Twilight Time
The Illinois Review Board has recommended disbarment of attorney who took funds from a client’s trust.
The findings
In 1987, Marion Moran (“Moran”) executed a trust agreement. In 2004, she amended the agreement to name Respondent, her attorney, as a successor trustee. The trust agreement provided for certain distributions to be made upon Moran’s death to various relatives, friends and charities. After Moran’s death in 2005, the trust held assets worth more than $200,000. When Respondent became trustee of the trust, he distributed $131,200 in trust assets in accordance with the terms of the trust agreement. However, from 2005 to 2010, Respondent also took $44,100 for himself, characterizing some of the payments as attorney’s fees. He did not submit a bill or fee statement for any of the payments to himself nor did he provide an accounting of the payments.
In March 2010, attorney John Rock (“Rock”) learned from his mother, one of the beneficiaries of the Moran trust, that a local newspaper reported that Moran held property that was in danger of escheating to the State of Illinois. Rock contacted Respondent to inquire as to why it was taking so long to wind up the trust’s affairs and to inquire about the alleged unclaimed property. Respondent refused to provide any information to Rock and refused to provide an accounting of his handling of the trust. Eventually, Rock filed a civil action seeking an accounting and alleging that Respondent breached his fiduciary duties to the trust. The lengthy litigation is set out in detail in the Hearing Board’s report. Incredibly, Respondent refused to provide an accounting, in spite of court orders to do so. He removed the remaining assets from the trust bank account, which at the time totaled approximately $82,500, and moved them to a new bank without notifying the beneficiaries, Rock or the court. Respondent then secretly took an additional $21,000 from the trust account during the litigation and used the funds for his own purposes. He refused to advise the court of the whereabouts of the new account where he was holding the funds, despite a court order to do so.
In March 2012, the court entered a judgment against Respondent and awarded the beneficiaries $124,659.91 in damages and $79,450.09 in punitive damages reflecting Rock’s attorneys fees incurred in his attempts to obtain an accounting from Respondent. The court found that throughout the litigation, Respondent had “demonstrat[ed] a pattern of deliberate, contumacious and unwarranted disregard for this Court’s authority.” As of the hearing date in this proceeding, Rock had collected some, but not all of the judgment, by receiving the trust assets, recording a judgment against Respondent’s home and initiating garnishment proceedings.
The board found its duty painful
We recognize that Respondent is in the twilight of his career. However, we believe that disbarment is warranted given the serious nature of Respondent’s misconduct and the numerous aggravating factors. Respondent’s ignorance of his obligations puts other clients at risk. Disbarment best serves the purposes of the disciplinary system.
(Mike Frisch)