Opinion ID: 1959580
Heading Depth: 1
Heading Rank: 1

Heading: IRM-Insurance Funds

Text: One of the clients that Tomaino brought to W & G was Institute of Resource Management, Inc. (IRM). IRM was a beneficiary of a life insurance policy on one of its employees. When that employee died in October 1990 there were competing claims to the proceeds. IRM received $100,000 of the proceeds which Tomaino placed in his personal account at Legg Mason, a stock brokerage and mutual funds firm. Tomaino testified that he did this at the instruction of the then owner of IRM, Jerry W. Donahoe (Donahoe), who said he did not want the money tied up in the W & G trust account because he intended to wire the money. The money was wired in two $50,000 transmissions to a law firm in New Orleans which later transferred $50,000 back to Tomaino's personal account. Tomaino testified that the $50,000 transferred to his personal account was supposed to have been directed to W & G. Nevertheless Tomaino transferred only $40,000 to W & G and retained $10,000 for himself. He testified that Donahoe told him to keep the $10,000 out of appreciation for Tomaino's having been with Donahoe `through thick and thin.' Tomaino admitted that he made a very, very significant, to put it mildly, mistake. In addition to his general finding of misappropriation, Judge Angeletti specifically stated that this conduct constituted a misappropriation of funds which [Tomaino], impliedly, held as a fiduciary to his employer, W & G. In his exceptions Tomaino admits that retention of the $10,000 was improper, but he argues that, rather than a misappropriation from [W & G] who was paid in full, the funds should have gone to the client. Somewhat contradictorily, in his presentation of the facts, Tomaino submits that his testimony that the client consented is unrebutted and implicitly argues that there was no misappropriation. Clearly, Tomaino violated the trust account requirements. The funds were not his. The funds were held for Donahoe, and it is immaterial whether they were a retainer for future professional services by W & G or were to be applied by Donahoe for some other legitimate purpose. In either event, the funds should have been placed in the W & G Clients' Fund Account or returned to the client. When Tomaino placed the funds in his personal account, he ran the risk that the trier of fact would reject his testimony concerning client consent. Judge Angeletti's finding that there was a knowing, willful, and deceitful misappropriation of funds is a rejection of Tomaino's attempted justification. At the conclusion of his report to us, Judge Angeletti states that the Donahoe and Wortley gifts, all constitute violation of BOP § 10-306. We read this reference to gifts as utilizing Tomaino's characterization to identify the funds, and not as a finding of fact. This is clear from the reference to BOP § 10-306 by which Judge Angeletti concludes that, contrary to that prohibition, Tomaino did use trust money for [a] purpose other than the purpose for which the trust money [was] entrusted to the lawyer.