Heard in the Court of Appeals February 17, 2014.
Counsel Amended May 15, 2014.
Disciplinary Hearing Commission of the North Carolina State Bar No. 12 DHC 38. Steven D. Michael, Judge.
Mr. David R. Johnson, Primary Attorney, Deputy Counsel and Ms. Carrie Virginia McMillan, Attorney at Law, Raleigh, NC, for Plaintiff-Appellee - The North Carolina State Bar.
Poyner Spruill LLP, Raleigh, NC, by Hon. Robert F. Orr, Primary Attorney, Attorney at Law, M. Jillian DeCamp, Attorney at Law, for Defendant-Appellant - Simmons, Geoffrey H.
Robert N. HUNTER, JR., Judge. Chief Judge MARTIN and Judge ELMORE concur.
HUNTER, JR., Robert N., Judge.
Appeal by defendant from order of discipline entered 19 April 2013 by the Disciplinary Hearing Commission of the North Carolina State Bar. Heard in the Court of Appeals 17 February 2014.
Geoffrey H. Simmons (" Defendant" ) appeals from a final order of the Disciplinary Hearing Commission (" DHC" ) disbarring him from the practice of law for embezzling client funds. Defendant contends (1) tat there was insufficient evidence before the DHC that he intended to embezzle client funds, (2) that the DHC could not impose discipline based on embezzlement without a criminal conviction, and (3) that the DHC's order failed to conform to the requirements of N.C. State Bar v. Talford, 356 N.C. 626, 576 S.E.2d 305 (2003), for disbarring attorneys. For the following reasons, we disagree and affirm the DHC's order.
I. Factual & Procedural History
Defendant was licensed to practice law by the North Carolina State Bar in 1977 and practiced law for over thirty years. Defendant's career was, in many respects, a decorated one. After graduating from Duke University School of Law, Defendant worked for the General Assembly and in the administration of former Governor James B. Hunt. Defendant engaged in significant pro bono work during his career. In 1987, the North Carolina Bar Association named Defendant the Pro Bono Lawyer of the year. In 1990, Defendant was elected the first black President of the Wake County Bar Association and the Tenth Judicial District Bar. During his career, Defendant established a reputation for good character, veracity, and truthfulness in both social and legal communities. Notwithstanding Defendant's accomplishments, however, the allegations in the State Bar's complaint against Defendant are serious, and are based on the following facts gleaned from the record.
From 1985 until his disbarment, Defendant was a solo-practitioner focusing on criminal and personal injury work, with an office in Raleigh. The record reflects that Defendant had an assistant on his payroll, who performed paralegal work. During the course of his law practice, Defendant maintained a trust account on behalf of his clients.
In March 2012, a medical provider filed a complaint with the State Bar alleging that Defendant had not paid one of his client's bills. A subsequent audit of Defendant's trust account by the State Bar revealed disbursements made by Defendant from 2010-2012 to himself and his assistant for which Defendant had no supporting documentation. The investigation also revealed instances of insufficient client funds to cover disbursements to those clients and their medical providers.
As a result of the investigation, the State Bar filed a complaint alleging, inter alia, misappropriation of entrusted funds with respect to eight of Defendant's clients. On 15 March 2013, the DHC held a hearing to determine if Defendant's alleged misconduct warranted disciplinary action. At the hearing, documentary exhibits were received into
evidence and testimony was heard from, among others, the State Bar's investigator, two of the eight clients who were named in the complaint, and Defendant.
The State Bar's investigator testified concerning Defendant's trust account activity and bookkeeping for the eight clients. His testimony, along with accompanying documentary exhibits, established undocumented disbursements to Defendant and Defendant's assistant, as well as occasions where disbursements were made from insufficient client funds. In those instances where Defendant disbursed funds from the trust account to himself and/or his assistant, a pattern was observed. Once Defendant received personal injury settlement proceeds on behalf of a client, Defendant deposited those proceeds into his trust account. Afterwards, Defendant withdrew his one-third contingency fee and paid the client a one-third share. The remaining funds were intended to satisfy medical liens and obligations. However, in addition to paying on the medical liens, Defendant wrote additional checks to himself and his assistant in varying amounts between $200 and $600. As a result, some medical providers with statutory liens against client funds were not paid in full for their share of the recovery. To cover shortfalls, Defendant used trust account funds belonging to others and not identified to the client to cover checks written to that client or the client's medical providers.
In his defense, Defendant admitted to poor record keeping practices but denied misappropriating client funds. Defendant attributed the undocumented disbursements to expenses, additional legal work, accounting mistakes, and, in some cases, Defendant claimed the disbursements were at the behest of his clients. Both clients who testified at the hearing indicated that Defendant did not tell them about any additional disbursements made from their account. One of the clients, after being contacted by the State Bar, filed a Client Security Fund Application against Defendant claiming he took an additional disbursement dishonestly.
On 19 April 2013, the DHC entered a written order of discipline. The order's findings of fact recite the transactions made for each of the eight clients, including the disbursements at issue. After reciting each undocumented disbursement made to Defendant and his assistant, the DHC found that Defendant and his assistant were " not entitled" to the additional disbursements and concluded that Defendant " misappropriated" these funds. The DHC's order also concludes that Defendant misappropriated each disbursement made from insufficient funds and each disbursement made from funds owed to medical providers with statutory liens. Furthermore, the order states:
91. The misappropriations . . . were committed knowingly and willfully.
92. The misappropriations . . . were not authorized by the parties for whom [Defendant] was holding the funds in trust.
93. The Hearing Panel specifically finds that [Defendant's] testimony at this hearing was not credible. [Defendant's] testimony was inconsistent with other testimony of his at the hearing and at his deposition. [Defendant's] testimony was also inconsistent with the documentation and with the testimony given by the other witnesses at the hearing.
Based on its findings, the DHC concluded, inter alia, that Defendant " committed the crime of embezzlement" and was subject to discipline pursuant to N.C. Gen. Stat. § 84-28(b)(2) (2013). After making additional findings of fact and conclusions of law regarding discipline, the DHC ordered Defendant disbarred from the practice of law. Defendant filed timely notice of appeal.
" There shall be an appeal of right by either party from any final order of the Disciplinary Hearing Commission to the North Carolina Court of Appeals." N.C. Gen. Stat. § 84-28(h) (2013); accord N.C. Gen. Stat. § 7A-29(a) (2013). Thus, Defendant's appeal is properly before this Court.
Defendant's appeal presents three questions for our review: (1) whether there was sufficient evidence upon which the DHC could find that Defendant intended to embezzle client funds; (2) whether the DHC could impose discipline based on the embezzlement of client funds without a criminal conviction; and (3) whether the DHC's order conforms to the requirements of Ta ...