Court Opinion

ID: 5127868
Source: CourtListenerOpinion
Date Created: 2021-11-20 02:03:33.408382+00
Date Added: 2024-06-11T08:23:03.233070
License: Public Domain

In the Supreme Court of Georgia

                                 Decided: October 5, 2021

     S21Y1269. IN THE MATTER OF LEONARD T. MATHIS.

     PER CURIAM.

     This disciplinary matter is before this Court on the petition for

voluntary discipline filed by Leonard T. Mathis (State Bar No.

976925) prior to the issuance of a formal complaint pursuant to Bar

Rule 4-227 (b). In his petition, Mathis, who has been a member of

the Bar since 2014, admits that, by his conduct in failing to ensure

that his trust account was properly maintained, he has violated

Rules 1.15 (I) (a) and 1.15 (II) (b) of the Georgia Rules of Professional

Conduct, found in Bar Rule 4-102 (d), and he requests that, as a

sanction for his admitted violations of the Rules, he receive either a

State Disciplinary Review Board reprimand or a public reprimand.

See Bar Rule 4-102 (b) (3, 4). The State Bar has filed a response, in
which it suggests that this Court should accept Mathis’s petition and

impose a public reprimand.

      In his petition, Mathis recounts that, in April 2020, he settled,

with his client’s authorization, a personal injury matter for $125,000

and shortly thereafter received a check for the settlement funds and

deposited those funds into his trust account. Approximately one

month later, Mathis issued a check to the client for approximately

$47,000, which was the client’s share of the settlement proceeds.

Unbeknownst to Mathis, the client did not promptly negotiate the

check, instead waiting approximately four months to do so.

However, on the date on which the client did seek to negotiate the

check, Mathis’s trust account contained only $18,000, which

resulted in the automatic generation by the bank of a notice of

insufficient funds, which was directed to the State Bar.1 Mathis

became aware of the shortfall that evening, contacted the client the

      1 Mathis acknowledges that, in the period between when the check was
issued and when the client attempted to negotiate the check, the ending daily
balance in his trust account was “on several occasions” insufficient to pay the
issued check and was as low as $12,825.90.

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next morning to alert him to the situation, and made deposits from

both his operating account and personal checking account to restore

the balance of the trust account to $65,956. Mathis then presented

the client with a new check, which, in addition to the settlement

funds owed to the client, included an additional $100 to defray any

costs incurred by the client. Mathis notes that the client was then

able to negotiate the check without incident and that the client did

not initiate the grievance in this matter. Mathis further notes that,

when contacted by the Bar regarding the insufficient funds matter,

he was forthright and cooperative, explaining the facts as he

understood them and providing copies of relevant documents.

     Mathis further recounts that, during the times in question, he

had retained a CPA, whose duties included bookkeeping, monthly

reconciliation of the trust account, and preparation of quarterly

income statements for estimated tax filings. Mathis asserts that he

believed in good faith that the CPA would keep him apprised of the

status of the trust account, because the CPA’s responsibilities

included maintaining a ledger of each client’s account and alerting

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Mathis to any discrepancies, such as outstanding checks drawn on

the trust account. Mathis asserts that, “[d]ue in part to misplaced

reliance on his CPA,” on numerous occasions during the period at

issue, he withdrew earned fees from his trust account without

referencing a ledger detailing the amount of earned fees attributed

to each client. Mathis also states that, on several occasions during

that period, he transferred funds from his operating and personal

accounts, and that many of these transfers were in response to his

realization that the trust account did not contain funds sufficient to

pay checks that were then outstanding.2 Mathis acknowledges that

the facts here reflect his own misunderstanding of proper trust

account management, and he asserts that his references to his

misplaced reliance on his now-former CPA are not intended to

deflect responsibility for these failures onto the CPA, but are rather

intended merely to demonstrate that these failures resulted from his

     2  The remaining transfers were apparently made to correct erroneous
transfers made to his operating and personal accounts, the circumstances of
which Mathis does not explain.

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being misinformed, rather than from any knowing and willful

actions on his part.

     Mathis acknowledges, as noted above, that his actions violated

Rules 1.15 (I) (a) and 1.15 (II) (b). Mathis notes that, although his

actions posed a potential threat of harm to the client, and although

the client was unable to negotiate the initially tendered check for

four days, the client did not file a grievance as to this matter and

has not alleged that any actual injury occurred.           As to the

appropriate level of discipline, Mathis cites no factors in aggravation

and cites in mitigation that he has no prior disciplinary record; that

his actions do not demonstrate a selfish or dishonest motive; that he

accepts responsibility for his reliance on his CPA and for managing

his trust account without a proper understanding of bookkeeping

and account procedures; that he quickly moved to remedy any

potential harm caused by his conduct, by making corrective deposits

to his trust account and by tendering a new check to the client, which

included an additional $100 to cover any costs incurred by the client

as a result of the insufficient funds issue; that he has implemented

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additional controls to ensure compliance with the standards

applicable to the maintenance of a trust account, including by

retaining a third-party reconciliation company, which is providing

monthly three-way reconciliation of the trust account and

monitoring his bookkeeping and accounting practices, by completing

a 9.5-hour course on bookkeeping and trust compliance, and by

overhauling his bookkeeping and accounting practices; that he has

cooperated fully with the State Bar throughout these disciplinary

proceedings and demonstrated good faith and a willingness to accept

discipline by the filing of this petition; that he is inexperienced in

the practice of law, having only been practicing for seven years,

including only three years as a solo practitioner, which, together

with the good fortune of a growing practice, resulted in the burden

of bookkeeping and accounting growing before he could implement

appropriate measures to monitor those issues; that his character

and reputation in the community are “stellar,” as attested to by the

several letters of recommendation attached to the petition; and that

he is deeply remorseful and embarrassed about this incident and is

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eager to demonstrate that he accepts responsibility. Mathis suggests

that the appropriate discipline in this matter would be either a State

Disciplinary Review Board reprimand or a public reprimand.

      The Bar has responded to Mathis’s petition, recommending

that it be accepted by this Court and that this Court impose as a

sanction a public reprimand. In its response, the Bar reiterates the

facts laid out by Mathis, adding that its review of this matter

revealed that Mathis made numerous “round number” transfers

from his trust account to his operating account that did not directly

correspond to his fees and expenses in personal injury matters. As

to the admitted Rules violations, the Bar states that Mathis violated

Rule 1.15 (I) (a)3 by failing to segregate client funds from his own,

by withdrawing fees from the trust account without referencing

applicable records, by failing to keep the client’s funds in his trust

account, and by failing to hold the client’s funds in the manner

      3Rule 1.15 (I) (a) provides, in pertinent part, that “[a] lawyer shall hold
funds or other property of clients or third persons that are in a lawyer’s
possession in connection with a representation separate from the lawyer’s own
funds or other property.”

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required of a fiduciary. As to Rule 1.15 (II) (b),4 the Bar notes that

Mathis violated it by making deposits from his operating and

personal accounts to cover the shortfall in his trust account, by his

record-keeping failures, and by the improper withdrawal of funds

from the trust account without reference to properly kept records.

     The Bar states that it does not appear that Mathis had any

intention of withholding the client’s funds, as this incident appears

to have arisen from his mismanagement of his trust account.

Although the Bar acknowledges Mathis’s assertions regarding the

role played by his then-CPA in leading to the incident here, it notes

that Mathis’s own admissions demonstrate that he was conscious of

     4   Rule 1.15 (II) (b) provides:
     No personal funds shall ever be deposited in a lawyer’s trust
     account, except that unearned attorney’s fees may be so held until
     the same are earned. Sufficient personal funds of the lawyer may
     be kept in the trust account to cover maintenance fees such as
     service charges on the account. Records on such trust accounts
     shall be so kept and maintained as to reflect at all times the exact
     balance held for each client or third person. No funds shall be
     withdrawn from such trust accounts for the personal use of the
     lawyer maintaining the account except earned lawyer’s fees
     debited against the account of a specific client and recorded as
     such.

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the existence of ongoing shortfalls in the trust account, which he

remedied by depositing his own personal and business funds to

make up for the deficiencies. Nevertheless, the Bar acknowledges

that Mathis’s failings here may have been due to inexperience and

ignorance, rather than an intention to improperly convert client

funds. As to the question of client injury, the Bar notes that Mathis

acknowledged at least some minimal injury to the client in the

client’s not having been able to negotiate the settlement check at the

time of his choosing, and that his mismanagement of his trust

account posed a general risk of potential injury to his clients. The

Bar asserts that it is “somewhat material” that no client has claimed

an actual injury, but it states that such is neither a mitigating nor

aggravating factor, citing Standard 9.4 (f) of the American Bar

Association’s Standards for Imposing Lawyer Sanctions.

      Moving to aggravating and mitigating factors, the Bar

identifies no aggravating factors.5 As to mitigation, the Bar does not

      5However, the Bar does note that, although its investigation “potentially
revealed multiple offenses and a pattern of misconduct—the admittedly

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contest Mathis’s assertions regarding the applicable mitigating

factors. In arguing for the proposed sanction here, the Bar points to

Mathis’s cooperation and contrition, noting that he immediately

sought to remediate the matter with the client, admitted his

misconduct, and filed this petition. The Bar further argues that

Mathis’s lack of experience and his lack of a dishonest or selfish

motive should mitigate in his favor. The Bar points to Mathis’s

misplaced reliance on his CPA as the source of much of his trouble,

although it also acknowledges that Mathis was the one making

transfers between his various accounts, with apparently little

diligence exercised as to the propriety of those transfers. The Bar

asserts that Mathis “did not appear to have been aware that he was

repeatedly violating the trust accounting rules until he was ‘caught’”

doing so, and maintains that his practice of transferring money back

and forth between his trust and operating accounts appears to have

improper transfers back and forth between IOLTA and operating accounts over
all of the seven months under review—pursuant to negotiations with
[Mathis]’s counsel[,] the State Bar refrains from arguing these as factors in
aggravation in response to his Petition.” (Citations omitted; emphasis in
original.)

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been intended simply to remedy his bookkeeping failures and does

not evince an intent to engage in misconduct.

     Having reviewed the record, we agree that the imposition of a

public reprimand is the appropriate sanction in this matter. See In

the Matter of Cook, 311 Ga. 206 (859 SE2d 495) (2021) (imposing

public reprimand for acknowledged violations of trust account rules

where attorney did not act dishonestly, intentionally, or maliciously;

where attorney lacked a prior disciplinary history; and where no

client was harmed). See also In the Matter of Howard, 292 Ga. 413

(738 SE2d 89) (2013) (imposing public reprimand where attorney

admitted violations of trust account rules). Accordingly, we accept

this petition for voluntary discipline and direct that Leonard T.

Mathis receive a public reprimand in accordance with Bar Rules 4-

102 (b) (3) and 4-220 (c).

      Petition for voluntary discipline accepted. Public reprimand.
All the Justices concur.

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