Opinion ID: 2430224
Heading Depth: 1
Heading Rank: 3

Heading: the cowell matter

Text: According to Rule 1.15(a), a lawyer is required to hold property of clients or third persons that is in the lawyer's possession in connection with a representation separate from the lawyer's own property. The lawyer is required to maintain complete records of such account funds and other property. Rule 1.15(b) provides that upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Unless otherwise provided by law or by agreement with the client, the lawyer is required promptly to deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, the lawyer is required promptly to render a full accounting regarding such property. Rule 1.15(c) provides that when, in the course of representation, a lawyer is in possession of property in which both the lawyer and another person claim an interest, the property shall be kept separate by the lawyer until there is an accounting and severance of their interests. The evidence supports a finding that respondent violated Rules 1.15(a), (b) and (c). Respondent represented Elvira Cowell in connection with her claims against Christian Hospital and others arising from surgery performed on Mrs. Cowell. In 1988, a settlement was reached between Mrs. Cowell and the hospital, pursuant to which a check in the amount of $4,500 made payable to Elvira Cowell and respondent was received by respondent during the latter part of December, 1988, or the early part of January, 1989. After some delay, Mrs. Cowell authorized respondent to endorse the settlement check so that it could be deposited without her having to travel to respondent's office. On February 9, 1989, the settlement check, deposited in respondent's business account at respondent's direction, was specifically marked by respondent with the following notation: Deposit in general account, 2/7. Respondent admits that the settlement check was never deposited in respondent's escrow account. The $4,500 settlement check deposited in respondent's business account on February 9, 1989, was used by respondent for business related to his law practice. On nineteen separate occasions between February 9, 1989, and July 25, 1989, the balance in the business account dropped below $3,000, the amount due Mrs. Cowell. On July 25, 1989, after receiving notice of a complaint filed by Mrs. Cowell relative to respondent's failure to continue to prosecute her claims, respondent deposited $3,000 into an escrow account from which he then wrote a check to the client in the amount of $3,000. The $3,000 deposit into the escrow account on July 25 was not by transfer from a payroll account, which respondent also maintained, nor did it come from the business account. The $3,000 check finally written to the client came from the monies paid in cash by another client. In testimony to the Bar Committee, respondent said he made a mistake. Before the Master, respondent contended that the delay in depositing the check was somehow related to his inability to contact his client in order to have the check endorsed, and that the delay in sending the $3,000 to the client resulted simply from respondent's being too busy to notice. The record reflects, however, that when respondent deposited into the business account the $4,500 check, he was not too busy to withdraw his $1,500 fee. As to the discrepancy in testimony, respondent attempted to explain at the hearing before the Master that he was not fully prepared to testify before the Bar Committee because he was before the Bar Committee on a number of other complaints as well. The Master found respondent's explanations not worthy of belief, as does this Court. When an attorney deposits the client's funds into an account used by the attorney for his own purposes, any disbursement from the account for purposes other than those of the client's interests has all the characteristics of misappropriation, particularly when the disbursement reduces the balance of the account to an amount less than the amount of the funds being held by the attorney for the client. Misappropriation of a client's funds, entrusted to an attorney's care, is always grounds for disbarment. In re Mentrup, 665 S.W.2d 324, 325 (Mo. banc 1984). Restitution of converted funds is not a defense. Id. Respondent's failure to preserve the client's funds undiminished in an escrow account constitutes a most serious violation of the disciplinary rules in an area where those rules properly demand procedures that not only guarantee that the client's funds will not be misappropriated but also enable the attorney readily to demonstrate that no misappropriation has occurred. In defense, respondent makes much of the fact that he exercised poor office practices and maintained a very heavy caseload, as well as the fact that the client did not affirmatively demand payment. These facts do not serve to mitigate when it is clear that respondent himself directed that the client's monies be deposited into respondent's business account, that respondent then withdrew from that account his own fee, and that on nineteen separate occasions between deposit of the check into the business account and payment to the client of the $3,000 owed to her, the balance in the business account dropped below $3,000. This Court finds that the misconduct of respondent was willful, deliberate, inexcusable and a violation of Rule 1.15(a), (b) and (c). The case is similar to Matter of Williams, 711 S.W.2d 518 (Mo. banc 1986). Williams deposited a settlement award into his trust account and failed timely to pay the client. Respondent used his business operating account for his own purposes and the balance was not always adequate to cover outstanding obligations. Id. at 519-20. The case also comes within the holdings of In re Mendell, 693 S.W.2d 76, 78 (Mo. banc 1985); In re Lechner, 715 S.W.2d 257, 259 (Mo. banc 1986); In re Staab, 785 S.W.2d 551, 554-55 (Mo. banc 1990); and In re Fenlon, 775 S.W.2d 134, 142 (Mo. banc 1989). Disbarment is the ultimate sanction and should be reserved for a clear case. In re Fenlon, 775 S.W.2d at 142. The case is clear and no sanction less than disbarment is warranted. Respondent ordered disbarred. All concur.