Opinion ID: 900607
Heading Depth: 1
Heading Rank: 7

Heading: Client Trust Account

Text: [¶ 10.] Mines maintained a general client trust account at Community First State Bank in Hot Springs. This account was an interest-bearing account. Referee found that Mines' trust account records were incomplete and confusing, and he failed to provide an accurate accounting of the interest earned on client funds and documentation of whether the interest earned was in fact paid to the client. In reviewing the trust account allegations against Mines, Referee found that Mines: (1) failed to maintain a trust account journal, rather, he considered a deposit book, checkbook, client ledger cards, cancelled checks and bank statements as a sufficient client trust journal; (2) did not withdraw his fees from the client trust account, but instead, left as much as $5,000 as a buffer for the protection of his clients; (3) did not maintain a separate ledger card that would reflect the balance of Mines' funds in the trust account; (4) failed to keep any trust account records which would verify payment of interest earned on the trust account to the clients entitled to that interest; (5) kept no documentation as to the purpose of funds transferred from client trust accounts to his personal account; and (6) has failed to make proper and prompt distributions of funds. [¶ 11.] Referee also found that Mines violated several rules including: (1) Rule 1.15(d)(3) [8] by depositing client funds in an interest-bearing account which did not meet the requirements of an interest-bearing account set forth in rule 1.15(d)(3)(a)-(d); (2) Rule 1.15(d)(3) by depositing client funds held for an extended period in a general client trust account; (3) Rule 1.15(d)(3) by depositing client funds which exceeded the definition of a nominal sum in a general client trust account; (4) Rule 1.15(a) [9] by failing to disburse trust account funds representing his earned fees when they were determined, thus commingling his funds with client funds; (5) Rule 1.15 by preparing and delivering checks drawn on his trust account before the funds were deposited or available for withdrawal; (6) Rule 1.15(a) and (d)(2)(c) and SDCL 16-18-20.1 [10] by failing to keep complete records of the trust account funds and preserving those records for a period of five years after termination of the representation; (7) SDCL 16-18-20.2 [11] by failing to keep a separate trust account receipts and disbursements journal, including columns for receipts, disbursements, transfers, and the account balance containing: (a) [t]he identification of the client or matter for which the funds were received, disbursed, or transferred; (b) [t]he date on which all trust funds were received, disbursed, or transferred; (c) [t]he check number for all disbursements; and (d) [t]he reason, such as `settlement,' `closing' or `retainer,' for which all trust funds were received, disbursed, or `transferred'; (8) SDCL 16-18-20.2 by failing to keep other documentary support for all disbursements and transfers from the trust account and Rule 1.15(d)(2)(c) by failing to render appropriate accounts to the client as it relates to Mines' withdrawals from the client trust account for `fees and expenses'; (9) SDCL 16-18-20.2 by failing to keep a separate ledger card with all transactions for funds in the trust account which belonged to him.