Title: Matter of Castro
Citation: 164 Ariz. 428, 793 P.2d 1095
Docket Number: 5-0020, SB-88-0051-D
State: Arizona
Issuer: Arizona Supreme Court
Date: June 21, 1990

164 Ariz. 428 (1990) 793 P.2d 1095 In the Matter of a Member of the State Bar of Arizona, Ernesto Rolando CASTRO, Respondent. No. SB-88-0051-D. Disciplinary Comm. No. 5-0020. Supreme Court of Arizona, In Banc. June 21, 1990. *429 Jerry L. Smith, Flagstaff, for respondent. State Bar of Arizona by Harriet L. Turney, Chief Counsel, Phoenix, and Walraven &amp; Roberts by Paul L. Roberts, Prescott, for State Bar of Arizona. OPINION CAMERON, Justice. I. JURISDICTION The Disciplinary Commission of the Supreme Court of Arizona (Commission) recommends respondent, Ernesto R. Castro, be suspended from the practice of law in Arizona for a period of 30 days and pay $500 in restitution. The conduct in question occurred prior to the adoption of the Rules of Professional Conduct, effective 1 February 1985. 17A A.R.S.Sup.Ct.Rules, Rule 42. The Code of Professional Responsibility (former Rule 29(a)), therefore, applies to the conduct in this case. See In Re Pappas, 159 Ariz. 516, 518, 768 P.2d 1161, 1163 (1988). We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and 17A A.R.S. Sup.Ct. Rules, Rule 53(e). III. PROCEDURAL HISTORY On 5 February 1986, the State Bar of Arizona (Bar) filed a two-count complaint against respondent. The first count alleged that respondent improperly handled his client's funds. The second count alleged that he failed to properly represent his client. Respondent answered the complaint and the Hearing Committee (Committee) began disciplinary proceedings on 5 January 1988. The Committee filed its report on 12 February 1988 and recommended public censure under Count One (Improperly Handling a Client's Funds) and a 30-day suspension under Count Two (Failure to Properly Represent a Client). A minority of the Committee recommended a 30-day suspension for both counts. Respondent filed an objection to the Committee Report on 11 March 1988. The Commission heard oral arguments on 9 July 1988 and filed its report on 18 July 1988, adopting the Committee's findings of fact and conclusions of law. By a 7 to 1 vote, the Commission recommended a 30-day suspension and $500 in restitution to be paid to respondent's client. The sole opposing vote recommended a longer suspension. Respondent filed a timely notice of appeal to this court objecting to the Commission's findings of fact, conclusions of law and recommended sanctions. IV. DISCUSSION In disciplinary proceedings, we sit as an independent trier of both fact and law in the exercise of our supervisory responsibility over the State Bar and its members. Pappas, 159 Ariz. at 518, 768 P.2d 1161. We will, however, give deference and serious consideration to the findings and recommendations of both the Committee and the Commission. Id. The burden remains on the Bar to prove by clear and convincing evidence that respondent violated his ethical obligations. Id. A. Count One In August 1983, respondent agreed to represent Aubrey L. Isbell (Isbell). Isbell was 57 years old and had been involved in more than 15 prior criminal matters. In 1983, Isbell was convicted of three felony counts of aggravated assault and was incarcerated in the Arizona State Prison at Perryville. Isbell employed respondent to perfect an appeal from those convictions *430 and agreed to pay respondent $200 a month for his services. Respondent claims that the agreement was for a fee of $5,000, payable at $200 a month, plus expenses. This fee agreement was not reduced to writing although evidence in the record indicates that the agreement was for a total of $5,000. Respondent appealed Isbell's convictions and received monthly checks from Isbell for fees ($200 per month) and other expenses. Respondent represented Isbell from August 1983 to October 1984 and received a total of $1,850 for fees and expenses. In January 1984, Isbell requested respondent's assistance in obtaining a medical release from prison. A medical release hearing was scheduled for June 1984. Respondent received funds from Isbell for attorney's fees, witness fees and other related expenses. In March 1984, Isbell requested an accounting of the fees paid to respondent. Respondent claims he furnished Isbell an accounting at the medical review hearing and that Isbell approved it. The Committee found that respondent received funds for costs of a transcript on appeal and for the employment of expert medical testimony. The Committee noted respondent "failed to maintain complete records of these client funds and was specifically unable to provide an accounting of such funds to the Committee from contemporaneously created records." The Committee also found respondent received funds to which he was not entitled. Specifically, in December 1983, respondent received $200 in excess of the $200 a month which Isbell agreed to pay. The evidence indicates that respondent never sent a billing statement or any other record to Isbell during the entire time he represented him. Almost every month, Isbell sent respondent a check for $200 and sometimes more. At one point, Isbell signed several blank checks and respondent filled in the blanks as expenses or monthly payments became due. Respondent admitted that his "book-keeping with respect to the entire matter was not the best." Respondent failed to keep time records and receipts in Isbell's case; instead, he merely maintained as a record "just a bunch of little chits that I would write." Respondent testified before the Committee as follows: Regarding the excess $200 he received from Isbell in December 1983, the Committee questioned respondent as follows: The Committee found that respondent violated former DR 9-102(B)(3) (Preserving the Identity of Funds and Property of a Client), Rule 29(a), Rules of the Supreme Court, which provided: The Commission adopted the Committee's finding and we agree with both the Committee and the Commission. Respondent failed to keep a complete financial record and failed to provide an appropriate accounting of all funds received from Isbell. B. Count Two In January 1984, while incarcerated, Isbell was treated for a bleeding ulcer. Isbell's treating physician noted that Isbell's condition was "very critical" and "near death." After his release from the hospital, Isbell discussed his health problems with respondent. Apparently, Isbell told respondent that his life was in danger and that he lost 90-95% of his stomach during surgery. Respondent decided to seek a medical release for Isbell and obtained Isbell's medical records in March 1984. He then moved for an order to release Isbell on the grounds that his "continued confinement would endanger his life." See A.R.S. § 13-3961. Hearing on the motion for release was held on 22 June 1984. With respect to the medical review hearing, the Committee found that respondent: In denying respondent's motion for release of Isbell, the trial court noted that neither Isbell nor Auguste were competent to testify as to Isbell's medical condition and that Isbell's medical records were never offered into evidence. The Committee concluded that respondent violated former DR 6-101 which provided: The Commission adopted the Committee's findings of fact and conclusions of law. We agree. Isbell's hospital record stating that his condition was "very critical" and "near death" was central to Isbell's claim. Respondent contacted Connie Auguste and asked her to explain the medical records to him so he could better understand Isbell's condition. Although Auguste was neither a physician nor a medical expert, she was a consultant in legal-medical matters and was previously licensed as a nurse in California. Auguste indicated that Isbell was not in any danger of dying either during or after surgery for his bleeding ulcer. Respondent also consulted both Drs. Runke and Morris, neither of whom was Isbell's treating physician. Both Runke and Morris told respondent that Isbell was not in any life-threatening danger. Because of these adverse opinions, the testimony of the treating physician and the medical record explaining Isbell's condition before the surgery were vital to Isbell's case. Nevertheless, the treating physician was not called to testify nor was the medical record properly introduced into evidence. Bar counsel asked respondent the following questions regarding the treating physician: *433 We agree with Bar counsel's argument before the Commission: We find that respondent, in his preparation for the medical release hearing, violated former DR 6-101(A)(2) &amp; (3) (Failing to Act Competently). V. SANCTIONS We have the ultimate authority to impose sanctions on members of the Bar. In re Arrick, 161 Ariz. 16, 22, 775 P.2d 1080, 1086 (1989). The main purpose behind attorney discipline is to protect the public and deter others from misconduct. In re Fresquez, 162 Ariz. 328, 783 P.2d 774, 780 (1989). We look to the American Bar Association's Standards for Imposing Lawyer Sanctions (1986) for guidance in determining the appropriate sanctions. Arrick, 161 Ariz. at 22, 775 P.2d 1080. The ABA Standards list the following factors to consider in imposing the appropriate sanction: (1) the duty violated, (2) the lawyer's mental state, (3) the actual or potential injury caused by the lawyer's misconduct, and (4) the existence of aggravating or mitigating circumstances. ABA Standards, Standard 3.0. The Committee in this case recommended that respondent be given public censure under Count One and a 30-day suspension under Count Two. The Commission, however, did not delineate its recommendation under each count. Instead, the Commission recommended a 30-day suspension and $500 restitution to Isbell. We consider respondent's acts under both counts in reaching our decision as to a single appropriate sanction. Reprimand is generally appropriate when a lawyer is negligent in dealing with client property and causes injury or potential injury to a client. ABA Standards, Standard 4.13. Regarding respondent's failure to maintain adequate financial records, we note the following: ABA Standards, Commentary to Standard 4.13.[1] With regard to respondent's failure to act competently, we note the following: ABA Standards, Standard 4.54. In support of a lesser sanction than that recommended by the Committee and the Commission, we consider several mitigating factors that may justify a reduction in the degree of sanction to be imposed. See ABA Standards, Standard 9.31. We note *434 that respondent did represent Isbell in his appeal, among other things, for more than one year and was paid less than the agreed upon total fee. This factor indicates an absence of a dishonest or selfish motive on the part of respondent. See ABA Standards, Standard 9.32(b). Moreover, we find respondent's inexperience in the practice of law a mitigating factor because he was admitted to the practice of law in August 1982 and the events in this case started in August 1983. See ABA Standards, Standard 9.32(f). Finally, we note that Isbell suffered no actual injury due to respondent's improper introduction of the medical records at the medical release hearing. See ABA Standards, Standard 4.54. Even with competent counsel, Isbell probably would not have been released because he was not in any life-threatening danger at the time of the hearing. One aggravating factor existing in this case is respondent's prior disciplinary offense. See ABA Standards, Standard 9.22(a). On 17 February 1987, but before the hearing in this case, the Commission issued a private reprimand to respondent for appearing in justice court while intoxicated. Considering both the mitigating and aggravating circumstances in this case, we note the following: ABA Standards, Commentary to Standard 9.1. We believe reprimand (public censure) is a more appropriate sanction in respondent's case. The Commission also recommended that respondent pay $500 in restitution to Isbell, presumably for the amount Isbell paid to respondent for Auguste's expert medical testimony. We believe restitution is appropriate under the facts of this case. Finally, the Bar has filed a statement of its administrative costs and expenses in the processing of this disciplinary matter. We order respondent to pay $2,659.80 in costs, pursuant to Rule 53(e), Sup.Ct.Rules, 17A A.R.S. VI. ORDER Respondent Ernesto R. Castro is publicly censured and ordered to pay $500 in restitution to Aubrey Lynn Isbell and $2,659.80 to the Bar for costs. My review of the record leads me to conclude that the Bar failed to show by clear and convincing evidence that respondent committed the violation charged in Count II. A large part of the majority's opinion relative to this count is based on the assertion that the respondent committed an ethical violation when he failed to secure the admission into evidence of his client's medical records at the release hearing. My reading of the record shows that respondent reviewed the medical records, found much in them harmful to his client's cause, and made a judgment call that he would not put the written records into evidence. Instead, he orally introduced into evidence the contents of portions of the records, and only those portions, which were helpful to his client. Some may opt for a different strategy, particularly with the benefit of hindsight. But there was no adequate showing that respondent breached the ethical code in proceeding in the manner in which he proceeded. Nevertheless, I concur in the issuance of a censure because, with respect to Count I, I agree that respondent had a woefully inadequate bookkeeping system, that his lack of such a system constituted an ethical violation, and that a censure is an appropriate remedy on the Count I violation. Because the restitution *435 order of the majority is apparently based on Count II, I would not impose it. FELDMAN, Vice Chief Justice, specially concurring. I concur in the result and in the views expressed by Justice Moeller. I write separately to express my views on the so-called "bookkeeping system" used by this respondent. Respondent testified that he threw away the "chits" little pieces of paper on which he made notations about funds received and was therefore unable to render an account of his clients' funds, as required by the former rules. See DR 9-102(B), former Rule 29(a), Ariz.R.Sup.Ct., 17A A.R.S. (hereafter Rule ____). As I see it, he would have been unable to render an adequate account even if he had kept the chits and claimed they had served to refresh his memory. The rule he was charged with violating, DR 9-102(B)(3), required an attorney to maintain "records" of all client funds in his possession and to render an appropriate "account" to the client regarding those funds (the present equivalent is Rule 43(a)). Such records should comply with generally accepted accounting principles or, at least, bookkeeping standards. While lawyers need not be skilled accountants, they are charged with the responsibility of maintaining records that will enable them to account for client funds in a businesslike manner. Attorneys lacking knowledge in bookkeeping or accounting should retain a bookkeeper or accountant to set up a proper system of accounting for their office. Slips of paper on which notations are made that may serve to refresh the recollection of the lawyer some years after the event do not qualify as records or books of account. In the future, I will take the position that lawyers who cannot produce acceptable ledgers, journals, or other recognized books of account will have failed to comply with the current requirements of ER 1.15, Rule 42. More importantly, they will have failed to comply with Rule 43, the Trust Account Guidelines of the State Bar of Arizona adopted pursuant to Rule 43(d), and Rule 44. Not having acceptable records of clients' funds is, without more, grounds for summary suspension under the present rules. See Rule 43(g). [1] Public reprimand under the ABA Standards is the same as public censure under our Rule 52(a)(4), Rules of the Supreme Court. Admonition under the ABA Standards is the same as informal reprimand under our Rule 52(a)(5).