Title: State ex. rel. Oklahoma Bar Assn. v. Taylor
Citation: 2000 OK 35, 4 P.3d 1242, 71OBJ1163
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: May 9, 2000

State ex. rel. Oklahoma Bar Assn. v. Taylor Annotate this Case State ex. rel. Oklahoma Bar Assn. v. Taylor 2000 OK 35 4 P.3d 1242 71 OBJ 1163 Case Number: SCBD-4466 Decided: 05/09/2000 Supreme Court of Oklahoma STATE OF OKLAHOMA, ex rel. Oklahoma Bar Association, Complainant v. MICHAEL C. TAYLOR, Respondent BAR DISCIPLINARY PROCEEDING ¶0 In this disciplinary proceeding brought against a lawyer, the complaint alleges - in one count - multiple instances of unprofessional conduct deemed to warrant sanctions. The Professional Responsibility Tribunal found that respondent's actions constitute grounds for professional discipline and recommended public censure. Upon de novo review of the evidence presented to the trial panel and this court's acceptance of the parties' stipulated findings of fact and conclusions of law, RESPONDENT'S LICENSE TO PRACTICE LAW IS ORDERED SUSPENDED FOR A PERIOD OF THIRTY DAYS AND HE IS DIRECTED TO PAY THE COSTS OF THIS PROCEEDING NOT LATER THAN NINETY DAYS AFTER THIS OPINION BECOMES FINAL Loraine Dillinder Farabow, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, Oklahoma for complainant. Michael C. Taylor, pro se, Tulsa, Oklahoma, for respondent. OPALA, J. ¶1 In this disciplinary proceeding against a lawyer, the issues to be decided are: (1) Does the record submitted for our examination provide sufficient evidence for a meaningful de novo consideration of the complaint and of its disposition? I INTRODUCTION TO THE RECORD ¶2 The Oklahoma Bar Association [Bar] charged Michael C. Taylor [Taylor or respondent], a licensed lawyer from Tulsa, Oklahoma, with one count of professional misconduct. ¶3 Following receipt of the parties' briefs and upon consideration of the stipulations and testimony on file the trial panel issued a report with its findings of fact and conclusions of law together with a recommendation for discipline. In accord with the parties' stipulations, the trial panel found that Taylor had violated ORPC Rules 1.15(b)(c), 5.3, 8.1(b), and 8.4(a)(c), and RGDP Rules 1.3 and 5.2. It recommended that Taylor be publicly censured and that he bear the costs of the proceedings. II THE RECORD BEFORE THE COURT PROVIDES SUFFICIENT EVIDENCE FOR A MEANINGFUL DE NOVO CONSIDERATION OF ALL FACTS RELEVANT TO THIS PROCEEDING ¶4 In a bar disciplinary proceeding this court functions in an adjudicative capacity as a licensing organ of the State vested with exclusive original jurisdiction. ¶5 This court can discharge its duty only if the trial panel submits a complete record of the proceedings. ¶6 Taylor has admitted, and the proof supports, the charge of professional misconduct. Upon consideration of the record, we conclude that its contents are adequate for this court's de novo consideration of respondent's professional misconduct. III THE CHARGES LODGED AGAINST THE RESPONDENT ¶7 The alleged misconduct occurred during respondent's representation of Shelby Deason and her two minor children [Deason or client], who were injured on 6 May 1998 in an automobile accident. From May through August of 1998 the Deasons received medical treatment from Dr. Gregg Alan Coker. On August 19 he sent to Prudential Insurance a final billing statement for his services in the amount of $890. Respondent settled the case with the insurer for $911.75. ¶8 On 2 November 1998 Prudential Insurance sent to Taylor three checks made payable to Dr. Coker, Taylor, and Deason totaling $911.75. Respondent did not notify Dr. Coker about the settlement checks. Instead, on November 9 respondent's employee (and wife), Mrs. Taylor, endorsed the names of Dr. Coker, Taylor, and that of the client on the three checks and deposited them in his trust account. Dr. Coker's name was signed without his knowledge or consent. ¶9 Dr. Coker's office manager (and wife), Kat Coker, would testify that on 10 December 1998 she was advised by Prudential Insurance that the Deason case had been settled and that payment had been sent to respondent. Mrs. Coker called respondent's office the same day to find out the status of the settlement check. She was informed by a temporary employee in respondent's office that they were waiting for Deason to sign the release. On 5 January 1999 she was again advised by the same employee that they were waiting on the client's signature before the funds could be disbursed. ¶10 Mrs. Coker's January 6 letter to Deason informed her that (a) respondent had been holding the settlement check for two months and that the physician's office had not been paid, (b) that respondent's employee told her they were trying to obtain her signature on the release so that funds could be disbursed, (c) and that unless Dr. Coker received full payment on January 20, a small claims action would be filed against Deason. A copy of the letter was sent to respondent. Two days later, Dr. Coker's office received an undated letter from respondent along with a check dated 9 November 1998 drawn on his trust account for $586.83 with a notation "part. pay Deason family." Respondent's letter neither addressed the two-month delay in sending payment nor explained how the settlement checks were negotiated without Dr. Coker's signature. ¶11 Mrs. Coker would testify that after checking with Prudential Insurance and determining that Dr. Coker was shown as a payee on the checks, she wrote (a) "VOID - NOT ACCEPTABLE" on respondent's letter and (b) "VOID" across the front of the respondent's check and returned both items to the latter. She again advised Deason that partial payment was not acceptable. On January 20 Dr. Coker received from Prudential Insurance copies of the negotiated settlement checks, discovering that three checks, not one, had been issued. The copies showed the endorsement of the payees' names on the back of the checks. Later that day Mrs. Coker called respondent's office and left a message that unless full payment was received by the end of the day, a complaint would be filed against him. Respondent did not comply with her demand. ¶12 On January 27 the Bar received from Dr. Coker a written grievance alleging (a) respondent failed to notify him upon receipt of settlement funds, (b) his office misrepresented the status of funds' disbursement, and (c) he forged Dr. Coker's signature on the settlement checks. The Bar advised the respondent by letter dated February 11 that a formal investigation had commenced and that he had 20 days to respond. When respondent did not timely answer, the Bar sent on March 15 a certified letter, informing him that failure to respond within five days would result in the issuance of a subpoena. In a letter to the Bar, dated March 15 but received March 17, respondent denied any wrongdoing, but failed, though he had been requested so to do, to address the applicability to his actions of ORPC Rules 1.15 and 8.1(a)(b)(c) and of RGDP Rule 1.4. ¶13 In a March 15 letter to Dr. Coker, respondent tendered another check for $586.83 drawn on his trust account, stating that the amount represents the "net remainder" of the settlement proceeds. His letter explained that because an attorney's lien is superior to that by a physician, it was not "unlawful, unethical nor improper" to deposit the settlement check in the trust account and to pay the "appropriate and lawful costs and fees" due in the case. ¶14 Respondent's June 21 letter to the Bar advised that he made four disbursements from the settlement proceeds for (a) an attorney's (referral) fee to Mark Harper ($101.97), (b) his counsel fee ($203.95), (c) costs (25.00) and (d) then "sent 100% of the remainder to Dr. Coker's office on the same day" ($586.83), referring to November 9, the day that respondent's checks were written and deposited to his operating account. In response to the Bar's query about the different signature styles on the back of the checks, respondent explained that because his bank would become concerned if all the endorsements on the checks appeared to be in the same handwriting, he avoided the problem by "altering the handwriting styles." This was done, he explained, not to perpetrate any fraud but merely to facilitate getting the funds deposited and then placed in the hands of the clients and medical providers. Respondent's letter failed to advise the Bar that although four checks were written on November 9, respondent's checks for attorney's fee and costs were deposited that day, but the checks to Dr. Coker and Harper were mailed some two months later. The letter also misrepresented to the Bar that these checks were sent the "same day" the respondent's check was deposited. According to respondent, the checks were being held until the settlement releases were either signed or authorized by his client. ¶15 Although respondent's letters to the Bar and to Dr. Coker disclaimed any wrongdoing in his handling of the settlement checks, he later stipulated that he had a duty (a) promptly to notify all interested parties that the funds had been received, (b) to obtain in writing the permission of all co-payees to endorse the checks and deposit them in his trust account, and (c) that if a dispute arose concerning their respective interests, to keep separate all funds until that dispute has been resolved. IV MISHANDLING OF FUNDS BELONGING TO A THIRD PARTY ¶16 The Bar has charged respondent with improperly managing the funds entrusted to him in violation of ORPC Rule 1.15(b) and (c). ¶17 We employ three different culpability standards when evaluating mishandling of client funds: ¶18 The record before us reveals that respondent (a) received three checks payable to Dr. Coker, respondent and to the client in November 1998; (b) failed to notify Dr. Coker of the checks until almost two months later, and (c) gave no legal excuse for the delay. On November 9 respondent's wife forged the signature of Dr. Coker on the back of the checks and deposited them in his trust account. On the same day he wrote two checks drawn on the trust account for his claimed fee and costs and deposited them in his operating account, (a) without first notifying Dr. Coker that the settlement checks had been received and (b) without giving Dr. Coker an opportunity to dispute the amount of the distribution. We find that respondent's (a) failure to notify promptly Dr. Coker of the receipt of the insurance checks (b) failure to hold the funds separate until the dispute over the respective interests in the funds (Dr. Coker's, the client's and Harper's) was resolved and (c) misleading (via his staff) Mrs. Coker about the distribution of the funds constituted a violation of ORPC Rule 1.15(b) and (c). V A LAWYER'S DUTY TO SUPERVISE LAY PERSONNEL ¶19 A lawyer is duty-bound to supervise the work done by lay personnel and stands ultimately responsible for work done by all nonlawyer staff. ¶20 The record shows that respondent fell woefully short of his obligation to supervise his staff in the handling of a client's funds in which third parties had an interest. Respondent admitted that his wife signed Dr. Coker's signature on the three settlement checks without the latter's authorization. Although the respondent may not have intended to defraud Dr. Coker of any money, his wife did falsely endorse the doctor's name on the settlement checks, and respondent's subsequent actions ratified this conduct. He stipulated that unauthorized endorsements are acts contrary to the prescribed standards of conduct. ¶21 Mrs. Coker would testify that she called respondent's office to inquire about the status of the settlement check on December 10 and again on January 5. On each occasion she was informed by respondent's employee that these checks were waiting for the client's signature before the funds could be disbursed and payments made to Dr. Coker. Based on this conversation, Mrs. Coker believed that respondent was holding the settlement check until the client signed the release, at which time the co-payees would endorse and negotiate the settlement check. No one in respondent's office ever advised Mrs. Coker that the three settlement checks had already been endorsed and deposited into his trust account (on November 9) and a transfer of the claimed fee and costs was made the same day from the proceeds to respondent's operating account. ¶22 It is misleading to the banking institutions for respondent and his staff to sign payees' names on the back of settlement checks and purposefully "change the handwriting styles," even if the purpose for doing so is only to facilitate the quick distribution of funds. The correct endorsement of a payee's name should take the form of placing a lawyer's initials (or a notation) following the endorsement of a payee's name. This would indicate that a lawyer has signed the name on behalf of that payee according to the latter's legal authorization. ¶23 We hold that respondent's failure to supervise his staff and to prevent the improper endorsement of the insurance checks was a violation of ORPC Rules 5.3 and 8.4(a)(c) and RGDP Rule 1.3. VI TIMELY RESPONSE ¶24 A knowing failure to respond fully and timely to the Bar's demand for information in a disciplinary proceeding is itself grounds for discipline. ¶25 Respondent's reply to the Bar's February 11 letter - dated March 15 but not received until March 17 - not only was written (1) after the twenty-day period required by RGDP Rule 5.2, but also (2) was received by the Bar after it had sent him a second letter dated March 15. Moreover, respondent's March 15 and June 21 letters to the Bar failed to address all the issues raised in the Bar's inquiry, as well as misrepresented that the checks payable to Dr. Coker and to Harper had been mailed the "same day" (November 9) as when the two checks were deposited in respondent's operating account. ¶26 Respondent's failure to answer timely, completely and accurately within twenty days after service of the grievance is a violation of ORPC Rule 8.1(b) VII A THIRTY-DAY SUSPENSION IS AN APPROPRIATE SANCTION FOR RESPONDENT'S PROFESSIONAL MISCONDUCT ¶27 The primary purpose of disciplinary judicature is not to punish the delinquent lawyer but to protect the public by a thorough inquest into the respondent's continued fitness to practice law. ¶28 While the PRT and the Bar recommend that respondent be publicly censured (and that he defray the costs of these proceedings), respondent suggests that his misconduct warrants a less severe discipline. He urges that we visit a private reprimand. A. Aggravation of Discipline ¶29 It would not be in keeping with our stewardship of public interest to visit in this case a mild form of discipline. When respondent received the settlement checks, he became a constructive trustee of Dr. Coker to the extent the physician may have had a legal claim to the money in respondent's hands. ¶30 Respondent's actions affected a third-party claim to the fund. By failing to hold separately funds that represent proceeds due his client as well as those of a third-party medical provider to whom the client was indebted and by diverting a portion of the funds to his personal account before any dispute could be resolved, respondent must be deemed to have commingled the funds he so withheld. ¶31 Moreover, respondent's breach of fiduciary duty was accompanied by total lack of candor in his failure to acknowledge the wrongfulness of his actions. He mistook the claimed superiority of his attorney's lien over that of the physician's as a license to breach the trust. B. Respondent's Attitudinal Pattern ¶32 Respondent's correspondence, with both the Bar and Dr. Coker, shows unwillingness either to admit any wrongdoing or to acknowledge the significance of his clouded actions. His initial reaction was to ignore the Bar's inquiry. In his first letter to the Bar respondent denied that his actions - in placing a co-payee's name on three checks without prior authorization and in taking out of the proceeds the fee and costs claimed to be due without giving interested third parties an opportunity to dispute and settle the amount - were in violation of any bar rules. C. Mitigating Factors ¶33 Mitigating circumstances may be considered in assessing the quantum of discipline that is appropriate. ¶34 The court holds that the severity of the offense (combined with a lack of compelling mitigating factors) nonetheless warrants a license suspension for thirty days. Respondent's misconduct consists of six separate violations of the ORPC and two separate violations of the RGDP. The claimed superiority of respondent's attorney's lien over that of Dr. Coker's cannot serve as a license: (1) to place an unauthorized endorsement of the physician's name on a check upon which the latter is co-payee; (2) to fail to notify promptly interested parties that funds have been received; (3) to commingle funds to which a third party claims an interest, (4) to misrepresent the disposition of a check on which the physician's name appears as co-payee; (5) to reduce the amount the physician claimed to be due without an explanation and justification, (6) to submit a tardy response to a bar grievance, and (7) to mislead a bar investigator. The components of this offense pose grave risk to the public image of the legal profession as composed of reputable practitioners in whom the public can place its confidence when they are in charge of funds belonging to other individuals. ¶35 Upon de novo review, the court concludes that there is clear and convincing evidence of respondent's violations charged in the complaint. An attorney may be disciplined by this court more severely than the PRT or the Bar have recommended. ¶36 Respondent's license to practice law is accordingly suspended for thirty days from the effective day of this pronouncement and he shall pay the costs of this proceeding - in the sum of $474.89 - not later than ninety days after this opinion becomes final. ¶37 SUMMERS, C.J., LAVENDER, OPALA, BOUDREAU and WINCHESTER, JJ., concur; ¶38 HARGRAVE, V.C.J., and HODGES, J., concur in part and dissent in part; ¶ ¶40 WATT, J., dissents. HODGES ¶1 I would adopt public reprimand - the measure recommended by the Professional Responsibility Tribunal - as the discipline to be imposed upon the respondent. WATT ¶1 I would impose a longer period of suspension. FOOT