Opinion ID: 3135175
Heading Depth: 2
Heading Rank: 2

Heading: The Purnell Transactions

Text: Counts II and III of the Administrator’s complaint involve respondent’s representation of Fulton Purnell and statements made to the ARDC regarding that representation. In count II, the Administrator alleged that respondent: (1) converted his client’s funds; (2) failed to hold his client’s property separate from his own (134 Ill. 2d R. 1.15(a)); and (3) failed to promptly deliver funds to a client (134 Ill. 2d R. 1.15(b)). In count III, the Administrator alleged that respondent: (1) made a statement of material fact known by the lawyer to be false in connection with a lawyer disciplinary matter (134 Ill. 2d R. 8.1(a)(1)); and (2) induced another to engage in conduct when the lawyer knows that the conduct will violate the Rules of Professional Conduct (134 Ill. 2d R. 8.4(a)(4)). Regarding both counts II and III, the Administrator alleged that respondent engaged in conduct involving fraud, dishonesty, deceit, or misrepresentation, in violation of Rule 8.4(a)(4), and also engaged in conduct “which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute” in violation of Supreme Court Rule 771. The Hearing Board’s findings on these allegations are not challenged by respondent. Fulton Purnell engaged respondent to represent him in a proceeding to set aside a judgment-by-confession taken against him by Leo Hickman. He was referred to respondent by a mutual friend, John Jordan, who had been represented in the past by respondent. According to respondent, he expended considerable time and effort in his attempt to set aside the Hickman judgment-by-confession. In September, 1998, respondent received a check for $23,448.94 made out to Purnell in settlement of the Hickman case. This check was deposited in respondent’s client fees account on September 21, 1998. The check was endorsed, “Fulton Purnell Pay to Leonard Timpone.” The handwriting was identified by respondent’s associate, Gail Golub, as that of Gina Biers, respondent’s secretary. Respondent did not have a trust account at the time he deposited Purnell’s check. He maintained a client fees account and an operating account at the same bank and money would be transferred from the fees account to the operating account as checks were written on the operating account. Respondent’s firm did not have a client trust account until 1999. Respondent testified that he, Jordan, and Purnell had a three-way telephone conversation in the early fall of 1998, at the time of a visit by Purnell to Jordan’s home. According to respondent, Purnell authorized him to sign his name to the settlement check and deduct his fee. This account was confirmed by Jordan, but denied by Purnell. Purnell denied ever having a three-way telephone conversation with respondent and Jordan and denied authorizing respondent to sign his name to the check and deduct his fees. In September 1998, Purnell received a letter from respondent enclosing a check for $10,742.19. The letter stated that he had received $23,448.94 in the Hickman matter and had deducted the balance of almost $12,000 in attorney fees. Before Purnell cashed the $10,742.19 check from respondent, the balance in respondent’s client fees account fell under $10,000 on at least three occasions. Respondent denied using Purnell’s funds for his own purposes. In early November 1998, respondent received a letter from the ARDC, requesting a response to allegations raised by Purnell as to the handling of the Hickman settlement check. At respondent’s direction, Golub wrote to the Administrator’s counsel on his behalf, stating, “As for Mr. Purnell’s settlement of funds, the entirety of the settlement remains in our client trust account.” On January 6, 1999, also at respondent’s direction, Golub again wrote to the Administrator’s counsel, advising, “As I stated in an earlier letter to your office, however, the entirety of the [Hickman settlement] check remains in our client fees account.” Based on this testimony, the Hearing Board found that respondent had converted Purnell’s funds, as charged in the complaint. The Board, citing In re Clayter , 78 Ill. 2d 276, 282 (1980), noted that a conversion occurs any time an account holding funds on behalf of a client drops below the sums due the client, even if the drop in the balance happens inadvertently. The Hearing Board also found Purnell’s testimony that he never gave respondent authority to negotiate the settlement check more credible than the version of events given by respondent. The Board similarly found that respondent failed to hold property of a client separate from his own property in violation of Rule 1.15(a). The Hearing Board likewise found that respondent violated Rule 1.15(b) by failing to promptly deliver to Purnell funds that Purnell was entitled to receive. The Board found that he was not entitled to deduct those funds from the Hickman settlement proceeds without a fee agreement, regardless of whether he was still owed fees for the completed work. Without an agreement, respondent had engaged in conduct involving fraud, dishonesty, deceit, or misrepresentation and conduct “which tends to defeat the administration of justice or bring the courts or the legal profession into disrepute.” 134 Ill. 2d R. 771. The Hearing Board also noted that, although respondent was censured in 1994 for failure to timely file a tax return, he had not yet filed a return for 1998. As to count III, the Hearing Board found that the charged conduct had been proved because the two letters in response to the ARDC inquiry, prepared at the direction and with the approval of respondent, contained false statements known by him to be false. He did not have a client trust account, as stated in the first letter, and the “entirety” of Purnell’s settlement check did not remain in his account, as stated in the second letter. Respondent did not challenge any of these findings and conclusions in his exceptions to the Hearing Board’s recommendations. The findings were, accordingly, affirmed by the Review Board. The Boards’ findings as to the allegations in counts II and III are likewise not challenged in this court.