93 PRB

[Filed 09-Aug-2006]


                              STATE OF VERMONT
                      PROFESSIONAL RESPONSIBILITY BOARD


  In re:   PRB File No 2006.241

                               Decision No. 93

       The parties filed a stipulation of facts and a joint recommendation as
  to conclusions of law.  The Panel accepts the stipulation and
  recommendation and orders that Respondent be admonished by Disciplinary
  Counsel for disbursing funds following a real estate closing without a
  prior determination that the funds were "collected funds"  in violation of
  Rules 1.15(d)(1) and (2) of the Vermont Rules of Professional Conduct.

                                    Facts

       Respondent conducted a closing for clients who were refinancing their
  house.  After the expiration of the three day right-of-rescission period,
  Respondent disbursed the checks related to the closing without first
  verifying that the bank had wired the funds to her trust account. The funds
  had not been wired due to a failure on the part of the bank.  Respondent
  disbursed six checks which were honored by her bank due to the presence in
  her trust account of funds belonging to other clients.  A seventh check was
  presented but dishonored due to insufficient funds.

       One week after the closing the bank called Respondent to inform her
  that funds had not been wired.  The funds were wired that day.
   
       Respondent has been admitted to the Vermont Bar for 10 years.  She has
  never been the subject of formal disciplinary proceedings and has never
  been disciplined.  She cooperated fully with Disciplinary Counsel's
  investigation, has expressed remorse for her conduct and acknowledges that
  she should have verified the arrival of funds before writing checks.  No
  client lost money as a result of this failure.

                             Conclusions of Law

       Rule 1.15(d) of the Vermont Rules of Professional Conduct governs an
  attorney's responsibility for safekeeping of client property.  Except as
  provided in paragraph(e):

       (1)   a lawyer shall not disburse funds for a client or third
       person unless the funds are "collected funds."  For the
       purposes of this rule, "collected funds" means funds that a
       lawyer reasonably believes have been deposited, finally
       settled, and credited to the lawyer's account.

       (2)   a lawyer shall not use, endanger, or encumber money
       held in trust for a client or third person for purposes of
       carrying out the business of another client or person without
       the permission of the owner given after full disclosure of
       the circumstances.

       At a minimum this rule requires that an attorney check with his or her
  bank to determine whether an anticipated wire of funds has actually
  occurred. This, Respondent failed to do, and her conduct violates Rule
  1.15(d)(1).  By writing and disbursing checks on her trust account without
  insuring that the funds to be wired were in fact in her trust account,
  Respondent used the funds of other clients to cover the checks written for
  the closing in clear violation of Rule 1.15(d)(2). Sanction
   
       Administrative Order 9 Rule 8(A)(5) provides that admonition is
  appropriate "[o]nly in cases of minor misconduct, when there is little or
  no injury to a client, the public, the legal system, or the profession, and
  when there is little likelihood of repetition by the lawyer."  Assiduous
  care in managing trust accounts is required of attorneys, and an attorney's
  failure to meet this standard can have serious consequences for clients.
  Thus the rule is strict, and even an inadvertent failure can and should
  lead to discipline.  In this case there was no intent to harm any client
  and no client was harmed. Respondent has no prior discipline, has expressed
  remorse and acknowledged that she should have verified the presence of
  funds before disbursing funds.   Based upon this, we believe that there is
  little likelihood that the misconduct will be repeated and that admonition
  is the appropriate sanction.

                                    Order

       The hearing panel orders that Respondent be admonished by Disciplinary
  Counsel for violation of Rules 1.15(d)(1) and (2) of the Vermont Rules of
  Professional Conduct.

  Dated: August 9, 2006
  FILED August 9, 2006            

  /s/
  ______________________________
  Bruce C. Palmer, Esq.

  /s/
  ______________________________
  Robert M. Butterfield, Esq.

  /s/
  ______________________________
  Florence Chamberlin