Court Opinion

ID: 4254338
Source: CourtListenerOpinion
Date Created: 2018-03-14 14:23:34.220552+00
Date Added: 2024-06-11T14:44:24.659664
License: Public Domain

THE STATE OF SOUTH CAROLINA
                        In The Supreme Court

            In the Matter of Stephen A. Yacobi, Respondent.

            Appellate Case No. 2017-002324

                              Opinion No. 27779
               Submitted February 21, 2018 – Filed March 14, 2018

                             PUBLIC REPRIMAND

            John S. Nichols, Disciplinary Counsel, and Kelly B.
            Arnold, Assistant Disciplinary Counsel, both of
            Columbia, for Office of Disciplinary Counsel.

            Harvey M. Watson, III, of Ballard & Watson, Attorneys
            at Law, of West Columbia, for Respondent.

PER CURIAM: In this attorney disciplinary matter, respondent and the Office
of Disciplinary Counsel (ODC) have entered into an Agreement for Discipline by
Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary
Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court
Rules (SCACR). In the Agreement, respondent admits misconduct and consents to
a public reprimand or a definite suspension not to exceed nine months.1 As a

1
  In 2002, respondent received a Letter of Caution, with a finding of misconduct,
citing the following Rules of Professional Conduct (RPC), Rule 407, SCACR:
Rule 1.3 (Diligence); Rule 1.4 (Communication); and Rule 1.16 (Declining or
Terminating Representation). In 2007, he received an Admonition citing the
following Rules of Professional Conduct: Rule 1.2 (Scope of Representation and
Allocation of Authority Between Client and Lawyer); Rule 1.3 (Diligence); Rule
1.4 (Communication); Rule 5.3 (Responsibilities Regarding Nonlawyer
Assistants); and Rule 8.1 (Bar Admission and Disciplinary Matters). Finally,
respondent received a Letter of Caution in 2012 citing Rules 8.1(b) (Bar
condition of discipline, respondent agrees to complete the Legal Ethics and
Practice Program Ethics School, Trust Account School, and Law Office
Management School within nine months of being disciplined. Respondent also
agrees to submit his monthly bank statements, reconciliation reports, and trial
balance reports for his trust accounts to the Commission on Lawyer Conduct for a
period of two years after being disciplined. Finally, respondent agrees to pay the
costs incurred in the investigation of this matter by ODC and the Commission on
Lawyer Conduct within thirty days of being disciplined. We accept the Agreement
and issue a public reprimand. The facts, as set forth in the Agreement, are as
follows.

                                      Facts

                                    Matter A

On December 6, 2011, respondent was retained to represent Client A in a workers'
compensation matter. Respondent maintains that on December 7, 2011, his
paralegal mailed a Form 50 to the Workers' Compensation Commission; however,
the Commission never received the form. Respondent further maintains his
paralegal mailed a copy of the form to the Commission in February 2012. The
paralegal used a certificate of mailing dated December 7, 2011 for the February
2012 mailing.

On November 6, 2012, Client A signed a settlement statement prepared by
respondent which set forth gross settlement proceeds of $75,000 and deductions
for attorney fees and litigation costs in the amounts of $25,000 and $197,
respectively. However, respondent had waived his claim to recover the latter. The
settlement statement did not include a deduction for Client A's existing debt of
$4,671.63 to a litigation loan company or a deduction of $15,453.50 Client A had
directed respondent pay to a car dealer for a new vehicle. Respondent did not
revise the settlement statement to reflect an accurate accounting of respondent's
actual disbursements from Client A's proceeds.

On November 6, 2012, respondent deposited the settlement check in the amount of
$75,000 into respondent's trust account. Between November 7, 2012 and
November 15, 2012, respondent wrote checks on the trust account to pay attorney

Admission and Disciplinary Matters) and 8.4(e) (Misconduct) of the Rules of
Professional Conduct.
fees, Client A, the car dealer, and the litigation loan company. All of the checks
had cleared the trust account by November 19, 2012. However, at the time the
disbursements were made, the settlement funds were neither collected funds
pursuant to Rule 1.15(f)(1), RPC, nor "good funds" pursuant to Rule 1.15(f)(2),
RPC.

Respondent did not respond to a Notice of Investigation from ODC nor a
subsequent Treacy letter,2 and he did not appear for an interview with ODC as
required by a Notice to Appear. When contacted by ODC, respondent indicated
his non-lawyer staff had not made him aware of mail or notices sent by ODC.

Respondent acknowledges he failed to supervise his non-lawyer staff and failed to
make reasonable efforts to ensure the conduct of his non-lawyer staff was
compatible with respondent's professional obligations.

                                      Matter B

In October 2013, Clients B retained respondent to represent them in a family court
matter. Clients B executed a fee agreement which provided for an attorney fee of
$4,310, and which they believed covered certain legal services, including
preparing, filing, and serving a complaint to initiate proceedings on their behalf.
Having heard nothing from respondent thereafter, Clients B attempted to contact
respondent by telephone, email, letter, and respondent's website between
November 2013 and January 2014, to no avail.

On January 7, 2014, Clients B learned nothing had been filed on their behalf with
the family court; therefore, they fired respondent. In their letter to respondent
terminating his services, which was accepted by his receptionist, Clients B
requested the return of the $4,310 previously paid to respondent. Clients B
retained new counsel who also tried to contact respondent without success.
Respondent recalls speaking with Mr. B in October 2013, but acknowledges there
was no further contact with Clients B. Respondent maintains his paralegal and the
paralegal's daughter, who was the receptionist, intentionally deflected attempts at
communication by Clients B and their successor counsel that were intended for
respondent, including the deletion of emails sent directly to respondent.
Respondent has terminated those staff members. Upon receipt of the complaint
filed by Clients B, respondent contacted their new counsel and hand-delivered a
full refund check on May 5, 2014.

2
    See In the Matter of Treacy, 277 S.C. 514, 290 S.E.2d 240 (1982).
Respondent admits he failed to prepare, file, or serve pleadings on behalf of Clients
B in a timely manner. He also admits not initiating communication with Clients B
to keep them reasonably informed as to the status of their case. Finally, he admits
he failed to make reasonable efforts to ensure the conduct of his non-lawyer staff
was compatible with respondent's professional obligations.

                                     Matter C

Respondent's bank reported he had an NSF - a check presented against insufficient
funds - on his real estate trust account on June 13, 2014. Respondent maintains the
check in question had been properly issued; however, there were insufficient funds
in the account because a $495 deposit for the same transaction was accidentally
deposited into respondent's general trust account. ODC's examination of the daily
balances provided by the bank and client ledger balances indicated the real estate
account was short by more than the amount of the one misdirected deposit at the
time of the NSF and respondent also had multiple negative client subaccount
ledgers.

On June 13, 2014, respondent deposited $468 of personal funds into the real estate
account to cover the shortage created by the presented check, and any possible
bank fees associated with the NSF, while respondent investigated the cause of the
NSF. On July 1, 2014, he deposited $700 of personal funds to rectify the other
negative client subaccount ledgers. On July 3, 2014, respondent also transferred
funds from his general trust account to the real estate account to correct the
misdirected deposit of $495. Respondent elected to leave any remaining personal
funds in the real estate account, resulting in an impermissible commingling of
respondent's personal funds with client funds.

Respondent employed a bookkeeping service to prepare monthly trust account
reconciliations; however, reconciliations were not being performed each month.
Respondent admits he failed to supervise his bookkeeper to ensure monthly
reconciliations of his trust accounts were being performed. Respondent also
admits he did not disburse checks related to real estate transactions in a timely
manner, on one occasion waiting six months.

ODC has determined respondent's negative client subaccount ledgers were a result
of carelessness in accounting for disbursements. Despite there being no indication
of misappropriation, respondent was not reconciling the real estate trust account as
required by Rule 1.15, RPC, and was not maintaining adequate records as required
by Rule 417, SCACR.

                                        Law

Respondent admits he violated the following Rules of Professional Conduct: Rule
1.2 (A lawyer shall consult with a client as to the means by which the objectives of
representation are to be pursued.); Rule 1.3 ("A lawyer shall act with reasonable
diligence and promptness in representing a client."); Rule 1.4(a) ("A lawyer shall: .
. . (2) reasonably consult with the client about the means by which the client's
objectives are to be accomplished; (3) keep the client reasonably informed about
the status of the matter; [and] (4) promptly comply with reasonable requests for
information[.]"); 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. Funds shall be kept in a separate account
maintained in the state where the lawyer's office is situated, or elsewhere with the
consent of the client or third person . . . . Complete records of such account funds .
. . shall be kept by the lawyer . . . . A lawyer shall comply with Rule 417, SCACR
(Financial Recordkeeping)."); Rule 1.15(f)(1) ("A lawyer shall not disburse funds
from an account containing the funds of more than one client or third person ('trust
account') unless the funds to be disbursed have been deposited in the account and
are collected funds."); Rule 1.16(d) ("Upon termination of representation, a lawyer
shall take steps to the extent reasonably practicable to protect a client's interests,
such as giving reasonable notice to the client, allowing time for employment of
other counsel, surrendering papers and property to which the client is entitled and
refunding any advance payment of fee or expense that has not been earned or
incurred."); Rule 3.2 ("A lawyer shall make reasonable efforts to expedite litigation
consistent with the interests of the client."); Rule 5.3(b) ("[A] lawyer having direct
supervisory authority over [a] nonlawyer . . . shall make reasonable efforts to
ensure that the person's conduct is compatible with the professional obligations of
the lawyer[.]"); Rule 8.1(b) ("[A] lawyer in connection with . . . a disciplinary
matter, shall not . . . knowingly fail to respond to a lawful demand for information
from [a] . . . disciplinary authority[.]"); and Rule 8.4(e) ("It is professional
misconduct for a lawyer to . . . engage in conduct that is prejudicial to the
administration of justice[.]"). Respondent also admits he violated Rule 1 of Rule
417, SCACR, by failing to maintain adequate financial records. Finally,
respondent admits the allegations contained in the Agreement constitute grounds
for discipline under Rule 7(a)(1), RLDE ("It shall be a ground for discipline for a
lawyer to . . . violate the Rules of Professional Conduct, Rule 407, SCACR, or any
other rules of this jurisdiction regarding professional conduct of lawyers[.]").
                                   Conclusion

We find respondent's misconduct warrants a public reprimand. Accordingly, we
accept the Agreement and publicly reprimand respondent for his misconduct.
Within thirty days of the date of this opinion, respondent shall pay the costs
incurred in the investigation of this matter by ODC and the Commission on
Lawyer Conduct. Respondent shall complete the Legal Ethics and Practice
Program Ethics School, Trust Account School, and Law Office Management
School within nine months of the date of this opinion. Finally, respondent shall
submit his monthly bank statements, reconciliation reports, and trial balance
reports for his trust accounts to the Commission on Lawyer Conduct for a period of
two years from the date of this opinion.

PUBLIC REPRIMAND.

BEATTY, C.J., KITTREDGE, HEARN and JAMES, JJ., concur. FEW, J.,
not participating.