PBCBA BAR BULLETINS pbcba_bulletin_April 2019 | Page 26

PROFESSIONALISM C o r n e r Trust-Account Delights & Cautionary Tales D. CULVER “SKIP” SMITH III We all have heard of and read about lawyer theft of trust funds. The motivation for such pilfering ranges from maintaining an excessively flamboyant lifestyle, to satisfying gambling debts, to meeting basic living needs in hard times (often brought about by the lawyer’s failure to grasp reality). Some are intended to be merely “temporary” use of the funds, to be replaced as soon as an expected fee is received (but often not received). Some misuse of trust funds simply is inexplicable. All such conduct is driven by delusional thinking of one kind or another. Never is it justified. To brighten your day, Dear Reader, herewith a smattering of trust-account delights from around the country, followed by some cautionary tales. The Case of the Chatty Lawyer: Lawyer attends Ethics CLE seminar. It is a large event, and the sign-in tables are manned by bar disciplinary lawyers as well as by administrative staff. Chatty Lawyer, being a gregarious sort, chats up a couple of bar prosecutors while signing in to ensure receipt of his ethics credits and presents a check for the course fee—drawn on his trust account. One presumes that his ethics credits became moot. The Case of the Generous Family Friend: Lawyer is a friend of the family of the bride-to-be. To demonstrate his affection for the family, he sends the bride a gift— you guessed it, a check drawn on his trust account. His generosity knows no bounds— at least not ethical. One wonders whom he told the bride to thank. The Case of the Online Don Juan: Lawyer actively participates in online dating—and pays for the service with funds from his IOLTA account. One supposes that any relationship that ensued was short-lived— or evolved into that glamorous foundation for affaires du coeur known as aiding and abetting. The Case of the Rapacious Day Trader: You already know what’s coming, don’t you? Yes, Lawyer uses his trust account for his receiving overdraft notices. Needless to say, day-trading. this took quite a while to undo. Now he probably is day-trading full time. The lessons from the foregoing are obvious. The Case of Desperate Addict: Lawyer, A couple more: addicted to Oxycontin, pays his dealer with trust-account checks. Needless to say, he 1. Distinguish trust-account checks from no longer is licensed. This, of course, is as operating-account checks by color, style, or sad as it is humorous. background scheme. There also are the cautionary tales: The Case of the Stopped Check: P.I. Lawyer settles case, but the settlement check does not arrive. Lawyer contacts the insurance company, which stops payment on the check and issues a new check. A few days later a check arrives, Lawyer deposits it into the trust account, and after an appropriate passage of time disburses the settlement funds. Then the reissued check arrives. In the interim? Overdrafts. This mistake did not result in a severe disciplinary sanction, but it is a lesson in paying attention. 2. Don’t hire your brother-in-law to manage your trust account. Okay, that may seem a bit of an overgeneralization, but you might be surprised by the number of wayward brother-in-law cases are out there. The point, of course, is to know well the person to whom you are entrusting the responsibility and regularly and carefully review what that person is doing. “I had every reason to trust him/her implicitly” goes only so far in a disciplinary case. Remember, nothing is more designed to bring the house crashing down than a trust- The Case of the Bank Switch: Lawyer moves account misstep. Lawyer’s bank accounts, including the trust account, from Bank A to Bank B. Thereafter, D. Culver “Skip” Smith III focuses his without realizing it, Lawyer writes a practice on the ethical and professional month’s worth of checks on the trust responsibilities of lawyers. He maintains account at Bank A, which contains only a an office in West Palm Beach and can be nominal amount of funds to cover bank fees. reached at 561-598-6800 or at . intact in the Bank B trust account, so no problem there. Lawyer promptly reissues checks from the proper account and covers SAVE THE DATE the overdraft fees charged by Bank A. No discipline followed from this inadvertence, Palm Beach County Bar Association but Lawyer was subjected to a considerable presents amount of auditing and aggravation by the bar. Note that this tale recites that Lawyer 97th Annual issued the Bank A checks “without realizing Installation Banquet it,” but one wonders whether he even looked at the checks when signing them. The Case of the Misprinted Checks: Lawyer’s bank prints an entire run of trust- account checks with the wrong account number. Most of us would check to ensure that the firm’s name and address are printed correctly, then move on, right? The account number was that of an existing account belonging to a private individual, who began Saturday, June 1st, 2019 7:00 PM - 11:00 PM Breakers Hotel 1 S County Rd. West Palm Beach, FL