In re Thomas

• Decision Date: 12 May 2015
• Docket Number: No. 82S00–1305–DI–386.,82S00–1305–DI–386.
• Citation: 30 N.E.3d 704
• Parties: In the Matter of Andrew D. THOMAS, Respondent.
• Court: Indiana Supreme Court

30 N.E.3d 704

In the Matter of Andrew D. THOMAS, Respondent.

No. 82S00–1305–DI–386.

Supreme Court of Indiana.

May 12, 2015.

Michael E. Brown, Kightlinger & Gray, LLP, Indianapolis, IN, Attorney for Respondent.

G. Michael Witte, Executive Secretary, John P. Higgins, Staff Attorney, Indianapolis, IN, Attorneys for the Indiana Supreme Court Disciplinary Commission.

Attorney Discipline Action

PER CURIAM.

We find that Respondent, Andrew Thomas, engaged in attorney misconduct by, among other things, neglect of a client's case, pervasive mismanagement of his attorney trust account, and conversion of client funds. For this misconduct, we conclude that Respondent should be suspended for 240 days without automatic reinstatement.

This matter is before the Court on the report of the hearing officer appointed by this Court to hear evidence on the Indiana Supreme Court Disciplinary Commission's “Verified Complaint for Disciplinary Action,” and on the post-hearing briefing by the parties. Respondent's 1976 admission to this state's bar subjects him to this Court's disciplinary jurisdiction. See Ind. Const . art. 7, § 4

.

Procedural Background and Facts

The Commission filed an eight-count “Verified Complaint for Disciplinary Action” against Respondent on May 29, 2013. Multiple rule violations were charged within many of these counts. The Commission withdrew certain charges at the outset of the hearing, including Count 7 in its entirety. The remaining charges alleged that Respondent violated the following rules governing professional conduct:

Ind. Professional Conduct Rules:

1.3: Failure to act with reasonable diligence and promptness.

1.15(a): Commingling client and attorney funds.

3.3(a)(1): Knowingly making a false statement of fact to a tribunal.

5.3(a) and (b): Failure to make reasonable efforts to assure that a nonlawyer employee's conduct is compatible with the professional obligations of the lawyer.

5.3(c): Failing to take reasonable remedial action with respect to the misconduct of nonlawyer assistants under the lawyer's supervision.

8.4(a): Attempting to violate the Rules of Professional Conduct.

8.4(b): Committing a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer.

8.4(c): Engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.

Admission and Discipline Rules:

23(29)(a)(3): Failure to create or retain sufficiently detailed client ledgers.

23(29)(a)(4): Commingling client funds with other funds of the attorney or firm.

23(29)(a)(5): Making withdrawals from a trust account without written withdrawal authorization stating the amount and purpose of the withdrawal and the payee.

Ind. Professional Conduct Guidelines Regarding Use of Non–Lawyer Assistants:

9.1: A lawyer is responsible for all of the professional actions of a non-lawyer assistant performing services at the lawyer's direction and should take reasonable measures to insure that the non-lawyer assistant's conduct is consistent with the lawyer's obligations under the Rules of Professional Conduct.

Rules Governing Attorney Trust Account Overdraft Reporting

Overdraft Rule 7(B)(1): Allowing a non-lawyer assistant to sign trust account checks and to deliver to him opened and unsealed trust account statements.

Prior to the hearing, the parties also entered into written “Agreed Stipulations” that they agreed would be treated as “conclusively established.” The hearing officer filed his report on October 17, 2014, which we summarize and adopt in part as described below.

Mismanagement of Respondent's trust account (Counts 1 and 2) . For several years, Respondent employed various experienced persons to manage his law office and attorney trust account. However, at some point between 2002 and 2004, Respondent's wife (“Marcia”) took over management of Respondent's trust account. Marcia had no prior experience with trust accounts or fiduciary accounting. Beginning in 2004 or 2005, Respondent abdicated control of his trust account to Marcia and did not adequately supervise her. Beginning around 2006, Respondent became aware that his trust account was in poor shape and needed to be “untangled.” Despite his knowledge that Marcia's accounting was incorrect, during the next several years Respondent did not take appropriate measures to supervise Marcia or reconcile his trust account issues. And throughout 2009 and 2010, with Respondent's permission Marcia signed Respondent's name to the drawer's line on trust account checks. During this same time, Marcia also opened the trust account bank statements received in the mail prior to giving them to Respondent.

Respondent stipulated, and the hearing officer found, a number of violations with respect to Counts 1 and 2:

• his inadequate oversight of Marcia's conduct and his failure to take appropriate remedial steps to address Marcia's misconduct once it became known violated Professional Conduct Rules 5.3(a), 5.3(b), and 5.3(c)

and Professional Conduct Guideline 9.1 ;

• allowing Marcia to sign trust account checks and open trust account statements prior to delivering them to Respondent violated Rule 7(B)(1) of the Indiana Supreme Court Disciplinary Commission Rules Governing Attorney Trust Account Overdraft Reporting;

• his failure to maintain trust account ledgers and making disbursements without written withdrawal authorizations violated Admission and Discipline Rules 23(29)(a)(3) and 23(29)(a)(5)

.

Respondent was also charged in Count 2 with violating Professional Conduct Rules 8.4(b) and 8.4(c)

based on alleged criminal conversion for being “out of trust” and using funds of one client to pay the obligations of other clients. But Respondent did not stipulate to these violations and the hearing officer concluded the Commission had failed to sustain its burden of proof on these charges.

Respondent's bankruptcy disclosures (Count 3) . Respondent filed for bankruptcy protection in 2009. Respondent did not list his attorney trust account in the schedules or the Statement of Financial Affairs (“SOFA”) he filed as part of his bankruptcy. In response to the Commission's investigation in this case, Respondent filed an answer on January 20, 2012, indicating that he would “amend my [SOFA] to list my escrow account as monies held for others.” But he did not amend his schedules and SOFA until January 2013—by which time his bankruptcy petition was in the process of being dismissed due to Respondent's failure to make payments pursuant to the bankruptcy plan. Because of this dismissal, no further amendment was required.

Respondent was charged with violating Professional Conduct Rule 3.3(a)(1)

's prohibition on lawyers knowingly making a false statement of fact or law to a tribunal or failing to correct a false statement of material fact or law previously made to the tribunal by the lawyer. However, the hearing officer concluded that no violation had been proven based on his finding that the “inaccuracy of the amendment was not a material inaccuracy to the bankruptcy case and would not have affected its outcome even if the [2013] amendment had been reflected in any of the earlier Schedules.” (HO Report at 11).

Payments of Respondent's personal expenses from the trust account (Counts 4 and 6) . Respondent was charged in both of these counts with violation of Professional Conduct Rules 8.4(b) and 8.4(c)

, and additionally in Count 4 with a violation of Rule 8.4(a), based on alleged criminal conversion for using client funds from his attorney trust account to pay his own bankruptcy filing fee and the cost of attending two continuing legal education programs. As to both of these counts, Respondent stipulated that by paying these personal expenses using client funds from the trust account, he committed the crime of conversion, thus violating Rules 8.4(a) and 8.4(b) in Count 4 and Rule 8.4(b) in Count 6. Despite these express written stipulations, the hearing officer found in Respondent's favor with respect to all of the charged rule violations in Counts 4 and 6.

Credit reports (Count 5) . Respondent was charged with violating Professional Conduct Rule 1.15(a)

and Admission and Discipline Rule 23(29)(a)(4) (for commingling), and Professional Conduct Rules 8.4(b) and 8.4(c) (for conversion and deception), based on his depositing of client funds into his operating account for the purchase of credit reports. As part of his bankruptcy practice, Respondent regularly had to obtain credit reports for his clients, and he did so through a company called CreditInfoNet (“CIN”). A change in CIN's procedures in 2008 eliminated the need for forms executed by the client; instead, the process was handled online by Respondent's staff. Based on this change in procedure, Respondent stopped escrowing payments advanced by the clients for these reports and instead began placing these payments into his general operating account, and he would pay CIN from his operating account once a client's credit report was ordered.

In sum, the Commission's position in these proceedings is that despite the change in CIN's procedures, these advance payments were client funds and should have been held by Respondent in his trust account until the credit report was ordered. Respondent maintains that he had fully earned the advance expenses for credit reports as soon as the clients gave him the money, and that any money not used for credit reports would be returned. The hearing officer found that the Commission had failed to prove a violation of Admission and Discipline Rule 23(29)(a)(4)

for commingling and also had failed to prove violations of Rules 8.4(b) and 8.4(c) for deception. The hearing officer did not make any findings or conclusions specifically addressing Rule 1.15(a).¹

Representation of “Client” (Count 8) . Respondent agreed to represent “Client” in defense of a claim brought against Client by a bank. However, Respondent failed to file an answer to the complaint, resulting in a default judgment being entered against Client in the amount of $60,875...