The Three Levels
The Oklahoma Supreme Court explained the levels of misconduct with respect to handled entrusted funds
Commingling is the least serious level of culpability and occurs when an attorney fails to keep client and attorney money in separate accounts. Mayes, 2003 OK 23, ¶ 18, 66 P.3d at 404. Respondent has admitted that he is guilty of commingling and “sloppy bookkeeping.” He regularly commingled his trust account — making earned fee deposits into it, transferring money directly to his personal account, and making cash withdrawals.
When an attorney uses client funds for a purpose other than that for which they are intended, he or she reaches the second level of culpability: simple conversion. Taylor, 2000 OK 35, ¶ 17, 4 P.3d at 1250. Respondent argues that he is not guilty of simple conversion. Rather, at most, he argues the money was simply missing and there is no evidence to establish what it was used for or that he used it. A thorough review of the client trust account records, however, shows that Respondent used client money to make loan payments on two occasions — clear examples of simple conversion at a minimum.
Finally, the most serious level of culpability is misappropriation. Id. ¶ 17, 4 P.3d at 1250. Misappropriation occurs when a lawyer purposefully deprives a client of money through deceit and fraud. Id. Respondent argues that he is not guilty of misappropriation because there was neither evidence of intent nor did the clients suffer grave economic harm. Misappropriation may be found without grave economic harm occurring when an attorney understands that he is utilizing money that belongs to a client. Mayes, 2003 OK 23, ¶ 22 n.26, 66 P.3d at 405-06 n.26. The focus of the test is intent and whether the deprivation occurred through deceit or fraud. State ex rel. Okla. Bar Ass’n v. Farrant, 1994 OK 13, ¶ 8, 867 P.2d 1279, 1284. A repeated pattern of behavior over time can show intent to misuse funds. State ex rel. Okla. Bar Ass’n v. Wilson, 2008 OK 42, ¶ 25, 187 P.3d 708, 716. Respondent’s pattern of withholding funds while making personal use of those funds by means of cash withdrawals and loan payments, especially after completing trust class and after the grievance was filed, is evidence of intent. There is, however, no evidence of Respondent’s deceit or fraud.
Respondent’s misconduct in this case was deplorable. He failed to ensure that the money for the minor children was placed into separate trust accounts for their benefit. Instead, he egregiously commingled the children’s funds with his business and personal account. Respondent also committed simple conversion when he made two loan payments out of his client trust account — a clear use of money for purposes other than that for which they were entrusted to him. Based on clear and convincing evidence, we hold that Respondent acted without competence or diligence, failed to safeguard client property or expedite litigation, and brought discredit upon the legal profession in violation of RGDP 1.3 and ORPC 1.1, 1.3, 1.15, and 3.2. We do not find clear and convincing evidence of misconduct involving dishonesty, fraud, deceit, or misrepresentation under ORPC 8.4(c).
Here
Few breaches of ethics are as serious as commingling and conversion of a client’s money. State ex rel. Okla. Bar Ass’n v. Raskin, 1982 OK 39, ¶ 14, 642 P.2d 262, 267. Respondent neglected clients for over two-and-a-half years while engaging in egregious commingling of client trust account funds and using those funds to make loan payments twice. This abuse of entrusted funds is especially deplorable considering the funds were intended for minor children after their mother’s untimely death. State ex rel. Okla. Bar Ass’n v. Drummond, 2017 OK 24, ¶ 24, 393 P.3d 207, 216.
This Court will not tolerate attorneys who show total disregard for court mandates, particularly orders directing attorneys to safeguard moneys intended for minor children. Additionally, we will not tolerate attorneys who fail to keep client money and property safeguarded in a trust account, completely severed from the lawyer’s operating account.
Id. While we did not find clear and convincing evidence of misappropriation in order to mandate disbarment, we found clear and convincing evidence of egregious commingling, simple conversion, and extended neglect. Because Respondent’s actions extended over such a long period of time and were so extensive in nature, especially after his completion of the diversion program classes and the filing of the grievance, we find the appropriate discipline is suspension for two years and one day.
(Mike Frisch)