Title: In re Eakin
Citation: N/A
Docket Number: S47644
State: Oregon
Issuer: Oregon Supreme Court
Date: June 7, 2002

Filed:  June 7, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON

In re: Complaint as to the Conduct of
MARGARETTA EAKIN,
	Accused.
(OSB 94-204, 95-193, 97-16; SC S47644)

	En Banc
	On review of the decision of a trial panel of the
Disciplinary Board.
	Argued and submitted November 1, 2001.
	Carl R. Neil, of Lindsay Hart Neil &amp; Weigler, LLP, Portland,
argued the cause for the accused.  With him on the brief was Roy
Pulvers.
	Mary A. Cooper, Assistant Disciplinary Counsel, Lake Oswego,
argued the cause and submitted the brief for the Oregon State
Bar.
	PER CURIAM
	The accused is suspended for 60 days, effective 60 days from
the date of the filing of this decision.
	PER CURIAM
	In this lawyer disciplinary proceeding, the Oregon State Bar
(Bar) charged the accused lawyer, Margaretta Eakin, with multiple
violations of the Code of Professional Responsibility in two
client matters.  In a contract dispute (the Schreiber matter),
the Bar charged violations of Disciplinary Rule (DR) 1-102(A)(3)
(dishonesty); DR 9-101(A) (maintain client funds in trust
account); DR 9-101(C)(3) (maintain trust account records); and DR
9-101(C)(4) (prompt return of client property). 
		In another client matter, a child custody dispute (the
Schmidt matter), the Bar charged violations of DR 1-102(A)(3); DR
1-102(A)(4) (conduct prejudicial to administration of justice);
DR 2-106(A) (excessive fees); DR 7-102(A)(1) (filing suit for
purpose of harassment); and DR 7-102(A)(2) (unwarranted claims). 
		A trial panel of the Disciplinary Board concluded that
the accused violated DR 1-102(A)(3), DR 1-102(A)(4), DR 2-106(A),
DR 9-101(A), DR 9-101(C)(3), and DR 9-101(C)(4), and recommended
that the accused be disbarred.  
		Our review is automatic.  BR 10.1; BR 10.4.  On de novo
review, we conclude that the accused violated DR 9-101(A), DR 9-101(C)(3), and DR 9-101(C)(4), and impose a 60-day suspension. 
See BR 10.6 (stipulating de novo review).
I.  FACTS AND PROCEDURAL HISTORY

	The Bar has the burden of establishing alleged misconduct by
"clear and convincing evidence."  BR 5.2.  Clear and convincing
evidence means evidence establishing that the truth of the facts
asserted is highly probable.  In re Johnson, 300 Or 52, 55, 707
P2d 573 (1985).  This court generally gives weight to a trial
panel's credibility finding, even though the court reviews
disciplinary proceedings de novo.  In re Trukositz, 312 Or 621,
629, 825 P2d 1369 (1992).  We find the following facts to have
been proven by clear and convincing evidence.
A.	Schreiber Matter
		In August 1991, Schreiber hired the accused to
represent him in a contract dispute.  Schreiber and the accused
agreed to an initial flat fee of $3,500, additional fees
contingent on recovery thereafter, and a deposit of $3,000 to
cover costs.  The $3,000 deposit for costs was placed in a trust
account. 
		The accused filed a complaint on Schreiber's behalf in
United States District Court.  To develop a theory of damages,
the accused contacted an expert, Wagner, to assist in the
analysis.  
		In April 1993, the defendant successfully moved for
summary judgment, and the district court dismissed the complaint. 
The accused then filed an appeal in the Ninth Circuit on
Schreiber's behalf. 
		On August 11, 1993, the accused requested that Wagner
prepare an estimate of his fee to complete an analysis of
Schreiber's damages.  On August 20, 1993, Wagner wrote to the
accused and informed her that such an analysis would require 50
to 70 hours of work and cost $7,500 to $11,250.  In that letter,
Wagner also stated: 
	"In addition, we have to date incurred fees and
expenses totaling $850 related to this matter which
have not yet been billed.  I will wait until I receive
your approval before beginning any further work."
Wagner, however, never sent a bill or invoice to the accused for
$850.
		On August 24, 1993, the accused forwarded Wagner's
letter to Schreiber.  In a cover letter, the accused recommended
that Schreiber authorize Wagner to undertake the damages analysis
and that Schreiber deposit with the accused sufficient funds to
cover Wagner's full fee.  In addition, the accused mentioned that
she needed to pay the $850 to which Wagner had alluded in his
letter.  
		Schreiber rejected the accused's advice and refused to
authorize the damages analysis or to provide additional funds to
pay Wagner while the appeal was pending, because he wanted to
wait until the Ninth Circuit announced a favorable decision
before spending his funds on a damages study. 
		On September 21, 1993, the accused wrote to Schreiber
again to ask him to authorize the damages analysis.  The accused
also requested that Schreiber fax to her a current bank
statement, showing that he had the funds to pay Wagner's fee. 
The accused was concerned that, after expending effort to obtain
a reversal of the summary judgment order, Schreiber might not
have the funds to pay for an expert and to continue prosecuting
the case.
		On September 22, 1993, the accused sent Schreiber a
statement indicating that she had deducted $850 from the trust
account to pay Wagner an "economic consultant fee."  Shortly
thereafter, Wagner sent the accused the only invoice that he
submitted to her in the Schreiber matter.  That invoice, however,
was for $140, not $850, reflecting services rendered during the
month of August 1993. 
		Months later, in January 1994, the accused "reimbursed"
herself the $850 by withdrawing that amount from the client trust
account.  In doing so, the accused assumed that she already had
paid the $850 to Wagner out of her general business account.   
The accused concedes that she had never paid Wagner the $850.
		In May 1995, after pleading with Schreiber to hire
Wagner, the accused informed Schreiber that he needed to get a
new lawyer unless he provided the funds to pay Wagner.  Schreiber
responded that, "[u]nless there is a trial[,] it would be a waste
of time and money" and that he could not "afford that type of
speculation."  Wagner's fees, Schreiber believed, were "probably
beyond his means."  The accused did not respond.
		In September 1995, Schreiber wrote to the accused
asking if she were still his lawyer.  Again, she did not respond. 
In January 1996, Schreiber informed the accused that she was
fired and asked that the file be sent to him immediately. 
Because the accused delayed in sending Schreiber the entire file,
he eventually sought the Bar's assistance. 
		In January 1996, the Ninth Circuit affirmed the
judgment of the district court dismissing Schreiber's complaint. 
		In February 1997, the Bar initiated a complaint against
the accused, alleging the failure to promptly return the file to
Schreiber.  The Bar later added the allegation that the accused
had misappropriated the $850 from Schreiber.
B.	Schmidt Matter
		In July 1992, Schmidt and her husband Wacker obtained a
dissolution of their marriage.  In the dissolution, Schmidt was
represented by Werst, and Wacker was represented by McClurg.  In
mediation, Schmidt and Wacker agreed that, although they would
share joint legal custody of their children, Schmidt would have
sole physical custody.  
		From Schmidt's perspective, Wacker's abusive behavior
precipitated the dissolution.  Schmidt compared Wacker's behavior
in their relationship to a "steamroller," and she described
herself as "battered."  According to Schmidt, during an argument,
Wacker had flipped over a chair in which Schmidt had been
sitting.  Also, according to Schmidt, after she had informed
Wacker that she wanted a dissolution, Wacker, the primary
breadwinner, had continued living in the home but ceased
providing financial support and food for Schmidt and the
children.  Once Wacker had moved out, he and Schmidt had argued
over visitation, and Schmidt had accused Wacker of denigrating
her and making her look mean in the children's eyes by suggesting
that Schmidt buy things for the children when she had limited
income.  While the dissolution was pending, Schmidt and Wacker
corresponded mostly in writing.
  		Around the time of the dissolution, Schmidt's
relationship with her daughter Jill became strained.  Jill moved
out of Schmidt's residence to live with Wacker.  After moving
out, Jill refused to talk to Schmidt.  Schmidt suspected that
Wacker had alienated Jill's affections toward her intentionally
and that Wacker had engineered Jill's decision to move out. 
Later, Schmidt discovered that, before Jill actually had moved
out, she had planned, with Wacker's assistance, to transfer to
another high school without telling Schmidt of her decision. 
		The same month that the dissolution became effective,
Wacker retained a new lawyer, Bomarito, to dispute the custody
agreement.  With Bomarito's assistance, Wacker moved the court
for sole physical custody of both Jill and their son, Brian,
claiming only that he would provide a "loving and stable
environment" for them. (1)  In addition, instead of agreeing to rely
on the recommendation of a free mediator from Multnomah County
Family Services (MCFS), Wacker proposed that the court appoint a
psychologist, Dr. Bolstad, to write a study and recommendation on
Brian's custody arrangements. (2) 
		Prevailing in the custody dispute over Brian was
imperative to Schmidt.  She recognized that Jill effectively had
switched custody, informally, to Wacker.  But if Wacker prevailed
in his quest to obtain custody of Brian, Schmidt would lose
physical custody of both her children. 
		Werst, the lawyer who represented Schmidt in the
dissolution, tired of fighting with Wacker, who was unrepresented
for a short time before hiring Bomarito.  Believing that Schmidt
needed a more aggressive lawyer in the custody battle that loomed
ahead, Werst referred her to the accused.  Werst stated that "it
became apparent that [Wacker] had no intentions of being
conciliatory, [and] that he was determined to alienate the
children from their mother."  Wacker, according to Werst, "truly
seemed contemptuous and because of the extreme difficulty of
dealing with [Wacker]," Werst referred Schmidt to the accused. 
		Schmidt felt that Wacker was unreasonable and even
violent.  She wrote to the accused that "I want [Wacker] to be
restrained from coming on my property, scaring Brian and I by
banging aggressively on the door, trying to start a verbal fight
with me and threatening me."  In her correspondence, repeatedly
Schmidt characterized Wacker as "abusive" and "threatening."  
She often accused Wacker of manipulating the children and
instigating crises regarding visitation and custody.  Schmidt's
accusations suggest that the relationship between Schmidt and
Wacker had become bitter, vindictive, and marked by distrust and
recrimination.  Their relationship was highly strained even
before the accused became Schmidt's lawyer, and the accused had
stepped into a circumstance that was even more highly charged in
light of Wacker's attempt to gain custody of both children.
		As a result of Schmidt's perception that Wacker had
taken advantage of her, she wanted a lawyer who would fight back
and take an assertive stand against Wacker.  At the same time,
she was learning, with the assistance of a therapist, to "stand
up" to Wacker's willfulness and wanted to develop a life in which
she was in control.  She perceived that Wacker's attempt to
obtain greater visitation rights from the court and his request
that the children spend more time with him was a part of his
method to maintain control over her.  Resisting Wacker's attempt
to gain greater time with the children -- greater, she believed,
than the time that he had spent with them when they were married
-- was her method of asserting independence.  Perhaps as a
result, one expert characterized Schmidt as "a high maintenance
client." 
		Werst's concerns about the nature of the impending
dispute were well-founded.  The litigation soon became hard-fought.  With Schmidt's approval and encouragement, the accused
took a "no stone unturned" approach to the litigation. 
		Schmidt asked the accused not only to assist with the
custody dispute over Brian, but to address Schmidt's allegations
that Wacker had violated the parenting agreement and had engaged
in harassing conduct toward her.  Schmidt asked the accused to: 
(1) investigate Wacker's refusal to pay one-half of her mortgage
fees and tax refund; (2) analyze various visitation issues; (3)
respond to a letter from the district attorney regarding child
support; (4) review letters that Schmidt had written to another
psychologist, Dr. Sheldon, about a recommendation on custody; (5)
examine Wacker's alleged conversion of insurance proceeds that
were due and owing to Schmidt; and (6) look into Wacker's
repeated refusal to provide a health insurance card for Brian.
		The accused's initial action consisted of moving for
summary judgment on Wacker's motion for sole custody of Brian. 
That motion argued that Wacker's change of custody motion was
flawed because it failed to establish a change in circumstances
sufficient to support any change in custody.  If successful, the
motion would have cut short Wacker's bid to obtain sole custody
of Brian, at least temporarily, and would have obviated the need
and expense of a custody study.
		The court denied Schmidt's summary judgment motion, but
conceded that the decision was a "close call."  The court also
denied Wacker's request to appoint Bolstad to make a custody
recommendation, but did appoint both Sheldon and MCFS to conduct
studies regarding custody. 
		Before trial, the accused attempted to gather
information about Wacker's financial circumstances.  When she was
unable to obtain all of that information by working informally
with Bomarito, she deposed several representatives of Wacker's
employer.  Working from a hypothesis that Wacker's household
income was relevant to a child-support calculation, the accused
deposed Wacker's live-in girlfriend, Carlson.  When Carlson
refused to cooperate with the accused's formal discovery efforts,
she filed a contempt motion against her.  
		The accused also deposed Bolstad and Sheldon.  The
accused wanted to know more about Bolstad's relationship with the
family and to obtain her notes.  Bolstad had made statements
about Schmidt's relationship with Brian and, in particular, had
opined that Brian was unhappy but afraid to speak out.  The
accused wanted to know the basis for those statements, but found
Bolstad uncooperative.  
		The accused had reasons for deposing Shelton as well. 
Shelton recommended midweek visitations for Brian and his father. 
The expert from MCFS did not recommend such visits, and the
accused and Schmidt were concerned about Shelton's reasons for
recommending midweek visits, because they were worried about the
effect that such visits would have on Schmidt and Brian.  The
accused thought deposing Shelton was appropriate, so that
Shelton's testimony would be "pinned down" if weeknight
visitations became a significant trial issue. 
		With Schmidt's approval, the accused researched whether
a claim might be made for alienation of Jill's affections.  In
addition, the accused tried to collect information about Jill's
decision to move in with her father.  Initially, the accused
tried to arrange an informal interview with Jill; when that did
not occur, she issued a subpoena.  Although the accused
recognized that deposing a high-school-age student was unusual
and not to be done casually, the accused thought that Jill's
information might be relevant to whether it would be appropriate
for Brian to move in with Wacker, and whether Wacker was engaging
in a pattern of manipulating his children's wishes as to custody. 
Also, the accused wanted to know what Jill might say at trial if
Wacker wanted her to testify as a witness.  Ultimately, the
accused did not depose Jill. 
		The accused also asked for a contempt citation against
Wacker.  Schmidt's supporting affidavit accused Wacker of
violating the dissolution decree in many respects, including
inviting Brian to spend time with him without consulting Schmidt,
telling Jill that she did not have to do anything that Schmidt
told her, encouraging Jill to be abusive to Schmidt and Schmidt's
parents, ridiculing and denigrating Schmidt in front of Jill and
Brian, refusing to comply with the visitation terms of the
parenting agreement, making false statements to the court that
Jill had run away from home and that Brian wanted to move in with
him, and refusing to provide life insurance as he was ordered. 
Also, according to Schmidt, Wacker changed Brian's primary
physician without consulting Schmidt and refused to provide her
with an insurance card for Brian, even after being requested to
do so several times. 
		The accused advised Schmidt, in writing, that the
outcome of the contempt request was uncertain.  "I cannot assure
you," the accused wrote to Schmidt, "of a positive outcome if we
pursue the contempt matter."  At the same time, the accused
expressed concern, even before the change of custody hearing,
that the case was becoming expensive.  "It really concerns me
that so much money has gone into this case.  I wish I could be
more certain of the outcome re the contempt." 
		Schmidt asked the accused to withdraw most of the
contempt allegations just before trial, because the children's
lawyer, Svetkey, and Sheldon persuaded her that the motions
should be withdrawn.  Schmidt felt that Sheldon was trying to
intimidate her into withdrawing the motions in order to make
settlement more possible, irrespective of Wacker's behavior.  In
fact, Schmidt thought that Svetkey and Sheldon were threatening
to recommend that custody be given to Wacker unless she relented
and withdrew the contempt request.  The accused withdrew the
contempt motions, except for the one regarding life insurance. 
		Nine months after Schmidt had retained the accused as
her lawyer, the court held a hearing on the custody and child
support issues, and the single remaining contempt issue.  The
trial court denied the change of custody for Brian, increased
Wacker's child support obligations to Schmidt, denied the request
for contempt, and clarified Wacker's visitation rights. 
		The court invited the accused to file a request for
attorney fees on Schmidt's behalf.  The accused submitted her fee
request, but only after discounting some of her time.  Wacker
contested the fee application, and a hearing was held in which
Wacker's expert contended that the accused's fees were too high
and that she had overcharged Schmidt for her services.  The judge
decided not to award any fees.  The accused, in consultation with
Schmidt, filed an appeal of the order denying attorney fees. 
Later, however, the accused and Schmidt fell into a disagreement
about the fees and the costs of the appeal.  After obtaining
different counsel, Schmidt dismissed the attorney-fees appeal.
		After write-offs, the accused charged Schmidt between
$63,000 and $66,000 in attorney fees and costs.
II.  DISCUSSION

A.  Schreiber Matter
	1.  DR 1-102(A)(3)
		DR 1-102(A)(3) provides that "[i]t is professional
misconduct for a lawyer to * * * [e]ngage in conduct involving
dishonesty, fraud, deceit or misrepresentation[.]"  This court
has noted that dishonesty, fraud, deceit, and misrepresentation
overlap, but are not identical concepts.  In re Starr, 326 Or
328, 342, 952 P2d 1017 (1998).  In particular, dishonesty is a
"[d]isposition to lie, cheat or defraud; untrustworthiness; lack
of integrity."  In re Hockett, 303 Or 150, 158, 734 P2d 877
(1987).  Under this court's cases, dishonesty includes theft or
knowing conversion of client property, such as client funds.  See
In re Martin, 328 Or 177, 185-86, 970 P2d 638 (1998) (discussing
concept of conversion in lawyer discipline cases).
		Conversion may be proved by direct evidence, such as an
accused lawyer's testimony.  See In re King, 320 Or 354, 357, 883
P2d 1291 (1994) (taped confession); In re Pierson, 280 Or 513,
516, 571 P2d 907 (1977) (admission to client).  In the absence of
direct evidence, proof of such charges may be based on reasonable
inferences drawn from the evidence.  See In re Phelps, 306 Or
508, 513, 760 P2d 1331 (1988) (so stating).  In Phelps, this
court concluded that severe financial straits, poor accounting
practices, and the lawyer's failure to explain what had happened
to the funds in question proved conversion.  Id. at 515-20.
		The Bar points to a number of circumstances surrounding
the accused's payment to herself in the Schreiber matter that the
Bar contends demonstrate that the conversion was intentional,
rather than a mistake.  The Bar begins with the undisputed fact
that, although Wagner had alluded to $850 in unbilled time in his
letter to the accused, Wagner never had sent the accused an
invoice seeking payment of that amount.  Despite the letter
mentioning a figure of $850, the accused paid Wagner's invoice
for $140 without contacting Wagner to inquire further whether the
$140 invoice bore any relationship to the $850 figure mentioned
previously.
		As noted above, although the accused often used a
reimbursement method, she also paid charges directly from the
trust account.  Sufficient funds existed in the trust account in
August or September 1993 to pay the $850 directly from that
account.  Nevertheless, the accused chose the reimbursement
method, even though there was no invoice to trigger any cost
advance. 
		The Bar maintains that, if the $850 mistake were an
innocent one, then the accused had two opportunities to correct
it.  First, when the accused received the $140 invoice from
Wagner, she could have remembered that she already had informed
Schreiber several weeks earlier that she was going to pay the
$850, and the $140 invoice should have raised a question in her
mind.  Second, the accused could have noticed the discrepancy
when Schreiber asked for an explanation of what Wagner had done
to merit his $990 fee ($140 plus $850).  Instead, the accused
responded to Schreiber's concerns without checking Wagner's
invoices for an explanation of the charges.
		The Bar also points out that the accused "drained"
Schreiber's account through several accounting "mistakes."  The
first such error had occurred in mid-1992 when the accused added
in the previous trust account balance of $936.89 as a "cost,"
thus removing that amount from the trust account for
reimbursement. (3)  Another "mistake" had occurred in January 1993,
when the accused billed Schreiber for an hour of her time, in
what was supposed to be a combination flat-fee contingency case. 
		Other errors occurred later in 1993, when the accused
had paid some costs both directly out of the trust account and
then also had reimbursed herself for such expenses.  In other
words, the accused had paid costs associated with Schreiber's
case out of her client trust account and also had "reimbursed"
herself for those same expenses from that account.  In that
regard, the accused paid costs out of the trust account on three
occasions -- once for a transcript of a summary judgment motion
($150), once for brief covers ($9), and once for Wagner's $140
fee -- and also had "reimbursed" herself for those costs as if
she had paid them out of her office account.  The accused
explained those as innocent mistakes and noted that she had made
two other mistakes, both of which were in Schreiber's favor.  The
Bar maintains that the mistakes in Schreiber's favor, however,
were corrected quickly -- one of them not even being a mistake,
yet the mistakes in the accused's favor never were corrected. 
		While the accused's client trust account was dwindling
in the latter half of 1993, the accused engaged in belabored
efforts to try to obtain the $12,000 from Schreiber -- including
repeatedly threatening to resign.  The Bar argues that the lack
of a reasonable explanation for the accused's tenacity in seeking
to add those funds to her trust account suggests the possibility
that she intended something outside the normal course of
representation once she extracted the funds from Schreiber. (4) 
		The accused makes three points in response to the Bar's
characterization of the evidence.  First, she asserts that no
direct evidence contradicts her explanation that she had
withdrawn the funds under the mistaken belief that she was
entitled to reimbursements.  Second, she asserts that there is
evidence in the record that tends to corroborate her claim that
she had transferred the funds mistakenly.  In that regard, the
accused points out that, in Wagner's letter of August 20, 1993,
Wagner stated that he had, "to date, incurred fees and expenses
totaling $850 related to this matter, which have not yet been
billed."  In other words, the letter is some evidence
establishing the origin of the accused's mistaken belief. 
Furthermore, the accused's secretary and bookkeeper at the time,
Webb, who had worked with the accused to prepare the billing
statements, testified that she "recalled something" about paying
the $850, but could not recall seeing an invoice for that sum. 
Finally, with regard to her second point, the accused notes that,
in her August 24, 1993, letter to Schreiber, she had commented
that she would need to pay Wagner the $850 mentioned in his
letter.  
		As to her third point, the accused maintains that the
trial panel's finding that her explanation was not credible stems
from the trial panel's fundamental misunderstanding of the
evidence with regard to the actual transfer of the funds. 
Therefore, the accused maintains that we should not defer to the
trial panel's assessment of credibility, as would be our general
practice.  See Trukositz, 312 Or at 629 (notwithstanding court's
de novo review, court normally will defer to trial panel's
assessment of credibility).  
		The trial panel's rejection of the accused's
explanation that she simply was mistaken about her right to
withdraw the funds from the trust account is premised on the
following:
		"The Accused suggests that she must have
erroneously supposed that she had paid the $850 out of
her own funds and believed that she could appropriately
reimburse herself from trust funds.  We find this
testimony not credible.  It was only by Mr. Wagner's
August 20 letter that the accused (for the first
time)learned that Mr. Wagner had incurred but not
billed $850 in time and expenses.  Only eleven days
later, she withdrew the funds."  
(Emphasis added.)
		However, the uncontradicted evidence in the record is
that the accused did not withdraw the funds eleven days after
Wagner's August 20, 1993, letter, as the trial panel found;
neither did she actually withdraw the funds in September 1993
when she sent out an invoice noting the purported reimbursement. 
Instead, the accused did not withdraw the funds from her client
trust account until five months later, in January 1994.  When she
did so, it was as part of an effort by the accused and her
secretary/bookkeeper to reconcile the expenses and trust
withdrawals associated with Schreiber's case between February and
November of 1993.  Because the trial panel appears to have
premised its determination that the accused's explanation was not
credible on its mistaken belief that the accused had transferred
the funds to herself eleven days after Wagner's letter, we do not
defer to the trial panel's assessment respecting the accused's
credibility.
		Giving appropriate weight to the accused's plausible
explanation of her withdrawal of the $850 -- an explanation for
which there is some corroboration -- and in light of the fact
that the accused did not withdraw the funds until five months
after receiving Wagner's letter, we conclude that the Bar has
failed to prove by clear and convincing evidence that the accused
violated DR 1-102(A)(3) when she withdrew the $850 from her trust
account.  
	2.  DR 9-101
		The Bar contends that the accused violated DR 9-101(A),
DR 9-101(C)(3), and DR 9-101(C)(4).  Those rules are
straightforward in that a lawyer must:  (1) maintain client funds
in lawyer's trust account (DR 9-101(A)); (2) maintain adequate
records of client property (DR 9-101(C)(3)); and (3) deliver
client property to the client when requested (DR 9-101(C)(4)). 
The evidence supports a violation of DR 9-101(A), because
mistakenly the accused removed Schreiber's funds from the client
trust account.  In addition, the accused failed to maintain
adequate trust account records and failed to give Schreiber the
$850 when he asked for the unearned portion of his retainer.  The
accused acknowledges that she violated DR 9-101(A), DR 9-101(C)(3) and DR 9-101(C)(4), and we agree.
B.	Schmidt Matter
	1.	DR 1-102(A)(3)
		In the Schmidt matter, the Bar's charges under DR 1-102(A)(3) are twofold.  First, the Bar alleges that the accused
engaged in padding her bill.  We have reviewed the evidence and
concur with the trial panel that the Bar failed to prove by clear
and convincing evidence that the accused "padded" her bill.
		The Bar's second charge under DR 1-102(A)(3) is that
the accused engaged in "churning," that is she engaged in
professional activities that had no purpose other than to enrich
herself. (5)  In particular, the Bar charges that the accused
"misled her client into believing that the accused's pointless
strategies and her incredibly high fees were essential to prevent
the loss of the client's son."  According to the Bar, the accused
knew that a less expensive method of achieving the results was
possible, but deceived Schmidt into believing that no other set
of tactics was possible.  The result, the Bar maintains, was that
the accused engaged in "unnecessary and wasteful" activities. (6) 
We do not agree with the Bar's characterization of the accused's
actions on Schmidt's behalf as unnecessary and wasteful.  
		For example, the Bar faults the accused for deposing
representatives of Wacker's employer and for deposing the
psychologists.  In each instance, however, a reasonable argument
could be made that those individuals possessed relevant
information that was not available by alternative means and that
the accused was justified in deposing them to establish a record
that would be useful at trial or in motion practice.  The accused
informed Schmidt that her intention in this case was to "cross
every 't' and dot every 'i,'" as she put it, which is what she
did.  The fact that some of the Bar's experts in this matter
suggested that they would have used shortcuts in the underlying
litigation does not demonstrate that the accused's approach in
this case was unwarranted.  As one of the experts testified, the
accused acted with due diligence to protect her client's
position.
		We conclude that the Bar has failed to prove by clear
and convincing evidence that the accused violated DR 1-102(A)(3)
in the Schmidt matter.
	2.  DR 1-102(A)(4)
		"It is professional misconduct for a lawyer to * * *
[e]ngage in conduct that is prejudicial to the administration of
justice."  DR 1-102(A)(4).  That rule has three parts.  The Bar
must show:  (1) that the accused lawyer engaged in conduct by
doing something that the lawyer should not have done or by
failing to do something that the lawyer was required to do; (2)
that the conduct occurred during the course of a judicial
proceeding or another proceeding that has the trappings of a
judicial proceeding; and (3) that the conduct was prejudicial
because it involved several acts that caused some harm to the
administration of justice or because it involved a single act
that caused substantial harm to the administration of justice. 
In re Gustafson, 327 Or 636, 643, 968 P2d 367 (1998).
		The Bar contends that the accused's litigation tactics
were prejudicial to the administration of justice because those
tactics were "unwarranted," complicated any potential settlement,
and prevented the parties from communicating with each other
rather than through lawyers.  As previously explained, we
disagree that the accused's actions were unwarranted.  The Bar's
unspoken premise is that a lawyer has a duty to posture a case
for settlement and then settle the dispute.  Although that might
be appropriate in many cases, the disciplinary rules do not
require that a lawyer posture a case for settlement rather than
trial, unless the lawyer understands that the client's interest
requires the lawyer to do so.  Moreover, vigorous preparation for
trial may in some cases provide the best impetus for settlement. 
Preparing a case for trial often includes deposing all major
witnesses and preserving their testimony, and might include
gathering documents from third parties, by subpoena if necessary. 
That is what the accused did in this case.  Although other
lawyers might have prepared the case differently, or gathered
information more efficiently, or not bothered at all, the
accused's conduct was, nevertheless, within permissible bounds.
		Finally, it was reasonable, given the history of
Wacker's allegedly abusive treatment of Schmidt and the couple's
inability to communicate effectively with each other, that
communications should occur through their lawyers.  Indeed,
Schmidt wanted that arrangement.  Hence, the Bar's arguments are
not well taken.
		For the foregoing reasons, we conclude that the Bar has
failed to prove by clear and convincing evidence that the accused
undermined the administration of justice in violation of DR 1-102(A)(4).
	3.  DR 2-106(A)
DR 2-106(A) provides that "[a] lawyer shall not enter
into an agreement for, charge or collect an illegal or clearly
excessive fee."  Moreover, DR 2-106(B) provides that "[a] fee is
clearly excessive when * * * a lawyer of ordinary prudence would
be left with a definite and firm conviction that the fee is in
excess of a reasonable fee." (7) 
		The Bar's attempt to blame the accused for the entire
cost of the litigation in the Schmidt matter is misplaced.  Our
review of the evidence convinces us that Wacker's aggressive and
uncooperative attitude that persisted both before the dissolution
and after, combined with Schmidt's desire not to surrender to
Wacker's tactics, contributed significantly to the high cost of
the litigation.  At the outset, according to Schmidt, Wacker
physically and verbally had abused her and manipulated the
children.  As Schmidt contended, Wacker was abusive, domineering
and uncooperative, and his attitude continued throughout the
litigation.  To cite but a few examples, Wacker wanted an
independent lawyer for the children; he refused to have MCFS
complete a study and instead wanted a private psychologist
appointed; he (and Carlson) refused to provide financial
information; and he failed to cooperate regarding insurance
coverage for Brian.  In responding to each of those events, the
accused and Schmidt reacted to complexities that Wacker had
created.  In particular, the accused's need for discovery and the
difficulty in obtaining that discovery increased Schmidt's fees. 
		In addition, Schmidt's unconciliatory attitude toward
Wacker also contributed to the expense of the litigation.  She
had wanted, and in fact, approved the accused's assertive
representation and the legal activities in which the accused
engaged.  Her testimony to the contrary, before the trial panel,
is inconsistent with her contemporary correspondence to the
accused, where she repeatedly thanked the accused for standing up
to Wacker.  In light of the parties' hardened attitudes toward
each other, the importance of the litigation to them, and the
aggressive legal struggle that they precipitated, encouraged, and
abetted, we conclude that the accused's fee was not clearly
excessive. (8) 
		We conclude that the Bar has failed to prove by clear
and convincing evidence that the accused violated DR 2-106(A).
III.  SANCTION

		In addition to its own cases, this court relies on the
American Bar Association's Standards for Imposing Lawyer
Sanctions (1991) (amended 1992) (ABA Standards) for guidance in
determining the appropriate sanction for lawyer misconduct.  In
determining the appropriate sanction and before attempting a
tentative estimate of the potential sanction this court
preliminarily weighs:  (1) the duty violated; (2) the accused's
mental state; and (3) the actual or potential injury.  In re
Devers, 328 Or 230, 241, 974 P2d 191 (1999).  We then examine any
aggravating or mitigating circumstances to determine if the
sanction should be adjusted.  Finally, we compare prior Oregon
cases and the sanctions imposed in them before determining on a
final sanction.  Id.
A.  Preliminary Analysis
		In violating DR 9-101(A), (C)(3), and (C)(4), the
accused mishandled her client trust account and failed in her
duty to preserve a client's property.  ABA Standard 4.1.  As a
result, Schneider was injured when the accused paid herself more
than she was entitled.
		A "[r]eprimand is generally appropriate when a lawyer
is negligent in dealing with client property and causes injury or
potential injury to a client."  ABA Standard 4.13.  By contrast,
"[s]uspension is generally appropriate when a lawyer knows or
should know that he is dealing improperly with client property
and causes injury or potential injury to a client.  ABA Standard
4.12.  Here, although we have concluded that evidence did not
establish that the accused acted knowingly, she "should have
known" that she was dealing improperly with the funds.  Thus,
preliminarily, suspension is the appropriate sanction.
B.  Aggravating and Mitigating Factors
		"[A]ggravating circumstances are any considerations or
factors that may justify an increase in the degree of discipline
to be imposed."  ABA Standard 9.21.  Here, the aggravating
circumstance is substantial experience in the practice of law.  
ABA Standard 9.22(i).  By 1993, when the accused mishandled the
trust account, she had been a member of the Bar for over 20
years, had extensive experience in private practice, and was held
in high professional regard.  We conclude that the accused's
substantial experience weighs heavily against her as we determine
a sanction for her mishandling of the trust account. 
		"[M]itigating circumstances are any considerations or
factors that may justify a reduction in the degree of discipline
to be imposed."  ABA Standard 9.31.  The Bar concedes that the
accused was cooperative, and that there was a delay in the
disciplinary proceeding.  See ABA Standard 9.32(e) &amp; (i) (two
mitigating factors).  We conclude that the one aggravating
circumstance -- substantial experience in the practice of law --
outweighs the mitigating circumstances.
C.  Oregon Cases
		Generally, this court has concluded that a reprimand is
an appropriate sanction for unintentional mistakes in trust
account management.  See, e.g., In re Mannis, 295 Or 594, 668 P2d
1224 (1983) (lawyer reprimanded for commingling office and client
funds through mistakes of bookkeeping assistant).
		Here, however, as noted above, the accused "should have
known" that she was dealing improperly with the trust account. 
That, combined with the accused's substantial experience in the
practice of law, require that the accused be suspended from the
practice of law for 60 days. 
		The accused is suspended for 60 days, effective 60 days
from the date of the filing of this decision.



1. 	Later, Wacker stated in an affidavit that Brian wanted
to live with him and not Schmidt.  That assertion was incorrect,
however, because Brian instead wanted something akin to a 50-50
visitation arrangement, not to live with Wacker full-time. 
Wacker later corrected his affidavit. 

2. 	Bolstad was no stranger to the family, as she 
previously had worked with Wacker and Brian after the dissolution
proceedings had begun. 

3. 	The Bar claims that the accused profited by twice that
amount, $1,873.78, presumably because the Bar assumed that the
trust account lost that balance in addition to that amount being
reimbursed as an expense.  Although that amount appears to have
been charged as an expense, whether that amount also was deducted
from the trust account balance is unclear. 

4. 	The accused offered various explanations.  For example,
the accused's explained that the damages study had to be
performed while the case was pending on appeal because there
would be no time to perform such a study if the case were
reversed and remanded.  Alternatively, the accused explained that
the study was necessary because she wanted to know whether the
appeal was worthwhile. 

5. 	Churning is defined as a "stockbroker's excessive
trading of a customer's account to earn more commissions rather
than to further the customer's interests; an abuse of a
customer's confidence for personal gain by frequent and numerous
transactions, disproportionate to the size and nature of the
customer's account."  Black's Law Dictionary, 235 (7th ed 1999).

6. 	The Bar also contends that the accused's hourly rate of
$160 was excessive.  The experts who testified disagreed
respecting whether that rate was excessive for a family-law
practitioner in Portland in 1992.  Hence, the Bar failed to
demonstrate that that rate was excessive.

7. 	That rule provides various considerations as to when a
fee may be considered excessive:
		"(1) The time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly.
		"(2) The likelihood, if apparent to the client,
that the acceptance of the particular employment will
preclude other employment by the lawyer.
		"(3) The fee customarily charged in the locality
for similar legal services.
		"(4) The amount involved and the results obtained.
		"(5) The time limitations imposed by the client or
by the circumstances.
		"(6) The nature and length of the professional
relationship with the client.
		"(7) The experience, reputation, and ability of
the lawyer or lawyers performing the services.
		"(8) Whether the fee is fixed or contingent."
DR 2-106(B)(1) to (8).

8. 	Also, the experts who testified in this matter were
divided on the issue whether the accused's fees were clearly
excessive.