The Florida Bar v. Clement
| Citation | 662 So.2d 690 |
| Decision Date | 02 November 1995 |
| Docket Number | No. 82097,82097 |
| Parties | , 20 Fla. L. Weekly S553, 13 A.D.D. 179 THE FLORIDA BAR, Complainant, v. Peter Charles CLEMENT, Respondent. |
| Court | United States State Supreme Court of Florida |
John F. Harkness, Jr., Executive Director and John T. Berry, Staff Counsel, Tallahassee, and Bonnie L. Mahon, Assistant Staff Counsel, Tampa, for Complainant.
Raymond O. Gross and Louis Kwall of Gross & Kwall, Clearwater, for Respondent.
Attorney Peter Charles Clement has petitioned this Court to review a referee's recommendation that he receive a thirty-six-month suspension. We have jurisdiction pursuant to article V, section 15 of the Florida Constitution.
The referee found Clement guilty of violating numerous Rules Regulating the Florida Bar. 1 Clement says he should not be sanctioned because he was suffering from manic-depression (or bipolar disorder) when the misconduct occurred and could not distinguish right from wrong. The Bar maintains that Clement knowingly and intentionally violated the rules, misappropriated client funds, and misrepresented information to a client. The Bar urges us to disbar Clement.
We approve the referee's findings of fact. We disapprove the referee's recommended suspension and disbar Clement because this sanction serves the purposes of attorney discipline.
Clement and Murray Koren met in 1980, and the two developed an attorney-client and a personal relationship which the referee described as a "father/son type relationship." Clement worked as Koren's attorney until 1991, placing mortgages and preparing real estate contracts, closing documents, trust agreements, and wills. Clement did not charge Koren for his legal representation. Instead, his fees were usually paid by people who sought a loan or mortgage from Koren. Koren also loaned money to Clement and his father.
Clement filed for personal bankruptcy in November 1990. He sought to discharge all outstanding loans from Koren for which he was personally responsible or had guaranteed for his father. Despite the bankruptcy filing, Koren continued to be Clement's friend and to use Clement as his attorney. Before filing for bankruptcy, Clement told Koren that he felt a moral obligation to satisfy the debts.
In December 1990 Clement met Edward Morelli, who was promoting Julio Iglesias and Willie Nelson concerts at Dunedin Stadium. Clement decided to invest in the venture and borrowed $20,000 to finance his interest.
At the same time, Clement was representing the owner of a shopping center in a foreclosure action. Clement asked Koren if he wanted to buy the shopping center. Koren sent Clement a $5000 check, made out to Clement's trust account, as an earnest money deposit if the owner accepted a contract to buy the shopping center.
Clement deposited the check into his trust account on January 7, 1991, then issued a trust account check to himself for $5000. Clement indicated in his trust account records that the funds were disbursed on behalf of Koren. Clement later admitted using Koren's funds for his own use, but said Koren authorized him to do so. He claimed that the offer to buy the shopping center had been rejected and that he wanted to use the $5000 as a loan to finance the promotion of the Dunedin concerts.
Koren, on the other hand, testified that he did not agree to loan Clement the $5000 on or before January 7, 1991. He also testified that Clement did not tell him before January 7 that the owner rejected a contract to buy the shopping center. Koren's testimony was corroborated by a letter from Koren to Clement dated January 28, 1991, which said in relevant part, Clement admitted receiving the letter.
The referee found no corroborating evidence to support Clement's claim that he presented the owner with an offer to buy the shopping center on January 7, 1991, or that Koren agreed to loan Clement the earnest money deposit on or before that date. The referee found that Clement knowingly used Koren's $5000 with the intent to appropriate the money to his own use.
Sometime between January 28 and February 5, 1991, Koren demanded the return of his $5000. Clement asked Koren to let him use the money to finance the concerts. Koren initially refused, but agreed after Clement promised to repay the money with proceeds from ticket sales. Clement later told Koren that Morelli had stolen about $10,000 in cash from ticket proceeds, so he could not repay the money.
On February 6, 1991, Clement asked Koren for a $25,000 loan to keep the concerts from going under. Koren refused. Clement called later that day and told Koren that Anthony Montello would assume responsibility for one concert and would give Koren a promissory note secured by a mortgage on three pieces of property in return for a $25,000 loan. Clement also said Montello would make the promissory note for $30,000 so Koren would have security for the $5000 loan to Clement. Koren initially refused, but later agreed to meet with Montello. Koren instructed Clement, as his attorney, to investigate the three Montello properties to determine their equity, tax status, and mortgage status.
When Koren met with Montello in Clement's office on February 7, 1991, Clement presented Koren with a $30,000 note and mortgage on the three pieces of property. The note and mortgage bore the signatures of Anthony and Loretta Montello, but the signatures were not witnessed or notarized.
The next day Koren gave Montello a $25,000 cashier's check--but only after Clement assured Koren that he knew of no reason Koren should not make the loan. Clement did not put Koren's $25,000 into his trust account because he needed to wire $25,000 to an entertainment agency to avoid cancellation of the concert. Koren instructed Clement to have the note and mortgage recorded, and Clement agreed to do so.
Clement said he was not acting as Koren's attorney for this loan, but Koren testified otherwise. The referee found clear and convincing evidence that Clement was acting as Koren's attorney, including a February 9, 1991, letter from Koren with specific instructions on legal matters regarding the Montello transaction.
The referee also found that Clement had a conflict of interest in representing Koren in the transaction because Clement's own financial interest limited his professional judgment. Clement needed Koren to loan $25,000 to Montello so the concert would not be canceled and he could recoup from concert profits the $20,000 he borrowed to finance his investment in the concert. Clement did not tell Koren about his financial interest and did not tell him of suspicions that people involved in the concert venture had connections with organized crime. Thus, Koren could not make an informed decision about the loan.
Further, Clement never had the note and mortgage witnessed or notarized and never recorded these documents. Clement gave two different accounts of why this happened. In a deposition given in the lawsuit that Koren filed to recover on the note, Clement stated that Montello asked for the note and mortgage back when Montello realized he would be personally guaranteeing it. Clement testified that he complied with the request. In the Bar proceedings, Clement testified during a grievance committee hearing that someone removed the mortgage and note from his office without his consent.
The referee found that Clement lied under oath either during his deposition or at the grievance committee hearing. In addition, the note and mortgage were never fully executed and recorded to protect Koren's interest. Thus, the referee found, Clement failed to represent Koren competently.
Clement did not respond to Koren's phone calls and letters between February and April 1991 about the status of the Montello note and mortgage. Sometime before April 25, 1991, however, he told Koren that he had recorded the note and mortgage. The referee found that Clement made a knowing and intentional misrepresentation. The referee based this finding on Clement's testimony that he lied to Koren, that he led Koren to believe everything was fine because the $25,000 payment had been made, and that Koren would be paid.
Koren learned in late April 1991 that certain documents were lost or missing. When Koren pressed Clement, Clement said the note and mortgage had not been recorded and they had been lost or stolen.
The concert was canceled because of the Gulf War. Koren lost his lawsuit against Montello because he could not prove that Montello had executed a note and mortgage for $30,000.
The referee rejected testimony from Clement's psychiatrist, Kevin Butler, about Clement's ability to distinguish right from wrong because Butler changed his testimony on four occasions.
Clement represented Phillippe Tisseaux in the sale of Tisseaux's house. The contract purchase price of $105,000 included a $5000 earnest money deposit that the buyer paid to Tisseaux in Clement's presence. At the closing on September 27, 1991, the buyer gave Clement $100,000, which included a foreign check for $7000.
Clement was supposed to use $72,248.45 to pay off the mortgage. Instead, Clement issued eight checks to himself totaling $10,000 in October and November 1991. He did not pay off the mortgage. Only one check--for $600--was for fees to which Clement was entitled.
Tisseaux learned that Clement had not paid off the mortgage when the mortgage company notified him in late November or early December 1991 that his mortgage payment was two months past due. Clement told Tisseaux he would make the mortgage payments when the $7000 foreign check cleared. He did not tell Tisseaux he had used $10,000 of the funds for his own purposes.
Clement sent a trust account check to the mortgage company for the two past-due payments, but did not pay off the mortgage when the foreign check...
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