State Ex Rel. Counsel for Discipline v. Wintroub

678 N.W.2d 103, 267 Neb. 872, 2004 Neb. LEXIS 71, 2004 WL 868290
Nebraska Supreme Court·Decided April 23, 2004·No. S-03-452·Published·Cited by 34 cases

Opinion

Per Curiam.

The office of the Counsel for Discipline of the Nebraska Supreme Court, as relator, commenced this disciplinary proceeding against attorney Edward L. Wintroub, respondent. Following *874 an evidentiary hearing, a referee appointed by this court found multiple violations of the Code of Professional Responsibility and recommended a 1-year period of suspension, with readmission subject to a period of probation. Both parties have filed exceptions to the referee’s report.

BACKGROUND

Wintroub was admitted to the practice of law in Nebraska on June 28, 1965. At all relevant times, he was engaged in private practice in Omaha. From 1974 to 2001, Wintroub’s practice consisted of insurance defense work regarding liquor liability laws for one principal client. Sometime in 2001, Wintroub’s relationship with this client ended, causing significant financial pressures on his law practice.

At all relevant times, Wintroub maintained a tmst account at First Westroads Bank. He did not, however, keep a separate ledger for each client’s account. Instead, when a settlement draft was received, he would obtain a statement of the case expenses found in the client’s file and prepare two checks; one for his fee and expenses and the other for the client.

On December 30, 2002, this court granted the application of the Committee on Inquiry of the Second Disciplinary District for a temporary suspension of Wintroub’s license pursuant to Neb. Ct. R. of Discipline 12 (rev. 2002) on the basis of alleged multiple irregularities in Wintroub’s tmst account. On April 22, 2003, the Counsel for Discipline filed formal charges consisting of five counts alleging multiple tmst account violations occurring in 2001 and 2002. Wintroub filed an answer which neither admitted nor denied the factual allegations, but placed the Counsel for Discipline on strict proof. At the hearing before the referee, Wintroub admitted the factual allegations of counts I through IV while denying the legal conclusions asserted by relator. During the hearing, relator voluntarily dismissed the fifth count. We summarize the factual allegations thus admitted and the referee’s findings with respect thereto.

Count I

On or about November 7, 2001, Wintroub purported to settle a personal injury case on behalf of his client, Debra Gillam, for $30,000, apparently believing that he had the requisite authority *875 to do so. He negotiated the settlement draft issued by an insurance company by signing Gillam’s name and his, and then deposited the draft in his trust account. He then issued a check to himself in the amount of $10,150 for fees and expenses relating to the settlement.

At some time thereafter, Gillam informed Wintroub that she had not authorized him to settle her case for $30,000. Wintroub sent a check in the amount of $30,000 to the insurance company, but then notified the company that he was stopping payment on the check. He did not refund the settlement proceeds to the insurance company until December 2002, after being requested to do so by Gillam’s new attorney.

At the point that Wintroub realized that Gillam had not authorized the settlement, there should have been at least $19,850, representing Gillam’s share of the failed settlement, on deposit in Wintroub’s trust account. When Wintroub sent the initial refund check to the insurance company, his trust account balance should have been at least $30,000. Between November 1 and 30, 2001, the balance in Wintroub’s trust account fell to a low of $122.13. Between December 1, 2001, and July 1, 2002, Wintroub’s trust account balance fell below $30,000 on numerous occasions and in fact had a negative balance on March 18,2002. Relator alleged that the foregoing constituted a violation of Wintroub’s oath of office as an attorney and the following disciplinary rules:

DR 1-102 Misconduct.
(A) A lawyer shall not:
(1) Violate a Disciplinary Rule.
(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation.
DR 9-102 Preserving Identity of Funds and Property of a Client.
(A) All funds of clients paid to a lawyer or law firm shall be deposited in an identifiable account or accounts maintained in the state in which the law office is situated in one or more state or federally chartered banks, savings banks, savings and loan associations, or building and loan associations insured by the Federal Deposit Insurance *876 Corporation, and no funds belonging to the lawyer or law firm shall be deposited therein except as follows:
(1) Funds reasonably sufficient to pay account charges may be deposited therein.
(2) Funds belonging in part to a client and in part presently or potentially to the lawyer or law firm must be deposited therein, but the portion belonging to the lawyer or law firm may be withdrawn when due unless the right of the lawyer or law firm to receive it is disputed by the client, in which event the disputed portion shall not be withdrawn until the dispute is finally resolved.
(B) A lawyer shall:
(3) Maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to the client regarding them.

With respect to count I, the referee found by clear and convincing evidence that Wintroub failed to preserve client funds regarding the settlement proceeds, constituting a violation of Canon 9, DR 9-102(A), and his oath of office as an attorney. The referee rejected Wintroub’s argument that because Gillam refused the funds and denied authorizing the settlement, the proceeds which he received from the insurance company never became client funds. The referee further concluded that such conduct was a violation of a disciplinary rule prohibited by Canon 1, DR 1-102(A)(1), and Wintroub’s oath of office as an attorney. He concluded, however, that there was not clear and convincing evidence that Wintroub engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation.

Count II

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State Ex Rel. Counsel for Discipline v. Wintroub, 678 N.W.2d 103, 267 Neb. 872, 2004 Neb. LEXIS 71, 2004 WL 868290 (Neb. 2004).

678 N.W.2d 103 (State Ex Rel. Counsel for Discipline v. Wintroub) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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