Friday, February 20, 2009

Conversion Finding Upheld

The Illinois Review Board has recommended a two-year suspension with restitution of an attorney in connection with his representation of a driver and passenger in an accident case. The misconduct is not for conflict of interest between the clients; rather, he was found to have converted medical payments by taking a contingency fee contrary to his agreement with the clients. He had deposited the payments into an account with a negative balance and used some proceeds for personal expenses.

The board rejected the claim that the conduct did not amount to conversion:

According to Respondent, his contracts with Kinnie and Harper entitled him to one-third of all funds collected. According to his clients, Respondent agreed that his fees would come only from the amounts recovered from the person responsible for the accident. The Hearing Board determined that the testimony of Kinnie and Harper was the more credible, and its findings must be given great deference, as it was able to observe the witnesses’ demeanor and judge their credibility. Additionally, as the Hearing Board noted, the testimony of Respondent’s clients was supported by the contracts themselves, in which Respondent crossed out and initialed the provision stating that Kinnie and Harper agreed to pay him "a sum equal to 33 1/3% of the gross amount collected for medical payment."

The Hearing Board’s findings that Respondent engaged in conversion and failed to deliver funds to his clients to which they were entitled were not against the manifest weight of the evidence. The fact that his clients signed the settlement statement does not indicate in any way that they agreed to a modification of their contracts, as Respondent contends. Harper testified that at the time she endorsed the checks, she was not aware that it was for payment of medical expenses. Kinnie did not question the division of funds, as she trusted Respondent’s judgment and believed he would do it correctly. The betrayal of that trust by converting his client’s funds tended to defeat the administration of justice and bring the legal profession into disrepute, in violation of Supreme Court Rule 770. Additionally, we conclude that the Hearing Board’s determination that Respondent engaged in dishonest conduct by taking fees from his clients’ payments for medical expenses, after he had specifically given up that right in his contracts with both women was not against the manifest weight of the evidence.

A restitution requirement was imposed:

Restitution is appropriate when there is an improper benefit to the attorney. The facts show that Respondent took one-third of the payments from State Farm for Kinnie and Harper’s medical expenses, after expressly eliminating any right to do so from his contracts with both women. That money must be returned to his clients in order to keep him from profiting from his unethical behavior. Although Respondent told Kinnie that the remaining third of the funds would be paid to the clinic, it was not.

The evidence showed that both women owed more to the clinic than the $1,666.66 that the clinic theoretically was going to receive, and they owed payment for services rendered by other medical providers, as well. It is clear that the Hearing Board did not consider the testimony that the $1,000 Respondent gave Stafford for gambling purposes was payment of his clients’ medical expenses to be credible, and therefore, Respondent wrongfully retained the final third of the State Farm checks as well. As there is no evidence of any medical liens having been filed in this case, restitution should be paid to Kinnie and Harper.

Where I come from, I'm proud to say, a lawyer gets disbarred for this type of misconduct. (Mike Frisch)

Bar Discipline & Process | Permalink

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