The Florida Bar v. Riggs, SC05-973.

• Decision Date: 05 October 2006
• Docket Number: No. SC05-973.,SC05-973.
• Citation: 944 So.2d 167
• Parties: THE FLORIDA BAR, Complainant, v. Jerry Arthur RIGGS, Sr., Respondent.
• Court: Florida Supreme Court

Page 167

944 So.2d 167

THE FLORIDA BAR, Complainant, v. Jerry Arthur RIGGS, Sr., Respondent.

No. SC05-973.

Supreme Court of Florida.

October 5, 2006.

Rehearing Denied November 30, 2006.

John F. Harkness, Jr., Executive Director, and Kenneth L. Marvin, Director of Lawyer Regulation, The Florida Bar, Tallahassee, FL; and Lorraine Christine Hoffmann and Lillian Archbold, Bar Counsel, The Florida Bar, Fort Lauderdale, FL, for Complainant.

Kevin P. Tynan of Richardson and Tynan, PLC, Tamarac, FL, for Respondent.

PER CURIAM.

We have for review a referee's report recommending that Jerry Arthur Riggs, Sr., be found guilty of professional misconduct and suspended from the practice of law for three years. We have jurisdiction. See art. V, § 15, Fla. Const. We approve the referee's findings and recommendations.

FACTS

The Florida Bar filed a complaint against Riggs, alleging that he engaged in misconduct regarding client funds, committed acts involving dishonesty and misrepresentation, and violated trust account requirements. After holding a hearing, the referee issued a report in which he made the following findings and recommendations.

Count I, Rafael and Maria Suncar. Riggs represented Rafael and Maria Suncar in a Miami-Dade County residential real estate transaction. The Suncars, through Argent Mortgage, financed the purchase of a foreclosed home from the seller's lender, U.S. Bank. In November 2003, upon receipt of the funds from Argent Mortgage, Riggs was obligated to satisfy the U.S. Bank mortgage, a second mortgage to American General Home Equity, and certain other obligations. However, after Argent Mortgage wired $171,174.58 to Riggs's trust account for the purposes of closing, he failed to pay the $118,000 U.S. Bank mortgage. Riggs did not and has not remitted these proceeds. The Suncars did not receive satisfaction of the U.S. Bank mortgage, although they did receive satisfaction on a second mortgage through American General Home Equity for $9000.

In February 2004, Riggs learned that a third-party bidder was attempting to purchase the Suncars' home in accordance with U.S. Bank's foreclosure. Riggs contacted the Attorneys' Title Insurance Fund (ATIF), of which he was a member, to inform it that he no longer possessed the Suncars' funds to satisfy the U.S. Bank mortgage. He claimed that a dishonest employee had victimized him. After numerous hearings, ATIF satisfied the U.S. Bank mortgage and suspended Riggs's ability to underwrite title insurance. Riggs has repaid ATIF approximately $10,000 of the $118,000 debt.

Based on these findings, the referee found that Riggs violated the following provisions of the Rules Regulating the Florida Bar: rules 4-1.3(a lawyer shall act with reasonable diligence and promptness when representing a client); 4-8.4(c) (a lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation); 5-1.1(b)(client money or other property that the lawyer has in his control, which is not subject to setoff for attorneys fees, shall be accounted for and delivered to the client; if not, it shall be deemed conversion); and 5-1.1(e)(upon receiving client funds, the lawyer shall promptly notify the client and render full accounting).

Count II, Other Transactions. After Riggs failed to respond to the Bar's request for his Bank of America (Bank) records for his "Client Account," the Bar subpoenaed the Bank. Riggs requested that the Bank deny the requested records. Thereafter, Riggs sought representation by an attorney, who tendered some of the trust account records to the Bar and lifted the restrictions on the Bank's subpoena. As a result, the Bar completed an audit reviewing Riggs's bank accounts, but primarily reconstructing his real estate trust account and IOTA trust account for the period of October 2002 through December 2003.

The Bar's audit revealed various incidents of account mishandling. Based solely on the Suncar matter, there was a $108,836 shortage in Riggs's real estate trust account as of December 2003. The real estate trust account only had a balance of $15,194, while Riggs still had a $124,030.71 liability to the Suncars. Also, Riggs failed to remit over $1300 in insurance concerning another matter, identified as the "Batista/Rutledge" closing, which he handled in December 2003. Furthermore, Riggs deposited several "fees" or "attorney fees" checks into the trust accounts during the audit period. Depositing earned fees into a trust account is a violation of the Rules Regulating Trust Accounts. Additionally, Riggs deposited checks concerning personal matters into his real estate trust account. Riggs paid personal expenses totaling $18,959 from his trust accounts, including payments for employee salaries, furniture, office equipment, automotive repairs, cabinets, and a gift to a relative. The audit also revealed Riggs transferred and commingled funds between multiple accounts for no apparent reason. For example, Riggs transferred a $4000 fee related to the "Murphy case" from the IOTA account to the real estate trust account without explanation. Riggs also deposited escrow funds from various other clients into his operating account and savings account and made numerous online transfers between accounts.

Because the account transfers were not fully identified by name or purpose, the Bar's auditor was sometimes unable to identify the case related to the transfers. As a result, the Bar requested by letter in August 2004 that Riggs identify the client names and matters relating to the transfers. Riggs did not provide a complete written response. Thus, Riggs's noncompliance with the Bar's request renders him in violation of rule 4-8.4(g)(a lawyer shall not fail to respond in writing to any official inquiry by bar counsel or disciplinary agency).

In addition, during December 2003 to March 2004, Riggs's trust account balances were negative, sometimes by over $9700. As a result, trust account checks were returned for insufficient funds. Riggs had overdraft protection on his real estate trust account, which was linked to his savings account. The Florida Bar Rules Regulating Trust Accounts prohibit overdraft protection. Rule 5-1.2(c)(4) states that a lawyer shall authorize and request any bank where the lawyer is a signatory on a trust account to notify the Bar's staff counsel of any trust check returned due to insufficient or uncollected funds. Riggs did not direct the Bank to follow this requirement. Also, Riggs did not notify the Bar of any trust check returned for insufficient or uncollected funds, as is required pursuant to the rules. Although Riggs was not in compliance with the rules applicable to lawyer trust accounts, he certified on his 2001-2002 and 2003-2004 Florida Bar Annual Membership Fees Statements that he read and was in compliance with such rules.

Based on these facts, the referee found Riggs violated rules 4-1.15 (a lawyer shall comply with the Florida Bar Rules Regulating Trust Accounts), 4-8.4(c)(a lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation), 5-1.1(a)(1)(no commingling of funds), 5-1.1(g)(2)(all nominal and client short-term funds shall be placed in an IOTA and each Florida lawyer must annually certify, in writing, that he is in compliance with or exempt from the rule provisions), and 5-1.2(b)(1) and (c)(noncompliance with minimum trust accounting records).

Riggs testified that the trust account shortages were due to a $13,902.87 overpayment to Dr. Rex Allen for a real estate closing and the misconduct of his former employee, Tammy Campbell. Riggs claimed Campbell stole the account funds. The referee did not find that Campbell was responsible for the missing funds. The facts found by the referee demonstrate that Riggs handled the refinancing of Campbell's home in December 2003, approximately one month after the Suncars' closing. Riggs asserted that Campbell was able to steal the funds due to the refinancing. To support this argument, he testified that he filed an incident report with the police alleging Campbell engaged in theft and forgery. However, Riggs did not file the report with police until August 2005, which was two months after the Bar filed the disciplinary complaint and over eighteen months after the Suncars' funds disappeared in 2003. After considering the evidence, the referee concluded that Riggs failed to adequately supervise Campbell and failed to properly maintain his trust account.

Sanction. With regard to recommending a disciplinary sanction, the referee found three mitigating and three aggravating factors. In aggravation, the referee found: (1) prior discipline; (2) dishonest or selfish motive; and (3) substantial experience in the practice of law. In mitigation, the referee found: (1) character or reputation; (2) imposition of other penalties or sanctions; and (3) remorse.

As to discipline, the referee recommended that Riggs (1) receive a three-year suspension; (2) undergo probation for three years from the date of reinstatement, during which he must hire a certified public accountant to...