Court Opinion

ID: 9514195
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:45:25.96713+00
Date Added: 2024-06-11T09:06:13.502591
License: Public Domain

CROTHERS, Justice,
dissenting.
[¶12] I agree with that part of the Majority Opinion accepting the Stipulation, Consent to Discipline and Recommendation of the Hearing Panel finding Kelling ton violated N.D.R. Prof. Conduct 1.15, 1.16 and 5.3 and suspending her from the practice of law for 90 days. But I respectfully disagree with that portion of the Majority Opinion staying the suspension. Because I do not agree with the Consent to Discipline in its entirety, I would reject the Consent to Discipline and remand this matter to the Disciplinary Board for further proceedings.
[¶13] Allegations in this matter surround improper trust account transactions. The Hearing Panel found Kellington "did not promptly issue refund checks from the [law firm] trust account but instead transferred the four clients' cumulative trust account balances of $3,310.85 from the [law firm] client trust account to the [law firm] business account, where the account balances were commingled with firm funds until refund checks were issued. [Law firm] was not entitled to any portion of the funds transferred." The Hearing Panel concluded, "Kellington should have known she was dealing improperly with the property of the clients named in the petition and caused injury or potential injury to the clients."
[¶14] Client funds must be held in a trust account to ensure their safekeeping from loss and to maintain ready availability to the client upon termination of the representation. - N.D.R. Prof. Conduct 1.15(a) and (d). "The prohibition against commingling ensures that a lawyer's eredi-tors will not be able to attach clients' property. See In re Anonymous, 698 N.E.2d 808 (Ind.1998) (commingling of lawyer and client funds would subject *302clients to 'unacceptable risks, such as attachment by creditors, or intended or unintended misappropriation by lawyer); In re Glorioso, 819 So.2d 320 (La.2002) (by commingling lawyer put clients' funds at risk of being seized by IRS to satisfy lawyer's tax liability)." Annotated Model Rules of Professional Conduct R. 1.15 an-not. at 241-42 (7th ed.2011). "[The prohibition also prevents lawyers from shielding personal assets from their own creditors by hiding funds in client trust accounts." Id. at 242 (citations omitted); Disciplinary Board v. Overboe, 2009 ND 40, ¶6, 763 N.W.2d 776.
[¶15] - Jurisdictions uniformly hold lawyers responsible for a nonlawyer assistant's handling of trust account transactions:
"Lawyers are responsible under Rule 5.3 for the mishandling of client funds by nonlawyer assistants. Courts view holding money in trust for clients as a nondelegable - fiduciary - responsibility that cannot be exeused by someone else's ignorance, inattention, incompetence, or dishonesty. Although lawyers may employ nonlawyers to assist in fulfilling this fiduciary duty, lawyers must provide adequate training and supervision to ensure that ethical and legal obligations to account for client funds are being met. When it comes to handling client funds, 'there must be some system of timely review and internal control to provide reasonable assurance that the supervising lawyer will learn whether the employee is performing the delegated duties honestly and competently.'"
Annotated Model Rules of Professional Conduct R. 5.3 annot. at 450 (7th ed.2011) (citations omitted). Here, the Hearing Panel properly found violations of N.D.R. Prof. Conduct 1.15, 1.16 and 5.3.
[¶16] The Hearing Panel's findings also alerted us that between 1996 and 2011 Kellington has been disciplined seven times prior to this proceeding. Those disciplines include two admonitions and five consent probations at the Inquiry Committee level.
[¶17] The Standards for Imposing Lawyer Sanctions adopted by this Court provide, "Suspension is generally appropriate when a lawyer knows or should know that he is dealing improperly with client property and causes injury or potential injury to a client." N.D. Stds. Imposing Lawyer Sanctions 4.12.
[¶18] Standard 9.1 provides, "After misconduct has been established, aggravating and mitigating cireumstances may be considered in deciding what sanction to impose." The Hearing Panel found Kell-ington's prior discipline is an aggravating factor. That prior discipline included consent probation for providing false financial information on her application for admission to the bar and consent probation for failing to adequately supervise a nonlaw-yer assistant in violation of Rule 5.3-which is one of the rule violations admitted in this matter. The Hearing Panel found mitigating factors of timely good faith efforts to make restitution, full and free disclosure, remorse and participation in the Lawyers Assistance Program through development of an individualized assistance plan.
[¶19] - Under our Standards, Kellington is subject to suspension unless aggravating or mitigating circumstances dictate otherwise. Here, the aggravating and mitigating cireumstances are offsetting at best. At worst, Kellington's history of discipline with a financial matter and with failure to adequately supervise a nonlawyer assistant suggests the disciplinary sanction should be increased. As a result, I cannot agree that our rules and standards, or the princi*303ples of graduated and proportional discipline allow us to stay Kellington's probation. The offer of discipline by consent therefore should be rejected.
[¶20] DANIEL J. CROTHERS and DALE V. SANDSTROM, JJ., concur.