Disciplinary Action Against Stockman, In re, No. C9-93-353

• Decision Date: 02 July 1993
• Docket Number: No. C9-93-353
• Citation: 502 N.W.2d 209
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST William L. STOCKMAN, an Attorney at Law of the State of Minnesota.
• Court: Minnesota Supreme Court

Page 209

502 N.W.2d 209

In re Petition for DISCIPLINARY ACTION AGAINST William L. STOCKMAN, an Attorney at Law of the State of Minnesota.

No. C9-93-353.

Supreme Court of Minnesota.

July 2, 1993.

Marcia A. Johnson, Director of Office of Lawyers Professional Responsibility, Betty M. Shaw, Sr. Asst. Director, St. Paul, for directors.

William L. Stockman, pro se.

PER CURIAM.

The Director of the Lawyers Professional Responsibility Board filed a petition for disciplinary action against the respondent, William L. Stockman, on January 22, 1993. The petition alleged that respondent had committed the following counts of unprofessional conduct warranting public discipline: (1) trust account violations; (2) lack of diligence, failure to communicate, and false notarization with respect to his attempt to clear title on a piece of property owned by his clients; and (3) failure to cooperate with the Director's Office. Pursuant to Rule 13, Rules on Lawyers Professional Responsibility (RLPR), respondent was given 20 days to respond to these charges. After he failed to answer these allegations, this court, by order dated March 11, 1993, deemed the allegations in the Director's petition to be admitted. On March 8, 1993, the Director filed a supplemental petition for disciplinary action against respondent, alleging additional trust fund violations, neglect of clients, further non-cooperation, and the unauthorized practice of law.

The respondent, William L. Stockman, who currently resides in Duluth, Minnesota, has been licensed to practice law in Minnesota since October 21, 1983. He is presently suspended from the practice of law for non-payment of the attorney registration fee but has continued to practice law in violation of this suspension.

The allegations contained in the petition for discipline against respondent arise out of respondent's trust account violations as well as his representation of another client in attempting to clear title to a piece of property owned by the client.

On February 15, 1991, respondent opened a trust account at the St. Louis Bank in Duluth, Minnesota. Respondent opened this account intending to use it as a personal and business account. He opened a trust account, however, because the bank refused to open a business or personal account for him because his previous account at First Bank Duluth had been closed for excessive non-sufficient funds (NSF) activity.

Once the trust account was opened, respondent proceeded to commingle his personal funds with $1,800 of client trust fund money. Respondent also failed to maintain any of the books and reports required by Rule 1.15, Minnesota Rules of Professional Conduct (MRPC), despite his certification on his 1990 and 1991 attorney registration statements that he was maintaining the required trust account books and records.

Respondent also had several trust account overdrafts despite the fact that he never made any disbursements to clients from the original trust account balance of $1,800. Beginning on December 24, 1991, the trust account was overdrawn on numerous occasions. Between April 13, 1992 and May 1, 1992, the bank returned 14 of respondent's trust account checks for NSF. Seven of those checks were written on the account after it had been closed by the bank. Thus, the evidence demonstrates that respondent's repeated trust account violations, including misrepresentation, commingling of funds, and repeated overdrafts, violated Rules 1.15(a), 1.15(b)(3), 1.15(h), 1.16(b)(3), and 8.4(c), MRPC.

On June 12, 1987, a married couple retained respondent to clear title to their property and gave respondent a $300 retainer. The closing took place on June 24, 1987, and the title company held $7,500 in escrow, giving respondent's clients two years to clear the title defects.

The couple attempted to contact respondent every two months on this matter, but respondent failed to return any of their phone calls. Finally, when the couple contacted him personally, respondent assured them that he was working on the case and that they should not worry about their escrow money because it was earning interest. Respondent eventually drafted quit claim deeds for the couple and for their children in order to commence a torrens proceeding. The couple delivered the unsigned deeds to each of their children, obtained the requisite signatures, and returned the deeds to respondent, who falsely notarized them showing the date of December 6, 1989.

In March 1990, the couple contacted respondent, who admitted that he had done little on the case but would get to it immediately. On June 29, 1990, respondent told the couple that the escrow was not earning interest and that he was too busy to handle the case. On July 20, 1990, respondent, with the couple's permission, referred the case to another attorney, who completed the torrens proceeding.

Respondent's neglect in failing to pursue the torrens proceeding and lack of communication violated Rules 1.3 and 1.4, MRPC. His conduct in falsely notarizing the signatures violated Rules 8.4(c) and (d), MRPC.

In addition to the above violations, respondent also failed to cooperate with the Director's Office in violation of Rule 8.1(a)(3), MRPC, and Rule 25, RLPR. Although respondent agreed to provide all trust account books and records to the Director by June 1, 1992, respondent failed to honor his promise. Although the Director finally received most of the bank statements and check carbons by July 23-24, 1992, the remainder of the statements and checks were never sent. On September 2, 1992, respondent met with the Director's Office and gave them his trust account check register for the period from November 1991 to April 1992. After this meeting, despite repeated requests for bank authorizations and further information necessary for the disciplinary investigation, the Director never received a response to these letters from respondent. Respondent did not appear at a pre-hearing meeting scheduled by the Director for December 28, 1992, nor did he contact the Director's Office to indicate that would be unable to attend the scheduled meeting.

The Director's supplementary petition contains several additional allegations of misconduct. Among these include evidence of further trust account violations, failure to return trust account money to a client, engaging in the practice of law after being suspended for failure to pay his attorney registration fee, and further non-cooperation with the Director's Office.

Because the allegations in the Director's initial petition are deemed admitted due to respondent's failure to respond within the 20-day time limit, the only issue before this court is determining the appropriate sanction to impose.

This court has held that trust account violations will be treated very seriously and will usually warrant a lengthy suspension. This court has stated:

[W]e feel compelled to advise the bar that misuse of trust accounts in the future will (1) almost invariably result in lengthy suspension at the very least and disbarment at worst and (2) that retainer fees not immediately placed in a trust account will be looked upon with suspicion. * * * Furthermore, attorney fees for payment of services to be performed in the future must be placed in a trust...