State ex rel. Oklahoma Bar Ass'n v. Stow

• Decision Date: 21 October 1998
• Docket Number: No. 4291,4291
• Citation: 975 P.2d 869,1998 OK 105
• Parties: STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. John Ray STOW, Jr., Respondent.
• Court: Oklahoma Supreme Court

Page 869

975 P.2d 869

1998 OK 105

STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. John Ray STOW, Jr., Respondent.

No. 4291.

Supreme Court of Oklahoma.

Oct. 21, 1998.

Rehearing Denied Dec. 15, 1999.

BAR DISCIPLINARY PROCEEDING

¶0 The complainant, Oklahoma Bar Association, alleged three counts of misconduct against the respondent, John Ray Stow, Jr. The trial panel found that the respondent had refused to account for and deliver over funds of a client upon demand in violation of the Rules Governing Disciplinary Proceedings, 5 O.S.Supp.1997, ch. 1, app. 1-A, Rule 1.4(b), and the Oklahoma Rules of Professional Conduct, 5 O.S.1991, ch. 1, app. 3-A, Rule 1.15(b). The trial panel additionally found that the Office of General Counsel of the Bar Association made several requests to the respondent for an accounting, that responses were not received for months, and

were unsatisfactory when received. The trial panel concluded that the respondent's failure to respond violated Rule 5.2 of the Rules Governing Disciplinary Proceedings and Rule 8.1(b) of the Oklahoma Rules of Professional Conduct. The panel recommended that the respondent be disbarred, or in the alternative that he receive a minimum discipline of suspension for two years and one day, and that he be further ordered to pay the costs of the action.

RESPONDENT SUSPENDED FOR THREE YEARS.

COSTS IMPOSED.

Allen J. Welch, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, Oklahoma, For Complainant,

John Ray Stow, Jr., Norman, Oklahoma, Pro Se.

ALMA WILSON, Justice.

¶1 The complainant, Oklahoma Bar Association (Bar Association), charged the respondent, John Ray Stow, Jr., with three counts of misconduct. In Count I, the Bar Association alleges that the respondent accepted an advance on attorney fees and refused to return or account for an unearned balance to his client, all in violation of RULE 1.4(B) OF THE RULES GOVERNING DISCIPLINARY PROCEEDINGS¹ (RGDP), 5 O.S.Supp.1997, ch. 1, app. 1-A, and Rule 1.15(b) ² of the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S.1991, ch. 1, app. 3-A. In Count II, the Bar Association alleges that the respondent failed to comply with several requests from the Office of General Counsel of the Bar Association for an accounting of the client's funds until nearly one year had passed, all in violation of Rule 8.1(b), ³ ORPC. In Count III, the Bar Association alleges that the respondent failed to respond to the request of the Office of General Counsel of the Bar Association to answer the grievance filed against him by his client. The Bar Association asserts that the respondent's failure to answer the grievance is a violation of Rule 5.2, ⁴ RGDP.

I. FACTS

¶2 The trial panel heard the evidence over a two day period, January 12, 1998, and ¶3 The Bar Association presented evidence to support the following set of facts. On November 12, 1991, Anita Booth and her husband Mike Booth, retained the respondent to file a bankruptcy for them. The Booths never executed a contract with the respondent for this representation, but Mrs. Booth testified that the respondent agreed to represent the Booths for a flat fee of $3,000.00 to $4,000.00. During the course of the respondent's representation of the Booths, they also asked him to file a lawsuit against Fajita Junction, and to represent them in other matters resulting from their failed business as well. Mrs. Booth testified that the attorney fee arrangement was always very vague, but the respondent continued to take money from the Booths on the representation that he would bill against the amount received from the Booths.

February 10, 1998, and found that the allegations of the Bar Association were proven by clear and convincing evidence. The panel concluded that the respondent had purposely deprived his client of money by way of fraud and deceit, and that his conduct called for disbarment. Accordingly, the panel recommended that the respondent be disbarred, but in addition, suggested an alternative as a minimum discipline, that the respondent be suspended from the practice of law for two years and one day for professional misconduct, and that he be further ordered to pay the costs of this action.

¶4 From November 14, 1991, through September 10, 1993, the Booths paid the respondent $30,141.00, and the respondent testified that all that money was deposited into his "escrow" account at Will Rogers Bank. He further testified that there was no distinction between his escrow account and a trust account. On September 22, 1993, Mike Booth died unexpectedly.

¶5 The first accounting received by either Mr. or Mrs. Booth occurred subsequent to Mr. Booth's death. That statement, dated February 11, 1994, consisted of eight pages listing dates from November 12, 1991, to December 29, 1993, and professional services rendered, but did not reveal the time spent in rendering the services. The attorney fees charged were $12,466.75, and the costs were listed at $574.83, for a total of $13,041.58. The respondent listed the payments made into the "Retainer Account" as $19,740.00, for a balance of $6,698.42 retained by the respondent for future fees and costs. During his testimony, the respondent agreed that he had failed to include payments made to the retainer account by Mrs. Booth in September 1993, of $10,401.00, which he included in his Transaction Listing dated July 10, 1997. So instead of a balance of $6,698.42, the actual balance on February 11, 1994, would have been $17,099.42. Mrs. Booth testified that she asked several times for an accounting, and that the respondent separate the bills for the Fajita Junction lawsuit from the bankruptcy. She testified that she made many appointments with him to ask what was taking so long, and to account for the money paid into the retainer account. She received no satisfactory answers, and each appointment resulted in another charge to her.

¶6 An attorney friend of Mrs. Booth, Mike Moore, assisted her in preparing a letter to the respondent, dated March 16, 1996, in which she demanded a full accounting, the balance of the retained funds, and location of those funds. The respondent on April 6, 1996, mailed Mrs. Booth what the respondent described as a work sheet, itemizing payments to and withdrawals from the Retainer Account. It showed the total payments to the account to be $30,141.00, and the total withdrawals to be $5,949.00, but no information concerning fees, costs, or location of the funds.

¶7 Both Mr. Moore and Mrs. Booth met with the respondent about April 8, 1996. The following month, Moore visited alone with the respondent regarding the accounting. The respondent had previously refunded $5,000.00 to Mrs. Booth. Moore testified that he had determined the respondent still retained unearned funds of $8,000.00. When Moore related this to the respondent, he replied that he did owe Mrs. Booth some ¶8 Three different accountings, dated October 14, 1996, June 26, 1997, and July 10, 1997, provided by the respondent to Mrs. Booth were entered as exhibits by the Bar Association. The documents are lengthy. The respondent testified that the first two were drafts. He testified that because of a computer crash he had to reconstruct the statements from his files, which is why he had taken so long to provide a final accounting. The total billable on the three statements was $18,983.90, $18,631.21, and $21,165.71, respectively. From the $30,141.00 paid to the respondent by the Booths, $949.00 was paid to a creditor of the Booths, and $5,000.00 was returned to Mrs. Booth on September 15, 1994. Without any documentation to prove it, the respondent claimed that he had also returned $2,800.00 to either Mr. or Mrs. Booth about May of 1993. This still left a balance of $226.29, which the respondent sent to Mrs. Booth after he had completed the July 10, 1997, statement of account.

money, but if she decided to fire the respondent and asked for her money back, he did not have it available and would have to find a way to make it up to her. Moore testified that the respondent had acknowledged he had received funds from Mrs. Booth, had expended all of the funds, and had retained none in any of his accounts. The respondent had not represented to Moore that he had earned all of the funds. Although the respondent promised a more complete accounting, he did not provide one, and so Moore sent a grievance to the Bar Association, dated June 24, 1996. Mrs. Booth also sent a letter to the Bar Association, dated June 21, 1996.

¶9 Concerning time records, the respondent testified that he had lost Mrs. Booth's records when his computer crashed, and he revealed that he did not keep a contemporaneous hard copy of time records. He testified that he reconstructed some of Mrs. Booth's time records four years after the service was performed. When determining how much to withdraw from his trust account for services, the respondent testified that he transferred money out of the trust account as he needed funds. When he withdrew the money, he did not know specifically which client funds were being withdrawn, and he did not send any notice to his clients. He testified that he "just knew roughly" and "had a feel for work being done" and that he was "probably about even with her" in the services he provided Mrs. Booth and the amount he withdrew for those services. He admitted that he was embarrassed and ashamed with regards to his accounting to Mrs. Booth.

II. MISHANDLING FUNDS

¶10 The Bar Association alleges in Count I of the Complaint that the respondent violated Rule 1.15(b), ORPC, and Rule 1.4(b), RGDP. The violation is that the respondent failed to promptly render a full accounting to Mrs. Booth, and to promptly deliver the remaining unearned funds upon her demand. Rule 1.4, RGDP, provides that a refusal to account for and deliver over client's funds shall be deemed a conversion.

¶11 One exhibit, marked PRT Panel Ex # 2, consists of copies of bank...