Office of Disciplinary Counsel v. Adams ( 2018 )

Electronically Filed
Supreme Court
SCAD-17-0000163
07-MAR-2018
08:32 AM
SCAD-17-0000163
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
OFFICE OF DISCIPLINARY COUNSEL,
Petitioner,
vs.
JO-ANN MARIE ADAMS,
Respondent.
ORIGINAL PROCEEDING
(ODC Case Nos. 14-001-9144, 14-067-9210, 15-018-9237)
ORDER OF SUSPENSION
(By: Recktenwald, C.J., Nakayama, Pollack, and Wilson, JJ.,
and Intermediate Court of Appeals Associate Judge Reifurth,
in place of McKenna, J., recused)
Upon consideration of the March 15, 2017 report
submitted to this court by the Disciplinary Board of the Hawai#i
Supreme Court, the record, and the briefs submitted in this
matter, we reach the following Findings of Fact and Conclusions
of Law, based upon clear and convincing evidence.
In Case No. 14-001-9144, the record establishes that,
from 2010 through September 30, 2013, Respondent Jo-Ann Adams
failed to maintain a separate business account, in violation of
Rule 1.15(a)(2) of the Hawai#i Rules of Professional Conduct
(HRPC) (1994).1 She used counter deposit slips to deposit funds
into her client trust account and her business account, and used
counter checks to disburse funds from her client trust account,
constituting multiple violations of HRPC Rule 1.15(b).
Respondent Adams commingled her own funds – including funds
earned in her legal practice, earned for non-legal work, and
obtained through an inherited interest in a judgment – with
client funds from 2010 through September 30, 2013, in violation
of HRPC Rule 1.15(c). By willfully and knowingly retaining her
earnings in her client trust account, she placed the client funds
in her account at substantial risk of injury.
Respondent Adams paid personal and non-client business
expenses from her client trust account, and withdrew funds from
the account by means of checks made to “cash,” each instance of
such conduct constituting a violation of HRPC Rule 1.15(e). She
failed to label checks and to maintain contemporaneous financial
records with the accuracy and consistency necessary to protect
the integrity of her clients’ funds by responsibly overseeing the
receipt, maintenance, and disbursement of those funds, as
required by HRPC Rule 1.15(g)(2).
We further conclude that Respondent Adams failed to
file her 2010, 2011, and 2012 federal and state tax returns until
August 23, 2013, and her 2010 second semester and 2011 and 2012
1
All citations to the HRPC in this order are to the 1994
edition, unless otherwise noted.
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general excise tax returns until
June 20, 2014. We further conclude failing to file her returns
by the appropriate deadlines injured the public and the legal
profession.
However, we also conclude, following a thorough and
complete de novo review of the record, that the Office of
Disciplinary Counsel (ODC) did not succeed in carrying its burden
of establishing, by clear and convincing evidence, that
Respondent Adams had the intent to conspire with her client in
this case to sequester the client’s inherited funds in her client
trust account in order to avoid the payment by her client of
appropriate taxes on those funds. See ODC v. Au, 107 Hawai#i
327, 336, 113 P.3d 203, 212 (2005); Disciplinary Bd. of the
Hawai[#]i Supreme Ct. v. Bergan, 60 Haw. 546, 554, 592 P.2d 814,
819 (1979).
In Case No. 14-067-9210, we conclude Respondent Adams
misappropriated client funds, in violation of HRPC Rules 1.15(c)
and 1.15(d), and injured that client when, on December 30, 2013,
she disbursed monies from her client trust account using a
counter check, overdrawing the account, at a time when she, by
her own admission, held funds for a client in that account.
In Case No. 15-018-9237, the record establishes by
clear and convincing evidence that, on May 17, 2015, Respondent
Adams wrote a check to herself for $459.80 from her client trust
account against insufficient funds and, in making the
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disbursement to herself, relied in part on $25.00 belonging to a
client. Based upon the plain language of HRPC Rule 1.15(c)
(2014), the withdrawal of the $25.00 of client money from her
client trust account violated that Rule and injured the client in
question.
Adams’s grossly negligent recordkeeping also
establishes, by clear and convincing evidence, that her financial
recordkeeping was so inadequate, the violation of her duties
under HRPC Rule 1.15(g) so severe, that she placed the funds of
her clients in substantial danger of serious injury. This
conclusion, viewed together with our conclusions regarding her
failure to file tax returns and her comingling of personal funds
in her client trust account, provides clear grounds for a
substantial period of suspension. See ODC v. Horner, SCAD-15-930
(March 20, 2016); ODC v. Manuia, SCAD-13-136 (May 20, 2013); ODC
v. Hartman, SCAD-11-96 (March 24, 2011); ODC v. James Ching, No.
25697 (May 2, 2003); ODC v. Trask, No. 21929 (January 19, 1999);
see also In re: Alex, 205 So. 3d 895 (La. 2016); In re Shamers,
873 A.2d 1089 (Del. 2005); In the Matter of Cabaniss, 495 S.E.2d
779 (S.C. 1998).
Finally, we find, in aggravation, that Respondent Adams
violated multiple provisions of the HRPC over an extended period
of time, had substantial experience in the practice of law and
failed to file her tax returns when due.
We find, however, in mitigation, that Respondent Adams
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has a clean disciplinary record, has an excellent reputation in
the community and has performed significant pro bono work, fully
and freely cooperated with ODC in its investigation (including
taking the initiative to report a subsequent overdraft of her
account), and expressed sincere remorse for the mishandling of
her financial affairs and client funds in particular. Therefore,
IT IS HEREBY ORDERED that Respondent Adams is suspended
from the practice of law for one year, effective 30 days after
the entry date of this order.
IT IS FURTHER ORDERED that Respondent Adams shall
complete a course, offered by the Practicing Attorneys’ Liability
Management Society (PALMS) or an equivalent, on the responsible
management of a law practice, which shall include requirements
governing the appropriate manner for receiving, maintaining, and
disbursing client funds, handling earned fees and incurred costs,
as well as the recordkeeping tools available to ensure compliance
with the Hawai#i Rules of Professional Conduct and the Hawai#i
Rules Governing Trust Accounting. Submission of proof of
completion of this course shall be a pre-requisite to her
reinstatement, as a condition of this order of suspension,
pursuant to RSCH Rule 2.17(b)(2). Respondent Adams is reminded
that, pursuant to RSCH Rule 2.17(a), she may not practice law
until reinstated by an order of this court.
IT IS FURTHER ORDERED that, pursuant to RSCH Rule
2.16(d), within 10 days of the effective date of her suspension
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Respondent Adams shall submit to this court proof of compliance
with the requirements of RSCH Rule 2.16.
IT IS FURTHER ORDERED that any reinstatement of
Respondent Adams to the practice of law shall be subject to her
successful completion of an audit, within one year of her return
to practice, conducted by the Practicing Attorneys’ Liability
Management Society or other similar organization, and submission
to this court of proof of said successful completion within 60
days of the one-year anniversary of reinstatement, or good cause
for an extension. Failure to fulfill this condition may result
in a further period of suspension, upon a review of the record in
this matter.
IT IS FINALLY ORDERED that Respondent Adams shall bear
the costs of these disciplinary proceedings, upon the timely
submission to this court of a verified bill of costs by ODC,
pursuant to RSCH Rule 2.3(c).
DATED: Honolulu, Hawai#i, March 7, 2018.
/s/ Mark E. Recktenwald
/s/ Paula A. Nakayama
/s/ Richard W. Pollack
/s/ Michael D. Wilson
/s/ Lawrence M. Reifurth
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