Vincent, Matter of

• Decision Date: 30 March 1978
• Docket Number: No. 476S122,476S122
• Citation: 374 N.E.2d 40,268 Ind. 101
• Parties: In the Matter of Charles W. VINCENT.
• Court: Indiana Supreme Court

Page 40

374 N.E.2d 40

268 Ind. 101

In the Matter of Charles W. VINCENT.

No. 476S122.

Supreme Court of Indiana.

March 30, 1978.

[268 Ind. 102] Thomas J. Campbell, Indianapolis, for appellant.

Sheldon A. Breskow and David L. Copenhaver, Indianapolis, for appellee.

DISCIPLINARY ACTION

PER CURIAM.

This is a disciplinary proceeding before this Court on an orally amended Verified Complaint filed by the Disciplinary Commission of the Indiana Supreme Court pursuant to Admission and Discipline Rule 23, Section 12. A Hearing Officer was appointed, the cause was heard, and the Hearing Officer has filed his findings of fact and conclusions of law. Respondent now petitions this Court for review. Both parties have filed briefs in this cause.

In the complaint filed in this cause the Respondent is charged with violating Disciplinary Rules 1-102(A)(1) and (5), 6-101(A)(3) and 7-101(A)(2) of the Code of Professional Responsibility and the Oath of Attorneys for members of the Indiana State Bar. During the hearing of this matter, prior to receiving evidence or testimony, the Disciplinary Commission orally moved that the complaint be amended to provide that the Respondent, while engaged in the conduct alleged in the complaint, represented parties having adverse interests, drafted a title insurance policy which was intended to and did, in fact, mislead the insured as to the status of real estate, failed to retain the identity of client's funds entrusted to the Respondent and expended these funds in payment of a personal debt. The Respondent specifically waived any procedural or substantive right afforded him by reason of the orally alleged misconduct and at this stage of the proceeding does not challenge this amendment.

After examining all matters which have been submitted in this cause, this Court now finds that on April 28, 1972, Roberta and James Crowe purchased a house in Terre Haute, Indiana. The purchase was financed by way of a note and mortgage in the favor of Federal Housing Authority (FHA) with Pfister Real Estate Company (Pfister) as the servicing agent for FHA. Shortly thereafter, a second loan (for the construction of a swimming pool on the property) was obtained from The Associates Service Corporation. This second loan was also arranged through Pfister and payments were to be made to Pfister. The Associates took a second mortgage to secure the loan and insured this second mortgage with First Federal Insurance Corporation (First) (currently doing business as United Guaranty Insurance Corporation).

Due to marital and financial difficulties, in the early part of 1973, the Crowes listed their house for sale with Pfister. The house remained unsold until early 1974. At this time, James Crowe, now divorced from Roberta, sought advice from Pfister how best to dispose of the property. It was suggested that a deed be executed to FHA in lieu of foreclosure. Pfister further advised Crowe to stop making payments and that they would contact him when the transaction had been arranged.

Several months later Crowe contacted Pfister to discover the progress of the transaction. He was referred by Pfister to their attorney, the Respondent. Respondent advised Crowe that such matters took time and that he would contact him in the near future. In subsequent conversations the Respondent advised Crowe that the deed and transfer were being delayed by the second mortgage, which had to be released before FHA would accept the deed in lieu of foreclosure.

On April 18, 1974, Pfister authorized the Respondent to commence a foreclosure action against Crowe. Additionally, after Crowe stopped making payments, Pfister, on behalf of Associates, filed a claim with First who honored the claim and thereby was assigned the second mortgage and note.

In late 1974 or early 1975, the Respondent began discussions with First in an attempt to negotiate a settlement and advised Crowe that he could represent him in such discussions. Crowe assented to this representation. Eventually, First agreed to accept One Thousand Dollars ($1,000.00) as consideration for release of the second mortgage.

On February 27, 1975, Crowe telephoned the Respondent and at that time was first advised of the agreement. The Respondent instructed Crowe to bring One Thousand, One-Hundred and Fifty Dollars ($1,150.00) in cash to the Respondent's office on March 1, 1975; the additional One Hundred Fifty Dollars ($150.00) was for attorney's fees. Crowe did as instructed and was further advised that the money would be forwarded to First.

The One Thousand Dollars ($1,000.00) was deposited in the Respondent's escrow account. On March 3, 1975, Respondent informed First that the money would be forwarded along with a mortgage release form. In the following months, First contacted the Respondent on numerous occasions, but still the money was not sent. Sometime during the Spring or Summer, the Respondent withdrew at least Six Hundred Dollars ($600.00) from his escrow account and applied this sum toward a personal debt. The escrow account never again reached One Thousand Dollars ($1,000.00).

After failing to get Respondent to forward the One Thousand Dollars ($1,000.00), First referred this matter to their attorney who in turn drafted a letter to Respondent on September 2, 1975. Receiving no answer, First's attorney drafted a second letter on September 29, 1975, indicating that a disciplinary grievance would be filed if the One Thousand Dollars ($1,000.00) was not forthcoming.

On October 17, 1975, the Respondent purchased, with funds from a personal account, a cashier's check for One Thousand Dollars ($1,000.00), payable to United Guaranty Insurance Company (United). This was formerly "First". Respondent believed that the check was mailed to, received by, and eventually negotiated by United.

On December 9, 1975, Respondent received notice of a grievance filed by United. Upon investigation he found that the October cashier's check had never been negotiated and accordingly the Respondent stopped payment. He immediately had a new cashier's check drawn, payable to the same parties, but retained possession of this second cashier's check.

Respondent then drafted a warranty deed conveying the Terre Haute property from the Crowes to the Department of Housing and Urban Development ^MA. This deed was signed by the grantors on January 3, 1976. Respondent informed the grantors that all matters concerning the property were concluded. No mention was made as to the One Thousand Dollar ($1,000.00) check at that time in possession of the Respondent nor the grievance filed by United.

On January 16, 1976, Respondent telephoned United and asked whether or not there still was an agreement. United indicated that they would accept the check and release the mortgage on receipt. On the same date Respondent, as an agent for St. Paul Title Insurance Company, prepared a title insurance policy covering the Terre Haute property insuring this property against "any defect in or lien or encumbrance on the title." This policy made no mention of the second mortgage although Respondent knew of the existence of such encumbrance. This property was conveyed on June 8, 1976, by FNMA by way of a special warranty deed. Again no mention was made of the existing second mortgage.

This Court further finds that the Respondent was admitted to the practice of law on September 16, 1959. He engaged in the full time practice of law for nearly sixteen years. In May 1975, the Respondent was hospitalized for three days by reason of a heart arrhythmia. At that time the Respondent was placed on medication. Respondent gradually reduced the dosage of this medication. Additionally, at the same time Respondent was having alcohol related problems. In February 1976, the Respondent left the private practice of law and has since been employed as a Deputy Attorney General for the State of Indiana.

In his petition for review the Respondent admits that his conduct violated Disciplinary Rules 6-101(A)(3) and 9-102(A). This Court now concludes that by failing to transmit One Thousand Dollars ($1,000.00) to First Federal and by failing to obtain the release of the second mortgage on the above noted property, the Respondent did neglect a legal matter entrusted to him and accordingly violated Disciplinary Rule 6-101(A)(3). We further conclude that by withdrawing Six Hundred Dollars ($600.00) from his escrow account the Respondent did fail to preserve the identity of funds of a client thereby violating Disciplinary Rule 9-102(A).

In his petition for review Respondent asserts that the evidence is not sufficient to establish an intentional failure to carry out his contract of employment with Crowe. Respondent argues that he neglected this matter due to poor health, excessive use of alcohol, and the significant, side effects of prescribed medication and thereby concludes that a conscious intent not to carry out the contract of employment was not present.

Disciplinary Rule 7-101(A)(2) provides that a lawyer shall not intentionally fail to carry out a contract of employment. The concept of intent, however, is not unique within the parameters of a disciplinary proceeding; this type of consideration has been repeatedly made in almost every type of judicial proceeding. It is well established that although intent is a subjective, mental function, the existence of intent may be established by resort to reasonable inferences based on an examination of the surrounding circumstances. Watson v. State (1970), 255 Ind. 348, 264 N.E.2d 616; Tuggle v. State (1970), 253 Ind. 279, 252 N.E.2d 796; Wojcik v. State (1965), ...