|Attorney for Respondent |Attorney for the Indiana Supreme Court|
|Kevin P. McGoff |Disciplinary Commission |
|Indianapolis, Indiana |Donald R. Lundberg, Executive |
| |Secretary |
| |Dennis K. McKinney, Staff Attorney |
| |Indianapolis, Indiana |
| | |
| | |
In the
Indiana Supreme Court
_________________________________
No. 49S00-0405-DI-221
In The Matter Of
Mark Eugene Small
Respondent.
________________________________
Disciplinary Action
________________________________
November 23, 2004
Per Curiam.
We find today that Respondent Mark Eugene Small’s mismanagement of
his attorney trust account warrants his suspension from the practice of law
in this state for six months. We will stay the period of suspension subject
to conditions designed to ensure his compliance with basic provisions
governing management of such accounts.
This attorney disciplinary action began on May 24, 2004, when the
Disciplinary Commission filed a verified complaint for disciplinary action
against the respondent, alleging several acts of attorney misconduct
involving his attorney trust account. In resolution of the complaint, the
Commission and the respondent have submitted for this Court’s approval a
Statement of Circumstances and Conditional Agreement for Discipline
pursuant to Ind.Admission and Discipline Rule 23(11). In that agreement,
the respondent admits to misconduct and agrees with the Commission that a 6-
month stayed suspension is an appropriate sanction for his misconduct. We
today approve this agreement and herein recount the facts and circumstances
of this case. The respondent’s admission to this state’s bar in 1989
confers jurisdiction in this matter.
The parties stipulate that the respondent opened a trust account on
January 25, 2000. The next day, the respondent deposited $650 into the
account on behalf of a certain client. Thereafter, through a series of
disbursements made on the client’s behalf, the respondent by April 13,
2000[1] had reduced the funds he held on the client’s behalf to $30. On
May 30, 2000, he drew a check for $500 on the account, payable to himself,
for attorney’s fees for legal work he provided to the client, despite the
fact that the account by that time held only $30 in trust for the client.
Similarly, on August 1, 2000, the respondent disbursed $2000 from the
account on the client’s behalf, despite having exhausted the client funds
he held in trust. On August 11, 2000, he deposited $500 into his trust
account to “partially replace” funds of other clients or third parties that
he had wrongly disbursed when he disbursed more money on behalf of the
client than he held in trust for the client.
Similarly, in February 2000 the respondent was obligated to hold
$584.50 in trust for a third party creditor after settling a lawsuit on
another client’s behalf. On February 24, 2000, he wrote a check for
$584.50 to the third party creditor. The creditor did not present the
check for payment until October 10, 2000, at which time the account held
insufficient funds to satisfy the obligation and which resulted in the bank
notifying the Commission of an overdraft of the respondent’s trust account,
pursuant to Admis.Disc.R. 23(29).[2] In fact, the account’s balance had
fallen below sufficient levels on several occasions between February 24 and
October 10, 2000. The Commission’s investigation of the respondent’s trust
account overdraft revealed that the respondent had failed properly to
distinguish between trust and non-trust funds, that he failed to account
separately for funds he held in trust for each client or entity, that he
failed adequately to account for his own funds that he allowed to
accumulate in the account, and that he failed adequately to reconcile his
own trust account records with monthly trust account bank statements.
The respondent mismanaged his trust account in other ways as well.
In September 2000, the respondent disbursed $100 from the trust account,
with a check payable to himself, to pay a filing fee for a client for whom
the respondent held no funds in trust. Although the respondent intended
that the disbursement come from his personal funds, the account did not
contain sufficient personal funds for that purpose. Accordingly, the
disbursement invaded money the respondent was holding in trust for other
clients and third parties. On other occasions, bank service charges
invaded client and third party funds held in the account. The parties’
agreement recites that, although the respondent “inadvertently” held some
of his personal funds in the account, he did not do so with the intent of
maintaining an identified pool of his own funds to maintain a nominal
balance, as permitted by Prof.Cond.R. 1.15(a). [3]
We find that the respondent violated Prof.Cond.R. 1.15(a) by failing
to hold in his attorney trust account all of the client and third party
funds he was obligated to hold in trust and by failing to keep adequate
records of his attorney trust account.[4] We find further that he failed
to abide by Admis.Disc.R. 23(29)(a)(2) and (3) by his failure to maintain
adequate trust account records.[5]
The respondent and the Commission today ask us to approve his six-
month suspension from the practice of law, stayed to a two-year period of
probation subject to specific conditions designed to assure the
respondent’s compliance with required attorney trust account management
provisions. Relevant to the determination of the adequacy of this sanction
are factors in mitigation. Accordingly, the parties cite the respondent’s
previously unblemished attorney disciplinary record and the fact that he
cooperated with the Commission during its investigation and prosecution of
this matter. The parties’ stipulations indicate that the respondent’s
funds mismanagement was the product of neglect, oversight, and ignorance of
governing strictures and not a calculated plan to convert client and third
party funds. With this in mind, are satisfied that the agreed sanction,
with its probationary conditions designed to educate the respondent and
protect his clients, is adequate in this case.
It is, therefore, ordered that the respondent, Mark Eugene Small, is
hereby suspended from the practice of law for a period of six (6) months,
with the entire six months to be stayed, and the respondent placed on
probation for two years, subject to the following terms and conditions of
probation:
• The respondent’s term of probation will begin on the date this
Court accepts the terms of this agreement and his probation will
run for two years thereafter.
• Within six (6) months of the beginning of his probation term,
the respondent will attend an ethics seminar with a trust
account management section of at least one hour in length.
• The respondent will have his trust account monitored by a CPA to
criteria acceptable to the Disciplinary Commission, who will
then report quarterly to the Commission on the respondent’s
compliance with the Rules of Professional Conduct and the
Admission and Discipline Rules for lawyer trust accounts.
• The respondent will comply in all respects with his obligations,
duties, and responsibilities under the Indiana Rules of
Professional Conduct for Attorneys at Law.
• The respondent will report to the Disciplinary Commission any
changes in his business or home address or employment with
fourteen (14) days of the change.
• The respondent will be responsible for any other costs arising
from his probation.
• In the event it is established pursuant to Admis.Disc.R.
23(17.2) that the respondent has violated the terms of his
probation, then the stay of his six-month suspension shall be
vacated, and the respondent will be suspended from the practice
of law in Indiana for six months, with automatic reinstatement
to the practice of law in Indiana thereafter.
• The respondent will immediately report to the Disciplinary
Commission any failure by him to comply with the terms of his
probation. Such report is to be made in writing within 14 days
of the compliance failure and must specifically identify the
type and circumstance of his failure to comply with the terms of
his probation.
The Clerk of this Court is directed to provide notice of this order
in accordance with Admis.Disc.R. 23(3)(d), to the hearing officer, and to
the clerk of the United States Court of Appeals for the Seventh Circuit,
the clerk of each of the United States District Courts in this state, and
the clerks of the United States Bankruptcy Courts in this state.
Costs of this proceeding are assessed against the respondent.
-----------------------
[1] The conditional agreement refers to April 13, 2002, but the sequence of
events indicates the proper year is 2000.
[2] Admission and Discipline Rule 23(29)(b) provides:
(b) Overdraft Notification Agreement Required. A financial institution
shall be approved as a depository for trust accounts if it files with the
Commission an agreement, in a form provided by the Commission, to report to
the Commission whenever any properly payable instrument is presented
against a trust account containing insufficient funds, irrespective of
whether or not the instrument is honored. The Commission shall establish
rules governing approval and termination of approved status for financial
institutions, and shall annually publish a list of approved financial
institutions. No trust account shall be maintained in any financial
institution that does not agree so to report. Any such agreement shall
apply to all branches of the financial institution and shall not be
canceled except upon thirty (30) days' notice in writing to the Commission.
[3] In this respect, Indiana Professional Conduct Rule 1.15(a) provides
that “a lawyer shall hold property of clients or third persons that is in a
lawyer’s possession in connection with a representation separate from the
lawyer’s own property,” and that “[a] lawyer may deposit his or her own
funds reasonably sufficient to maintain a nominal balance.”
[4] Indiana Professional Conduct Rule 1.15(a) provides, in full:
A lawyer shall hold property of clients or third persons that is in a
lawyer's possession in connection with a representation separate from the
lawyer's own property. Funds shall be kept in a separate account
maintained in the state where the lawyer's office is situated, or elsewhere
with the consent of the client or third person. Other property shall be
identified as such and appropriately safeguarded. Complete records of such
account funds and other property shall be kept by the lawyer and shall be
preserved for a period of five years after termination of the
representation. A lawyer may deposit his or her own funds reasonably
sufficient to maintain a nominal balance.
[5] Those provisions provide:
Maintenance Of Trust Funds In Approved Financial Institutions;
Overdraft Notification
(a) Clearly Identified Trust Accounts In Approved Financial
Institutions And Related Recordkeeping Requirements.
(1) Attorneys shall deposit all funds held in trust in accounts clearly
identified as "trust" or "escrow" accounts, referred to herein as "trust
accounts" and shall inform the depository institution of the purpose and
identity of the accounts. Funds held in trust include funds held in any
fiduciary capacity in connection with a representation, whether as trustee,
agent, guardian, executor or otherwise. Attorney trust accounts shall be
maintained only in financial institutions approved by the Commission.
(2) Every attorney shall maintain and preserve for a period of at least
five (5) years, after final disposition of the underlying matter, the
records of trust accounts, including checkbooks, canceled checks, check
stubs, written withdrawal authorizations, vouchers, ledgers, journals,
closing statements, accounting or other statements of disbursements
rendered to clients or other parties with regard to trust funds or similar
equivalent records clearly and expressly reflecting the date, amount,
source, and explanation for all receipts, withdrawals, deliveries and
disbursements of the funds or other property held in trust.