Opinion ID: 2056529
Heading Depth: 1
Heading Rank: 1

Heading: the board on professional responsibility's report and recommendation of sanctions

Text: This is the report and recommendation of sanctions of the Board on Professional Responsibility of the Supreme Court of the State of Delaware (the Board) in the-above-captioned matter. A hearing on this matter was held on September 9, 2009, in the Supreme Court Hearing Room, 11th Floor, Carvel State Building, 820 North French Street, Wilmington, Delaware. The Panel of the Board consisted of Wayne J. Carey, Esquire, Yvonne Anders Gordon, Ed. D., and Kevin F. Brady, Esquire (Chair) (collectively the Panel). The Office of Disciplinary Counsel (ODC) was represented by Michael S. McGinniss, Esquire. Respondent, John M. Stull (Respondent), was represented by Charles Slanina, Esquire of Finger, Slanina & Liebesman.
ODC filed a four-count Petition for Discipline on July 2, 2009, in Board Case No. 2009-0061-B (the Petition). As set forth in more detail below, ODC asserted in the Petition that Respondent, a member of the Bar of the Supreme Court of the State of Delaware since 1967, engaged in professional misconduct in violation of Rule 1.15(a), 1.15(d), 8.4(c) and 8.4(d) of the Delaware Lawyers' Rules of Professional Conduct (Rules). (Petition at 1). The Respondent filed an Answer to the Petition (the Answer) on July 22, 2009, essentially admitting the allegations of the Petition. The record in this case consists of: (i) the Petition; (ii) the Answer; and (iii) the transcript of the September 9, 2009 hearing (and exhibits admitted therein) which includes the testimony of Edward D. Devenny and the Respondent, who testified on his own behalf, [1] as well as post-hearing submissions from Mr. McGinnis and Mr. Slanina in the form of legal authority regarding sanctions.

2. For many years, Respondent was in-house counsel in the Labor Law group at DuPont until his retirement in 1990. (Tr. at 35-36). After his retirement from DuPont, Respondent entered into the private practice of law in Delaware as a solo practitioner with a small practice in the field of ERISA law. (Tr. at 37-38). Respondent worked approximately 25 hours per week servicing an average of five to six clients and generating on average about $2,000 per month in fees. (Tr. at 16, 39). Respondent had no employees; he was solely responsible for the management of his law office, including maintaining the law practice bank accounts. (Answer at 1; Tr. at 37, 51). 3. On April 22, 2008, Edward D. Devenny, a certified public accountant (`CPA) with Master Sidlow & Associates, the auditor for the Lawyers' Fund for Client Protection (LFCP), performed a compliance audit of Respondent's records which included a review of the Respondent's law practice books and records as well as the relevant bank accounts. (Answer at 1; Tr. at 8). The LFCP report for this audit identified the Respondent's non-compliance with Rule 1.15 for the six-month period ending March 31, 2008. (Id.) In particular, the LFCP noted in its report that the Respondent did not have an office manager, accountant, or computerized records system. (Tr. at 8). LFCP provided Respondent with a copy of the audit report and directed him to submit an affidavit from a licensed CPA by November 1. 2008, confirming that he was in full compliance with Rule 1.15 with respect to the maintenance of his law practice books and records and bank accounts for the preceding quarter, and that the errors identified in the audit report had been corrected. (Exhibit 1). Respondent, however, failed to submit the requested affidavit. (Answer at 2). 4. On December 12, 2008, the LFCP again wrote to the Respondent directing him to provide the required affidavit by December 31, 2008, or the LFCP would send its auditor back to do another audit of Respondent's books and also refer the matter to the ODC. (Answer at 2). While Respondent failed to meet the December 31, 2008 deadline, he did leave a phone message for the LFCP indicating that the Respondent would not be able to comply. (Answer at 2; Exhibit 1). After Respondent's second failure to comply, the LFCP referred the matter to the ODC on January 5, 2009. (Exhibit 1). 5. The ODC contacted the Respondent and arranged for an audit to be performed on January 30, 2009, by Master Sidlow & Associates, P.A. (Answer at 2). By letter dated February 9, 2009, ODC sent Respondent a copy of the audit report which showed that Respondent was still not in compliance with Rule 1.15 and that the previously noted deficiencies had not been corrected. (Answer at 2; Exhibit 6). The audit showed that Respondent was still using the same deficient procedures for maintaining his books and records he had been using since January 1, 2004. (Exhibit 2). Among other things, Respondent had yet to reconcile his escrow account, and he was still using the same manual check book to manage his accounts. (Tr. at 11). 6. Sometime subsequent to February 24, 2009, but before April 24, 2009. Respondent retained the services of an experienced bookkeeper to assist him in correcting the deficiencies in his law practice books and records. (Tr. at 49-50; Exhibit 7). 7. On April 24, 2009, the LFCP auditor performed a follow-up audit, which showed that the Respondent had finally corrected the prior deficiencies in the maintenance of law practice books and records and that bank accounts had been resolved, and the accounts were reconciled through March 31, 2009. (Answer at 3; Exhibit 3). 8. With the Respondent's bank accounts being reconciled through March 31, 2009, the LFCP auditor was able to determine that there were a number of problems with Respondent's books and records, including: a) Some of Respondent's fiduciary accounts had negative client balances that had existed since February 2004 and were not covered in full until March 2009; b) Respondent's fiduciary account had contained earned attorneys' fees that should have been transferred to his operating account and were therefore considered to be commingled with client funds; and c) The non-fiduciary account was incorrectly titled and had a non-sufficient funds charge in December 2004. (Exhibit 3). 9. For years 2005, 2006, 2007, and 2008, respondent had signed and filed Certificates of Compliance with the Delaware Supreme Court, wherein Respondent certified that he was in compliance with Rule 1.15 when he was not. (Answer at 3; Exhibit 4). These inaccurate responses included statements that:

(d) the escrow account reconciled end-of-month cash balance agreed with the total of the client balance listing of the client subsidiary ledger, when the reconciliation and client subsidiary ledger preparation processes had not been completed so as to allow this determination to have been made on a monthly basis. (Answer at 3-4).