Unfamiliarity Breeds Censure

An Illinois Hearing Board has proposed a public censure of an attorney, based on its conclusion that the mishandling of entrusted funds was a product of unfamiliarity with the governing rule

Based on our assessment of the evidence and of  Respondent, we do not believe Respondent’s repeated acts of commingling resulted  from any improper motive or dishonest intent, but rather from Respondent’s  failure to understand and recognize the duties required of her in holding client  funds. Respondent clearly should have known what to do; Rule 1.15(a) is  unambiguous. However, Respondent was practicing law on her own for the first  time. Her prior employment would not have given her firsthand experience with  the proper law firm procedures. This does not excuse her misconduct, but it  provides a framework from which we assess this Respondent’s repeated acts of  commingling. Respondent has now learned how to properly handle funds belonging  to others if she has occasion to hold such funds in the future. In her current  employment, Respondent does not hold client funds.

As to Count I, Respondent was confronted with a  very unusual set of circumstances. She had received funds to hold in escrow, for  Geralyn and Duffing. However, very shortly after the closing in which Respondent  received those funds, Respondent became aware of circumstances which reasonably  suggested the transaction was affected by an underlying fraud. The perpetrator  of that fraud, Radmer, was the same person from whom Geralyn derived her  interest in the escrowed funds. As a result of this situation, and Duffing’s  representations to her, Respondent no longer thought of the funds as a tax  escrow, as to which she would have to take direction from both parties, but  rather money belonging to Duffing, which could be disbursed based on Duffing’s  instructions alone. This may not have been correct, but it is very significant  to our decision as to the sanction to recommend. Respondent thought Duffing was  a bona fide purchaser and, consequently, his interest in the escrow funds was  legitimate. Respondent believed she had authority from Duffing to disburse the  funds as she did. This is also important in our determination of the sanction.

The attorney sought dismissal of the charges. (Mike Frisch)