Suspension For Multiple, Systematic Trust Violations

The Iowa Supreme Court accepted findings of misconduct but rejected the Attorney Disciplinary Board’s proposed public reprimand in favor of a 30-day suspension.

The attorney is a sole practitioner admitted in 2010.

He had used a fee in a drunk driving case before it was earned and 

Lubinus handles collections cases on a contingent-fee basis, usually receiving between twenty and twenty-five percent of the amount collected. In this area of practice, Lubinus’s law firm uses a computerized accounting system that processes payments for clients and calculates the contingent fees he is entitled to withdraw from the trust account. In June 2013, Lubinus deposited $20,379.47 total into his trust account. In July, his deposits totaled $30,879.42. During June and July, Lubinus made transfers totaling $6600 from his trust account to either his office operating account or his personal bank account. Lubinus acknowledges these funds had not yet been earned, at least in part because Lubinus had not yet completed the work for his clients by providing them with their respective shares of the collection payment.

These transfers were made electronically, and Lubinus did not initially let his support staff know about them, nor did he provide contemporaneous notice to his clients. These transfers caused accounting errors, problems with monthly reconciliations, and other issues with Lubin us’s trust account. Lubinus restored $6100 to the trust account in late July and subsequently placed another $500 in escrow when he realized he had not restored the full $6600.

Lubinus reported his own actions to the Board. In an affidavit, Lubinus explained that when the premature withdrawals of $6600 occurred, “I was at a financial low point in my career. I felt desperate and did not see any way out of my short term money problems.”

Lubinus has ceased making electronic transfers out of the trust account, so all transactions from the trust account are now handled by check only. Lubinus has also taken on a law partner. The parties agree that no client lost funds as a result of Lubinus’s actions and that Lubinus has repaid all funds to his trust account that were improperly transferred.

The court

when an attorney has committed multiple or more systematic trust account violations, we have imposed suspensions, often of thirty days.

There was mitigation but 

The Board has not alleged, and we do not find, that Lubinus has misappropriated client funds such that revocation is warranted. The parties’ factual stipulation is not particularly detailed. Nevertheless, it appears that as debt collection funds came into the trust account, Lubinus withdrew some of those funds, but not in excess of what would have been his share of those funds after proper calculations and disbursements had been performed. The OWI incident is somewhat more troubling. There, Lubinus withdrew $400 from the trust account “to cover this client’s bond.” Later, he received other funds from the client and no longer needed additional money for the bond—yet he did not restore the $400 to the trust account. Still, we cannot find that Lubinus intentionally misappropriated funds; at most, he failed to pay them back when it turned out the client didn’t need them, and the record is not even clear whether the retention of the $400 was intentional or an inadvertent error.

Nor was there a good faith belief that the used funds had been earned. Thus, suspension. (Mike Frisch)