Is it Legal Malpractice to Withhold Monies From the Attorney’s Client Trust Fund Account?
Yes. Does it matter how much was involved? No. Does it matter if it was only a few weeks? No.
While it may seem obvious from the way we phrased the questions, it wasn’t so obvious to an attorney in Massachusetts, according to a recent case handed down by the Massachusetts Supreme Judicial Court. In fact, for what should have been a simple albeit small matter, an attorney was sanctioned for violating the Massachusetts Rules of Professional Conduct.
In Matter of Strauss (479 Mass. 294) a Massachusetts attorney was retained by a client who was a victim of a Massachusetts personal injury claim. The attorney resolved the claim for $5,000 and the client authorized settlement. All good so far. When the monies came, the attorney did the right thing in depositing the $5,000 into his IOLTA (Interest On Lawyer Trust Account) account. IOLTA accounts are for client monies or monies that are owned by clients and attorneys and need to be separated from that account. Unfortunately, in this case, Attorney Strauss wrote himself a check for his fee, which was ok, but…he did not write his client a check. Nor did he send a letter to his client, who was out of the country at the time, asking what to do with the monies. When the client did return from oversees and asked for the monies, the attorney gave a convoluted story which involved his father, cash set aside for the client instead of IOLTA monies.
The Court found that the attorney “intentionally – not negligently – misused client funds.” Furthermore, and of critical importance here, the fact that the client was only denied the funds for a “matter of weeks” the Court found that “attorneys are obligated to safeguard client funds regardless of the amount. They may not treat client funds as fungible commodities, using funds belonging to one client for the benefit of another, or even for their own purposes.”
Indefinite Suspension of Massachusetts Attorney for IOLTA Violation
The Court found the Attorney Strauss be indefinitely suspended from the practice of law. The Court factored in that they found that the attorney had “engaged in multiple violations of the rules of professional conduct, and that he used the discipli8nary violations concerning record-keeping to “conceal” his misuse of client funds” in their finding of indefinite suspension.
Thus, the fact that the amount of money was not high and the time the client was deprived of the funds was merely weeks, the clear violation of the Rules of Professional Conduct drove the Court to this level of sanction.
Attorney Malpractice Suspected? Hire Attorneys Who Have Experience.
Attorney Neil Burns and Attorney Roshan Jain have 47 years of combined experience in legal malpractice. They know the Rules of Professional Conduct. They know the law. They litigate against professional malpractice insurance trial lawyers on a daily, weekly, monthly basis. In the above case, there was no damages to the client in that they received their monies. However, we have many cases in which there is legal negligence and there are significant damages.
Call them for a free consultation on a legal malpractice matter. The consult is free. 617-227-7423.