Opinion ID: 2260682
Heading Depth: 2
Heading Rank: 1

Heading: Legal Analysis of Pertinent Precedents on Sanctions In Commingling/Misappropriation Cases

Text: An analysis of the pertinent precedents in commingling/misappropriation cases reveals four categories of sanctions, depending on the severity of the misconduct: (1) public censure for simple commingling; (2) short-term suspension (one year or less) in cases involving commingling plus one or more additional serious violations; (3) long-term suspension (year and a day, or more) for commingling, plus unintentional misappropriation, and plus other serious violations of the Disciplinary Rules; and (4) disbarment for commingling plus intentional misappropriation amounting to dishonesty or fraud. For the reasons set forth below, the Board concludes that Respondent's misconduct here fits within the general range of the misconduct in category (2) cases where short-term suspension was imposed, and the consistency requirement of Rule XI therefore mandates that the sanction in this case should be short-term suspension (one year or less). As to the first category of pertinent precedents on sanctions, In re Gilchrist, 488 A.2d 1354 (D.C.1985), is the most recent example of commingling for which the mildest form of sanction (public censure) was imposed. There, the record established that the attorney had violated DR 9-103(A)(2) by commingling his client's funds with his own personal funds and had also violated DR 9-103(B)(3) by failing to maintain proper records of client's funds. Although the documentary evidence indicated an apparent intentional misappropriation of client's funds sufficient to constitute dishonesty in DR 1-10[2](A)(4), the attorney's testimony provided an explanation of how the funds had been used, and when this testimony was credited by the Hearing Committee, it was sufficient to justify the finding that Bar Counsel had failed to support the alleged dishonesty violation by clear and convincing evidence. The Court of Appeals accepted the Board's recommendation in Gilchrist and imposed public censure as the sanction. In so doing, the Court relied on its prior decision in In re Artis, No. M-103-81 (D.C.C.A. Feb. 25, 1982), where public censure had been imposed for three separate incidents of simple commingling for the same client, unaccompanied by misappropriation or dishonesty. The second category of pertinent precedents on sanctions consists of cases involving commingling plus additional serious violations. For these cases, the sanction is short-term suspension. For example, in In re Dwyer, No. M-61-80 (D.C.C.A. June 9, 1981), the attorney's misconduct consisted of commingling in violation of DR 9-103(A), plus neglect in violation of DR 6-101(A)(3), plus inadequate preparation in violation of DR 6-101(A)(2). The Board recommended, and the court imposed, suspension for a period of three months. In arriving at this recommended sanction, it was stressed that attorney's violations did not involve any misrepresentation, deceit or dishonesty. Another precedent in the second category is In re O'Bryant, 425 A.2d 1313 (D.C. 1981). There the attorney not only commingled his client's funds in violation of DR 9-103(A). He also failed promptly to pay the funds to his client in violation of DR 9-103(B)(4), and he made misrepresentations to his client in violation of DR 1-102(A)(4). The Board recommended, and the Court imposed, suspension for six months. Turning to the third category of prior cases where the sanction was long-term suspension, the two leading precedents are In re Hines, 482 A.2d 378 (D.C.1984), and In re Harrison, 461 A.2d 1034 (D.C.1983). In Hines, the attorney's misconduct consisted of both commingling and misappropriation in violation of DR 9-103(A), plus a failure promptly to pay funds owing to his client in violation of DR 9-103(B)(4). Moreover, these violations in Hines were accompanied by other serious violations, e.g., dishonesty and deliberate misrepresentations in violation of DR [1-]10[2](A)(4) and intentional prejudice or damage to his client in violation of DR 7-101(A)(3). In addition, the misconduct in Hines involved two clients in two separate matters. The sanction in Hines was suspension for two years. It was in Hines that the Court announced that we take this occasion to notify the Bar that in future misappropriation cases disbarment will ordinarily be the sanction imposed by this Court. 482 A.2d at 386. However, the Hines opinion stressed that the word ordinarily had been intentionally included in this announcement because there may be instances of misappropriation which, for any number of reasons, may call for a lesser sanction. Id. In Harrison, the misconduct consisted of commingling, plus unintentional misappropriation in violation of DR 9-103(A), plus a failure promptly to pay funds owing to his client in violation of DR 9-103(B)(4). The record in Harrison also showed aggravating factors. Thus, after commingling his client's funds in his own bank account, the attorney not only misappropriated those funds; he also intentionally evaded his client's repeated requests for payment of the funds. Id. at 1035. Moreover, when a check was finally given to the client after a delay of two months, this check was returned for insufficient funds. Then, a month later when part of the misappropriated funds were finally paid to the client, two more weeks elapsed before the attorney in Harrison released the additional misappropriated monies for payment of the client's medical bills. The fourth category of prior precedents covers the most egregious forms of commingling/misappropriation where the evidence typically shows multiple instances of commingling plus an intentional misappropriation of a client's funds sufficient to establish dishonesty or a pattern of such misconduct. In that type of case, disbarment is clearly the appropriate sanction in this jurisdiction. In re Burton, 472 A.2d 831 (D.C.1984); In re Minninberg, 485 A.2d 149 (D.C.1984); In re Burka, 423 A.2d 181 (D.C.1980); In re Quimby, 123 U.S.App.D.C. 273, 359 F.2d 257 (D.C.C. 1966). See also, In re Hines, 482 A.2d 378, 386 (1984).