In Re Johnson

552 N.E.2d 703, 133 Ill. 2d 516, 142 Ill. Dec. 112, 1989 Ill. LEXIS 171
CourtIllinois Supreme Court
DecidedDecember 21, 1989
Docket67740
StatusPublished
Cited by35 cases

This text of 552 N.E.2d 703 (In Re Johnson) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Johnson, 552 N.E.2d 703, 133 Ill. 2d 516, 142 Ill. Dec. 112, 1989 Ill. LEXIS 171 (Ill. 1989).

Opinions

JUSTICE RYAN

delivered the opinion of the court:

On January 14, 1987, the Administrator of the Attorney Registration and Disciplinary Commission (Administrator) filed a three-count complaint charging the respondent, Paul Sveinbjorn Johnson, with numerous acts of professional misconduct arising out of the settlement of a claim of his client, Walter Geldzahler, against INA Life Insurance Company. Count I charged the respondent with commingling client funds with funds of the Icelandic Consulate and failure to prepare a closing statement upon settlement of the claim. Count I further charged that the respondent had forged the endorsement of co-counsel on the settlement draft, and that the respondent had attempted to shield the settlement funds from Geldzahler’s creditors. Count II charged respondent with engaging in dishonest conduct by representing to co-counsel that he had not received settlement funds on behalf of Geldzahler, when in fact respondent had received them. Count III charged the respondent with repeatedly refusing to produce before the Administrator records related to his handling of the Geldzahler settlement funds.

The complaint alleged that the respondent’s conduct violated the following provisions of the Code of Professional Responsibility: Rule 1 — 102(a)(3), which prohibits illegal conduct involving moral turpitude; Rule 1— 102(a)(4), which prohibits conduct involving dishonesty, fraud, deceit, or misrepresentation; Rule 7 — 102(a)(7), which forbids an attorney to assist a client in conduct known to be illegal or fraudulent; Rule 9 — 102(a), which requires that an attorney deposit client funds into a separate identifiable trust account; Rule 2 — 106(c)(3), which requires that an attorney prepare a detailed closing statement setting forth the application of the contingent fee agreement; and Canon 9, which states that a lawyer should avoid even the appearance of professional impropriety. (107 Ill. 2d Rules 1 — 102(a)(3), 1 — 102(a)(4), 7— 102(a)(7), 9 — 102(a), 2 — 106(c)(3), Canon 9.) The complaint further alleged that the respondent violated Supreme Court Rule 771 (107 Ill. 2d R. 771) by engaging in conduct which tends to defeat the administration of justice and to bring the courts or the legal profession into disrepute.

Respondent did not file an answer to the complaint. Consequently, the Hearing Board ordered that the allegations of the complaint be deemed admitted. The Hearing Board then ordered a hearing, at which it heard the testimony of Thomas Moore, the respondent’s co-counsel in the Geldzahler claim. The respondent did not appear before the Hearing Board. The Hearing Board issued its report, finding that all of the misconduct alleged by the Administrator was proven by clear and convincing evidence, and recommending that respondent be disbarred. Respondent filed with the Review Board exceptions to the report and recommendation of the Hearing Board. The Review Board adopted the Hearing Board’s findings of fact and law, but recommended that respondent be suspended from the practice of law for one year. Respondent has filed with this court exceptions to the report and recommendation of the Review Board.

Respondent was admitted to the bar of Illinois in 1947. In addition to his legal practice, respondent serves as consul general for the Republic of Iceland. In 1982, the respondent agreed to represent Walter Geldzahler in connection with a claim on a disability insurance policy issued by INA Life Insurance Company. Walter Geldzahler is a United States citizen. His wife, Gudrun, is an Icelandic citizen. The respondent asked attorney Thomas Moore of the law firm of Kelly & Moore to join with him in representing Geldzahler. Geldzahler entered into a written contingent fee retainer agreement whereby he jointly retained the respondent and Kelly & Moore to prosecute the action against INA. Under the terms of the contract, attorney fees were to be one-third of the recovery. The respondent and Kelly & Moore orally agreed to a 50/50 division of the attorney fees.

In January 1984, Geldzahler agreed to settle his claim against INA for $35,000. The respondent and Moore agreed to reduce the attorney fees from the contractual one-third to $10,000. On January 15, 1984, the respondent received a settlement check in the amount of $35,000, payable to Walter and Gudrun Geldzahler, the respondent, and Kelly & Moore. The respondent then endorsed the settlement check in his own name, and in the name of Kelly & Moore. The respondent deposited the check in the account of the Icelandic Consulate at the American National Bank & Trust Company of Chicago. The Icelandic consulate account holds funds of the Icelandic government and of Icelandic citizens and is used to pay expenses of the Icelandic Consulate. The respondent testified before the Inquiry Board that because of the Geldzahlers’ poor financial situation, he deposited the check in the Icelandic account, where it would be beyond the reach of the Geldzahlers’ creditors until he could determine what, if any, rights the creditors might have against the settlement proceeds.

Also in January 1984, the respondent told Moore that the case had been settled, but that the attorney fees would not be disbursed until the Geldzahlers’ financial problems were resolved. The respondent testified before the Inquiry Board that he did not wish to disburse the attorney fees immediately following the settlement because he feared that further litigation, including possible bankruptcy proceedings, and negotiations with the Geldzahlers’ creditors might well have been required. The respondent further testified that following the settlement with INA Life Insurance Company, the respondent did in fact engage in negotiations with the Geldzahlers’ creditors. Before the Hearing Board Moore testified that between January and September 1984, the respondent and Moore had several conversations concerning the settlement proceeds. Moore initially stated that “[h]e [the respondent] was never clear to me on whether or not he had received the check. It was my understanding that, due to creditors the Geldzahlers may or may not have had, I honestly don’t know, that either he had not requested them [INA Life Insurance Company] to send the check or that he had the check but would not deposit it.” Moore later testified, “now that I have seen my complaint again, it’s clear to me that he [the respondent] had said all along that the check had really not been issued and he didn’t want it issued because of the creditors and would I please wait.” Also, between January and September 1984, a dispute arose between the respondent and Moore concerning the division of the attorney fees. The respondent determined that because he had done the majority of the work on the Geldzahler case, the original agreement to divide fees equally had become inequitable. Eventually, Moore agreed to a 60/40 division, with the respondent to receive $6,000 and Kelly & Moore to receive $4,000.

In September 1984, the respondent informed Moore that the Geldzahlers had received their share of the settlement proceeds and that the respondent had withdrawn a portion of the respondent’s share of the attorney fees in order to pay his taxes. The respondent refused at that time to pay Moore’s share of the attorney fees.

On November 9, 1984, Moore filed a complaint with the Administrator, charging that the respondent had lied to Moore concerning issuance of the settlement draft and that the respondent had forged Moore’s signature on the settlement draft.

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Cite This Page — Counsel Stack

Bluebook (online)
552 N.E.2d 703, 133 Ill. 2d 516, 142 Ill. Dec. 112, 1989 Ill. LEXIS 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-johnson-ill-1989.