STATE EX REL. OKLAHOMA BAR ASS'N v. Brown, SCBD No. 4333.

• Citation: 1998 OK 123,990 P.2d 840
• Decision Date: 08 December 1998
• Docket Number: SCBD No. 4333.
• Parties: STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Danny Ray BROWN, Respondent.
• Court: Supreme Court of Oklahoma

990 P.2d 840

1998 OK 123

STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Danny Ray BROWN, Respondent.

SCBD No. 4333.

Supreme Court of Oklahoma.

December 8, 1998.

Rehearing Denied February 16, 1999.

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

Danny Ray Brown, Lawton, Oklahoma, Pro Se.

ALMA WILSON, Justice.

¶ 1 The Complainant, Oklahoma Bar Association (Bar Association), charged the respondent, Danny Ray Brown, with one count of misconduct. The Bar Association alleges that the respondent falsely endorsed another's signature on a settlement check, and failed to satisfy the lien on the check asserted by the U.S. Army for $439.00, representing charges for medical treatment received by the respondent's client, all in violation of the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S.1991, ch.1, app. 3-A, Rules 1.15,¹ and 8.4(c),² and the Rules Governing Disciplinary Proceedings (RGDP), 5 O.S.Supp.1998, ch. 1, app. 1-A, Rules 1.3³ and 1.4.⁴

¶ 2 The day of the hearing, the respondent stipulated that he had entered the unauthorized signature on the settlement check. The Bar Association announced that it could not establish a violation of Rule 1.4, RGDP. The respondent was the only witness called. After the hearing the trial panel found that the respondent had violated Rules 1.15(b) and 8.4(c), ORPC, and Rule 1.3, RGDP. The trial panel found that disbarment would have been justified, but for the candor of the respondent, and accordingly the trial panel recommended that the respondent be suspended for two years and one day.

I. FACTS

¶ 3 The parties filed stipulations to the following facts on May 7, 1998. The respondent has been licensed to practice law in Oklahoma since March 20, 1973. On September 3, 1995, the respondent's client, L.C., was involved in an automobile accident in Lawton, Oklahoma. She received medical treatment for her injuries at Reynolds Army Hospital on Ft. Sill, Oklahoma. In March 1996, the respondent was employed to represent her in her claim for personal injuries. The U.S. Army asserted a lien for $439.00, representing the charges for the treatment she received at the hospital. The respondent negotiated a settlement with the party responsible for the accident, and received $3,000.00 in July 1996. The U.S. Army assigns a Recovery Judge Advocate to recover costs of medical treatment. At the time the respondent received the settlement check, the Recovery Judge Advocate was Captain Thomas Serrano, who had replaced Captain Jeff Sexton in that position.

¶ 4 On July 29, 1996, the settlement check dated June 12, 1996, was deposited in the respondent's trust account with the requisite signatures affixed, including "Dept. of Army By Capt. Jeff Sexton." That endorsement had not been authorized by the United States Government. On August 19, 1996, the respondent disbursed the net proceeds of the settlement to his client, a check in the amount of $1,811.00. As a result of his own negligence, the respondent closed his file without delivering a check for $439.00 to the U.S. Army for the payment of its medical lien.

¶ 5 In March 1997, the respondent was contacted by the Fort Sill Claims office regarding the medical lien, and after reviewing his records and determining that the bill had not been paid, the respondent paid the U.S. Government from his trust account by check in the amount of $439.00. On April 15, 1997, the respondent received the Bar Association Complaint, which is the basis for this proceeding.

¶ 6 On April 28, 1997, the U.S. Government contacted the respondent regarding this matter, and on June 10, 1997, he voluntarily met with government officials including Captain Serrano at the Ft. Sill Claims office. At the conclusion of the meeting, all parties agreed to settle the matter, and the respondent subsequently delivered to the U.S. Government a cashier's check in the amount of $5,000.00, which was accepted as a final settlement for any and all claims the U.S. Army had in the matter.

¶ 7 The Bar Association and respondent subsequently stipulated to the following additional facts, filed May 27, 1998. The respondent entered the unauthorized signature of Captain Sexton on the settlement check, and deposited it in his trust account. Between the date of deposit and April 1997, the balance of his trust account was never less than $439.00, which was the amount of the U.S. Government's lien.

¶ 8 The respondent testified at the hearing that after he originally received the settlement check, his client was having a change of heart about accepting it. The respondent said there were discussions back and forth, that at some point her husband got involved and she changed her mind about settling. The respondent held onto the check for a period of time, and his client did come back in to accept the settlement, but she was now in a hurry to take the money because her husband had been stationed in Germany and she was to meet him there. The respondent testified that he tried to get in contact with someone at Ft. Sill to endorse the check, but the responsible officer was gone and would not be back in time before his client left for Germany. At that time the respondent forged the signature of Captain Sexton, and deposited the check in his trust account. He testified that through negligence, he failed to send the Army the $439.00 claim, which remained in his trust account for about nine months until the Army called him. The respondent testified that he had no evil intent to deprive the government of their money, but was facilitating the process of getting his client her funds before she left for Germany. He admitted that he went about this in the wrong way. He testified that he had handled many of these cases before, reimbursing the Army thousands of dollars over the years, and that he did not typically forge government endorsements before reimbursing the U.S. Army. At the end of the hearing, the trial panel commended the Bar Association and the respondent for the manner in which they had handled the proceeding and assisted the panel in acquiring the information it needed to make its decision.

II. PROMPT DELIVERY OF FUNDS TO THIRD PERSON

¶ 9 Rule 1.15(b), ORPC, requires prompt delivery of funds or other property to a client or third person, who is entitled to receive the funds. In State ex rel. Oklahoma Bar Association v. Wilkins, 1995 OK 59, ¶¶ 22-23, 898 P.2d 147, 151, the respondent in that case failed to notify a client that he had received payments from her ex-husband. On one occasion he did not pay her for five weeks and on another occasion, he took three months. Additionally, he did not promptly pay another client's medical bills as he agreed to do. The Court found these failures to be a violation of Rule 1.15(b). The Court also found that Wilkins had failed to keep his clients reasonably informed about the status of their cases, had commingled funds, and engaged in dishonest conduct. The Court suspended him for six months. In State ex rel. Oklahoma Bar Association v. Lavelle, 1995 OK 96, 904 P.2d 78, the respondent in that case agreed to pay the client's doctor, but delayed for about one year, and misrepresented his actions to the doctor. The Court also found that Lavelle forged another client's name on a settlement check, and misrepresented the facts to both the client and the Bar Association. The Court disbarred the respondent.

¶ 10 The record in the case before us reveals that the respondent retained, from July 1996, to April 4, 1997, $439.00 owed to the U.S. Army, with no legal excuse for that retention of funds. We find that the respondent violated Rule 1.15(b), ORPC, by this action.

III. ENGAGING IN DISHONEST CONDUCT

¶ 11 For an attorney to engage in conduct involving dishonesty, deceit, fraud or misrepresentation is professional misconduct. Rule 8.4(c), ORPC. The respondent in the case before us admitted in the stipulations that he had entered the unauthorized signature of Captain Jeff Sexton onto the settlement check. In State ex rel. Oklahoma Bar Association v. Wilcox, 1997 OK 87, 942 P.2d 205, the respondent in that case had issued six checks to a clinic for medical bills which were all returned for insufficient funds. Additionally, a settlement check deposited in that respondent's account had a payee's name forged on the endorsement. As mitigation, the Court found that Wilcox had practiced law for thirteen years with no previous discipline for professional misconduct, and had reimbursed the clinic, which was willing to continue to accept the respondent's clients. The Court found that the respondent had violated Rule 8.4, as well as Rule 1.15 of the ORPC, and Rule 1.4 of the RGDP. For these acts the Court suspended the respondent for one year.

¶ 12 In State ex rel. Oklahoma Bar Association v. McMillian, 1989 OK 16, ¶ 1, 770 P.2d 892, 893, this Court construed the language of the Code of Professional Responsibility, which provided: "DR 1-102. Misconduct... (A) A lawyer shall not: ... (4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation." A comparison with Rule 8.4(c) reveals that the rule has substantially the same wording. In McMillian, the Court held that the rule was generally geared toward fraudulent conduct, and as such bad or evil intent or its equivalent must be shown by clear and convincing evidence to be a violation of the rule. McMillian, 1989 OK 16, ¶ 23, 770 P.2d at 899.

¶ 13 Although the respondent in the case before us may not have intended to defraud the U.S. Army of its money, he did intentionally endorse Captain Sexton's name on the settlement check, and by his own admission, the respondent knew this to be wrong. This action was a violation of Rule 8.4(c), ORPC. The respondent agreed during his testimony that forgery and unauthorized endorsements are acts contrary to the prescribed standards of conduct. Accordingly, the unauthorized endorsement...