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In re Moore6/27/2000
ged that the letter was sent in response to a request for a letter of protection. Indeed, if respondent sent this letter intending that the vendor rely upon it to continue to render care and to postpone collection efforts, while intending not to be obligated to dispense settlement proceeds to the vendor, a more serious question of misrepresentation and fraud could arise. As we noted in Rawson, in response to the contention that the doctors were not paid because the client changed her mind, an attorney's obligation to abide by a client's directives "does not extend to assisting the client in defrauding courts and creditors." Id. at 762, 833 P.2d at 239. The consent agreement requires that any letter respondent sends to a medical vendor to indicate that payment will be made from the proceeds of settlement or suit, if not intended as a letter of protection, state in capital letters that it is not a letter of protection. If respondent decides to send such a letter, he should be reminded that, notwithstanding the capitalized disclaimer, he has a continuing obligation not to engage in dishonest or fraudulent conduct or statements. We agree with and adopt the language of the disciplinary board's formal reprimand in In re Ellis, S. Ct. No. 19,226, 29 State Bar Bulletin 29, (September 27, 1990) that " hen dealing with an attorney, another person (whether an attorney or a lay person) has the right to expect that the attorney will be honest and straightforward."
Because respondent failed to disburse his client's settlement funds in accordance with the letter quoted above, disciplinary counsel appropriately investigated the handling of the settlement funds in respondent's trust account. A request for trust account documentation for the period in question revealed that respondent had not maintained all required documents, nor properly recorded all transactions. In turn, an audit of respondent's trust account was conducted and revealed systemic problems with his trust account maintenance and record keeping. Of 164 transactions reviewed by the auditor, 78 were not only unidentified, but also were unidentifiable by respondent. He failed to maintain copies of deposit slips, a check register, or a complete copy of all checks written, nor did he keep copies of bank statements or perform the reconciliations required by Rule 17-204(A)(7).
Additionally, on a number of occasions, respondent's trust account balance fell below the amount indicated on his ledgers that should be holding for clients. In the case of the client whose personal injury claim was involved in this complaint, respondent presented at the eleventh hour a statement signed by the client stating she agreed that respondent could use her funds. This document, however, failed to discharge respondent's trust account obligations. Although respondent was not charged with violating Rule 16-108, it is unlikely that the document signed by respondent's client adequately reflects compliance with that rule.
Rule 16-108(A) governs business transactions with clients. It requires that the terms of the transaction be fair and reasonable to the client, that the terms be disclosed to the client in writing, that the client be given a reasonable opportunity to seek the advice of independent counsel, and that the client consent in writing. Borrowing money from clients is not condoned by this Court. If an attorney determines to brave these conflict-infested waters, he or she is well advised to do so on an arm's length basis. This would include execution of customary loan documents, and the payment of a reasonable amount of interest. Further, once the money has been loaned to the attorney, it should be removed from trust. The attorney should not, as respo
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