Conduct of Thomas, In re

• Decision Date: 29 March 1983
• Citation: 659 P.2d 960,294 Or. 505
• Parties: In re Complaint as to the CONDUCT OF Robert B. THOMAS, Accused. OSB 80-78; SC 28672.
• Court: Oregon Supreme Court

Page 960

659 P.2d 960

294 Or. 505

In re Complaint as to the CONDUCT OF Robert B. THOMAS, Accused.

OSB 80-78; SC 28672.

Supreme Court of Oregon,

In Banc.

Argued and Submitted Nov. 2, 1982.

Decided Feb. 15, 1983.

Rehearing Denied March 29, 1983.

Frank R. Alley, III, Medford, argued the cause for the Oregon State Bar. With him on the brief was Heffernan, Fowler, Alley & McNair, Medford.

Donald Myrick, Grants Pass, argued the cause for the accused. Donald H. Coulter, Grants Pass, filed the brief for the accused. With him on the brief was Myrick, Coulter, Seagraves, Myrick & Adams, Grants Pass.

Before LENT, C.J., and LINDE, TANZER, ^* CAMPBELL, ROBERTS and CARSON, JJ.

PER CURIAM.

The Oregon State Bar filed a complaint against Robert B. Thomas accusing him of unethical conduct in eight separate causes. ¹ It alleged that Thomas had violated the Disciplinary Rules of the Oregon State Bar and the Oregon Revised Statutes in matters involving Klamath Indians in estates within the jurisdiction of the Klamath County probate court between November 1, 1978 and December 31, 1980.

The most serious charge in the complaint is that Thomas, as a conservator or personal representative, withdrew without court approval substantial sums from the estates and paid the money to himself as attorney fees when the fees had not been earned. It was also alleged that Thomas failed to preserve the identity of the funds withdrawn, charged excessive attorney fees, and made personal loans to the protected persons and heirs of the estates.

The Trial Board found Thomas guilty of five causes, not guilty of one cause, and on the remaining two causes found him guilty of only a part of the charges. The Trial Board recommended that Thomas be suspended from the practice of law for a period of two years. The Disciplinary Review Board agreed with the Trial Board's findings but recommended that Thomas be permanently disbarred. We make our own independent review of the evidence. In re Robeson, 293 Or. 610, 629, 652 P.2d 336 (1982). We conclude that Thomas should be permanently disbarred.

At the time of the hearing before the Trial Board, Thomas was 56 years of age. He was admitted to the Oregon State Bar in 1956 and had practiced in Klamath Falls since 1960. At the time in question, Thomas was practicing with two lawyer associates. He had a general practice which for accounting purposes he divided into departments that included litigation, municipal and probate.

Starting in 1970, a substantial part of Thomas' probate practice involved Klamath Indians. The federal government from time to time made large payments of money to members of the Klamath tribe. This money was distributed by a bank through the Klamath Indian Management Trust (KIMT). The local financial institutions would not loan money directly to the tribal members against their shares in KIMT, but would loan the money to a conservator with court approval. For that reason Thomas was appointed the conservator for several different Klamath Indians. He also served as the personal representative in estates where the deceased had been a Klamath Indian.

On September 15, 1980, KIMT distributed approximately $80,000,000 to the tribal members. Of that total, Thomas' law office processed about $2,750,000.

Between September 15, 1980 and November 30, 1980, Thomas, as conservator or personal representative in seven separate conservatorships or estates, without court approval paid large sums of money to himself as attorney fees. In an eighth matter, the Estate of Vera Lee Riddle, Deceased, he caused the personal representative to pay to him without court approval the sum of $1,000 on October 8, 1980 as attorney fees. ²

On November 25, 1980, one of the lawyer associates looked at the office books in anticipation of becoming a partner and with Thomas' approval. He found what he thought was an "irregularity in some of the conservatorship accounts." He told the other associate and together they made a closer inspection and found that "many thousands of dollars" had been withdrawn--maybe as much as $45,000. A later audit by the Klamath County Bar showed that as of November 30, 1980, the nine conservatorships and estates in question had been overdrawn ³ as to attorney fees by the sum of $48,524.78.

The two associates contacted Thomas who told them there were no "irregularities" and "that it would all balance out when the accountings were filed." The associates were not satisfied and talked to a lawyer who advised them to contact a Klamath County circuit judge. By this time Thomas had retained an attorney to represent him. On December 11, 1980, the circuit judge froze the bank accounts. It was agreed between the circuit judge, the president of the local bar, and Thomas' attorney that the files in the estates would be transferred to and held by Steven A. Zamsky, a Klamath Falls attorney.

Zamsky was an experienced attorney who had been admitted to practice in 1971. He has an undergraduate degree in accounting and has a computer in his office capable of producing account printouts. He testified that his instructions were to:

"Attempt to determine the magnitude and how much money we were talking about, both in terms of how much had been withdrawn and how much might have been earned, how much had been court approved."

Thomas posted $40,000 in liquid assets with his attorney to be held until the final determination of the matter. He continued to serve as conservator or personal representative in the various estates, but could write checks only with the court's approval.

On June 21, 1981, the Oregon State Bar filed its complaint against Thomas. The causes of complaint (all alleging acts between November 1, 1978 and December 31, 1980) are summarized as follows:

FIRST CAUSE.

Thomas while acting as conservator for the following named individuals:

Patricia Ann Charles,

Denice Fay Hatcher,

Arlan W. Donahue,

Derrick Wayne Hatcher,

Natalie Ann Jackson,

Wilbur Harrington,

withdrew money from the accounts of one or more of the conservatorships and paid it to himself as attorney for the conservator. The payments were made without court approval and prior to the time that Thomas had performed legal services sufficient to entitle him to reasonable compensation under ORS 126.263. ⁴ Said acts were in violation of DR 1-102(A)(4), (5) and (6), DR 9-102(A) and (B) and ORS 9.480(1) and (4). ⁵

SECOND CAUSE.

Thomas received conservatorship funds from the six estates mentioned in the first cause and deposited them to his general account "without having first performed legal services sufficient to entitle" him to reasonable compensation pursuant to ORS 126.263. Thomas failed to "preserve the identity of the funds." Said acts were in violation of DR 1-102(A)(4), (5) and (6), DR 9-102(A) and (B), and ORS 9.480(1) and (4).

THIRD CAUSE.

(Dismissed by the Bar before the Trial Board)

FOURTH CAUSE.

(Same as first cause except that Thomas was acting as successor representative and attorney for the personal representative in the separate estates of Donald Webster Knoke and Leroy Gene Kirk.)

FIFTH CAUSE.

Thomas, while attorney for the personal representative of the Estate of Vera Lee Riddle, caused the personal representative to pay to him estate funds as attorney fees without court approval. Said acts were in violation of DR 1-102(A)(4), (5) and (6), DR 9-102(A) and (B), and ORS 9.480(1) and (4).

SIXTH CAUSE.

Thomas, in one or more of the conservatorships or probate estates, charged or collected a fee for his legal services which was "clearly excessive" in violation of DR 2-106(A) and (B). ⁶

SEVENTH CAUSE.

Thomas, while acting as attorney for the conservator or personal representative in one or more of the estates, made personal loans to the beneficiary and obtained repayment of the loan from the estate accounts in violation of DR 5-104(A). ⁷

EIGHTH CAUSE.

(Allowed by amendment by the Trial Board at the time of the hearing). Thomas, in the estate of Donald Webster Knoke misrepresented to the circuit court that a loan was to be obtained for the purpose of providing support for the "ward" when he knew the loan was not to be used for that purpose.

NINTH CAUSE.

Thomas' conduct and course of conduct alleged in the foregoing causes, taken in the aggregate, were prejudicial to the honor and integrity to the practice of law in this state in violation of DR 1-102(A)(5) and (6).

Thomas' answer to the Bar's complaint is described in his brief in this court as follows:

" * * * after admitting formal allegations of the complaint [the answer] generally denied the claims of professional misconduct, but did admit that during the course of handling the matters adverted to in the complaint, [Thomas] had withdrawn moneys and applied them to fee accumulations which he believed were due himself."

The hearing before the Trial Board was held in Klamath Falls on November 16 and 17, 1981. Steven Zamsky testified to the results of his audit and a copy of the computer print-out he prepared was received in evidence. It shows that Thomas, in a two and one-half month period between September 15, 1980 ⁸ and November 30, 1980, withdrew from the estates as attorney fees without court approval the following amounts which overdrew the accounts and resulted in minus cumulative balances:

Although Thomas did not withdraw from the estates any further sums as attorney fees after November 30, 1980, he did submit many billings or statements which substantially reduced the overdrawn balance. This is demonstrated by using one of the simpler estates (Natalie Ann Jackson) as an example:

                             "DESCRIPTION                            CUMULATIVE
                    DATE       OF ENTRY        ADVANCE     CHARGE     BALANCE
                07/24/80  BILLING                             12.00      12.00
                07/31/80  JULY STATEMENT                     223.75     235.75
                08/04/80  ATTORNEY FEE AND
                          FILING FEE (12.00)     -512.00               -276.25
                08/12/80  ATTORNEY FEE           -500.00

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