2004 WI 12
SUPREME COURT
CASE NO.: COMPLETE TITLE:
OF
WISCONSIN
02-2197-D In the Matter of Disciplinary Proceedings Against Leo Barron Hicks, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Leo Barron Hicks, Respondent.
DISCIPLINARY PROCEEDINGS AGAINST HICKS
OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS:
February 27, 2004
ABRAHAMSON, C.J., did not participate.
2004 WI 12
NOTICE
This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports.
No.
02-2197-D : IN SUPREME COURT
STATE OF WISCONSIN
In the Matter of Disciplinary Proceedings Against Leo Barron Hicks, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Leo Barron Hicks, Respondent.
FILED
FEB 27, 2004
Cornelia G. Clark Clerk of Supreme Court
ATTORNEY reprimanded.
disciplinary
proceeding.
Attorney
publicly
¶1
PER
CURIAM.
We
review
the
recommendation
of
the
referee, Amy Gentz, that Attorney Leo Barron Hicks receive a public reprimand for professional misconduct consisting of
failing to hold a client's property in trust, separate from the lawyer's own property; failing to take remedial action when a lawyer knows of misconduct by another lawyer in the firm; and failing to treat property in which both the lawyer and another person claim interests as trust property until there has been an
No.
02-2197-D
accounting and severance of their interests.
The referee also
recommends that Attorney Hicks be required to pay the costs of the proceeding. ¶2 We determine that a public reprimand is appropriate We also order him to
discipline for Attorney Hicks' misconduct. pay the costs of this proceeding. ¶3 Attorney Hicks was admitted
to
practice
law
in
Wisconsin in 1985.
His license has been under suspension since
October 31, 2001, for failure to pay state bar dues and since June 3, 2002, for failure to comply with mandatory Continuing Legal Education (CLE) reporting requirements. currently resides in Texas. ¶4 Attorney Hicks formerly practiced law in Madison in In 1997 a client The Attorney Hicks
association with Attorney Lauren Brown-Perry.
was referred to the law firm by a legal services plan.
client's case involved a prospective buyer who had backed out of an agreement to purchase real estate from the client shortly before the closing. Attorney Brown-Perry accepted the client's
case and did most, if not all, of the client's legal work. ¶5 The client made advance payments of $1500 toward the
legal fees and signed a fee agreement that provided the retainer would be applied toward hourly fees and expenses but would not be placed in a trust account. The agreement did not state an
hourly rate but the legal services plan required the fee to be set at a maximum of $70 per hour. The agreement also provided
the client would receive monthly billing statements.
2
No.
02-2197-D
¶6
The
case
was
settled
in
July
of
1998
with
the
prospective buyer and the realtor each paying the client $2000. The client was not provided with any monthly billing statements as required by the fee agreement. The client said she
understood that her $1500 retainer fee covered all or nearly all of her fees, and she expected to receive a check for the full amount of the $4000 settlement. ¶7 At the time the two settlement checks were received,
the law firm did not have a client trust account so Attorney Brown-Perry deposited the two settlement checks into the law firm's business checking account. Prior to the date the first In by
check was deposited the account had a balance of $2439.10. the next week 14 checks cleared the account, 10 signed
Attorney Hicks and 4 signed by Attorney Brown-Perry.
The checks
signed by Attorney Hicks included a late payment to the Internal Revenue Service, two checks to Attorney Brown-Perry, and three checks to Attorney Hicks personally. Five days after the
client's second settlement check was deposited, the balance in the account was only $3520.21, which was less than the $4000 in settlement proceeds allegedly being held for the client. next two weeks numerous other checks were written In the on the
account, several deposits were received, and the account became overdrawn. ¶8 No distribution had yet been made to the client.
Attorney Hicks said he was advised by Attorney Brown-
Perry that she would deposit the client's settlement funds into an account with the law firm. understanding that Attorney Attorney Hicks said it was his intended to promptly
Brown-Perry 3
No.
02-2197-D
satisfy client
the for
client's four
claim,
but
no her
payment
was
made
to
the were
months
after
settlement
proceeds
received.
In late November 1998 Attorney Hicks signed a check Attorney Brown-
payable to the client in the amount of $2028.
Perry mailed the check to the client indicating the settlement balance was enclosed but she provided no explanation for the deduction of $1982 from the $4000 settlement. ¶9 client Although Attorney said a billing Brown-Perry's was cover letter no to the
statement
enclosed,
billing The
statement was in fact enclosed, nor had one been prepared. client did not cash the check.
Instead she made frequent phone
calls to the law firm asking for an explanation why the check was written for less than the $4000 settlement. personally inquiring took about some the of the phone of calls Attorney Hicks the client
from
balance
her
settlement
proceeds.
Attorney Hicks said he advised Attorney Brown-Perry of the calls and requested that she take appropriate action. ¶10 savings In February 1999 Attorney Hicks opened a money-market account entitled "Hicks & Brown-Perry Law Office,
[client] Account" and deposited fee payments totaling $2587 into the account. No checks were ever written on the account, and
the client never received an accounting or billing statement. ¶11 In April 1999, while the check previously sent to the
client was still outstanding, the law firm closed the business account on which the check had been written and transferred the remaining funds into a new account. A new check was not
4
No.
02-2197-D
provided to the client so the check she was holding would no longer have been honored had it been presented for payment. ¶12 On April 14, 1999, Attorneys Hicks and Brown-Perry
signed a new account authorization for removing the client's name from the account Attorney Hicks had previously opened for her and retitled the account as the law firm's IOLTA Trust
Account.
Attorneys Hicks and Brown-Perry reported this account
as their firm's trust account to the state bar and the Office of Lawyer Regulation (OLR). ¶13 The client hired a lawyer to file a small claims
action against Attorney Brown-Perry to recover her settlement proceeds. The small claims case was concluded in December of
1999, more than 16 months after the law firm had received the settlement funds, with an agreement that Attorney Brown-Perry would pay the client the full amount of the settlement plus an additional $1000, for a total payment of $5000. settlement was paid out of the firm's IOLTA Part of the Trust Account.
Attorney Hicks' association with Attorney Brown-Perry ended soon thereafter. ¶14 Attorney The OLR filed a disciplinary out of her complaint mishandling against of the
Brown-Perry
arising
client's funds. misconduct.
Her license was suspended as a result of her
In re Disciplinary Proceedings Against Brown-Perry,
2003 WI 151, 267 Wis. 2d 184, 672 N.W.2d 287.
5
No.
02-2197-D
¶15
On August 19, 2002, the OLR filed a complaint alleging
that Attorney Hicks violated SCR 20:1.15(a),1 SCR 20:5.1(c)(2),2
1
SCR 20:1.15(a) provides:
(a) A lawyer shall hold in trust, separate from the lawyer's own property, that property of clients and third persons that is in the lawyer's possession in connection with a representation or when acting in a fiduciary capacity. Funds held in connection with a representation or in a fiduciary capacity include funds held as trustee, agent, guardian, personal representative of an estate, or otherwise. All funds of clients and third persons paid to a lawyer or law firm shall be deposited in one or more identifiable trust accounts as provided in paragraph (c). The trust account shall be maintained in a bank, savings bank, trust company, credit union, savings and loan association or other investment institution authorized to do business and located in Wisconsin. The trust account shall be clearly designated as "Client's Account" or "Trust Account" or words of similar import. No funds belonging to the lawyer or law firm, except funds reasonably sufficient to pay or avoid imposition of account service charges, may be deposited in such an account. Unless the client otherwise directs in writing, securities in bearer form shall be kept by the attorney in a safe deposit box in a bank, savings bank, trust company, credit union, savings and loan association or other investment institution authorized to do business and located in Wisconsin. The safe deposit box shall be clearly designated as "Client's Account" or "Trust Account" or words of similar import. Other property of a client or third person shall be identified as such and appropriately safeguarded. If a lawyer also licensed in another state is entrusted with funds or property in connection with an out-of-state representation, this provision shall not supersede the trust account rules of the other state.
2
SCR 20:5.1(c)(2) provides: for another Professional
(c) A lawyer shall be responsible lawyer's violation of the Rules of Conduct if: 6
No.
02-2197-D
and SCR 20:1.15(d).3
Attorney Hicks filed an answer, affirmative
defenses, and counterclaim in which he asserted that he lacked knowledge of when Attorney Brown-Perry deposited the checks and that he did not become personally aware, nor should he have become aware, that his partner had commingled the client's funds until the OLR's inquiry in August of 2000. ¶16 In September of 2003 the parties entered into a
stipulation whereby Attorney Hicks withdrew his answer to the OLR's complaint and pled no contest to each and every allegation of misconduct contained in the complaint. The stipulation
further provided that the complaint could be relied upon by the referee as the basis for establishing the factual record in the matter. ¶17 The referee issued her report and recommendation on She found that all of the factual allegations had been proven and concluded that
October 28, 2003. in the OLR's
complaint
(2) the lawyer is a partner in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
3
SCR 20:1.15(d) provides:
(d) When, in the representation, a lawyer is in possession of property in which both the lawyer and another person claim interests, the property shall be treated by the lawyer as trust property until there is an accounting and severance of their interests. If a dispute arises concerning their respective interests, the portion in dispute shall continue to be treated as trust property until the dispute is resolved. 7
No.
02-2197-D
Attorney Hicks had violated the three supreme court rules as alleged in the complaint. She recommended that this court
impose a public reprimand on Attorney Hicks, and she further recommended that the costs of the proceeding be assessed against him. ¶18 statement Attorney of Hicks filed an that objection the OLR is to the OLR's from
costs, asserting
estopped
requesting an assessment of costs because in early 2002, before the complaint was filed, the OLR offered Attorney Hicks the
opportunity to consent to a public reprimand and informed him that if he so consented no costs would be sought. responds that although it did offer Attorney The OLR Hicks the
opportunity to resolve the matter without costs prior to the filing of the complaint, it was unreasonable for Attorney Hicks to assume that no costs would be assessed after the disciplinary complaint was filed and after he litigated the case nearly up to the date of the scheduled hearing before the referee. ¶19 We adopt the referee's findings of fact and
conclusions of law.
Attorney Hicks' misconduct with respect to
the handling of the client's funds and the mishandling of his firm's trust account are serious failings. As discipline for We
the professional misconduct we impose a public reprimand.
also order Attorney Hicks to pay the costs of this proceeding, as recommended by the referee. Attorney Hicks chose to litigate
the matter, and the OLR incurred costs which are appropriately assessed against Attorney Hicks.
8
No.
02-2197-D
¶20
IT
IS
ORDERED
that
Attorney
Leo
Barron
Hicks
be
publicly reprimanded for his professional misconduct. ¶21 IT IS FURTHER ORDERED that within 60 days of the date
of this order Attorney Leo Barron Hicks shall pay to the Office of Lawyer Regulation the costs of this proceeding in the amount of $1644.84. If the costs are not paid within the time
specified, and absent a showing to this court of his inability to pay the costs within that time, the license of Attorney Leo Barron Hicks to practice law in Wisconsin shall be suspended until further order of the court. ¶22 SHIRLEY S. ABRAHAMSON, C.J., did not participate.
9
No.
02-2197-D
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