IN THE
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) Case No. 79S00-9912-DI-697
ANONYMOUS )
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DISCIPLINARY ACTION
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September 12, 2000
Per Curiam
The Indiana Supreme Court Disciplinary Commission and the respondent
agree that the respondent in this lawyer disciplinary proceeding committed
professional misconduct in his handling of matters relating to his firm’s
trust account. The parties further agree that the appropriate sanction for
that misconduct is a private reprimand. We agree and, therefore, accept
the parties’ agreed resolution. Here we recount the facts and
circumstances of this case to illustrate the importance of diligent
attention to the details of maintaining attorney trust accounts.
The respondent is a lawyer in good standing whose law firm maintained
a client trust account at a financial institution. The respondent’s law
partner allegedly created overdrafts in that account. In violation of Ind.
Admission and Discipline Rule 23(29) and the Indiana Supreme Court
Disciplinary Commission Rules Governing Attorney Trust Account Overdraft
Reporting, neither the respondent nor his partner had notified the bank
that the account was a lawyer trust account subject to the reporting of
overdrafts to the Disciplinary Commission.[1] The agreement does not
inform us further about the respondent’s efforts or lack thereof to insure
that the firm complied with the applicable rules. The parties agree,
however, that he violated Admis.Disc.Rule 23(29), Rule 4(A) of the Rules
Governing Attorney Trust Account Overdraft Reporting, and Ind. Professional
Conduct Rule 5.1(a).[2] Not being aware that the account was a client
trust account, the bank did not report the overdrafts to the Commission as
required by Rule 4(A). The Commission independently learned of the
overdrafts while investigating a complaint filed against the respondent’s
partner.
Attorneys are required to deposit all funds held in trust in accounts
clearly identified as “trust” or “escrow” 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. Attorneys shall maintain trust accounts only in financial
institutions that are approved by the Disciplinary Commission.
Admis.Disc.R. 23(29)(a)(1); Rule 2, Indiana Supreme Court Disciplinary
Commission Rules Governing Attorney Trust Account Overdraft Reporting.
Every attorney must notify each financial institution in which the
attorney, or the law firm for which the attorney works, maintains any trust
account that the account is subject to the provisions of overdraft
reporting. Rule 4, Indiana Supreme Court Disciplinary Commission Rules
Governing Attorney Trust Account Overdraft Reporting. Such notice is
accomplished by the filing of a form attached as Exhibit B to the Indiana
Supreme Court Disciplinary Commission Rules Governing Attorney Trust
Account Overdraft Reporting. Such notice is to be provided
contemporaneously with the opening of any trust account opened thereafter.
Id. For each trust account, a lawyer or law firm shall maintain a copy of
each such notice throughout the period of time that the account is open and
for a period of five years following closure of the account. Id.
The duty to notify the financial institution that the account is a
lawyer trust account subject to overdraft reporting is incumbent on all
members of a firm, although that duty need be fulfilled by only one. Rule
4(B), Indiana Supreme Court Disciplinary Commission Rules Governing
Attorney Trust Account Overdraft Reporting. Thus, all attorneys in a firm
which has a trust account in a financial institution may be subject to
professional misconduct charges where the financial institution is not
notified in the manner prescribed in the applicable rules.
Although the respondent’s failure to comply with the notification
provisions delayed discovery of irregularities in his firm’s trust account,
the parties identify no improper motive on the respondent’s part. That
persuades us that a private reprimand is appropriate in this instance.
Accordingly, the agreement submitted by the respondent and Commission to
resolve this case will be accepted by separate order, and the respondent
will be privately reprimanded.
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[1] Ind. Admis.Disc.R. 23(29)(a) provides in relevant part:
(a) Clearly Identified Trust Accounts in Approved Financial
Institutions
and Relate Record-keeping 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. . . .
Rule 4(A) of the Indiana Supreme Court Disciplinary Commission Rules
Governing Attorney Trust Account Overdraft Reporting provides:
Every attorney shall notify each financial institution in which
he or
she maintains any trust account, as defined above, that the
account
is subject to the provisions of overdraft reporting by
submitting a notice
in the form attached as Exhibit B for each such account to the
financial
institution in which the account is maintained. . . .
Rule 4(B) of the Indiana Supreme Court Disciplinary Commission Rules
Governing Attorney Trust Account Overdraft Reporting provides:
In the case of a law firm that maintains one or more trust
accounts in the name of the firm, only one notice from a member
of the firm need be provided for each trust account. However,
every member of the firm is responsible for insuring that notice
of each firm trust account is given to each financial
institution wherein an account is maintained.
[2] Prof.Cond.R. 5.1(a) provides in relevant part:
(a) A partner in a law firm shall make reasonable efforts to ensure
that the
firm has in effect measure giving reasonable assurance that all
lawyers in the
firm conform to the Rules of Professional Conduct.