Mishandling of Client Funds Mitigation Disbarment
Office of Disciplinary Counsel v. Quigley, PICS Case No. 17-1052 (Pa. June 20, 2017) Mundy, J., Donohue, J. (dissenting) (19 pages).
Court agreed with board that petitioner had to be disbarred for mishandling the funds of five clients over a three-year period because the court was not persuaded by petitioner's arguments for mitigation and, while petitioner cooperated with the disciplinary process, he did not make restitution to four of his clients until after the disciplinary process was instituted. Board recommendation adopted and petitioner was disbarred.
Office of disciplinary counsel charged respondent with violating the rules of professional conduct by mishandling the funds of five clients. Petitioner withdrew money from and allowed his IOLTA account balance to drop below the amounts he owed those clients in settlement funds. Petitioner did make restitution to those clients, but only after disciplinary proceedings were instituted. Petitioner stipulated that his conduct violated rules of professional conduct 1.3, 1.5 and 1.15. Petitioner acknowledged that he mishandled funds and attributed it to a combination of circumstances including the decline of business, troubles with the IRS, and the departure of his longtime bookkeeper. A psychologist testified on petitioner's behalf that petitioner had been depressed and the mismanagement was unintentional and would not have occurred if petitioner had sought assistance. A professional acquaintance testified to petitioner's excellent performance as an attorney. The hearing committee found the psychologist's opinion not credible as mitigation, found that petitioner commingled personal and client funds to avoid detection by the IRS and recommended disbarment. Petitioner filed exceptions and the board agreed with the committee and recommended disbarment. Petitioner appealed.
Petitioner argued that his mishandling of funds was the result of negligence, poor record keeping and a lack of understanding of accounting principles rather than dishonesty. He contended that although he committed ethical violations, he did not possess criminal intent to defraud his clients; they had all been paid in full; he had accepted responsibility for his actions and taken remedial action to avoid future misconduct. The court was not persuaded that there was mitigation. Petitioner's serious violations involved five separate clients over a three-year period and he made full restitution to four of the clients only after disciplinary proceedings began. The record also supported the committee's and board's finding that petitioner failed to show that depression was a causal factor in his misconduct. The psychologist's testimony showed that he did not understand the violations or their specific timeframes and his testimony was speculative. Additionally, petitioner's first misconduct predated the resignation of his bookkeeper.
Justice Donohue dissented, arguing that the mitigating evidence and petitioner's deep remorse and cooperation throughout the disciplinary process warranted a lesser sanction than disbarment.