In re Farris

• Decision Date: 08 September 2015
• Docket Number: No. SC 94418,SC 94418
• Citation: 472 S.W.3d 549
• Parties: In re: Eric Alexander Farris, Respondent.
• Court: Missouri Supreme Court

472 S.W.3d 549

In re: Eric Alexander Farris, Respondent.

No. SC 94418

Supreme Court of Missouri, en banc .

Opinion issued September 8, 2015

Rehearing Denied November 24, 2015

The chief disciplinary counsel was represented by Chief Disciplinary Counsel Alan D. Pratzel and Sam S. Phillips of the chief disciplinary counsel's office in Jefferson City, (573) 635–7400, and special representative Randee S. Stemmons, an attorney in Mt. Vernon, (417) 466–3121.

Farris, of Branson, (417) 334–7278, represented himself.

Paul C. Wilson, Judge

The Office of Chief Disciplinary Counsel ("OCDC") filed an Information in two counts charging Respondent Eric Farris ("Farris") with various violations of the Rules of Professional Responsibility (the "Rules").¹ The Advisory Committee of the Supreme Court of Missouri appointed a disciplinary hearing panel (the "DHP") to hear the case. Following a hearing, the DHP found that Farris committed numerous instances of misconduct under the Rules, including misappropriation of client funds, and recommended that Farris be suspended indefinitely with no leave to apply for reinstatement for six months.

Both Farris and the OCDC disagree with the DHP's decision. Farris maintains that he committed no wrongdoing but, if he is to be disciplined, argues that he should be given a stayed suspension and a term of probation. Conversely, the OCDC agrees with the DHP's findings but argues that the proposed discipline is insufficient and that Farris should be disbarred.

After a de novo review of the record, the Court finds that Farris committed the violations alleged in the Information and orders that he be disbarred.

I. The Charges

The two counts in the Information focus on Farris' representation of clients in two cases. The facts relating to these representations are summarized below.

A. Count I—Client A²

In June 2005, Client A hired Farris to represent her in a personal injury action. The case was settled for $197,500, and the check was deposited into Farris' trust account in September 2010. Under a written contingent fee agreement, Farris was entitled to 40 percent of Client A's recovery. Client A was entitled to the remainder (i.e., $118,500), less expenses.

Prior to the settlement, the hospital that treated Client A's injuries filed a notice of lien in the amount of $114,604.31. Client A also owed other medical providers in relation to her injuries. As a result, Farris told Client A he would keep her share of the settlement in his trust account and use it to pay the hospital and her other medical creditors. However, Farris told Client A he would negotiate with these creditors to see if they would accept less than the full amount of their bills. If so, Farris told Client A he would distribute the savings to her.

Beginning in November 2010, Client A called Farris many times in an effort to find out when she would receive her share of the settlement. Finally, in January 2011, Farris sent Client A a $50,000 check from his trust account. This check stated that it was for "Client's Partial Recovery." Farris did not tell Client A whether he had paid any of her medical bills and did not tell her what negotiations he had had with those providers. Over the next nine months, Client A tried frequently to contact Farris about the balance of her settlement. Her requests were ignored or prompted only vague replies.

On October 21, 2011, Farris sent Client A a second check from his trust account. This check was in the amount of $31,756.11. Farris provided no explanation for the amount of the check and no information concerning the status of his negotiations with the hospital or the other medical creditors. When Client A tried to deposit this check, however, it was returned due to insufficient funds. Client A immediately sought an explanation from Farris. After several calls and one cancelled meeting, Client A succeeded in meeting with Farris and his then-wife on November 15, 2011, to discuss why this check bounced.

At the November 15 meeting, Farris provided Client A with a summary of how her settlement proceeds had been distributed. This summary shows the total amount of the settlement ($197,500), the amount of Farris' fee ($79,000), the expenses paid from Client A's share ($2,139.58), and the amount of Client A's initial disbursement ($50,000). The remainder of Client A's share, therefore, was $66,360.42.

The summary Farris gave to Client A also showed that the total amount of her "Medical Bills" was $66,360.42. Farris told Client A that, because all of the remaining funds from the settlement had been paid to Skaggs Hospital "in full satisfaction and accord" of her bill, there was nothing left to distribute to her. Client A asked Farris to confirm that the hospital had been paid in full. Farris reassured her and told her there was nothing to worry about.³

Farris did not explain—in November 2011 or at any time since—why he decided to send Client A this trust account check for $31,756.11. He was supposed to be holding the remainder of Client A's settlement to satisfy the claim of the hospital and Client A's other medical creditors. If the hospital and the remainder of Client A's providers had agreed to settle all of her bills for a total of $34,604.31, Farris would have been justified—in fact, bound—to send Client A a check for the $31,756.11 balance of her settlement. Farris knew that this explanation would be untrue, however, and never offered any other.

Instead of explaining why he sent Client A a second trust account check for such an odd amount, Farris focused solely on trying to explain why that check bounced. Farris stressed—to Client A and, later, to the OCDC—that he had fulfilled his obligation to Client A by sending the remaining settlement funds (i.e., $66,360.42) to Skaggs Hospital in "full satisfaction and accord" of Client A's bill. Farris insists that the only reason his (unexplained) trust account check to Client A was returned for insufficient funds is that he sent it to Client A before learning that his wife had sent the $66,360.42 check to the hospital.

The DHP characterized this "explanation" as "bordering on the disingenuous." DHP Decision at p. 15. That characterization is generous because Farris' explanation is illogical, inconsistent and demonstrably false. Despite Farris' claims, the timing of the two checks was not the cause of the problem. If Farris knew he had gotten the hospital to agree to accept $66,360.42 as full payment of Client A's debt, then he also knew there was nothing left of the settlement proceeds to send to Client A—and certainly not enough to cover the check for $31,756.11 he sent her.

But this is not what happened, and Farris knew it. He knew that the hospital never agreed with him to accept this sum in satisfaction of Client A's debt because he knew he had never had any discussions (let alone agreements) with the hospital on that subject or any other. Accordingly, Farris knew he had no justification for sending Client A any more of the settlement proceeds and no basis for telling Client A that he had "taken care" of her hospital bill.

Not only was Farris' explanation to Client A and to the OCDC illogical and inconsistent, the evidence also showed that it was false. In an effort to bolster his explanation that the trust fund check to Client A bounced solely because the entire balance of the settlement had been paid to Skaggs Hospital, Farris produced to the OCDC a photocopy of that $66,360.42 check. Upon investigation, however, the OCDC learned that the hospital never received this check and, therefore, never presented it for payment.

Because Farris never sent the $66,360.42 check to the hospital and the hospital never presented it for payment, that check played no role in causing Client A's check to bounce. Instead, the evidence showed that the check bounced because—by November 2011—all of the money Farris was supposed to be holding in his trust account for Client A and her medical creditors was gone. It had been transferred to Farris' office account and spent for his benefit.

Farris lied to cover up this misappropriation. When Client A asked Farris at the November 15, 2011, meeting to confirm that her hospital bill had been paid in full, he lied and told her she did not need to worry about it. In truth, Farris never paid any of this debt. So, at the moment Farris assured her that she no longer needed to worry about her hospital bill, Client A still owed the hospital more than $106,000. By then, however, there was no money left from her settlement to help pay it.

To summarize, after deducting his reduced fee ($64,000), expenses ($2,139.58), and payments to Client A ($65,000),⁴ Farris held $66,360.42 in his trust account for the benefit of Client A and her medical creditors. They never received any of this money. Instead, all (or nearly all) of this $66,360.42 was transferred to Farris' office account, where it was used to pay his personal and business expenses.⁵ The available evidence shows that Farris knew all of this by November 2011. To date, he has not paid or promised to pay any of this money to its rightful owners.

B. Count II—Client B⁶

When Farris' trust account check to Client A bounced in October 2011, the bank automatically notified the OCDC under Rule 4–1.15(g)⁷ and related regulations adopted by the Advisory Committee. The OCDC conducted an audit and learned that Farris not only had misappropriated funds from Client A's settlement, but he also had misappropriated settlement proceeds belonging to Client B under nearly identical circumstances.

In September 2010, Client B settled their personal injury claims for $90,500, which was deposited in Farris' trust account. After deducting Farris' fee ($30,000) and expenses ($773.70), Client B was entitled to the remaining $59,726.30. Like Client A, however, Client B owed various medical creditors in connection with their injuries. The total of their combined bills was $27,132.20. No liens were filed, but the terms of Client B's settlement...