Marc Alan Wells v. Kentucky Bar Association ( 2017 )

TO BE PUBLISHED
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MARC ALAN WELLS MOVANT
V. IN SUPREME COURT
KENTUCKY BAR ASSOCIATION RESPONDENT
OPINION AND ORDER
Marc Alan Wells was admitted to the practice of law on October 1, 1975.
Wells's bar roster address is 209 W. Main Street, Princeton, Kentucky 42445,
and his Kentucky Bar Association (KBA) member number is 75747.
Pursuant to Supreme Court Rule (SCR) 3.480(2), Wells moves this Court
to impose a suspension of sixty-one days, probated for one year with
conditions, for violation of SCR 3.130(1.15)(a), SCR 3.130(1. lS)(d), SCR
3.130(8.l)(b), and SCR 3.130(8.4)(c). The KBA has no objection to Wells's
motion.
I. BACKGROUND.
on· September 7, 2012, Wells conducted a closing involving the sale of
real estate from the Hintons to theVan Hoosers. In connection with that
closing, Wells received a check from the Van Hoosers in the amount of
$4,927.00 and a wire transfer from their mortgage company in the amount of
$128,932.00. The check and wire transfer were deposited into Wells's escrow
account. At the time of the closing, the Hintons had a $65,771.47 mortgage,
which was held by Wells Fargo. Wells states that he: placed a check drawn on
his escrow account in that amount in a FedEx envelope; properly addressed
the envelope to Wells Fargo; and deposited the envelope in a FedEx drop box.
However, according to Wells, FedEx did not pick up or deliver the envelope to
Wells Fargo, and he did not learn that the Hintons' mortgage had not been paid
until sometime in November 2012. When Wells learned that the mortgage had
not been paid, he paid the delinquency of $2,936.28 and the revised payoff
amount.
Wells admits that there were insufficient funds in his escrow account in
September 2012 to cover the check he wrote to pay the Hintons' mortgage.
Wells also admits that, in order to cover the check he wrote in November 2012,
he deposited personal funds into his escrow account. Finally, Wells admits
that he borrowed $75,000.00 from a friend and deposited that amount into his
escrow account in order to reimburse another client in an unrelated matter.
Wells has repaid that loan.
Based on the preceding, the Inquiry Commission issued a Complaint,
charging Wells with violating SCR 3.130(1. lS)(b), which states that:
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Upon receiving funds or other property in which a client has an
interest, a lawyer shall promptly notify the client. Except as stated
in this Rule or otherwise permitted by law or by agreement with
the client a lawyer shall promptly deliver to the client any funds or
other property that the client is entitled to receive and, upon
request by the client, shall promptly render a full accounting
regarding such property.
The Inquiry Commission also charged Wells with violating SCR 3.130(1. lS)(d),
which states: "A lawyer may deposit the lawyer's own funds in a client trust
account for the sole purpose of paying bank service charges on that account,
but only in an amount necessary for that purpose." Finally, the Inquiry
Commission charged Wells with violating SCR 3.130(8.4)(c) which states that it
is professional misconduct for a lawyer to "engage in conduct involving
dishonesty, fraud, deceit or misrepresentation."
Following receipt of Wells's response to the Complaint, Bar Counsel
made several. requests for additional information. Notably, Bar Counsel
requested information on July 24, 2014, stating that a response was due by
August 5, 2014. When Wells failed to respond, Bar Counsel sent a second
request on October 2, 2014, stating that a response was due by October 16,
2014. On October 14, 2014, Wells sent an email to Bar Counsel confirming a
phone conversation they had regarding Wells's trial preparation and stating
that the requested information would be forthcoming by October 29, 2014. On
October 29, 2014, Wells sent Bar Counsel another email indicating that he was
again in trial preparation, and he would supply requested information by the
end of the week of November 10, 2014. Because of Wells's dilatory response to
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Bar Counsel's request for information, he was charged with violating SCR
3.130(8.1 ){b), which states that a lawyer shall not "fail to disclose a fact
necessary to correct a misapprehension !mown by the person to have arisen in
the matter, or knowingly fail to respond to a lawful demand for information
from an admissions or disciplinary authority."
As noted above, Wells has admitted to violating the applicable ethical
rules. He and Bar Counsel have entered into a negotiated settlement that
provides for a sixty-one day suspension, probated for one year. Wells's
probation is contingent on: (1) receipt of no further disciplinary charges; (2)
completion of the Ethics and Professionalism Enhancement Program (EPEP);
(3) timely payment of KBA dues; (4) timely satisfaction of all continuing legal
education requirements; and (5) payment of all costs associated with the
investigation and prosecution of this matter. The recommended sanction has
been reviewed and approved by the Chair of the Inquiry Commission and a
Past President of the KBA.
II. ANALYSIS.
In support of its position that the agreed to discipline is appropriate, the
KBA notes that Wells has not been a party to any prior disciplinary
proceedings. The KBA also cites to King v. Kentucky Bar Ass'n, 440 S.W.3d
378 (Ky. 2014); Kentucky Bar Ass'n v. Francis, 439 S.W.3d 750 (Ky. 2014); Son
v. Kentucky Bar Ass'n., 398 S.W.3d 432 (Ky. 2013); and Section 9.32 of the
American Bar Association Standards for Imposing Lawyer Sanctions (the ABA
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Standards). Having reviewed the cited cases and section of the ABA Standards
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we agree that the proposed sanction is appropriate.
In King; King deposited client funds in two separate cases into his escrow
account pending resolution of Medicaid liens. When the lien issues were
resolved, King distributed the funds to his clients. However, in the interim,
King failed to maintain sufficient funds in his escrow account to cover
payments to his clients and/or Medicaid. He also used money from his escrow
account to pay personal expenses. 440 S.W.3d at 379-380. King, who had
previously received a public reprimand with conditions, was suspended for 181
days, with sixty-one days to serve, the remainder being probated for two years
subj.ect to several conditions. Id. at 380-81.
In Francis, Francis wrote several checks from his escrow account that
were returned for insufficient funds. 439 S.W.3d at 751. He also took a fee
from a client, failed to perform any work, and failed to refund the fee when
asked to do so. Id. at 752. Finally, Francis failed to respond to either of the
complaints and to requests for information from Bar Counsel. Id. at 752-53.
Pursuant to the KBA's recommendation, and noting that Francis had been
privately reprimanded on two prior occasions, this Court suspended Francis for
181 days. Id. at 753.
In Son, Son negotiated a $100,000 settlement for a client in a personal
injwy claim. 398 S.W.3d at 433. He deposited the settlement proceeds in his
escrow account, paid himself his one-third fee, and paid his client $30,000. Id . .
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Son kept the remainder in his escrow account to pay his client's unpaid
medical bills. Id. However, Son failed to negotiate with the medical services
providers and, when he failed to respond to his client's requests for
information, she retained new counsel. Id. Son forwarded the remainder of the
client's money to the new attorney, but he had to deposit personal funds into
the escrow account to cover the check. Id. 'Furthermore, during the time
between the settlement and the time he· forwarded that check, Son failed to
maintain sufficient funds in his escrow account to pay either the client or her
medical bills. Id. This Court approved of and imposed the thirty-day sanction,
probated for two years with conditions, which Son and the KBA had negotiated.
Id. at 434-35.
Finally, we note that, although not binding, the ABA Standards "can at
times serve as persuasive authority." Anderson v. Kentucky Bar Ass'n, 262
S.W.3d 636, 639 {Ky. 2008). Here, we find that Section 9.32, which notes that
a lack of a history of discipline and the effort to make amends may be
considered as mitigating factors, is persuasive. Wells has no history of prior
discipline in more than forty years of practice. Furthermore, when he
recognized the issue with regard to the Hintons' mortgage, Wells took the
necessary steps to rectify the situation. These are laudable attributes.
However, they do not completely excuse Wells's failure to maintain an adequate
balance in his escrow account, his failure to refrain from co-mingling client and
personal funds, and his failure to timely respond to requests for information
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from Bar Counsel. Therefore, we agree with the KBA that a sixty-one day
suspension, probated for one year with conditions, is appropriate .
. ACCORDINGLY, IT IS ORDERED THAT:
1. Marc Alan Wells, KBA Member No. 75747, is suspended from the
practice of law for sixty-one days, probated for a period of one year from
the date of the Court's Order on the condition that he comply with the
remainder of this Order;
2. Wells shall not receive any charges of professional misconduct during the
probationary period;
3. Wells shall attend at his own cost and successfully complete the KBA 's
EPEP within one year of this Court's Order, and Wells shall not apply for
CLE credit for his attendance at that program. Furthermore, Wells shall
provide an appropriate release form so that his CLE records can be
reviewed for one year following his completion of that program;
4. Wells shall timely pay his KBA membership dues and satisfy all
continuing legal education requirements;
5. Pursuant to SCR 3.450, Wells is directed to pay all costs associated with
this disciplinary proceeding, certified to be in the sum of $446.30, for
which execution may issue from this Court upon finality of this Opinion
and Order;
6. In the event Wells violates any of the terms of probation stated herein,
. the KBA may file a motion with the Court requesting the issuance of an
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order directing Wells to show cause why the sixty-one day suspension
should not be imposed; and
7. If Wells fully complies with the terms of this Opinion and Order, the
suspension and all terms of probation shall be terminated at the end of
the probationary period.
Minton, C.J., Hughes, Keller, VanMeter, Venters and Wright, JJ., concur.
Cunningham, J., not sitting.
ENTERED: February 16, 2017.
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