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24775 - In the Matter of Marshall

Davis Adv. Sh. No. 12
S.E. 2d

THE STATE OF SOUTH CAROLINA

In The Supreme Court

In the Matter of Sharon

G. Marshall, Respondent.

Opinion No. 24775

Heard January 21, 1998 - Filed March 23, 1998

DEFINITE SUSPENSION

J. Cordell Maddox, Jr., of Glenn, Haigler & Maddox, of

Anderson, for respondent.

Attorney General Charles M. Condon and Assistant

Deputy Attorney General J. Emory Smith, Jr., both of

Columbia, for Complainant.

PER CURIAM: In this attorney disciplinary matter, respondent,

Sharon G. Marshall, is charged with several acts of misconduct arising out of

her representation of her clients and her supervision of her employee. We find

respondent committed misconduct and impose a definite suspension from the

practice of law for a period of six months. In addition, respondent must

complete the Law Office Management Assistance Program (LOMAP) of the South

Carolina Bar and make restitution prior to reinstatement.

PROCEDURAL BACKGROUND

This disciplinary, matter concerns six complaints filed against

respondent between May 1995 and May 1996. The complaints alleged ten

separate matters in which respondent was charged with misconduct.1 A hearing


1 The Third Supplemental Complaint was abandoned by Complainant prior

to the hearing because the witnesses were unable to attend the hearing. The

Panel made no findings concerning the allegations made in the Fifth

Supplemental Complaint, and neither party has excepted to the Panel's lack of

p.15


IN THE MATTER OF MARSHALL

was held on June 18, 19, and 20, 1996. Respondent was represented by counsel.

On April 12, 1997, the Hearing Panel (Panel) issued its report finding

misconduct and recommending a definite suspension for one year. Both

respondent and Complainant filed exceptions to this report. The Interim Review

Committee2 of the Board of Commissioners on Grievances and Discipline

(Committee) agreed with the Panel's findings of fact and conclusions of law. In

addition to recommending a one year suspension, the Committee recommended

respondent provide restitution to the victims and complete the LOMAP of the

South Carolina Bar prior to reinstatement. Both respondent and Complainant

filed exceptions and briefs with this Court. Complainant claims the Panel and

Committee erred in not finding respondent was directly involved in several

schemes to defraud her clients. Respondent argues, because the Panel concluded

she was not involved in these schemes to defraud her clients, the recommended

sanction of one year suspension is too harsh.

DISCIPLINARY VIOLATIONS

Although this Court is not bound by the findings of the Panel and

Committee, these findings are entitled to great weight, particularly when the

inferences to be drawn from the testimony depend on the credibility of the

witnesses. Matter of Yarborough, Op. No. 24662 (S.C. Sup. Ct. filed Aug. 4,

1997) (Davis Adv. Sh. No. 23 at 15). However, this Court may make its own

findings of fact and conclusions of law. Id. Further, a disciplinary violation

must be proven by clear and convincing evidence. Id.

In 1991, respondent hired Miriam Durham, whom she had known

since childhood, to manage her office and to be a paralegal. Ms. Durham had

previously worked for several other attorneys and respondent contacted one of

these attorneys who gave Ms. Durham a good reference.

Respondent's office staff was controlled by Ms. Durham. Ms.

Durham directed all of respondent's appointment making, telephone calls and

mail to herself. Respondent erroneously believed the office procedure was for

mail to be brought to the receptionist's desk and then to respondent. After Ms.

Durham's departure in April 1994, many documents were found in her office,


findings on this matter.

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.

Rule 413, SCACR.

p.16


IN THE MATTER OF MARSHALL

including original letters regarding some of the matters involved in this

proceeding.

Respondent was often out of the office. She was the juvenile public

defender for Anderson County and was required to be in court each Wednesday

and, usually, additional mornings or afternoons each week.

From 1991 to 1994, respondent delegated to Ms. Durham

unsupervised and unfettered authority within her office, including control over

the day to day financial affairs. Although respondent's bookkeeping was

handled by an outside company, Triple A Bookkeeping, Ms. Durham usually

dealt with Triple A. All of respondent's bank statements were sent directly to

Triple A and respondent rarely, if ever, closely reviewed these statements.

Eventually, Ms. Durham caused respondent to terminate her relationship with

Triple A. Ms. Durham then handled the bookkeeping.

In April 1994, respondent changed the office locks after a telephone

conversation with another attorney regarding Ms. Durham's misrepresentation of

her identity at a local jewelry store. On the day the locks were changed,

respondent did not confront Ms. Durham about the misrepresentation or about

the changing of the locks. Ms. Durham left that same day and never returned.

After Ms. Durham ended her employment, "clients" came to

respondent inquiring about their cases. Respondent had not previously met

many of these "clients." These persons brought receipts which respondent had

never seen and checks which had been forged by Ms. Durham. Respondent did

attempt to help several of these people or to reimburse them for the money they

paid to Ms. Durham. In 1995, respondent was diagnosed with cancer and has

since undergone treatment.

Ms. Durham had a criminal record in Anderson County for

fraudulent checks prior to 1991. Ms. Durham's ex-husband testified he thought

respondent had represented Ms. Durham in a criminal proceeding prior to hiring

her. Respondent denied ever representing Ms. Durham and denied any

knowledge of Ms. Durham's past criminal record for fraudulent checks.

Respondent admitted she was aware Ms. Durham had credit problems. A

colleague of respondent expressed concerns to respondent about Ms. Durham's

character shortly after respondent hired Ms. Durham. Respondent dismissed

these concerns because Ms. Durham was doing a great job running the office

and because she attributed the concerns to a personality conflict between the

colleague and Ms. Durham. Further, this colleague testified her concerns

partially arose out of her envy that respondent had found such a hard working

employee. Respondent's brother also attempted to warn respondent in 1992 that

Ms. Durham could not be trusted. Respondent's brother had entrusted

respondent with a large sum of money. Respondent placed a portion of this

money in her trust account and the rest she held as cash in a box at her office.

p.17


IN THE MATTER OF MARSHALL

Supposedly, respondent would hold this money for her brother and as he needed

it, she would disburse it. Respondent's brother refused to believe the accuracy

of the accounting provided to him by respondent and Ms. Durham of the

disbursement of his funds; instead, he accused Ms. Durham of stealing the

money. Respondent refused to believe Ms. Durham had stolen this money.

Respondent testified her brother was irresponsible with money.

Ms. Durham testified during this hearing. The Panel's report did

not address her testimony. We conclude her testimony is completely incredible.

Provident Matter

Beginning in 1989, respondent represented a client on a social

security disability claim. The client received an award of $12,530.10.

Respondent was owed 25% of this award for attorney fees.

After receiving her disability award in May 1992, the client was

required to reimburse Provident Insurance Company (Provident) for monies

provided by Provident to the client before her disability award. Ms. Durham

informed the client she would be required to repay Provident $12,530.10 in a

lump sum. The client brought Ms. Durham a check for this amount. This

check was deposited into respondent's trust account on August 8, 1992. Ms.

Durham also instructed the client to cash another check for $949.67 and to

bring the cash back to Ms. Durham. Ms. Durham assured the client she would

send these monies to Provident as repayment but she never did. On August 28,

1992, the client gave Ms. Durham another check for $3,798.68. Ms. Durham

told the client this check would also be part of the repayment to Provident.

This check was deposited into respondent's trust account. Ms. Durham received

from the client a total of $17,278.35.

The client then received a letter from an employee of Provident

stating, that Provident's overpayment to the client was $9,991.53. This amount

was calculated based on the amount of the award minus the attorney fees.

Provident asked the client to forward a check or money order for that amount.

Because the client thought she had repaid Provident, the client contacted Ms.

Durham to inquire about the letter. Ms. Durham claimed she was working on

the matter and she told the client not to speak with any employees of Provident.

The client then received another letter from Provident asking for repayment.

The client scheduled an appointment with respondent to discuss this

matter. However, shortly before her appointment, Ms. Durham canceled the

appointment. The client never talked directly to respondent about the problems

arising from the Provident matter.

The client never owed Provident more than $9,991.53. Checks were

written to respondent from the trust account for "[the client] SS" on August 28,

p.18


IN THE MATTER OF MARSHALL

1992 in the amount of $1,200.00 and on August 31, 1992 in the amount of

$2,000.00. The signatures on these checks were made by a signature stamp.

Respondent testified she had authorized Ms. Durham to use this stamp in

emergencies. These checks were deposited into respondent's operating account.

By September 30, 1992, the trust account balance into which $15,828.78 had

been deposited, was $239.00. None of the missing monies were ever paid to

Provident. However, from April 1993 to March 1994, respondent paid Provident

$1200.00 on behalf of the client. Respondent testified in 1993 Ms. Durham told

her the client could not repay Provident in a lump sum. Thus, respondent

contacted Provident on behalf of the client, and Provident agreed to accept

monthly payments of $200.00. Respondent conveyed this information to Ms.

Durham who was to inform the client of the arrangement. Afterwards, when

Ms. Durham would inform respondent the client had paid $200.00, respondent

would send Provident a check for that amount.

In the fall of 1994, after the client became aware Ms. Durham had

left respondent's office by seeing Ms. Durham's picture on the television show

."American's Most Wanted," the client contacted respondent and told her about

her experiences with Ms. Durham. Respondent was receptive to the client's

information. The client asked respondent to repay her for the money Ms.

Durham had taken. At that time, respondent indicated perhaps she could help

the client with her repayment to Provident. However, because respondent

received a grievance notice concerning this matter shortly after this

conversation, respondent did not contact the client again. After Ms. Durham's

departure in April 1994, respondent discovered several documents regarding the

Provident matter in Ms. Durham's office. Respondent had not previously seen

these documents.

At the time of the hearing, Provident was drafting $60.00 each

month from the client's social security check of $300.00, leaving the client with

$240.00 per month.

The Panel concluded respondent, through her failure to supervise

Ms. Durham, violated Rule 407, SCACR, Rule 1.15 by failing to promptly deliver

to the client funds she was entitled to receive. and by failing to promptly render

a full accounting to the client. In addition, the Panel found respondent, through

failure to supervise Ms. Durham, violated Rule 407, SCACR, Rule 1.3 by failing

to act with reasonable diligence in representing this client during the time the

client's financial matters were being handled by respondent's office. Further,

respondent, through her failure to supervise Ms. Durham, failed to keep the

client reasonably informed about the status of her payments to Provident and

respondent failed to supervise her office staff to ensure the client's requests for

information would receive a reasonable response. Rule 407, SCACR, Rule 1.4(a).

Moreover, the Panel concluded respondent's failure to adequately supervise Ms.

Durham violated Rule 407, SCACR, Rule 5.3. Finally, the Panel found

respondent's failure to supervise the operations of her office demonstrated a

p19


IN THE MATTER OF MARSHALL

current lack of professional competence in the practice of law in violation of Rule

407, SCACR, Rule 1.1 and Rule 413, SCACR, IU5(E).

We agree with the Panel's findings. If respondent had property

supervised and monitored her office and her bank statements, respondent. could

have at least mitigated the damage caused by Ms. Durham. With proper

supervision, respondent may have been able to prevent Ms. Durham's activities.

Inter-Serve Matters

Inter-Serve is a company which loans money at very high interest

rates to persons with pending personal injury lawsuits. The person obtaining

the loan agrees to repay the loan plus interest when he recovers on his lawsuit.

In 1991 Don King, the owner of Inter-Serve, informed respondent of

this business for the purpose of obtaining respondent's agreement to refer clients

to his business. Mr. King left pamphlets with Ms. Durham. Thereafter

respondent's firm began to refer clients to Inter-Serve.

Mr. King met with respondent in August 1992 concerning the status

of her clients' lawsuits. Mr. King was unsure if Ms. Durham was also present

at this meeting. Mr. King claims he discussed the cases of Michelle Patterson,

Russell Fair, Lawrence Fair and a Marian Durham.3 with respondent and

respondent verified all these cases were outstanding. However, respondent

denies having a discussion about these particular loans. Instead, she claims the

meeting was very general and no specific cases were discussed. Mr. King

testified he mailed respondent a list of the outstanding loans.

During this time, Ms. Durham was screening respondent's mail;

therefore, it is possible respondent never received this list. Further, none of the

paperwork concerning these loans was signed by respondent. Instead, Ms.

Durham signed all the necessary documents and was the one who usually dealt

with Inter-Serve.

Ms. Durham's Relatives

Michelle Patterson was the fiancee of Russell Fair, Ms. Durham's

son, and is the mother of Ms. Durham's grandchild. At the direction of Ms.

Durham, Ms. Patterson went to Inter-Serve to obtain a loan by falsely telling

Inter-Serve she had been in an accident and respondent was representing her.

Ms. Durham verified this information when contacted by an Inter-Serve

employee. Ms. Durham instructed Ms. Patterson to cash the $4,500.00 loan

check and give Ms. Durham the cash. Ms. Durham gave Ms. Patterson $100.00


3 The name Marian was probably an alias used by Ms. Durham.

p.20


IN THE MATTER OF MARSHALL

in cash. Ms. Patterson never received any more of this money. Inter-Serve was

never repaid.

Ms. Patterson testified Ms. Durham told her the money was needed

because the IRS was investigating respondent and respondent needed the money

to pay her taxes. Ms. Patterson admits she never discussed the loan with

respondent. However, according to Ms. Patterson, respondent was in the office

during the transaction and saw Ms. Durham hand Ms. Patterson $100.00.4

Although respondent admitted she was having to pay back taxes to the IRS

during this time, respondent denied having any knowledge of this transaction.

However, respondent testified she had observed Ms. Durham giving Ms.

Patterson and other family members money in the past.

Russell Fair is Ms. Durham's son. At Ms. Durham's direction, Mr.

Fair obtained a loan from Inter-Serve. Ms. Durham had already filled out the

paperwork and had cleared the loan with Inter-Serve by confirming that Mr.

Fair was a client of respondent. Mr. Fair testified respondent never represented

him on a personal injury claim. Pursuant to Ms. Durham's instructions, Mr.

Fair took the loan check for $3,500.00 to the bank, cashed it, brought the cash

back to Ms. Durham, and was given $50.00 in cash by Ms. Durham. Mr. Fair

never received any more money. Further, Inter-Serve was never repaid.

Mr. Fair testified that although respondent was present in the office

during this transaction, he did not discuss the loan with respondent.

Respondent denied knowledge of this transaction.

Lawrence Fair is the brother of Ms. Durham. Mr. Fair claimed

respondent asked him to get a loan from Inter-Serve so she could pay her taxes.

According to Mr. Fair, respondent promised she would repay the loan. However,

Mr. Fair testified Ms. Durham was the one who set up the loan with Inter-Serve

and who falsely verified that he was a client of respondent. Mr. Fair testified

he had never been a client of respondent. Mr. Fair cashed his loan check and

took the cash to Ms. Durham. She gave him a portion of the cash for his

trouble. Inter-Serve was never repaid.

Social Security Client

Respondent represented a client on a social security claim.

According to client he borrowed $3,000.00 from Inter-Serve on April 30, 1992.

He then turned over the check to respondent. Respondent told client she was

going to put the money in escrow for medical bills and "whatnots." Respondent


4 Respondent's law firm included a small office for Ms. Durham and an

office for respondent, separated by a small conference room. Both Ms. Patterson

and Russell Fair testified all transactions took place in Ms. Durham's office.

p.21


IN THE MATTER OF MARSHALL

did not pay the medical bills; instead, client had to pay these bills himself.

The $3,000.00 check was deposited into respondent's trust account.

Three checks, one for $800.00, one for $475.00, and one for $300.00, were

written on respondent's trust account for client. The $475.00 check was

redeposited into the trust account, and the $800.00 check and $300.00 check

.were deposited into respondent's operating account. The signatures on these

checks were produced with a signature stamp.

On July 2, 1992, a check was written to respondent on the trust

account for $682.58. A portion of this check was deposited into respondent's

personal account. Respondent's signature on the check was made with a

signature stamp. Respondent testified it was possible the endorsement on the

back of this check was not her signature. On July 3, 1992, a check was written

to respondent on the trust account for $400.00 for "[client]." The respondent's

signature on the front of this check was made with a signature stamp.

However, a handwriting expert testified there were indications that respondent

endorsed this check.5 A portion of this check was deposited into respondent's

personal account. Respondent denied endorsing this check. Respondent testified

she left a deposit book for her personal account in the office.

A series of checks totaling $831.00 were issued on the trust account

to client from April 30 to August 1992. Therefore, a total of $3,013.58 was

withdrawn from respondent's trust account during this time.

Respondent testified part of the proceeds from this Inter-Serve loan

was used to pay for her services. According, to respondent, in addition to

representing this client in the social security matter, she also handled other

matters, including child support issues, for him. Client claimed respondent did

not do any work for him on the social security matter and, in fact, he

successfully concluded the matter himself.

The Panel found respondent, by delegating to Ms. Durham the

complete operation of her office with little or no supervision, violated Rule 407,

SCACR, Rule 5.3 by failing to assure Ms. Durham's conduct was compatible

with respondent's professional obligations. This failure to supervise facilitated

Ms. Durham's scam of Inter-Serve and her embezzlement of funds belonging to

respondent's clients. Further, the Panel found respondent violated Rule 407,

SCACR, Rule 1.15 by failing to monitor her trust account and safeguard her

clients' funds. The Panel concluded had respondent complied with Rule 407,

SCACR, Rule 1.15, respondent could have prevented Ms. Durham's

embezzlement. Although the Panel found respondent was not directly involved


5 "Indications" means the handwriting expert is approximately 60% sure

the signature is respondent's.

p.22


IN THE MATTER OF MARSHALL

with the Inter-Serve matters except for the Social Security client, the Panel held

respondent responsible for Ms. Durham's conduct because respondent should

have noticed the many warning signals concerning Ms. Durham's criminal

activity, including the advice given by her brother and her colleagues. The Panel

concluded Complainant had not clearly and convincingly demonstrated

respondent was a co-conspirator with Ms. Durham in the Inter-Serve scam. The

Panel found Russell Fair's testimony incredible and did not address Lawrence

Fair's testimony. The Panel did not mention Mr. King's testimony in its report.

As to the Inter-Serve matters concerning Ms. Durham's relatives,

we agree with the Panel's conclusions of law. However, in addition to finding

Russell Fair's testimony not credible, we also find the portions of Ms. Patterson's

and Lawrence Fair's testimony which attempted to include respondent in this

scam unbelievable. Further, while we believe Mr. King generally discussed the

loans with respondent, we do not find that at the August 1992 meeting they

discussed specific cases. Instead, it is our opinion Mr. King discussed specific

cases with Ms. Durham since she was the person with whom he usually dealt.

Thus, we do not find the evidence clearly and convincingly supports the

conclusion respondent was participating in this scam or had knowledge of this

scam. However, respondent's lack of supervision of Ms. Durham created this

problem, and therefore, respondent is ethically responsible for Ms. Durham's

conduct.6

As to the Social Security client, the Panel concluded respondent had

written the check for $800.00 which was deposited into her operating account

and the check for $400.00 which was deposited into her personal bank account.

Thus, the Panel implicitly found the endorsement on the back of the $400.00

check was respondent's signature and not a forgery. In our opinion, the

endorsement on the $400.00 check does not appear to be respondent's signature.

The endorsement on the $682.58 check is not respondent's signature. Instead,

we find these signatures are forgeries. Only a small portion of the cash from

these checks was actually deposited into respondent's personal account ($20 of

the $400.00 check and $175.58 of the S682.58 check). The balance of the money

was received as cash. Ms. Durham had access to respondent's personal account

and respondent testified Ms. Durham had done some of her personal banking in

the past. As to the checks deposited into the operating account, we note the

signatures on these checks are by signature stamp. Thus, we find Ms. Durham

was the only one writing these checks. However, respondent's lack of

supervision of Ms. Durham and her failure to properly monitor her bank

accounts created these problems and she is ethically responsible for Ms.

Durham's misappropriation of these funds in violation of Rule 407, SCACR,

Rules 1.15 and 5.3. If respondent had been properly monitoring her bank


6 The Inter-Serve matters have been resolved and Inter-Serve has been

repaid $16,000.00 by respondent's insurance company.

p.23


IN THE MATTER OF MARSHALL

accounts she could have at least mitigated the damage caused by Ms. Durham's

conduct.

Criminal Matter

Respondent was retained by client's brother.7 (Brother) to represent

client in a criminal matter. While represented by other counsel, the client was

convicted of murder in Orangeburg County on July 14, 1991 and pled guilty to

conspiracy in Hampton County on October 23, 1991.

According to respondent, on or about October 14, 1991,

respondent and Ms. Durham met with Brother in Augusta, Georgia, to discuss

her representation of client in a post conviction relief (PCR) proceeding in the

Orangeburg County matter. Respondent testified she agreed to represent client

in the PCR matter for a fee of $15,000.00, plus costs. Respondent claimed she

was not hired to represent client in the Hampton County case since the client

had not yet terminated the services of his other attorney. According to

respondent, Brother was to obtain a refund of a portion of the fee paid to client's

previous attorney and he would use this refund to pay respondent's fee.

Respondent testified she discussed the refund and payment of the fee with

Brother several times. According to respondent, financial matters were only

discussed with Brother.

Client testified respondent was retained to represent him in the

Hampton County matter and to pursue PCR in the Orangeburg County matter

for $15,000.00, plus costs. Client claimed in December 1991, respondent

personally requested $5,000.00 to pay for a transcript of the Orangeburg County

trial. Client testified respondent accepted several collect calls made by him to

her office.

It is undisputed that on October 21, 1991, $15,000.00 was bank

wired into respondent's account by client's family. Further, on December 3,

1991, an additional 45,000.00 was bank wired into respondent's account by

client's family.

Respondent met with client on Sunday, October 20, 1991.8

Respondent also met with client at least one other time before receiving the

December 3, 1991, payment of $5,000.00. Respondent testified she was unaware

of the October 21, 1991, wire transfer of 415,000.00 until Brother advised

respondent of this payment in August 1994. According to respondent, she was


7 Brother died on November 24, 1994.

.8 The Panel mistakenly found this was the date of the meeting in Augusta.

p.24


IN THE MATTER OF MARSHALL

only aware of the $5,000.00 and she thought that money was sent so she would

begin to work on the PCR matter.

The day after the wire transfer of $15,000.00 was received, Ms.

Durham wrote a check to herself on respondent's account for $11,000.00. On

December 4, 1991, Ms. Durham wrote another check to herself on respondent's

account for $4,000.00. Respondent's signature stamp was used to sign the

checks. Ms. Durham pled guilty in December 1996 to writing these checks to

herself.

Respondent did not appear in the Hampton County matter.

Instead, client's previous attorney handled this matter. Respondent filed a

Notice of Appeal (NA) in the Hampton County matter in November of 1991;

however, it was dismissed by this Court due to the failure of respondent to file

an initial brief and to designate material to be included in the Record on

Appeal. Respondent did not seek nor receive permission from client to abandon

this appeal. Respondent testified she filed the NA in order to protect client;

however, because she was never retained to pursue this matter she permitted

the appeal to be dismissed without discussing the dismissal with client.

Respondent requested a transcript of the Orangeburg County trial

on April 4, 1993. The court reporter on three occasions requested payment from

respondent before payment was effected. The cost of the transcript was

$1,223.70. Respondent testified she delayed ordering the transcript because she

had not yet received her full fee of $15,000.00. Further, respondent claimed she

delayed making payment in hopes that client's family would provide the

necessary funds to cover this expense.

The Panel concluded the evidence was not clear and convincing that

respondent had been retained to represent the client in the Hampton County

matter; therefore, respondent committed no ethical violations by failing to attend

court. However, the Panel found respondent failed to act with reasonable

diligence and promptness in representing client in violation of Rule 407, SCACR,

Rule 1.3 by filing a NA in the Hampton County matter and then failing to

either perfect the appeal or seek permission of her client to abandon the appeal.

Further, the Panel found it incredible that respondent would travel

over two hours to visit with the client prior to receiving payment or that

respondent would expend any time or effort on the case between the initial

meeting with client's family and the receipt of the $5,000.00 on December 3,

1991, when respondent admitted she knew nothing of client's family's financial

resources or reputation prior to the initial meeting. Thus, the Panel implicitly

concluded respondent was aware of the initial $15,000.00 wire transfer.

However, the Panel did not reach the issue of whether respondent had

participated in a "scam" to obtain an additional $5,000.00 from client's family.

Instead, the Panel concluded the evidence clearly and convincingly demonstrated

p.25


IN THE MATTER OF MARSHALL

respondent had violated Rule 407, SCACR, Rule 5.3 by failing to adequately

supervise Ms. Durham.

Finally, the Panel concluded respondent did little or no work in

return for the payments of $15,000.00 and $5,000.00. The transcript of the

Orangeburg trial was not ordered until April 1993. Further, a PCR application

was never filed. Respondent has neither accounted for nor refunded any of the

monies paid by client's family.

We do not find it incredible that respondent would begin

preliminary work on the PCR matter prior to receiving any payment. Further,

because respondent had, for all practical purposes, delegated the day to day

operations of the office to Ms. Durham, we find it believable that respondent

was unaware of the first wire transfer of $15,000.00. At this time, respondent's

bank statements were being sent directly to Triple A Bookkeeping. Thus,

respondent had little first hand knowledge of her bank accounts. Instead, she

depended on Ms. Durham to keep her informed. We find that respondent was

only aware of the $5,000.00 wire transfer and that she thought this was a

partial payment of her fee and was not money with which to order a transcript.

In our opinion, respondent was not attempting to defraud, client's family.

However, we agree with the Panel's finding respondent violated Rule 407,

SCACR, Rule 5.3 by failing to adequately supervise Ms. Durham. Respondent

gave Ms. Durham unrestrained control over the financial affairs of her office and

failed to monitor Ms. Durham's activities. Respondent also violated Rule 407,

SCACR, Rule 1.15 by failing to adequately monitor her trust account. If

respondent had reviewed her bank statements, she would have realized there

was a discrepancy. Further, we find respondent violated Rule 407, SCACR, Rule

1.3 by failing to act with reasonable diligence and promptness in representing

client. Even after respondent became aware that client's family had paid her

office $20,000.00, respondent still did not file a PCR application. In addition,

respondent violated Rule 407, SCACR, Rule 1.3 by abandoning the Hampton

County appeal without first obtaining client's permission.



Retaining Out of State Attorney for Client



In February 1992, a client contacted respondent's office seeking

legal representation for a matter in the State of Georgia. Ms. Durham informed

the client that for a reasonable fee respondent would locate a Georgia attorney

for her. The amount of fee was not specified and the parties did not enter into a

written contract.

Client gave Ms. Durham a check for $5,000.00 which was to be

used as a retainer for the Georgia attorney. Neither respondent nor Ms.

Durham retained a Georgia attorney for this client. Instead, client retained a

Georgia attorney herself and was forced to pay the attorney's retainer fee

without access to the $5,000.00 she had previously given to respondent's office

p.26


IN THE MATTER OF MARSHALL

for this purpose.

After client's $5,000.00 check was deposited in respondent's trust

account, $3,000.00 was withdrawn and deposited into respondent's operating

account. At that time, no accounting was sent to client showing how respondent

had earned the $3,000.00. While it is unclear who caused this transfer of funds,

the record repeatedly demonstrates Ms. Durham controlled the operations of

respondent's office and had full and total access to these accounts.

During this time, client asked respondent's office to retain a Georgia

attorney for another matter. According to client, she told Ms. Durham she only

had $1,100.00 and Ms. Durham told her that would be sufficient. Thus, client

signed over the $l,100.00 two-party check to respondent's office. Ms. Durham

assured client this money would be used to pay the Georgia attorney. A Georgia

attorney was located for client; however, client had to pay the attorney the

retainer without access to the $1,100.00 she had previously given to Ms.

Durham.

Client attempted to communicate with respondent or respondent's

staff about these matters, but client's telephone calls were not returned.

Further, when client was able to speak to someone in respondent's office, it was

always Ms. Durham, who continued to assure client that all was well with her

Georgia cases.

Eventually, client initiated a fee dispute claim. The billing

statement submitted by respondent was not prepared until after the fee dispute

claim had been filed. The statement was prepared by respondent and Ms.

Durham from memory, notations in files, and telephone bills.

Respondent testified her office worked on several other matters for

client during this time. Thus, her fee reflected both her work on the Georgia

matter and her work on these other matters. The fee dispute was resolved in

February 1993 when respondent agreed to refund client $5,500.00.

The Panel concluded, through respondent's failure to properly

control and supervise Ms. Durham, client funds were improperly appropriated to

respondent's use for operating expenses, client funds were improperly handled,

and client was not rendered a prompt and full accounting. Rule 407, SCACR,

Rule 1.15. The Panel also concluded respondent failed to keep her client

reasonably informed about the status of client's matters and failed to comply

promptly with reasonable requests for information in violation of Rule 407,

SCACR, Rule 1.4(a). In addition, respondent failed to ensure the conduct of her

employee, Ms. Durham, was compatible with respondent's professional

obligations by failing to correctly record time expended on client matters, by

failing to oversee expenditures of funds from trust accounts, by failing to

properly distinguish between the use of monies held in trust accounts and

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IN THE MATTER OF MARSHALL

operating accounts, and by failing to properly supervise her office staff, all in

violation of Rule 407, SCACR, Rule 5.3. Finally, the Panel concluded

respondent's conduct had violated Rule 413, SCACR, ¶5(E) (demonstrating a

current unfitness to practice law).

While we agree with the Panel's findings, we further find

respondent violated Rule 407, SCACR, Rule 1.3 by failing to act with reasonable

diligence and promptness in representing her client because client was forced to

seek her own attorney even though she had retained respondent to find an

attorney for her.

Lowry Detective Agency Matter

Mr. Davy Lowry was the owner of Lowry Detective and

Investigation Agency. Mr. Lowry testified he entered into a verbal contract with

respondent and Ms. Durham in which, for a flat fee of $600.00, he would

provide investigatory services in simple domestic situations.9 Respondent's

clients were to pay an initial retainer and if the investigation was successful,

Mr. Lowry would depend on a court order directing the other party to pay the

private investigation costs to recover his fee. Mr. Lowry testified he only had

direct contact with one of respondent's clients and he billed respondent and not

the client for his services because the contract was between respondent and Mr.

Lowery. Respondent denied any such agreement existed and claimed her clients

were directly responsible for the payment of investigatory expenses.

Mr. Lowry brought an action against respondent in Magistrate's

Court to collect the unpaid fees. In the fall of 1994, the magistrate dismissed

the matter finding the agreement violated the statute of frauds. However, the

magistrate directed respondent to provide Mr. Lowry with names and addresses

of the delinquent accounts. Respondent did not comply with this directive until

January 20, 1995. Further, according to Mr. Lowry, two of the addresses were

incorrect. Respondent testified these addresses were from her files.

At least one of the clients contacted by Mr. Lowry claimed she had

paid respondent's firm for the investigative services. However, respondent's firm

failed to pay this money to Mr. Lowry. Ms. Durham receipted the client for the

cash payment on the investigatory account and all parties concede Ms. Durham

appropriated this money. Mr. Lowry claimed respondent still owed him $1560.

The Panel concluded respondent and Mr. Lowry had entered into an

agreement with regard to payment for investigation services provided to her

clients and respondent committed acts of deceit in attempting to avoid payment

for these services thus violating Rule 407, SCACR, Rule 8.4(d) (engaging in


9 Mr. Lowry also provided process service for respondent.

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IN THE MATTER OF MARSHALL

conduct involving deceit or misrepresentation). The Panel further found

respondent violated Rule 407, SCACR, Rule 5.3 by failing to adequately

supervise Ms. Durham. In this instance, Ms. Durham only misappropriated

$150.00; however, because this was not an isolated event, the Panel found it to

be further proof of respondent's dismal performance in supervising this

employee. The Panel concluded respondent did not violate Rule 407, SCACR,

Rule 1.15 or Rule 8.4(b) because respondent did not have knowledge of Ms.

Durham's activities. The Panel found respondent violated Rule 413, SCACR,

¶5(D).10 by procrastinating in her obligation to provide Mr. Lowry with the

addresses of her clients and by providing Mr. Lowry with incorrect addresses.

We agree with the Panel's findings of fact and conclusions of law in this matter.

Real Estate Matter

A client retained respondent to represent her in the purchase of real

estate for a church. Client testified at the hearing that she had informed

respondent of her intention to purchase three lots prior to the November 1993

closing; however, in May 1994, client discovered she had only purchased one lot.

The deed prepared by the seller's attorney had omitted two of the parcels of

land. Respondent claimed she was unaware at the time of the closing that

client intended to purchase three lots. All closing documents refer to only one

lot, including documents prepared by the bank.

Upon discovering the problem, client contacted respondent. After

respondent agreed to attempt to rectify the problem, respondent failed to return

several of client's telephone calls and keep client informed of the status of this

matter. Eventually, respondent prepared a deed conveying the other two lots

and sent it to seller's attorney. However, client had to retain another attorney

to complete the matter because respondent failed to obtain the seller's signature

on the corrected deed. Client testified she did not pay respondent for her

attempt to correct the deed.

The Panel found the error in the deed and respondent's efforts to

remedy the error did not give rise to an ethical violation. The Panel did find

respondent violated Rule 407, SCACR, Rule 1.4(a) by failing to keep her client

reasonably informed about the status of a matter and by failing to comply

promptly with reasonable requests for information. We agree with the Panel's

findings of fact and conclusions of law. However, we further find respondent

violated Rule 407, SCACR, Rule 1.3 by failing to promptly and diligently pursue

this matter on behalf of the client. Respondent's procrastination forced the


10 Rule 413, SCACR, ¶5(D) defines misconduct as "[c]onduct tending to

pollute the administration of justice or to bring, the courts or the legal profession

into disrepute or conduct demonstrating unfitness to practice law."

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IN THE MATTER OF MARSHALL

client to seek another attorney to handle this matter.

Divorce Matter

Through Ms. Durham, a client retained respondent in 1991 to bring

a separate maintenance and divorce action on her behalf. Client and her

husband went to respondent's office where Ms. Durham prepared their

separation agreement, a complaint for a divorce and an answer. Client's

husband paid Ms. Durham $500.00. Ms. Durham informed the couple that it

would take one year for the divorce to be final and she would contact client with

the court date for the divorce. Further, Ms. Durham told the couple they would

owe an additional $500.00 when the divorce was finalized. The complaint

contains respondent's signature; however, respondent claimed she had no first

hand knowledge of this client. The complaint was filed in 1991. Subsequently,

the complaint was dismissed by the family court for lack of prosecution.

Although client attempted to contact Ms. Durham or respondent several times,

she was unable to reach either of them until 1995.

In 1995, client contacted respondent who was unaware of her

representation of client and had no record of this client ever visiting her office.

Prior to this communication, client had never met respondent. Respondent

informed client of Ms. Durham's improper activities including agreeing to

represent clients and receiving payment for services that were never performed.

Respondent told client she would complete the work in this matter; however, she

explained it would cost $300.00 more to complete the action. After this meeting,

client called respondent on numerous occasions, but her telephone calls were

never returned. Finally, after client's mother contacted someone at respondent's

home regarding this matter, respondent called client and claimed client had

broken several appointments with her. Client then obtained another attorney to

represent her and she eventually obtained a divorce. Respondent refunded

$500.00 to client when she was informed client had obtained another attorney.

During this time (1995-96), respondent was undergoing treatment for cancer and

was often out of the office.

The Panel concluded respondent failed to act with reasonable

diligence and promptness in representing client and failed to keep client

reasonably informed of the status of this case and to respond promptly to

reasonable requests for information. Rule 407, SCACR, Rules 1.3 & 1.4(a). In

addition, the Panel found respondent failed to supervise and control her

employee in violation of Rule 407, SCACR, Rule 5.3. We agree with the Panel's

findings of fact and conclusions of law in this matter.

Other Trust Account Matters

The Panel found, from September to December 1993, respondent's

trust account showed several insufficient funds charges and negative balances.

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IN THE MATTER OF MARSHALL

Although the Panel acknowledged that these problems were probably caused by

Ms. Durham, the Panel concluded respondent has an ethical obligation pursuant

to Rule 407, SCACR, Rule 1.15 to monitor her trust account and this she clearly

failed to do. We agree with the Panel's findings of facts and conclusions of law

on this matter.

SANCTION

The authority to discipline attorneys and the manner in which the

discipline is given rests entirely with the Supreme Court. Matter of Hines, 275

S.C. 271, 269 S.E.2d 766 (1980).

Both the Panel and Committee recommended a one year suspension.

In addition, the Committee recommended respondent complete LOMAP and

make restitution before being readmitted to practice. The Panel and Committee

found respondent violated Rule 407, SCACR, Rules 1.1, 1.3, 1.4(a), 1.15, 5.3, &

8.4(d); and Rule 413, SCACR, ¶5(D) & (E). Most of these violations were the

result of respondent failing to properly supervise Ms. Durham and failing to

properly monitor her bank accounts. We agree respondent violated the above

rules; however, we disagree with the Panel's and Committee's recommendation

for a sanction.

This Court has sanctioned attorneys for failing to supervise their

employees and for misappropriating funds. In Matter of Craig, 317 S.C. 295, 454

S.E.2d 314 (1995), this Court suspended attorney for fifteen months for failing to

supervise employees, negligently managing the trust account, misappropriating

funds, lacking diligence in representing his clients, and failing to cooperate with

the investigation. In Matter of Gibbes, 315 S.C. 186, 432 S.E.2d 482 (1993),

this Court imposed a public reprimand on attorney for failing to supervise an

employee who engaged in misconduct. In Matter of Gibbes, attorney did not

commit multiple acts of misconduct. In Matter of Bell, 304 S.C. 529, 405 S.E.2d

825 (1991), the attorney received a public reprimand for negligently supervising

employees, for failing to correctly post expenses to clients' accounts, and for

failing to timely disburse client funds. The attorney did not misappropriate

funds in Matter of Bell.

While there is no allegation respondent failed to cooperate with this

investigation, respondent's misconduct involved multiple violations of the Rules

of Professional Responsibility, Rule 407, SCACR, including misappropriation of

funds. Further, respondent created many of these problems by delegating to Ms.

Durham such a wide breadth of responsibilities and duties without adequately

overseeing Ms. Durham's actions. Respondent delegated complete control of her

office to Ms. Durham and did little to ensure Ms. Durham was running the

office in an ethical manner. Respondent allowed Ms. Durham to work in her

office from 1991 until 1994 without any real supervision of her activities.

Instead, she gave Ms. Durham unfettered control of her office, including her

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IN THE MATTER OF MARSHALL

financial affairs. Because respondent chose not to review her bank statements

during this time period, Ms. Durham's actions remained undetected and

unchecked for three years. Thus, we find respondent's misconduct warrants a

harsher sanction than a public reprimand.

However, in choosing the appropriate sanction, the Court may

consider circumstances in mitigation. Matter of Brown, 286 S.C. 454, 334

S.E.2d 281 (1985). Several witnesses testified on behalf of respondent. Carl

Benson testified Ms. Durham was a good liar and he did not think respondent

was involved in Ms. Durham's schemes. Ms. Durham's ex-husband testified that

although Ms. Durham had been arrested for writing bad checks in the past, Ms.

Durham had a good reputation in Anderson. Mr. Durham further testified he

did not tell respondent about Ms. Durham's previous problems.

William Bannister testified respondent resolved a child support

matter for him without further compensation after he told respondent he had

previously paid Ms. Durham to resolve this issue. Curtis Mattison testified

when he discovered Ms. Durham had not properly handled his real estate

closing, respondent corrected the problem without charge. Mr. Bannister and

Mr. Mattison were "clients" Ms. Durham had undertaken to represent without

respondent's knowledge. As to the Divorce Matter, we note during the time

period respondent was attempting to straighten out the matter for client,

respondent was diagnosed with cancer and her treatment resulted in time away

from the office. Also, respondent did return the $500.00 client had previously

paid to Ms. Durham. Thus, respondent attempted to help those "clients" who

had paid Ms. Durham for services she never provided. Further, respondent

attempted to refund the money Ms. Durham had taken from these "clients" if

she was unable to help them. Respondent did this even though she never

actually received any of the money from Ms. Durham.

Elizabeth Williams testified respondent handled the financial affairs

for the church and there had never been a problem. Several attorneys who

practiced with respondent testified respondent was a good lawyer. The Public

Defender in Anderson County stated he would continue to employ respondent if

she is allowed to continue to practice law.

Finally, there was no evidence suggesting respondent personally

benefitted from Ms. Durham's scams. Instead, all evidence suggests these scams

harmed respondent at least as much as they did her clients.

In consideration of all the facts in this case, we find the appropriate

sanction for respondent's misconduct is a definite suspension from the practice of

law for six months. In addition, respondent must make restitution and complete

LOMAP prior to reinstatement.

Respondent shall file, within fifteen (15) days of this opinion, an

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IN THE MATTER OF MARSHALL

affidavit with the clerk of this Court stating she has complied with Paragraph

30 of Rule 413, SCACR.

DEFINITE SUSPENSION.

p.33