In re Scheurich

871 So. 2d 1104, 2004 La. LEXIS 1451, 2004 WL 936709
Supreme Court of Louisiana·Decided April 30, 2004·No. No. 2003-B-3264·Published

Opinion

ATTORNEY DISCIPLINARY PROCEEDINGS

PER CURIAM.

This disciplinary matter arises from two counts of formal charges filed by the Office of Disciplinary Counsel (“ODC”) against respondent, Val K. Scheurich, III, an attorney licensed to practice law in Louisiana.

FORMAL CHARGES

Count I

Between September 1, 1994 and October 31, 2000, respondent commingled his own [1105]*1105funds with client funds in his trust account and converted at least $14,985.84 in client funds to his own use. According to an audit report prepared by Ronald White, respondent occasionally used his trust account to pay operating expenses. Respondent also used the trust account to pay expenses for a business he eventually incorporated and for a business that belonged to his wife. Respondent also misused the trust account by withdrawing funds as an “advance” fee, paying expenses on cases prior to depositing the settlement funds, leaving a portion of his fee in the account, or withdrawing a larger fee than that to which he was entitled.

The audit also revealed that respondent often failed to pay third party expenses which were listed on client settlement sheets. In some instances, respondent made late payments to third parties, ranging from one to six years after receiving the settlement funds.

Count II

In 1997, respondent paid a non-lawyer, Larry Harris, the sum of $550 for referring a personal injury case to him.

DISCIPLINARY PROCEEDINGS

On December 17, 2001, the ODC filed two counts of formal charges against respondent, alleging that his conduct violated the following provisions of the Rules of Professional Conduct: Rules 1.1(a) (failure to provide competent representation to a client), 1.3 (failure to act with reasonable diligence and promptness in representing a client), 1.15 (safekeeping property of clients or third persons), 7.2(d) (a lawyer shall not give anything of value to a person for recommending the lawyer’s services), 8.1(a) (knowingly making a false statement of material fact), 8.4(a) (violation of the Rules of Professional Conduct), 8.4(c) (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation), and 8.4(d) (engaging in conduct prejudicial to the administration of justice).

Respondent answered the formal charges and did not deny any of the allegations. The matter then proceeded to a formal hearing, which was conducted by the hearing committee on April 15, 2002. The record was held open to receive evidence relating to restitution, which respondent subsequently submitted without objection.

Hearing Committee Recommendation

After reviewing the evidence presented, the hearing committee made the following factual findings:

1.Respondent converted $14,985.84 in client funds but has since made restitution.

2. Respondent paid a non-lawyer $550 for referring a case to him.

3. There is no evidence that respondent’s clients suffered any financial loss due to his conduct.

Based on these factual findings, the committee determined that respondent violated the following Rules of Professional Conduct:

1. Rules 1.3 and 1.15 by failing to promptly pay healthcare providers after receiving settlement funds. The committee noted that nearly $13,000.00 in payments were outstanding at the time of the hearing, and questioned whether respondent would have paid these sums absent disciplinary action.

2. Rule 7.2(d) for paying $550.00 to a non-lawyer as a referral fee.

3. Rule 8.4(a) for violating the Rules of Professional Conduct.

The committee made no findings as to the other rule violations alleged in the formal charges.

[1106]*1106Considering the ABA’s Standards for Imposing Lawyer Sanctions, the committee concluded that the baseline sanction for respondent’s misconduct is a suspension from the practice of law. The committee found no aggravating or mitigating factors are present.1 Citing Louisiana State Bar Ass’n v. Hinrichs, 486 So.2d 116 (La.1986), the committee recommended that respondent be suspended for three years.

Neither respondent nor the ODC filed an objection to the hearing committee’s recommendation.

Disciplinary Board Recommendation

The disciplinary board generally accepted the hearing committee’s factual findings and application of the Rules of Professional Conduct. In addition, the board found that respondent engaged in conduct prejudicial to the administration of justice, a violation of Rule 8.4(d), when he paid a referral fee to a non-lawyer. The board concluded the remainder of the rule violations alleged in the formal charges are not supported by the record.2

The board found that respondent knowingly violated duties owed to his clients and to the profession. Respondent has admitted that he converted to his own use more than $14,000 in funds withheld to pay third-party medical providers for services rendered to his clients. Although respondent paid all outstanding amounts to the medical providers after institution of these proceedings, his clients were exposed to the danger of being required to pay the providers for the unsatisfied balances on their accounts. Furthermore, respondent’s payment of a referral fee to a non-lawyer caused harm to the profession, the legal system, and the public.

In aggravation, the board recognized a pattern of misconduct. The board found the following mitigating factors are supported by the record: absence of a prior disciplinary record, full and free disclosure to the disciplinary board and a cooperative attitude toward the proceedings, and remorse.

Considering the Hinrichs guidelines, the board concluded that respondent’s misconduct falls within the category of a three-year suspension. Respondent’s actions rise above the threshold level of a “high degree of negligence,” but respondent did not commit other fraudulent acts in connection with his conversion and there is no indication that his clients were greatly harmed. Additionally, respondent paid all outstanding balances due to the third-party medical providers without the necessity of extensive disciplinary or legal proceedings.

Based on this reasoning, the board adopted the committee’s recommendation that respondent be suspended from the practice of law for three years. The board further recommended that respondent be assessed with all costs and expenses of these proceedings, with legal interest to commence running thirty days from the date of finality of the court’s judgment until paid.

Neither respondent nor the ODC filed an objection to the disciplinary board’s recommendation.

[1107]*1107DISCUSSION

Bar disciplinary matters come 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: Quaid, 94-1316 (La.11/30/94), 646 So.2d 343; Louisiana State Bar Ass’n v. Boutall, 597 So.2d 444 (La.1992).

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In re Scheurich, 871 So. 2d 1104, 2004 La. LEXIS 1451, 2004 WL 936709 (La. 2004).

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