In Re: Daniel E. Becnel, III

• Court: Supreme Court of Louisiana
• Decided: January 30, 2019
• Docket: 2018-B-0848
• Status: Published

Opinion

Supreme Court of Louisiana FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #005

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 30th day of January, 2019, are as follows:

PER CURIAM:

2018-B-0848 IN RE: DANIEL E. BECNEL, III

Upon review of the findings and recommendations of the hearing committee and disciplinary board, and considering the record, briefs, and oral argument, it is ordered that Daniel E. Becnel, III, Louisiana Bar Roll number 20692, be and he hereby is suspended from the practice of law for a period of one year and one day. All costs and expenses in the matter are assessed against respondent in accordance with Supreme Court Rule XIX, § 10.1, with legal interest to commence thirty days from the date of finality of this court’s judgment until paid.

WEIMER, J., concurs in part and dissents in part and assigns reasons. HUGHES, J., dissents with reasons. 01/30/19

SUPREME COURT OF LOUISIANA

NO. 2018-B-0848

IN RE: DANIEL E. BECNEL, III

ATTORNEY DISCIPLINARY PROCEEDING

PER CURIAM

This disciplinary matter arises from formal charges filed by the Office of

Disciplinary Counsel (“ODC”) against respondent, Daniel E. Becnel, III, an attorney

licensed to practice law in Louisiana.

PRIOR DISCIPLINARY HISTORY

Before we address the current charges, we find it helpful to review

respondent’s prior disciplinary history. Respondent was admitted to the practice of

law in Louisiana in 1991. In 2005, we accepted a joint petition for consent discipline

in which respondent stipulated that he engaged in three instances of neglect of a legal

matter, five instances of failure to communicate with a client, and two instances of

failure to promptly remit funds to third parties. For this misconduct, he was

suspended from the practice of law for one year and one day, fully deferred, subject

to eighteen months of supervised probation with conditions, including the

appointment of a probation monitor and respondent’s attendance at Ethics School.

In re: Becnel, 05-0831 (La. 4/29/05), 900 So. 2d 836 (“Becnel I”).

In 2006, respondent accepted a representation involving post-conviction relief

proceedings when he was not competent to handle the matter. After researching the

issues, respondent determined his client had no non-frivolous claims to support post-

conviction relief. Instead of informing his client of this determination and allowing him to decide the future course of the representation, respondent simply failed to file

post-conviction pleadings in state court. He thereafter refused to refund any portion

of the $5,000 advance fee paid by his client, claiming he earned the entire amount.

Subsequently, respondent’s client provided him with arguments for a habeas

petition. Respondent continued to believe the arguments were frivolous. Despite

his belief, respondent did not terminate the representation and instruct the client to

seek other counsel; instead, he filed the habeas petition anyway. Because he

believed the arguments were frivolous, respondent deliberately failed to file the

required supporting memorandum, thereby failing to comply with the federal court’s

rules and again neglecting his client’s legal matter. When the magistrate judge

recommended the client’s habeas petition be dismissed, respondent made no effort

to file an opposition on his client’s behalf.

After review, we determined that respondent’s conduct was knowing, if not

intentional. For his misconduct, respondent was suspended for one year, with three

months deferred, followed by a one-year period of unsupervised probation, and

ordered to make restitution of the unearned fee. In re: Becnel, 10-0884 (La.

10/19/10), 48 So. 3d 1042 (“Becnel II”).

Finally, in 2012, we accepted a joint petition for consent discipline in which

respondent stipulated that he engaged in a consensual sexual relationship with a

client. For this misconduct, he was suspended from the practice of law for nine

months. In re: Becnel, 12-2139 (La. 11/2/12), 99 So. 3d 1005 (“Becnel III”).

Against this backdrop, we now turn to a consideration of the misconduct at

issue in the instant proceeding.

UNDERLYING FACTS

In May 2013, respondent’s client, Tammy Rowell, received a partial

settlement in her workers’ compensation case. Because respondent was serving his

2 suspension in Becnel III at this time, his wife and law partner, Kathryn Becnel,

handled the distribution of the settlement funds. Ms. Becnel withheld $9,574.50

from the settlement to satisfy a Social Security lien. After subtracting sums owed to

a finance company and to the law firm for attorney’s fees, Ms. Becnel paid Ms.

Rowell her portion of the settlement funds on June 12, 2013.

On August 2, 2013, respondent was reinstated to the practice of law. Shortly

thereafter, Ms. Rowell received the final settlement in her workers’ compensation

case. Unaware that his wife had already withheld funds to satisfy the Social Security

lien, respondent erroneously withheld another $7,659.60 for this purpose.1 After

subtracting an additional sum for expenses, respondent paid Ms. Rowell her portion

of the settlement funds on August 19, 2013.

In August 2014, respondent wrote a check to himself drawn on his client trust

account in the amount of $28,000. Respondent believed this sum represented

attorney’s fees owed to him that had not been transferred from the trust account to

his operating account; however, in actuality, $9,574.50 of the withdrawal

represented the funds belonging to Ms. Rowell and still held in the trust account.

In November 2014, the ODC received notice from Chase Bank that

respondent’s client trust account was overdrawn. The overdraft was the result of a

misplaced deposit and was quickly remedied by respondent. When respondent’s

bank records were reviewed as part of the investigation into the overdraft, the

conversion of $9,574.50 of Ms. Rowell’s funds came to light. In August 2015,

respondent wrote a check to Ms. Rowell in the amount of $10,339.41, representing

the amount owed to her with interest.

Respondent has acknowledged that he converted Ms. Rowell’s funds. He also

acknowledged that he made several mathematical errors in connection with his

1 Respondent had negotiated a reduction in the amount of Ms. Rowell’s Social Security lien, and the amount of $7,659.60 represented the reduced amount.

3 handling of his client trust account, and failed to transfer his attorney’s fees from the

account as they were earned.

DISCIPLINARY PROCEEDINGS

In September 2016, the ODC filed formal charges against respondent, alleging

that his conduct violated the following provisions of the Rules of Professional

Conduct: Rules 1.15(a) (safekeeping property of clients or third persons) and 8.4(c)

(engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation).

Respondent answered the formal charges and acknowledged that he negligently

handled client funds.

Joint Stipulations

Prior to a hearing in the matter, respondent and the ODC filed into the record

the following stipulations:

1. Respondent committed the misconduct alleged in the formal charges (a) by

converting a total of $9,574.50 from his former client Tammy Rowell; (b) by

making several mathematical errors in association with his handling of his

trust account; and (c) by failing to promptly transfer earned attorney’s fees out

of his trust account.

2. Respondent’s misconduct violated Rule 1.15(a) of the Rules of Professional

Conduct. 2

3. Respondent contends that he was negligent in committing the stipulated

misconduct. The ODC contends that respondent’s conduct was “knowing.”

4. It is an aggravating factor that respondent has the following three incidents of

prior discipline: Becnel I (2005), Becnel II (2010), and Becnel III (2012).

2 Respondent did not admit to the violation of Rule 8.4(c) alleged in the formal charges, so that issue remained for determination by the hearing committee.

4 5. It is a mitigating factor that respondent had no dishonest or selfish motive in

committing the misconduct alleged in the formal charges.

6. It is a mitigating factor that respondent made full and free disclosure to the

ODC and has demonstrated a cooperative attitude toward these disciplinary

proceedings.

7. It is a mitigating factor that respondent made timely and good faith efforts to

rectify the consequences of his misconduct (a) by paying his client the

proceeds of her settlement promptly after he learned of his accounting error,

and (b) by hiring CPA Angela Willis to regularly audit his trust account.

8. It is a mitigating factor that respondent has exhibited sincere remorse for his

misconduct.

9. It is a mitigating factor that one of the three incidents of prior discipline,

Becnel I (2005), was remote in time. 3

Hearing Committee Report

In its report, the hearing committee determined that the only factual issue

before it was whether respondent’s conduct was negligent or knowing. In resolving

this question, the committee cited respondent’s testimony that he mistakenly

withheld funds from Ms. Rowell’s second settlement to satisfy the Social Security

lien because he was unaware that his wife had already withheld funds for the same

purpose. The committee found there was no evidence presented by the ODC that

respondent actually knew he had Ms. Rowell’s funds in his client trust account for

an extended period of time. The committee also noted the testimony of the ODC’s

forensic accountant that respondent was guilty of “sloppiness” in handling his trust

account. Based upon these findings, and the testimony, exhibits, and joint

3 Although not included in the stipulations, the parties also agreed that the applicable baseline sanction in this matter is a one year and one day suspension from the practice of law.

5 stipulations of the parties, the committee concluded that respondent’s conduct was

negligent and did not rise to the level of knowing or intentional.

The committee determined that respondent violated a duty to his client. As

previously stated, his conduct was negligent. He caused injury to his client. As a

result of respondent’s mishandling of Ms. Rowell’s settlement, she was deprived of

a portion of her settlement funds for approximately two years. However, the

committee pointed out that Ms. Rowell actually received some $2,000 in additional

money because respondent had negotiated a reduction in the Social Security lien

from $9,574.50 to $7,659.60. The parties agree that the applicable baseline sanction

is a one year and one day suspension. The aggravating and mitigating factors have

been stipulated to by the parties.

Concerning the issue of an appropriate sanction, the committee recognized

that there are more mitigating factors present in this matter than aggravating factors.

The committee particularly noted respondent’s remorse and the fact that he has hired

a CPA to eliminate the type of error that occurred herein. However, despite the fact

that there are relatively few aggravating factors, the committee gave significant

weight to the fact that this is respondent’s fourth disciplinary proceeding.

Accordingly, the committee recommended that respondent be suspended from the

practice of law for one year and one day, with all but sixty days deferred, followed

by a one-year period of probation governed by the following conditions:

a) Regular audits of respondent’s trust account during the period of probation shall be performed by a CPA of respondent’s choosing, subject to the approval of the ODC, to be submitted quarterly to the ODC, with the cost and expenses of the audits paid by respondent; b) At least six hours of respondent’s mandatory continuing legal education requirements during the probationary period shall be obtained in the area of law office practice management/client trust account management; and c) Respondent shall successfully complete the Louisiana State Bar Association’s Trust Accounting Program during the probationary period.

6 Both respondent and the ODC objected to the hearing committee’s report.

Respondent asserted that the sanction recommended by the committee is too harsh.

The ODC objected to the committee’s conclusion that respondent’s conduct was

negligent and its failure to address the violation of Rule 8.4(c) alleged in the formal

charges. The ODC also argued that the sanction recommended by the committee is

too lenient.

Disciplinary Board Recommendation

After reviewing this matter, the disciplinary board determined that the hearing

committee’s factual findings are not manifestly erroneous, and that the committee

correctly found respondent violated Rule 1.15(a), as stipulated. Though it did not

specifically reject a Rule 8.4(c) violation, the committee apparently declined to find

a violation of that rule, which applies to misconduct involving dishonesty, fraud,

deceit, or misrepresentation. In describing respondent’s misconduct, the committee

used terms such as “unaware,” “mistakenly,” and “sloppiness,” suggesting it did not

find respondent’s conduct to be dishonest or that he intended to misrepresent

anything to his client. Indeed, the parties stipulated as a mitigating factor that

respondent had no dishonest or selfish motive. Based upon the committee’s factual

findings, the board declined to find a violation of Rule 8.4(c).

The board determined that respondent violated a duty owed to his client. He

acted negligently and caused harm to his client, inasmuch as she was deprived of

funds to which she was rightfully entitled for two years.

Turning to the issue of an appropriate sanction, the board noted that in cases

involving trust account mismanagement with little or no actual harm, this court has

often imposed fully deferred suspensions. In In re: Alex, 16-1020 (La. 11/15/16),

205 So. 3d 895, an attorney misused and mishandled her client trust account by

making inappropriate payments, failing to disburse attorney’s fees as earned, making

7 numerous accounting and procedural errors regarding settlement documents, and

failing to maintain proper documentation. Similar to the instant case, the single Rule

violated was Rule 1.15(a). This court commented that it had imposed fully deferred

suspensions in similar trust account mismanagement cases, but in the case of Ms.

Alex, it found a fully-deferred suspension was inappropriate due to her prior

discipline for similar misconduct. The court imposed a one year and one day

suspension, with all but thirty days deferred, followed by a two-year period of

probation subject to conditions similar to those recommended by the committee in

this matter.

The board noted that although the instant case has many similarities to Alex,

two distinctions can be made. First, respondent has not previously been disciplined

for trust account violations, making this aggravating factor somewhat less egregious

here than in the case of Ms. Alex. Respondent has, however, been disciplined on

three prior occasions. Second, unlike Ms. Alex, respondent’s conduct led to some

measure of client harm. Although respondent made his client whole by promptly

making payment to her, with interest, the client was nonetheless deprived of the use

of her funds for two years. Finding these two distinctions merit the imposition of an

actual suspension, the board adopted the two-month period of actual suspension

recommended by the hearing committee, along with probation and the recommended

conditions.

Based on this reasoning, the board recommended respondent be suspended

from the practice of law for one year and one day, with all but sixty days deferred,

followed by a one-year period of probation governed by the conditions

recommended by the committee. The board also recommended that respondent be

assessed with the costs and expenses of the proceeding.

8 The ODC filed an objection to the disciplinary board’s recommendation.

Accordingly, the case was docketed for oral argument pursuant to Supreme Court

Rule XIX, § 11(G)(1)(b).

DISCUSSION

Bar disciplinary matters fall within the original jurisdiction of this court. La.

Const. art. V, § 5(B). Consequently, we act as triers of fact and conduct an

independent review of the record to determine whether the alleged misconduct has

been proven by clear and convincing evidence. In re: Banks, 09-1212 (La. 10/2/09),

18 So. 3d 57. While we are not bound in any way by the findings and

recommendations of the hearing committee and disciplinary board, we have held the

manifest error standard is applicable to the committee’s factual findings. See In re:

Caulfield, 96-1401 (La. 11/25/96), 683 So. 2d 714; In re: Pardue, 93-2865 (La.

3/11/94), 633 So. 2d 150.

Respondent stipulated that he did not disburse $9,574.50 to his client, made

several mathematical errors in handling his trust account, and failed to promptly

transfer earned attorney’s fees out of his trust account. This misconduct amounts to

a violation of the Rules of Professional Conduct as found by the disciplinary board.

Having found evidence of professional misconduct, we now turn to a

determination of the appropriate sanction for respondent’s actions. In determining

a sanction, we are mindful that disciplinary proceedings are designed to maintain

high standards of conduct, protect the public, preserve the integrity of the profession,

and deter future misconduct. Louisiana State Bar Ass’n v. Reis, 513 So. 2d 1173

(La. 1987). The discipline to be imposed depends upon the facts of each case and

the seriousness of the offenses involved considered in light of any aggravating and

mitigating circumstances. Louisiana State Bar Ass’n v. Whittington, 459 So. 2d 520

(La. 1984).

9 The hearing committee and disciplinary board have recommended respondent

be suspended for a period of one year and one day, with all but sixty days deferred.

We acknowledge that such a sanction finds some support in our prior jurisprudence

involving negligent mishandling of a client trust account.

However, the case at bar differs from a typical negligent mishandling case

because respondent has already been disciplined twice by this court for mishandling

client funds. Each time, we imposed relatively lenient sanctions (a fully-deferred

suspension in Becnel I, and a one-year suspension with three months deferred in

Becnel II), in the expectation that respondent would make positive and responsible

changes in his law practice, including the way he handled client and third-party

funds. Rather than accepting these opportunities to correct his accounting practices,

respondent instead continued the same slipshod methods.

Respondent’s actions created both actual and potential harm. The deprivation

lasted for two years and may have lasted longer if not discovered during the ODC’s

investigation of an overdraft. It appears likely, if not certain, that respondent’s

careless accounting practices could have eventually led to a situation where the client

or third-party funds might be unavailable and respondent would be unable to make

restitution. Considering these factors against the backdrop of respondent’s prior

disciplinary history, we must conclude the conduct in the instant case warrants more

significant discipline than a typical case arising from negligent mishandling of a trust

account.

In mitigation, we acknowledge respondent’s lack of a dishonest motive, his

prompt efforts at restitution, cooperation, and remorse. We also believe the record

demonstrates he has taken measures, albeit belatedly, to improve his accounting

practices.

Considering these factors, we will suspend respondent from the practice of

law for a period of one year and one day. We further caution respondent that any

10 future mishandling or mismanagement of his trust account will be viewed by this

court in a very harsh light.

DECREE

Upon review of the findings and recommendations of the hearing committee

and disciplinary board, and considering the record, briefs, and oral argument, it is

ordered that Daniel E. Becnel, III, Louisiana Bar Roll number 20692, be and he

hereby is suspended from the practice of law for a period of one year and one day.

All costs and expenses in the matter are assessed against respondent in accordance

with Supreme Court Rule XIX, § 10.1, with legal interest to commence thirty days

from the date of finality of this court’s judgment until paid.

11 01/30/19

NO. 18-B-0848

ATTORNEY DISCIPLINARY PROCEEDINGS

WEIMER, J., concurring in part and dissenting in part.

In the instant case, the record supports the hearing committee’s determination

that respondent’s misconduct was largely the product of “sloppiness” and

miscalculations of which the respondent was “unaware.” The hearing committee

concluded his conduct was negligent, there was no dishonest or selfish motive, he

demonstrated a cooperative attitude to the disciplinary proceedings, a good faith

effort to rectify his mistake, and sincere remorse. The disciplinary board agreed with

these findings and noted the client was made whole when repaid with interest.

However, I find the number of times respondent has been sanctioned for misconduct

to be troubling. Despite respondent’s lack of a selfish motive and the fact he

apparently represented his client’s interests well–including negotiating a reduction

of a social security lien on the client’s settlement–respondent’s inattention to the

details of handling the funds owed to the client are now part of a lineage of

professional misconduct. Therefore, the present misconduct merits a more serious

sanction than otherwise would be imposed.

In light of the factual determinations of the hearing committee and the

concurrence in those findings by the disciplinary board, I would order a suspension

of one year and one day, with all but six months deferred, followed by a period of

probations with conditions. In other respects, I concur with the majority’s opinion. 01/30/19

Hughes, J., dissents.

I respectfully dissent from the suspension of one year and one day imposed

and would order a suspension of one year.