Opinion ID: 2135775
Heading Depth: 2
Heading Rank: 1

Heading: Rose Lietza

Text: Counts I and II of the Administrator's complaint charged respondent with, inter alia, conversion of client funds, failure to maintain complete records of client funds, disregarding court orders, and making false, misleading statements to the ARDC. Rose Lietza retained respondent in a difficult divorce action with a $1,500 retainer fee in 1986. On December 30, 1986, the trial court entered an order directing respondent to hold the proceeds of the sale of Lietza's marital residence in escrow. A January 8, 1987, court order dissolved Lietza's marriage and provided that the proceeds from the sale of the marital home were to be divided equally. On that same day, respondent closed the sale of Lietza's marital home. Respondent deposited the net proceeds from the sale of Lietza's house into his client fund account and issued checks from those funds at Lietza's instructions. Among the checks issued was one to respondent's law firm in the amount of $6,359.00 for attorney fees. After this dispersal, $18,665.59 remained from the sale of Lietza's marital residence. In February 1987, respondent advised Lietza that her husband would probably attempt to vacate the January 8, 1987, judgment for the dissolution of marriage and try to enjoin her from using the remaining sale proceeds. Respondent suggested that Lietza protect the proceeds by entrusting the money to him. By doing so, respondent advised, Lietza would keep the money from her husband and make it available for future litigation expenses. On February 9, 1987, Lietza wrote respondent instructing him to place the money in a six-month holding account. Respondent kept the money in his client fund account. According to respondent, Lietza authorized him to use the $18,665.59 as prepaid attorney fees and to pay her husband if later litigation so required. Under this agreement, Leitza was to receive any remaining amount of the money after legal expenses and any payments to her husband. Lietza testified that she gave respondent no such authority. On February 5, 1987, Lietza's husband moved to vacate the judgment for dissolution of marriage and to redistribute the marital home's sale proceeds. On February 11, 1987, the court ordered Lietza to make an accounting of the marital residence sale proceeds. No such accounting was made. The court ordered Lietza not to dispose of the marital residence on March 13, 1987. On April 23, 1987, respondent wrote an $18,000 check on his client fund account to pay another client's real estate taxes. This payment depleted respondent's client fund account to an amount less than $6,000, well below the $18,665.59 he was holding in that account for Lietza. By July 1987, respondent admitted, no proceeds remained from the sale of Lietza's marital property in his client fund account. Lietza wrote to respondent several times in August 1988, inquiring about the funds, but received no response. A settlement was reached in Lietza's divorce on September 26, 1988, in which Lietza was to pay her husband an additional $9,600. Respondent paid this amount in installments. On September 26, 1988, Lietza filed a charge against respondent with the ARDC because she felt respondent was not keeping her informed of her divorce proceedings. Later, in December 1988, Lietza met with respondent to discuss her case. Lietza testified that respondent informed her that he would not bill her any further and that he would return to her all the money remaining in the escrow account. Respondent never made an accounting to Lietza. On January 24, 1989, Lietza wrote respondent again asking that he send her the amount remaining in her escrow account and confirming that there would be no attorney fees deducted from the escrow balance. Respondent answered by offering to make an accounting of all monies Lietza had on deposit. In August 1989, Lietza again wrote respondent, asking him for $8,000, the amount she believed was remaining from the sale of her marital assets. Respondent offered to draft a note in which he would pay Lietza $1,000 a month for eight months. As part of this agreement, respondent asked Lietza to sign a form acknowledging that neither party would owe each other any money after the payments. Lietza refused to accept the $8,000 under these circumstances, but as of the time of the disciplinary hearing, had not asked respondent for the money and had not commenced any legal proceedings seeking return of the money. Respondent testified that he intended the $8,000 offer to be a gift because he felt sorry for Lietza due to her difficult divorce and other problems she had. Respondent also testified that he had spent about 75 hours on Lietza's case for which he had not billed her and had stopped keeping time records in the case because he did not believe he could collect any money from Lietza. Respondent believed that he was entitled to keep as attorney fees the $6,600 to $8,000 he estimated remained from the $18,665.59. The Hearing Board concluded that an understanding existed between respondent and Lietza in January and February 1987 in which respondent would hold the $18,665.59 to keep it beyond the jurisdiction of the court in Lietza's marriage dissolution proceedings. This money would be used in part to pay respondent's legal fees at the conclusion of Liezta's marriage dissolution. The Hearing Board further found that while the February 11, 1987, order for an accounting of the marital residence and the March 13, 1987, order directing Lietza not to dispose of those proceeds technically applied only to Lietza, respondent was on notice as early as February 11, 1987, and was under an obligation as an officer of the court not to dispose of what remained of the sale proceeds until further order of the court. The Hearing Board noted that these funds were not respondent's to use as he saw fit, but were instead subject to the direction of his client and the court. The funds were to be held by respondent, not disposed of. The Hearing Board concluded that respondent used the funds to pay another client's tax bill, which constituted conversion of client funds. The Hearing board also found that respondent disregarded a tribunal's rulings during the course of a proceeding in violation of Rule 7106(a) of the Code of Professional Responsibility (107 Ill.2d R. 7106(a)). The Hearing Board also concluded that Lietza knew that she would owe respondent a fee at the conclusion of the dissolution proceedings. This conclusion was buttressed by the fact that even after respondent agreed to waive his fee and pay Lietza $8,000, Lietza did not accept his offer, did not again ask for money, and did not file suit against respondent for the money. Next, the Hearing Board found that respondent made no accounting to Lietza of the disposition of the marital residence proceeds and had no records to verify what happened to the money. The Hearing Board concluded that in the absence of records to support his estimates, respondent failed to maintain complete records of client funds coming into his possession in violation of Rule 9102(c)(3) and failed to make an accounting prior to claiming fees from client funds. 107 Ill.2d R. 9 102(c)(3); see In re Solomon (1987), 118 Ill.2d 286, 113 Ill.Dec. 243, 515 N.E.2d 52. Finally, with regard to Lietza, count II charged respondent with sending the ARDC a letter on October 24, 1988, in response to Lietza's charges, which stated: I presently have some funds which are being held for her. The ARDC found this to be a misrepresentation in violation of Rule 1102(a)(4) because when written and sent, respondent was not in possession of any of Leitza's funds, having already used them without authority. 107 Ill.2d R. 1 102(a)(4).