Divorce And Fight Over Escrow Account Leads To Ethics Lapse

An Illinois Hearing Board summarized its conclusions

Based on the evidence presented and the credibility determinations made, the Hearing Board found Respondent failed to properly handle client funds by not keeping the funds separate from his own funds but that his actions in doing so were not dishonest, and that he did not knowingly and dishonestly violate a court order by using funds in his firm’s operating account. In consideration of the evidence in aggravation, which included his failure to appear in-person at his disciplinary hearing, the fact that he allowed the difficulties in his personal life to affect his judgment in practicing law, his failure to recognize the wrongfulness of his actions, and his failure to pay restitution, the Hearing Board recommended Respondent be suspended from the practice of law for six months. The Hearing Board declined to recommend Respondent’s suspension be subject to until further order of Court as requested by the Administrator since the evidence was insufficient to show his misconduct was related to his mental health disorder and that such a severe sanction was necessary to protect the public.

The personal difficulties were rooted in a combined marriage and law partnership

Between January 2008 and August 2011, Respondent and Cynthia Koroll were married and practiced law together as partners under the name of Szymanski Koroll Litigation Group (SKLG). SKLG maintained both an operating account and a trust account. During this time, SKLG represented Tressie Loveland and Paul and Susan Hoskinson in personal injury cases and expended costs with respect to these matters. 

In late 2011, Ms. Koroll and Respondent began the process of getting a divorce and ceased practicing law together. However, SKLG’s operating and trust accounts remained open for some time, and both Respondent and Ms. Koroll had access to account information and were able to conduct transactions with respect to these accounts. 

Around this time, Ms. Koroll began practicing law under the name Koroll Litigation Group (KLG), and continued to represent Ms. Loveland. Nathan Reyes, a former associate of SKLG, went to work for Ms. Koroll at KLG. 

In early 2012, Ms. Koroll, on her own behalf, filed for bankruptcy. James Stevens was the appointed bankruptcy trustee, and as trustee, interacted with Respondent in determining the attorney fees earned by Ms. Koroll both before and after the filing of her bankruptcy. 

On June 13, 2012, the bankruptcy court ordered the assets of the SKLG client trust and operating accounts be frozen and that the funds could not be distributed without the permission of the trustee or the court. Respondent received notice of the court’s order shortly after it was entered and understood it. Mr. Stevens had sought the entry of this order because both Ms. Koroll and Respondent were constantly in disagreement regarding the funds they were entitled to and accusing each other of wrongfully taking funds. According to the evidence presented at hearing, the relationship between Respondent and Ms. Koroll was and still is highly acrimonious. 

As to entrusted funds

On August 6, 2012, Respondent drew $6,473.50 from the SKLG client trust account. He claimed he drew these funds from the Loveland settlement proceeds, which had previously been deposited into the trust account, in order to compensate SKLG for funds Ms. Koroll wrongfully took as reimbursement for costs in the Hoskinson matter. Yet, at the time Respondent drew these funds, only $5,458.53 remained in the trust account for reimbursement of costs with respect to both the Hoskinson and Loveland matters. This was because Ms. Koroll already had withdrawn $7,500.99 of the $12,192.52 allocated by court order for costs reimbursement in the Hoskinson matter, and Respondent had withdrawn $3,326.14 of the $4,093.14 allocated by the court for costs reimbursement in the Loveland matter. Accordingly, Respondent withdrew $1,014.97 from the Loveland settlement that was not allocated by the court for costs reimbursement. Respondent’s act of withdrawing these funds was not in the best interest of the client, who, as he knew or easily could have determined, had not yet received her share of the settlement proceeds, and his failure to safeguard and segregate these funds for her benefit was in violation of Rule 1.15(a).

We acknowledge Respondent’s argument that he drew these funds from the SKLG client trust account to compensate SKLG for funds he believed Ms. Koroll wrongfully took from the Hoskinson settlement and that these funds were not client funds, but funds belonging to KLG for fees earned in the Loveland matter. Yet, we are still not convinced his actions were justified. In both the Loveland matter and Ms. Koroll’s bankruptcy matter, court orders existed stating KLG was entitled to $14,583.33 for fees in the Loveland matter. Respondent did not have authority to unilaterally decide KLG was entitled to less than this court ordered amount and to then withdraw more from the Loveland settlement proceeds than he and SKLG were entitled to in that matter. Moreover, Respondent’s first communication with Ms. Koroll regarding his withdrawal came by fax, which she  received after she had withdrawn the funds she was authorized to pursuant to court order. As a result, Respondent’s actions resulted in there being insufficient funds in the SKLG client trust account to cover Ms. Loveland’s share of the settlement proceeds, which supports our conclusion that Respondent violated Rule 1.15(a).

The hearing board rejected dishonesty and other charges relating to 28 checks.

As to sanction

At the Administrator’s request, Dr. Stafford Henry performed a psychiatric evaluation of Respondent on November 13 and 24, 2015. According to Dr. Henry, Respondent suffers from a recurrent major depressive disorder, which is largely attributed to a number of situational stressors in his life, such as the death of his son and five broken marriages. He also suffers from a cognitive disorder, resulting in memory impairment. He has had eight head injuries, the most recent of which was in 2008, and has diabetes. Dr. Henry opined that Respondent is a good candidate for treatment and outlined treatment recommendations. Respondent, however, is neither on medication nor receiving other forms of treatment for these disorders, which he acknowledges preclude him from practicing law. Dr. Henry opined that there is no nexus, connection or association between the misconduct Respondent is alleged to have engaged in and his depressive and cognitive disorders. Both at hearing and during his evaluation by Dr. Henry, Respondent unequivocally denied doing anything wrong and does not believe his mental illness contributed in any way to the alleged misconduct. 

Dr. Henry further opined that given the deficits in Respondent’s memory, he would not be consistently able to practice law in accordance with the Rules of Professional Conduct. Respondent agreed with Dr. Henry’s conclusion that he should not practice law and stated that he no longer wants to practice law.

…In consideration of the nature of Respondent’s misconduct, the foregoing legal precedent, and the significant aggravating evidence, specifically his failure to appear in-person at his disciplinary hearing, his willingness to allow the difficulties in his personal life to affect his law practice, his failure to recognize the wrongfulness of his actions, and his failure to pay restitution, we believe a suspension of six months is warranted. We are confident this sanction is appropriate in light of the purpose of the disciplinary system, namely to protect the public and maintain the integrity of the legal profession. 

Unrelated ethics charges against the former spouse/partner are linked here with the answer linked here.

Our prior coverage of the charges against the former spouse linked here under the title quoting an alleged email

Your Slimey Israeli Punk Client [Will] Wish He Had Never Thought of Hiring a White, Brilliant Gentile.”

Citations to record omitted throughout. (Mike Frisch)