Opinion ID: 1742730
Heading Depth: 3
Heading Rank: 3

Heading: Trust Fund Violations/Taking Client Funds Without Prior Authorization

Text: Client funds paid to an attorney must be deposited into an interest-bearing trust account, rather than the firm's operating account, until they are earned. Kadenge, 706 N.W.2d at 408; Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Herrera, 560 N.W.2d 592, 594 (Iowa 1997). D'Angelo's failure to deposit Kemp's payments in a trust account was a violation of DR 9-102(A) (requiring client funds to be deposited to trust account until earned). At least part of the $850 flat fee paid by Kemp had not been earned because the bankruptcy petition was neither filed nor completed. See Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Sullins, 648 N.W.2d 127, 134 (Iowa 2002) ([P]resuming the flat fee is fair, the attorney is entitled to the entire amount when he or she completes the necessary services.); Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Winkel, 599 N.W.2d 456, 459 (Iowa 1999) (A lawyer who takes a fee before it is earned effectively misappropriates the client's funds.). D'Angelo also violated DR 9-102(A) in the Knapp and Roberson matters when he inexplicably lost funds that were supposed to be kept in client trust accounts. D'Angelo also violated DR 9-102(B)(3), (4) (requiring a lawyer to account for and properly return funds to which a client is entitled) in the Kemp matter when he violated Court Rule 35.21( c ) by not refunding unearned fees within 30 days of his suspension. In the Eckert matter, D'Angelo violated Iowa Code section 633.198 when he took fees for his work in a probate matter before he received court authorization. See Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Reese, 657 N.W.2d 457, 461 (Iowa 2003) (stating a lawyer may not take fees for a probate matter until authorized to do so by the court). Because restitution is a lawyer's duty, the fact that D'Angelo paid the money back to these clients after they filed complaints is not a valid defense or excuse for these ethical violations. See Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Stowers, 626 N.W.2d 130, 133 (Iowa 2001). To allow such payments to serve as mitigating factors might imply to the public that an officer of the court can buy his way out of professional difficulties if financially able to do so. Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Havercamp, 442 N.W.2d 67, 72 (Iowa 1989).