Opinion ID: 1792167
Heading Depth: 3
Heading Rank: 7

Heading: The H.V.R. Client Matter

Text: ¶ 31. Counts 15-20 alleged violations of former SCR 20:1.15(a), former SCR 20:1.15(b), [13] and SCR 20:8.4(c), [14] in collection matters that Attorney Scanlan handled for a business, H.V.R. Attorney Scanlan arranged to retain one-third of any amount he collected as a fee. These counts pertain to Attorney Scanlan's conversion of client funds, mishandling of payments, and his poor recordkeeping. ¶ 32. The referee made numerous findings with respect to Attorney Scanlan's handling of client funds, including that Attorney Scanlan deposited six checks totaling $1000 belonging to H.V.R., into his business account, rather than his trust account. [15] The referee also found that between August 16, 2001, and September 14, 2001, Attorney Scanlan made eight telephone transfers from his client trust account to his business checking account and, although he should have been holding $820 in his trust account for H.V.R., the balance in his trust account fell to $333.03. [16] The referee also found that on August 21, 2001, Attorney Scanlan overdrew his business checking account and it continued in overdraft status until August 28, 2001. ¶ 33. The Door County Sheriff's Department opened an investigation regarding Attorney Scanlan's handling of H.V.R.'s funds and provided the OLR with a copy of its file. In May 2003 the OLR requested Attorney Scanlan to provide an accounting of all funds he had received on behalf of H.V.R., and provide complete trust account records from January 1, 2001, through May 30, 2002, but Attorney Scanlan did not respond. After further requests, Attorney Scanlan provided responses, but omitted documentation. At one point the OLR inquired whether Attorney Scanlan had disbursed to H.V.R. two-thirds of the trust account deposits made for its benefit on three specific dates and Attorney Scanlan responded that his records were not clear and he did not have copies of correspondence which would permit him to answer. ¶ 34. The referee also found that the trust account records Attorney Scanlan did provide revealed among other things that some of the deposits to the trust account appeared to represent payment of fees that had already been earned and billed, and therefore, constituted personal funds belonging to Attorney Scanlan. The referee also found that on October 2, 2001, there was an automatic withdrawal from the client trust account to U.S. Cellular, constituting a personal payment. [17] ¶ 35. As to Count 15, the referee determined Attorney Scanlan deposited six checks, totaling $1000 belonging to H.V.R., into his personal business account rather than his trust account, contrary to former SCR 20.1.15(a). As to Count 16, the referee concluded that Attorney Scanlan commingled personal and client funds by depositing earned fee payments into the trust account and paying a personal bill out of the trust account, contrary to former SCR 20:1.15(a). ¶ 36. With respect to Count 17, the referee concluded by failing to notify H.V.R. of the funds he collected and failing to deliver them, Attorney Scanlan violated former SCR 20:1.15(b), which provides that upon receiving funds or other property in which his client has an interest, a lawyer shall promptly notify the client in writing and deliver the funds as well as render a full accounting on request. The referee found that $3086.67 was still missing. ¶ 37. The referee dismissed Counts 18 and 19, both of which charged violations of SCR 20:8.4(c). Count 18 alleged that by converting $3086.67 belonging to H.V.R., Attorney Scanlan engaged in dishonesty, fraud, deceit or misrepresentation. Count 19 alleged that Attorney Scanlan made telephone transfers of over $48,000 in funds from his client trust account to his personal business account, without identifying and knowing the purpose of the withdrawals and to whom the funds belonged, and therefore engaged in dishonesty, fraud, deceit or misrepresentation. The referee found, based on medical testimony, that Attorney Scanlan's failure to properly account for and turn money over to his client resulted from sloppy bookkeeping and ineffective office administration rather than intentional wrongdoing. The referee dismissed Counts 18 and 19. ¶ 38. Count 20 alleged that Attorney Scanlan failed to maintain trust account records and was unable to produce such records for the OLR inspection and unable to identify funds on deposit. Attorney Scanlan agreed, and the referee concluded, that by failing to maintain a complete trust account record, including individual client ledgers, receipts and disbursement journals, and checkbook reconciliation, so that he was unable to produce records for the OLR's inspection, and unable to identify the ownership of $49,455.23 in funds un-deposited in his client trust account as of December 1, 2000, he violated former SCR 20:1.15(a).