ORIGINAL PROCEEDING IN DISCIPLINE
One-year suspension, imposition suspended.
This is a contested, original proceeding in discipline filed by the office of the Disciplinary Administrator against Respondent Rosie M. Quinn, a Kansas City, Kansas, attorney licensed to practice in this state since 1981.
The Disciplinary Administrator filed a formal complaint against Respondent on November 30, 2006, after a complaint was received from a claims manager for Farmers Insurance Company (Farmers), followed by an investigator's audit of her attorney trust account. The formal complaint alleged that Respondent violated KRPC 1.15, 5.3 and 8.4(b), (c), and (g). At her June 7, 2007, hearing before the disciplinary panel, Respondent appeared in person and through counsel, Reginald Davis. Based upon its findings of fact, the hearing panel concluded that Respondent violated four rules of professional conduct:
KRPC 1.15(a) (2007 Kan. Ct. R. Annot. 473) (safeguard client's property; keep complete records of client trust account; no commingling of client and attorney funds in client trust account);
KRPC 1.15(b) (2007 Kan. Ct. R. Annot. 473) (promptly deliver funds to clients when entitled);
KRPC 5.3(b) (2007 Kan. Ct. R. Annot. 536) (ensure non-lawyer assistant's conduct is compatible with professional obligations of the lawyer); and
KRPC 8.4(c) (2007 Kan. Ct. R. Annot. 559) (conduct involving dishonesty, fraud, deceit or misrepresentation).
A majority of the panel recommended that Respondent be publicly censured. A minority recommended suspension from the practice of law for 6 months. Respondent filed exceptions to the panel's final hearing report and to the minority recommendation.
Hearing Panel's Findings of Fact
The hearing panel's findings of fact included the following:
Respondent represented J.B. in a personal injury case filed in Wyandotte County District Court against P.M. Bren Abbott represented P.M. Respondent and Abbott negotiated the settlement of the case.
On March 22, 2005, Abbott sent Respondent a letter, enclosing a check in the amount of $2,343.10 for a personal injury protection (PIP) lien, an additional check in the amount of $6,156.90 for the remainder of the settlement, a release, and a journal entry of dismissal. Abbott directed Respondent to return the release, the PIP lien check, and the journal entry after they had been appropriately executed. Abbott also wrote: "I trust that the settlement check will not be negotiated until the executed settlement documents have been returned to my office."
On March 23, 2005, J.B. signed the checks and documents in Respondent's office. The following day, the settlement check was deposited into Respondent's trust account. The day after that, the PIP lien check was deposited into Respondent's trust account.
Months later, Chad Kuntz, Farmers' State Liability Claims Manager for Kansas and Iowa, learned that the PIP lien check had been cashed in March 2005. Because Farmers never received its share of the check proceeds, Kuntz requested a copy of the check.
The check had purportedly been endorsed by Kimberly Bohannon on behalf of Farmers. Bohannon is employed by Farmers and works in Aurora, Illinois. But she did not endorse the check and did not authorize Respondent or anyone in Respondent's office to endorse the check. She had not been assigned to manage the case and had no contact with Respondent or anyone in Respondent's office regarding the case. Because the check with the purported Bohannon signature had been deposited into Respondent's trust account, Kuntz wrote a letter about Respondent to the Disciplinary Administrator. It was received on June 15, 2005.
On June 17, 2005, the Disciplinary Administrator provided Respondent with a copy of Kuntz' complaint letter.
On June 23, 2005, Respondent sent to Abbott the journal entry of dismissal, the release, and a check in the amount of $1,562.07 for Farmers' share of the PIP lien check proceeds.
In response to the complaint from Kuntz, Respondent wrote:
"My office did receive the check payable to Farmers Insurance Company and [J.B.] The check's endorsement was apparently the result of a misunderstanding.
"From time to time, certain entities, i.e. Farmers Insurance Company, give me authority to sign their names to checks with the understanding that I will forward their share of the check to them.
"Part of my secretary's duties is to collect and deposit checks into my trust account. My secretary may have erroneously believed she had Ms. Bohannon's permission to sign Farmers' name to the check, which she did and deposited into my trust account.
"I did not realize the check had been deposited until I received your letter and thereafter, I sent Farmers a check for the amount of money it was entitled to."
After the Disciplinary Administrator received the Kuntz letter, investigator Robert Straub was directed to conduct an audit of Respondent's trust account. On October 23, 2005, Straub provided Respondent with a subpoena for attorney trust account records from March through October 2005. The subpoena required Respondent to deliver the records to the Disciplinary Administrator on November 28, 2005. On November 28, 2005, Gary Pettijohn, Special Investigator for the Disciplinary Administrator, agreed to allow Respondent to mail rather than deliver the documents.
Respondent failed to provide all the records required by the subpoena. On January 4, 2006, Straub wrote to Respondent, specifically directing her to provide records from March 2005, copies of the fronts and backs of deposit slips, monthly reconciliations of bank statements, individual client ledgers, and any other transaction journals or transaction ledgers used. She was to produce these documents by January 16, 2006.
In answer to Straub's January 4, 2006, letter, Respondent wrote:
"I have no deposit slips. The bank does not return them. I will request copies from March through October, 2005 and will provide them to you upon receipt.
"I don't have any check registers or monthly reconciliations of bank statements. I do not maintain client ledgers or transaction ledgers."
On May 3, 2006, Straub wrote to Respondent again, seeking additional information. Straub asked Respondent about the distribution of the settlement check in J.B.'s case:
"Farmers Insurance Company issued a check on 3/21/05 to J.B. for $6,156.90. J.B. endorsed the check and [it] was deposited into your trust account . . . . I was unable to find any distribution of these funds from your trust account to J.B. Please explain if J.B. was entitled to any of this deposit, since the check was payable only to J.B., and when distribution was made. Please include date, check number and amount distributed."
On May 23, 2006, Respondent wrote to Straub and informed him that she was unable to relate facts about the distribution of the settlement check because she could not locate J.B.'s file.
When Respondent appeared for her June 7, 2007, hearing before the disciplinary panel, she explained that she used money from her trust account to purchase a cashier's check issued to J.B. She testified as follows:
"A: [By Respondent] Okay. What had happened was that J.B. had came in on or about March the 23rd so that he could sign those settlement checks. And at that time -- remember, there are two different checks. There was one for the money that belonged to me and J.B. and there was another one for the PIP.
"A: Now, at the time J.B. came in, you know, he signed the checks and his check was to have been deposited immediately and which it was deposited immediately. So I had gone through my settlement sheet with J.B., he approved it and then signed it. A day or two later, J.B. came back by my office and he brought me the check that I had written on March the 23rd, as well as a note, and he told me in the note that he was returning this check because he thought he was due an additional $180 primarily.
"A: Now, I remember talking to J.B. and remember going to the bank after a while, you know, because he didn't pick up this check, and buying a cashier's check for the amount that I had initially given him plus $180. Now, I called J.B., said, 'J.B., you know I have this cashier's check that includes the $180.' But J.B. wanted copies of invoices and cancelled checks and everything that was involved in his case, and I couldn't locate all of those documents for him at that time.
"Q: [By Mr. Diehl] In fact, isn't the file misplaced entirely?
"A: No, I have found that file now.
"A: It had been lost for a while. But, unfortunately, sometimes in my office I have this black hole, sometimes things disappear. But if we look long enough, we can generally find them. But in any event, to answer your question about J.B., then I had gone -- he didn't want the check with the additional $180 . . . . Then I went and bought him another cashier's check for even more than $180. I was just anxious for this man to get his money.
"Now, I could not find the first cashier's check I remember buying, the one with the plus $180. But the second one, I did find it. . . . And my recollection is that, you know, J.B. would not accept any money from me until I have given him copies of invoices and -- and everything else that showed the cost that I had taken out of the case.
"And after the complaint had come from Farmers, of course, I sat down and I went through that file with a fine-toothed comb. We were able to locate everything that I needed to satisfy J.B. And my recollection is that I took that cashier's check that I had bought for him in April to the bank and cashed it in. Now, that's what I remember."
According to Respondent, she wrote a check made payable to J.B. in the amount of $3,514.14 on March 23, 2005. However, J.B. returned the check to Respondent because he believed he was owed an additional $180. Then, on April 27, 2005, it appears that Respondent purchased a cashier's check from Douglass National Bank for the benefit of J.B. in the amount of $3,800. It appears that the cashier's check was not negotiated by J.B. Finally, on June 23, 2005, Respondent executed a teller's check to J.B. in the amount of $3,379.40. On June 27, 2005, the teller's check ...