In the Matter of William Thomas Moody

THE STATE OF SOUTH CAROLINA
In The Supreme Court
In the Matter of William Thomas Moody, Respondent.
Appellate Case No. 2014-001889
Opinion No. 27453
Submitted September 16, 2014 – Filed October 15, 2014
DISBARRED
Lesley M. Coggiola, Disciplinary Counsel, and Barbara
M. Seymour, Deputy Disciplinary Counsel, both of
Columbia, for Office of Disciplinary Counsel.
J. Calhoun Watson, Esquire, of Sowell Gray Stepp &
Laffitte, LLC of Columbia, for Respondent.
PER CURIAM: In this attorney disciplinary matter, respondent and the Office
of Disciplinary Counsel (ODC) have entered into an Agreement for Discipline by
Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary
Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court
Rules (SCACR). In the Agreement, respondent admits misconduct and consents to
disbarment with conditions. Respondent requests the disbarment be imposed
retroactively to January 27, 2014, the date of his interim suspension. In the Matter
of Moody, 407 S.C. 81, 754 S.E.2d 266 (2014). We accept the Agreement and
disbar respondent retroactively to the date of his interim suspension. In addition,
we impose the conditions set forth hereafter in this opinion. The facts, as set forth
in the Agreement, are as follows.
Facts
Matter I
Respondent represented Client A in a contested estate case that was resolved
several years ago. Ultimately, approximately $700,000 from the estate was placed
in trust for the benefit of Client A until he reached the age of thirty. Respondent
was named trustee of the trust. Most of the trust fund was placed with an
independent broker and was invested properly.
Respondent invested $15,000 of Client A's trust funds in a commercial real estate
venture arranged by respondent's friend. The venture was unsuccessful and the
funds were lost. In 2013, when Client A turned thirty, respondent determined that
he needed to repay the trust the funds lost in his investment, plus interest.
Respondent also represented the personal representative (Client B) of the Estate of
John Doe. Respondent received $50,000 on behalf of the Doe Estate for
renovations on estate property. Respondent deposited those funds into his law firm
trust account on October 1, 2013.
On October 9, 2013, respondent registered an entity called HCJ Enterprises, LLC,
with the South Carolina Secretary of State and named himself the registered agent.
On October 11, 2013, at respondent's instruction, a check was written from the law
firm trust account in the amount of $22,000 payable to HCJ Enterprises, LLC.
Respondent used the check to open a bank account in the name of HCJ Enterprises,
LLC.
On October 15, 2013, respondent wrote a check from the HCJ Enterprises, LLC,
account in the amount of $19,176.16 payable to Client A to reimburse him for
funds lost in the real estate venture, plus interest. On the same date, respondent
cashed a check from the HCJ Enterprises, LLC, account in the amount of $2,300.
On October 23 and October 25, 2013, respondent made counter withdrawals from
the HCJ Enterprises, LLC, account in the amounts of $300 and $200, respectively.
Respondent used these funds for personal purposes.
On November 1, 2013, at respondent's direction, a second check was written from
the client trust account to HCJ Enterprises, LLC, in the amount of $7,500. On the
same date, respondent make a counter withdrawal of $4,000.
Between November 4 and November 14, 2013, respondent made cash withdrawals
from the HCJ Enterprises' account totaling $3,350. Respondent used all of these
funds for his own benefit.
On November 19, 2013, respondent obtained a check in the amount of $5,000 from
Client B for the renovation project. Respondent did not place these funds in his
trust account, but deposited them into the HCJ Enterprises' account. Respondent
converted these funds to his own use. At the time of respondent's interim
suspension, the balance in the HCJ Enterprises' account was $5.84.
Respondent acknowledges he used HCJ Enterprises, LLC, and the related bank
account to misappropriate Doe Estate funds held in the law firm trust account. He
admits there was no legitimate purpose for payment of $34,500 from the Doe
Estate to Client A, HCJ Enterprises, LLC, or respondent.
On January 3, 2014, respondent wrote a check on a law firm petty cash account for
$3,000 payable to Client B in an attempt to replace some of the misappropriated
funds. At the time he wrote the check, the law firm petty cash account did not
have sufficient funds to cover the check. Notice of the overdraft on the petty cash
account alerted respondent's law partner (Partner) to the misappropriation of funds
from the Doe Estate. Partner made arrangements to cover the check on the petty
cash account, removed respondent as a signatory on the firm accounts, terminated
the partnership, and reported respondent's conduct to the Commission on Lawyer
Conduct (the Commission). In addition to the $3,000 paid from the petty cash
account on January 3, 2014, respondent paid a total of $10,895.10 to or on behalf
of the Doe Estate from petty cash and from personal funds.
Matter II
Client C retained respondent to represent her in a partition action related to her
mother's estate. Respondent successfully handled that matter.
In the meantime, a dispute arose between Client C and her brother (who was the
personal representative of the mother's estate) about the distribution of personal
property. Respondent agreed to represent Client C in that dispute. On November
9, 2010, respondent accepted a fee of $750 from Client C to assist her in resolving
that dispute.
Respondent admits that he failed to diligently pursue the personal property dispute
and that he failed to adequately communicate with Client C about the matter.
Although he had some discussions with Client C's brother in an attempt to settle
the matter, respondent took no significant action in the matter for more than three
years.
Matter III
In January 2010, Client D and his two brothers retained respondent to represent
them as plaintiffs in a civil matter involving a dispute with a neighbor and her
landlords. Respondent represented Client D and his brothers in filing a lawsuit and
participating in discovery and other pretrial matters. Respondent did not present
Client D or his brothers with a formal fee agreement or with billing statements, but
contacted Client D from time to time asking for payment.
The neighbor filed a motion to dismiss. Subsequently, all defendants filed a
motion for summary judgment referencing documents attached to the neighbor's
answer and her motion to dismiss. On October 29, 2013, a hearing was held on the
motion for summary judgment. At that hearing, respondent protested, claiming
that he had not received a copy of the answer. The judge continued the matter
based on respondent's statement.
In fact, respondent had received a copy of the answer on June 18, 2012. Opposing
counsel filed a motion for sanctions against respondent. Following the rescheduled
motion hearing, the judge ruled in favor of the defendants, granting summary
judgment on all but one cause of action. The judge held the issue of sanctions in
abeyance.
On January 9, 2014, the day respondent was confronted by Partner about the
$3,000 withdrawal from the law firm petty cash account, respondent sent a text
message to Client D stating: "[t]o finish up this part of the case it looks like with
time and costs about $3,000. Is that going to be a problem?" Respondent sent
additional text messages to Client D asking that he deposit the fee into respondent's
personal account, that the deposit be made in cash to avoid a hold by the bank, and
he urged Client D to make the deposit immediately. Client D deposited the money
as requested. Respondent acknowledges that the fee obtained from Client D and
his brothers in advance of his work should have been placed in the law firm's trust
account.
On January 10, 2014, respondent and the defendants' attorney agreed to have the
case dismissed pursuant to Rule 40(j), SCRCP, to facilitate mediation and
settlement on the remaining cause of action. On January 14, 2014, the judge
signed a form order dismissing the case pursuant to Rule 40(j). Client D stated
respondent neither consulted with him or his brothers about the Rule 40(j) motion
nor did he inform them that it was granted.
On January 27, 2014, respondent was placed on interim suspension. In the Matter
of Moody, Id. Although he was suspended, respondent continued to
communicate with Client D regarding the scheduling of mediation and other
matters related to the civil action. During this communication, respondent
did not advise Client D of his interim suspension or the Rule 40(j) dismissal
of the case.
On February 5, 2014, Client D sent a text message to respondent inquiring
about the opposing party's Facebook posting stating respondent had been
suspended. Respondent responded with a text message that he was "not sure"
where the opposing party got that information and that he would call Client D
the following morning. On February 6, 2014, respondent called Client D and
informed him of his suspension. Respondent still did not tell Client D about the
Rule 40(j) dismissal. Client D discovered the dismissal when he retrieved his file
from Partner who had been appointed to protect the interests of respondent's
clients.
Matter IV
Respondent represented Client E in a legal matter related to Client E's business.
To settle the matter, Client E agreed to make monthly payments to the opposing
party. Prior to respondent's interim suspension, Client E delivered to respondent a
series of personal checks in the amount of $500, each payable to respondent. As it
was Client E's intent that respondent make the payments to counsel for the
opposing party on a monthly basis, Client E post-dated the checks.
Respondent delivered a total of $3,000 to the opposing party's counsel between
April and November 2013. In December 2013 and January 2014, respondent
negotiated Client E's checks, but rather than delivering them to the opposing party
or his counsel, respondent converted the checks to this own use.
On January 27, 2014, respondent was placed on interim suspension and Partner
was appointed to protect the interests of respondent's clients. In the Matter of
Moody, Id. Following the suspension, Client E contacted respondent and
respondent assured him that the payments were being made. Respondent did not
deliver the remaining checks to Partner. Respondent converted four more checks
between February and May 2014 for a total of $3,500.
On June 12, 2014, Partner sent Client E a letter from opposing counsel indicating
Client E had not made the payments as agreed. When Client E contacted
respondent, respondent told him he would "look into it." Respondent did not tell
Client E that he had failed to make the payments as agreed. On June 30, 2014,
respondent delivered $3,500 in cash and the remaining unnegotiated checks to
Client E.
Law
Respondent admits that by his conduct he has violated the following provisions of
the Rules of Professional Conduct, Rule 407, SCACR: Rule 1.2 (lawyer shall
abide by client's decisions concerning objectives of representation); Rule 1.3
(lawyer shall act with diligence and promptness in representing client); Rule 1.4
(lawyer shall promptly inform client of any decision with respect to which client's
informed consent is required, shall reasonably consult with client about means by
which client's objectives are to be accomplished, and shall keep client reasonably
informed about status of matter); Rule 1.7(a)(2) (lawyer shall not represent client if
representation involves concurrent conflict of interest; conflict of interest exists if
there is significant risk that representation of one or more clients will be materially
limited by lawyer's responsibilities to another client); Rule 1.15(a) (lawyer shall
hold property of clients or third persons in lawyer's possession in connection with
representation separate from lawyer's own property); Rule 1.15(g) (lawyer shall not
use any entrusted property to obtain personal benefit for lawyer or other person
other than the legal or beneficial owner of the property); Rule 1.16 (upon
termination of representation, lawyer shall take steps to extent reasonably
practicable to protect client's interests, such as giving reasonable notice to client
and surrendering property to which client is entitled); Rule 3.3 (lawyer shall not
knowingly make false statement of fact to tribunal); Rule 5.5(a) (lawyer shall not
practice law in a jurisdiction in violation of the regulation of law in that
jurisdiction); Rule 8.4(b) (it is professional misconduct for lawyer to commit
criminal act that reflects adversely on lawyer's honesty, trustworthiness or fitness
as a lawyer in other respects); Rule 8.4(d) (it is professional misconduct for lawyer
to engage in conduct involving dishonesty, fraud, deceit or misrepresentation). In
addition, respondent admits he violated Rule 30(d) of the Rules for Lawyer
Disciplinary Enforcement, Rule 413, SCACR (suspended lawyer shall deliver to
client being represented in pending matter any papers or other property to which
client entitled).
Respondent also admits he has violated the following Rules for Lawyer
Disciplinary Enforcement, Rule 413, SCACR: Rule 7(a)(1) (it is ground for
discipline for lawyer to violated Rules of Professional Conduct or any other rules
of this jurisdiction regarding professional conduct of lawyers).
Conclusion
We accept the Agreement for Discipline by Consent and disbar respondent from
the practice of law in this state, retroactively to January 27, 2014, the date of his
interim suspension.1 In the Matter of Moody, supra. Further, we impose the
following conditions:
1) within thirty (30) days of the date of this opinion, respondent shall pay
the costs incurred in the investigation and prosecution of this matter by
ODC and the Commission;
2) within one (1) year of the date of this opinion, respondent shall:
a) refund the $750 fee paid by Client C;
b) refund the $3,000 fee paid by Client D and his two brothers;
c) pay any remaining funds owed to Partner as a result of
respondent's misappropriation in Matter I; and
d) reimburse the Lawyers' Fund for Client Protection for any funds
paid out on his behalf; and
1
Respondent's prior disciplinary history includes letters of caution issued in 2007
and 2010 warning respondent to adhere to some of the Rules of Professional
Conduct cited in the current Agreement. See Rule 2(r), RLDE (fact that letter of
caution has been issued shall not be considered in subsequent disciplinary
proceeding against lawyer unless the caution or warning contained in letter of
caution is relevant to the misconduct alleged in new proceedings).
3) complete the Legal Ethics and Practice Program Ethics School, Trust
Account School, and Law Office Management Program prior to applying
for readmission.
Within fifteen (15) days of the date of this opinion, respondent shall file an
affidavit with the Clerk of Court showing that he has complied with Rule 30 of
Rule 413, SCACR, and shall also surrender his Certificate of Admission to the
Practice of Law to the Clerk of Court.
DISBARRED.
TOAL, C.J., PLEICONES, BEATTY, KITTREDGE and HEARN, JJ.,
concur.