Court Opinion

ID: 9789640
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:39:31.561165+00
Date Added: 2024-06-11T07:37:23.724177
License: Public Domain

PETERSON, C. J.,
concurring.
I concur with the majority, with this exception.
Concerning the charge that the accused violated former DR 9-102 (A) by “depositing funds made payable to the [Frederick] estate into his personal” bank account, the majority opinion states that it is arguable that the rule was violated and that it is arguable that it was not. Because the “arguments were not recognized and were not briefed by either the Bar or the accused,” the majority does not decide this question. 304 Or at 203-4.
Respecting the Frederick estate, the Trial Panel found that the accused violated former DR 9-102(A). The Bar argues here that the accused was guilty of violating the rule. True, the specific question raised by the majority was not argued. The question properly is before us and I would decide it.
Former DR 9-102(A) provided that “[a]ll funds of clients paid to a lawyer * * * shall be deposited in one or more *218identifiable trust accounts * * I would find that the estate funds that the accused deposited in his personal account were funds of a client, and therefore would find the accused guilty of violating former DR 9-102(A).
One obvious purpose of mandating the “separation of funds of a client from those of a lawyer [is] to protect the client.” EC 9-5. In interpreting the phrase “funds of client” consistent with this purpose, we should construe the phrase consistent with the goal the rule seeks to attain — separation of the lawyer’s personal or business funds from funds received from clients.
A lawyer has an obligation to his or her client to avoid the commingling of funds whether the client owns the property or is otherwise responsible (and potentially liable) for it — that is, whenever the avoidance of commingling would “protect the client.” We should interpret DR 9-102(A) as identifying an interest of the client that would be adversely affected or threatened by the lawyer’s commingling of the lawyer’s funds with funds that the lawyer possesses on behalf of, or for the client. Cf. ABA Model Rule 1.15(a) (“A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property.”).
Other states have disciplined lawyers for commingling the funds of an estate with the lawyer’s own funds where the lawyer’s client was the personal representative of the estate. The opinions do not specifically discuss whether the funds of the estate are “funds of a client,” but the holdings are clear. See, e.g., In re Moore, 110 Ariz 312, 518 P2d 562 (1974) (accused acting as executor and lawyer for estate, court “had no hesitancy in ordering disbarment” when commingling was “accompanied by a conversion of the client’s funds”); Matter of Reed, 369 A2d 686 (Del Supr 1977) (accused represented estate administrator, accused’s failure to maintain and preserve funds of estate by disbursing to other clients amounts held on behalf of the estate was a violation of DR 9-102 and warranted censure and fine); Disciplinary Bd of Hawaii Supreme Court v. Kim, 59 Hawaii 449, 583 P2d 333 (1978) (accused represented estate administrator and made personal use of estate’s funds; “wrongful misappropriation of the funds of a client” warranted disbarment); Matter of Cochran, 270 *219Ind 15, 383 NE2d 54 (1978) (accused acting as administrator and lawyer for estate; violations, including failure to segregate assets of estate and use of such assets, warranted disbarment); State ex rel. NSBA v. Miller, 225 Neb 261, 404 NW2d 40 (1987) (lawyer represented personal representative and commingled and made personal use of estate’s funds; court held that such use of “client’s” funds usually warranted disbarment, circumstances warranted two-year suspension).
The Oregon probate code also supports this conclusion notwithstanding ORS 114.215(1), which provides that “[u]pon the death of a decedent, title to the property of the decedent vests [in the heirs or devisees] subject to * * * rights of creditors, * * * administration and sale by the personal representative.” Even though title to real and personal property “vests” in the heirs or devisees upon the decedent’s death, the personal representative has these duties and responsibilities respecting that property:
— “has a right to and shall take possession and control over the estate.” ORS 114.225
— “is a fiduciary who is under a general duty to and shall collect the income from property of the estate.” ORS 114.265
— is authorized to “retain assets,” “receive assets,” “deposit funds * * * in bank * * * accounts” and do a host of other things. ORS 114.305.
— “has power to sell, mortgage, lease or otherwise deal with property of the estate.” ORS 114.325(1)
The personal representative is not the owner of the property of the estate. But the personal representative — solely — holds, possesses, retains, preserves and controls the property of the estate. Only the personal representative has the right to “collect the income from property of the estate.” Petersen could have put the income in a bank account in his name. He permitted the accused as his attorney to collect the income. Petersen, the accused’s client, entrusted the accused with the money. Only Petersen had the right to demand from the accused the proceeds of the sale of the real property. Those funds were, in the sense of former DR 9-102(A), the funds of the personal representative until the estate was distributed.
*220When the accused received the contract payments, he was accountable to the personal representative for the money. Even though the personal representative was not the legal owner of the property, his rights and responsibilities respecting those assets were considerable. The funds the accused received were funds of a client — Petersen — under former DR 9-102(A).