In the Matter of Paul Clarendon Ballou

THE STATE OF SOUTH CAROLINA
In The Supreme Court
In the Matter of Paul Clarendon Ballou, Respondent
Appellate Case No. 2015-000959
Opinion No. 27535
Submitted June 9, 2015 – Filed June 24, 2015
DISBARRED
Lesley M. Coggiola, Disciplinary Counsel, and Ericka M.
Williams, Assistant Disciplinary Counsel, both of
Columbia, for Office of Disciplinary Counsel.
Paul Clarendon Ballou, of Columbia, pro se.
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
the imposition of a definite suspension ranging from nine (9) months to three (3)
years or disbarment. He requests that any suspension or disbarment be imposed
retroactively to May 23, 2013, the date of his interim suspension. In the Matter of
Ballou, 403 S.C. 138, 742 S.E.2d 868 (2013). In addition, respondent agrees to
pay the costs incurred in the investigation and prosecution of this matter by ODC
and the Commission on Lawyer Conduct (the Commission) within thirty (30) days
of the imposition of discipline and to complete the Legal Ethics and Practice
Program Ethics School and Trust Account School prior to reinstatement. Further,
within sixty (60) days of the imposition of discipline, respondent agrees to enter
into a restitution agreement with the Commission to repay clients and third parties
harmed as a result of his misconduct. We accept the Agreement and disbar
respondent from the practice of law in this state retroactively to the date of his
interim suspension, and, further, impose the conditions as set forth hereafter in this
opinion. The facts, as set forth in the Agreement, are as follows.
Facts
Matter I
Respondent represented Complainant A and his wife in a personal injury case.
Subsequent to mediation, Client A became dissatisfied with respondent's
representation, terminated respondent's services, and demanded his file.
Respondent prepared a handwritten release for Complainant A's signature
discharging respondent from representation. The release also stated respondent
had incurred $313.05 in expenses, the defendant had offered to settle the case for
$23,000, and that respondent asserted an attorneys' fee lien in the amount of 25%
or $5,750 payable out of any settlement of the case along with costs. Complainant
A signed the document and added the following notation: "With reservations and
after Disciplinary Counsel Review Board."
Complainant A and his wife later settled the case with the defendant insurance
company. The insurance company sent a check to respondent in the amount of
$5,750 payable to the order of respondent's firm, Complainant A, and Complainant
A's wife. Respondent endorsed the check, signing the names of Complainant A
and his wife without their consent. Respondent then deposited the check into his
operating account.
Matter II
Respondent's firm represented Complainant B on criminal charges arising out of
her employment; the employer alleged Complainant B had stolen funds from the
employer. On November 17, 2006, the criminal charges were dismissed with leave
to re-indict by the solicitor's office.
After the employer's insurance company covered the stolen funds, it attempted to
recover the amount it paid to the employer from Complainant B. Some of the
efforts to recover the funds were allegedly made by a recovery management
company.
Thereafter, respondent represented Complainant B in a civil suit for damages
allegedly suffered by Complainant B as a result of the collections efforts taken by
or on behalf of the insurance company. Initially, respondent filed suit in state court
in March of 2007. On May 27, 2008, respondent filed for a voluntary non-suit
pursuant to Rule 41(a)(1), SCRCP, because the complaint had not been served.
In July 2008, respondent filed suit in state court. On August 25, 2008, the case
was removed to federal court. On June 8, 2009, defendant Recovery Management
Company moved to dismiss the suit for lack of jurisdiction. On July 7, 2009, the
court granted the motion to dismiss due to respondent's failure to respond. The
court noted respondent had called the court on June 25 or 26, 2009 requesting an
extension of time and was advised that an extension would be granted if
respondent filed the motion by June 29, 2009. The court did not receive the
motion despite a follow-up call from the court shortly after the June 29, 2009,
deadline. Respondent did not notify Complainant B of this development.
On December18, 2009, the defendant insurance company filed a motion for
summary judgment. On January 19, 2010, respondent filed a response to the
motion. On January 29, 2010, the court ordered respondent to show cause why the
response should not be stricken for failure to cure a signatory deficiency. The
court's order noted that the Clerk of Court had drawn the deficiency to respondent's
attention three times and respondent had ignored the requests to cure. Ultimately,
respondent acknowledged and corrected his filing deficiency and assured the court
that he would avoid future difficulties by obtaining additional training in the e-
filing procedures used by the court. As a result, the court did not strike the
response.
On February 8, 2010, the trial court issued its order granting summary judgment to
the defendant insurance company finding that Complainant B had not filed her suit
within the statute of limitations and the record lacked sufficient evidence to
support the claims. Respondent was unaware of the order as he did not monitor his
e-mail account properly. Respondent failed to timely inform Complainant B of the
order granting summary judgement and failed to preserve Complainant B's
appellate rights. Respondent made a unilateral decision not to pursue the case as
respondent believed that this was in Complainant B's best interest.
Matter III
Respondent represented Complainant C in a personal injury matter. Respondent
received a settlement of $101,000 in the case. Respondent deposited the entire
settlement amount into his operating account. Pursuant to the written fee
agreement, respondent should have received $33,633.00 (1/3%) as attorneys' fees.
Out of the $101,000 settlement, respondent disbursed $55,000 to the client and
kept the remaining fees in his operating account. There was no written agreement
between respondent and Complainant C regarding the withholding of any funds
beyond the initial one third stated in the fee agreement. Respondent failed to
safeguard the additional fees in his trust account.
On March 6, 2013, a subpoena for respondent's trust account records was issued
and mailed to the address of record shown in the Attorney Information System.
The subpoena was returned "unclaimed" to ODC. A subpoena dated April 17,
2013, was served by a South Carolina Law Enforcement Division agent on
respondent on the same day. The subpoena again requested respondent's trust
account records by May 14, 2013. Respondent advised ODC he did not have the
trust account records demanded by the subpoena.
Respondent admits he does not maintain a client trust account. He further admits
that he deposited and disbursed client settlement funds into and out of his operating
account. Respondent also conducted his personal and office business through this
same operating account.
Matter IV
Respondent represented Complainants D against an insurance carrier concerning
personal injuries sustained by them in an automobile accident. The carrier offered
a settlement which was accepted by Complainants D. The carrier issued a check
payable to respondent's firm and Complainants D on June 23, 2010, and requested
an executed release be returned to the carrier. Respondent and Complainants D
endorsed and negotiated the check, but respondent did not return the executed
release to the carrier.
ODC initiated its investigation of this matter on November 5, 2010, by sending a
Notice of Investigation to respondent and requesting a response within fifteen
days. When respondent failed to respond within the fifteen days, ODC sent
respondent a letter by certified mail on January 13, 2011, reminding respondent of
his obligation to respond and citing In the Matter of Treacy, 277 S.C. 514, 290
S.E.2d 240 (1982). Respondent submitted his response to ODC by letter dated
January 28, 2011. Respondent also returned the executed release to the insurance
carrier in January 2011.
Matter V
Respondent requested a copy of a deposition transcript and copies of exhibits from
two other depositions from a court reporting agency. These items were delivered
as requested on January 21, 2010. Respondent failed to pay the invoice for these
services until January of 2011, after ODC initiated its investigation into this matter.
Matter VI
Respondent and his law partner retained the services of a court reporter to attend
and transcribe depositions on seven occasions. The transcripts of the depositions
were hand-delivered to respondent and his partner, along with an invoice for each
transcript. Respondent and his law partner failed to pay the invoices despite
telephone calls and other communication from the court reporting agency
regarding payment. The court reporting agency obtained a judgment against
respondent and his law partner in the amount of $4,120.69 which represented the
amount due for the outstanding invoices plus interest and court costs. Out of the
total invoiced amount, respondent's invoiced share was $801.58.
Matter VII
Respondent was retained to represent Complainant E in a workers compensation
matter. In connection with the representation, respondent also agreed to assist
Complainant E in filing for social security benefits; respondent was not paid
separately for his representation in the social security matter. The initial
application for social security benefits was denied. Respondent did not timely file
an appeal of the denial. Eventually, Complainant E refiled her application for
social security benefits and was approved for benefits.
On February 25, 2014, ODC mailed respondent a Notice of Additional Allegations
and requested a response within fifteen days. At respondent's request, a fifteen day
extension was granted. When respondent failed to respond by the extended
deadline, ODC sent respondent a letter by certified mail on April 4, 2014,
reminding respondent of his obligation to respond and citing In the Matter of
Treacy, Id. Respondent failed to submit a response.
Matter VIII
Respondent engaged a court reporter for services to be rendered on January 30,
2013. The transcript was delivered to respondent on or about February 12, 2013,
along with the original invoice. Despite monthly invoices and contact from the
court reporting agency, respondent failed to pay the original invoice of $383.90.
With the late fee, respondent owes the court reporting agency $401.18.
Law
Respondent admits that by his conduct he has violated the following provisions of
the Rules of Professional Conduct, Rule 407, SCACR: Rule 1.1 (lawyer shall
provide competent representation); Rule 1.2 (lawyer shall abide by client's
decisions concerning objectives of representation and consult with client as to
means by which they are to be pursued); Rule 1.3 (lawyer shall act with reasonable
diligence and promptness in representing client); Rule 1.4 (lawyer shall promptly
inform client of any decision in which client's informed consent required; lawyer
shall keep client reasonably informed about status of matter); Rule 1.15 (lawyer
shall safekeep client funds; lawyer shall promptly deliver to client or third person
any funds client or third person entitled to receive); Rule 4.4(a) (in representing
client, lawyer shall not use means that have no substantial purpose other than to
burden third person); Rule 8.1(b) (in connection with disciplinary matter, lawyer
shall not fail to respond to lawful demand from disciplinary authority); Rule 8.4(d)
(it is professional misconduct for lawyer to engage in conduct involving
dishonesty, fraud, deceit, or misrepresentation); Rule 8.4(e) (it is professional
misconduct for lawyer to engage in conduct prejudicial to administration of
justice). Further, respondent admits he failed to comply with Rule 417, SCACR.
Respondent also admits his misconduct constitutes grounds for discipline pursuant
to the following Rules for Lawyer Disciplinary Enforcement, Rule 413, SCACR:
Rule 7(a)(1) (it shall be ground for discipline for lawyer to violate Rules of
Professional Conduct) and Rule 7(a)(3) (it shall be ground for discipline for lawyer
to willfully fail to comply with subpoena issued pursuant to the Rules for Lawyer
Disciplinary Enforcement or to knowingly fail to respond to lawful demand from
disciplinary authority to include request for response).
Conclusion
We accept the Agreement for Discipline by Consent and disbar respondent from
the practice of law in this state retroactively to the date of his interim suspension.
Within thirty (30) days of the date of this opinion, respondent shall reimburse ODC
and the Commission for costs incurred in the investigation and prosecution of this
matter. Within sixty (60) days of the date of this opinion, respondent shall enter
into a restitution agreement with the Commission to repay his former client and
third parties harmed as a result of his misconduct as follows: 1) Complainant C -
$10,000; 2) the court reporting agency in Matter VI - $841.58; 3) the court
reporting agency in Matter VIII - $401.18; and 4) the Lawyers' Fund for Client
Protection (Lawyers' Fund) - in full for any payments made on his behalf to any of
the clients or third parties referenced in this opinion.1 Before he shall be eligible to
file a petition for reinstatement, respondent shall complete the Legal Ethics and
Practice Program Ethics School and Trust Account School. 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.
1
The amount due from respondent to Complainant C and the two court reporting
agencies shall be reduced by any payments made to Complainant C and the court
reporting agencies by the Lawyers' Fund.