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In re Thompson

Supreme Court of Kansas

May 31, 2019

In the Matter of Pamela J. Thompson, Respondent.

          Original proceeding in discipline.

          Matthew D. Franzenburg, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett, Disciplinary Administrator, was with him on the formal complaint for the petitioner.

          John J. Ambrosio, of Morris, Laing, Evans, Brock & Kennedy, Chtd., of Topeka, argued the cause, and Pamela J. Thompson, respondent, argued the cause pro se.

          ORIGINAL PROCEEDING IN DISCIPLINE

          PER CURIAM

         This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Pamela J. Thompson, of Wichita, an attorney admitted to the practice of law in Kansas in 1985.

         On October 3, 2018, the office of the Disciplinary Administrator filed a formal complaint against the respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). The respondent filed a timely answer to the complaint on October 16, 2018. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on December 4, 2018, where the respondent was personally present and was represented by counsel. The hearing panel determined the respondent violated KRPC 1.15 (2019 Kan. S.Ct. R. 334) (safekeeping property); 8.4(c) (2019 Kan. S.Ct. R. 387) (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation); and 8.4(d) (engaging in conduct prejudicial to the administration of justice).

         After the hearing, the panel made the following findings of fact and conclusions of law, together with its recommendation to this court:

         "Findings of Fact

         "DA12768

         "8. In late 2015, the respondent hired Qualified Plan Solutions (hereinafter 'QPS') to provide administrative services for 401(k) retirement accounts pursuant to a retirement plan established for the respondent and her employees. The respondent was the plan's administrator and trustee. The respondent and her employees, Jackie Brewster and Lora Manny, chose to participate in the plan. By participating, the respondent and her employees agreed to have a portion of their compensation deferred from their paychecks and deposited into the plan account. According to the plan, the respondent was to deposit the salary deferrals into the 401(k) retirement account within seven days. In November, 2015, the respondent approved and signed the plan as the administrator and trustee. The plan went into effect January 1, 2016.

         "9. Beginning January 1, 2016, the respondent withheld funds from her paycheck and from her employees' paychecks. The respondent, however, did not deposit the salary deferrals as required by the plan. The respondent timely deposited the salary deferrals on only one occasion in 2016.

a. The respondent failed to deposit any salary deferrals from January 22, 2016, through July 8, 2016. On July 20, 2016, the respondent made a deposit in an effort to make the 401(k) accounts current.
b. The respondent failed to deposit any salary deferrals from July 22, 2016, through December 23, 2016.

         "10. On February 7, 2017, Ms. Brewster and Ms. Manny noticed that their 401(k) accounts were underfunded. In 2016, the respondent withheld $1, 653.08 from Ms. Brewster's paychecks in 2016, but deposited less than $800.

         "11. Ms. Manny called Seth Asher, her financial advisor. The respondent overheard Ms. Manny's phone call with Mr. Asher. The respondent said to Ms. Manny, 'don't involve him in this, you'll get me in trouble.'

         "12. On February 8, 2017, Ms. Manny contacted the Kansas Department of Labor regarding the underfunding of the 401(k) accounts. Within an hour of Ms. Manny's phone call, a Kansas Department of Labor employee called the respondent by telephone.

         "13. At some point in time, the respondent contacted her accountant, Sandra Worsham who is also the respondent's cousin, for assistance in resolving the issue with the salary deferrals. Ms. Worsham was able to determine what the respondent needed to deposit to become current.

         "14. In addition to contacting Ms. Worsham, in February, 2017, the respondent also contacted Nick Nowak of QPS to assist the respondent with calculating the amount of the deposit the respondent needed to make to bring the accounts current. The amount included both the salary deferrals and the interest lost as a result of the late payments.

         "15. In mid-February, 2017, the respondent deposited funds in the three 401(k) accounts and brought them current, using a portion of the money converted as described in ¶¶ 21-32, below.

         "16. On February 16, 2017, the respondent told Ms. Brewster and Ms. Manny that she had failed to deposit the amounts which had been withheld from their paychecks into their 401(k) accounts. The respondent apologized to her employees.

         "17. Ms. Brewster told the respondent that her husband was an accountant and he wanted to talk to the respondent about the 401(k) issue. The respondent told Ms. Brewster that if that happened, Ms. Brewster would no longer be working in the respondent's office.

         "18. On February 17, 2017, Ms. Brewster filed a complaint with the disciplinary administrator's office against the respondent. During the disciplinary investigation, the respondent admitted that she failed to make timely payments to the 401(k) accounts.

         "19. In order to ensure that the respondent does not again fail to make the proper deposits, the respondent made arrangements with Ms. Worsham to visit the respondent's office at least once a month to assist in all accounting matters relating to the 401(k) accounts.

         "20. On March 10, 2017, Ms. Worsham signed a verification that the respondent had deposited the proper amounts in the 401(k) accounts.

         "DA12872

         "21 During the investigation of DA12768, Ms. Manny advised the disciplinary administrator's auditor, Larry Pfannenstiel, that the respondent paid herself fees in two estate cases without first obtaining a court order. Ms. Manny also told Mr. Pfannenstiel that the two estate files were missing from the office.

         "Estate of E.I.

         "22. The respondent drafted E.I.'s will. In the will, the respondent named herself as the successor executor. Following E.I.'s death, on October 27, 2016, a court appointed the respondent to serve as the executor for the estate of E.I. The respondent also served as the attorney for the estate.

         "23. The estate had a total value of $72, 102.35. While the estate of E.I. was pending, and during the period of one week, the respondent converted $30, 365.85 of the estate proceeds, as follows:

a. Check 1001, dated February 14, 2017, was made payable to Pamela Thompson, in the amount of 4, 865.85. In the memo line, the respondent wrote 'attorney fees.' The respondent deposited the funds into her operating account. The respondent, however, never sought nor received court approval to pay herself attorney fees from the estate account.
b. Check 1002, dated February 16, 2017, was made payable to Pamela Thompson, in the amount of $8, 250. In the memo line, the respondent wrote '. . . ordered.' The respondent deposited the funds into her operating account. The court did not order this disbursement from the estate account.
c. Check 1003, dated February 16, 2017, was made payable to Pamela Thompson, in the amount of $17, 250. In the memo line, the respondent wrote 'to Trust for distribution.' The respondent deposited this check into her attorney trust account on February 17, 2017. On February 21, the respondent wrote herself a check out of her trust account in the amount of $17, 250 and in the memo line wrote 'attorney fees.' The respondent never sought nor received court approval to pay herself attorney fees from the estate account.

The respondent improperly used these funds for payment of payroll and other expenses related to her law office. Specifically, the respondent used a portion of the funds converted to make the deposits necessary to bring her 401(k) account current and to bring her employees' accounts current. See ¶ 15, above.

         "24. On May 10, 2017, the respondent replaced $25, 500 of the funds she converted by depositing funds ...


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