In re Krause

737 A.2d 874, 1999 R.I. LEXIS 178, 1999 WL 760641
Supreme Court of Rhode Island·Decided September 21, 1999·No. No. 99-368-M.P.·Published

Opinion

OPINION

PER CURIAM.

This matter is before the Court on a recommendation of the Supreme Court Disciplinary Board (board) that the respondent, Harold E. Krause, be disbarred from the practice of law. The respondent was previously suspended from the practice of law in 1996 by an order of this Court and has not practiced law nor sought reinstatement since that order. See In the Matter of Krause, 676 A.2d 1340 (R.I.1996).

The facts giving rise to the instant recommendation of the board relate to ten disciplinary complaints filed against respondent after his suspension from the practice of law. Formal petitions for disciplinary action were duly served on respondent in each of the disciplinary complaints. The respondent did not file a responsive pleading to any of the disciplinary charges levied by the board. Accordingly, pursuant to Section 3, Rule 3.18(d) of the Rules of Procedure of the Disciplinary Board of the Supreme Court, all of the charges were deemed admitted.

The ten disciplinary complaints were consolidated for hearing before a retired judge of the Family Court, in accordance with Article III, Rule 4(c) of the Supreme Court Rules of Disciplinary Procedure.1 The respondent was served with a notice of the hearing and did not appear to contest the charges against him. The hearing judge recommended the sanction of disbarment, a recommendation duly approved by the board and submitted to this Court. Pursuant to Article III, Rule 6(d) of the Supreme Court Rules of Disciplinary Procedure, it is the duty of this Court to review the record of the disciplinary proceedings and enter an appropriate order.

Upon receipt of the board’s recommendation, respondent was ordered to appear before the Court to show cause why he should not be disciplined in accordance with the board’s recommendation. He appeared before the Court and claimed that he should not be disciplined as he alleged, inter alia, that he believed that the disciplinary hearing had been postponed so that his attorney could prepare an affidavit in consent of disbarment; that he had been prejudiced due to the consolidation of the ten complaints into one hearing; that his due process rights were violated because deputy disciplinary counsel had purportedly advised him that he could submit his answer to the pending charges “at his convenience”; and that the disciplinary hearing was scheduled before he was allowed to file his answer. Our review of the record and affidavits submitted by the chief and deputy disciplinary counsels reveal that each of these allegations is devoid of merit. The respondent was not represented by counsel during these proceedings; he was not prejudiced by the consolidation of ten complaints deemed admitted by rule; there was no agreement that he could submit his answer to the formal charges whenever he found it convenient [876] to do so; and he failed to submit an answer to the formal charges or request an extension of time in which to do so. His claims to the contrary border on the spurious. Therefore, we conclude that cause has not been shown, and we proceed to address the merits of the charges.

It is not necessary for the disposition of this disciplinary case to address each factual allegation in the individual petitions. A brief summary of that misconduct is sufficient to demonstrate that the recommendation of the board is amply supported by the record. The respondent has engaged in a broad pattern of misconduct that is in violation of a number of the Supreme Court Rules of Professional Conduct. We will summarize the disciplinary complaints in the order presented by the board.

The most serious of respondent’s transgressions was his misappropriation of client funds entrusted to his care. In one instance he was appointed as guardian of the estate of Helen M. Speedwell by the Probate Court of Newport. From the ward’s funds he withdrew, without court permission, $25,000 as fees. On a subsequent fee application the court awarded him less than this sum and directed him to reimburse the estate $10,350 as excess fees. The respondent did not comply with the order of the Probate Court. This misconduct constitutes a conversion of funds in violation of Article V, Rule 8.4(c) of the Supreme Court Rules of Professional Conduct.2 Moreover, he failed to properly segregate the ward’s funds in a separate account, and commingled those funds and other funds belonging to the ward with his own accounts in violation of Article V, Rule 1.15(a) of the Supreme Court Rules of Professional Conduct,3 and failed to promptly pay bills owed by the ward in violation of Rule 1.15(b).4 The respondent continued to serve as guardian of the ward even after he had been directed to remove himself from involvement by an order of this Court on May 27, 1993, in violation of Rule 3.4(c) of the Supreme Court Rules of Professional Conduct.5 Throughout his involvement in this guardianship estate he neglected the interests of the ward in violation of Rule 1.3 of the Supreme Court Rules of Professional Conduct.6

The estate was eventually reimbursed when successor counsel filed a claim against a posted surety bond. However, payment by the bonding company does not absolve respondent of his misconduct. We believe that this case, standing alone, would warrant the sanction recommended by the board.

However, respondent’s misappropriation of funds occurred during the course of his representation of other clients as well. In May 1993 he was retained to represent a minor who had been injured when she was struck by a motor vehicle while riding her bicycle. The respondent successfully negotiated a settlement in the amount of $50,000, a settlement approved by a judge of the Superior Court upon the recommendation of an in[877] dependent guardian ad litem. The settlement check was received by respondent on November 19, 1995. An irrevocable trust was established from the settlement proceeds for the benefit of the minor.

The corpus of the trust was to consist of $30,045, the remainder of the settlement after payment of an attorney’s fee to respondent and other court approved disbursements. The named trustee was another attorney admitted to the bar of this state. The respondent delayed payment of those funds to the trustee until April 9, 1996, after a disciplinary complaint had been filed by the child’s mother. A review of respondent’s financial records revealed that the funds properly belonging in trust did not remain in respondent’s accounts during the intervening five months, and a portion of those funds had been converted to his own use. While full payment was eventually made, the disciplinary violations were complete upon the misappropriation of the funds. Accordingly, the board properly determined that respondent’s conduct was in violation of Rules 1.3, 1.15(a), 1.15(b) and 8.4(c) of the Supreme Court Rules of Professional Conduct.

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In re Krause, 737 A.2d 874, 1999 R.I. LEXIS 178, 1999 WL 760641 (R.I. 1999).

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Matter of Krause
676 A.2d 1340 (Supreme Court of Rhode Island, 1996)
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667 A.2d 1265 (Supreme Court of Rhode Island, 1995)