In re Pstrak, 25767.
| Decision Date | 12 January 2004 |
| Docket Number | No. 25767.,25767. |
| Citation | 591 S.E.2d 623,357 S.C. 1 |
| Parties | In the Matter of Stephen M. PSTRAK, Respondent. |
| Court | South Carolina Supreme Court |
Henry B. Richardson, Jr., of Columbia, for Office of Disciplinary Counsel.
Stephen M. Pstrak, of Lexington, Pro Se.
Respondent and Disciplinary Counsel have entered into an agreement pursuant to Rule 21, RLDE, Rule 413, SCACR, in which respondent admits misconduct and agrees to accept an admonition or a public reprimand. We accept the agreement and issue a public reprimand.1 The facts, as set forth in the agreement, are as follows.
Respondent attended a real estate closing in place of attorney J. Wendell Arsi, who had a conflict and could not attend.2 The closing involved the purchase of a mobile home from a mobile home dealer and real property from a developer. The transaction was being financed by a lender. Respondent was only asked to attend the closing and be responsible for the review and execution of the closing documents. Respondent was "under the good faith impression" that Arsi had examined, or would be examining, or at least reviewing, the abstract of title and had drafted, or at least reviewed, the closing documents.
Respondent attended the closing at the offices of Carolina Title Services, Inc. (CTS). The HUD-1 Settlement Statement reflected that attorney William J. McMillian, III, was the settlement agent. Respondent gathered from that information that the proceeds from the transaction would be disbursed by McMillian in accordance with the Settlement Statement. It was unclear to respondent whether Arsi or McMillian was to be responsible for updating the title and seeing to the recordation of documents in connection with this transaction, but respondent incorrectly assumed that one of those attorneys would do so.
Respondent is now advised, and does not dispute, that the loan documents were prepared by CTS, that Amy Cook, the owner and manager of CTS, advised Arsi that the funds from this transaction would be disbursed by McMillian, and that Arsi was under the impression that he was only expected to attend the closing and that other aspects of the transaction required by applicable rules to be handled by an attorney would be handled by McMillian.3 Respondent did not confirm any of the foregoing with Arsi or McMillian and respondent is advised, and does not dispute, that Arsi did not confirm any of the foregoing with McMillian. It is now known and acknowledged that McMillian had no involvement with the transaction whatsoever, that McMillian had previously opened an IOLTA account with BB & T on which he allowed Cook to be a signatory, that the checkbooks for that IOLTA account were kept by Cook at CTS, that the cancelled checks and bank statements concerning real estate transactions were returned to and maintained by Cook, that McMillian was not reconciling or even reviewing the bank statements and cancelled checks pursuant to Rule 417, SCACR, and that McMillian's only involvement with transactions such as the instant transaction was to allow CTS to use his IOLTA account and show McMillian as settlement agent.
Subsequently, there was a substantial shortage discovered in McMillian's IOLTA account. It is reported that BB & T placed a "sweep" on the account at the direction of Cook and would "sweep" the funds from the account into Cook's account on a daily basis. After the shortage of funds in McMillian's IOLTA account was discovered, McMillian was placed on interim suspension. In the Matter of McMillian, 350 S.C. 216, 565 S.E.2d 765 (2002).
The closing appeared to be a relatively simple matter. Respondent had no file in connection with the transaction when he arrived for the closing. Respondent questioned Cook about getting a file to Arsi. Respondent later checked with Arsi's office, which confirmed that it had received a file in connection with the closing, which, in turn, "triggered" the firm to compensate respondent for standing in for Arsi at the closing. At the time, respondent was under the impression that his involvement in the transaction ended upon the review and execution of the closing documents and the file being sent to Arsi.
As a result of delays and the subsequent suspension of McMillian, the transaction was not completed. The mobile home dealer received payment for the mobile home, but the developer did not receive payment for the real estate. Respondent subsequently received a telephone call from an attorney representing the developer advising that the transaction had not been completed. Respondent left a message on the attorney's answering machine relating his limited involvement in the transaction and advising her to contact Arsi.
When the purchaser became aware that the transaction had not been completed in a timely manner, he filed a complaint with the Commission on Lawyer Conduct. He maintained he had expended funds to clear the real property and to have the driveway installed, but was not able to register his mobile home or get connections for water or electricity or a permit for a septic tank because the transaction had not been completed. The purchaser was under the impression that respondent was standing in for McMillian at the closing and was unaware of Arsi having any involvement in the matter.
Respondent now recognizes that, pursuant to State v. Buyers Service Co., Inc., 292 S.C. 426, 357 S.E.2d 15 (1987) and Doe v. Condon, 351 S.C. 158, 568 S.E.2d 356 (2002), Cook was engaged in the unauthorized practice of law and that respondent, albeit unintentionally, assisted Cook in doing so. Respondent now acknowledges that when he served as the closing attorney in connection with the transaction it was his responsibility to see that an attorney had been involved in all other aspects of the transaction requiring attorney participation under the aforementioned cases, that it was his responsibility to either see to the proper disbursement of the funds or see that an attorney approved by the client was going to handle or oversee the recordation of documents and proper disbursement of the funds.
In mitigation, Disciplinary Counsel states respondent was under the good-faith impression that either Arsi or McMillian were to see to the other aspects of the closing that required attorney participation, that respondent was unaware that Cook was engaging in the unauthorized practice of law, that respondent was unaware Cook had unsupervised access to and use of McMillian's IOLTA account and that respondent in no way contributed to the subsequent defalcations in the transaction. Furthermore, Disciplinary Counsel has been advised by the attorney subsequently retained by the developer that the matters set forth herein were resolved to the satisfaction of the purchaser within a few months after the closing.
Respondent was contacted by a paralegal in Arsi's office to attend a second closing in Arsi's place. The paralegal asked only that respondent attend...
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