Opinion ID: 2051064
Heading Depth: 1
Heading Rank: 8

Heading: The Shabani Case

Text: The Administrator first argues that, in reducing respondent's recommended sanction, the Review Board incorrectly downplayed the fact that respondent made an affirmative misstatement in his pro hac vice petition. According to the Administrator, the Review Board focused upon the finding that the misstatement was the result of a mistake, and ignored the Hearing Board's admonishment that respondent nonetheless had a duty to find and correct the error. Further, in failing to apprise the Alaska court of his suspension, respondent essentially deprived that court of information highly relevant to its decision to deny or possibly restrict his admission. We find no evidence that the Review Board unduly downplayed this aspect of respondent's misconduct. Giving appropriate deference to the Hearing Board's credibility findings (see, e.g., In re Holz, 125 Ill.2d 546, 557, 127 Ill.Dec. 736, 533 N.E.2d 818 (1988) (Hearing Board findings entitled to deference by Review Board as well as this court)), the Review Board noted respondent's testimony that, had he noticed the inaccuracy in the petition, he would have corrected it to reflect the suspension. The Review Board also considered evidence that disclosure of the prior suspension probably would not have adversely affected respondent's Alaska petition: it was confined only to the Seventh Circuit's jurisdiction, and at the time of the petition, respondent was already a member in good standing of the Ninth Circuit Court of Appeals, which encompassed the Alaska district court. Further, he had practiced before the Alaska federal court on other occasions since the suspension without repercussions. Next, the Administrator maintains that the Review Board improperly considered as a mitigating circumstance the fact that respondent eventually completed making restitution of Shabani's $25,000 fee advance. The Administrator argues that the Review Board completely disregarded respondent's initial refusal to return the funds despite Shabani's repeated demands, and the fact that the full refund did not occur until this case was being briefed before the Review Board in late 1997 or early 1998. Rule 1.16(e) states that a lawyer who withdraws or is discharged from a case must promptly refund any portion of a fee advance that has not been earned. 134 Ill.2d R. 1.16(e). The failure to promptly return client funds will be subject to discipline. See In re Smith, 168 Ill.2d 269, 213 Ill.Dec. 550, 659 N.E.2d 896 (1995); In re Fox, 122 Ill.2d 402, 410, 119 Ill.Dec. 370, 522 N.E.2d 1229 (1988); In re Dorsey, 731 S.W.2d 252 (Mo.1987); ABA Lawyer's Manual on Professional Conduct 45:1202 (1997) (citing cases). Although there is scant guidance as to what time period is deemed prompt under the rules, it is readily apparent that a delay measured in years will fail the promptness test. ABA/BNA Lawyer's Manual on Professional Conduct 45:1103-04 (1997), citing, among other authorities, In re Jennings, 75 A.D.2d 676, 426 N.Y.S.2d 862 (1980) (discharged attorney delayed 22 months in refunding unearned fees). Delays of a shorter period also may be subject to disciplinary sanctions, especially when the lawyer has displayed indifference to repeated demands by the client for return of the funds. Doyle v. State Bar, 32 Cal.3d 12, 648 P.2d 942, 184 Cal.Rptr. 720 (1982) (attorney delayed 10 months in returning client funds despite repeated requests); People v. Coyne, 913 P.2d 12 (Colo.1996) (nine-month delay after promising to return funds). We agree that the Review Board failed to properly consider respondent's clear violation of Rule 1.16(e). Respondent withdrew from Shabani's case in late February of 1992. Thereafter, he failed to respond to four letters from Shabani's new counsel demanding return of the $25,000 advance. It was not until October of 1993, over 18 months after he withdrew from the case, that respondent entered into a written agreement with Shabani admitting that he owed $20,000, and promising to pay $5,000 at execution of the agreement and the remaining $15,000 by December 1, 1993. Even then, however, respondent disregarded his promise, and did not refund $5,000 until late 1997 or early 1998, when this case was being briefed before the Review Board. In its discussion of mitigating factors, the Review Board pointed out that respondent had completed full restitution to the Shabanis, and that his failure to more promptly deliver the funds was caused by cash flow problems related to the number of repayments owed rather than any corrupt motive. Making full restitution has been considered a proper mitigating circumstance. In re Rotman, 136 Ill.2d 401, 422, 144 Ill.Dec. 776, 556 N.E.2d 243 (1990); but see In re Feldman, 89 Ill.2d 7, 13, 59 Ill.Dec. 103, 431 N.E.2d 388 (1982) (restitution never excuses improper conduct). However, this is not so where the client's repeated demands for repayment have gone unheeded for 18 months, and funds are forthcoming only after the client is forced to resort to proceedings before the attorney disciplinary system. Rotman, 136 Ill.2d at 422-23, 144 Ill.Dec. 776, 556 N.E.2d 243; Fox, 122 Ill.2d at 410, 119 Ill.Dec. 370, 522 N.E.2d 1229. Although Rotman was a case involving the conversion of client funds, we find its logic equally applicable to the withholding of unearned fees. Further, we fail to view respondent's cash flow problems as a justification for his failure to even reply to Shabani's requests for his money, or, after finally executing an agreement, to reasonably honor his promise to pay.