Opinion ID: 2516942
Heading Depth: 3
Heading Rank: 2

Heading: Presumptive sanction for violation of former RPC 1.14(a)

Text: ¶ 42 The presumptive sanction for a violation of former RPC 1.14(a) is also ABA Standards standard 4.1. An attorney's reason for commingling funds indicates his or her mental state. In re Disciplinary Proceeding Against Tasker, 141 Wash.2d 557, 569, 9 P.3d 822 (2000). Trejo argues that he merely acted negligently in commingling client and personal funds in violation of former RPC 1.14(a) and that his conduct caused no actual or potential injury. Trejo asserts that a [g]ood faith dispute exists over whether nonrefundable retainers should be deposited in a trust account or a general account and, thus, his placement of allegedly earned fees in a client trust account was negligent at worst. Appellant's Am. Opening Br. at 30-31. Furthermore, he argues, the commingling caused no actual or potential injury to a client. Only one client's funds were regularly deposited into the trust account, and the only injury to this client was a delay in payment. ¶ 43 The WSBA argues that Trejo's state of mind was knowing because he knew that all wire transfers and checks were deposited into his trust account, regardless of whether they were earned or client funds. Also, Trejo's 2001 admonition indicates that he was aware that he should not commingle client and personal funds. As to injury, the WSBA argues that Negrete was actually injured because his payments were delayed and one check bounced. Additionally, there was a serious potential injury to all of Trejo's clients because Trejo's creditors could argue that the character of the trust account had been changed, making the funds in the IOLTA account accessible to [Trejo's] creditors. CP at 528. ¶ 44 As the hearing officer concluded, Trejo knew that all wire transfers and checks, at least some of which he admits were earned fees, were deposited into a client trust account. Trejo presents no evidence to contradict the hearing officer's determination that he knowingly commingled funds, so it is appropriate to defer to the hearing officer's and Board's determinations that Trejo knowingly violated former RPC 1.14(a). ¶ 45 As to the injury consideration, even if the commingling itself did not cause injury to a client, there is a potential for serious injury to Trejo's clients. Although the commingling may have been the result of poor bookkeeping and deposit practices, rather than an intent to convert client funds, Trejo is still responsible for his actions. [Former] RPC 1.14 implicitly includes the duty not to use a lawyer's trust account as a personal bank. In re Disciplinary Proceeding Against McKean, 148 Wash.2d 849, 865, 64 P.3d 1226 (2003). `Lawyers sometimes forget that the dangers of commingling are not merely that the lawyer will squander the money borrowed from a trust account and not be able to restore it, but that the commingled funds might be subject to attachment by a lawyer's creditors, thus preempting the lawyer's ability to do so.' Id. at 864, 64 P.3d 1226 (quoting GEOFFREY C. HAZARD, JR. & W. WILLIAM HODES, THE LAW OF LAWYERING: HANDBOOK ON THE MODEL RULES OF PROFESSIONAL CONDUCT § 19.4 (3d ed. 2001 & Supp.2002)). Additionally, the prohibition against commingling prevents lawyers from shielding personal assets from their own creditors by hiding funds in client trust accounts. ANNOTATED MODEL RULES OF PROF'L CONDUCT 249-50 (5th ed.2003). Thus, there is ample evidence that continued commingling of client and personal funds in the trust account could result in a personal creditor satisfying a judgment against Trejo from the client trust account. The presumptive sanction for Trejo's violation of former RPC 1.14(a) is suspension.