Committee on Legal Ethics of West Virginia State Bar v. Pence

• Decision Date: 24 June 1975
• Docket Number: No. 13579,13579
• Citation: 216 S.E.2d 236,161 W.Va. 240
• Parties: The COMMITTEE ON LEGAL ETHICS OF the WEST VIRGINIA STATE BAR v. Richard F. PENCE.
• Court: West Virginia Supreme Court

Page 236

216 S.E.2d 236

The COMMITTEE ON LEGAL ETHICS OF the WEST VIRGINIA STATE BAR v. Richard F. PENCE.

No. 13579.

Supreme Court of Appeals of West Virginia.

June 24, 1975.

Syllabus by the Court

1. In a court proceeding initiated by the Committee on Legal Ethics of the West Virginia State Bar to annul the license of an attorney to practice law, the burden is on the Committee to prove, by full, preponderating and clear evidence, the charges contained in the Committee's complaint.

2. All funds belonging to a client and held by an attorney, other than advances for costs and expenses, should be deposited in a separate account in a bank and not commingled with the attorney's personal funds.

3. An attorney must promptly pay or deliver, upon request by a client, the funds or other property in the possession of the attorney to which the client is entitled.

Campbell, Love, Woodroe & Kizer, David A. Faber, Charleston, for complainant.

Rudolph L. DiTrapano, Charleston, for defendant.

BERRY, Justice:

This is a proceeding for disciplinary action instituted by the Committee on Legal Ethics of the West Virginia State Bar, pursuant to the authority conferred by Part D, Article VI of the By-laws of the West Virginia State Bar. The respondent, Richard F. Pence, a licensed attorney and member of the West Virginia State Bar, was charged with professional misconduct by The Committee on Legal Ethics. The verified complaint of the Committee on Legal Ethics filed with this Court on March 24, 1975 charges that the defendant: (1) received in his professional capacity $30,000 belonging to his clients, Clarence R. Joachim and in Mr. Joachim's capacity as guardian for his infant son, Keith Joachim, and wrongfully commingled such funds with his own funds and those of his wife; (2) refused to pay over to his client on demand such funds as required by Code, 30--2--13, by Section 23, Part E, Article VI of the By-laws of the West Virginia State Bar and by the provisions of the Code of Professional Responsibility; (3) failed to pay over to his client such funds within six months of receipt thereof as required by the above cited provisions of the West Virginia Code and the By-laws of the West Virginia State Bar; (4) was without good and sufficient reason for failing to pay over such funds upon demand or within six months of receipt; and (5) deliberately falsified a bank deposit ticket and submitted it to the Committee as evidence in an attempt to defraud and mislead the Committee on Legal Ethics of the West Virginia State Bar.

The Committee on Legal Ethics conducted a formal hearing upon the charges against the respondent on December 2, 1974 and on February 3, 1975 a supplementary hearing was held. Subsequently, the Committee filed its complaint with this Court praying that this Court enter an order annulling the respondent's license to practice law. On March 25, 1975 this Court issued a rule directing the respondent to appear and show cause why his license to practice law should not be annulled. On May 13, 1975 the case was submitted for decision upon the briefs and oral arguments on behalf of the respective parties.

On February 5, 1971 Clarence Joachim and his wife, Anna, retained the respondent to prosecute a claim for a personal injury suffered by Keith Joachim, their son, as a result of an alleged medical malpractice on the part of Dr. D. R. Lantz of Parkersburg, West Virginia. The respondent took the case on a contingent fee basis whereby he was to receive one-fourth of any settlement or judgment on behalf of the child.

On March 29, 1973 the respondent instituted suit against Dr. Lantz on the claim and was successful in negotiating a settlement with the Traveler's Company, the insurer of Dr. Lantz whereby $40,000 would be paid in settlement of the claim. After a summary proceeding on April 5, 1973 in the Circuit Court of Wood County, which resulted in an order confirming and approving the negotiated settlement, Mr. Joachim received a check from the Traveler's Company dated March 30, 1973 in the amount of $40,000 and made payable to 'Clarence Joachim, Guardian for Keith Joachim and Richard F. Pence, his attorney'. Respondent and Mr. Joachim endorsed the check and Mr. Joachim asked the respondent to retain Mr. Joachim's part of the proceeds until he returned from a trip to North Carolina. Respondent subsequently deposited the $40,000 check in his personal joint checking account with his wife. At the same time he made a cash withdrawal of $5,000. Respondent contended that he had $25,000 in cash on hand in his safe in his office and subsequently added the $5,000 which he withdrew from the bank to the $25,000 to make a total of $30,000 which was the amount Mr. Joachim was entitled to receive from the settlement. By April 16, 1973 the respondent and his wife had reduced the joint checking account to $12,210.75. Apparently, on April 5, 1973 when the respondent took control of the $40,000, Mr. Joachim signed a statement directing the respondent to hold the proceeds for him and to deliver 'the same when and as directed'.

Mr. Joachim testified that on approximately six occasions he demanded delivery of the $30,000 without success. The respondent denies Mr. Joachim's statement in this regard and testified that Mr. Joachim failed to appear at an appointment without explanation on one occasion and that on another occasion when the parties were to meet and settle the account the respondent was occupied outside the City of Parkersburg and advised Mr. Joachim to that effect so that another meeting could be arranged. However, it does appear that on February 6, 1974 the respondent delivered to Mr. Joachim a personal check in the amount of $3,305 drawn on the respondent's joint checking account.

Subsequent to a complaint by Mr. Joachim, Lawrence M. Ronning, Chairman of the District Three Grievance Committee of the West Virginia State Bar on June 26, 1974 made demand of the respondent that he deliver the balance of the $30,000 to Mr. Joachim by June 28, 1974. In response to a request by the respondent this time was later extended to July 1, 1974. Respondent did not deliver the money on or before July 1, 1974 and alleged in his answer that he was ready and willing to deliver the balance of the $30,000 at that time but that he had requested that Mr. Ronning deliver to him a receipt for the money or a release from Mr. Joachim concerning delivery of the money which was not done.

The Chairman of the Committee on Legal Ethics of the West Virginia State Bar informed the respondent by letters dated September 3, 1974 and October 15, 1974 of his duty to pay over on demand or within six months after receipt any funds held by him as attorney for Mr. Joachim. On September 19, 1974 Mr. Joachim retained Daniel A. Ruley, Jr. an attorney, to collect for him the funds held on his behalf by the respondent. Mr. Ruley, during the last week in September, 1974 telephoned the respondent and made demand that he pay over the funds to Mr. Joachim. The respondent contends that he told Mr. Ruley that he was ready and willing to pay over the money as soon as Mr. Ruley calculated the amount of interest due on the money held by him. Mr. Ruley testified that he made two or three other demands of the respondent to pay over the money without success.

On November 20, 1974 the respondent received a letter from Mr. Ruley stating the amount of principal due which he incorrectly calculated as being $27,700 and an additional amount for interest at the rate of six percent. On November 27, 1974 the respondent paid over to Mr. Ruley $27,700 in cash which the respondent testified was the remaining sum of money which he had kept in an envelope in his safe for Mr. Joachim and a check for the amount of interest that was owing on the principal outstanding. Mr. Ruley immediately turned the money over to Mr. Joachim.

At the first hearing the respondent testified that on February 6, 1974 he had taken out $3,300 from the envelope in his safe and had deposited that amount of cash in his checking account from which he wrote the check to Mr. Joachim, individually, for $3,300, which was actually for $3,305. Members of the Committee at the first hearing asked the respondent to send in the deposit slip showing the $3,300 cash deposit to his checking account. The respondent subsequently submitted by letter to the Committee a copy of a deposit slip purporting to represent a deposit to his personal checking account of funds withdrawn from the safe covering his personal check. However, this copy of the deposit slip contained no markings showing that it had been processed by a bank. The respondent was next requested to furnish the original of the deposit slip and Mr. Pence subsequently sent in a purported original deposit slip but it too had no bank markings. The deposit slips showed an entry of $3,300 under currency and checks totaling $547.06 for a total deposit of $3,847.06. The Committee next formally notified the respondent that the Committee felt a supplementary hearing should be held on this matter. The respondent responded by letter stating that he had mistakenly furnished the Committee the wrong deposit slip and sent another deposit slip to the Committee which had the proper bank markings and showed an entry for checks totaling $547.06, but did not show a cash deposit of $3,300. The respondent's bank ledger cards were subpoenaed for the supplementary hearing and the ledger cards showed that no cash deposit of $3,300 was ever made during the period in question. The respondent...