Application for Disciplinary Action Against Lee, Matter of, 9602

• Decision Date: 06 August 1979
• Docket Number: No. 9602,9602
• Court: North Dakota Supreme Court
• Parties: In the Matter of the APPLICATION FOR DISCIPLINARY ACTION AGAINST Robert N. LEE, a Member of the Bar of the State of North Dakota. DISCIPLINARY BOARD OF the SUPREME COURT, Complainant, v. Robert N. LEE, Respondent. Civ.

Page 179

283 N.W.2d 179

In the Matter of the APPLICATION FOR DISCIPLINARY ACTION AGAINST Robert N. LEE, a Member of the Bar of the State of North Dakota DISCIPLINARY BOARD OF the SUPREME COURT, Complainant, v. Robert N. LEE, Respondent.

Civ. No. 9602.

Supreme Court of North Dakota.

Aug. 6, 1979.

Gregory D. Morris, Bismarck, for Disciplinary Board.

W. T. DePuy, Grafton, for respondent.

VANDE WALLE, Justice.

This is a disciplinary action against an attorney, Robert N. Lee.

Lee represented Kenneth Coppola in a divorce action. On May 6, 1978, Lee received a check for $3,000 from Mr. Coppola with instructions that he pay that amount to Coppola's former wife, Nancy Coppola, as part of a court-ordered property settlement.

Lee deposited the check in his business account at a bank in Cavalier, North Dakota, and, on May 15, 1978, issued a check for $3,000 to Mrs. Coppola. Lee gave the check to counsel for Mrs. Coppola, who in turn mailed it to her. Upon receiving the check, Mrs. Coppola deposited it in her savings account at a financial institution in Grand Forks, North Dakota. The check, however, was twice dishonored by Lee's bank in Cavalier because his account contained insufficient funds. After each dishonor, Lee received notice of his account's lack of funds and the bank's refusal to accept his check.

On June 29, 1978, counsel for Mrs. Coppola presented the check at Lee's bank in Cavalier. At that time, he requested and received a cashier's check from the bank in exchange for the $3,000 check issued by Lee. Because of the delay in Mrs. Coppola's receipt of the proceeds of the check well over 50 days from the time that Lee initially received instructions to issue the check to Mrs. Coppola she suffered a loss of $16.38 in interest and a loss of the use of the funds during the period that Lee's check remained unpaid.

The Disciplinary Board of the Supreme Court of North Dakota received an informal complaint against Lee in early July 1978. Pursuant to Rule 8, North Dakota Rules of Disciplinary Procedure, Inquiry Committee East investigated the complaint and gave notice to Lee of his right to respond and to appear before it, but Lee availed himself of neither opportunity. After consideration of the matter, Inquiry Committee East recommended to the Disciplinary Board that a formal disciplinary proceeding be instituted against Lee, and that he be publicly reprimanded for his conduct.

The Disciplinary Board considered the matter and ultimately filed a formal complaint against Lee, charging that by his conduct he violated Sections 27-13-05 ¹ and 27-14-02(1), (7), N.D.C.C., ² and Canons 1, DR1-102(A) (1), (6), ³ and 9, DR9-102, ⁴ Code of Professional Responsibility. For these violations, the Disciplinary Board requested that Lee be publicly reprimanded and required to pay the cost of these disciplinary proceedings.

After Lee answered, he and the Disciplinary Board, both through counsel, entered into a "Stipulation, Waiver and Agreement," which included a stipulation as to the basic facts of this matter and a waiver by both sides of their right to present additional testimony and to confront and cross-examine witnesses except Lee himself and those witnesses offered by Lee for purposes of mitigation.

The Disciplinary Board conducted a formal hearing. Lee appeared without counsel and testified. Following this hearing, the Disciplinary Board filed its "Findings, Conclusions and Recommendations." The Disciplinary Board concluded that Lee had violated Sections 27-13-05 and 27-14-02(7), N.D.C.C., and Canon 9, DR9-102(A) and (B)(4), Code of Professional Responsibility, and recommended that Lee be publicly reprimanded, be required to pay Mrs. Coppola $16.38 as interest lost during the time his check remained dishonored and unpaid, and be required to pay the cost of these disciplinary proceedings. Counsel for Lee and the Disciplinary Board then entered into a stipulation stating that neither objected to the findings and recommendations of the Disciplinary Board and that both waived oral argument and submission of briefs to this court. This court, however, ordered the parties to file briefs and, unless they waived their right to do so, to appear for oral argument. ⁵

Lee has conceded that he violated the State statutes and disciplinary rules cited above. Therefore, we only briefly discuss the nature of his mishandling of his client's funds. Lee failed to maintain the separate identity of his client's funds by not depositing them in an account separate from his personal business account. As Canon 9, EC9-5, points out, "Separation of the funds of a client from those of his lawyer not only serves to protect the client but also avoids even the appearance of impropriety, and therefore commingling of such funds should be avoided." ⁶ Both evils, which may be avoided by an observance of EC9-5, befell Lee through his unethical conduct. First, his client's $3,000 was diverted for over 50 days from the person to whom the client, by his instructions, directed it. And, second, Lee's commingling of his client's funds with his own has created, rather than avoided, the appearance of impropriety. The issuance of a check with insufficient funds in the account upon which the check is drawn may constitute criminal conduct in itself. ⁷

For the most part, the facts set forth previously are undisputed. The sole remaining dispute concerns the punishment Lee should receive for his illegal and unethical conduct. In their briefs to this court, counsel for the Disciplinary Board asks that we publicly reprimand Lee, and counsel for Lee asks that private reprimand be considered.

To determine the proper discipline, we look for guidance in the words of Henry Drinker:

"Ordinarily the occasion for disbarment should be the demonstration, by a continued course of conduct, of an attitude wholly inconsistent with the recognition of proper professional standards. Unless it is clear that the lawyer will never be one who should be at the bar, suspension is preferable. For isolated acts, censure, private or public, is more appropriate. Only where a single offense is of so grave a nature as to be impossible to a respectable lawyer, such as deliberate embezzlement, bribery of a juror or court official, or the like, should suspension or disbarment be imposed. Even here the lawyer should be given the benefit of every doubt, particularly where he has a professional record and reputation free from offenses like that charged. Similarly, such extreme measures should be invoked only in case of fairly recent offenses, proof in refutation of which would be reasonably available to respondent, except, of course, in cases where he was shown to have actively concealed them. Just as a lawyer who has been habitually dishonest will almost certainly revert to his low professional standards when necessity, temptation, and occasion recur, so one who has been consistently straight and upright can properly be trusted not to repeat an isolated offense unless of such a nature as of itself to demonstrate a basically depraved character." (Footnotes omitted.) Henry Drinker, Legal Ethics (New York: Columbia University Press, 1953), pp. 46-47.

See also Matter of Jaynes (1st case), 267 N.W.2d 782 (N.D.1978).

Lee's record, apart from this incident, is unblemished. He appears remorseful and apparently has remedied the prohibited accounting practices that created this problem. His commingling of the funds of his client with his own funds is different from the mishandling of the funds of clients occurring in Matter of Jaynes (1st case), Supra ; Matter of Jaynes (2d case), 278 N.W.2d 429 (N.D.1979); In re Jelliff, 271 N.W.2d 588 (N.D.1978); and Matter of Walton 251 N.W.2d 762 (N.D.1977). In Matter of Jaynes (1st case), Supra ; In re Jelliff, supra ; and Matter of Walton, supra ; the disciplined attorney mishandled funds belonging to a client or clients and, until an investigation of alleged unethical conduct began, made no attempt to return the funds to the client. Here, prior to the commencement of the disciplinary action, Lee's account eventually contained sufficient funds to enable his bank to honor the $3,000 check.

In Matter of Jaynes (2d case), Supra, the disciplined attorney had repeatedly engaged in or had been suspected of engaging in unethical conduct. In the words of this court, ". . . four informal complaints against Jaynes were dismissed; three informal complaints resulted in private admonishments; and one resulted in a public reprimand." 278 N.W.2d at 435. Here, apart from this incident, Lee has not previously been disciplined professionally nor has a complaint alleging unethical conduct been filed against him.

We cannot condone Lee's mishandling of his client's funds. The fact that Mrs. Coppola suffered only a small loss of interest through Lee's mishandling of his client's funds is not the significant factor to us. An attorney's failure to preserve the separate identity of his...