Opinion ID: 2178106
Heading Depth: 1
Heading Rank: 14

Heading: Commingling/Dishonesty/Failure to Maintain Complete Records)

Text: 1. Commingling. Respondent violated Rule 1.15(a) prohibiting commingling as he failed to hold property of clients or third persons that is in the lawyer's possession in connection with a representation separate from the lawyer's own property. Id. The evidence clearly established that Respondent commingled funds entrusted to him as a lawyer by clients and third parties with his own earned fees and other personal assets in his NationsBank Trust Account. Respondent's defense that he used this trust account as a triage account into which all incoming funds were deposited for a short period of time before being redeposited into a more appropriate account not only fails as a defense to commingling (even if there was truth to this statement), but also fails because this claim is plainly contradicted by the facts. The rule against commingling has three principal objectives: to preserve the identity of client funds, to eliminate the risk that client funds might be taken by the attorney's creditors, and most importantly, to prevent lawyers from misusing/misappropriating client funds, whether intentionally or inadvertently. See In re Goldberg, 721 A.2d 627, 628 (D.C.1998) (per curiam); In re Ross, 658 A.2d 209, 211 (D.C.1995); In re Choroszej, 624 A.2d 434, 438 (D.C. 1992) (per curiam) (Wagner, J. concurring); In re Hessler, 549 A.2d 700, 702 (D.C.1988). Respondent's misuse of his NationsBank Trust Account plainly violated all three objectives. 2. Dishonesty. Bar Counsel charged Respondent with a violation of Rule 8.4(c)(dishonesty) for using his trust account for personal purposes at a time when he had various unpaid judgments and with writing more than 40 checks between June 1995 and February 1998 when the funds in Respondent's trust account were insufficient to cover the checks. The Hearing Committee did not address whether Respondent violated the charged ethical rule with respect to using his escrow account to conceal the ownership of his funds from creditors. The Board, however, has reviewed the evidence presented to the Hearing Committee on this alleged violation and we find that Bar Counsel has failed to establish this violation by clear and convincing evidence. With regard to depositing personal funds in his trust account, all that Bar Counsel has established is that Respondent used his trust account for personal and business reasons and that when he did so, he had judgments and IRS liens outstanding. There was no evidence presented that he was so misusing his trust account to dishonestly hide his money from creditors or, for that matter, anyone else. If anything, the evidence was to the contrary. Among the alleged improper uses of his trust account was that Respondent used it for personal reasons, including payment of a portion of a lien that the IRS had placed on him. It is difficult to conclude that Respondent was using his trust account to hide funds from the IRS when he was using that same account to pay the IRS's lien. If anything, the danger here was that the IRS might seize all the funds in this trust account, including client funds, in an attempt to satisfy its tax lien. It is this kind of danger that the rule against commingling is designed to prevent. Bar Counsel appears to be arguing that a lawyer automatically engages in dishonesty in violation of Rule 8.4(c) if the lawyer deposits personal funds, regardless of amount, in a trust account and then writes a check against those funds while holding outstanding debts or obligations. We disagree; we believe that there must be some showing of a dishonest intent  such as an intent to hide the lawyer's personal assets. Dishonesty violations are fact driven, and Bar Counsel must prove facts sufficient to establish the dishonest intent. Bar Counsel failed to develop such facts here. The Hearing Committee did, however, find that Respondent engaged in dishonesty by writing more than 40 checks on his trust account against insufficient funds between June 1995 and February 1998. The Hearing Committee particularly noted that Respondent continued to write these checks on his trust account even after having been notified numerous times by the Bank that his account was overdrawn. The Hearing Committee concluded, and we agree, that Respondent's conduct rose to the level of dishonesty (but not necessarily to the level of fraud, deceit or misrepresentation). Under Rule 8.4(c), the term dishonesty includes conduct evincing `a lack of honesty, of fairness and straightforwardness'. In re Shorter, 570 A.2d 760, 767-68 (D.C.1990). Respondent's repeated writing of checks without sufficient funds, particularly after the bank had sent repeated notices of his lack of funds, plainly demonstrates dishonesty.