Murdaugh Association Leads To Sanction Tantamount To Disbarment

The Georgia Supreme Court accepted a voluntary license surrender

With regard to the conduct at issue in this case, Fleming states that, on February 2018, a woman sustained injuries to her head at the home of R. Alexander Murdaugh, a lawyer then-licensed in South Carolina; that Murdaugh contacted Fleming asking that he represent the woman or, if she passed away, her estate; that the woman—who was a long-time employee of Murdaugh’s—later died from her injuries, leaving two sons; and that one of the woman’s sons was appointed as the Personal Representative of the woman’s probate estate. At the relevant time, Murdaugh had two insurance policies providing coverage for this type of incident: Lloyd’s of London (“Lloyd’s”), through which Murdaugh had $505,000 in insurance coverage, and Nautilus Insurance Group (“Nautilus”), through which Murdaugh had excess coverage of an additional $5,000,000. At some point in 2018, Fleming apparently filed suit against Murdaugh presumably on behalf of the woman’s estate— and, in November 2018, Lloyd’s tendered its policy limits to settle Fleming’s client’s claims against Murdaugh. Fleming did not inform his client about this fact, however; instead, in December 2018, Fleming allowed the woman’s son to be replaced by Chad Westendorf as the Personal Representative for the estate and then petitioned the probate court to approve the wrongful death settlement with Lloyd’s for a payment of $505,000. Fleming admits that the petition detailed payments of $166,000 to his law firm for legal fees and $11,500 for “prosecution expenses”; that those figures were misrepresentations; and that there were no legitimate prosecution expenses. In December 2018, the probate court held a hearing and approved the settlement.

Then, in March 2019, Murdaugh, Fleming, Westendorf, and John Grantland, a lawyer representing Nautilus, participated in a mediation that ultimately led to an additional settlement in Fleming’s client’s case that involved a total payment from Nautilus of $3,800,000. In May 2019, a hearing was held to obtain the court’s approval of the global $4,305,000 settlement reached with both insurance companies. Fleming acknowledges that the settlement statement presented to the court in this instance, like the petition submitted in December 2018, contained false representations. He further admits that the disbursement sheet prepared after the second settlement also contained false statements.

After both settlements, Murdaugh—a defendant in the lawsuit—requested that Fleming make the net settlement proceeds check payable to “Forge,” apparently explaining that he had created structured settlement or annuity accounts for the woman’s surviving sons with Michael E. Gunn of Forge Consulting, LLC (“Forge Consulting”). In 2019, checks payable to “Forge” were issued from Fleming’s IOLTA account in a total amount exceeding $3,400,000. Fleming asserts that he gave the checks to Murdaugh, allegedly because Murdaugh advised that he would “hand deliver” the checks to Gunn.  Instead, Murdaugh apparently converted the funds to his own benefit.

In addition to delivering a large portion of the settlement proceeds to Murdaugh, Fleming asserts that he paid Westendorf at least $20,0007 for his services as Personal Representative, and between May 2019 and October 2020, Fleming withdrew an additional $26,200 from the IOLTA account, falsely documenting these withdrawals as expenses of the litigation. Although it is clear that the money was removed from the IOLTA account and that it was not used for the purposes it was supposed to be used for, Fleming does not specify whether he retained the $26,200 for his own benefit or passed some of the money to Murdaugh, as suggested by the Bar’s response to the petition. He does admit, however, that he agreed to hold monies in his firm’s IOLTA account from the settlement that would be accessible to Murdaugh. After October 2020, some portion of the proceeds from the settlements apparently remained, undistributed, in Fleming’s law firm’s IOLTA account, and Fleming apparently never advised the woman’s sons that he had recovered any monies as a result of the litigation against Murdaugh.

Fleming claims that from the time of the settlement until September 2021, he was under the impression that Murdaugh (one of the defendants in the lawsuit) was handling the creation of structured settlement annuities with Forge Consulting for the benefit of the heirs of Fleming’s client (the plaintiff). He asserts that, on September 3, 2021, however, he learned from one of Murdaugh’s law partners that the firm had discovered that Murdaugh was stealing money from it by using a fictitious bank account in the name of “FORGE dba R. Murdaugh.” Fleming then states that thereafter, he was informed that Forge Consulting did not have any accounts related to this matter and had never received the funds from either settlement.

Fleming admits that on September 15, 2021, a new lawsuit was filed on behalf of the woman’s sons naming as defendants Murdaugh, Fleming, Fleming’s law firm, Westendorf and Westendorf’s employer. Fleming states that he and his law firm and their insurance carrier signed a settlement statement on October 1, 2021 to resolve that lawsuit, with the firm to contribute $676,255.59 (allegedly representing all legal fees obtained on behalf of and all expenses paid by the woman’s estate) and the firm’s insurance carrier to pay $650,000 for a total payment of $1,326,255.59.

Fleming also states that on October 8, 2021, his law firm initiated a wire transfer of $113,800 from its IOLTA account to counsel for the woman’s sons. Fleming contends that the $113,800 represented the remaining funds in that account belonging to the woman’s estate.

Sufficient admissions to disbar

We have reviewed the petition in this case and conclude that
Fleming has admitted conduct sufficient to establish violations of Rules 1.4 (a) (3), 1.5 (c) (1), 1.7 (a), 1.8 (b), 1.15 (I) (c), 5.4 (c) and 8.4 (a) (4) of the GRPC. Our review of this case indicates that the underlying facts may well be more egregious than Fleming admits, but we need not delve into those details, because the conduct to which Fleming admits is sufficient to establish the violations of the GRPC discussed above. Indeed, we need not determine whether Fleming’s conduct was worse than he acknowledges, because he has admitted (and we agree) that he warrants the most serious sanction we can impose in a bar discipline matter: disbarment (or, as here, acceptance of the voluntary surrender of his license, which is tantamount to disbarment).

(Mike Frisch)