In the Matter of Edward Hine, Jr

875 S.E.2d 716, 314 Ga. 70

• Court: Supreme Court of Georgia
• Decided: June 22, 2022
• Docket: S22Y0206
• Status: Published

Opinion

314 Ga. 70 FINAL COPY

S22Y0206. IN THE MATTER OF EDWARD HINE, JR.

PER CURIAM.

This disciplinary matter is before this Court on the petition for

voluntary discipline filed by Edward Hine, Jr. (State Bar No.

355775), prior to the issuance of a formal complaint, pursuant to Bar

Rule 4-227 (b). In his petition, Hine, who has been a member of the

Bar since 1976, admits that, by his conduct in failing to adequately

communicate with his clients and in mishandling client funds, he

has violated Rules 1.4 (requiring a lawyer to keep a client informed

of matters requiring the client’s informed consent and to consult

with the client), 1.8 (a) (providing that a lawyer shall not enter into

a business transaction with a client if the client expects the lawyer

to exercise his professional judgment for the protection of the client,

and that a lawyer shall not knowingly acquire an interest adverse

to the client unless certain conditions are met) and (b) (providing that a lawyer shall not use information gained in the professional

relationship to disadvantage of a client), 1.15 (I) (a) (requiring a

lawyer to keep client funds separate from the lawyer’s own funds),

and 1.15 (II) (b) (providing that a lawyer’s personal funds should not

be deposited in his trust account and that trust account funds,

except for earned attorney fees, not be withdrawn for the lawyer’s

personal use) of the Georgia Rules of Professional Conduct found in

Bar Rule 4-102 (d). The maximum sanction for a violation of Rules

1.4 and 1.8 (a) is a public reprimand, while the maximum sanction

for a violation of Rules 1.8 (b), 1.15 (I) (a), and 1.15 (II) (b) is

disbarment. Hine requests that he receive a six-month suspension

as a sanction for his admitted violations of the rules. The State Bar

has filed a response, in which it states that it “might” be appropriate

for this Court to accept Hine’s petition and impose a six-month

suspension. For the reasons discussed below, we reject Hine’s

petition for voluntary discipline.

Hine begins his recitation of the underlying facts by recounting

that his wife passed away in May 2021 after a 17-month battle with

2 cancer, that he has transferred all of his clients save one to other

counsel, that his one remaining client was in the process of selling

off all of its assets, and that he intends to convert his Bar status to

inactive once that sale has closed. Hine then states that, in

November 2018, he was appointed as executor of a client’s estate; he

deposited the estate funds into his trust account, paid the estate’s

expenses, and made distributions from those funds to the estate’s

beneficiaries. Hine asserts that the will underlying the estate

authorized him, in his role as executor, to make loans from the

estate funds, and he acknowledges that he advanced funds from the

estate to his operating account without the consent of the estate’s

beneficiaries. Hine states that he repaid these advances in February

2020. In March 2021, Hine noticed that an item pending against his

trust account would overdraw that account, so he made a deposit to

his trust account before the pending item presented, such that there

was no overdraft, and he self-reported the matter to the Bar,

attributing the issue to his failure to debit a distribution to the

estate’s beneficiaries against a deposit he made of personal funds to

3 his trust account. In response to a query from the Bar, Hine

investigated the matter, concluding that he was guilty of the

aforementioned violations of the Rules, and made full disclosures to

the Bar and to the beneficiaries, who he asserts have accepted his

accounting and make no claim against him.

Hine acknowledges that he violated Rule 1.4 and Rule 1.8 (a)

and (b) by failing to communicate with, and to seek the approval of,

the estate’s beneficiaries before advancing funds to his operating

account and that he violated Rule 1.15 (I) (a) and Rule 1.15 (II) (b)

by depositing estate funds into his operating account. Hine asserts

that a suspension would be the appropriate penalty in this matter,

given that he repaid the misappropriated funds in full, that he made

an accounting to the estate beneficiaries, and that he self-reported

the matter to the State Bar. Hine acknowledges that he acted

knowingly in failing to obtain consent from the beneficiaries prior to

advancing funds to his operating account from the estate and that,

although no actual client harm occurred, his actions had the

potential to cause harm to his clients and the legal system.

4 As to factors in aggravation of discipline, Hine states that,

because of his considerable experience as an attorney, he was “very

clearly someone who knew better than to act in such a reckless and

improper manner.” As to factors in mitigation, Hine asserts that he

does not have a prior disciplinary history in his 45 years of practice;

that he made a timely, good-faith effort to disclose his misconduct to

the affected clients and the Bar and sought to rectify the

consequences of his misconduct; that he has demonstrated a

cooperative attitude in bringing this matter to the attention of the

Bar and in submitting this petition prior to the commencement of

proceedings by the Bar; and that he has otherwise exhibited good

character, integrity, and a positive reputation in the community, as

evidenced by letters of reference. Based on the foregoing, Hine

requests the imposition of a six-month suspension.

The Bar filed a timely response to this petition, in which it

provides additional facts regarding the estate matter, recounting

that, during his administration of the estate, Hine transferred

$129,071.50 in funds that had been entrusted to him to his operating

5 account, despite the fact that, as of that time, the fees and expenses

that Hine had charged to the estate totaled only $59,363.50. Hine

explained in a letter to the beneficiaries that the $69,608 difference

between the earned and allocated funds had been a loan, although

the beneficiaries had been unaware of the existence of any such loan.

Hine further explained to the beneficiaries that he had repaid

$68,951.50 to the estate from his personal funds before making a

distribution to the beneficiaries. These distributions apparently

resulted in an overdraft of Hine’s trust account in the amount of

$3,344.31, which Hine covered with personal funds. The overdraft

was reported to the Bar, with Hine explaining that he

had a credit balance of $85,000 in [his] ledger account in trust, [so he] planned to debit [his] trust account credit balance to cover the [estate] deficit. However, [he] failed to actually debit [his] personal trust account with the [estate] deficit, and on the trust account ledger, [his] account remained at $85,000 instead of the correct balance of $81,658.69 after debiting the [estate] deficit against [his] credit balance.

The Bar further recounts that Hine informed the estate’s

beneficiaries that, although the will authorized him to charge an

6 hourly fee, the earned fees to which he was entitled totaled $43,526,

as opposed to the $59,363.50 he had collected in fees from the estate;

Hine did apparently refund the $15,837.50 fee overcharge to the

beneficiaries.

In addition to providing additional details concerning the

estate matter, the Bar’s response contains a recitation of facts

related to Hine’s handling of a trust involving a different client,

which Hine did not mention in his petition. The Bar recounts that

Hine was the sole trustee of a trust established by a client, who died

in October 2003, with a remainder interest to be distributed for the

benefit of a college after the death of the client’s wife, who passed in

September 2018. In January 2011, Hine executed a promissory note

to the client trust in exchange for an $85,000 loan from the trust to

Hine, with an apparent maturity date on the note of December 31,

2011. Hine remained the trustee of the client trust and the obligor

on the note during the events described above concerning the estate,

and Hine maintained to the Bar that the client’s wife was aware of

the $85,000 loan and permitted him to defer repayment of the loan,

7 although the Bar notes that Hine has not provided written

documentation to that effect. Upon the client’s wife’s passing, Hine

paid the balance of the proceeds of the client trust to the college, but

he did not pay the $85,000 plus interest that he owed pursuant to

the note until apparently prompted to do so as a result of the Bar’s

investigation, at which point he paid the $154,489.93 owed

(principal plus interest) to a foundation associated with the college,

to which the college had apparently assigned its interest in the

bequest.

The Bar agrees that Hine’s conduct violated Rule 1.4 by failing

to keep his client informed and to consult with his client, that he

violated Rule 1.8 because there was no evidence that he had ever

obtained informed consent from any of the interested parties prior

to borrowing money from the sums entrusted to his care, that he

violated Rule 1.15 (I) (a) by commingling funds over which he had a

fiduciary duty and converting them for his own use, and that he

violated Rule 1.15 (II) (b) by withdrawing funds belonging to the

estate for his personal use without first properly debiting the funds

8 to the estate’s account and by having to deposit significant personal

funds into his trust account to make up shortfalls in the account.

The Bar then assesses Hine’s conduct in the context of the ABA

Standards for Imposing Lawyer Sanctions. See In the Matter of

Morse, 266 Ga. 652, 653 (470 SE2d 232) (1996) (stating that this

Court looks to the ABA Standards for guidance in determining the

appropriate disciplinary sanction). The Bar begins with Standard

4.1, which concerns the failure to preserve client property and as to

which the Bar notes that Hine’s conversion of client funds for his

own use violated his duties to preserve client funds in a manner that

kept them segregated from his own, presumptively calling for

disbarment or suspension, subject to considerations such as Hine’s

mental state and any actual or potential injuries caused. As to

Standard 4.3, which concerns the failure to avoid conflicts of

interest, the Bar states that Hine’s advances of client funds to

himself without the informed consent of impacted parties had the

intent to benefit Hine and the potential for serious injury to clients

or third-party beneficiaries, such that the presumptive penalty for

9 Hine’s Rule 1.8 violation would be disbarment. The Bar next

addresses Hine’s conduct under ABA Standard 4.4, which concerns

a lack of diligence, noting that disbarment is generally appropriate

where a lawyer knowingly deceives a client with the intent to benefit

himself where there is serious injury or potential injury to the client.

The Bar further notes that, although Hine admitted a lack of candor

that violated the duties associated with Standard 4.6, he did not

admit to a violation of Rule 1.5 or Rule 8.4 (a) (4), which are the only

rules to which Standard 4.6 applies, see Appendix 1, Cross-

Reference Table: ABA Model Rules of Professional Conduct and

Standards for Imposing Sanctions, although the Bar allows that

Hine’s reference to Standard 4.6 underscores the seriousness of his

Rule 1.4 violation. The Bar points to Hine’s admission that he acted

knowingly in failing to obtain the informed consent of the affected

parties, notes the considerable potential for injury to the affected

parties, and concludes that the presumptive penalty would be

disbarment or a lengthy suspension. The Bar agrees with the factors

10 in aggravation1 and mitigation noted by Hine and adds that the

illness and death of his wife provides some additional mitigation,

although it notes that Hine’s misconduct and his wife’s illness do not

necessarily appear to have been contemporaneous.

The Bar asserts that, in light of the facts that Hine converted

for his own use substantial funds that had been entrusted to him as

a fiduciary and that he did not acknowledge to the affected parties

that he owed to them almost $240,000,2 disbarment is the

presumptively appropriate penalty. However, the Bar states that

this Court has “softened its approach” in cases in which the

mitigating factors substantially outweigh the factors in aggravation.

The Bar acknowledges that the mitigating factors here appear to

outweigh the factors in aggravation and states that it is also

relevant that Hine happened to be able to repay all of the amounts

1 The Bar additionally specifies that it is refraining from arguing any

additional factors in aggravation, pursuant to negotiations between the Bar and Hine’s counsel in this matter. 2 This amount consists of the “loan” from the estate, the fee overcharge

to the estate, and the principal plus interest owed on the loan from the client trust.

11 owed to the various affected parties. The Bar points to the recent

decision of this Court in In the Matter of Mathis, 312 Ga. 626 (864

SE2d 40) (2021), and asserts that Hine’s cooperation and contrition

are substantially mitigating, as he remediated the effects of his

misconduct as to the affected parties,3 effectively closed his practice

and announced his retirement, and filed this petition prior to the

instigation of other proceedings. The Bar maintains that this Court

should “uphold” Hine’s acceptance of the consequences of his

misconduct, as opposed to other, unidentified attorneys who only

make restitution or seek to “cut a deal” when all other avenues are

exhausted. As such, the Bar agrees that this Court “might

appropriately order” a six-month suspension as punishment for

Hine’s acknowledged misconduct.

In addition to its recitation of the underlying facts and its

analysis of the potentially appropriate sanction, the Bar’s response

3 Although it appears that Hine did repay the “loan” from the estate prior

to the Bar becoming aware of his misconduct, he does not appear to have sought to remediate the fee overcharge to the estate or his conduct regarding the client trust until after the Bar became involved.

12 has attached certain documents related to its investigation.

Although not mentioned by either Hine or the Bar, among these

documents is a letter from Hine to an individual at the Bar, in which

Hine provided some explanation regarding his misconduct and to

which he attached a number of documents. In the course of his

explanation, Hine states, as to the client trust matter that he failed

to mention in his petition, that

[a]lthough [he] did not consider it at the time the note [to the client trust] was funded, [he] acknowledges that the loan and [his] failure to timely repay it was a breach of [his] fiduciary obligations to the . . . Trust and is a separate ground for disbarment to which [he has] no defense.

It is unclear, in the light of this record evidence, why Hine

apparently did not believe that he needed to address the client trust

matter at all in his petition for voluntary discipline or why the Bar

did not mention this admission in its response or apparently view

the client trust matter as a separate basis for discipline.

Furthermore, it is noteworthy that Hine’s treatment of the

estate matter contains no mention of the fact that he overcharged

13 the estate’s beneficiaries by more than $15,000 in fees. He appears

to have refunded the overcharged fees to the beneficiaries, but, from

a letter to the beneficiaries that Hine attached to his aforementioned

letter to the Bar, it appears that Hine did not even realize his error

in calculating his fee, in a manner inconsistent with the will, let

alone seek to remediate it, until after he reported his misconduct in

the handling of the estate funds to the Bar. Additionally, Hine

appears to have failed to mention the overcharging in his

communications with the Bar, and it appears to have become known

to the Bar only because of the inclusion of that issue in the letter to

the beneficiaries, which Hine provided to the Bar in order to explain

his mishandling of the estate funds in the matter of the “loan” from

the estate.

Having reviewed the record, we conclude that acceptance of

this petition would not be appropriate. Taking into account no more

than the conduct to which Hine has admitted, that conduct

represents a serious violation of the Rules of Professional Conduct

and could by itself warrant disbarment in the absence of substantial

14 mitigating evidence. See, e.g., In the Matter of Harris, 301 Ga. 378

(801 SE2d 39) (2017) (disbarring attorney for violating Rules 1.15 (I)

and 1.15 (II), where attorney misappropriated trust funds and

commingled those funds with his own and offered no explanation for

his conduct and no mitigation beyond the lack of a prior disciplinary

history). Moreover, in addition to the conduct to which Hine has

admitted in his petition, the contents of the Bar’s response and the

documents attached thereto raise the further question of whether

Hine’s conduct in overcharging the estate and in regards to his

handling of the client trust matter might serve as the basis for

additional sanctionable violations of the Rules of Professional

Conduct. Hine’s failure to mention the estate fee overcharge or client

trust matter at all appears to call into question the validity of the

assertion, made by both Hine and the Bar, that his supposed

willingness to disclose his misconduct and accept its consequences

is significantly mitigating. It is also unclear from the Bar’s response

whether it was suggesting that the recommended discipline was

based on the estate matter alone or whether it was also taking into

15 account the client trust matter and the billing overcharge. Any

future attempts to resolve Hine’s disciplinary matter should address

this additional conduct and the question of whether it provides any

basis for discipline, and, if so, at what level of sanction. For these

reasons, we reject Hine’s petition for voluntary discipline.

Petition for voluntary discipline rejected. All the Justices concur.

Decided June 22, 2022.

Paula J. Frederick, General Counsel State Bar, William D.

NeSmith III, Deputy General Counsel State Bar, Jenny K.

Mittelman, James S. Lewis, Assistant General Counsel State Bar, for

State Bar of Georgia.