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In re Edwards

October 03, 2002

IN RE LUCY R. EDWARDS, RESPONDENT A MEMBER OF THE BAR OF THE DISTRICT OF COLUMBIA COURT OF APPEALS ON REPORT AND RECOMMENDATION OF THE BOARD ON PROFESSIONAL RESPONSIBILITY (BDN 344-96 AND 24-97)


Before Terry, Farrell, and Glickman, Associate Judges.

The opinion of the court was delivered by: Terry, Associate Judge

Argued March 20, 2001

The Board on Professional Responsibility ("the Board") recommends that respondent, Lucy Edwards, be disbarred. The proposed sanction comes after the Board's hearing committee found, inter alia, that Edwards' handling of client funds constituted commingling and reckless misappropriation in violation of Rule 1.15 (a) of the District of Columbia Rules of Professional Conduct. *fn1 The Board adopted the hearing committee's findings and agreed with the hearing committee's recommended sanction of disbarrment. The matter comes before us on Ms. Edwards' exceptions to the Board's recommendation.

Edwards contends that the Board's findings of misappropriation were not supported by substantial evidence and that, given the circumstances of her case, the recommended sanction of disbarrment was unwarranted. We agree with Edwards that some of the Board's findings of misappropriation were not supported by substantial evidence. Because the Board's finding of recklessness was based in part on its determination that Edwards misappropriated certain funds which we conclude she did not misappropriate, we remand this case to the Board with directions to reconsider whether the severe sanction of disbarrment is warranted in light of our ruling. *fn2

I. FACTUAL BACKGROUND

Lucy Edwards was admitted to the bar of the United States District Court for the District of Columbia on March 5, 1965, and thus was automatically enrolled as a member of the District of Columbia Bar when it was created in 1972, pursuant to the Court Reorganization Act of 1970. See D.C. Code § 11-2501 (c) (2001). *fn3 She has practiced law continuously since that time and has no prior disciplinary record.

Ms. Edwards first came to the attention of Bar Counsel in 1996 after the District of Columbia Bar received notice that a check she had written to Ford Motor Credit Corporation had been returned by her bank for insufficient funds. Bar Counsel then began reviewing Ms. Edwards' bank records and, finding indications of professional misconduct, filed charges against her. The charges stemmed from Ms. Edwards' handling of the funds of four clients during the summer of 1996. She managed these funds by using two checking accounts. One was the operating account for her law practice (the "operating account"), and the second was an escrow account intended for client funds (the "escrow account").

Since 1992, Edwards had been representing Reverend Robert Ansah in connection with disputes that he was having with the Washington Gas Light Company over gas bills. On June 13, 1996, Ms. Edwards received and deposited into her operating account a check for $1,641.61 from Reverend Ansah which was intended to help satisfy a $1,696.80 default judgment that Ansah owed to Washington Gas. On June 18, before any payments were made to or on behalf of Reverend Ansah, the balance in the operating account fell to minus $103.60. *fn4

Also in June of 1996, Ms. Edwards represented Joseph Kim in a personal injury case and obtained a $5,500 settlement in his favor from State Farm Insurance Company. On June 19, 1996, Edwards received the settlement check, which was payable to herself and Kim, and deposited it in her operating account. Ms. Edwards testified that she deposited the check in that account because Mr. Kim wanted the money quickly, and that use of the operating account enabled her to disburse the money to him immediately. This deposit brought the operating account balance to $5,396.40. That same day, Edwards transferred $4,000 from the operating account to the escrow account, noting "Kim Settlement" on the "memo" line. This transfer brought the escrow account balance to $5,830, but allowed the balance in the operating account to fall below the settlement amount owed by Reverend Ansah. Edwards testified that she left $1,500 of the Kim settlement proceeds in her operating account to cover her fees.

On June 24, 1996, Mr. Kim executed a settlement sheet that Ms. Edwards had prepared. The settlement sheet entitled Ms. Edwards to receive a fee of $1,833.33 plus $28.99 in costs, with Kim receiving the balance (after some additional payments to medical providers) of $3,439.18. On June 25 Edwards disbursed the sums from the escrow account in accordance with the settlement agreement, but in addition she paid $766.55 to Barbara Bailey (another attorney) for work done in the Kim case. On June 28 Edwards wrote an additional check for $650 against the escrow account, payable to "Cash," with a notation on the memo line that said "Attorney's fees." At the hearing Ms. Edwards could not recall why she withdrew the $650 or what client or case the fees were for.

On June 28 Reverend Ansah gave Edwards a check for $150.74 so that she would have sufficient funds to satisfy the Washington Gas judgment in full. Edwards deposited the check in her operating account on July 1. After that deposit, Edwards had $813.64 in the operating account and $517.95 in the escrow account. On July 16 the balance in the escrow account had risen to $1,244.45 when Edwards drew a check on it in the amount of $1,792.53 to pay the Washington Gas judgment. The next day, July 17, she transferred $560 from the operating account to the escrow account, bringing the escrow account balance to $1,804.45, enough to cover the check she had written to Washington Gas.

In July 1996 Edwards agreed to represent Rochelle Fashaw in a dispute with Nations Bank. Ms. Fashaw's son promised to send funds to cover Edwards' fees and to settle a $10,940.33 claim with Nations Bank. On or about July 20, 1996, Ms. Edwards received and deposited in her escrow account two checks, one for $375 and one for $500. The Board report states that the $500 check was for "Fashaw Fees" and the $375 check was for "Rochelle Fashaw/Fees." *fn5 Edwards later withdrew $700 from her escrow account for an undetermined reason, leaving approximately $175 of the Fashaw monies in the escrow account.

In the summer of 1996, Edwards accepted Shellie Sharpe White as a pro bono client. Ms. White was having difficulty making her car payments to Ford Motor Credit Corporation ("FMC") and wanted Ms. Edwards to "help straighten out the number of payments" that she owed, so that she would not lose her car. Edwards negotiated a payment of $430.86, payable on August 1, 1996. On August 1 Ms. White brought $430.86 in cash to Ms. Edwards' office, gave it to an employee of Edwards, and was given a receipt indicating that the money was for payment to FMC. The money, however, was not deposited in either account, nor was any payment made to FMC at that time. According to the Board's report, Ms. Edwards "testified that she was unaware that Ms. White had brought the funds in to her office, was confident that Ms. White would try to bring the money in, and that [she] intended to make a 'temporary loan from trust funds' to cover the check to Ford Motor Credit." On August 1, 1996, the balance in the escrow account was $187.10 when Edwards drew a check on it, payable to FMC, for $430.86. On August 14 Edwards learned that this check had been returned by the bank for insufficient funds. She promptly purchased a Western Union Quick Collect Payment and sent it to FMC on White's behalf. On August 19 Edwards deposited $300 in cash in the escrow account, and on August 27 FMC redeposited the original check from Edwards. This time it was honored by the bank, effectively causing Edwards to pay the $430.86 twice.

Testifying before the hearing committee, Edwards essentially claimed that each instance of mishandling of client funds was the result of confusion and disorganization within her office. She acknowledged that she should not have placed client funds in her operating account and conceded that she had done so with respect to the Ansah and Kim monies. She denied, however, that any misappropriation occurred, and said that if it did, it was due to oversight and was not intentional. She offered several mitigating factors to the Board, including: (1) that she had no prior disciplinary record; (2) that she had an exemplary record of public service, as the hearing committee found; (3) that she did not profit from her misappropriations; (4) that she achieved her clients' desired results and did not owe them any money; (5) that the violations occurred during a brief period from approximately mid-June 1996 to mid-August 1996; and (6) that she was ill during that period and at the same time was relocating her office, and that the move resulted in disorganization and lost or misplaced files. *fn6

The Board adopted the hearing committee's conclusion that Ms. Edwards had committed "multiple acts of ...


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