STATEWIDE GRIEVANCE COMMITTEE

 

Daniel B. Horwitch, Statewide Bar Counsel, Complainant vs. Richard H. G. Cunningham, Respondent

 

Grievance Complaint #02-1085

 

DECISION

 

Pursuant to Practice Book §2-35, the undersigned, duly-appointed reviewing committee of the Statewide Grievance Committee, conducted a hearing at the Superior Court, 80 Washington Street, Hartford, Connecticut on November 6, 2003.  The hearing addressed the record of the complaint filed on May 9, 2003, and the probable cause determination rendered by the Stamford/Norwalk Judicial District Grievance Panel on August 12, 2003, finding that there existed probable cause that the Respondent violated Rules 1.15(a) and (b), 8.1(2), and 8.4(3) and (4) of the Rules of Professional Conduct, as well as Practice Book §2-32(a)(1).[1]

 

Notice of the hearing was mailed to the Complainant and to the Respondent on October 6, 2003.  The Respondent appeared at the hearing and gave testimony.  One exhibit was admitted into evidence.

 

The Respondent was advised that the third member of this reviewing committee, Doctor Frank G. Regan, was unavailable for the hearing.  Thereafter, the Respondent waived the participation of Doctor Regan, and agreed to have the undersigned render this decision.

 

This reviewing committee finds the following facts by clear and convincing evidence:

 

The Respondent maintained a clients’ funds account (No. 10-9389579) with Webster Bank (hereinafter Webster).  Check #1058 was issued from the Respondent’s clients’ funds account on March 27, 2003 to Robert Cunningham for $100.  On April 1, 2003, check #1058 was presented to Webster for payment against insufficient funds.  Webster covered check #1058, resulting in an overdraft on the Respondent’s clients’ funds account and a negative balance of $1.53.

 

By letter dated April 3, 2003, Webster reported the overdraft to the Complainant.  The Complainant sent notices dated April 10 and 23, 2003 to the Respondent notifying him of the overdraft and requesting an explanation with documentation; however, the Respondent did not respond to the Complainant’s notices.  As such, pursuant to Rule 9(b)(2) of the Statewide Grievance Committee Rules of Procedure and Practice Book §2-28(g), the Complainant filed this complaint based on the Respondent’s failure to answer the Complainant’s letters.

 

This reviewing committee also considered the following:

 

The Respondent claimed that, at the time of the overdraft, all of the money in his clients’ funds account was his own personal funds.  He admitted that he routinely kept up to a few hundred dollars of his personal funds in the account to keep it from being closed by Webster, as had been done in the past.  The Respondent further explained that he did not maintain a ledger that a third person could review to determine what portion of the funds in his clients’ funds account was clients’ funds and what portion was his personal funds.  Rather, he explained that he would have to review his bank statements to calculate the amount of clients’ funds and the amount of his personal funds in the account.  According to the Respondent, check #1058 was “in effect” a payment to himself given that the funds in the account were his personal funds.  He testified that check #1058 was issued to his cousin for storage of a motor vehicle and was unrelated to legal services.  Moreover, the Respondent maintained that there were no “improper” payments or commingling of clients’ funds with his personal funds, given that all of the funds in the account were his personal funds.  He maintained that check #1058 would be a non-issue if he had issued the check to himself directly.  In addition, the Respondent testified that he is a solo practitioner with no staff and that he rarely handles or deals with clients’ funds.  He explained that he does not have a business operating account; rather, he pays business expenses through his personal checking and American Express accounts.

 

Pursuant to a subpoena duces tecum, the Respondent provided this reviewing committee with bank statements and copies of checks issued from his clients’ funds account for March, April and May of 2003.  A review of these documents reveals the following.  The Respondent issued check #1054 from his clients’ funds account to Springdale Oil Company for $410.34 on March 15, 2003.  This was a personal expense.  The Respondent also issued check #1055 for $66 on March 18, 2003 without any payee information.  The Respondent testified that he did not record this check and was unsure what the check was issued for.  According to the Respondent, this check is what “threw off” his bookkeeping for the clients’ funds account.

 

The Respondent testified that he did not receive notice of the overdraft from Webster or the copy of the grievance complaint sent by certified mail from the Complainant; however, he admitted receiving correspondence from the Complainant that was sent via regular mail.  The Respondent explained that after he became aware of this grievance complaint, he telephoned the Complainant’s office and explained the source of the overdraft.  The Respondent did not recall who he spoke with other than the fact that the person was a man, and he did not recall the exact date that he spoke with this individual, other than that it probably was in the beginning of May of 2003.  Nevertheless, the Respondent admitted that whomever he spoke with informed him that he must respond to the overdraft in writing and instructed him to do so.  However, the Respondent further admitted that he never filed a written response to the Complainant’s notices or the grievance complaint as he misplaced the correspondence from the Complainant, had difficulty locating his bank statements and “was busy with other matters.”  The Respondent also apologized for not responding to the grievance complaint.

 

This reviewing committee finds the following violations of the Rules of Professional Conduct and the Practice Book by clear and convincing evidence:

 

The Respondent violated Rule 1.15(a) of the Rules of Professional Conduct by commingling personal funds with client funds in his clients’ funds account.  Rule 1.15(a) of the Rules of Professional Conduct is clear:  an attorney must hold client funds in a separate account from the attorney’s own funds.  The Respondent admitted that he routinely kept personal funds in his clients’ funds account.  Although the Respondent maintained that he did not commingle funds, he admitted that he did not keep a ledger indicating the amount of personal and client funds in the account and that he would have to review his records to calculate the respective amounts. Moreover, the Respondent did not testify that he never handles client funds, but rather that he rarely does so.  In addition, a review of the Respondent’s bank records revealed that there were other payments for personal expenses out of the account in addition this overdraft, despite the fact that the Respondent maintained a separate personal checking account.  Although this overdraft resulted in the Respondent’s account being overdrawn by the relatively minor amount of $1.53, we are less concerned with the amount that the account was overdrawn than with the routine manner with which the Respondent has commingled funds.

 

This reviewing committee finds credible the Respondent’s testimony that he kept personal funds in his clients’ funds account to prevent it from being closed.  However, we remind the Respondent that the Statewide Grievance Committee’s policy only allows an attorney to keep a de minimis amount of personal funds, generally not to exceed $100, in a clients’ funds account to cover administrative costs.  There clearly is a distinction between depositing a de minimis amount into an account and leaving it there untouched to prevent the account from being closed, and repeatedly depositing personal funds into an account and accessing those funds from the account on a number of occasions, as the Respondent has admitted doing.

 

By failing to respond to the Complainant’s lawful demands for information and by failing to file a written response to the grievance complaint, the Respondent violated Rule 8.1(2) of the Rules of Professional Conduct.  The Respondent admitted that he did not respond to the Complainant’s repeated requests for an explanation with documentation for the overdraft, despite being specifically instructed to do so by a member of the Complainant’s office, and did not file a written response to this grievance complaint.  The Respondent explained that he failed to respond because he had difficulty locating paperwork, he misplaced the Complainant’s correspondence and he was busy with other matters.  We find the Respondent’s explanations to be insufficient.  We note that the Respondent could have sought extensions of time to respond to the Complainant’s notices and the grievance complaint.  In addition, this reviewing committee does not find credible the Respondent’s testimony regarding these excuses or his apology for his failure to respond.

 

The Respondent presented to this reviewing committee with an air of disdain for the grievance process and for the requirement that he answer for and explain his conduct.  This reviewing committee reminds the Respondent that he has a professional obligation to respond to inquiries by the Complainant involving overdrafts and to file written responses to any grievance complaints that may be filed against him.  We note that no attorney licensed in this state is exempt from fulfilling these obligations.  We found the Respondent’s attitude towards his conduct and this reviewing committee to be unbecoming of an officer of the court.

 

We find that the Respondent violated Rule 8.4(4) of the Rules of Professional Conduct by failing to respond to the Complainant’s notices and the grievance complaint, despite having an obligation to do so.  In addition, we find that the explanations provided by the Respondent as detailed above do not constitute good cause for his failure to respond to the grievance complaint. As such, we find that the Respondent failed to answer the grievance complaint without good cause in violation of Practice Book §2-32(a)(1).  Finally, there was no evidence before us indicating that the Respondent misappropriated client funds, or that he engaged in conduct constituting fraud, deceit, dishonesty or misrepresentation.  Therefore, we find that the Respondent did not violate Rules 1.15(b) and 8.4(3) of the Rules of Professional Conduct.

 

Although we note that the Respondent has no history of prior professional discipline, we are deeply concerned given the seriousness of the Respondent’s misconduct, his disrespect for the grievance process and his failure to exhibit an awareness of his misconduct.  While we are tempted to order that the Respondent be presented to the Superior Court, we instead reprimand the Respondent and, pursuant to Practice Book §2-37(5), order the Respondent to attend the following continuing legal education courses at his own expense within nine (9) months of the issuance of this decision:  a minimum of three (3) credit hours in law office management and a minimum of three (3) credit hours in professional responsibility or legal ethics.  The Respondent is further ordered to provide the Statewide Grievance Committee with written confirmation of his compliance with these conditions within thirty (30) days of completion of each continuing legal education course.

 

 

____________________________________

Attorney Kathleen D. Stingle

 

 

____________________________________

Attorney John C. Matulis, Jr.



[1]  Although the grievance panel’s August 12, 2003 probable cause letter quoted the appropriate language from Rules 8.1 and 8.4 of the Rules of Professional Conduct, it incorrectly cited to the subsections as Rules 8.1(1) and 8.4(1) and (2).  The subsections quoted by the grievance panel and intended to be findings of probable cause were Rules 8.1(2) and 8.4(3) and (4).  These corrections were made on the record at the November 6, 2003 hearing.