Opinion ID: 1562683
Heading Depth: 1
Heading Rank: 22

Heading: Allegations Involving Accounting Violations

Text: After reviewing the allegations involving accounting violations, the majority finds the respondents violated Rule 1.15(b) and 1.16(d) (insofar as this rule requires respondents to furnish an accounting to their client). As the majority bases its findings regarding Rule 1.16(d) completely on the reasons contained in their discussion of Rule 1.15(b), my analysis of the alleged 1.15(b) violation below will, in effect, address the purported violation of both rules. At the time of the alleged misconduct, Rule 1.15(b) of the Rules of Professional Conduct provided, in pertinent part, as follows: [A] lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. As the majority opinion notes, after a review of the entire record, both the hearing committee and the disciplinary board rejected the charge that the respondents violated Rule 1.15(b). The disciplinary board found that [t]here is no dispute that Mr. Hart controlled the Palowsky/GSLD files while he was at TGD & L, and that, there is no dispute that, as the lawyer for Mr. Palowsky/GSLD, Mr. Hart was responsible for handling the financial aspects of the Palowsky/GSLD files. The board also stated that when Mr. Hart left the law firm, Mr. Hart took all the Palowsky and GSLD files. Based on these findings, the board noted that the obligation to provide an accounting rested with Mr. Hart and Mrs. Marchman and not the respondents. The majority finds that the record shows that means were available to respondents whereby they could have rendered an accounting despite Mr. Hart's departure from their law firm. At p. 1156. Specifically, the majority cites evidence in the record that the firm retained numerous financial documents from the Palowsky litigation, such as cancelled checks, records of deposits, and ledger entries. At p. 1156. Yet, the majority fails to address the very practical observation of the disciplinary board that, [a]s attorneys for Mr. Palowsky and GSLD, Mr. Hart and Mrs. Marchman were the lawyers that generated the vast majority of the expenses and fees in the bank litigation matter. Accordingly, [respondents are not in a position to interpret these [financial] documentsthat is the obligation of Mr. Palowsky's attorneys, Mr. Hart and Mrs. Marchman. Considering the above, the board and the hearing committee found that the respondents tendered a reasonable accounting by providing Mr. Palowsky with all the financial documents they had concerning monies billed and paid by Mr. Palowsky and GSLD, some 920 pages. I do not find evidence in the record which justifies the majority's departure from the findings of the hearing committee and the disciplinary board regarding this point.