Court Opinion

ID: 4028449
Source: CourtListenerOpinion
Date Created: 2016-08-25 15:08:21.332323+00
Date Added: 2024-06-11T07:45:07.344484
License: Public Domain

TO BE PUBLISHED

               Supreme (iCourf of rttfurku
                              2016-SC-000262-KB

JOSEPH DANIEL THOMPSON                                                  MOVANT

V.                            IN SUPREME COURT

KENTUCKY BAR ASSOCIATION                                          RESPONDENT

                             OPINION AND ORDER

      Pursuant to SCR 3.480(2), Movant, Joseph Daniel Thompson, moves this

Court to impose a 181 day suspension from the practice of law for his admitted

violations of the Rules of Professional Conduct, with 120 days of the

suspension probated for 2 years on the condition that he not receive any new

charges from the Inquiry Commission during his probationary period. The

Kentucky Bar Association (KBA) has no objection to this negotiated discipline

      Finding this agreed upon disciplinary sanction to be appropriate under

the facts of this case, we grant Movant's motion. Movant's Kentucky Bar

Association (KBA) member number is 88578 and his bar roster address is

listed as 108 North Main Street, Somerset, Kentucky, 42505. Movant was

admitted to the practice of law in the Commonwealth of Kentucky on October

14, 2000.
                                KBA FILE 21298

      Mabab Trade, LLC, entrusted Movant with $775,000.00 to be used in

connection with a proposed investment transaction between Mabab, Jason

Castenir, and four other investors. Movant initially and appropriately placed

the funds into his office escrow account.

      About seven weeks later, Mabab requested the return of the funds in

their entirety. An attempt to wire the escrow funds back to Mabab was

unsuccessful due to a lack of funds in Movant's escrow account. At the time of

the refund request, the escrow account contained a balance of approximately

$373,131.13. Following this unsuccessful transfer attempt, Movant wired

Mabab $300,000.00 about two weeks later, and an additional $47,000.00

about two weeks after that.

      The remaining $427,500.00 was eventually returned to Mabab; not from

Movant's escrow account, however, but rather from Maverick Asset

Management, who had originally received the funds from the escrow account

via a transfer initiated by Jason Castenir, one of the original investors. Movant

had given Castenir, who is not an attorney, access to the escrow account with

instructions to obtain prior approval from Movant before making any transfers

from the account. Castenir did not, however, get Movant's approval before

initiating the transfer of funds to Maverick Asset Management.

      In connection with his failure to immediately return the funds to Mabab

upon request, Movant falsely told the Manager of Mabab that the funds were

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secure even though a portion of the funds had already been transferred to

Maverick Asset Management; falsely told him that the escrow account could

not be accessed temporarily due to an audit when, in fact, there was no audit;

and falsely told him that the funds were "tied up" due to a pending lawsuit in

Texas when, in fact, there actually was no such lawsuit.

      Mabab filed a lawsuit against Movant and others in connection with the

mishandling of its funds, and the case was eventually settled, with Movant's

portion of the settlement being $95,000.00, which he has paid. In summary,

Mabab has been made whole, and Movant has fully complied with his

obligations under the settlement.

      As a result of the above conduct the Inquiry Commission charged Movant

with violating SCR 3.130(1.15)(a) (failure to maintain funds in escrow); SCR

3.130(5.3(b) (inadequate supervision of a non-lawyer); and SCR 3.130(8.4)(c)

(dishonest, fraud, deceit, or misrepresentation). Movant admits that his

conduct as described above violates the Rules as charged by the Inquiry

Commission, and we accordingly hold that the Movant violated the Rules as

just described.

                                 DISPOSITION

      Movant now moves this Court to enter an order suspending him for a

period of 181 days with 120 of those days suspended for a period of two years

under the condition that he receives no further charges during the

probationary period. The KBA has no objection to the proposed discipline,

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which was negotiated pursuant to SCR 3.480(2). 1 Upon review of the facts in

this case and relevant case law, we find the proposed discipline is appropriate.

See KBA v. Schaffner, 2015 WL 1544453 (Ky. 2015), and Dutra v. KBA, 440
S.W.3d 374 (Ky. 2014).

       Accordingly, it is hereby ORDERED that:

       1) Movant, Joseph Daniel Thompson, is suspended from the practice of

          law in the Commonwealth of Kentucky for 181 days, with 120 of those

          days suspended under the condition that he commit no further

          ethical violations during the suspension period.

       2) Pursuant to SCR 3.390, and to the extent that he has not done so as

          a result of his prior suspension, Respondent shall notify in writing, all

          courts in which he has matters pending of his suspension from the

          practice of law, and notify in writing all clients of his inability to

          represent them and of the necessity and urgency of promptly

          retaining new counsel. "Such notification shall be by letter duly

        1 "The Court may consider negotiated sanctions of disciplinary investigations,
complaints or charges prior to the commencement of a hearing before a Trial
Commissioner under SCR 3.240. Any member who is under investigation pursuant to
SCR 3.160(2) or who has a complaint or charge pending in this jurisdiction, and who
desires to terminate such investigation or disciplinary proceedings at any stage of it
may request Bar Counsel to consider a negotiated sanction. If the member and Bar
Counsel agree upon the specifics of the facts, the rules violated, and the appropriate
sanction, the member shall file a motion with the Court which states such agreement,
and serve a copy upon Bar Counsel, who shall, within 10 days of the Clerk's notice
that the motion has been docketed, respond to its merits and confirm its agreement.
The Disciplinary Clerk shall submit to the Court within the 10 day period the active
disciplinary files to which the motion applies. The Court may approve the sanction
agreed to by the parties, or may remand the case for hearing or other proceedings
specified in the order of remand."

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    placed in the United States mail within ten days of the date of this

    Opinion and Order. Respondent shall simultaneously provide a copy

   of all such letters to the Office of Bar Counsel. Furthermore, to the

   extent possible and necessary, Respondent shall immediately cancel

   and cease any advertising activities in which he is engaged.

3) If Movant commits any ethical violations during the probationary

   period, the KBA should undertake appropriate filings with this Court

   to revoke the suspension period.

4) Pursuant to SCR 3.450, Movant is directed to pay all costs associated

   with these disciplinary proceedings, in the amount of $47.60, for

   which execution, may issue from this Court upon finality of this

   Opinion and Order.

All sitting. All concur.

ENTERED: August 25, 2016.

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