Opinion ID: 836505
Heading Depth: 1
Heading Rank: 1

Heading: The Murphey Matter

Text: As noted, the accused was appointed to represent Murphey on a pro bono basis. Murphey gave the accused $1000 for costs and expenses. The accused did not prepare an agreement setting forth the purposes for which the funds were to be used. He also did not deposit the money in a client trust account but, instead, placed the money in an envelope and made notations on it as the funds were spent. The evidence establishes that the accused spent most of the money to pay for the services of a law clerk and of Clark, who acted both as a lawyer, performing legal research, and as a secretary for the accused. None of Murphey's money was expended for purposes unrelated to her case. The trial panel found that the accused converted Murphey's money and concluded that the conversion was a dishonest act for purposes of DR 1-102(A)(3). The panel stated that, in a pro bono case such as the Murphy matter, a deposit for costs and expenses [t]raditionally    includes an attorney's out-of-pocket expenses such as filing fees, parking, long distance telephone expenses and copying charges. `Costs and expenses' do not include attorney's fees, nor do they include a lawyer's normal overhead such as secretarial salaries or other staff expenses. The trial panel found that, although the accused genuinely believed that he was entitled to spend Murphey's money on Clark's and the law clerk's services, such expenditures do not constitute  `costs and expenses' as those terms are traditionally understood. According to the trial panel, the accused's conduct therefore amounted to intentional conversion, because the accused consciously knew of the nature of the funds involved and intended to exercise dominion and control over them. Moreover, the trial panel concluded that the accused's conduct in converting the funds in that manner lies closer to theft than innocent conversion and, thus, constitutes a `dishonest act' for purposes of DR 1-102(A)(3). The Bar agrees with the conclusions of the trial panel with regard to the Murphey matter, and calls our attention to another piece of evidence not noted by the trial panel, which it claims further supports those conclusions. The accused testified that Murphey signed a contingency retainer agreement that defined expenses to include such items as telephone charges, copies, expert fees, and deposition costs, and that provided that all or a portion of Murphey's case could be assigned to other attorneys at the attorney's own expense and that the attorney reserved the right to use paralegals. We agree with the trial panel that the evidence in the record establishes that the accused genuinely believed that he was entitled to spend Murphey's money on Clark's and the law clerk's services. Moreover, neither the trial panel nor the Bar references a source of law, other than tradition, for the proposition that such expenditures are improper. As for the contingency agreement referenced by the Bar, the exhibit copy is unsigned and undated, and Murphey herself testified that she never signed any such agreement. Moreover, the wording of that agreement is not so clear that an inexperienced lawyer, as the accused was, could not believe mistakenly that he was entitled to charge the client for secretarial and legal research expenses that he paid out-of-pocket. The Bar has not proved, by clear and convincing evidence, that the accused's conduct in spending Murphey's deposit for secretarial work and legal research was intentional or knowing, rather than merely negligent. Accordingly, we find the accused did not commit conduct involving dishonesty in violation of DR 1-102(A)(3) in the Murphey matter.