Florida Bar v. Johnson

132 So. 3d 32, 2013 WL 4734568
CourtSupreme Court of Florida
DecidedSeptember 4, 2013
DocketNos. SC11-1136, SC11-1578, SC11-2343
StatusPublished
Cited by4 cases

This text of 132 So. 3d 32 (Florida Bar v. Johnson) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Florida Bar v. Johnson, 132 So. 3d 32, 2013 WL 4734568 (Fla. 2013).

Opinion

PER CURIAM.

We have for review the referee’s reports recommending that Respondent Clint Johnson be found guilty of professional misconduct and disciplined. We have jurisdiction. See art. V, § 15, Fla. Const. Previously, in case number SC11-622, Respondent Johnson was suspended on an emergency basis due to trust account irregularities and shortages discovered after his bank sent a trust account overdraft report to the Bar. The three cases involved here are the formal complaint filed against Johnson after the emergency suspension was entered (case number SCI 1-1136) and two contempt proceedings against Johnson (case numbers SC11-1578 and SC11-2343).1

BACKGROUND

SC11-1136: On June 10, 2011, the Bar filed a formal complaint2 against Johnson based on the underlying allegations of misconduct for which he had been suspended on an emergency basis in case number SC11-622. The referee in this case submitted his report and recommendation making extensive findings of fact detailing the rather complicated circumstances of this case.

At the time of the events involved in this case, Johnson was the principal of the Johnson Law Group and also the principal of several debt management companies, including Debt Wave, Consumer Business Debt Counseling, and Enhanced Servicing Solutions. Each of the debt management companies had at least one trust account and an operating account. Johnson Law Group also had a trust account and an operating account. In May 2010, the Bar received an overdraft report for the Johnson Law Group trust account (the 4380 [34]*34account) that triggered its investigation. This report reflected that personal injury settlement checks written to two of Johnson’s clients had been returned for insufficient funds. The clients were paid their funds the following day when the checks were re-presented.

At the final hearing, the Bar’s Chief Auditor, Clark Pearson, testified that his investigation of the 4380 account showed irregularities during the audit period, from January 2009 to November 2010, including account shortages, negative balances, improper transfers into and out of the account and a lack of required documentation showing regular trust account reconciliations and comparisons.3 Pearson testified that Johnson had misappropriated client funds by taking fees before the corresponding deposit and taking an earned fee more than once from the same client. The referee concluded, however, that the testimony concerning actual misappropriations, was conflicting in that Johnson presented the testimony of Pedro Pizzaro, a CPA and former auditor for the Bar, who found fewer actual shortages in the account than Pearson had. The referee also noted that both parties agreed that only two client checks were ever returned for insufficient funds, both on the same date and both had been promptly redeposited and paid. The referee essentially concluded that although there were irregularities and shortages in the account, Johnson had not stolen any money. Rather, as testified by Pizzaro, the shortages and irregularities were the result of bookkeeping and accounting errors made by Johnson’s trusted and longstanding bookkeeper, Deanna Cintron, in order to cover up her theft of funds from Johnson’s operating account4 and poor performance as a bookkeeper. The referee credited Cin-tron’s and Johnson’s testimony that Johnson was unaware of Cintron’s activities and the shortages and irregularities in the trust account until July 5, 2010, when Cin-tron first informed Johnson of the overdraft report and the Bar’s investigation. The referee found that over time, Johnson had allowed Cintron to handle the trust accounts with little supervision and with complete autonomy. Johnson acknowledged his responsibility for the proper operation and management of his trust accounts and his failure to continually and directly supervise the management of those accounts.

From July 2010 through November 2012, Johnson assembled his financial records and tried to recreate accurate records of the many transactions in his many accounts. By December 2010, with the help of two accountants, a new bookkeeper, and Pizzaro, he had properly balanced and reconciled the trust account. In April 2011, [35]*35Johnson was suspended. Although he ceased practicing law, he continued to pay his employees from savings and family loans to assist in the transfer of client files. With the help of Roger D. Moss, Esq., of the Zimmerman, Kiser, Sutcliff law firm in Orlando, he transferred his debt clients to Consumer Alliance Processing Corporation and Consumer Attorney Services. He duly advised these firms that he was suspended, and those firms agreed to cover the nearly $60,000 cost of mailing notices to clients via certified mail.

Johnson also acknowledged that he is the subject of several out of state investigations for failing to obtain authorization in those states for debt management services. He is contesting some, stipulating to others and facing penalties and fines. He stopped accepting debt management clients in early 2010. Walter Tuller, Staff Investigator for the Bar, testified that he spoke with the Attorney General’s Offices in Florida, Georgia, South Carolina, and Colorado regarding the debt management practices of the Johnson Law Group. Tul-ler received copies of court documents in each of these states indicating that the law firm was not in compliance with that state’s registration requirements regarding debt management services, was required to refund funds to some consumers in South Carolina, Georgia, and Florida, and was the subject of a law suit in Colorado regarding these same issues.

SC11-1578: On August 15, 2011, the Bar filed a petition for contempt and order to show cause against Johnson alleging that he violated the terms of the emergency suspension order entered in SC11-622. The petition and a second petition for contempt, discussed below, were referred to a referee. After a hearing, the referee found that Johnson violated the terms of the emergency suspension order by (1) holding himself out as an attorney and continuing to represent three clients after the suspension took effect; (2) failing to notify his debt management clients of his suspension and failing to provide those clients with a copy of the suspension order; (3) providing the Bar with an affidavit that falsely stated that he notified all clients of his suspension; and (4) continuing to withdraw and disburse funds from certain trust accounts after the effective date of the emergency suspension.

SC11-2343: On December 12, 2011, the Bar filed a second petition for contempt and order to show cause against Johnson alleging that he violated the Court’s order granting the parties’ stipulation for appointment of a receiver.5 The petition alleged that Johnson had failed to retain the services of the receiver, despite having stipulated that he would be responsible for all costs associated with the appointment of the receiver and despite having access to funds which should have been used for this purpose. Johnson filed a response on December 30, 2011, acknowledging that he had not retained the appointed receiver, but alleging essentially that he could not afford to do so because all of his operating and trust accounts were frozen. As noted, the petition for contempt was referred to a referee. The referee found that Johnson knowingly and willfully violated the order by failing to retain the services of the receiver.

[36]

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Bluebook (online)
132 So. 3d 32, 2013 WL 4734568, Counsel Stack Legal Research, https://law.counselstack.com/opinion/florida-bar-v-johnson-fla-2013.