Untitled Document

The hearing in this matter was held on August 3, 1999, at the offices of the Attorney Registration and Disciplinary Commission, 130 East Randolph, Suite #1100, Chicago, Illinois. The panel consisted of James A. Shapiro, chair; Lawrence X. Pusateri, lawyer member; and Edward J. Miller, public member. Wendy Muchman represented the Administrator of the Attorney Registration and Disciplinary Commission ("ARDC"). The Respondent, Garrett Stephen Reidy, appeared and was represented by David J. Walker.

The Respondent was licensed to practice law in Illinois on October 29, 1977. On April 9, 1998, the Administrator of the ARDC filed a one-count complaint against him, alleging the conversion of funds belonging to a client's medical providers.

On February 16, 1999, the Administrator and the Respondent filed a joint motion for approval to file a petition to impose discipline on consent. In the petition, the parties asked that the Supreme Court impose a sanction of five months' suspension upon the Respondent for the misconduct alleged in the complaint. The hearing panel which was at that time assigned to the case approved the submission of the case to the Court as an agreed matter, and the consent petition was filed with the Court on February 23, 1999.

On March 26, 1999, the Supreme Court entered an order denying the petition, based upon its finding that the five-month suspension to which the parties had agreed was inconsistent with the sanction recommended in the case of In Re Georgette Lee Greenlee, No. M.R. 15670.* (* The Greenlee matter also involved allegations of conversion and was also submitted to the Supreme Court as a joint petition to impose discipline on consent, with the parties in that matter agreeing to and recommending the imposition of a thirty-day suspension on the respondent. In Greenlee, the Supreme Court likewise rejected the petition, finding the recommended sanction in that case to be inconsistent with the recommended sanction in this case.) See In Re Reidy, No. M.R. 15725. The Supreme Court remanded the Respondent's case to the Hearing Board and a new panel was assigned. A hearing went forward on the Administrator's complaint on August 3, 1999. Before the start of the hearing, the chair granted the Administrator's motion to strike paragraph 6 of the complaint. (Tr. 4)

The Administrator's complaint alleged as follows: In May of 1995, the Respondent agreed to represent Rahim Ali, on a contingent fee basis, in a claim for damages for personal injuries Ali suffered in a motor vehicle accident. As a result of the accident, Ali incurred various medical expenses.

The Respondent settled Ali's case in October of 1995 for $15,000. On November 7, 1995, the Respondent received a $15,000 draft from the other driver's insurance company and deposited the draft into his client trust account at Citizen's Bank.

At no time between November 7, 1995 and February 14, 1996, did the Respondent pay the following medical providers sums they were due in connection with Ali's case: 1) Drs. DePinto and Leonardo ($3,000); 2) Metro Paramedic ($450); 3) Elmhurst Hospital ($400); 4) Edgewater Hospital ($283.76); and 5) E.H. Emergency Physicians ($148.50). On various occasions between those dates, the balance in the Respondent's trust account fell below the amount owed to medical providers and, as of February 14, 1996, fell to a balance of $42.40.

The complaint alleged that, based on the foregoing, the Respondent had engaged in the following misconduct: a) conversion; b) failing to promptly deliver to a client or a third person funds that the client or a third person is entitled to receive, in violation of Rule 1.15(b) of the Illinois Rules of Professional Conduct; c) engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct; and d) engaging in conduct which tends to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 771.

At the hearing, the Administrator called the Respondent as an adverse witness. The Respondent stated that he was licensed to practice law in 1977, and for eighteen years was in-house counsel for United States Fidelity and Guaranty Company, an insurance company. (Tr. 13) At present, he does some personal injury work as a private practitioner, but his practice is concentrated primarily in the area of criminal defense. (Tr. 13)

The Respondent settled Rahim Ali's case in 1995 for $15,000 and deposited the settlement check into his IOLTA account at Citizen's Bank. Between October of 1995 and January of 1996, it was the Respondent's practice to deposit any settlement checks into this account and also to use the account to pay his ordinary business expenses. During that period, the Respondent had no account other than the IOLTA account. (Tr. 14)

The Respondent identified Administrator's Exhibit No. 2 as a settlement statement he prepared relating to Ali's case. The settlement statement reflected that the Respondent's fee was one-third of the total settlement amount, or $5,000, and that $4,677.26 was owed to medical providers, for total fees and costs of $9,677.26. (Tr. 17) The net amount paid to his client, however, was $4,072.74 rather than $5,322.74, because, the Respondent testified, the client also owed the Respondent $1,250 for work the Respondent did for him on another matter. (Tr. 14-16) The Respondent stated that he believed the other matter on which he represented Ali was a criminal case, although he could not recall where the case was heard or its specific nature. He could not find either

The Respondent acknowledged that, as of November 7, 1995, he had not paid all the medical providers listed on Administrator's Exhibit No. 2. (Tr. 21) Sometime in October of 1995, he had negotiated and been able to reduce the lien of Drs. DePinto and Leonardo. He acknowledged that on June 18, 1996, he received a letter from Dr. Moretti, also from Drs. DePinto and Leonardo's office, requesting payment of the outstanding lien, but he did not pay it until September of 1996. (Tr. 22-23) A review of the Respondent's trust account records disclosed that he paid Elmhurst Radiology and Horizon Medical on January 15, 1996; Metro Paramedic on November 20, 1996; Elmhurst Hospital on November 21, 1996; and Edgewater Hospital on November 22, 1996. The Respondent paid each provider with his own funds, by cash or money order. The Respondent stated that he could not explain the discrepancies in the dates of payments because he did not have his file from the Ali case. (Tr. 22-24) However, he now keeps all his files in one central location. (Tr. 24)

The Respondent acknowledged that his December 31, 1995 bank statement for his IOLTA account showed the balance in the account as of that date to be $1,002.40, less than what he still owed at that time to Ali's medical providers. (Tr. 25) He also acknowledged that, as of May of 1996, while sums were still owing to the providers, he had a negative balance in his account. (Tr. 30) He acknowledged that he had used money owed to the providers for his own business and personal purposes. (Tr. 26-29)

The Respondent also testified on his own behalf during his case-in-chief. He stated that both his home and office are located at 1409 S. Harlem in Forest Park. He is not married and has no children. (Tr. 51) He graduated from DePaul Law School and was admitted to practice in 1977. He entered private practice in 1992. (Tr. 51)

In November of 1995, at the time he received the settlement check on the Ali case, the Respondent's procedure with respect to settling personal injury cases was as follows: Once the client accepted the settlement offer, the Respondent would call the medical providers to see if they would reduce their liens. When he received the check, the Respondent would have his client come into the office and go over the settlement statement with him or her. (Tr. 52-53) After he paid the client and the lienholders, the Respondent would leave the net proceeds from the settlement in his trust account and use it to pay bills and expenses and to take draws. (Tr. 54-57)

The Respondent stated that he has now changed his procedures substantially. Although he only had one account in 1995, he now has his own account, along with a client trust account. As soon as a case is settled, the Respondent takes his fees out and puts them into his own account. (Tr. 54-57)

In late 1995, the Respondent was working out of four offices -- one in South Berwyn, one in Oak Park, one in Chicago, and one out of his home. (Tr. 53) He did not keep a running ledger on or balance his trust account. (Tr. 56) Now, however, he keeps track of his check stubs and bank statements. (Tr. 56-57)

The Respondent acknowledged that he paid the medical providers in the Ali case late. He stated that he first became aware that some of the providers had not been paid when he received the letter from Dr. Moretti. He did not recall the exact date he received this letter. (Tr. 57-58)

After receiving the letter, the Respondent spoke to the doctor and told him he would pay the lien if it was still owed, but that he could not find his file at that time. He looked at all four offices for the file and still had not located the file as of the date of the hearing. (Tr. 58)

The Respondent stated that he called the providers after he found the settlement statement and asked what was still owed, and then paid them. He had not yet paid E.H. Emergency Physicians because he could not locate them, but he had paid all other providers on the Ali case. (Tr. 58-60)

The Respondent attributed his failure to pay the providers promptly in Ali to inadvertence and sloppy business practices. He was not facing any financial difficulties at the time of the incident and had no large bills to pay. (Tr. 63-64) He also stated that this type of incident had never happened before or since the Ali case, and that he now keeps all his files at his home office. (Tr. 60-61) On several occasions during the hearing, the Respondent stated that he was sorry for what had happened and for any inconvenience he had caused. (Tr. 56, 60, 63, 67, 83)

The Respondent stated that he engages in pro bono work, assisting the elderly with their legal problems, through Proviso Township, and that he also gives free legal advice to friends and others. (Tr. 64-65) He referees basketball games at charity

The Respondent acknowledged that, in the course of his eighteen years of work as in-house counsel for an insurance company, he had handled property damage and personal injury claims, and settled hundreds of claims. He stated that he was not involved in the distribution of the personal injury money and that the claims adjuster would get information regarding the medical liens. (Tr. 67-68) Prior to Ali's case, the Respondent had settled fifteen to twenty personal injury cases for clients, and in some of those cases there were existing medical liens. He agreed that he was aware medical providers had to be paid when the clients were paid. (Tr. 68-70)

During questioning by the panel, the Respondent acknowledged that the settlement statement he had prepared for the Ali case did not reflect that he had taken an additional $1,250 in fees, but agreed that it should have reflected that fact. (Tr. 76-77) He also acknowledged that his bank records reflected occasions during the time in question when his trust account was overdrawn, but stated that at that time he did not really pay attention to his bank statements. (Tr. 84-85)

The Respondent also presented several character witnesses at the hearing. John Maciorowski, a partner at the law firm of Rusin, Patton, Maciorowski & Friedman, testified that he has been a lawyer since 1980, practicing in the area of general civil defense. He has known the Respondent for twenty-five years. Maciorowski stated that the Respondent's reputation for truthfulness and honesty is outstanding. (Tr. 32-34)

for the courthouse and deputies for the courtrooms. (Tr. 35-36) Woods stated that the Respondent practices at the Maywood courthouse and he has known the Respondent for about ten years through that work. The Respondent's reputation among the deputies at the courthouse for truthfulness and honesty was that he was very truthful and honest. (Tr. 36-37)

Joseph Cimino, director of Senior Services for Proviso Township, testified that he met the Respondent through Judge Joseph Casciato and has known him for about ten years. Cimino's duties as director of Senior Services are to provide light home repair services for seniors, and assist them in getting to doctor's appointments, shopping, and so forth. Over the last several years, Cimino had referred work to the Respondent with respect to senior citizens' legal problems, and the Respondent had taken about a dozen pro bono cases during that period. (Tr. 41-43) Cimino stated that the Respondent has a very good reputation for honesty and truthfulness. (Tr. 43)

Judge Joseph Casciato, an Associate Judge in the Law Division of the Circuit Court of Cook County, testified that he and the Respondent became close friends during the early 1970s, when both he and the Respondent were in college, and had remained friends throughout the years. When asked about the Respondent's reputation for honesty, Judge Casciato stated that the Respondent is as credible a person as he has ever met, and that his reputation is excellent. (Tr. 45-47) He believed that if anything went wrong at the Respondent's office, it was due to carelessness and not done with any malice or evil intent. (Tr. 49)

87-92) The Respondent's counsel acknowledged that the Respondent had made improper use of his trust account and that a conversion had occurred. He contended that the conversion was a result of the Respondent's poor record-keeping practices and that no dishonest motive was shown, and asked that the panel recommend censure. (Tr. 92-102) The record reflects that the Respondent has not been the subject of prior disciplinary proceedings.

The Respondent was charged in a one-count complaint with the conversion of funds belonging to third parties, the conversion arising out of circumstances in which the Respondent, as a routine business practice, commingled funds belonging to him with funds belonging to clients and third parties. In determining whether the Respondent engaged in the misconduct alleged, we note at the outset that it is now beyond dispute, regardless of a lack of malicious intent, and even in the absence of proof of harm to a client, that it is a violation of the Illinois Code of Professional Conduct for an attorney to commingle his own funds with funds belonging to a client or third parties. In Re Clayter, 78 Ill. 2d 276, 278, 399 N.E.2d 1318, 1319 (1980); In Re McLennon, 93 Ill. 2d 215, 221, 443 N.E.2d 553, 556 (1982); In Re Elias, 114 Ill. 2d 321, 332, 499 N.E.2d 1327, 1331 (1986); In Re Lewis, 118 Ill. 2d 357, 364, 515 N.E.2d 96, 99 (1987). Inadvertence, mistake, or plain ignorance is no excuse for a violation of this fundamental precept governing attorney conduct. This principle is so basic and long-standing that one would think it should no longer be necessary to state it.

Unlike the more common scenario, where an attorney fails to establish a client trust account pursuant to IOLTA, the Respondent in the case before us had only an IOLTA account, in which he kept not only funds belonging to clients and third parties, but his own funds. This set-up, however, is no less violative of the Illinois Rules of Professional Conduct than its usual counterpart, where an attorney commingles client and third-party funds with his own funds in his own business account.

The Respondent admitted that, through what he contends was inadvertence, he converted funds belonging to medical providers in a personal injury action. We note in passing that we view with some skepticism -- particularly in light of the Respondent's eighteen years of experience as a personal injury lawyer, albeit on the defense side -- the Respondent's claims that he believed, and continued to believe for a period of about a year, that he had already paid the medical providers in question and that he was unable to locate any part of the file from the Ali case other than a copy of the settlement statement.

We note, too, that by the Respondent's own testimony, only weeks before he received the settlement draft in the Ali case, he had spent time negotiating and successfully reducing the lien of Drs. DePinto and Leonardo. (Tr. 21-23) It is difficult to understand how, in the short span of time between his negotiation of the lien and his receipt of the settlement draft, the Respondent forgot about his obligation to pay the outstanding medical liens. However, having no concrete evidence to the contrary, and certainly not to the degree of clear and convincing proof, we are compelled to accept as true the Respondent's representations that his actions were the result of inadvertence. Despite the absence of proof of a dishonest motive, however, the Respondent is

Based upon our review of the testimony and exhibits, therefore, we find that the Administrator has established by clear and convincing evidence that the Respondent engaged in the following misconduct: a) conversion; b) failure to promptly deliver to a client or a third person funds that the client or third person is entitled to receive, in violation of Rule 1.15(b) of the Illinois Rules of Professional Conduct; and c) engaging in conduct which tends to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 771. Because we cannot find, however, that the Administrator established by clear and convincing proof that the Respondent acted with a dishonest motive in this case, we enter a finding in favor of the Respondent on the allegation that he engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct.

Having determined that the Respondent engaged in misconduct, we must now turn to the question of what to recommend as an appropriate sanction. The purpose of attorney disciplinary proceedings is to protect the public and safeguard the integrity of the legal profession. In Re Lenz, 108 Ill. 2d 445, 450, 484 N.E.2d 1093, 1095 (1985). Although there should be consistency in the sanctions imposed for similar misconduct, each case nevertheless must be addressed on its own merits, with a consideration of the aggravating and mitigating factors present in that case. In Re Kunz, 122 Ill. 2d 547, 554, 525 N.E.2d 544, 547 (1988).

In the case before us, we note in mitigation that the Respondent has practiced law for a period of more than twenty years with no prior disciplinary actions; that he has paid, albeit in a less than timely fashion, the medical providers the fees to which they were entitled; and that he has engaged in community and pro bono work. An attorney's remorse for his misconduct is also a factor which can be considered in mitigation. In Re Scarnavack, 108 Ill. 2d 456, 461, 485 N.E.2d 1, 3 (1985). We are not willing to find that mitigating factor here, however, as it appears to us, particularly in view of the rote manner in which they were expressed, that the Respondent's repeated apologies for his conduct were made more in the hope that they would have a favorable impact on the panel's consideration of his case than as a consequence of any sincere contrition he felt.

In cases in which an attorney who has not been previously disciplined has committed an isolated act of conversion, the sanction imposed has typically been a short period of suspension. See, e.g., In Re Merriwether, 138 Ill. 2d 191, 200, 561 N.E.2d 662, 665-66 (1990) (attorney suspended for three months for converting money received through settlement of a client's personal injury case which should have been paid as a lien to Public Aid); In Re Wojcik(Commission No. 85 CH 153, Report and Recommendation of Hearing Board, Oct. 16, 1987; approved by Illinois Supreme Court, Apr. 4, 1988) (attorney suspended for six months where he failed to pay two medical providers out of client's personal injury settlement for more than a year after receiving settlement proceeds, Hearing Board finding attorney's handling of trust account "atrocious" and record-keeping methods "sloppy and totally inadequate"); In Re Conlon (Commission No. 94 CH 371, Report and Recommendation of Hearing Board, Aug. 1,

1995; approved by Illinois Supreme Court, Dec. 1, 1995) (attorney suspended for five months where he committed two acts of conversion, one of which Hearing Board found to be a "technical" conversion); In Re Davies (Commission No. 96 CH 644, Supreme Court No. M.R. 13668, Petition to Impose Discipline on Consent allowed May 30, 1997) (attorney suspended for six months where he took $5,000 to be held in escrow for third party's purchase of real estate and converted funds to his own use, and where he had not yet paid full restitution as of date sanction imposed); In Re Lyden (Commission No. 97 CH 93, Supreme Court No. M.R. 14458, Petition to Impose Discipline on Consent allowed Mar. 23, 1998) (attorney suspended sixty days for converting $2,263.81 of client funds in two matters, panel noting that attorney had expressed remorse for actions, made restitution to clients, and cooperated with Commission).

Before making a recommendation as to an appropriate sanction, we must also consider the factors in aggravation. We find as aggravating factors in this case that the Respondent not only converted funds belonging to third parties, but that he improperly commingled funds belonging to clients and third parties with his own funds and inordinately delayed payment to medical providers of sums to which they were entitled, whether as a result of sloppy record-keeping practices or otherwise. We also recognize, however, that this case involves an isolated instance of conversion and that the Respondent has a previously unblemished record. Under these circumstances, we believe, based upon the precedent cited above, that an appropriate sanction is a four-month suspension, and it is our recommendation that such a sanction be imposed.

successfully complete a course in law office management sponsored by or through the Cook County, Chicago, or other bar association. The Respondent testified at the hearing that he has changed his banking and bookkeeping practices and that he now maintains separate accounts for his own funds and funds belonging to clients and third parties. (Tr. 54-57) Despite the Respondent's assertions to the contrary, however, we are not entirely convinced that the system he now has in place is sufficiently well-maintained and monitored so as to avoid a repeat of the conduct for which he is being disciplined. We believe the condition that the Respondent complete a course in law office management is particularly appropriate here in light of evidence disclosing that there were occasions during the time in question when the Respondent's IOLTA account was overdrawn. (Tr. 84-85) Even if the Respondent sincerely believed that any money "left over" in this account belonged to him (and, indeed, even if it did belong to him), there is no excuse for allowing this account to become overdrawn at any time.

In sum, it is our recommendation, based upon our review of the evidence presented at the hearing and the factors in aggravation and mitigation present, that the Respondent be suspended for a period of four months, with the condition that he take and successfully complete a course in law office management prior to the end of the term of suspension.

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