Opinion ID: 1324563
Heading Depth: 1
Heading Rank: 4

Heading: Count II Complaint of the Office of Disciplinary Counsel

Text: On October 19, 2003, Mr. Chittum's wife was involved in an automobile accident and received serious injuries. Both Mr. and Mrs. Chittum asserted a claim for damages as a result of this accident and obtained the assistance of an attorney, McGinnis E. Hatfield, to help process their claim. Following the accident, Mr. Chittum and his wife received a settlement in the amount of $200,000.00. On December 5, 2003, and December 19, 2003, two $100,000.00 settlement checks were deposited into Mr. Chittum's Attorney at Law Trust Account that he maintained at First Community Bank. Mr. Chittum had a second account at First Community Bank titled Client Trust Account-IOLTA. [4] On December 9, 2003, Mr. Chittum paid McGinnis E. Hatfield $5000.00 for legal work performed on behalf of himself and his wife, and the $195,000.00 from the settlement remained in his Attorney at Law Trust Account. From December 11, 2003, through December 30, 2003, Mr. Chittum issued a number of checks for household and office expenses from his Attorney at Law Trust Account. [5] Mrs. Chittum ratified and confirmed all of the expenditures made from the settlement fund. In addition, Mr. Chittum deposited client funds into his Attorney at Law Trust Account rather than his Client Trust Account-IOLTA. On March 23, 2004, Mr. Chittum wrote and cashed a check made out to Cash in the amount of $150.00 from his Client Trust Account-IOLTA. After this check cleared, he maintained a balance of $30.11 in his Client Trust Account-IOLTA until June 30, 2005, when he emptied the remaining funds from the IOLTA account. The Hearing Panel Subcommittee determined that no client funds were misappropriated and restitution is not an issue in this matter. However, the Subcommittee found that by failing to properly maintain and administer a separate client trust account and by commingling his personal money with client funds, Mr. Chittum violated Rule 1.15(a) of the Rules of Professional Conduct, which states: Rule 1.15 Safekeeping property (a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account designated as a client's trust account in an institution whose accounts are federally insured and maintained in the state where the lawyer's office is situated, or in a separate account elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. The Subcommittee also found that by closing his Client Trust Account-IOLTA, Mr. Chittum failed to maintain an IOLTA account, thereby violating Rule 1.15(d) of the Rules of Professional Conduct, which provides: Rule 1.15 Safekeeping property (d) IOLTA (Interest on Lawyers Trust Accounts). A lawyer who receives client funds that are nominal in amount or are expected to be held for a brief period shall establish and maintain a pooled, interest or dividend-bearing, account for the deposit of such funds, at an eligible financial institution which carries federal deposit insurance, in compliance with the following provisions: (1) The account shall include only such client funds that are nominal in amount or are expected to be held for a brief period of time such that the funds cannot earn income for the client in excess of the costs of securing that income. In determining whether a client's funds can earn income in excess of costs, the lawyer or law firm shall consider the following factors: (i) The amount of funds to be deposited; (ii) The expected duration of the deposit, including the likelihood of delay in the matter for which the funds are held; (iii) The rates of interest or yield at financial institutions where the funds are to be deposited; (iv) The cost of establishing and administering non-IOLTA accounts for the client's benefit, including service charges, the costs of the lawyer's services, and the costs of preparing any tax reports required for income accruing to the client's benefit; (v) The capability of financial institutions, lawyers or law firms to calculate and pay income to individual clients; (vi) Any other circumstances that affect the ability of the client's funds to earn a net return for the client. (2) The lawyer shall review the account at reasonable intervals to determine whether the circumstances warrant further action with respect to the funds of any client. (3) Lawyers may only establish and maintain an IOLTA Trust Account at an eligible financial institution. [6] Our review of the record confirms the Board's finding that Mr. Chittum violated rules 1.15(a) and 1.15(d). Mr. Chittum had an Attorney at Law Trust Account that he deposited personal funds into, including the $200,000.00 settlement that he and his wife received following her automobile accident. Mr. Chittum used his Attorney at Law Trust Account to pay personal expenses. While Mr. Chittum maintained a separate IOLTA account, which he used for some client funds, the bank records show he also deposited client funds into his Attorney at Law Trust Account. This commingling of personal and client funds is a clear violation of Rule 1.15(a) of the Rules of Professional Conduct. The record also shows that Mr. Chittum emptied the funds from his IOLTA account on June 30, 2005. This failure to maintain a proper IOLTA client trust account is a violation of Rule 1.15(d) of the Rules of Professional Conduct.