Court Opinion

ID: 4252502
Source: CourtListenerOpinion
Date Created: 2018-03-07 20:10:24.50389+00
Date Added: 2024-06-11T09:36:45.876596
License: Public Domain

Electronically Filed
                                                     Supreme Court
                                                     SCAD-17-0000163
                                                     07-MAR-2018
                                                     08:32 AM
                         SCAD-17-0000163

          IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                 OFFICE OF DISCIPLINARY COUNSEL,
                           Petitioner,

                               vs.

                       JO-ANN MARIE ADAMS,
                           Respondent.

                       ORIGINAL PROCEEDING
      (ODC Case Nos. 14-001-9144, 14-067-9210, 15-018-9237)

                       ORDER OF SUSPENSION
   (By: Recktenwald, C.J., Nakayama, Pollack, and Wilson, JJ.,
   and Intermediate Court of Appeals Associate Judge Reifurth,
                in place of McKenna, J., recused)

          Upon consideration of the March 15, 2017 report

submitted to this court by the Disciplinary Board of the Hawai#i

Supreme Court, the record, and the briefs submitted in this

matter, we reach the following Findings of Fact and Conclusions

of Law, based upon clear and convincing evidence.

          In Case No. 14-001-9144, the record establishes that,

from 2010 through September 30, 2013, Respondent Jo-Ann Adams

failed to maintain a separate business account, in violation of

Rule 1.15(a)(2) of the Hawai#i Rules of Professional Conduct
(HRPC) (1994).1   She used counter deposit slips to deposit funds

into her client trust account and her business account, and used

counter checks to disburse funds from her client trust account,

constituting multiple violations of HRPC Rule 1.15(b).

Respondent Adams commingled her own funds – including funds

earned in her legal practice, earned for non-legal work, and

obtained through an inherited interest in a judgment – with

client funds from 2010 through September 30, 2013, in violation

of HRPC Rule 1.15(c). By willfully and knowingly retaining her

earnings in her client trust account, she placed the client funds

in her account at substantial risk of injury.

          Respondent Adams paid personal and non-client business

expenses from her client trust account, and withdrew funds from

the account by means of checks made to “cash,” each instance of

such conduct constituting a violation of HRPC Rule 1.15(e).       She

failed to label checks and to maintain contemporaneous financial

records with the accuracy and consistency necessary to protect

the integrity of her clients’ funds by responsibly overseeing the

receipt, maintenance, and disbursement of those funds, as

required by HRPC Rule 1.15(g)(2).

          We further conclude that Respondent Adams failed to

file her 2010, 2011, and 2012 federal and state tax returns until

August 23, 2013, and her 2010 second semester and 2011 and 2012

     1
        All citations to the HRPC in this order are to the 1994
edition, unless otherwise noted.

                                  2
general excise tax returns until

June 20, 2014.   We further conclude failing to file her returns

by the appropriate deadlines injured the public and the legal

profession.

          However, we also conclude, following a thorough and

complete de novo review of the record, that the Office of

Disciplinary Counsel (ODC) did not succeed in carrying its burden

of establishing, by clear and convincing evidence, that

Respondent Adams had the intent to conspire with her client in

this case to sequester the client’s inherited funds in her client

trust account in order to avoid the payment by her client of

appropriate taxes on those funds.      See ODC v. Au, 107 Hawai#i

327, 336, 113 P.3d 203, 212 (2005); Disciplinary Bd. of the

Hawai[#]i Supreme Ct. v. Bergan, 60 Haw. 546, 554, 592 P.2d 814,

819 (1979).

          In Case No. 14-067-9210, we conclude Respondent Adams

misappropriated client funds, in violation of HRPC Rules 1.15(c)

and 1.15(d), and injured that client when, on December 30, 2013,

she disbursed monies from her client trust account using a

counter check, overdrawing the account, at a time when she, by

her own admission, held funds for a client in that account.

          In Case No. 15-018-9237, the record establishes by

clear and convincing evidence that, on May 17, 2015, Respondent

Adams wrote a check to herself for $459.80 from her client trust

account against insufficient funds and, in making the

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disbursement to herself, relied in part on $25.00 belonging to a

client.   Based upon the plain language of HRPC Rule 1.15(c)

(2014), the withdrawal of the $25.00 of client money from her

client trust account violated that Rule and injured the client in

question.

            Adams’s grossly negligent recordkeeping also

establishes, by clear and convincing evidence, that her financial

recordkeeping was so inadequate, the violation of her duties

under HRPC Rule 1.15(g) so severe, that she placed the funds of

her clients in substantial danger of serious injury.    This

conclusion, viewed together with our conclusions regarding her

failure to file tax returns and her comingling of personal funds

in her client trust account, provides clear grounds for a

substantial period of suspension.     See ODC v. Horner, SCAD-15-930

(March 20, 2016); ODC v. Manuia, SCAD-13-136 (May 20, 2013); ODC

v. Hartman, SCAD-11-96 (March 24, 2011); ODC v. James Ching, No.

25697 (May 2, 2003); ODC v. Trask, No. 21929 (January 19, 1999);

see also In re: Alex, 205 So. 3d 895 (La. 2016); In re Shamers,

873 A.2d 1089 (Del. 2005); In the Matter of Cabaniss, 495 S.E.2d
779 (S.C. 1998).

            Finally, we find, in aggravation, that Respondent Adams

violated multiple provisions of the HRPC over an extended period

of time, had substantial experience in the practice of law and

failed to file her tax returns when due.

            We find, however, in mitigation, that Respondent Adams

                                  4
has a clean disciplinary record, has an excellent reputation in

the community and has performed significant pro bono work, fully

and freely cooperated with ODC in its investigation (including

taking the initiative to report a subsequent overdraft of her

account), and expressed sincere remorse for the mishandling of

her financial affairs and client funds in particular.   Therefore,

          IT IS HEREBY ORDERED that Respondent Adams is suspended

from the practice of law for one year, effective 30 days after

the entry date of this order.

          IT IS FURTHER ORDERED that Respondent Adams shall

complete a course, offered by the Practicing Attorneys’ Liability

Management Society (PALMS) or an equivalent, on the responsible

management of a law practice, which shall include requirements

governing the appropriate manner for receiving, maintaining, and

disbursing client funds, handling earned fees and incurred costs,

as well as the recordkeeping tools available to ensure compliance

with the Hawai#i Rules of Professional Conduct and the Hawai#i

Rules Governing Trust Accounting.   Submission of proof of

completion of this course shall be a pre-requisite to her

reinstatement, as a condition of this order of suspension,

pursuant to RSCH Rule 2.17(b)(2).   Respondent Adams is reminded

that, pursuant to RSCH Rule 2.17(a), she may not practice law

until reinstated by an order of this court.

          IT IS FURTHER ORDERED that, pursuant to RSCH Rule

2.16(d), within 10 days of the effective date of her suspension

                                5
Respondent Adams shall submit to this court proof of compliance

with the requirements of RSCH Rule 2.16.

          IT IS FURTHER ORDERED that any reinstatement of

Respondent Adams to the practice of law shall be subject to her

successful completion of an audit, within one year of her return

to practice, conducted by the Practicing Attorneys’ Liability

Management Society or other similar organization, and submission

to this court of proof of said successful completion within 60

days of the one-year anniversary of reinstatement, or good cause

for an extension.   Failure to fulfill this condition may result

in a further period of suspension, upon a review of the record in

this matter.

          IT IS FINALLY ORDERED that Respondent Adams shall bear

the costs of these disciplinary proceedings, upon the timely

submission to this court of a verified bill of costs by ODC,

pursuant to RSCH Rule 2.3(c).

          DATED: Honolulu, Hawai#i, March 7, 2018.

                                     /s/ Mark E. Recktenwald

                                     /s/ Paula A. Nakayama

                                     /s/ Richard W. Pollack

                                     /s/ Michael D. Wilson

                                     /s/ Lawrence M. Reifurth

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