Elias, In re
| Decision Date | 01 October 1986 |
| Docket Number | No. 63238,63238 |
| Citation | 114 Ill.2d 321,499 N.E.2d 1327,102 Ill.Dec. 314 |
| Parties | , 102 Ill.Dec. 314 In re Basil Chris ELIAS, Attorney, Respondent. |
| Court | Illinois Supreme Court |
James J. Grogan, Atty. Registration and Disciplinary Com'n, Chicago, for adm'r.
William J. Harte, David J. Walker, William J. Harte, Ltd., Chicago, for respondent.
On April 17, 1984, the Administrator of the Attorney Registration and Disciplinary Commission filed a four-count complaint against respondent, Basil Chris Elias.
Count I of the complaint alleged that respondent failed to deposit clients' settlement proceeds into a trust account established for that purpose. It also alleged that respondent commingled and converted funds properly belonging to his clients by depositing these funds into one of five nontrust accounts; by drawing on the funds so deposited to pay personal and business expenses; and by permitting these accounts to be overdrawn on a routine basis. Each of the foregoing allegations was cited as a violation of Disciplinary Rules 9-102(a) and (b) of the Code of Professional Responsibility (94 Ill.2d Rules 9-102(a), (b)). Count I further charged respondent with dishonesty, fraud, deceit, and misrepresentation in connection with his use of clients' funds deposited in these accounts in violation of Disciplinary Rule 1-102(a)(4) (87 Ill.2d R. 1-102(a)(4)). Count II made the same allegations with respect to a bank account opened and controlled by respondent but established and maintained in the name of an attorney associated with his practice. Thus, under counts I and II, respondent was charged with commingling and converting funds with regard to a total of six different accounts.
Counts III and IV related to specific clients. Count III alleged commingling and conversion of funds belonging to Mary K. Rooney in violation of Rules 9-102(a) and (b). It also charged that respondent failed to maintain records, render an accounting, and distribute promptly the proceeds of the settlement negotiated on Rooney's behalf in violation of subsection (c) of Rule 9-102 (94 Ill.2d R. 9-102(c)). Additionally, count III charged dishonesty, fraud, deceit, and misrepresentation in distributing to Rooney her share of the negotiated settlement. Count IV realleged the foregoing charges with respect to respondent's client Fred Roll.
Respondent filed an answer on July 24, 1984, and an amended answer on October 30, 1984. His amended answer admitted the factual allegations contained in the complaint but denied that these facts constituted commingling or conversion of clients' funds. He further denied engaging in any conduct which could be deemed fraudulent or deceitful.
This matter came before the Hearing Board on January 28 and April 11, 1985. The Administrator introduced numerous exhibits, over respondent's objection, purporting to detail respondent's disposition of funds belonging to clients which, according to the Administrator, amounted to commingling, conversion, fraud, and deceit as charged in the complaint. Respondent testified before the Board, denying all allegations of wrongdoing.
The facts are not in dispute. Respondent is a sole practitioner concentrating his practice in the area of personal injury. Between 1977 and 1982, respondent opened and maintained six bank accounts. These accounts bore names as follows: Basil C. Elias Attorney at Law Clients Fund Account (Heritage Bank of Oak Lawn); Basil C. Elias Attorney at Law Account (First State Bank of Alsip); Kenneth R. LeVey and Basil C. Elias Attorney at Law Account (LeVey was an associate of respondent); Geraldine Keim Clients Fund Account (Keim was respondent's secretary-bookkeeper during this time--not an attorney); Joseph N. Lascaro Attorney at Law Account (Lascaro was an associate of respondent); and Prairie States Petroleum Company, Inc. Account (respondent was president of Prairie States during this period). When respondent received a check in settlement of a client's personal injury claim, it was deposited into one of these six accounts. Respondent then issued a check to the client representing the client's share of the settlement check. Sometimes respondent's check was post-dated. On other occasions, respondent's check bore the date on which it was given to the client.
The check given the client was drawn on one of the above named accounts but not necessarily on the account into which the settlement check had been deposited. On at least eight occasions, respondent's check was dishonored due to insufficient funds when presented for payment. One of these instances involved Mary K. Rooney, the subject of count III of the complaint. Rooney received a post-dated check and held the check until the date indicated, at which time she deposited it in her checking account. Respondent's check was dishonored, causing several of Rooney's checks to be dishonored. Several days later, Rooney received a cash payment along with an additional $40.
The record further reveals at least five other occasions on which respondent's checks were dishonored when presented. The specific reason for the dishonor of these checks does not appear in the record.
The record indicates that most of these checks were paid upon re-presentment, although two of the checks were dishonored on second presentment. The record does not show how respondent settled with the clients involved in these two cases.
The record also reveals that respondent disbursed funds from all six accounts in payment of personal and business expenses. Illustrative of disbursements for personal expenses are checks issued to gambling casinos in Nevada and New Jersey in various amounts ranging from $7,000 to $50,000. Other disbursements for personal expenses include checks issued to respondent and members of his family and checks drawn to cash. There were also disbursements for business expenses such as payments to Commonwealth Edison, Illinois Bell Telephone, People's Gas, the clerk of the circuit court of Cook County, and the post office. Other checks were issued to Prairie States Petroleum Company.
The record further reveals that large sums of money were deposited into these accounts. For example, during 1984, the bank statements for one of these accounts, the Basil C. Elias Attorney at Law Clients Fund Account, showed the total deposits for the year to be in excess of $3 million.
The Hearing Board issued its report and recommendation on January 24, 1986. It found that respondent maintained several different bank accounts in various names; that respondent deposited checks received by him in settlement of his clients' claims into these accounts; that he disbursed funds from these accounts for personal purposes; and that these accounts were overdrawn on occasion. The Board further found that respondent's check to client Rooney had been dishonored due to insufficient funds but had been replaced with cash. It also noted that the account on which respondent's check to client Roll had been issued was overdrawn prior to presentment.
The Hearing Board concluded that "[t]echnically, there would be a breach of ethics any time the balance in [r]espondent's bank account or accounts fell below the sum of all outstanding checks to clients." Referring specifically to count III involving Rooney and count IV involving Roll, it found that respondent failed to preserve the identity of their funds as required by Rule 9-102. The Board recommended that respondent be reprimanded and admonished to adhere strictly to the requirements of Rule 9-102 in his future transactions with clients.
The Administrator filed exceptions before the Review Board on January 27, 1986. On February 3, 1986, this court ordered that the Board expedite review. Thereafter, on March 7, 1986, the Review Board filed its report and recommendation.
This Board found that respondent had failed to maintain a clients' trust account for deposit of settlement proceeds prior to distribution to each client of his portion of the settlement as required by Rule 9-102(a). It found that these proceeds were deposited into accounts controlled by respondent which were used, in part, for his personal activities and business enterprises. The Board concluded that respondent had commingled clients' funds.
The Board also found, in its review of the documentary evidence, several instances in which checks given to clients by respondent had been dishonored for insufficient funds, requiring re-presentment or the issuance of a replacement check. It concluded that conversion had occurred in each of these cases. It also concluded that respondent's conduct in handling his clients' funds was fraudulent and deceitful in violation of Rule 1-102(a)(4).
The Review Board reversed the recommendation of the Hearing Board, recommending instead that respondent be disbarred. Respondent has filed exceptions to the report and recommendation of the Review Board in this court as provided by Supreme Court Rule 753(e)(5) (94 Ill.2d R. 753(e)(5)).
Respondent's first exception is substantive. He contends that the Review Board erred in concluding that he violated Rule 9-102(a) because the funds in his possession were not funds belonging to his clients within the meaning of the rule and, therefore, the Board erred in concluding that he commingled and converted clients' funds. In the alternative, respondent claims error in that the Administrator failed to prove these allegations by clear and convincing evidence as required by our Rule 753(c)(6) (94 Ill.2d R. 753(c)(6)).
Respondent also raises two procedural exceptions regarding his alleged violation of Rule 9-102(a). He maintains that the Hearing Board erred in admitting documentary evidence substantiating various transactions occurring in his bank accounts since he had admitted, in his amended answer, the factual allegations supported by these documents. He further contends that he was denied...
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