In re Moore, 26,279.

• Decision Date: 27 June 2000
• Docket Number: No. 26,279.,26,279.
• Citation: 129 N.M. 217,2000 NMSC 19,4 P.3d 664
• Parties: In the Matter of Roger MOORE, Esq., An Attorney Licensed to Practice Before the Courts of the State of New Mexico.
• Court: New Mexico Supreme Court

4 P.3d 664

129 N.M. 217

2000 NMSC 19

In the Matter of Roger MOORE, Esq., An Attorney Licensed to Practice Before the Courts of the State of New Mexico.

No. 26,279.

Supreme Court of New Mexico.

June 27, 2000.

Sally Scott-Mullins, Deputy Chief Disciplinary Counsel, Albuquerque, for Disciplinary Board.

J. Wayne Griego, Albuquerque, for Respondent.

OPINION

PER CURIAM.

{1} Pursuant to Rule 17-211 NMRA, this matter came before the Court for consideration of the recommendation of the hearing committee and the disciplinary board to accept a conditional agreement not to contest and consent to discipline tendered by Roger Moore. By the terms of the consent agreement, respondent agreed not to contest the charges that he had violated Rules 16-115(A) and (B), 17-204(A)(1), (2), and (4) through (7), and 16-804(H). For the reasons that follow, we accept the recommendation and impose the discipline to which respondent agreed.

{2} This matter began with a complaint from a chiropractor that respondent failed to pay the bill for treatment provided to his client, despite having issued a letter stating payment would be made from the settlement. The pertinent language in the letter respondent sent the chiropractor states:

[Client] has requested that my office tender to your office a letter stating that payment of any bill for services she may incur will be made from settlement or ultimate judgment which [client] may receive as a result of the ... automobile accident. It is understood that [client] will be ultimately responsible for the payment of any bill for services incurred with your office.

Respondent denied to the chiropractor and later to disciplinary counsel that the letter in question obligated him to withhold funds to pay the chiropractor. Respondent contended that the letter only stated that his client would pay the bill from the settlement funds, although he acknowledged his letter was sent in response to a request for a letter of protection.¹ Respondent also argued that there was no assignment of proceeds, as was the case in Romero v. Earl, 111 N.M. 789, 810 P.2d 808 (1991), and that without an unambiguous assignment, no individual responsibility for payment to the healthcare provider could be imposed upon him.

{3} In Romero, this Court considered the effect of an agreement signed by the lawyer and the client granting to a doctor a lien on the proceeds of a personal injury suit. We held that once a lawyer has executed such an assignment, he or she is "obligated to distribute the proceeds of [the] claim in accordance with [it]," and that this obligation may be enforceable against the lawyer. Id. at 790, 810 P.2d at 809. A subsequent disciplinary case, In re Rawson, 113 N.M. 758, 833 P.2d 235 (1992), demonstrated that formal assignment language is not essential to the creation of the obligation. Id. at 761, 833 P.2d at 238. In Rawson, the attorney sent letters to three doctors stating they would be paid from the proceeds of any recovery the client received. Although Rawson's letter did not contain formal assignment language, it did contain a promise to pay the doctors from the proceeds of the suit. Relying on Romero, we stated that "[t]he attorney in such a situation is obligated to distribute the proceeds of the settlement in accordance with the promise to the creditors...."² Id.

{4} The language of the letter respondent sent to the chiropractor in this case clearly communicated that payment would be made "from settlement or ultimate judgment." The fact that the letter ended by saying that the client would be ultimately responsible for payment did not change the message. A client remains ultimately liable for paying the medical vendor, for example, when no recovery is received. The essence of the letter, and the language that obligated respondent to pay the vendor from the settlement proceeds was the statement that the client had asked him to communicate that payment would be made from settlement proceeds. It should have been obvious to respondent that this is the message he was sending, especially since he acknowledged that the letter was sent in response to a request for a letter of protection. Indeed, if respondent sent this letter intending that the vendor rely upon it to continue to render care and to postpone collection efforts, while intending not to be obligated to dispense settlement proceeds to the vendor, a more serious question of misrepresentation and fraud could arise. As we noted in Rawson, in response to the contention that the doctors were not paid because the client changed her mind, an attorney's obligation to abide by a client's directives "does not extend to assisting the client in defrauding courts and creditors." Id. at 762, 833 P.2d at 239. The consent agreement requires that any letter respondent sends to a medical vendor to indicate that payment will be made from the proceeds of settlement or suit, if not intended as a letter of protection, state in capital letters that it is not a letter of protection. If respondent decides to send such a letter, he should be reminded that, notwithstanding the capitalized disclaimer, he has a continuing obligation not to engage in dishonest or fraudulent conduct or statements. We agree with and adopt the language of the disciplinary board's formal reprimand in In re Ellis, S.Ct. No. 19,226, 29 State Bar Bulletin 29, (September 27, 1990) that "[w]hen dealing with an attorney, another person (whether an attorney or a lay person) has the right to expect that the attorney will be honest and straightforward."

{5} Because respondent failed to disburse his client's settlement funds in accordance with the letter quoted above, disciplinary counsel appropriately investigated the handling of the settlement funds in respondent's trust account. A request for trust account documentation for the period in question revealed that respondent had not maintained all required documents, nor properly recorded all transactions. In turn, an audit of respondent's trust account was conducted and revealed systemic problems with his trust account maintenance and record keeping. Of 164 transactions reviewed by the auditor, 78 were not only unidentified, but also were unidentifiable by respondent. He failed to maintain copies of deposit slips, a check register, or a complete copy of all checks written, nor did he keep copies of bank statements or perform the reconciliations required by Rule 17-204(A)(7).³

{6} Additionally, on a number of occasions, respondent's trust account balance fell below the amount indicated on his ledgers that should be holding for clients. In the case of the client whose personal injury claim was involved in this complaint, respondent presented at the eleventh hour a statement signed by the client stating she agreed that respondent could use her funds. This document, however, failed to discharge respondent's trust account obligations. Although respondent was not charged with violating Rule 16-108, it is unlikely that the document signed by respondent's client adequately reflects compliance with that rule.

{7} Rule 16-108(A) governs business transactions with clients. It requires that the terms of the transaction be fair and reasonable to the client, that the terms be disclosed to the client in writing, that the client be given a reasonable opportunity to seek the advice of independent counsel, and that the client consent in writing. Borrowing money from clients is not condoned by this Court. If an attorney determines to brave these conflict-infested waters, he or she is well advised to do so on an arm's length basis. This would include execution of customary loan documents, and the payment of a reasonable amount of interest. Further, once the money has been loaned to the attorney, it should be removed from trust. The attorney should not, as respondent did, disburse the funds from trust for the attorney's personal or business purposes....