Iowa Supreme Court Attorney Disciplinary Bd. v. Ricklefs

• Citation: 844 N.W.2d 689
• Decision Date: 28 March 2014
• Docket Number: No. 13–1965.,13–1965.
• Parties: IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant, v. Ronald L. RICKLEFS, Respondent.
• Court: United States State Supreme Court of Iowa

844 N.W.2d 689

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant,

v.Ronald L. RICKLEFS, Respondent.

No. 13–1965.

Supreme Court of Iowa.

March 28, 2014.

Charles L. Harrington and David J. Grace, Des Moines, for complainant.

Ronald L. Ricklefs, Cedar Rapids, pro se.

MANSFIELD, Justice.

This matter comes before us on the report of a division of the Grievance Commission of the Supreme Court of Iowa. SeeIowa Ct. R. 35.10. The Iowa Supreme Court Attorney Disciplinary Board (Board) charged that the respondent, attorney Ronald L. Ricklefs, violated several of our ethical rules by failing to maintain proper trust account records, commingling funds, and misrepresenting his trust account practices on his client security questionnaire. After hearing the matter, the commission found most of the alleged violations had occurred and recommended a thirty-day suspension. Upon our consideration of the commission's findings of fact, conclusions of law, and recommendation, we determine that all but one of the alleged violations took place. Giving particular consideration to Ricklefs's failure to rectify his trust account problems despite a prior audit four years before, we suspend his license to practice law with no possibility of reinstatement for three months.

I. Factual Background.

Ricklefs was admitted to practice law in Iowa in 1978. He is currently sixty-one years old and works in Cedar Rapids as a solo practitioner.

This case centers on a routine audit performed by the Client Security Commission on Ricklefs's client trust account and accounting records in 2012. The audit showed noncompliance with our rules. Even more worrisome, many of the same deficiencies had been uncovered in an audit four years earlier and had been pointed out to Ricklefs, but Ricklefs had not corrected them. We therefore begin our discussion with the prior 2008 audit.

A. The 2008 Audit. On September 13, 2007, Thomas W. McGarvey, an auditor with the Client Security Commission, contacted Ricklefs by phone. McGarvey attempted to set up an appointment with Ricklefs on that day or the following day to conduct an audit of his client trust account. Ricklefs said he was not available those days but proposed meeting late the following week. McGarvey said his schedule did not permit that, but indicated he would return to Cedar Rapids in October and contact Ricklefs at that time to set up a meeting.

Accordingly, McGarvey called Ricklefs on October 10 and proposed a meeting on either October 17 or 18. Ricklefs did not respond, so McGarvey placed a second call on October 15 and insisted the meeting needed to take place on October 19. Late in the afternoon of October 18, Ricklefs attempted to reschedule. He indicated his recent transactions had not been recorded and also claimed he was sick and likely to be out of the office the following day. Ricklefs asked McGarvey to allow him to submit the needed documents by mail no later than October 31.

McGarvey agreed to this plan but proceeded to interview Ricklefs regarding his accounting practices during the October 18 telephone call. Ricklefs told McGarvey he had reconciled his bank statements with his trust account “from time to time” and also said his client ledgers were reconciled to his trust account balance “in some fashion.”

McGarvey followed the phone call with a formal written request for documents on October 23. Ricklefs failed to provide the documents by the agreed-upon October 31 deadline. Therefore, McGarvey followed up with a second request for the documents on December 28. He also asked Ricklefs to explain why he had not provided the documents by the original deadline. Again, Ricklefs failed to respond.

On April 23, 2008, McGarvey contacted Ricklefs by telephone and requested to meet with him at Ricklefs's office on April 24. Ricklefs indicated he was not ready for McGarvey's visit and his records were not up to date. He also claimed he would be in depositions. After McGarvey informed Ricklefs he was not in compliance and insisted on meeting with him within ten days, Ricklefs consented to a May 1 meeting.

In the course of this audit, Ricklefs provided some client ledger cards. However, it became clear that Ricklefs had been writing numerous checks on his client trust account to cover personal expenses, including payment of his rent and utilities, payments to his mother, and payments for medical services. Ricklefs explained that these payments were made out of earned funds or personal funds he had deposited into the trust account. Ricklefs declined to answer when asked whether he had a personal checking account. In any event, McGarvey concluded that Ricklefs had been commingling client and personal funds. McGarvey shared this finding with Ricklefs and provided him with a copy of the trust account rules. McGarvey also turned in his audit report to the Client Security Commission, but apparently no action was taken on it at that time.

B. The 2012 Audit. In October 2011, Charles Brinkmeyer, another auditor with the Client Security Commission, stopped at Ricklefs's Cedar Rapids office to try to conduct another routine audit of Ricklefs's client trust account records. Brinkmeyer was unsuccessful in scheduling an audit that day and was provided with a myriad of excuses from Ricklefs over the following weeks. Following multiple trips and phone calls to Ricklefs's office, Brinkmeyer insisted on meeting with Ricklefs no later than February 9, 2012. Ricklefs finally agreed to that date, and the meeting was set.

Brinkmeyer performed an initial interview and completed part of the audit during the February 9 meeting. However, he was unable to conduct a meaningful review because of Ricklefs's failure “to prepare or maintain most of the required records.”

Ricklefs had not regularly retained trust account bank statements. Ricklefs acknowledged he did not have all the statements and had to contact the bank to get them. Ricklefs also admitted he did not maintain a check register. Instead, he produced a blank register and told Brinkmeyer he was willing to begin using it immediately. Brinkmeyer observed that Ricklefs had retained only carbon copies of checks and deposit slips in place of a proper checking account register.

For his client ledger, Ricklefs produced only a single page for a single client, showing a $300 deposit made by that client on September 26, 2011. No other activity was shown for that client, and the ledger still reflected the existence of the $300 balance as of the date of the audit. Brinkmeyer concluded from his discussions that Ricklefs had not prepared client ledger pages on a regular basis and the single page provided had been prepared only recently.

Brinkmeyer determined it would be impossible for Ricklefs to perform any required monthly reconciliations without the bank statements or a check register. Despite Ricklefs's claim that he did monthly reconciliations, the reconciliations attempted by Ricklefs were “not correct in either form or end result,” and Brinkmeyer noted it was “apparent he is not in the habit of preparing” the reconciliations. In the audit report, Brinkmeyer stated he believed “the entries on the six statements provided to me today reflect his first-ever efforts to complete such reconciliations.”

Even though the client ledger detail showed only a $300 balance and Ricklefs claimed in the initial interview that his trust account contained only client funds, his trust account had an actual balance of $2243.66. Ricklefs asserted the excess funds were money he had earned and not yet removed from the account. However, he could not provide documentation showing where the funds had originally come from.

As a result of the February 9, 2012 review, Brinkmeyer enumerated a long list of deficiencies:

(1) Failure to retain client trust account bank statements[,]

....

(2) Failure to maintain a separate client trust checking account (commingling of funds is apparent),

(3) Failure to maintain a check register,

(4) Failure to complete and maintain monthly 3–way reconciliations,

(5) Failure to maintain client ledger account detail,

(6) Failure to satisfactorily identify or explain the source of the “excess” amount in his trust account (bank statement vs. the client ledger balance as presented to the auditor)[.]

When Ricklefs signed Brinkmeyer's audit statement, Brinkmeyer also requested “preparation and maintenance of a check register, reconstruction of a client ledger for at least the most recent six months, and that the attorney provide those documents to [him] no later than March 31, 2012.” However, that deadline passed without Ricklefs providing the additional information.

Ricklefs finally contacted Brinkmeyer via email on April 17, apologized for the delay, and provided a five-page handwrittendocument entitled “RLR Trust Account Check Ledger.” The document appeared to be a reconstruction of the check register without the required six-month reconstruction of a client ledger. Brinkmeyer responded and called attention to Ricklefs's failure to provide all of the requested information. He commented on Ricklefs's continued practice of commingling client funds with personal funds and expressed the importance of maintaining separate accounts. Additionally, Brinkmeyer provided Ricklefs with a copy of Iowa Court Rules chapter 45, advised him to become familiar with the court rules, and told him to properly “reconstruct all client trust records as required by the Rules, including the check register, client ledger, and monthly reconciliations for at least the period of July 1, 2011 to the present.” Ricklefs was given a sixty-day deadline to respond to the request and to set a time to meet with Brinkmeyer again.

When the sixty-day deadline passed without a response from Ricklefs, Brinkmeyer emailed him on July 2, 2012, and asked for a response by the end of business on July 6. Brinkmeyer indicated that if a response was not received, he would forward his audit file for possible...