William Wesley Ruth v. Commission for Lawyer Discipline ( 2024 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-23-00122-CV
William Wesley RUTH,
Appellant
v.
COMMISSION FOR LAWYER DISCIPLINE,
Appellee
From the 216th Judicial District Court, Gillespie County, Texas
Trial Court No. 16375
Honorable Cynthia Marie Chapa, Judge Presiding
Opinion by: Luz Elena D. Chapa, Justice
Sitting: Luz Elena D. Chapa, Justice
Liza A. Rodriguez, Justice
Lori I. Valenzuela, Justice
Delivered and Filed: July 24, 2024
AFFIRMED
Appellant William Wesley Ruth appeals the trial court’s judgment suspending him from
the practice of law for eighteen months. We affirm the trial court’s judgment.
BACKGROUND
After being injured in a car accident, Stephanie Alvarado hired Ruth to represent her in a
personal injury lawsuit against the adverse driver involved in the accident. The lawsuit settled for
$43,000.00, and a settlement check made payable to Alvarado and Ruth was mailed to Ruth’s
office. Ruth deposited the check into his spouse’s non-IOLTA bank account and issued a check
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in the amount of $33,000.00 to Alvarado from a different non-IOLTA bank account. Despite not
having a written fee agreement with Alvarado, Ruth had charged and collected a contingency fee
from the settlement amount for his legal representation. He did not provide Alvarado with a
written statement describing the outcome of the matter and showing the remittance to Alvarado
and the method of its determination.
In August 2019, Alvarado filed a grievance against Ruth with the Office of the Chief
Disciplinary Counsel, which ultimately led to the Commission for Lawyer Discipline initiating a
disciplinary action against Ruth for violations of the Texas Disciplinary Rules of Professional
Conduct 1.04(d), 1.05(b)(1), 1.14(a), and 8.04(a)(1). See Tex. Disciplinary Rules Prof’l Conduct
R. 1.04(d), reprinted in TEX. GOV’T CODE, tit. 2, subtit. G, app. A (requiring contingency fee
agreements to be in writing and requiring lawyer to provide client with written statement
describing outcome and showing remittance and method of determination), 1.05(b)(1) (prohibiting
lawyer from disclosing confidential information of client), 1.14(a) (requiring lawyer to hold funds
in separate “trust” or “escrow” account), and 8.04(a)(1) (prohibiting lawyer from violating
disciplinary rules). The Commission then moved for partial summary judgment on its claims Ruth
had violated the disciplinary rules. After a hearing, the trial court granted partial summary
judgment in favor of the Commission, stating Ruth violated Rules 1.04(d), 1.14(a), and 8.04(a)(1).
On December 14, 2022, the case proceeded to a one-day bench trial on the issue of sanctions, and
the trial court heard testimony from Alvarado and the Coryell County District Attorney. The trial
court ultimately entered a final judgment, imposing an eighteen-month active suspension against
Ruth. This appeal followed.
ANALYSIS
Ruth contends the trial court’s eighteen-month suspension was an inappropriate sanction
because: 1) it does not advance the purpose of the Texas Rules of Disciplinary Procedure, 2) he
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did not cause actual or potential harm to anyone, and 3) it was based on a previous judgment of
suspension that was pending on appeal. According to Ruth, the suspension should be set aside,
and we should remand this case to the trial court for a new trial on sanctions.
Standard of Review
We review the sanction imposed on an attorney for professional misconduct for an abuse
of discretion. Neely v. Comm’n for Law. Discipline, 196 S.W.3d 174, 186 (Tex. App.—Houston
[1st Dist.] 2006, pet. denied); McIntyre v. Comm’n for Law. Discipline, 169 S.W.3d 803, 807 (Tex.
App.—Dallas 2005, pet. denied). “The judgment of a trial court in a disciplinary proceeding may
be so light, or so heavy, as to constitute an abuse of discretion.” State Bar of Tex. v. Kilpatrick,
874 S.W.2d 656, 659 (Tex. 1994). “At the same time, the trial court has broad discretion to
determine whether an attorney guilty of professional misconduct should be reprimanded,
suspended, or disbarred.” Id.; see Rosas v. Comm’n for Law. Discipline, 335 S.W.3d 311, 320
(Tex. App.—San Antonio 2010, no pet.) (“A trial court has broad discretion to determine the
consequences of professional misconduct.”). A trial court abuses its discretion when it acts in an
unreasonable and arbitrary manner, or when it acts without reference to any guiding principles.
See Rosas, 335 S.W.3d at 320. But the mere fact the trial court “may decide a matter differently
than an appellate court does not demonstrate an abuse of discretion.” Cantu v. Comm’n for Law.
Discipline, No. 13-16-00332-CV, 2020 WL 7064806, at *20 (Tex. App.—Corpus Christi Dec. 3,
2020, no pet.) (mem. op.) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242
(Tex. 1985)).
Applicable Law
For attorney discipline cases involving grievances filed before June 1, 2018, Rule 3.10 of
the Texas Rules of Disciplinary Procedure sets forth several factors for trial courts to consider in
determining the appropriate sanctions for misconduct. See Tex. Rules Disciplinary P. R. 3.10
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(repealed June 1, 2018). For cases involving grievances filed after June 1, 2018, as here, the Texas
Supreme Court replaced these factors with guidelines in part XV of the current version of the
Texas Rules of Disciplinary Procedure. See Order Adopting Amendments to the Texas Rules of
Disciplinary Procedure, Misc. Docket No. 18-9031 (2018); Tex. Rules Disciplinary P. R. 15.01–
.09 reprinted in TEX. GOV’T CODE, tit. 2, subtit. G, app. B. In this case, Alvarado filed her
grievance against Ruth in August 2019; therefore, we apply the guidelines in the current version
of the rules. See Order Adopting Amendments to the Texas Rules of Disciplinary Procedure, Misc.
Docket No. 18-9031 (2018).
According to the guidelines, “[t]he purpose of lawyer discipline proceedings is to protect
the public and the administration of justice from lawyers who have not discharged, will not
discharge, or are unlikely to properly discharge their professional duties to clients, the public, the
legal system, and the legal profession.” Tex. Rules Disciplinary P. R. 15.01(A). The guidelines
further provide the disciplinary tribunal should consider “the duty violated,” “the Respondent’s
level of culpability,” “the potential or actual injury caused by the Respondent’s misconduct,” and
“the existence of aggravating or mitigating factors” when imposing a sanction. Id. R. 15.02. In
cases where a lawyer fails to preserve client property, “[s]uspension is generally appropriate when
a Respondent knows or should know that he is dealing improperly with client property and causes
injury or potential injury to a client.” Id. R. 15.04(B)(2). Suspension is also “appropriate when a
Respondent knowingly engages in conduct that is a violation of a duty owed as a professional and
causes injury or potential injury to a client, the public, or the legal system.” Id. R. 15.07(2).
Application
We begin our analysis by considering the first factor the guidelines provide the disciplinary
tribunal should consider—“the duty violated.” See id. R. 15.02. In this case, Ruth does not dispute
the duties he violated or challenge the trial court’s partial summary judgment, which stated he
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violated Rules 1.04(d), 1.14(a), and 8.04(a)(1) of the Rules of Professional Conduct. See Tex.
Disciplinary Rules Prof’l Conduct R. 1.04(d), 1.05(b)(1), 1.14(a), and 8.04(a)(1). In fact, in his
brief, Ruth states he “conceded during the sanctions trial that he violated the duties to have a
written contract, to have a written itemization of the settlement[,] and to deposit the insurance
check in an IOLTA account.”
As to Ruth’s level of culpability, Ruth does not dispute he improperly handled Alvarado’s
settlement proceeds and violated duties owed as a professional; thus, recognizing he knew or
should have known his actions were improper. See CULPABILITY, Black Law’s Dictionary (11th
ed. 2019) (defining culpability as “moral blameworthiness” and “mental state that must be proved
for a defendant to be held liable for a crime”). Rather, he attempts to justify his misconduct by
arguing his level of culpability is “low” because Alvarado testified at the sanctions hearing she
was not confused about their contractual agreement, a written itemization of the settlement was
unnecessary because no expenses needed explaining, and paying Alvarado from a personal account
placed the funds into her possession quicker. However, these justifications lack merit because
they fail to explain Ruth’s level of culpability and focus instead on minimizing the gravity of his
actions.
Turning to the potential or actual injury caused by Ruth’s misconduct, Ruth asserts
Alvarado was not harmed by his misconduct. It is well-established “[a]mong an attorney’s
foremost ethical obligations is the proper handling of clients’ funds and trust accounts.” Neely v.
Comm’n for Law. Discipline, 302 S.W.3d 331, 350 (Tex. App.—Houston [14th Dist.] 2009, pet.
denied). And we have recognized this ethical obligation, cautioning the potential danger “that
funds in a commingled account will be viewed as the lawyer’s property, rather than the client’s,
and will thus be subject to the claims of the lawyer’s creditors.” Brown v. Comm’n for Law.
Discipline, 980 S.W.2d 675, 680 (Tex. App.—San Antonio 1998, no pet.); see also Tex.
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Disciplinary R. Prof’l Conduct 1.14 cmt. 2 (cautioning against commingling because such course
of dealing increases risk that all assets of account will be viewed as the lawyer’s property and
subject to creditors); 48 Robert P. Schuwerk, et al., Tex. Prac., Tex. Lawyer & Jud. Ethics § 6:14
(2024 ed.). Thus, even assuming Alvarado was not actually harmed by Ruth’s actions, the
guidelines account for the potential for harm. See Tex. Rules Disciplinary P. R. 15.02.
Finally, with respect to “the existence of aggravating or mitigating factors,” Ruth contends
the trial court did not consider “the absence of a dishonest or selfish motive” or his “inexperience
in the practice of law” as mitigating factors. Under the guidelines, a disciplinary tribunal may
consider mitigating factors, such as those listed by Ruth, in determining mitigation. See id. R.
15.09(C) (outlining factors which “may” be considered in mitigation). However, it may also
consider aggravating factors in determining aggravation. See id. R. 15.09(B) (outlining factors
which “may” be considered in aggravation). Here, the trial court was presented with evidence
solely of aggravating factors concerning Ruth’s past conduct. During the sanctions trial, the
Coryell County District Attorney testified in 2019, he was a special prosecutor assigned to
investigate several charges against Ruth, including an assault on a public servant and “some
misdemeanor evading and resisting charges.” During his investigation, additional charges
followed for “aggravated perjury” and “[t]he misapplication of fiduciary duty [and] the
obstruction, retaliation, the fraudulent use of identifying information.” He testified the matters
were resolved by Ruth pleading guilty to the lesser included offense of assault on a public servant.
In addition to this testimony, the Commission produced evidence showing Ruth’s legal license had
been suspended for five years in September 2022. Ruth, however, contends the September 2022
judgment of suspension should not have been considered because it was pending on appeal, but
there is nothing in the record indicating his judgment of suspension had been stayed and should
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not have been considered. 1 Thus, based on this record, it is clear the trial court considered the
existence of aggravating factors when determining the degree of discipline imposed.
When considering the factors a disciplinary tribunal should consider when imposing a
sanction—“the duty violated,” “the Respondent’s level of culpability,” “the potential or actual
injury caused by the Respondent’s misconduct,” and “the existence of aggravating or mitigating
factors,” we cannot conclude the trial court acted unreasonably or arbitrarily to constitute an abuse
of discretion. See Neely, 196 S.W.3d at 807; Rosas, 335 S.W.3d at 320. Here, Ruth concedes he
violated several rules of professional conduct, and the record shows he knowingly violated these
rules by mishandling the settlement. Such misconduct could have potentially harmed Alvarado,
and there is evidence of aggravating factors the trial court could have considered. To the extent
Ruth contends the trial court’s eighteen-month suspension does not advance the purpose of the
disciplinary rules and therefore he should have received a lesser sanction, Ruth fails to cite any
legal authority supporting this contention. See TEX. R. APP. P. 38.1(i). Furthermore, we must
remain mindful an abuse of discretion does not occur merely because a trial court may have
decided a matter differently and imposed a lesser sanction. See Cantu, 2020 WL 7064806, at *20.
Accordingly, we conclude the trial court did not abuse its discretion.
CONCLUSION
Based on the foregoing, we affirm the trial court’s judgment.
Luz Elena D. Chapa, Justice
1
We note on June 20, 2024, this court issued an opinion affirming the September 2022 judgment of suspension
referenced during the sanctions trial. See Ruth v. Comm’n for Law. Discipline, No. 04-22-00796-CV, 2024 WL
3056655 (Tex. App.—San Antonio June 20, 2024, no pet. h.) (op.).
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