In the Matter of Karen Lynn Pass

879 S.E.2d 454, 314 Ga. 805

• Court: Supreme Court of Georgia
• Decided: October 4, 2022
• Docket: S22Y1156, S22Y1176
• Status: Published

Opinion

314 Ga. 805 FINAL COPY

S22Y1156, S22Y1176. IN THE MATTER OF KAREN LYNN PASS.

PER CURIAM.

These two disciplinary matters are before the Court on the

consolidated report submitted by the Special Master, Patrick H.

Head, who recommends that this Court impose a public reprimand

with conditions upon respondent Karen Lynn Pass (State Bar No.

480920) for her violations of Rules 1.15 (I) (a), 1.15 (II) (b), and 5.3

(b) of the Georgia Rules of Professional Conduct (“GRPC”), found in

Bar Rule 4-102 (d), in connection with two client matters. Neither

party has filed any exceptions to the report and recommendation,

see Bar Rule 4-218, and we agree that a public reprimand with

conditions is appropriate discipline in this case.

According to the special master, the matter underlying Case

No. S22Y1156 arose from a formal complaint charging Pass with

violating a number of rules during her representation of an individual in a personal injury matter. But the special master found

that clear and convincing evidence showed only that Pass had

deposited funds from the settlement of her client’s case into her

IOLTA account at a time when that account also held funds

belonging to at least one other client and that Pass admittedly kept

no ledgers or other records from which she would be able to tell at

any given time the actual amount of funds in her IOLTA account

belonging to each client. Based on those facts, the special master

concluded that Pass had violated Rules 1.15 (I) (a)1 and 1.15 (II) (b),2

which rules, he noted, were somewhat duplicative in that Rule 1.15

(I) (a) requires an attorney to keep complete records of the trust

1 Rule 1.15 (I) (a) provides in relevant part that “[a] lawyer shall hold

funds or other property of clients or third persons that are in a lawyer’s possession in connection with a representation separate from the lawyer’s own funds or other property. Funds shall be kept in one or more separate accounts maintained in an approved institution. . . . Complete records of such account funds and other property shall be kept by the lawyer.” 2 Rule 1.15 (II) (b) provides in relevant part that “[n]o personal funds

shall ever be deposited in a lawyer’s trust account, except that unearned attorney’s fees may be so held until the same are earned. . . . Records on such trust accounts shall be so kept and maintained as to reflect at all times the exact balance held for each client or third person. No funds shall be withdrawn from such trust accounts for the personal use of the lawyer maintaining the account except earned lawyer’s fees debited against the account of a specific client and recorded as such.”

2 account in which she holds the “funds or other property” of any client

or third party, and Rule 1.15 (II) (b) requires that those records be

“kept and maintained as to reflect at all times the exact balance held

for each client or third person.”

With regard to Case No. S22Y1176, the special master noted

that it arose from a separate formal complaint charging Pass with

violations of a variety of the GRPC during her representation of a

client in an investigation she agreed to undertake. After considering

the evidence, however, the special master found that the Bar had

shown, by clear and convincing evidence, only that Pass had taken

money in advance from her client to be used for fees and expenses

connected to an investigation she was to perform for the client; that

she deposited the unearned expenses into her IOLTA account, but

then failed to review, audit, or otherwise reconcile that account; that

unbeknownst to Pass, her office manager — a longtime friend and

nonlawyer employee — was accessing Pass’s IOLTA account and

obtaining funds via forged checks; and that, as a result, there were

multiple times where Pass’s IOLTA account carried a balance that

3 was less than the almost $4,000 she should have been holding in

trust on her client’s behalf. The special master found that Pass was

unaware of her employee’s illegal actions until several months after

that employee abruptly left Pass’s employment, absconding with a

firm computer and other office equipment and materials; that after

discovering the thefts, Pass was able, over time, to restore enough of

the stolen funds to replace the money she was required to return to

her client; and that those funds now have been returned to the

client. The special master specifically noted that there was no

allegation that Pass was involved in, or even contemporaneously

knew of, her employee’s withdrawal of the client’s funds from Pass’s

IOLTA account. The special master concluded that Pass had

violated Rule 1.15 (I) (a) and Rule 5.3 (b)3 in that she failed to

provide the proper oversight of a nonlawyer employee thereby

allowing that employee to misappropriate funds belonging to Pass’s

3 Rule 5.3 (b) provides that “[w]ith respect to a nonlawyer employed or

retained by or associated with a lawyer . . . a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer.”

4 client from Pass’s IOLTA account; she failed to review, audit, or

reconcile her IOLTA account; and, therefore, she failed to

adequately safeguard her client’s property.

After finding those violations, the special master turned his

attention to determining the appropriate discipline in these two

cases. He noted the importance of looking only at the portions of the

rules found to have been violated and of focusing not on what

punishment the offense may warrant, but on what punishment is

required “as a penalty to the offender, a deterrent to others, and as

an indication to laymen that the courts will maintain the ethics of

the profession.” In the Matter of Dowdy, 247 Ga. 488, 493 (4) (277

SE2d 36) (1981). He recited that this Court generally looks to the

Standards for Imposing Lawyer Sanctions, American Bar

Association Center for Professional Responsibility (“ABA

Standards”), for guidance in determining punishment in

disciplinary cases, see In the Matter of Morse, 266 Ga. 652, 653 (470

SE2d 232) (1996), and that those standards look to the duty violated,

the lawyer’s mental state, the actual or potential injury caused by

5 the lawyer’s misconduct, and the existence of any aggravating and

mitigating factors in assessing discipline.

The special master found that Pass’s violations in both cases

implicated ABA Standard 4 (violations of duties owed to clients) in

that Pass’s failure to properly monitor her trust account and her

failure to properly supervise her nonlawyer employee both affected

her ability to preserve her client’s property. See ABA Standard 4.1.

The special master concluded, however, that Pass was merely

negligent in her dealings with the IOLTA account and her clients’

funds, noting Pass’s testimony that she is primarily a criminal

defense attorney and, therefore, rarely has client funds in her

IOLTA account. He further concluded that Pass did not have the

“conscious awareness of the nature or attendant circumstances” of

the actions of her nonlawyer employee, and, at worst, was merely

negligent in her supervision of that employee.

With regard to injury or potential injury, the special master

noted that, although the funds of the client in Case No. S22Y1176

were taken from Pass’s IOLTA account, Pass did not steal those

6 funds and, once the loss was discovered, she replaced them and

returned the funds to the client. And, with regard to Case No.

S22Y1156, the special master noted that there was no injury to the

client in that none of that client’s funds were lost or misappropriated

in any way. Ultimately, the special master concluded that there was

no actual injury to either client, but acknowledged that the potential

for injury was present.

In terms of aggravating and mitigating factors, the special

master noted, in aggravation, that Pass had one instance of prior

discipline, having received a formal letter of admonition in 2011

related to a failure to communicate with a client, and that she had

substantial experience in the practice of law, having been admitted

to the Bar in 1994. See ABA Standards 9.22 (a) and (i). In

mitigation, he somewhat discounted Pass’s former discipline on the

grounds that it did not involve her trust account or her failure to

supervise a nonlawyer employee. See In the Matter of Kakol, 286 Ga.

469, 470 (689 SE2d 308) (2010) (“In mitigation of discipline . . . we

find that Kakol’s prior discipline did not involve [the] trust fund

7 issues [involved in this case].”). He further noted that Pass had not

acted with a dishonest or selfish motive; that she made a timely and

good faith effort to rectify the consequences of the actions of her

nonlawyer employee; that she made full and free disclosure to the

State Bar; that she has had a cooperative attitude during the

proceedings; and that she has a good reputation in the legal

community. See ABA Standards 9.32 (b), (d), (e), and (g). The special

master further noted that, although neither aggravating nor

mitigating, neither client filed a grievance against Pass.4 See ABA

Standard 9.4 (f).

Ultimately, the special master concluded that this case was

most similar to In the Matter of Brock, 306 Ga. 388 (830 SE2d 736)

(2019) (Review Board reprimand where, unbeknownst to Brock, his

paralegal misappropriated $21,000 in trust account funds; Brock

kept no ledger or other record showing the balance belonging to each

4 Apparently, the discovery of the violations set out in Case No. S22Y1156 arose during the Bar’s investigation of Case No. S22Y1176, which, in turn, arose from a grievance filed by an attorney who alleged that he had been hired by a client to conduct the same investigation Pass was hired to conduct.

8 client in his trust fund account; the Bar’s investigation uncovered

several minor instances of Brock’s own misuse of his trust account;

and Brock replaced all missing client funds once he learned of the

theft), and In the Matter of Grant, 287 Ga. 131 (694 SE2d 647) (2010)

(Review Panel5 reprimand for violations of Rules 5.3 and 1.15 (I) and

(II) caused by Grant’s negligent failure to supervise her paralegal

and to reconcile or review her IOLTA account). Therefore, the

special master recommended, for Pass’s negligent violation of Rules

1.15 (I) (a), 1.15 (II) (b), and 5.3 (b), that she receive a public

reprimand and that she consult with the Law Practice Management

Section of the Bar within 60 days after this Court’s opinion and

follow its recommendations concerning her law practice.

Neither side has filed exceptions contesting the special

master’s factual findings, legal conclusions, and recommendations

for discipline. And, after review of the record, we agree with the

special master’s conclusions that Pass negligently violated Rules

5 The Review Panel is now known as the Review Board.

9 1.15 (I) (a), 1.15 (II) (b), and 5.3 (b), and that Pass’s conduct was

similar to that of the respondents in Brock and Grant. Although we

imposed a Review Board reprimand in Brock and Grant, the

attorneys in those cases had no prior disciplinary history. See Brock,

306 Ga. at 389 (“[T]here are several mitigating factors in this

matter, specifically, the lack of a prior disciplinary record.”); Grant,

287 Ga. at 132 (“Grant offers in mitigation . . . that she has no prior

disciplinary record.”). Here, by contrast, Pass has previously been

disciplined. Under the circumstances, we agree with the special

master that a public reprimand is appropriate and sufficient to act

as a penalty to Pass, a deterrent to other lawyers, and as an

indication to the public that the courts will maintain the ethics of

the profession. Therefore, we accept the report and recommendation

of the special master and order that respondent Karen Lynn Pass

receive a public reprimand in accordance with Bar Rules 4-102 (b)

(3) and 4-220 (c), and that she provide certification to the Office of

General Counsel within 60 days after this Court’s opinion that she

has consulted with the Law Practice Management Section of the Bar

10 and that she will follow its recommendations concerning her law

practice.

Public reprimand with conditions. All the Justices concur.

Decided October 4, 2022.

Public reprimand.

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

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

Mittelman, Andreea N. Morrison, Assistant General Counsel State

Bar, for State Bar of Georgia.

Wood Smith Henning & Berman, Kathryn S. Whitlock, for

Pass.