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

• Decision Date: 27 May 2003
• Docket Number: No. 4615.,4615.
• Parties: STATE of Oklahoma, ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Michael C. TAYLOR, Respondent.
• Court: Oklahoma Supreme Court

71 P.3d 18

2003 OK 56

STATE of Oklahoma, ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Michael C. TAYLOR, Respondent.

No. 4615.

Supreme Court of Oklahoma.

May 27, 2003.

Loraine Dillinder Farabow, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, Oklahoma for Complainant.

Respondent, Michael C. Taylor, appearing pro se.

LAVENDER, J.

¶ 1 Complainant, the Oklahoma Bar Association (OBA) brought disciplinary proceedings against respondent, Michael C. Taylor under Rule 6, Rules Governing Disciplinary Proceedings (RGDP), 5 O.S.2001, Ch. 1, App. 1-A, as amended. A Professional Responsibility Tribunal trial panel (PRT) found respondent violated the RGDP and the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S.2001, Ch. 1, App. 3-A, as amended, and recommends a public reprimand.¹ We hold respondent engaged in misconduct, a public reprimand is warranted and he should pay the costs of these proceedings.²

PART I. STANDARD OF REVIEW.

¶ 2 The review standard in attorney disciplinary cases is as follows:

In attorney disciplinary proceedings [our] determinations are made de novo. The ultimate responsibility for deciding whether misconduct has occurred and what discipline is warranted if misconduct is found rests with us in the exercise of our exclusive original jurisdiction in bar disciplinary matters. [N]either the findings of fact of a [PRT] nor its view of the evidence or credibility of witnesses are binding on us and [its] recommendations ... are merely advisory. (citations omitted)

State ex rel. Oklahoma Bar Ass'n v. Todd, 1992 OK 81, 833 P.2d 260, 262. Even when the parties' stipulate to misconduct, the stipulations do not bind us for our duty is to review the evidence de novo to decide if misconduct allegations are established by clear and convincing evidence [State ex. rel. Oklahoma Bar Ass'n v. McGee, 2002 OK 32, ¶ 20, 48 P.3d 787, 792

], i.e, a degree of proof producing in the mind of the trier of fact a firm belief or conviction of the truth of the allegations sought to be established. State ex. rel. Oklahoma Bar Ass'n v. Green, 1997 OK 39, 936 P.2d 947, 949. The review is a full-scale exploration of all relevant facts [State ex. rel. Oklahoma Bar Ass'n v. Doris, 1999 OK 94, ¶ 3, 991 P.2d 1015, 1017] and requires a complete record be made before the PRT, one sufficient for an examination of all pertinent issues, a thorough inquiry into all essential facts, and the crafting of appropriate discipline. Id. The record is adequate for such de novo review.

PART II. OVERVIEW, FACTS AND BACKGROUND.

¶ 3 A hearing, at which respondent testified and 117 exhibits were admitted, was held before the PRT. The record includes the hearing transcript, the complaint against respondent, his answer and the PRT's written report, with the parties' joint stipulations attached.³ The stipulations are detailed, containing fifty-six (56) numbered sentences or paragraphs that span twenty (20) pages. They are broken down into three counts, include sections on agreed aggravating and mitigating circumstances, a discipline recommendation and other matters the parties deem pertinent. No need exists to set out the entirety of the stipulations. It will suffice to discuss them as required to execute our duty to decide if respondent violated pertinent Rules and, if so, the discipline warranted. A joint brief-in-chief and waiver of further briefs was filed by the parties with this Court.⁴

¶ 4 Respondent stipulates he violated Rule 1.15(b)-(c), ORPC, that provide:

(b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.

(c) When in the course of representation a lawyer is in possession of property in which both the lawyer and another person claim interests, the property shall be kept separate by the lawyer until there is an accounting and severance of their interests. If a dispute arises concerning their respective interests, the portion in dispute shall be kept separate by the lawyer until the dispute is resolved.⁵

He also stipulated to violating Rule 8.4(c), ORPC, that provides: "[i]t is professional misconduct for a lawyer to ... engage in conduct involving dishonesty, fraud, deceit or misrepresentation[.] Although the parties stipulated to its violation, we do not find clear and convincing evidence respondent violated Rule 8.4(c). We do find he violated Rule 1.15(b)-(c) by the way he handled personal injury settlement funds he received while representing a client, Jamie Herdt.⁶

¶ 5 The case springs from respondent's representation of Ms. Herdt who, in 1997, was injured while a passenger in a vehicle hit by a drunk driver in Texas. Her injuries required treatment, she incurred medical bills and was initially represented by a Texas attorney, Hank Anderson. The record reveals medical bills totaling about $45,600 and involving, at least, thirteen (13) medical providers located in Texas. Also, as we read the record, Ms. Herdt's medical bills actually exceeded $50,000, but the additional bills are not detailed in the record. Further, although the joint stipulations sometimes refer to medical provider liens in the plural, as we read the parties' stipulations, coupled with respondent's testimony and the exhibits admitted at the PRT hearing, respondent was aware of only one medical provider having a lien in its favor at the time he disbursed certain settlement funds in late November-early December 1999. The lienholder was United Regional Health Care System (URHCS)(also known as Wichita General Hospital), URHCS having a statutory hospital lien under Texas law.⁷ The parties stipulated that Texas law governs as to whether a medical provider or lienholder may make a claim to settlement proceeds paid by underinsured/uninsured (UM) benefits—the stipulation, in effect, based on the fact the accident occurred and pertinent medical services were received in Texas. Although the parties have not so formally stipulated, in our view, it would also appear to be Texas law that would govern whether a medical provider or lienholder had a legitimate claim to any liability insurance settlement proceeds received by respondent.

¶ 6 In 1999 Ms. Herdt moved to Oklahoma, terminated Anderson and hired respondent. This case is fairly unusual because the initial grievance to the OBA against respondent was by Ms. Herdt. In effect, she asserted a lack of communication on respondent's part, his alleged failure to completely account to her for all settlement proceeds received by him and frustration about being contacted by collection agencies regarding outstanding medical bills. During the disciplinary process the matter underwent metamorphosis into charges of misconduct about respondent's treatment of third-party medical providers of Ms. Herdt respecting settlement funds he received. The case is also unusual because although the substantive law of Texas appears applicable to the underlying question of competing disputants' entitlement to settlement proceeds received by respondent, the ethical obligations of respondent are measured by adherence to the ORPC and the RGDP, i.e., Oklahoma's professional standards governing a lawyer's conduct.

¶ 7 In September 1999 Allstate Insurance Company (insurer for the vehicle owner in which Herdt was a passenger) issued a settlement check for $50,000 for UM benefits payable to Herdt and Anderson. The check was mailed to Herdt, given by her to respondent, and with Herdt's and Anderson's permission respondent endorsed and deposited it to his trust account in late September 1999. Respondent also negotiated a settlement for $20,000 with the tortfeasor's insurer, Geico Insurance Company. He requested two checks be issued by Geico, one for $12,417.81, the amount of URHCS's lien. He asked that check be made payable to him, Herdt and URHCS and that a second check for the remainder ($7,582.19) list him, Herdt and Anderson as payees.⁸ The two checks issued and respondent received them about November 23, 1999.

¶ 8 The $12,417.81 check was held by respondent, i.e., not deposited to his trust account or any account controlled by him. Eventually, about August 24, 2000, respondent gave the check to Herdt's new attorney, i.e., nine months after he received it, Herdt having terminated respondent in July 2000. Respondent was unable to deposit the check to his trust account as URHCS never agreed to endorse it because no agreement was reached regarding their medical bill and lien. The $7,582.19 check was deposited to his trust account on or about November 23, 1999.

¶ 9 Prior to disbursal of any of the above sums, Herdt, Anderson and respondent agreed the two attorneys would equally share a 40% fee on the gross settlement proceeds collected. There is also clear and convincing evidence that although respondent did not know what Texas law was as to whether medical providers, lienholder or not, could rightfully claim an interest in the liability or UM proceeds received or, if so, the extent of any such interest, nor did he know, under Texas law, the appropriate disposition of the liability proceeds check in the amount of URHCS's lien or the extent URHCS could rightfully claim an interest therein, on November 24, 1999 he disbursed monies (by check) from his trust account in regard to the Herdt matter as follows:

1. $10,000 to Anderson—the check indicating it was for half the attorney fees owed to Anderson from the $50,000 UM settlement proceeds received, i.e., 20% of $50,000 = $10,000;

2. $1,435.10 to Anderson to reimburse him for costs he had incurred in the Herdt case;

3. $10,000 to respo

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