Opinion ID: 1872312
Heading Depth: 1
Heading Rank: 3

Heading: Carol Courtney Matter

Text: Carol Courtney sustained personal injuries in a car accident on April 6, 2000. She retained Threadgill in February 2001 to file a lawsuit on her behalf. Courtney testified that they agreed to a one-third contingency fee arrangement, with Courtney paying the filing fee. [4] The case was settled at mediation in January 2002. The insurance company's representative wrote and delivered the $37,500 settlement check to Threadgill at the mediation. Threadgill deducted his contingency fee, expenses, half of the mediation cost, and the expected amount of subrogation interests of $2,754.20 owed to Travelers Property and Casualty Insurance (Travelers) and $2,175.21 to United Health Care, a/k/a Health Care Recoveries (Health Care). On February 18, 2002, Threadgill's office provided Courtney with a check for the balance of $19,419.01. Courtney testified that, although one of Threadgill's employees verbally explained the disbursements of the settlement proceeds, she never received a written itemization. [5] Courtney also testified that she did receive Threadgill's letter of February 19, 2002, which stated, We will work with the two insurance carriers to see if we can save some money on their subrogation claim. Courtney also received copies of two letters that Threadgill sent to Travelers's representatives in May 2002, offering to settle the subrogation claim for $2,000. According to Threadgill, he believed that the subrogation claims were resolved at some point after that date, such that he considered the matter closed and sent Courtney's file to an offsite storage location. Courtney testified that, between May 2002 and August 2003, Threadgill's office did not communicate with her about her case. On February 13, 2003, Courtney wrote to an employee in Threadgill's office, noting that the amount of settlement proceeds held back to pay the subrogation interests would exceed the amount actually paid to those interests. [6] Courtney's letter asserted that Threadgill's office ha[d] the money in reserve to pay [the subrogation interests] and the remainder should be refunded back to [Courtney]. Courtney wrote to Threadgill's office again on June 23, 2003, requesting to hear from [Threadgill] as soon as possible to know that [payment of the subrogation interests] is settled and finalized. Courtney further requested to know the exact amount paid to Health Care, Travelers, and the mediator, along with documentation of how the remainder of $5,581.00 [of settlement proceeds] was disbursed. Courtney testified that Threadgill did not respond to her letters. He did not inform Courtney of the $677.49 payment that he had already made to satisfy Health Care's interest. [7] Courtney testified that she learned about this payment by corresponding directly with Health Care. On June 12, 2003, Travelers wrote to Threadgill accepting the settlement offer. Threadgill neither informed Courtney about this letter nor paid the $2,000 to consummate the settlement. In a letter dated August 4, 2003, Travelers told Courtney that her file remained open and unpaid and would be referred to an outside collection agency. Courtney testified that, on August 8, 2003, she spoke with Threadgill, who said that he would retrieve her closed file from the storage warehouse and address the matter immediately. In a follow-up phone conversation on August 11, Courtney confirmed that Threadgill had spoken with a Travelers representative and agreed to send Threadgill a copy of all of her documentation of Travelers's subrogation claim. Courtney next spoke with Threadgill in late September 2003, after Travelers wrote to Courtney that it could not collect from Threadgill the amount due and did not believe that further efforts would yield a recovery. Threadgill asked Courtney to provide a second copy of the same records that she had sent him in August, as her file remained in the warehouse. In follow-up correspondence, Courtney directed Threadgill to pay Travelers the $2,000 and then provide her with the remaining settlement proceeds. Finally, on October 20, 2003, Courtney directed Threadgill in writing to give her proof of payment to Travelers and send her a check for the remaining settlement proceeds. If Threadgill did not make both payments within ten days, Courtney indicated that she would forward her file to authorities within the department of insurance and the judicial department. Threadgill's last communication with Courtney was a voicemail on October 22, 2003 stating that he was still trying to locate the file in the warehouse so he could resolve the case. The same day, Courtney mailed another letter to Threadgill, objecting to his delay in locating her file. Courtney then wrote to the Board on November 12, 2003. At the Panel hearing Courtney testified that she did not know whether Travelers had ever been paid. Threadgill testified that, when he again communicated with Travelers, it refused payment, explaining it had written off the claim. Once Travelers informed Threadgill that it had written off Courtney's claim, Threadgill admitted that he sort of was aware that he owed Courtney money, but he didn't know what had been disbursed and what hadn't. After his review of the billing file, he felt like [he] owed Ms. Courtney something, but [he] didn't think [he] knew what that amount was. He did not make any payment. A bank statement introduced into evidence at the hearing showed that Threadgill's trust account balance as of April 30, 2002 was $1,013.01, less than the amount at issue in this case. In support of his testimony that he was opening a trust account at a different bank from March May 2002, Threadgill introduced an April 1, 2002 check for $3,900, which was purportedly a transfer of funds to his new trust account. However, Threadgill never complied with the Board's written request for a copy of all trust account checks and statements from February 2002 until December 2003. [8] On the second day of the Panel hearing in 2006, Threadgill introduced into evidence a document memorializing Courtney's release of all claims against Threadgill and his firm for $2,079.71. The release had been notarized that same day. Finding Courtney to be a credible witness and accepting her testimony as true, the Panel concluded that Threadgill did not promptly deliver funds to Travelers or to Courtney, respectively, nor did Threadgill provide an accounting of those funds. Thus, the Panel determined that Threadgill violated Disciplinary Rule [9] (DR) 9-102(B) [10] and Rule of Professional Conduct (RPC) 1.15(b). [11] Furthermore, citing Threadgill's trust account balance as of the end of April 2002, the Panel found that Threadgill misappropriated monies belonging to Travelers and Courtney because Threadgill did not maintain those monies in a trust account. Thus, the Panel determined that Threadgill also violated DR 9-102 [12] and RPC 1.15(a). [13]