In the Matter of Edward Hine, Jr ( 2022 )

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official text of the opinion.
In the Supreme Court of Georgia
Decided: June 22, 2022
S22Y0206. IN THE MATTER OF EDWARD HINE, JR.
PER CURIAM.
This disciplinary matter is before this Court on the petition for
voluntary discipline filed by Edward Hine, Jr. (State Bar No.
355775), prior to the issuance of a formal complaint, pursuant to Bar
Rule 4-227 (b). In his petition, Hine, who has been a member of the
Bar since 1976, admits that, by his conduct in failing to adequately
communicate with his clients and in mishandling client funds, he
has violated Rules 1.4 (requiring a lawyer to keep a client informed
of matters requiring the client’s informed consent and to consult
with the client), 1.8 (a) (providing that a lawyer shall not enter into
a business transaction with a client if the client expects the lawyer
to exercise his professional judgment for the protection of the client,
and that a lawyer shall not knowingly acquire an interest adverse
to the client unless certain conditions are met) and (b) (providing
that a lawyer shall not use information gained in the professional
relationship to disadvantage of a client), 1.15 (I) (a) (requiring a
lawyer to keep client funds separate from the lawyer’s own funds),
and 1.15 (II) (b) (providing that a lawyer’s personal funds should not
be deposited in his trust account and that trust account funds,
except for earned attorney fees, not be withdrawn for the lawyer’s
personal use) of the Georgia Rules of Professional Conduct found in
Bar Rule 4-102 (d). The maximum sanction for a violation of Rules
1.4 and 1.8 (a) is a public reprimand, while the maximum sanction
for a violation of Rules 1.8 (b), 1.15 (I) (a), and 1.15 (II) (b) is
disbarment. Hine requests that he receive a six-month suspension
as a sanction for his admitted violations of the rules. The State Bar
has filed a response, in which it states that it “might” be appropriate
for this Court to accept Hine’s petition and impose a six-month
suspension. For the reasons discussed below, we reject Hine’s
petition for voluntary discipline.
2
Hine begins his recitation of the underlying facts by recounting
that his wife passed away in May 2021 after a 17-month battle with
cancer, that he has transferred all of his clients save one to other
counsel, that his one remaining client was in the process of selling
off all of its assets, and that he intends to convert his Bar status to
inactive once that sale has closed. Hine then states that, in
November 2018, he was appointed as executor of a client’s estate; he
deposited the estate funds into his trust account, paid the estate’s
expenses, and made distributions from those funds to the estate’s
beneficiaries. Hine asserts that the will underlying the estate
authorized him, in his role as executor, to make loans from the
estate funds, and he acknowledges that he advanced funds from the
estate to his operating account without the consent of the estate’s
beneficiaries. Hine states that he repaid these advances in February
2020. In March 2021, Hine noticed that an item pending against his
trust account would overdraw that account, so he made a deposit to
his trust account before the pending item presented, such that there
was no overdraft, and he self-reported the matter to the Bar,
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attributing the issue to his failure to debit a distribution to the
estate’s beneficiaries against a deposit he made of personal funds to
his trust account. In response to a query from the Bar, Hine
investigated the matter, concluding that he was guilty of the
aforementioned violations of the Rules, and made full disclosures to
the Bar and to the beneficiaries, who he asserts have accepted his
accounting and make no claim against him.
Hine acknowledges that he violated Rule 1.4 and Rule 1.8 (a)
and (b) by failing to communicate with, and to seek the approval of,
the estate’s beneficiaries before advancing funds to his operating
account and that he violated Rule 1.15 (1) (a) and Rule 1.15 (II) (b)
by depositing estate funds into his operating account. Hine asserts
that a suspension would be the appropriate penalty in this matter,
given that he repaid the misappropriated funds in full, that he made
an accounting to the estate beneficiaries, and that he self-reported
the matter to the State Bar. Hine acknowledges that he acted
knowingly in failing to obtain consent from the beneficiaries prior to
advancing funds to his operating account from the estate and that,
4
although no actual client harm occurred, his actions had the
potential to cause harm to his clients and the legal system.
As to factors in aggravation of discipline, Hine states that,
because of his considerable experience as an attorney, he was “very
clearly someone who knew better than to act in such a reckless and
improper manner.” As to factors in mitigation, Hine asserts that he
does not have a prior disciplinary history in his 45 years of practice;
that he made a timely, good-faith effort to disclose his misconduct to
the affected clients and the Bar and sought to rectify the
consequences of his misconduct; that he has demonstrated a
cooperative attitude in bringing this matter to the attention of the
Bar and in submitting this petition prior to the commencement of
proceedings by the Bar; and that he has otherwise exhibited good
character, integrity, and a positive reputation in the community, as
evidenced by letters of reference. Based on the foregoing, Hine
requests the imposition of a six-month suspension.
The Bar filed a timely response to this petition, in which it
provides additional facts regarding the estate matter, recounting
5
that, during his administration of the estate, Hine transferred
$129,071.50 in funds that had been entrusted to him to his operating
account, despite the fact that, as of that time, the fees and expenses
that Hine had charged to the estate totaled only $59,363.50. Hine
explained in a letter to the beneficiaries that the $69,608 difference
between the earned and allocated funds had been a loan, although
the beneficiaries had been unaware of the existence of any such loan.
Hine further explained to the beneficiaries that he had repaid
$68,951.50 to the estate from his personal funds before making a
distribution to the beneficiaries. These distributions apparently
resulted in an overdraft of Hine’s trust account in the amount of
$3,344.31, which Hine covered with personal funds. The overdraft
was reported to the Bar, with Hine explaining that he
had a credit balance of $85,000 in [his] ledger account in
trust, [so he] planned to debit [his] trust account credit
balance to cover the [estate] deficit. However, [he] failed
to actually debit [his] personal trust account with the
[estate] deficit, and on the trust account ledger, [his]
account remained at $85,000 instead of the correct
balance of $82,658.69 after debiting the [estate] deficit
against [his] credit balance.
6
The Bar further recounts that Hine informed the estate’s
beneficiaries that, although the will authorized him to charge an
hourly fee, the earned fees to which he was entitled totaled
$43,526.00, as opposed to the $59,363.50 he had collected in fees
from the estate; Hine did apparently refund the $15,837.50 fee
overcharge to the beneficiaries.
In addition to providing additional details concerning the
estate matter, the Bar’s response contains a recitation of facts
related to Hine’s handling of a trust involving a different client,
which Hine did not mention in his petition. The Bar recounts that
Hine was the sole trustee of a trust established by a client, who died
in October 2003, with a remainder interest to be distributed for the
benefit of a college after the death of the client’s wife, who passed in
September 2018. In January 2011, Hine executed a promissory note
to the client trust in exchange for an $85,000 loan from the trust to
Hine, with an apparent maturity date on the note of December 31,
2011. Hine remained the trustee of the client trust and the obligor
on the note during the events described above concerning the estate,
7
and Hine maintained to the Bar that the client’s wife was aware of
the $85,000 loan and permitted him to defer repayment of the loan,
although the Bar notes that Hine has not provided written
documentation to that effect. Upon the client’s wife’s passing, Hine
paid the balance of the proceeds of the client trust to the college, but
he did not pay the $85,000 plus interest that he owed pursuant to
the note until apparently prompted to do so as a result of the Bar’s
investigation, at which point he paid the $154,489.93 owed
(principal plus interest) to a foundation associated with the college,
to which the college had apparently assigned its interest in the
bequest.
The Bar agrees that Hine’s conduct violated Rule 1.4 by failing
to keep his client informed and to consult with his client, that he
violated Rule 1.8 because there was no evidence that he had ever
obtained informed consent from any of the interested parties prior
to borrowing money from the sums entrusted to his care, that he
violated Rule 1.15 (I) (a) by commingling funds over which he had a
fiduciary duty and converting them for his own use, and that he
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violated Rule 1.15 (II) (b) by withdrawing funds belonging to the
estate for his personal use without first properly debiting the funds
to the estate’s account and by having to deposit significant personal
funds into his trust account to make up shortfalls in the account.
The Bar then assesses Hine’s conduct in the context of the ABA
Standards for Imposing Lawyer Sanctions. See In the Matter of
Morse, 266 Ga. 652, 653 (470 SE2d 232) (1996) (stating that this
Court looks to the ABA Standards for guidance in determining the
appropriate disciplinary sanction). The Bar begins with Standard
4.1, which concerns the failure to preserve client property and as to
which the Bar notes that Hine’s conversion of client funds for his
own use violated his duties to preserve client funds in a manner that
kept them segregated from his own, presumptively calling for
disbarment or suspension, subject to considerations such as Hine’s
mental state and any actual or potential injuries caused. As to
Standard 4.3, which concerns the failure to avoid conflicts of
interest, the Bar states that Hine’s advances of client funds to
himself without the informed consent of impacted parties had the
9
intent to benefit Hine and the potential for serious injury to clients
or third-party beneficiaries, such that the presumptive penalty for
Hine’s Rule 1.8 violation would be disbarment. The Bar next
addresses Hine’s conduct under ABA Standard 4.4, which concerns
a lack of diligence, noting that disbarment is generally appropriate
where a lawyer knowingly deceives a client with the intent to benefit
himself where there is serious injury or potential injury to the client.
The Bar further notes that, although Hine admitted a lack of candor
that violated the duties associated with Standard 4.6, he did not
admit to a violation of Rules 1.5 or 8.4 (a) (4), which are the only
rules to which Standard 4.6 applies, see Appendix 1, Cross-
Reference Table: ABA Model Rules of Professional Conduct and
Standards for Imposing Sanctions, although the Bar allows that
Hine’s reference to Standard 4.6 underscores the seriousness of his
Rule 1.4 violation. The Bar points to Hine’s admission that he acted
knowingly in failing to obtain the informed consent of the affected
parties, notes the considerable potential for injury to the affected
parties, and concludes that the presumptive penalty would be
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disbarment or a lengthy suspension. The Bar agrees with the factors
in aggravation1 and mitigation noted by Hine and adds that the
illness and death of his wife provides some additional mitigation,
although it notes that Hine’s misconduct and his wife’s illness do not
necessarily appear to have been contemporaneous.
The Bar asserts that, in light of the facts that Hine converted
for his own use substantial funds that had been entrusted to him as
a fiduciary and that he did not acknowledge to the affected parties
that he owed to them almost $240,000,2 disbarment is the
presumptively appropriate penalty. However, the Bar states that
this Court has “softened its approach” in cases in which the
mitigating factors substantially outweigh the factors in aggravation.
The Bar acknowledges that the mitigating factors here appear to
outweigh the factors in aggravation and states that it is also
1 The Bar additionally specifies that it is refraining from arguing any
additional factors in aggravation, pursuant to negotiations between the Bar
and Hine’s counsel in this matter.
2 This amount consists of the “loan” from the estate, the fee overcharge
to the estate, and the principal plus interest owed on the loan from the client
trust.
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relevant that Hine happened to be able to repay all of the amounts
owed to the various affected parties. The Bar points to the recent
decision of this Court in In the Matter of Mathis, 312 Ga. 626 (864
SE2d 40) (2021), and asserts that Hine’s cooperation and contrition
are substantially mitigating, as he remediated the effects of his
misconduct as to the affected parties,3 effectively closed his practice
and announced his retirement, and filed this petition prior to the
instigation of other proceedings. The Bar maintains that this Court
should “uphold” Hine’s acceptance of the consequences of his
misconduct, as opposed to other, unidentified attorneys who only
make restitution or seek to “cut a deal” when all other avenues are
exhausted. As such, the Bar agrees that this Court “might
appropriately order” a six-month suspension as punishment for
Hine’s acknowledged misconduct.
3 Although it appears that Hine did repay the “loan” from the estate prior
to the Bar becoming aware of his misconduct, he does not appear to have
sought to remediate the fee overcharge to the estate or his conduct regarding
the client trust until after the Bar became involved.
12
In addition to its recitation of the underlying facts and its
analysis of the potentially appropriate sanction, the Bar’s response
has attached certain documents related to its investigation.
Although not mentioned by either Hine or the Bar, among these
documents is a letter from Hine to an individual at the Bar, in which
Hine provided some explanation regarding his misconduct and to
which he attached a number of documents. In the course of his
explanation, Hine states, as to the client trust matter that he failed
to mention in his petition, that
[a]lthough I did not consider it at the time the note [to the
client trust] was funded, I acknowledge that the loan and
my failure to timely repay it was a breach of my fiduciary
obligations to the [] Trust and is a separate ground for
disbarment to which I have no defense.
It is unclear, in the light of this record evidence, why Hine
apparently did not believe that he needed to address the client trust
matter at all in his petition for voluntary discipline or why the Bar
did not mention this admission in its response or apparently view
the client trust matter as a separate basis for discipline.
13
Furthermore, it is noteworthy that Hine’s treatment of the
estate matter contains no mention of the fact that he overcharged
the estate’s beneficiaries by more than $15,000 in fees. He appears
to have refunded the overcharged fees to the beneficiaries, but, from
a letter to the beneficiaries that Hine attached to his aforementioned
letter to the Bar, it appears that Hine did not even realize his error
in calculating his fee, in a manner inconsistent with the will, let
alone seek to remediate it, until after he reported his misconduct in
the handling of the estate funds to the Bar. Additionally, Hine
appears to have failed to mention the overcharging in his
communications with the Bar, and it appears to have become known
to the Bar only because of the inclusion of that issue in the letter to
the beneficiaries, which Hine provided to the Bar in order to explain
his mishandling of the estate funds in the matter of the “loan” from
the estate.
Having reviewed the record, we conclude that acceptance of
this petition would not be appropriate. Taking into account no more
than the conduct to which Hine has admitted, that conduct
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represents a serious violation of the Rules of Professional Conduct
and could by itself warrant disbarment in the absence of substantial
mitigating evidence. See, e.g., In the Matter of Harris, 301 Ga. 378(801 SE2d 39) (2017) (disbarring attorney for violating Rules 1.15 (I)
and 1.15 (II), where attorney misappropriated trust funds and
commingled those funds with his own and offered no explanation for
his conduct and no mitigation beyond the lack of a prior disciplinary
history). Moreover, in addition to the conduct to which Hine has
admitted in his petition, the contents of the Bar’s response and the
documents attached thereto raise the further question of whether
Hine’s conduct in overcharging the estate and in regards to his
handling of the client trust matter might serve as the basis for
additional sanctionable violations of the Rules of Professional
Conduct. Hine’s failure to mention the estate fee overcharge or client
trust matter at all appears to call into question the validity of the
assertion, made by both Hine and the Bar, that his supposed
willingness to disclose his misconduct and accept its consequences
is significantly mitigating. It is also unclear from the Bar’s response
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whether it was suggesting that the recommended discipline was
based on the estate matter alone or whether it was also taking into
account the client trust matter and the billing overcharge. Any
future attempts to resolve Hine’s disciplinary matter should address
this additional conduct and the question of whether it provides any
basis for discipline, and, if so, at what level of sanction. For these
reasons, we reject Hine’s petition for voluntary discipline.
Petition for voluntary discipline rejected. All the Justices
concur.
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