Title: In re Balocca
Citation: N/A
Docket Number: S53380
State: Oregon
Issuer: Oregon Supreme Court
Date: January 19, 2007

FILED: January 19, 2007
IN THE SUPREME COURT OF THE STATE OF OREGON
In re Complaint as to the Conduct of
MICHAEL G. BALOCCA,
Accused.
(OSB 05-02; SC S53380)
On review of the decision of a trial panel of the
Disciplinary Board.
Argued and submitted November 2, 2006.
Michael G. Balocca, Ashland, argued the cause and filed the
brief for himself.
Jane Angus, Assistant Disciplinary Counsel, Lake Oswego,
argued the cause and filed the brief for the Oregon State Bar. 
With her on the brief was Charles M. McNair, Bar counsel.
Before De Muniz, Chief Justice, and Carson,* Gillette,
Durham, Balmer, Kistler, and Walters, Justices.**
PER CURIAM
The accused is suspended from the practice of law for 90
days, commencing 60 days from the date of this decision. 
* Carson, J., retired December 31, 2006, and did not
participate in the decision of this case.  
** Linder, J., did not participate in the consideration or
decision of this case.
PER CURIAM
In this lawyer disciplinary proceeding, the Oregon
State Bar (the Bar) charged Michael G. Balocca (the accused) with
violating five Disciplinary Rules (DR) of the Oregon Code of
Professional Responsibility (1) in his representation of Marc
Taylor and, subsequently, Carol Brookins.  The Bar alleged that
the accused violated DR 9-101(A) (requiring lawyer to deposit and
maintain client funds in trust), DR 9-101(C)(3) (requiring lawyer
to account for client funds), DR 2-106(A) (prohibiting illegal or
clearly excessive fee), DR 2-110(A)(3) (requiring lawyer promptly
to deliver unearned fee on termination of employment), and DR 5-105(C) (prohibiting representation that would conflict with
representation of former client).  
Three factual disputes underlie the charges:  (1)
whether Taylor signed a written fee agreement that specified that
the fees that he paid to the accused were deemed earned upon
receipt; (2) whether the $300 that the accused collected from
Taylor was an excessive fee for the work that he performed for
Taylor; and (3) whether the accused obtained confidences or
secrets from Taylor such that the accused's subsequent
representation of Brookins in a paternity petition that Taylor
filed against Brookins created a conflict of interest.
After a two-day hearing, a trial panel of the
Disciplinary Board found by clear and convincing evidence that
Taylor had not signed a written fee agreement providing that the
fees that he had paid to the accused were deemed earned upon
receipt, that the accused had not earned the $300 paid by Taylor,
and that the accused had obtained confidences or secrets from
Taylor that created a conflict for the accused in his subsequent
representation of Brookins.  The trial panel concluded that the
accused had violated all the rules charged in the Bar's complaint
and suspended the accused from the practice of law for 120 days.  
Pursuant to ORS 9.536(1) and Bar Rules of Procedure
(BR) 10.1 and 10.3, the accused seeks review of the trial panel's
decision.  We review a decision of the trial panel de novo.  ORS
9.536(2); BR 10.6.  The Bar must establish misconduct by clear
and convincing evidence, which "means evidence establishing that
the truth of the facts asserted is highly probable."  In re
Cohen, 316 Or 657, 659, 853 P2d 286 (1993).  For the reasons that
follow, we conclude that the accused committed the violations
charged and suspend the accused from the practice of law for 90
days. 
I.  FACTS
The accused was admitted to practice law in Oregon in
1983 and in New Hampshire in 1984.  He practiced law in New
Hampshire from 1984 to 1988 and has practiced law in Oregon since
1988.
A. Taylor Matter
Brookins, whom the accused previously had advised on a
bankruptcy petition, referred Taylor to the accused for a
bankruptcy consultation.  Taylor and Brookins had a romantic
relationship at that time.  Taylor consulted with the accused on
July 11, 2002, about filing for bankruptcy.  Prior to meeting
with the accused, Taylor had completed the accused's client
intake form, including providing information regarding his
finances.  At the meeting, the accused and Taylor reviewed the
information on the intake form and discussed other aspects of
Taylor's financial status, as well as some of the details of the
accused's proposed representation of Taylor.  The accused agreed
to represent Taylor and to prepare and file a bankruptcy petition
for a flat, nonrefundable fee of $550, plus costs and expenses of
$225.
The accused asserts that, at their initial meeting, he
also explained to Taylor that the $550 flat fee was deemed earned
upon receipt, that the accused would not begin work until Taylor
had paid at least $100, that Taylor could pay in installments,
and that the accused would not file the bankruptcy petition until
Taylor had paid the entire $775 of the fees and costs.  The
accused testified that his office had provided to Taylor, and
that Taylor had signed, the standard fee agreement form that he
used with most of his bankruptcy clients and that the form
explicitly stated that all fees paid under the agreement were
deemed earned upon receipt. (2)
Taylor testified that the accused had not explained
that the fees were deemed earned upon receipt and that he never
had signed a fee agreement.  Although Taylor initially told the
Bar that he had signed a fee agreement, he subsequently testified
that he was mistaken and that the document that he had recalled
signing was a different document.  The accused, although
admitting that he never saw an agreement with Taylor's signature,
maintains that such an agreement must have been signed by Taylor
but subsequently lost by the accused's office.  The accused was
unable to produce a fee agreement signed by Taylor, but he did
introduce at the hearing the form of agreement that he claims
that Taylor had signed.
Taylor testified that, after his initial consultation
with the accused, the accused's secretary, Curtis, (3) gave him
an 11-page form with detailed questions concerning his finances. 
Taylor stated that he answered the questions and returned the
form to the accused's office on August 6, 2002.  The accused
maintains that Taylor never returned it.  Neither party has been
able to produce a copy or the original of Taylor's completed
financial questionnaire.
Taylor paid $100 to the accused on July 11, 2002, and
he made additional $100 payments on August 6, 2002, and October
16, 2002.  Taylor did not pay the balance of the fee or the
costs.  The accused admits that he did not deposit the $300 into
his lawyer trust account and that he never provided an accounting
of the money to Taylor.  The accused argues that, because his
flat-fee agreement stated that the fees were deemed earned upon
receipt, the money was no longer Taylor's but was his and,
therefore, the Disciplinary Rules forbade him from placing that
money into his lawyer trust account. 
On July 22, 2002, the accused paid $100 to Karon Aaker
(Aaker), an independent contract paralegal, to prepare 
bankruptcy schedules for Taylor to be filed with a bankruptcy
petition.  The accused regularly hired Aaker to prepare
bankruptcy petitions and schedules for his clients, and he paid
her a nonrefundable $100 fee for such services for each client. 
Aaker, however, never received any documents regarding the Taylor
matter, either from the accused or from Taylor, and she never
prepared any petition or schedules for Taylor's bankruptcy.  In
August 2002, the accused asked Aaker about the status of Taylor's
bankruptcy schedules.  Aaker responded in a memorandum to the
accused, stating that she had not received any documents
concerning Taylor and therefore was unable to produce the
bankruptcy schedules.  She also told the accused that his
secretary frequently did not provide Aaker with the information
necessary to complete the schedules that the accused paid her to
prepare.  The accused apparently took no action in response to
that memorandum, but he did fire his secretary later that year.
After the July 11, 2002, bankruptcy consultation, the
accused and Taylor never met again to discuss the bankruptcy. 
Testimony at the trial panel hearing indicated that the accused,
through his secretary, may have provided advice to Taylor on one
additional occasion after the initial consultation.  It is
undisputed that neither the accused nor Aaker ever prepared a
bankruptcy petition or schedule for Taylor and that, beyond the
accused's claim that he had made himself available to respond to
Taylor's creditors, thus precluding himself from representing any
of them against Taylor, the accused did nothing further of any
substance on the matter after paying Aaker the $100 in July 2002
and inquiring in August 2002 whether she had completed the forms.
The accused testified that he "closed" the file on his
representation of Taylor's bankruptcy petition during the summer
or fall of 2003, and the Bar does not dispute that.  The accused
did not inform Taylor that he had closed the file or refund any
of the $300 that Taylor had paid to him.  The accused testified
that he did not refund any of the fee because he believed that he
had earned that portion of the fee.  The accused later refunded
$300 to Taylor in September 2004, after the Bar had begun its
investigation of the accused's conduct and had informed the
accused that, under the Disciplinary Rules, he might be required
to refund the money to Taylor.  The accused continues to argue
that he earned the $300.
B. Brookins Matter
In early 2003, Brookins informed Taylor that she was
pregnant with his child, and she gave birth to a daughter in
September 2003.  Soon thereafter, Brookins contacted the accused
and requested that he represent her in a paternity action
involving Taylor.  Brookins apparently was concerned that Taylor
would demand custody or visitation rights beyond what she thought
was appropriate.  
The accused did not agree immediately to represent
Brookins on that matter and informed her, through his secretary,
that he might have a conflict of interest due to his prior
representation of Taylor.  The accused reviewed his files on
Taylor's bankruptcy petition and determined that he did not have
a conflict.  He wrote a memorandum to the file stating: 
"No info[rmation] or confid[ence]s from Taylor re
Brookins' affair or their pregnancy/child [sic]. 
Conclusion - Brookins was cl[ient] previously.  I can
cont[inue] to adv[ise] her, as long as [I] don't use
any info[rmation]/knowledge about Taylor I gained from
him."  
The accused asserts that "he never received any detailed
information from Taylor other than the intake form * * * [and]
also believe[s] that Taylor had already shared this minimal,
non-specific information with Brookins[.]"
The accused began to represent Brookins in early
January 2004.  The accused did not seek written consent to the
representation from Taylor or Brookins.  Taylor, represented by
Bryan Blodgett, filed a paternity petition against Brookins that
sought to establish custody, visitation rights, and child
support.  The accused filed an answer on behalf of Brookins. 
Taylor's petition and Brookins's answer both stated that Taylor
was the father of Brookins's child.  Taylor, however, sought
confirmation that the child was his and filed a motion requesting
DNA testing of the child.  The court denied the motion, and the
accused sought and obtained an attorney fee award against Taylor
for the accused's fees incurred in responding to that motion. 
After the court denied the motion for DNA testing,
Taylor informed Blodgett that the accused had represented him in
the bankruptcy matter.  Blodgett then sent a letter to the
accused stating that Taylor believed that the accused had a
conflict of interest due to the accused's former representation
of Taylor and that Taylor did not want to pay the attorney fee
award.  Blodgett also noted that the accused had not refunded the
$300 that Taylor already had paid to him, even though the accused
had failed to perform any services for Taylor.  The next day, the
accused informed Blodgett that he needed to review his files on
the Taylor bankruptcy petition.  The accused subsequently
responded with a letter to Blodgett dated July 2, 2004, in which
he stated that there had been "no attorney-client relationship"
and that the money that Taylor had paid to the accused was
"earned when received and [was] not refundable."  Brookins and
Taylor settled the paternity action in December 2004.
II.  ALLEGED VIOLATIONS
A. Taylor Matter
1. DR 9-101(A) and DR 9-101(C)(3)
The Bar argues that the accused violated DR 9-101(A)
and DR 9-101(C)(3) because he did not deposit the $300 from
Taylor into his lawyer trust account and because he never
provided an accounting of that money to Taylor.  We begin by
examining the rules and the types of lawyer-client billing
arrangements to which they apply.  DR 9-101(A) provides, in part:
"All funds of clients paid to a lawyer or law firm,
including advances for costs and expenses and escrow
and other funds held by a lawyer or law firm for
another in the course of work as lawyers, shall be
deposited and maintained in one or more identifiable
trust accounts in the state in which the law office is
situated."
DR 9-101(C)(3) provides, in part, that a lawyer shall
"[m]aintain complete records of all funds, securities
and other properties of a client coming into the
possession of the lawyer and render appropriate
accounts to the lawyer's client regarding them."
Under those rules, a lawyer is required to deposit all
client funds into a lawyer trust account and to provide
statements to the client accounting for that money.  The lawyer
may withdraw fees from that account only after those fees have
been earned.  Those rules describe the common arrangement in
which the client pays a "retainer" amount that is held in trust,
with the lawyer then performing work on an hourly or other
agreed-upon basis and reducing the retainer amount, usually on a
monthly basis, as the lawyer performs the work.  The critical
aspect of such an arrangement is that the retainer payment is the
client's money until the lawyer performs legal services that the
client has agreed to pay for.  A retainer arrangement contrasts
with another common billing practice in which the lawyer performs
work for the client and then bills the client for the work
performed.  When the client pays a lawyer's bill for work already
performed, that payment is the lawyer's money, not "client funds"
as that term is used in DR 9-101(A) and DR 9-101(C)(3), and the
lawyer is not required to deposit the funds into a trust account
or to account to the client for the funds.  
In In re Hedges, 313 Or 618, 836 P2d 119 (1992), this
court discussed a variation of the standard retainer arrangement
described above, stating that a lawyer may be excused from
depositing into a trust account money received from a client
before services are performed if the client has agreed, in
writing, that all legal fees paid are deemed earned by the lawyer
upon receipt.  Id. at 623-24.  In that situation, the money does
not qualify as "client funds" under DR 9-101(A) and DR 9-101(C)(3), because the parties have agreed that, at the time that
it is paid, it is the lawyer's money.  In Hedges, however, the
accused lawyer lacked a written agreement explicitly providing
that fees were deemed earned upon receipt, and this court
concluded that the lawyer had violated the predecessor to DR 9-101(C)(3) by treating the money as his own when, instead, the
money was the property of the client until earned by the lawyer. 
313 Or at 623-24.  This court further explained the requirement
of a written agreement in In re Biggs, 318 Or 281, 293, 864 P2d
1310 (1994):  "Without a clear written agreement * * * that fees
paid in advance constitute a non-refundable retainer earned upon
receipt, such funds must be considered client property and are,
therefore, afforded the protections imposed by DR 9-101(A)."
Here, it is undisputed that the accused did not deposit
the $300 that he received from Taylor into his lawyer trust
account and did not provide any accounting of those funds to
Taylor.  It also is undisputed that the $300 was not payment for
services already performed and billed by the accused.  For that
reason, whether the accused violated DR 9-101(A) and DR 9-101(C)(3) turns on whether, at the time that the payments were
made, Taylor had signed an agreement providing that the fees that
he paid were nonrefundable and were deemed earned by the accused
upon receipt.
The Bar has the burden to prove by clear and convincing
evidence that the accused engaged in conduct that violated the
Disciplinary Rules.  The accused argues that clear and convincing
evidence does not support the Bar's claim that he did not have a
nonrefundable fee agreement with Taylor.  In contrast to Hedges
and Biggs, where the accused lawyers each admitted that they had
no written fee agreements with their respective clients, the
accused here claims that there was such an agreement; he simply
is unable to produce it.  Nevertheless, he asserts, the Bar's
burden of proving that he violated DR 9-101(A) and DR 9-101(C)(3)
requires that the Bar prove that no such agreement existed.
We disagree.  In our view, the text of the relevant
rules, quoted above, as well as this court's cases interpreting
those rules, make it clear that client funds must be deposited
into a lawyer trust account unless a written agreement provides
that the funds are nonrefundable and are deemed earned upon
receipt.  The accused testified that the three $100 payments that
Taylor had made were installments on a $550 flat-fee amount and
were not payments for services already rendered and billed.  DR
9-101(A) provides, in part, "All funds of clients paid to a
lawyer * * * shall be deposited [into a trust account]."  As this
court stated in Biggs, "Without a clear written agreement [that a
payment constituted a nonrefundable retainer earned on receipt],
such funds must be considered client property * * *."  318 Or at
293 (emphasis added).  It follows that Taylor's payments "must be
considered [Taylor's] property" -- and the accused therefore was
required to deposit them in a trust account -- unless the accused
had a written agreement with Taylor.
For those reasons, although the Bar has the burden of
proving the alleged violations by clear and convincing evidence,
it does not have the burden of proving the nonexistence of the
fee agreement.  Rather, because the accused sought to rely on the
existence of the fee agreement to justify his handling of
Taylor's payments, it is his burden to demonstrate the existence
of such an agreement.  We turn to that factual dispute.  
We initially note, again, that neither party produced
the original or a copy of a signed fee agreement at the trial
panel hearing.  Although that fact obviously makes it more
difficult for the accused to show that such an agreement existed,
it could have been proved by testimony or other evidence.  There
is, however, little credible evidence to support the accused's
claim in that regard.  Neither the accused, nor any other
witness, saw Taylor sign a fee agreement or saw an original or
copy of a signed fee agreement.  The evidence supporting the
accused's contention consisted of (1) his testimony that his
usual practice was to require his bankruptcy clients to sign such
a fee agreement and that he thought that that practice had been
followed with respect to Taylor; and (2) an email that Taylor had
sent to the Bar in which he stated that he had signed a fee
agreement.  At the hearing, Taylor testified that he had been
mistaken in his email to the Bar and that the document that he
recalled signing was a one-page document (rather than accused's
three-page standard form fee agreement).
The Bar asserts that the evidence supports its
contention that the accused had no written fee agreement with
Taylor.  In addition to the fact that no agreement was produced,
the Bar points to Taylor's testimony that he never had signed a
fee agreement; the accused's letter to Blodgett stating he never
had represented Taylor; an August 6, 2004, letter from the
accused to the Bar again stating that he never had represented
Taylor; and a September 9, 2004, letter from the accused to the
Bar stating that "Mr. Taylor never returned a signed retainer
agreement to my office."   
The trial panel specifically found that the accused's
testimony of this issue lacked credibility.  The trial panel
noted the accused's conflicting statements regarding the fee
agreement and also his demeanor at the hearing.  The trial panel
observed the accused's testimony and stated that it believed that
he was trying to "confuse and hide the facts."  In contrast, the
trial panel accepted Taylor's explanation, based on his
description of the document that he did sign, that his earlier
email to the Bar had been mistaken (that is, that the document
that he had signed was not a fee agreement).  The trial panel
found that the Bar had proved, by clear and convincing evidence,
that there was no written fee agreement between the accused and
Taylor.
As noted previously, the Bar did not bear the burden of
proving by clear and convincing evidence that no written fee
agreement existed.  Rather, the accused bore the burden of
proving that he did have a written agreement with Taylor that
allowed the accused to deposit Taylor's payments into the
accused's own account.  Having reviewed the record de novo, we
conclude that the accused has not carried his burden of proving
that he had a written fee agreement with Taylor.  
For the reasons set out above, we conclude that the
accused violated DR 9-101(A) by failing to deposit Taylor's funds
into his lawyer trust account.  Because we have concluded that
the $300 paid by Taylor constituted "client funds," and because
the accused admits that he did not render any account of those
funds to Taylor, we also conclude that the accused violated DR 9-101(C)(3).
2. DR 2-106(A) and DR 2-110(A)(3)
The Bar argues that the accused collected an excessive
fee in violation of DR 2-106(A). (4)  The Bar first points out
that, although the accused agreed, for a flat fee, to handle
Taylor's entire bankruptcy proceeding and to deal with Taylor's
creditors, he never even prepared or filed a bankruptcy petition
and met only once with Taylor.  The Bar argues that the accused
cannot use an hourly basis to justify his fee, because that would
deprive Taylor of the benefit of the flat-fee agreement; rather,
in the Bar's view, whether the accused's fee was excessive must
be determined based on the extent to which the accused performed
the agreed-upon services.  Because the accused took no
substantial steps to complete the agreed-upon work of
representing Taylor in filing and completing the bankruptcy
proceeding, the Bar argues, the $300 that the accused collected
-- more than half of the amount for which the accused had agreed
to perform all of the services -- was clearly excessive.  
The Bar notes that this court has held that a lawyer
violates DR 2-106(A) "when he or she collects a nonrefundable
fee, does not perform or complete the professional representation
for which the fee was paid, but fails promptly to remit the
unearned portion of the fee."  In re Gastineau, 317 Or 545, 551,
857 P2d 136 (1993).  The Bar also argues that, even if the
accused were justified in charging Taylor at an hourly rate for
the time that he spent working on Taylor's matter, $300 was a
clearly excessive amount, given the limited work that the accused
actually performed.
The accused responds that he did not file a bankruptcy
petition or complete other work for Taylor because Taylor failed
to provide needed financial information, failed to participate in
a scheduled telephone conference with the accused, and lost
contact with the accused.  He points out that Taylor moved twice
during the course of the representation, that the accused made
efforts to contact Taylor, and that the accused later learned
that Taylor had decided not to proceed with filing a bankruptcy
petition.  In those circumstances, the accused argues, the value
of his services that he provided to Taylor was at least $300.
The accused's argument is misplaced.  Contrary to the
accused's characterization of the agreement with Taylor, Taylor
did not retain the accused primarily to advise him regarding his
financial problems or to represent him in dealings with
creditors.  Although the accused asserts that he stood prepared
to offer those services, there is clear and convincing evidence
that the agreement required the accused, in return for a
nonrefundable flat fee, to handle Taylor's bankruptcy case.  Even
Taylor's initial consultation with the accused, which the accused
now characterizes as a meeting where he offered extensive
substantive advice to Taylor and for which he was justified in
charging Taylor a fee, is more accurately viewed as a
consultation intended to help Taylor determine whether it would
be advantageous for him to file for bankruptcy.  Only at the
conclusion of that meeting did Taylor make that decision and
agree that the accused would undertake the bankruptcy
representation for a flat fee.  Computing the amount that the
accused earned based on hours expended would, as the Bar notes,
deny Taylor the benefit of the flat-fee arrangement.  See In re
Yacob, 318 Or 10, 18, 860 P2d 811 (1993) (finding violation of DR
2-106(A) when lawyer collected more than flat-fee agreement
allowed where lawyer had determined that his firm had earned
substantially more than fee agreement amount of $150).
In this case, the accused agreed to prepare, file, and
complete Taylor's bankruptcy proceeding for a flat fee.  He did
no substantial work on that matter.  We find that the accused did
not earn the $300 that he collected and that that fee, therefore,
was excessive and a violation of DR 2-106(A).
The Bar asserts that the accused also violated DR 2-110(A)(3), which requires that a "lawyer who withdraws from
employment shall refund promptly any part of a fee paid in
advance that has not been earned."  The accused admits that he
did not refund the fees when he closed the file in 2003, and, as
discussed above, we find that he did possess client funds that he
promptly should have refunded.  However, the violation of DR 2-110(A)(3) is based on the same conduct as the violation of DR 2-106(A) and, on the facts of this case, followed ineluctably from
it.  We therefore do not treat the two offenses as justifying a
greater sanction due solely to the fact that the Bar charged and
proved a violation of DR 2-110(A)(3) as well as a violation of DR
2-106(A).
B. Brookins Matter
The Bar alleged that the accused violated DR 5-105(C)
when he represented Brookins in the paternity action without
obtaining the consent of Brookins or Taylor because he possessed
secrets or confidences from his prior representation of Taylor --
specifically, information about Taylor's finances -- the use of
which likely would cause injury to Taylor. (5)
DR 5-105(C) provides, in part:
"Except as permitted by DR 5-105(D) [regarding
obtaining consent to such representation], a lawyer who
has represented a client in a matter shall not
subsequently represent another client in the same or a
significantly related matter when the interests of the
current and former clients are in actual or likely
conflict.  Matters are significantly related if * * *
"* * * * * 
"(2) Representation of the former client provided
the lawyer with confidences or secrets as defined in DR
4-101(A), the use of which would, or would likely,
inflict injury or damage upon the former client in the
course of the subsequent matter."
The terms "confidence" and "secret" are defined in DR 4-101(A): 
"'Confidence' refers to information protected by the
attorney-client privilege under applicable law, and
'secret' refers to other information gained in a
current or former professional relationship that the
client has requested be held inviolate or the
disclosure of which would be embarrassing or would
likely to be detrimental to the client."
We first determine whether the accused obtained
confidences or secrets from Taylor.  The Bar alleges that the
accused obtained secrets or confidences from Taylor from three
sources:  the initial intake form that Taylor completed on July
11, 2002; the conversation between the accused and Taylor on that
day; and the detailed 11-page questionnaire that Taylor claims to
have completed and returned to the accused's office.  The accused
argues that he did not violate DR 5-105(C) because he received
only the initial intake form, not the detailed questionnaire, and
because Taylor already had shared with Brookins all the
information that Taylor had provided to the accused.  The accused
also asserts that the information that Taylor had provided to him
was neither confidential nor secret because that same information
would have been revealed in a Uniform Child Support Affidavit, a
form that Taylor would have been required to complete if the
paternity action had proceeded further.  Finally, the accused
asserts that the financial information that Taylor had provided
to him could not have amounted to a secret or confidence likely
to harm Taylor because the information was two years old, the
paternity suit concerned custody, not financial support, and
because any information about Taylor's poor finances would only
help Taylor, not hurt him, in establishing child support. 
We need not decide whether Taylor completed, and the
accused received, the 11-page financial information form, because
we conclude that the information that Taylor provided on the
four-page client intake form constituted "secrets" as that term
is used in DR 5-105(C)(2).  The intake form, which the accused
admits Taylor completed and gave to him, included Taylor's
monthly income, debts, assets, and pending lawsuits.  Taylor
provided that information to the accused in the course of his
representation of Taylor, and the disclosure of that information
would have been embarrassing to Taylor and "would be likely to be
detrimental to [Taylor]."  DR 4-101(A).
We also conclude that the use of Taylor's financial
information in the paternity action "would, or would likely,
inflict injury or damage upon [Taylor]."  DR 5-105(C)(2).  In the
paternity action, Taylor sought to gain joint custody or, in the
alternative, "sole care, custody, and control" of the child.  He
also sought to establish child support.  As to both those issues,
Taylor's financial status would have been at issue.  The accused
obtained that information in confidence from Taylor in the course
of his representation of Taylor, and it unquestionably would have
been useful to Brookins -- and potentially harmful to Taylor --
in the paternity action.
As noted previously, the accused argues that the
information that he received from Taylor would have been revealed
in a Uniform Child Support Affidavit, to be filed subsequently in
the paternity action, and therefore cannot be considered a secret
or confidence.  The accused is incorrect.  The paternity action
concluded with a settlement, and Taylor never filed the uniform
affidavit with the court.  And even if Taylor had filed the
uniform affidavit, the accused's information regarding Taylor's
financial situation would have allowed him to determine whether
the affidavit was incomplete or inaccurate -- an advantage to his
current client, Brookins, that he would not have had without the
disclosure of that confidential information to him by Taylor.  In
any event, there was no requirement that the affidavit be filed
until later in the litigation, and the accused's knowledge of the
financial information at an earlier stage in the proceedings
would have been detrimental to Taylor.  
The accused's claim that the information in question
could not have been a secret because Taylor had revealed all the
information on the intake form to Brookins is not supported by
the record.  Brookins testified before the trial panel that she
did not know Taylor's monthly and annual income, which was
information that Taylor had provided to the accused on the intake
form.
III.  SANCTION
We determine the appropriate sanction by examining the
American Bar Association's Standards for Imposing Lawyer
Sanctions (1991) (amended 1992) (ABA Standards) and this court's
prior decisions.  In re Gustafson, 333 Or 468, 486, 41 P3d 1063
(2002).  We begin by considering the duty breached, the accused's
mental state, the presence of actual or potential injury, and
aggravating and mitigating factors.
In the Taylor matter, the accused breached his duty to
preserve Taylor's property.  ABA Standard 4.1.  In the Brookins
matter, the accused breached his duty to his former client,
Taylor, by failing to avoid a conflict of interest.  ABA Standard
4.3.  
As to the accused's mental state, the accused knew that
he was under an obligation to deposit Taylor's funds into his
lawyer trust account, to provide Taylor with an accounting of
those funds, and promptly to refund the unearned portion of those
funds.  The accused understood that, in the absence of a written
fee agreement providing that the fees were nonrefundable and
earned upon receipt, Taylor's payments should have been deposited
into his trust account.  Although the accused initially may have
thought that Taylor had signed such a fee agreement, he knew or
should have known that he did not have a signed agreement at some
point prior to receiving the letter from Blodgett in May
2004. (6)
The accused also knew or should have known that his
representation of Brookins violated DR 5-105(C)(2) because of the
information that he had obtained during his prior representation
of Taylor.  The accused knowingly represented Brookins in the
paternity action that Taylor had filed, and the face of the
petition demonstrated that financial matters -- as to which he
had obtained secrets from Taylor -- would be at issue.  The
accused may have thought that Taylor already had informed
Brookins of the financial information on the intake form, and
therefore that she already was privy to those secrets and
confidences, but the accused did nothing to determine whether
that was correct.  Moreover, the accused did not attempt -- or
even, apparently, consider -- whether he should make full
disclosure to both Taylor and Brookins and obtain their written
consent to his representation, as permitted by DR 5-105(D).
The accused's conduct caused injury to Taylor, because
the accused deposited Taylor's funds into his own bank account,
did not account for that money to Taylor, and did not promptly
return the unearned money at the close of his representation of
Taylor.  The accused also caused, at a minimum, potential injury
to Taylor by representing Brookins in a subsequent matter adverse
to Taylor, in which the confidences or secrets that Taylor had
entrusted to the accused could have been used against Taylor.  
The ABA Standards suggest that suspension is generally
appropriate when a lawyer knows or should know that the lawyer is
dealing improperly with client property and causes injury or
potential injury to the client.  ABA Standard 4.12.  Suspension
also is appropriate when a lawyer knows of a conflict of interest
and does not fully disclose to a client the possible effect of
that conflict, thereby causing injury or potential injury to the
client.  ABA Standard 4.32.  As described above, the accused knew
or should have known that his handling of Taylor's funds was
improper.  The accused also knew the facts that created a
conflict of interest in his representation of Brookins; his
erroneous belief that the representation did not violate DR 5-105(C), of course, is no defense.  We conclude that a suspension
for some period is appropriate.
Several aggravating factors are present here.  The
accused, who was admitted to the Oregon Bar in 1983, has
substantial experience in the practice of law.  ABA Standard
9.22(i).  The accused committed multiple offenses.  ABA Standard
9.22(d).  The accused made false statements to the Bar during the
investigation, initially stating that he never represented Taylor
and also stating that he had performed significant services for
Taylor -- both statements that the accused now admits were not
accurate.  ABA Standard 9.22(f).  The accused previously received
one prior letter of admonition for conduct similar to the conduct
in this case -- overcharging a client for costs and office
expenses in a manner not permitted by the fee agreement.  ABA
Standard 9.22(a).  No mitigating factors are applicable.
We turn to a consideration of this court's case law. 
This court suspended for 60 days an accused lawyer with
substantial experience, but no prior disciplinary record, for
violations of the trust account obligations set out in DR 9-101(A), DR 9-101(C)(3), and DR 9-101(C)(4).  In re Eakin, 334 Or
238, 48 P3d 147 (2002).  In that case, this court stated that,
because the lawyer "'should have known' that she was dealing
improperly with the trust account[,]" and because of her
"substantial experience in the practice of law," the required
sanction was suspension from the practice of law.  Id. at 259. 
The accused in that case had cooperated with the Bar's
investigation, and fewer aggravating factors applied than apply
here.
In In re Knappenberger, 338 Or 341, 108 P3d 1161
(2005), this court suspended an accused lawyer for 120 days for
two violations of DR 5-105(C) -- representing the wife in a
dissolution proceeding and in a restraining order action after
providing initial consultation regarding dissolution and related
matters to the husband -- and two violations of DR 7-104(A)(1),
which prohibits lawyers from contacting represented parties.  In
that case, however, the accused had committed previous violations
that demonstrated an "unsettling record" of communicating with
represented parties.  338 Or at 361.  See also In re Hockett, 303
Or 150, 163-64, 734 P2d 877 (1987) (30-day suspension appropriate
for single violation of DR 5-105 with serious aggravating
circumstances); In re Wyllie, 331 Or 606, 19 P3d 338 (2001)
(four-month suspension for violating conflict of interest, trust
account, and excessive fee rules, along with aggravating
circumstances).
In our view, this case falls between Eakin and
Knappenberger.  As in Eakin, the accused, an experienced lawyer,
violated rules regarding the proper handling of client funds. 
However, the accused here committed additional violations,
including charging an excessive fee and violating the conflict of
interest rule.  The aggravating circumstances, however, are not
as pronounced as in Knappenberger.  Based on the foregoing, we
conclude that a 90-day suspension is appropriate.  
The accused is suspended from the practice of law for
90 days, commencing 60 days from the date of this decision. 
1. The Code of Professional Responsibility applies to the conduct at issue in this case.  The
conduct occurred prior to the effective date of the new Oregon Rules of Professional Conduct. 
The new rules were not effective until January 1, 2005, pursuant to this court's order dated
December 1, 2004.
2. As described in greater detail below, the accused's testimony was inconsistent, in some
respects, with his initial responses to the Bar's letter of inquiry, in which he had stated that,
although he had met with Taylor for 15 minutes in July 2002, he "did not represent Mr. Taylor." 
The accused also had informed the Bar in a September 9, 2004, letter that "Mr. Taylor never
returned a signed retainer agreement to my office."
3. Curtis, the accused's secretary at that time, did not testify before the trial panel.
4. DR 2-106(A) provides:
"A lawyer shall not enter into an agreement for, charge or collect an illegal or
clearly excessive fee."
5. DR 5-105(D) provides that a "lawyer may represent a client in circumstances otherwise
prohibited by DR 5-105(C) when both the current client and the former client consent to the
representation after full disclosure."  Here, as noted, the accused did not obtain consent from
Brookins (the current client) or from Taylor (the former client).
6. Among other opportunities, the accused should have noticed the lack of the agreement when
he periodically reviewed Taylor's file, when he purportedly closed Taylor's file, or when he
reviewed the file to determine whether his representation of Brookins would create a conflict of
interest.