S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
In the Matter of
David M. Adams, Respondent.
Opinion No: 25157
Heard May 23, 2000 - Filed June 26, 2000
DISBARRED
Attorney General Charles M. Condon and Senior Assistant Attorney
General James G. Bogle, Jr., for Office of Disciplinary Counsel.
Desa A. Ballard, of West Columbia, for respondent.
PER CURIAM: In this attorney grievance matter, David M. Adams
("Adams") is charged with violating various provisions of the Rules of
Professional Conduct contained in Rule 407, SCACR, and the Rules for Lawyer
Disciplinary Enforcement ("RLDE") contained in Rule 413, SCACR. The Full
Panel recommended disbarment pursuant to Rule 7(b)(1), RLDE. We agree
with the Full Panel's recommendation and disbar Adams from the practice of
law.
FACTS/PROCEDURAL BACKGROUND
Adams is an attorney, formerly licensed to practice law by this Court, who
maintained a law practice in Charleston, South Carolina. On December 29,
1998, this Court placed Adams' license on Interim Suspension based upon
several acts of misconduct. A brief outline of Adams' misconduct as determined
by the Full Panel is as follows:
1. The Sandra K. Livingston/Shirrese B. Brockington Matter:
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In the Matter of Adams
In the summer of 1998, Sandra K. Livingston ("Livingston") was
appointed Personal Representative of her father's estate.
Livingston hired Adams to be her attorney and/or the attorney for
the estate. Her father's construction company was auctioned and
the net proceeds ($116,985.00) were placed in Adams' escrow
account. Some of the auctioned items were titled vehicles with
outstanding liens. Adams did not forward any money to Farmers
and Merchants Bank to release the liens, nor did Adams forward to
the Personal. Representative or the estate the balance of
approximately $39,890.00 for unencumbered assets. He wrote
approximately fifteen checks, using money from the Livingston
estate, to persons or entities other than his client, the Livingston
estate account, or Farmers and Merchants Bank.
2. The Wachovia Check Matters: Adams used operating account
funds to satisfy a trust obligation in the Livingston matter in
violation of Rule 1.5 (safekeeping of funds and commingling of
funds). Adams also violated Rule 1.15 by writing an escrow account
check in the Livingston matter because the Livingston funds had
long since vanished from the escrow account. The check, therefore,
used funds from clients other than the Livingston estate.
3. The Welch Misappropriation: A $33,640.17 deposit was made
into Adams' escrow account for the Welch estate. Adams' account
balance dropped to $5.52. All subsequent Welch disbursements
were made with misappropriated funds.
4. The Reynolds Misappropriation: Adams represented Joseph
William Reynolds regarding his mother's estate. The net proceeds
from the sale of the Reynolds' home were placed in Adams' escrow
account. Adams wrote a check with partial disbursement to Mr.
Reynolds, and partial disbursement to himself. He also wrote
several checks using the money from the Reynolds' estate payable
to the South Carolina Department, of Revenue Estate Tax Division
for the estate taxes of another client. Disbursements regarding the
Reynolds' estate came from other client funds, including a
$3,055.05 check made payable to the South Carolina Department
of Revenue and Taxation.
5. The Internal Revenue Service Matter: Adams failed to pay
p.312
In the Matter of Adams
federal income taxes, or filed late tax returns for 1989, 1990, and
1991. He failed to file federal tax returns for 1994,1995, and 1996.
The Internal Revenue Service seized Adams' home on Kiawah
Island. Adams borrowed $30,000.00 from Blyth Bullock to redeem
his residence: When Adams repaid Ms. Bullock, he used another
client's funds.
6. The Barbara Oree Matter: Adams failed to keep Ms. Oree
informed as to the progress of her case, failed to return her phone
calls, and failed to respond to requests for information. He took
little or no action for the benefit of the estate. Ms. Oree receive a
Summons from the Probate Court for contempt for not closing the
estate in a timely manner.
7. The Burk Y. Herrin, Jr. Matter: Adams was hired to reopen the
Herrin estate. Adams misappropriated approximately $3,449.38
in the Herrin matter. He also failed to recover 42 shares of stock,
and did not supply information to Herrin as to the status of his
stock.
8. The Michael Arnau Matter: Adams was hired to represent
Michael Arnau ("Arnau") in a dispute with the IRS over unpaid
employment taxes. Adams failed to take any action on the case for
over a year, failed to communicate with Arnau on numerous
occasions, and failed to respond to inquires as to the status of the
case. Adams cannot find the bulk of the Arnau file.
9. The Patricia O. DeTreville Matter: Adams misappropriated
$68,919.38 from the DeTreville estate. Ms. DeTreville closed out
two estate accounts and provided them to Adams for deposit into
his escrow account in order to make final disbursement to the heirs.
Adams received $71,155.79 on behalf of the estate. Funds disbursed
or expended on behalf of the estate totaled approximately
$2,236.41. Adams' escrow account went to a negative balance on
October 8,1998; and therefore $68,919.38 was misappropriated by
Adams, or. applied to uses other than those for which it was
intended.
10. The Frank Woolbright Matter: Frank Woolbright hired Adams
to represent him in an estate matter and a Common Pleas matter.
p.313
In the Matter of Adams
Adams failed to communicate with his client concerning both
matters. Mr. Woolbright received a letter from the Charleston
probate court threatening to rule Mr. Woolbright in contempt for
failing to file a number of documents in the estate. Adams also
neglected the Common Pleas matter by failing to respond to
discovery, and not attending both the September 10, 1998 and
September 16, 1998 hearings.
11. The Jeannette S. Wood Matter: On December 18, 1997, some
real estate was sold for $19,000 pursuant to an estate matter. A
check was issued to Adams for $17,135.58 as a result of the sale.
Adams misappropriated funds due and owing to Jeannette S. Wood,
as Personal Representative, or due and owing to the Estate of
George Farago. Roper Hospital was supposed to receive some of
the proceeds from the real estate sale. Neither Roper Hospital, its
attorney, nor the Personal Representative has received any of the
proceeds from the real estate sale on December 18, 1997.
12. Escrow Account Violations: Adams failed to comply with Rule
417, SCACR, including: a failure to maintain receipt and
disbursement journals specifically identifying the date, source, and
description of each item deposited; a failure to maintain accurate
ledger methods; failure to maintain copies of accountings and
disbursements; failure to sufficiently detail the identity of each
item of the receipt and records of deposit; and using an escrow
account check to meet payroll.
13. Failure to Respond to Disciplinary Authority: Adams failed
to reply to the Notice of Full Investigation and to several letters of
inquiry by the Commission on Lawyer Conduct, including letters
regarding the following cases: the Barbara Oree matter, the Burk
Y. Herrin Jr. matter, and,the Edward K. Pritchard, III matter.
Adams did respond late to the Third Notice of Full Investigation,
but he did not accurately address all issues contained in the Notice
of Full Investigation.
14. The Full Panel found Adams misappropriated approximately $280,
196.44 from his clients. Although some of his clients in these
matters have been fully compensated, $280,196.44 is the total
amount of money that was mishandled, misappropriated, or used
p.314
In the Matter of Adams
for an improper purpose.
On March 4, 1999, Adams was served with a Notice of Filing of Formal
Charges by the Commission on Lawyer Conduct ("Commission"). He did not file
an Answer to the Formal Charges within the thirty days required by Rule 413,
SCACR. The Commission filed an Affidavit of Default on April 12, 1999. On
June 4, 1999, Adams was served with a Notice of Filing of Second Formal
Charges. He did not file an Answer and an Affidavit of Default was filed on
July 20, 1999.
On July 28, 1999, a Subpanel hearing-was held. Adams did not appear,
but was represented by counsel, Desa Ballard ("Ballard"), of West Columbia.
Ballard requested a continuance based upon health problems associated with
Adams' prostate cancer. We agree with the Subpanel's denial of Adam's request
for continuance based on the reasons cited below. The Subpanel denied the
request for a continuance, and the companion Motion to Vacate the default
based on the following reasons: (1) Adams elected not to appear at the hearing
on his own volition because he faxed an affidavit from his employment in
Maryland, where he was apparently working on the day of the hearing; (2) the
case had been going on for some time; (3) Adams chose not to reply to the
inquiries of the Commission of Lawyer Conduct; and (4) these appear to be
willful refusals to cooperate. The Subpanel did not find the medical evidence
indicated Adams' health condition rendered him unable to cooperate with the
Commission and attend the hearing.
The Subpanel recommended: (1) Adam be disbarred on the day of the
Court's opinion in this case; (2) he be required to pay all costs incurred by the
Commission in connection with this matter ($343.08); and (3) this Court order
immediate restitution to all persons financially injured, repayment of unearned
or inequitable costs, and reimbursement to any claims made against the
Lawyer's Fund for Client Protection, as authorized by Rule 7(b)(7) of Rule 413.
On November 29, 1999, Adams filed seven exceptions to the subpanel
report pursuant to Rule 26(c)(7), RLDE. The prosecutor filed a response to his
exceptions on December 3,1999. On January 21, 2000, the Full Panel adopted
the Subpanel's report.
CONCLUSION
By his conduct, Adams has violated several of the Rules of Professional
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In the Matter of Adams
Conduct and Rules for. Lawyer Disciplinary Enforcement. The .evidence
overwhelmingly demonstrates a pattern of misappropriation of client funds,
commingling of client money, neglect of legal matters, and other misconduct.
The Subpanel found Adams engaged in the following acts of misconduct: (1)
misappropriation of approximately $280,196.44; (2) failure to pay federal
income taxes, or filed late tax returns for 1989, 1990, and 1991, and failure to
file federal tax returns for 1994; 1995, and 1996; (3) willful failure to respond
to a lawful demand from a Disciplinary Authority, Rule 7(a)(3), RLDE; (4)
conduct tending to pollute the administration of justice or bring the legal
profession into disrepute or demonstrate an unfitness to practice law, Rule
7(a)(5), RLDE; (5) violating the oath of office taken upon the admission to
practice law in this state, Rule 7(a)(6), RLDE; and (6) violating specific Rules
of Professional Conduct, including Rule 1.1 (competence), Rule 1.3 (diligence);
Rule 1.4 (communication), Rule 1.15 (safekeeping of property), and Rule 8.4 (all
subsections of misconduct).
This Court has the sole authority to discipline attorneys and to decide the
appropriate sanction. Matter of Holt, 317 S.C. 48, 451 S.E.2d 884 (1994). While
this Court may draw its own conclusions and make its own findings in an
attorney disciplinary matter, the unanimous findings and conclusions of the
Full Parcel are entitled to much respect and consideration. Matter of Larkin,
336 S.C. 366, 520 S.E.2d 804 (1999). The Commission recommends disbarment,
as provided for in Rule 7(b)(1), RLDE. Based on the egregious nature of Adams'
conduct and his outrageous pattern of misappropriation, we agree with the
Commission's recommendation.
Disbarment in this case is neither excessive nor disproportionate to
sanctions imposed by this Court in similar cases involving misappropriation,
neglect, and other similar acts of misconduct. See, e.g., Matter of Driggers, 334
S.C. 40, 512 S.E.2d 112 (1999) (attorney disbarred for failing to provide
competent representation, keep clients informed, consult with clients, promptly
account for and deliver funds and documents, misappropriation of funds, and
knowing failure to respond to disciplinary proceedings); Matter of Godbold, 336
S.C. 568, 521 S.E.2d 160 (1999) (attorney disbarred for failing to remit
settlement funds to clients, remit funds to clients' medical providers, failing to
pay bills, and failing to file state and federal tax returns); Matter of Glee, 333
S.C. 9, 507 S.E.2d 326 (1998) (attorney disbarred for converting client funds for
his own purposes; failing to provide competent representation, failing to comply
with demand for payment, failing to act with reasonable diligence, failing to
keep client informed about status of case, being dilatory in winding up and
p.316
In the Matter of Adams
closing a probate action, and engaging in conduct involving dishonesty); Matter
of Hunter, 331 S.C. 58, 503 S.E.2d 464 (1998) (attorney disbarred for
misappropriating client funds and converting these funds for his own gain,
failing to act with reasonable diligence, and engaging in morally reprehensible
conduct); Matter of Edwards, 323 S.C. 3, 448 S.E.2d 547 (1994) (attorney
disbarred for failing to keep clients informed, misappropriating or improperly
using client funds, knowingly presenting false testimony; and in failing to
cooperate in investigation of disciplinary charges against him).
Accordingly, we hereby DISBAR Adams, effective on the date of the filing
of this order. We order Adams to pay all costs incurred by the Commission in
connection with this matter. We also order Adams, pursuant to Rule 7(b)(7),
SCACR, to make complete restitution immediately to all parties whose funds
were misappropriated, including, but not limited to, clients, health care
providers, and financial institutions. To the extent financial institutions, client
security funds, or any other source paid restitution on account of Adams'
misappropriation, Adams shall make complete restitution. Within fifteen days
of the date of this opinion, Adams shall file an affidavit with the Clerk of Court
showing that he has complied with Rule 30, RLDE, Rule 413, SCACR.
p.317