful in obtaining visitation forClient A, but several months later, the child's mother filed an action to terminate Client A's parental rights. The termination of parental rights case went to trial in 2010. Respondent again prevailed, and Client A's visitation rights were restored.

In 2011, the child disclosed sexual abuse by Client A. Client A was arrested and charged with first-degree criminal sexua l conduct with a minor. Respondent told Client A that his law partner had experi ence with handling criminal cases, and Client A, with the help of his father, retained the firm for representation on the criminal matter. The firm charged C lient A $10,000. Clie nt A paid $5,000 up front, and the other $5,000 came in contributions made throughout the representation by friends and family me mbers. The firm did not keep an accounting of when and how the fee was earned.

The child's mother refiled for termination of Client A's parental rights. Respondent and his law partner agreed that Responde nt would focus on the termination of parental rights matter, while his law part ner would focus on the criminal matter. Client A's parental rights were terminated in Octobe r 2012. Respondent and Client A discussed filing an appeal, but Client A ultimately decided not to appeal and

focus on the criminal case.

Respondent and his law partner prepared the criminal case together and divided the duties. Ultimately, Client A was convicted. Client A and his family discussed filing an appeal and retained Respondent's firm to handle the appeal. The firm charged Client A $3,000 for representation on the appeal and held the money in the

firm's trust account until used. Client A then hired a different attorney to write the appellate briefs and assist Respondent with the appeal. In early 2016, the court of appeals held oral arguments. The attorney from the other law firm handled the oral
argument.

Shortly thereafter, Respondent went to wo rk for the firm that represented the mother in the underlying family court matte r. Respondent informed Client A of

his move to the new firm and notified C lient A that he could no longer represent him due to the potential conflict of inte rest. Respondent filed a motion to be relieved. Respondent informed Client A that the $317.57 remaining in the firm's

trust account would be sent to his new atto rney. The law firm sent a check, but it

was returned due to insufficient funds in the firm's trust account.

Client A's father requested an accounting of how the funds provided for Client A's

defense were used. He also filed a complaint with ODC. In response to the noticeof investigation, Respondent stated he ha d already left the firm and could not provide an accounting. Respondent's form er law partner provided ODC with an accounting of the funds paid for the crim inal appeal. That accounting indicated $317.57 remained on Client A's ledger; however, Respondent did not provide an accounting of the funds paid for the crimin al trial. Respondent also indicated that he did not have signatory authority on the trust account, did not participate in monthly reconciliations, and assumed the account was being properly managed by his law partner and the fi rm's office manager.

Respondent admits the flat-fee agreements should have been in writing; that he should have been able to provide Clie nt A with an accoun ting upon request; and that he failed to keep his client's mone y safe. Respondent admits his conduct in this matter violated the following Rule s of Professional Conduct in Rule 407, SCACR: Rule 1.5(f) (requiring flat-fee agre ements to be in writing) and Rule 1.15 (requiring lawyers to keep c lient property safe).

Matter B

Two checks from Respondent's former firm's trust account were presented against

insufficient funds. As to the first check , ODC sent a notice of investigation, but the firm's office manager intercepted the notice and responded herself without informing Respondent or his law partner. The second check was returned when the firm attempted to refund Client A the remaining funds it held on his behalf.

Respondent again responded to ODC that he never had signatory authority on the firm's trust account, did not participate in monthly reconciliations, and did not take steps to ensure that the reconciliati ons were being perfo rmed. Respondent explained that he relied on his law partner to handle all financ ial matters for the

firm.

Respondent admits he abdicated his responsib ility for the trust account and that he did not discuss the requirements of Rule 417, SCACR, with his law partner. Respondent acknowledges he s hould have taken steps to ensure the firm was reconciling the trust account purs uant to Rule 417, SCACR. See Rule 1.15(a), RPC, Rule 407, SCACR (mandating co mpliance with Rule 417, SCACR).Matter C

Respondent was a partner in his former la w firm from September 2006 until March 2016. Respondent admits he knew payroll taxes were required to be paid but believed his law partner was responsible for the taxes and paid them. In 2012, Respondent received a notice from the Intern al Revenue Service (IRS) stating that as a partner in the firm, he was responsible for payroll taxes that had not been paid. After receiving the IRS notice, Respondent learned that although many payroll tax

returns were submitted and taxes were withheld from em ployees' checks, the taxes had not been remitted to the IRS. Respondent discussed the tax issues with his law partner, and together they met with an IRS representative. The firm entered into an agreement to pay $2,000 per month for th e unpaid payroll taxes and penalties.

Unbeknownst to Respondent until 2012, th e IRS, the South Carolina Department of Revenue (SCDOR), and the South Car olina Department of Employment and Workforce (SCDEW) had begun placing liens against the law firm's assets based on the failure to pay payroll taxes and une mployment insurance beginning in 2009. The IRS, SCDOR, and SCDEW placed li ens against the firm's assets in Spartanburg County. The IRS placed liens against Respondent personally in Greenville County. Respondent entered into an agreement to pay the IRS what was determined to be his personal shar e of the firm's payroll tax liability. Respondent made all of the payroll tax payments for which he was deemed personally responsible, and th e Greenville County liens in his name were satisfied in 2014. When Respondent left the partne rship, his law partner agreed to assume responsibility for the remaining liens in Spartanburg County that were filed against

the firm's assets.

Respondent explained that he trusted his la w partner and believed his law partner was handling the trust account and the payr oll taxes but admitted he shared the responsibility and should have taken a more active role in the firm's financial affairs. Respondent expre ssed deep remorse for not being more involved in the operation of the firm as a pa rtner. Respondent admits hi s failure to ensure payroll taxes were being remitted to the IRS and SCDOR violated Rule 8.4, RPC, Rule 407, SCACR (prohibiting misc onduct involving a pattern of indifference to legal obligation).II.

Respondent admits his misconduct constitu tes grounds for discipline under Rule 7(a)(1), RLDE, Rule 413, SCACR (prohi biting a violation of the Rules of Professional Conduct). In the Agreement, Respondent consents to a confidential admonition or a public reprimand, agrees to pay costs, and agrees to complete the Legal Ethics and Practice Pr ogram Ethics School and Tr ust Account School within

one year.

III.

We find Respondent's misconduc t warrants a public reprimand. Accordingly, we accept the Agreement and publicly reprim and Respondent for his misconduct. Within thirty days, Respondent shall pay or enter into a reasonable plan to repay the costs incurred in the investigation and prosecution of this matter by ODC and the Commission on Lawyer Conduc t. Within one year of the date of this opinion, Respondent shall complete the Legal Ethi cs and Practice Program Ethics School

and Trust Account School.

PUBLIC REPRIMAND.

BEATTY, C.J., KITTREDGE, HEAR N, FEW and JAMES, JJ., concur.