Opinion ID: 6351471
Heading Depth: 1
Heading Rank: 2

Heading: STATEMENT OF FACTS (a) Charge I:[A]

Text: The facts found by the hearing committee, which are fully supported by the record, are as follows: In 1975, respondent was retained by a [A] in connection with a domestic dispute. [A’s wife] was represented by counsel with whom respondent negotiated a property settlement agreement providing that $10,000 would be paid by [A] into escrow with respondent and then paid over to [A’s wife] upon the entry of a final divorce decree. Respondent was specifically designated as the “escrowee” in the property settlement agreement. A final divorce decree was entered on November 4, 1976. Between the dates on which respondent received the $10,000 and November 4, 1976, he failed to maintain the funds in escrow and in fact converted some of the funds to his own use without the knowledge or consent of [A’s wife], the person for whose benefit the escrow was established. Consequently, respondent did not turn over the $10,000 to [A’s wife] when it was properly demanded after the divorce decree. On February 8, 1977, three months after respondent was obligated to turn over the funds to [A’s wife], he had only paid her $1,000. That day, her attorney filed a complaint in assumpsit against him to procure a turnover of the remaining $9,000 to [A’s wife]. During the pendency of this lawsuit, from February 8,1977 to January 14,1980, respondent continued to convert the $9,000 fund to his own use without the permission of [A’s wife] and against the instructions of his own client, [A]. During the course of the trial, respondent was called as a witness. Under oath, he represented to the trial judge that the $9,000 was in an escrow account at [ ] Bank. He further testified that he stood ready to turn over the funds if so ordered. Both of those representations to the trial judge were false when made. (Report of hearing committee, findings of fact 12, 13). On January 14, 1980, the court decided in favor of [A’s wife]. Even after judgment was entered and despite repeated requests, respondent continued to delay in paying the funds to [A’s wife]. Finally, on March 13, 1980, he advised her attorney that a check had been forwarded. This representation was also false when made. On March 21, 1980, respondent sent her attorney a check in the amount of $ 11,145 which was not honored by the drawee bank because of insufficient funds. Not until April 15, 1980 nearly three and one half years after he was required to turn over escrow funds to [A’s wife], did respondent finally discharge his obligation. On April 15, 1980, respondent deposited directly into the account of [A’s wife] attorney, in satisfaction of his obligation to [A’s wife], a money order payable to [B]. This money order was procured from another client of respondent’s and was given to respondent for an entirely different purpose. (b) Charge II: [B] [B] was widowed in March, 1980. In April, 1980, she asked respondent to assist her in investing $18,500 of life insurance proceeds in a corporation which respondent represented. At respondent’s request, she prepared two money orders in the amounts of $11,500 and $7,000 respectively and tendered them to respondent for the sole purpose of making the investment. These money orders were given to respondent on April 15, 1980. The corporation which respondent represented was never advised of [B’s] desire to invest or that she had turned over money orders in the amount of $18,500 to respondent. Yet respondent executed a promissory note from the corporation to [B] showing a principal indebtedness of $ 18,500 and interest at the rate of 30 percent per annum. Respondent had no authority from the corporation to execute this note on its behalf and never turned over the funds to the corporation. Rather he used the $11,500 money order to attempt to extricate himself from his problems described in Charge I, supra, and converted the $7,000 money order to his own use, both without the knowledge or permission of [B]. Shortly after this transaction, [B] informed respondent that she no longer wished to make the investment and wanted her money back. Respondent promised to issue a check to [B] and on May 7, 1980, respondent drew a check to [B] in the amount of $18,962, representing her investment plus interest. [B] immediately telephoned the drawee bank who advised her that there were no funds in the account on which respondent drew the check. Upon confronting respondent with this information, respondent said that he would call the bank and clear up whatever confusion might exist. When [B] deposited the check several days later, it was returned with the notation “account closed.” On May 22,1980, respondent was given letters of administration for the estate of his late uncle. On June 23,1980, he withdrew $18,962 from the estate and discharged his obligation to [B].