INQUIRY COMMISSION V. DONALD LYNN RICHARDSON
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2010-SC-000570-KB
DAT
INQUIRY COMMISSION
V.
MOVANT
IN SUPREME COURT
DONALD LYNN RICHARDSON
KBA MEMBER NO . 58120
RESPONDENT
OPINION AND ORDER
The Inquiry Commission of the Kentucky Bar Association (hereinafter
KBA) requests that Respondent, Donald Lynn Richardson, KBA Member No .
58120, be temporarily suspended from the practice of law in the
Commonwealth of Kentucky pursuant to Supreme Court Rule (SCR) 3 .165(1) .
Richardson's Bar Roster address is 541 Buttermilk Pike, Suite 101, Crescent
Springs, Kentucky 41017 . The Inquiry Commission, in its petition to this
Court, states that it has probable cause to believe that Richardson has been
misappropriating or otherwise improperly dealing with funds that he holds for
others . See SCR 3 .1 65(l) (a) . Richardson has not currently filed a response to
the Inquiry Commission's allegations. Having reviewed the petition and the
supporting evidence and Richardson's failure to file a response, we agree there
is probable cause to find Richardson has misappropriated or otherwise
improperly dealt with funds held on behalf of his clients and, thus, grant the
petition .
In support of its petition, the Inquiry Commission has brought to the
attention of this Court a verified complaint by Eric W. Richardson (no relation
to Respondent), an attorney representing Fifth Third Mortgage Company
(hereinafter Fifth Third) in a civil action filed in Hamilton County, Ohio. In this
complaint, the following factual scenario is presented .
Donald Lynn Richardson owned and operated a company known as
Commitment Title Agency (hereinafter Commitment Title), and this company
entered into an arrangement with Fifth Third to provide real estate closing
services. The funds for a closing would be transferred to an escrow account by
Fifth Third for Commitment Title to hold as escrow agent until completion of
the closing. At that time, Fifth Third would provide Commitment Title with
instructions for the disbursement of those funds to the proper party.
According to the terms of the agreement, Commitment Title was not authorized
to decline to remit the funds held in escrow once given instructions by Fifth
Third, nor was Commitment Title allowed to take action regarding the escrow
funds contrary to the obligation to disburse them timely as directed by Fifth
Third .
Five closings were conducted pursuant to this agreement between May 5
and May 13, 2010 . In each instance, Fifth Third transferred the funds to the
specified escrow account . The total amount of funds held in escrow by
Commitment Title was approximately $1,124,034 .63. As the five closings were
completed, Fifth Third learned that the funds had not been remitted as directed
for these transactions . Fifth Third's civil complaint avers that Richardson and
Commitment Title "have used the funds to purchase real and personal
property, to pay personal debts and to otherwise convert the funds to their own
use ." In order to avoid foreclosure on the homes, Fifth Third paid out an
additional $1 .1 million and filed a civil action in Hamilton County, Ohio to
recoup the funds.' The Ohio court issued a temporary restraining order on
July 2, 2010, and a preliminary injunction on
July 21, 2010.
Both orders froze
the assets of Richardson and Commitment Title up to the amount of the
missing funds. In addition, both orders entered a finding that "Fifth Third has
demonstrated a substantial likelihood that it will prevail on its claims ."
The sole explanation given regarding Commitment Title's failure to
disperse the funds was contained in a letter dated June 11, 2010, written by R.
Scott Croswell, who was then serving as counsel for both Richardson and
Commitment Title .2 In that statement, it is averred that "[d]ue to
[C]ommitment Title Agency's present financial condition, they are unable to
transfer funds necessary to satisfy these obligations ."
Given the evidence supporting the Inquiry Commission's petition and
Richardson's failure to respond as to the merits of the complaints, we find
i Fifth Third Mortgage Company v. Donald L. Richardson & Commitment Title Agency,
Inc., case no. A-10-6229 .
2 As of July 9, 2010, counsel for Fifth Third was informed that Croswell no longer
represents Richardson and Commitment Title in the civil matter .
probable cause exists to believe, pursuant to SCR 3.165(1) (a), that Richardson
has misappropriated or otherwise improperly dealt with funds held on behalf of
his clients and, thus, hereby grant the petition for temporary suspension .
ACCORDINGLY, IT IS HEREBY ORDERED AS FOLLOWS :
1 . Respondent, Donald Lynn Richardson, KBA Member No. 58120, is
temporarily suspended from the practice of law in the Commonwealth of
Kentucky pending further orders of this Court.
2 . Disciplinary proceedings against Richardson shall be initiated by the
Inquiry Commission, pursuant to SCR 3 .160, unless already begun or
unless Richardson resigns under terms of disbarment .
3. Pursuant to SCR 3 .165(5), Richardson shall, within twenty (20) days of
the date of entry of this order, notify all clients in writing of his inability
to continue to represent them and shall furnish copies of such letters of
notice to the Director of the KBA.
4 . Pursuant to SCR 3 .165(6), Richardson shall immediately, to the extent
possible, cancel and cease any legal practice advertising activities in
which he is engaged .
All sitting. All concur.
ENTERED : November 18, 2010 .
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