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

• Decision Date: 01 February 1994
• Docket Number: No. 3929,No. 1112,3929,1112
• Citation: 867 P.2d 1279,1994 OK 13
• Parties: STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Joe R. FARRANT, Respondent. SCBDOBAD
• Court: Oklahoma Supreme Court

Page 1279

867 P.2d 1279

1994 OK 13

STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Joe R. FARRANT, Respondent.

SCBD No. 3929.

OBAD No. 1112.

Supreme Court of Oklahoma.

Feb. 1, 1994.

Bar Discipline Proceeding.

The complainant, Oklahoma Bar Association (Bar Association), alleged two counts of misconduct by the respondent, Joe R. Farrant (Farrant/attorney). The trial panel found that: 1) the Bar Association failed to prove conversion of funds entrusted to the attorney for a specific purpose; and 2) Farrant made misrepresentations to the Bar Association in response to the grievance. We find that the Bar Association established by clear and convincing evidence that: a) Farrant converted client funds entrusted to him for a specific purpose; and b) that he knowingly misrepresented the facts surrounding the complaint to the Bar Association. This conduct warrants a one-year suspension followed by a probationary period of one year accompanied by weekly attendance at AA meetings and monthly sessions with a professional counselor. Costs of $1,138.09 are also imposed.

RESPONDENT SUSPENDED; PROBATION UPON REINSTATEMENT; COSTS IMPOSED.

John E. Douglas, Asst. Gen. Counsel, Oklahoma Bar Ass'n, Oklahoma City, for complainant.

Joe R. Farrant, pro se.

KAUGER, Justice:

The complainant, Oklahoma Bar Association (Bar Association), alleges two counts of misconduct by the respondent Joe R. Farrant (Farrant/attorney). The first count relates to conversion of client funds entrusted to Farrant for a specific purpose. ¹ The second count involves misrepresentations made to the Bar Association in relation to the facts

                and circumstances surrounding the grievance. 2  We find that the Bar Association established by clear and convincing evidence 3 that:  a) Farrant converted client funds entrusted to him for a specific purpose;  and b) that he knowingly misrepresented the facts surrounding the complaint to the Bar Association.  This conduct warrants a one-year suspension followed by a probationary period of one year accompanied by weekly attendance at AA meetings and monthly sessions with a professional counselor.  Costs of $1,138.09 are also imposed. 4
                

FACTS

A. Agreed Facts

The parties stipulated to a portion of the trial panel's factual findings. They agree that in 1992, Jamee Clapper (Clapper/client) hired Farrant to represent her daughter and son-in-law in a child custody dispute. Farrant hired a private investigator, Bob Reed (Reed/investigator), of B & B Investigation to observe the son-in-law's former wife. Reed charged $5,777.93 for his work. On June 22, 1992, Farrant billed the client for $7,837.50 in attorney fees and $6,162.23 in expenses. The expense amount included the total for the investigation fees and charges for a deposition transcript and court costs. On the same date, the client gave Farrant a check for the exact amount of the expenses--$6,162.23. On June 26, 1992, Farrant wrote the client acknowledging receipt of the check for expenses and requesting that she make some payment towards his fee. ⁵ Farrant deposited the $6,162.23 in his operating account. In December of 1992, Farrant told the investigator that he had appropriated his client's check for himself.

B. Additional Facts Found by Trial Panel

In addition to the stipulated facts, the trial panel found that the client believed she had an agreement with Farrant for the payment of attorney fees. She asserted that Farrant was to be paid at the conclusion of an unrelated civil action. The check for expenses was executed shortly after Clapper received either a partial settlement or a loan from one of the defendants in the civil suit. The civil suit, handled by another attorney, has concluded. Clapper received a net settlement of approximately $490,000.00; however, Farrant's fees have not been paid. Although the check delivered to Farrant had a notation on it indicating that it was intended for "expenses," there was no specific agreement between the attorney and the client when the check was delivered concerning its application. Farrant denied the existence of the notation in response to the Bar Association's inquiry. ⁶

C. Facts Supported by the Record

The instant cause was instituted as a Rule 6 proceeding. ⁷ Farrant did not interpose a dependency on alcohol as a defense ⁸ to his actions concerning the application of the On September 24, 1993, the trial panel issued its report with recommended findings of fact, conclusions of law and proposed discipline. It found that: 1) the Bar Association failed to prove conversion of funds entrusted to the attorney for a specific purpose; and 2) Farrant made misrepresentations to the Bar Association in response to the grievance. The trial panel recommended a six-month suspension followed by a probationary period of one year in which time Farrant must attend weekly AA meetings and seek professional counseling on a monthly basis.

check to his fee bill rather than to payment of expenses. However, he did state that he was emotionally upset over domestic problems when he decided to apply the check towards his bill and that he has had problems with the excessive use of alcohol. He indicated that he attends AA meetings on an irregular basis and that he has sought professional counseling. Farrant's testimony leaves no doubt that he understood that Clapper's check was delivered and intended to defray the costs of the litigation. ⁹

I.

THE BAR ASSOCIATION ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE THAT: A) THE ATTORNEY CONVERTED CLIENT FUNDS ENTRUSTED TO HIM FOR A SPECIFIC PURPOSE; AND B) HE KNOWINGLY MISREPRESENTED THE FACTS SURROUNDING THE COMPLAINT TO THE BAR ASSOCIATION. THIS CONDUCT WARRANTS A ONE-YEAR SUSPENSION FOLLOWED BY A PROBATIONARY PERIOD OF ONE YEAR ACCOMPANIED BY WEEKLY ATTENDANCE AT AA MEETINGS AND MONTHLY SESSIONS WITH A PROFESSIONAL COUNSELOR. COSTS OF $1,138.09 ARE ALSO IMPOSED.

A. Conversion of client funds.

In his brief filed before this Court on November 3, 1993, Farrant does not address the trial panel's finding that the evidence was insufficient to establish conversion of client funds entrusted to him for the specific purpose of defraying expenses. However, the Bar Association insists that it has proven its allegations of conversion by clear and convincing evidence. We agree.

Before this Court may impose discipline upon an attorney, the charges must be established by clear and convincing evidence. ¹⁰ In disciplinary matters, this tribunal exercises exclusive original jurisdiction. ¹¹ Our review is de novo in considering the Farrant is charged with improperly managing client funds entrusted to him for a specific purpose in violation of Rule 1.15(a) and (b), Rules of Professional Conduct, ¹⁴ and Rule 1.4(b), Rules Governing Disciplinary Proceedings. ¹⁵ We have defined three levels of applicable culpability when evaluating the mishandling of funds: 1) commingling; 2) simple conversion; and 3) misappropriation, i.e., theft by conversion or otherwise. ¹⁶ Commingling takes place when client monies are combined with the attorney's personal funds. Rule 1.4(b) reveals that simple conversion occurs when a lawyer applies a client's money to a purpose other than that for which it was entrusted to the attorney. The third, and most serious infraction, occurs when funds are misappropriated--there is a theft by conversion or otherwise. This happens when an attorney purposefully deprives a client of money by way of deceit and fraud. Lawyers found guilty of intentionally inflicting grave economic harm through mishandling of client funds are guilty of this offense. A finding that the attorney intentionally committed such an act requires imposition of the harshest discipline--disbarment. ¹⁷

                record presented as well as the trial panel's disciplinary recommendation. 12  The ultimate decision making authority rests with this Court.  Neither the findings of fact of the trial panel nor its view of the weight of the evidence or credibility of the witnesses bind us. 13
                

Farrant was charged with the second level of culpability--simple conversion. The trial panel found that the Bar Association failed to prove its charge of conversion by clear and convincing evidence. ¹⁸ This finding was premised on the fact that no express agreement existed between the client and the attorney that the funds would be used solely to pay litigation expenses. In effect, the trial panel found that the client did not tell Farrant specifically to only pay expenses with her check. A de novo review of the record supports a finding that the proof of conversion was sufficient. ¹⁹

Farrant authored a letter on June 26, 1992, addressed to his client, in which he acknowledged the receipt of the check in payment of expenses and requested an additional payment towards his fees. ²⁰ In three different passages from the transcript of the trial proceedings, Farrant admitted that he either: 1) knew that the money was for expenses; 2) recognized that the client intended that the check be applied to expenses; or 3) although he did not recall the notation for expenses appearing on the face of the check, that he understood it was intended to defray expenses because of the dollar amount of the check. ²¹ Farrant's letter and his own sworn testimony provide clear and convincing evidence

                that he intentionally appropriated his client's money to defray attorney expenses when he understood that the money had been entrusted to him for a specific purpose--payment of expenses.  It is undisputed that the expense check was deposited in the attorney's operating account and that the funds were appropriated to defray his fee.  Farrant commingled client funds with his own in violation of Rule 1.15, Rules of Professional Conduct. 22  He violated Rule 1.4, Rules Governing Disciplinary Proceedings, 23 when he appropriated client monies entrusted to him for a specific purpose
                

B. Misrepresentation of facts surrounding the complaint.

Farrant argues that the evidence...