In re Wool

In re Wool  (99-064); 169 Vt. 579; 733 A.2d 747

[Filed 10-May-1999]

      


                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 99-064

                             NOVEMBER TERM, 1998


In re Joseph S. Wool, Esq.	}	Original Jurisdiction
                                }
                                }
                                }	Professional Conduct Board
                                }	
                                }
                                }	DOCKET NOS. 94.03, 94.04 & 94.61 


       In the above-entitled cause, the Clerk will enter:


       Pursuant to the recommendation of the Professional Conduct Board filed
  February 17, 1999, and  approval thereof, it is hereby ordered that Joseph
  S. Wool, Esq. be publicly reprimanded for the  reasons set forth in the
  Board's report attached hereto for publication as part of the order of this 
  Court.  A.O. 9, Rule 8E.

       Attorney Wool shall also be placed on probation for 18 months with the
  conditions set forth in the  attached report; however, the potential
  sanction in Condition 1 of immediate suspension is  modified to require
  appropriate prior review by the Board.  The period of probation shall begin
  on  June 1, 1999.




BY THE COURT:


_______________________________________
Jeffrey L. Amestoy, Chief Justice

_______________________________________
John A. Dooley, Associate Justice

_______________________________________
James L. Morse, Associate Justice

_______________________________________
Denise R. Johnson, Associate Justice

_______________________________________
Marilyn S. Skoglund, Associate Justice

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131.PCB

[12-Feb-1999]

                              STATE OF VERMONT
                         PROFESSIONAL CONDUCT BOARD


In re:	  Joseph S. Wool, Esq.--Respondent
          PCB Files No. 94.03, 94.04 and 94.61

                      Final Report to the Supreme Court

                             DECISION NO.   131

       This matter concerns an experienced practitioner's violation of a
  number of disciplinary  rules involving mishandling of client monies and,
  in one instance, improper communication with a  represented party.  It is
  before us by stipulated facts which we adopt as our own and attach hereto 
  as Appendix 1.  In addition, we rely upon uncontroverted facts submitted to
  a sanctions panel by  the bar counsel.  Those facts were adopted by the
  sanctions panel, are adopted by reference here,  and are attached hereto as
  Appendix 2.  

       Respondent has waived all procedural rights accorded him by
  Administrative Order 9,  Rule 8, although he has reserved  the right to
  appeal a recommended sanction if that sanction is  greater than a public
  reprimand.  Upon consideration of all the stipulated facts, we conclude
  that  Respondent should be publicly reprimanded.

       Respondent has been a member of the bar of the State of Vermont for
  more than sixty  years.  This disciplinary proceeding is a result of his
  conduct in representing three different clients.	
					
PCB File 94.03

       Respondent represented MB in the summer of 1992 in connection with
  some post-divorce  litigation.  MB paid Respondent an advance of $1,000 in
  July of 1992.  MB was not satisfied with  the quality of the representation
  he received during 1992. In the spring of 1993, MB realized that he would
  need to pursue some additional issues in  court. He wanted to hire another
  lawyer to help him.  He contacted Respondent and asked  for a  refund of
  the $1000.  

       Respondent told MB that he had already provided services in excess of
  the $1,000  advance.  MB asked for an accounting as to how the $1000 fee
  had been spent. Respondent prepared three documents,  none of which
  properly detailed the scope of  Respondent's services to MB.  Each is
  simply a list of charges for services performed on certain  dates, without
  specification as to how much time Respondent spent on each of these
  services.  Further, all of the letters are inconsistent.

       The first letter claimed that MB owed Respondent $230.00.  The second,
  written some  two weeks later, claimed that $525.00 in services had been
  rendered, but noted the $1000.00 paid  on account.  This would have left a
  balance of $475.00 owed to MB.  Subsequently, Respondent  amended this
  bill, adding an additional $345.00 in charges for services rendered in June
  and July  of 1993.  MB had not retained Respondent to represent him in June
  or July of 1993.  There is  some evidence that Respondent may have provided
  some legal services to MB at that time. As of this date, Respondent has yet
  to provide MB with a detailed explanation as to how  Respondent applied 
  the $1000.00 fee. 

       Disciplinary Rule 2-106 prohibits a lawyer from collecting an
  excessive fee.  In order to  determine whether a fee is excessive, the
  lawyer needs to be able to account to the client as to  what the lawyer did
  to earn the fee.  Because of Respondent's failure to account for his
  services, it  is impossible to determine whether or not the $1000.00 fee
  was earned.

       Disciplinary Rule 9-102(B)(3) imposes upon all lawyers a duty "to
  maintain complete  records of all funds...coming into the possession of the
  lawyer" and a duty "to render appropriate  accounts to the client regarding
  them."  We find Respondent violated that disciplinary rule by  failing to
  comply with his duty to render an appropriate account to MB.

PCB File No. 94.04

       Respondent represented FM, an elderly man entitle to monthly  Social
  Security and  veteran's benefits.  During 1986,  FM was incarcerated.  He
  gave Respondent a power of attorney  and asked Respondent to take care of
  his finances for him.  At that time, FM was receiving  Veterans benefits of
  $135 per month and Social Security benefits of $337 per month.   In July of
  1986, Respondent opened a  trust savings and checking account at a local
  bank.  There is some evidence that some of FM's monthly checks were
  deposited to that account.  There  is some evidence that funds were
  withdrawn from the account. There is no evidence as to how  those funds
  were expended.  There is no evidence as to when that account was closed. In
  early 1992, one HC, the niece of Respondent's client FM, telephoned
  Respondent.  She  had  FM's power of attorney.  She asked Respondent for an
  accounting of her uncle's money that  had come into Respondent's possession
  during the time her uncle had been incarcerated. Respondent had a few
  records of this account, but they were in no way complete.  Respondent
  wrote to the bank in February of 1992 and on at least three other
  occasions, asking  the bank to supply records about the account.  HC
  continued to contact Respondent, seeking  information about her uncle's
  funds.  She filed a complaint with this Board.  Bar counsel also  contacted
  Respondent, seeking information about FM's assets.

       Finally, in June of 1993, a bank representative wrote to Respondent
  that it would be able  to search its records for information about the
  trust account.  However, the research would cost  $15.00 per hour. 
  Respondent elected not to have the bank proceed with the research. At
  sometime later, bar counsel began a full investigation into HC's
  allegations of  mismanagement.  By that time, the bank records had been
  destroyed.  There is now no reliable  way to determine how much money went
  into the account, when the money was withdrawn, and  to whom the money was
  paid.  The parties have stipulated - and we so find - that Respondent has 
  not accounted for at least $2,000 that he received in trust for FM while FM
  was incarcerated.(FN1)

       Respondent had a duty to maintain records of the trust funds and to
  account for them to  HC as FM's attorney in fact.  DR 9-102(B)(3).  His
  failure to expend the $15.00 an hour to obtain  essential bank records,
  knowing that bar counsel was investigating HC's complaint, is inexplicable. 
  This failure to account for the funds violates DR 9-102(B)(3).
  
       Respondent has an obligation to "promptly pay or deliver to the
  clients as requested by a  client the funds ...in the possession of the
  lawyer which the client is entitled to receive."  DR 9-102(B)(4).  The
  client, via the attorney in fact, HC, sought return of whatever funds
  Respondent  had received on behalf of her uncle but which Respondent had
  not returned or expended for her  uncle's benefits.  Once the client
  requests return of trust funds, the burden is on the attorney to  return
  the funds or demonstrate that all funds have been returned to or used for
  the benefit of the  client. See, e.g.,  Louisiana State Bar Association v.
  Keys, 567 So. 2d 588 (Sup.Ct. La.  1990)(once the disciplinary authority has
  proven that a client's funds under the attorney's control  have not been
  properly accounted for,  the attorney has the burden of proceeding with
  evidence of  his freedom from culpability in the misuse of the funds.)
  Here, Respondent is unable to  demonstrate that the funds were returned or
  properly expended. He is, therefore, in violation of  DR 9-102(B)(4).

PCB File No. 94.61

       Unlike the prior two cases of improper use of client funds, this case
  involved improper  contact with represented party.  

       In 1994, Respondent represented HS in a divorce from JS, her husband.
  JS was  represented by counsel.  Respondent  made several discovery
  requests of JS through his counsel.   He was not satisfied with the
  resulting production.  Therefore, he filed, among other motions, a  motion
  for contempt, requesting that JS be found in contempt  and jailed for his
  failure to produce  ordered documents.  Respondent sent copies of the cover
  letter and all the motions directly to JS  as well as to JS' attorney.

       Based upon the parties' stipulation, we concluded that the
  communication with JS directly  was the result of inadvertence and neglect,
  and was not a purposeful attempt to communicate  directly  with a
  represented party.   Fortunately, JS was nonplused by this direct
  communication  and no injury resulted.  In any event, the misconduct
  violated DR 7-104(A)(1).

SANCTION

       In considering the appropriate sanction, we consider the duty
  violated, the lawyer's state  of mind, and any aggravating or mitigating
  circumstances.

       The parties have stipulated that Respondent's state of mind is one of
  negligence, not  willfulness, and we are bound by that stipulation.  In at
  least the first two cases, the duty violated  is significant:  misuse of
  client funds.

       We are guided by  Section 4.13 of the ABA Standards for Imposing
  Lawyer Sanctions  which provides that a "[r]eprimand is generally
  appropriate when a lawyer is negligent in dealing  with client property and
  causes injury or potential injury to a client."

       In the first case,  PCB File No. 94.03, the client  suffered injury,
  although the scope of the  injury is unknown.  Taking the evidence in the
  light most favorable to Respondent,  Respondent  has failed to return or
  account for at least $130--over 10% of the retainer he was given.  This 
  factor is aggravated by the fact that Respondent's failure to return the
  funds prevented him from  obtaining substitute counsel.

       In the second case, PCB File No. 94.04, FM suffered injury or
  potential injury because  Respondent has not accounted for at least $2,000
  that he received in trust for FM while he was  incarcerated.  This
  situation is aggravated by the fact that FM was vulnerable at the time and
  not  in a position to take care of his own finances.

       As to the third case of improper contact, we find that Section 6.34 of
  the ABA Standards is most applicable. That section  provides that a private
  admonition is appropriate here because of  the isolated nature of the
  misconduct and the complete lack of injury. In aggravation, we note that
  Respondent has a disciplinary history of four prior private  admonitions,
  although in mitigation, we note that they are all now remote in time. 
  Three occurred  in the late 70's and one in 1988.  He has substantial
  experience in the practice of law and has  evidenced a pattern of
  misconduct.  He failed to carefully execute his fiduciary duties owed to 
  clients who were vulnerable.  We find no mitigating circumstances.

       The Board recommends to the Supreme Court that it publicly reprimand
  Respondent. In  order to fully protect the public, we feel that Respondent
  must also be placed on probation for the  next 18 months with the following
  conditions:

       1.  Respondent, at his expense, shall have a CPA conduct a compliance
  review of his trust  accounts within 90 days of the Supreme Court's order
  to ensure that he is in compliance with the  record keeping requirement of
  DR 9-102.  If the auditor determines that, Respondent is not in 
  compliance, Respondent shall have 60 days in which to correct any problems. 
  If the book keeping  problems remain uncorrected at the end of 60 days, 
  Respondent shall be suspended from the  practice of law immediately. He
  will not be readmitted until he has proven by clear and convincing 
  evidence that his accounts are in compliance with DR 9-102.

       2.  Respondent shall have no new, proven disciplinary offenses, the
  allegations of which  are currently unknown to Bar	Counsel, during the
  period of probation, or be subject to immediate  violation of his
  probation.

       3.  Respondent shall successfully complete, within the period of
  probation, eight hours of  continuing education in the areas of case file
  management, attorney-to-client fee obligations, and  trust account
  management, and report his progress to Bar Counsel.

       4. Within 60 days of entry of the Court's order, Respondent shall
  refund to his former  client, MB, $130.00 and shall provide to MB a
  complete and accurate accounting  of what  services he performed to earn
  the remainder of the $1000.00 fee.  In the event that MB finds the  fee
  charged by Respondent to be excessive for services actually rendered,
  Respondent shall  request MB to join him in submitting this matter to the
  VBA fee arbitration program for  resolution. 

       5.  Within 60 days of entry of the Court's order, Respondent shall pay
  $2000 to HC, as  attorney in fact for Respondent's client, FM.   This sum
  represents the amount of funds which  Respondent stipulated that he
  received from his client in trust but for which he cannot account.

       6.  Respondent shall submit a written report to Bar Counsel every 60
  days during the  course of his probation.  The report shall detail the
  status of his compliance with the terms of the  probation.  Failure to
  abide by any of the terms of the court's order will constitute a violation
  of  probation.

Dated at Montpelier, Vermont this           day of February, 1999.

PROFESSIONAL CONDUCT BOARD

   /s/
____________________________ 
Robert P. Keiner, Esq. Chair

     /s/	                   /s/
___________________________	____________________________
Steven Adler, Esq. 	        John Barbour

     /s/	     
___________________________	____________________________
Charles Cummings, Esq.	        Paul Ferber, Esq.

     /s/	                   /s/
___________________________	____________________________
Michael Filipiak	        Nancy Foster


___________________________	____________________________
Barry Griffith, Esq.	        Robert F. O'Neill, Esq.

     RECUSED
___________________________	____________________________
Alan Rome, Esq.	                Mark L. Sperry, Esq.

     /s/	                   /s/
___________________________	___________________________
Joan Loring Wing	        Jane Woodruff, Esq.

     /s/
___________________________
Toby Young



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                                  Footnotes

FN1.  This information appears at page 2, par. 5 of The Parties' Jointly
  Recommended Conclusions of Law and  Sanctions, filed February 9, 1998.