Opinion ID: 1971625
Heading Depth: 2
Heading Rank: 2

Heading: The Failure to Repay

Text: The Board and Bar Counsel both contend that Mr. Cloud's failure to pay Kemper back within a reasonable time after discovering his error supports the finding of reckless misappropriation. On this point we agree. Mr. Cloud failed to pay Kemper the full amount owed after his misunderstanding about the letter of October 4, 1993, was corrected. While we hesitate to find genuine misappropriation in connection with Mr. Cloud's initial distribution in reliance on the letter, or in connection with his subsequent failure to pay Kemper the funds that his client refused to return, we are constrained to find misappropriation with respect to Mr. Cloud's prolonged delay in paying Kemper the excess fees he paid to himself. However reasonable it may have been for him to take those fees initially, the fact remains that he unjustifiably refused to disgorge the fees with anything like reasonable promptness after he learned that he was not entitled to keep them. It is this conduct that supports the Board's finding of recklessness and its recommendation of disbarment. See In re Anderson, 778 A.2d at 339 (disbarment appropriate when attorney showed a disregard of entrusted funds). Mr. Cloud became aware of the true amount due and owing to Kemper in December 1993, yet failed to pay Kemper in full until more than four years later, and only after formal disciplinary proceedings had been brought against him. See In re Utley, 698 A.2d at 449 (a finding of recklessness can be based on a lawyer's prolonged delay in making restitution). Furthermore, it took several attempts, including the filing of a lawsuit by Kemper's attorney, to prompt Mr. Cloud's payment of the remainder of funds he held in trust, even though he had access to funds as early as April 1994 that would easily have covered the full amount due. While Mr. Cloud did suffer from intermittent medical and financial troubles, these difficulties were not the cause of his failure to pay Kemper. Rather, his explanation before the hearing committee was: I paid my portion of [the money]. I didn't get anything out of it. I have done nothing wrong. Kemper caused it. . . . [M]y position was when it happened I was right. . . . I didn't steal anyone's money. Mr. Cloud's testimony makes clear that his failure to rectify the situation was knowing and deliberate  at least reckless, in the language of the Board  and not the product of inadvertence or mistake. Even assuming that the October 4, 1993, letter was ambiguous, Mr. Cloud was given several opportunities to pay Kemper the funds to which it was entitled and had sufficient time to do so. Thus we hold that the Board's finding of reckless misappropriation in this instance, along with the recommendation of disbarment based on it, was supported by the record. See In re Anderson, 778 A.2d at 339; In re Berryman, 764 A.2d at 768-770.