Opinion ID: 1816818
Heading Depth: 1
Heading Rank: 2

Heading: commingling and conversion

Text: The committee accuses respondent of receiving $15,500 [4] in client funds, commingling those funds with his personal funds, and converting those funds to his own use. DR 9-102 provides: (A) All funds of clients paid to a lawyer or law firm, other than advances for costs and expenses, shall be deposited in one or more identifiable bank accounts maintained in the state in which the law office is situated and no funds belonging to the lawyer or law firm shall be deposited therein except as follows: (1) Funds reasonably sufficient to pay bank charges may be deposited therein. (2) Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally resolved. (B) A lawyer shall: (1) Promptly notify a client of the receipt of his funds, securities, or other properties. (2) Identify and label securities and properties of a client promptly upon receipt and place them in a safe deposit box or other place of safekeeping as soon as practicable. (3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them. (4) Promptly pay or deliver to the client as requested by a client the funds, securities, or other properties in the possession of the lawyer which the client is entitled to receive. Respondent admits that he failed to maintain a clients' account and that he commingled Marengo's funds with his own. However, he contends that he did not convert those funds since he maintained sufficient cash funds in the Creighton account to pay for the releases at any time. The commissioner concluded that respondent commingled and converted the funds to his own use. Likewise, we conclude that respondent converted the funds. The existence of the Creighton account does not exculpate respondent from the conversion charge, since he failed to keep any records of his own regarding the funds in that account. Marengo was never aware that Perez maintained funds with Creighton and he did not consent for his funds to be deposited in that account. If Perez had met his demise prior to obtaining the releases, Marengo would have been left without recourse for the recovery of his funds, regardless of whether Perez maintained sufficient funds with Creighton. After the deposit of Marengo's funds in respondent's personal checking account, the balance in that account was reduced as respondent drew checks for various business and personal expenses. An examination of Perez' bank statements reveals that his account went into overdraft status on several occasions after the deposit of Marengo's funds. Regardless of the existence of credits with his friend Creighton, Perez used his client's money. The funds were converted to respondent's use. The misuse of client funds has repeatedly been characterized as one of the gravest and most reprehensible forms of attorney misconduct. Louisiana State Bar Association v. Daye, 443 So.2d 1107 (La.1983); Louisiana State Bar Association v. Armagnac, 424 So.2d 996 (La.1982); Louisiana State Bar Association v. Selenberg, 270 So.2d 848 (La.1972); Louisiana State Bar Association v. Van Buskirk, 249 La. La. 781, 191 So.2d 497 (1966). Although disbarment is often warranted in such cases, we have refrained from applying this extreme remedy where the misconduct is offset by mitigating factors. Louisiana State Bar Association v. Hopkins, 447 So.2d 464 (La.1984); Louisiana State Bar Association v. Rivette, 368 So.2d 1045 (La.1979); Louisiana State Bar Association v. Adams, 368 So.2d 694 (La. 1979). Restitution through the repayment of converted funds has been recognized as a mitigating factor, especially where it is accomplished prior to the commencement of a formal investigation by the bar association. Louisiana State Bar Association v. Rivette, supra; Louisiana State Bar Association v. Weysham, 307 So.2d 336 (La.1975). Uncontested evidence of an attorney's good character and reputation in the community will also be considered as mitigating evidence. Louisiana State Bar Association v. Adams, supra. Finally, the absence of prior misconduct and the isolated nature of the charged misconduct will be considered in determining whether a less severe form of discipline is appropriate in a given case. Louisiana State Bar Association v. Daye, 427 So.2d 840 (La.1983). Restitution of the converted funds was completed on October 23 and 30 when Perez delivered the funds to the Slidell banks. The transfer of Marengo's funds to the Slidell banks was accomplished prior to any notice from the bar association, but after letters of complaint from Marengo. In addition to restitution of the converted funds, respondent paid Marengo $6030 in damages and attorney fees. At the commissioner's hearing character witnesses offered uncontested testimony concerning respondent's good character. Three judges from St. Bernard Parish testified that respondent enjoys a fine reputation in the St. Bernard community. Furthermore, they attested to respondent's dignified and professional conduct while practicing before their tribunals. Respondent has been practicing law for the past twenty-three years. He has been the subject of four prior complaints to the bar association. None of those complaints warranted disciplinary action by the committee. In consideration of the mitigating evidence, the extreme remedy of disbarment is not appropriate in this case. The commissioner recommended that respondent be suspended from the practice of law for six months. Such discipline would fail to reflect the gravity of respondent's misconduct. Instead, an eighteen month suspension from the practice of law is appropriate. For the foregoing reasons, it is ordered, adjudged and decreed that, in addition to the reprimand referred to above, Stephen R. Perez be suspended from the practice of law for eighteen months from the date of the finality of this judgment, at respondent's cost. CALOGERO and MARCUS, JJ., concur in the majority's findings, but dissent as regards the discipline imposed. A six month suspension from the practice of law, as recommended by the Commission, rather than the eighteen months suspension imposed by the majority, is more appropriate. LEMMON, J., dissents, believing that the six-month suspension recommended by the Commission is adequate discipline, since respondent either had the funds or the immediate ability to produce the funds that he failed to segregate.