Opinion ID: 1232801
Heading Depth: 4
Heading Rank: 1

Heading: Misappropriation of $26,365 in May 2003.

Text: According to Moser's billing records, after Peterson paid an initial deposit of $32,760, Peterson's outstanding balance for the Moser furniture ordered on Johnson's behalf was $38,400. On May 13, 2003, Peterson wrote check number 1036 in the amount of $38,365 from one of Johnson's bank accounts to the account of Peterson's family partnership. On the memo line of that check Peterson wrote Furniture repay (charged on Visa). As of May 13, 2003, Peterson had charged $12,000 of the outstanding Moser bill on his personal credit card. Peterson testified that he thought Moser was going to charge him for the entire outstanding balance in one transaction, and that he only discovered later that only $12,000 could be charged to his credit card in one transaction. The referee appears to have credited this testimony. The referee found that Peterson eventually spent the remaining funds on artwork purchased as part of the spend down. The director argues that Peterson only had a claim or entitlement to $12,000 at the time he wrote check number 1036, and therefore misappropriated $26,365. The referee's conclusion that the director had failed to prove by clear and convincing evidence that Peterson violated rule 1.15(a) is clearly erroneous in light of the referee's factual findings. While the referee found that Peterson eventually spent the entire $38,365 on behalf of Johnson, the artwork purchased on Johnson's behalf was not purchased until after the balance of the Moser furniture order was cancelled in September 2003. This leaves several months during which Peterson held, without entitlement, $26,365 of Johnson's money in a personal account. This constitutes a violation of rule 1.15(a). [8]