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24697 - In the Matter of William Gary White, III

Davis Adv. Sh. No. 29
S.E. 2d

THE STATE OF SOUTH CAROLINA

In the Supreme Court

In the Matter of William Gary

White, III, Respondent.

Opinion No. 24697

Heard August 18, 1997 - Filed October 13, 1997

PUBLIC REPRIMAND

William Gary White, III, pro se, of Columbia.

Charles Molony Condon, Attorney General, and James G. Bogle,

Jr., Senior Assistant Attorney General, both of Columbia, for

complainant.

PER CURIAM: In this attorney discipline matter, Respondent William

Gary White, III, is charged with seven acts of misconduct. A panel hearing

on this matter was conducted July 20-21, 1995.1 The panel filed its report

January 31, 1997, finding Respondent committed misconduct in three of the

matters charged. As to the other charges raised, the panel found the record

contained no clear and convincing, evidence of misconduct and recommended

they be dismissed. Regarding the appropriate sanction, it recommended

Respondent receive a public reprimand with certain conditions (as described

herein) for those matters constituting misconduct. The Interim Review


1 We granted Respondent's motion that this hearing be made open to the

public. However, we gave the panel chairperson the authority to close any

part of the hearing when the chairperson felt it necessary to protect those

persons having the right to confidentiality under Rule 413, SCACR, and who

did not request the confidentiality provisions be lifted.

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IN THE MATTER OF WHITE

Committee2 ("IRC") adopted the panel's findings of fact and conclusions of

law. The IRC agreed with the panel's recommended sanction, suggesting as

an additional condition that Respondent be directed to contact the Law Office

Management Assistance Program ("LOMAP").

After reviewing the record in this case, we agree with those findings

and conclusions made by the panel and IRC. We further agree the

appropriate sanction is a public reprimand, with conditions as set forth in

this opinion, for Respondent's misconduct in the following matters.

I. Magaline Cathy Smith Matter

Ms. Smith hired Respondent on a contingency fee basis to pursue a civil

action.3 After suit was filed and several depositions were taken, Ms. Smith

became dissatisfied with Respondent's representation and decided to

terminate his services. She sent him a letter to this effect April 1, 1994 in

which she requested her file. She had contacted another attorney about

taking her case, but he told her he needed to review the file before making

a decision.

On April 11, 1994, Ms. Smith filed a complaint with the Board of

Commissioners on Grievances and Discipline because Respondent had not

returned her file. Over the course of the next several months, Respondent

was repeatedly asked by the Board, Ms. Smith, her newly-consulted attorney,

and other counsel representing her in a lawsuit Respondent filed against

her,4 to return the file. He refused, claiming he was asserting a retaining

lien on the file.


2 The order adopting the new Rules for Lawyer Disciplinary Enforcement

provided that any disciplinary case in which a hearing had been held by a

hearing panel prior to January 1, 1997, would continue to conclusion under

the former Rule on Disciplinary Procedure. The Interim Review Committee

was created to fulfill the functions performed by the Executive Committee

under Paragraph 14(a) of the former Rule on Disciplinary Procedure in those

cases. Citations in this opinion to Rule 413, SCACR, will be to the former

Rule on Disciplinary Procedure.

3 The record does not disclose when Respondent was hired.

4 This lawsuit did not arise from any fee dispute between Respondent and

Ms. Smith, but apparently stemmed from a separate matter between them.

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IN THE MATTER OF WHITE

A petition for contempt was ultimately filed with this Court on June

30, 1994, seeking issuance of a Rule to Show Cause and an order requiring

Respondent to return the file. The day after this petition was filed,

Respondent returned the file. Part of the file included depositions of several

witnesses. However, Respondent only provided sealed depositions. The

Attorney General's office requested copies of the depositions on August 4,

1994. It was not until October 7, 1994, two days after the contempt hearing

held before this Court, that Respondent provided deposition copies.5 We then

dismissed the contempt petition, finding Respondent had delivered the

required information. Thus, it took approximately six months for Ms. Smith

to receive her complete file. During, this time, her newly-consulted attorney

had to request her case be removed from the active trial roster because he

could not evaluate her case without the depositions.6

The panel found Respondent engaged in misconduct in his refusal to

return Ms. Smith's file. It recommended Respondent receive a public

reprimand. We agree. Under the Rules of Professional Conduct, upon

termination a lawyer shall "take steps to the extent reasonably practicable

to protect a client's interests, such as ... surrendering papers and property

to which the client is entitled . . . ." Rule 1.16(d), Rule 407, SCACR. "The

lawyer may retain papers [i.e. as security for a fee] relating to the client to

the extent permitted by other law." Id. An attorney's assertion of a

retaining lien is not per se unethical. In re Anonymous Member of the Bar,

287 S.C. 250, 335 S.E.2d 803 (1985). Rather, the attorney must consider

whether retention of a file would be unethical on a case by case basis. Id.

We elaborated on what constitutes unethical retention of a client file in In

re Anonymous:

The application of this standard requires the lawyer to evaluate

his or her interests against interests of the client and of others

who would be substantially and adversely affected by assertion

of the lien. The lawyer should take into account the financial

situation of the client, the sophistication of the client in dealing

with lawyers, whether the fee is reasonable, whether the client

clearly understood and agreed to pay the amount now owing,


5 Respondent claimed the copies could not be found in his office. He

stated after he ordered replacement copies, the original copies were found in

another attorney's office who was associated on the case.

6 This attorney ultimately decided not to take Ms. Smith's case and as of

the panel hearing, she had no representation in it.

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IN THE MATTER OF WHITE

whether imposition of the retaining lien would prejudice

important rights or interests of the client or of other parties,

whether failure to impose the lien would result in fraud or gross

imposition by the client, and whether there are less stringent

means by which the matter can be resolved or by which the

amount owing can be secured.

Id. at 252, 335 S.E.2d at 805 (emphasis added) (internal citations omitted).

See also In the Matter of Tillman, 319 S.C. 461, 462 S.E.2d 283 (1995)

(attorney bears the burden of showing justification to assert lien because

client is financially able but deliberately refuses to pay a fee clearly agreed

upon and due).7

Considering these principles, we find Respondent's retention of Ms.

Smith's file exceeded ethical boundaries. At the panel hearing, Respondent

testified he retained the file because Ms. Smith owed him $600 in deposition

costs. However, Ms. Smith testified she thought she paid all of the

deposition costs. Respondent admitted he never billed her for these or any

other costs. Furthermore, the record shows, and Respondent admits, he

never clearly specified what amount he claimed was owed by Ms. Smith

during the time he was retaining the file.8 Respondent testified at the


7 In re Anonymous Member strongly suggests that if a client has good

cause to terminate representation, the attorney, can never assert a retaining

lien on the file. In other words the right to assert a retaining lien at all only

exists where an attorney has been terminated without good cause. See 287

S.C. at 252 n.1, 335 S.E.2d at 804 n.l. We decline to address whether Ms.

Smith had good cause to terrminate Respondent's representation, for we find

that even if she did not, Respondent's retention of her file was improper.

8 On April 5, 1994, Respondent wrote Ms. Smith's newly-consulted

attorney, asking, him to let Respondent know "whether or not you will protect

my interest in the file." This other attorney responded by letter dated April

8, 1994, in which he stated, "If you will be more specific as to what your

interests are that you would like protected, I would be glad to discuss that

with Ms. Smith." Respondent answered by letter dated April 13, 1994,

claiming Ms. Smith owed "around $1500" in deposition and other costs.

Respondent wrote this attorney another letter dated May 16, 1994 offering

to "get rid of the file" if the attorney would agree not to give any documents

therein to Ms. Smith and to "protect whatever interest I have in the file."

No monetary amount was requested. This attorney again responded by letter

dated May 17, 1994, that he could not agree to accept the file on the

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IN THE MATTER OF WHITE

hearing the amount owed was not important; he just wanted a general

assurance that whatever interest he may have would be protected. We hold

this is an improper basis upon which to assert a lien. From this record it is

clear this was not a situation where the client knew how much was owed and

deliberately refused to pay it. Here, the client was never made aware of

what was owed. Thus, we find Respondent has failed to meet his burden in

this case and committed misconduct in retaining Ms. Smith's file.

II. The Harry A. Hancock Matter

Respondent and attorney Harry A. Hancock were involved in a civil

action, filed in the Court of Common Pleas for the Eleventh Judicial Circuit,

entitled Harris v. White v. Harris. The original complaint was brought

against Respondent by his former investigator, Lee Harris. Hancock

represented Harris; Respondent represented himself. Respondent then filed

a cross-complaint against Ms. Smith (see supra note 4), Harris, and Hancock.

After Respondent was found in default in the original complaint, he

wrote a letter to the presiding judge ostensibly to address the default issue.

In this letter, Respondent commented on the facts and merits of the action,

discussed, inter alia, the opposing parties' trial strategy, and made

disparaging comments about Hancock and the parties he was representing.

Respondent did not send Hancock, as the opposing party's attorney, a copy

of this letter.

The panel found Respondent committed misconduct. It recommended

Respondent receive a public reprimand. We agree. Under Rule 3.5, Rule

407, SCACR, lawyers are prohibited from communicating ex parte with a

judge unless otherwise permitted by law. Respondent has offered no legal

exception justifying his letter, nor have we found one. Rather, he admitted

the communication was ex parte arguing, he merely "overlooked" sending

Hancock a copy of the letter.


condition he not give any materials to Ms. Smith. He then stated, "On two

occasions, you have asked me to protect your interest. I still don't know

what interest you claim. . . ." The record contains no other communication

by Respondent indicating what specific monetary interest he was claiming.

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IN THE MATTER OF WHITE

Ill. The Escrow Account Matter

Pursuant to a subpoena, Respondent provided information showing he

had written numerous checks out of his escrow account for personal expenses.

Respondent admits the checks were written for personal expenses, but states

they were drawn from funds representing fees he earned. Essentially,

Respondent was not transferring fees earned from his escrow account into a

separate account before paying his expenses; he simply paid his expenses

from the escrow accounts.9

The panel found Respondent's practice of "living out of" his trust

account constituted misconduct and recommended a public reprimand.

Additionally, it recommended Respondent's escrow account be audited for a

minimum of eighteen months "to ensure he has corrected the problem." The

panel also suggested that while this monitoring was occurring, Respondent's

complete office financial records be monitored "to determine whether

Respondent is maintaining an accurate record of his earnings, deposits, and

disbursements." The IRC agreed with the panel's findings and

recommendations, but recommended as an additional condition that

Respondent be directed to contact LOMAP

We agree Respondent's handling of his escrow account constitutes

misconduct. Commingling of an attorney's personal funds with client trust

funds is clearly prohibited. Rule 1.15(a), Rule 407, SCACR ("A lawyer shall

hold property of clients or third persons that is in a lawyer's possession in

connection with a representation separate from the lawyer's own property").

See also Comment, Rule 1.15(a), Rule 407, SCACR ("All property which is the

property of clients of third persons should be kept separate from the lawyer's

business and personal property and, if monies, in one or more trust

accounts"). We have sanctioned attorneys for this offense regardless of

whether misappropriation of client funds resulted from the commingling.

See, e.g., In the Matter of Kenyon and Lusk, Op. No. 24692 (S.C. Sup. Ct.

filed September 22, 1997) (Davis Adv. Sh. No. 27 at 17) (writing personal

checks from lawyers' escrow accounts from funds earned as fees to avoid

having to withdraw the fees and place them in business account improper);

In the Matter of Amick, 288 S.C. 486, 343 S.E.2d 623 (1986); In re Drose,

275 S.C. 414, 272 S.E.2d 173 (1980); Robert M. Wilcox, South Carolina Legal

Ethics ยง 3.3.2 (1992) ("Discipline is not avoided simply because the clients

suffer no pecuniary loss").


9 There has been no allegation or findings Respondent misappropriated

client funds.

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IN THE MATTER OF WHITE

CONCLUSION

We find Respondent has committed misconduct in the above matters

warranting a public reprimand with the conditions recommended by the panel

and IRC.10 Thus, we find Respondent's trust and office accounts should be

monitored for a period of eighteen months to insure he is maintaining proper

separate accounts for client and personal funds, and to insure he is keeping

accurate records of earnings, deposits, and client disbursements.11 Finally,

Respondent shall contact LOMAP within thirty days of the filing of this

opinion to make arrangements to participate in the program.

PUBLIC REPRIMAND.


10 Regarding the other matters charged in the complaints, we agree with

the panel and IRC these allegations are not supported by clear and

convincing, evidence and therefore order they be dismissed.

11 This monitoring shall be accomplished by the Chairman of the

Commission on Lawyer Conduct, or his designee, in such a manner as is

approved by the Commission.

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