Conduct of Laury, In re

CourtSupreme Court of Oregon
Citation706 P.2d 935,300 Or. 65
PartiesIn re Complaint as to the CONDUCT OF Thomas E. LAURY. OSB 84-19, 84-38, 84-51; SC S31724.
Decision Date24 September 1985

Thomas O. Moe, Portland, for accused.

William M. Tomlinson, and George A. Riemer, Gen. Counsel, Oregon State Bar, Portland, for Oregon State Bar.

PER CURIAM

The issue is whether, for commingling and eventually converting to his own use the funds of his clients, the accused should be suspended from the practice of law rather than being disbarred. The accused contends that disbarment is not a proper sanction because of the accused's alcohol dependency during the period in which the commingling and conversion occurred. We hold that he must be disbarred.

The Oregon State Bar (Bar) filed a formal complaint containing three causes, and the complaint and notice to answer were served on the accused on November 13, 1984. Despite the fact that both the notice and BR 4.3 required that the accused answer the formal complaint within 14 days of service, the accused did not answer until February 22, 1985. The hearing before the Trial Panel was on March 13, 1985.

The first cause in the Bar's complaint alleged violation of DR 6-101(A)(3) 1 arising out of allegations that the accused undertook to represent plaintiffs Cook and McDowell in certain civil litigation in August of 1980, that the accused neglected the case "and failed to keep [the plaintiffs] informed of his whereabouts and of the status of the litigation he had filed on their behalf." The complaint alleged that the accused's services were terminated by his clients in August of 1983, at which time the accused turned over the file to a former partner of the accused for transmittal to the clients.

The second cause charged that the accused was retained to represent one of the defendants in a civil cause. The plaintiff was represented by attorney Berne. Just before trial was to occur, alleged the Bar, the parties agreed that upon payment to plaintiff by the accused's client of the sum of $500 the plaintiff would execute a covenant not to sue the accused's client and dismiss the claim against him. The Bar alleged that on July 26, 1983, Berne mailed to the accused a covenant not to sue executed by the plaintiff and advised the accused that when the $500 was paid Berne's client would dismiss as to the plaintiff's claim against the accused's client. The Bar further alleged that the accused on July 26, 1983, received from his client the sum of $500 to effectuate the settlement, that the accused did not deposit the funds in a separate identifiable client's trust account until used for their intended purpose or returned to the client, and that the accused did not render an appropriate accounting to his client regarding those funds. The Bar further alleged that despite demand by Berne for payment of the amount of the settlement, the accused failed to pay; rather, it was alleged, the accused led Berne to believe that the settlement check was in the mail "on numerous occasions when he knew his representations to [Berne] were not true." The Bar alleged that Berne had not received the money as of October 16, 1984, almost 15 months after the agreement to settle and the payment to accused by his client of the $500. The Bar alleged that the accused used the $500 for his personal purposes without the consent of his client.

The Bar alleged that the conduct of which complaint was made in the second cause violated the following: DR 1-102(A)(4), DR 6-101(A)(3), DR 7-101(A)(2) and (3), DR 9-102(A) and DR 9-102(B)(3). 2

In the third cause the Bar charged that the accused was retained by a creditor on a collection matter. The Bar alleged that the cause was settled, and the debtor paid the amount of the settlement into court. In August of 1983, this amount was allegedly paid to the accused. The Bar further alleged that the accused and the client had a disagreement as to how much of that sum was to be paid to the accused. The Bar further alleged that the accused deposited the check in the checking account of a friend. The client and the accused, it is alleged, eventually decided to arbitrate the matter, and the arbitrator ordered the accused to pay to the client approximately one-half of the amount the accused had received from the settlement. The third cause alleged that the accused had still not paid that amount, about $600, to the client as of October 16, 1984. Rather, it is alleged, the accused used the money for his personal purposes without the consent of the client. The Bar further alleged that the accused had failed to hold the sum received in a client's trust account until the dispute was settled, had failed promptly to notify the client of the receipt of the money, had failed to maintain accurate records of the client's funds and had failed to render an appropriate accounting to the client when the client sought one. It was also alleged that the accused refused to comply with the client's demand to pay the money. The third cause charged violation of DR 1-102(A)(4), DR 9-102(A) and DR 9-102(B)(1), (3) and (4). 3

By his tardy answer, the accused admitted substantially all of the allegations except violation of DR 1-102(A)(4), and denied that he had intentionally failed to seek the lawful objectives of his client and intentionally prejudiced or damaged his client with respect to the second cause.

When the matter came on for hearing, the accused stipulated that the only issue to be tried was whether he violated DR 1-102(A)(4) when he converted to his own use his clients' funds as charged in the second and third causes. The accused contended that he did not intentionally convert the funds.

The accused submitted a written statement that was received in evidence, which stated:

"Although being an alcoholic and having serious emotional problems do not excuse my failure to establish a client trust account or pay meticulous attention to the details of a client's legal matters, my recognition of my alcohol dependency and emotional problems, as well as the winding down of my active practice, certainly indicate that my actions on which the complaints were filed against me were not performed with malice or intentional deceit.

"Once I had decided to dissolve my law partnership, as well as temporarily leave the practice of law, I made a conscious effort to place my clients and their files with competent attorneys who could represent them better than I could. The cases I kept, and notably the clients who filed complaints against me, were cases that had little or no monetary appeal to other practitioners and thus, I determined that I would have to continue to handle them. I believe that was a serious mistake on my part and that I should have simply resigned from each of the cases and turned the files over to the clients. I acknowledge that that was a mistake. Although I used poor judgment, the circumstances of my case should not go unheard. I was trying to wind down my law practice to allow me time to rehabilitate myself. Unfortunately, I stumbled at the end.

"I intend to make restitution. I will also enter into an alcohol rehabilitation program which I personally intend to complete prior to my resumption of the practice of law.

"Dated this 13th day of March, 1985."

The accused testified that when he received the $500 check mentioned in the second cause, he no longer had a client trust account because he was winding down his practice. He testified that he deposited the check in another bank account and took $500 from his own funds and placed that amount of cash in his client's file, which was in the office of another attorney, where the accused was utilizing space while winding down his practice. He testified that he thought his client was about to take bankruptcy and that he feared to disburse the money because the accused thought he might be personally liable to the trustee in bankruptcy. He later spent the funds kept in the client's file for his own purposes.

With respect to the third cause, he testified that he no longer had a client trust account when he received the check from the settlement and that that was the reason he deposited the check in his friend's account. The accused was a "signatory" on that account, although he was not an owner of the account. He testified that he placed cash in the amount of that check in the client's file kept at the accused's home. Eventually he spent for his own purposes that entire amount.

In June, 1984, the Bar sent a representative to interview the accused concerning complaints by both clients involved in the second and third causes. The accused admitted before the Trial Panel that when the Bar's representative asked him where the money was, he had lied about its whereabouts and that he failed to take the cash and deliver it to the Bar's office as he had promised to do.

The Trial Panel found that the accused had violated every disciplinary rule as charged in the three causes contained in the Bar's complaint. The Trial Panel found mitigating circumstances as follows:

"There are mitigating circumstances in this matter which caused the trial panel to believe that the Accused should be suspended from the practice of law rather than disbarred. The Accused recognized his alcohol dependency and that he suffered from emotional problem[s] and did undertake to transfer to other lawyers the legal matters he was handling for various clients. He kept three or four cases which, because they involved modest amounts, could not be easily transferred to other lawyers and it was while handling these cases that the wrongdoing by the Accused occurred which resulted in his clients losing less than $1,200."

Acting under BR 6.1 and 6.2, the Trial Panel decided that the accused should be suspended from the practice of law for a period of three years, but that the third year be stayed and the accused be placed on probation under...

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