Paul F. Coddington Jr. (2007)

we granted it and vacated our disbarment order. November 13, 2006. After hearing oral argument on the respondent's motion, The respondent moved for reconsideration of the disbarment order on

2006, he was disbarred. respondent did not file a response to the show cause order and, on October 31, disbarred for his violations of the rules of professional conduct. The 2006, we ordered the respondent to show cause why he should not be its allegations were deemed admitted. Sup. ct. R. 37(16)(c). On March 28, Hampshire for two years. Because the respondent did not answer the petition, respondent, Paul F. Coddington, Jr., from the practice of law in New Conduct Committee (PCC) filed a petition recommending that we suspend the DALIANIS, J. On December 8,2005, the Supreme Court Professional

se. Paul F. Coddington. Jr., on the motion for reconsideration and orally, pro

professional conduct committee. Landya B. McCafferty, of Concord, on the petition and orally, for the

No. LD-2005-009 Original

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E-mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

severity of the misconduct and any mitigating circumstances appearing in the discipline case on its own facts and circumstances, taking into account the Richmond's Case, lS p. 2 2 N.H. ISS, lS9-60 (200S). We judge each attorney the integrity of the legal profession, and prevent similar conduct in the future." rather"to protect the public, maintain public confidence in the bar, preserve mindful that the purpose of attorney discipline is not to inflict punishment, but N.H. 710, 714 (200S) (quotation omitted). In determining a sanction, we are has occurred and, if so, the appropriate sanction." Wolterbeek's Case, lS2 whether, on the facts found, a violation of the rules governing attorney conduct In attorney discipline matters, we retain"ultimate authority to determine

recommendation. upon meeting certain requirements. The respondent agrees with this the recommendation and that his reinstatement to practice be conditioned suspended for a period of two years following the date of final court approval of For this misconduct, the PCC recommended that the respondent be

the Rules. (4) Rule 8.4{a). This rule makes it professional misconduct to violate

this rule when he failed to respond to the letter of complaint. matter to respond to a lawful demand for information. The respondent violated (3) Rule 8.1 (b). This rule requires a lawyer involved in a disciplinary

Supreme Court Ruies. receipts, and failed to perform monthly reconciliations as required by the balances for each client, rarely recorded the source and purpose of cash accordance with Supreme Court Rules. The respondent failed to keep running disposition of all client funds and property in the lawyer's possession in rules require a lawyer to maintain records regarding the handling and ( p. 2 2) Rule 1.1S{a)(2) and Supreme Court Rule SO(2) A and F. These

periods of time after he had earned them. his own funds with those of his clients by leaving fees in trust for extended by commingling earned legal fees with client funds. Moreover, he commingled funds from his trust account for personal use without proper authorization and Supreme Court Rules. The respondent violated this rule by withdrawing client in clearly designated trust accounts maintained in accordance with the keep the property separate from the lawyer's own property and to deposit funds the property of a client or a third person in connection with representation to (1) Rule 1.1S{a)(1). Rule 1.1S(a)(1) requires a lawyer who is holding

which are deemed admitted pursuant to Supreme Court Rule p. 3 37(16)(c): of Professional Conduct (Rules), which the respondent does not dispute and The petition alleged the following violations of the New Hampshire Rules 3

from that account to pay such expenses. instead of first moving them into his operating account and withdrawing them earned fees directly from his trust account to pay personal or office expenses funds, it is removed from [the trust] account." The respondent withdrew his account [or] your personal account, ... but ... at the time it is no longer client it is removed from the [trust] account, and either put into your firm's operating earned. As Calaman explained,"The proper procedure is, once a fee is earned, fees from his client trust account at or shortly after the time the fees were "commingled" client funds with his own funds by failing to remove his earned and willfully stole from his clients. Calaman testified that the respondent testified that he"did not see evidence ... at all" that the respondent knowingly that there was intentional theft. Craig Calaman, the auditor for the PCC, recommendation for a two-year suspension, the disciplinary office never argued property. As the hearing panel observed and as the PCC noted in its There was no evidence that the respondent knowingly converted client

Standards, supra § 4.11. property," in addition to causing injury or potential injury to the client. § 4.12. Disbarment is reserved for when a lawyer"knowingly converts client property and causes injury or potential injury to a client. Standards, suora when a lawyer knows or should know that he is dealing improperly with client his client's property. The Standards provide that suspension is generally fitting We first consider the sanction for the respondent's failure to safeguard

cooperate. client's property; (2) failure to maintain proper records; and ( p. 3 3) failure to Here, the respondent's misconduct involves: (1) failure to safeguard his

factors on the ultimate sanction. Richmond's Case, 152 N.H. at 160-61. N.H. at 714. We then consider the effect of any aggravating or mitigating misconduct and identify the appropriate sanction. Wolterbeek's Case, 152 In applying these factors, the first step is to categorize the respondent's

Standards, supra § p. 3 3.0; Wolterbeek's Case, 152 N.H. at 714. lawyer's misconduct; and (d) the existence of aggravating or mitigating factors. (b) the lawyer's mental state; (c) the actual or potential injury caused by the following factors for consideration in imposing sanctions: (a) the duty violated; guidance. Wolterbeek's Case, 152 N.H. at 714. The Standards list the for Imposing Lawver Sanctions (2005) (Standards), we look to them for Although we have not adopted the American Bar Association's Standards

1 p. 4 4 p. 3 3 N.H. 475, 477 (1999). determined largely with reference to the attorney's behavior." Morgan's Case, solely by the number of rules broken or by the particular rules violated, but is record. Id. at 160. "The gravity of unprofessional conduct is not determined 4

severe disciplinary action." Douglas' Case, 1 p. 4 47 N.H. 538, 544 (2002). This is "In cases involving an attorney's misuse of client funds, we often take

is in accord with our prior decisions. three categories of the respondent's misconduct. We observe that this sanction Therefore, we conclude that suspension is the suitable sanction for all

with the PCC's investigation. right financial records, as required by our rules, and for his failure to cooperate conclude that suspension is the correct sanction for his failure to maintain the In light of the findings with respect to the respondent's mental state, we

uncommon reaction. (Quotation omitted.) and the PCC, which the office of disciplinary counsel recognized was not an responded like a"deer in the headlights" according to both the hearing panel PCC's investigation out of"fear and ignorance as to what steps to take." He his law office. The hearing panel noted that the respondent reacted to the testimony that the respondent"had no idea how to keep a bank account" for negligence or recklessness. This observation is supported by Calaman's the respondent's state of mind with respect to record-keeping was gross The PCC observed in its recommendation for a two-year suspension that

when lawyers neglect to respond to orders of the disciplinary agency." Id. supra § 6.23. The commentary explains that"[c]ourts... impose reprimands when a lawyer's mental state is"negligent" instead of"knowing." Standards, applies directly to him or her." Id. Reprimand, on the other hand, is suitable violations can occur when a lawyer fails to comply with a court order that supra § 6.22. The commentary to the Standards states that"[s]uch knowing or interference or potential interference with a legal proceeding. Standards, violates a court order or rule, and there is potential injury to a client or a party, The Standards provide that suspension is fitting when a lawyer knowingly involves the respondent's violation of duties that he owed to the legal system. proper records and cooperate with the PCC's investigation. This conduct We next consider the sanction for the respondent's failure to maintain

safeguard his client's property. funds, we conclude that suspension is the correct sanction for his failure to As there is no evidence that the respondent knowingly converted client

for a two-year suspension that the respondent has repaid this amount. respondent owed one client $39.60. The PCC observed in its recommendation negligible. After the audit was completed, Calaman concluded that the PCC observed in its recommendation, the actual loss to any client was Moreover, although commingling funds in this way was improper, as the p. 5 5

irregularities. While the attorney in Eshleman's Case, 126 N.H. at 2-3, lied at as that of the attorneys whom we have disbarred for trust account On the other hand, the respondent's conduct is not nearly as egregious

respond to the PCC's requests for information. shortage, id. at 476, the respondent did not self-report and initially failed to and because, whereas Morgan self-reported to the PCC when he discovered the misconduct, id. at 477, one of the respondent's clients lost approximately $40, however, because, whereas none of Morgan's clients were harmed by his The respondent's conduct is slightly worse than Morgan's conduct,

operating account, and then paying his expenses. Id. client trust account instead of withdrawing funds, putting them into his records. Id. In addition, like the respondent, Morgan paid expenses from his and unearned client deposits, and, like the respondent, he failed to keep proper the respondent, he had one client trust account in which he held both earned Case. Morgan, like the respondent, was a solo practitioner. Id. at 476. Like The respondent's misconduct is similar to that involved in Morgan's

measures to prevent actual harm." Morgan's Case, 143 N.H. at 477-78. responsibility for his actions and made good faith efforts to take corrective commingling of funds" were"patently unacceptable, ... he accepted methods, numerous bookkeeping errors, inaccurate client trust reporting and correct sanction because, even though his"admittedly poor accounting the PCC, and made good faith remedial efforts. We ruled that this was the own money to cover the shortage, investigated the matter, reported himself to who, when he discovered a substantial shortage in his trust account, put in his imposed a conditionally delayed suspension of two years upon an attorney her conduct was legitimate. In Morgan's Case, 143 N.H. 47 p. 5 5,476 (1999), we client's permission, where the attorney honestly, but erroneously, believed that for six months for withdrawing her fees from an escrow account without her In Douglas' Case, 147 N.H. at 545, however, we suspended the attorney

$ p. 6 6,000 from a personal injury settlement. records, which precluded any audit from occurring, and failed to pay his client funds, even after we enjoined him from doing so, failed to produce requisite attorney in Farley's Case, 147 N.H. 476, 476-77 (2002), because he transferred to the firm in connection with a real estate transaction. We also disbarred the and knowingly and where one client never recovered the $77,000 he entrusted 131 N.H. 73 p. 5 5, 739-40 (1989), we disbarred an attorney who acted deliberately account was out of trust by more than $70,000. Similarly, in Woiccak's Case, (1985), we disbarred an attorney because, among other things, his trust (quotation omitted). Thus, for instance, in Eshleman's Case, 126 N.H. 1,2 property must stand among the most insistent of professional norms." Id. because"[a] lawyer's obligation to refrain, at the least, from misuse of a client's 6

recommendation and order the respondent suspended for two years based been subject while this proceeding was pending, we adopt the PCC's factors, and the two and one-half year suspension to which the respondent has the PCC, the arguments made by the parties, the mitigating and aggravating Considering the above facts, the findings by both the hearing panel and

supply the records required for the audit. See Standards, supra § 9.22(e). respond and communicate with the attorney discipline office and, initially, to For aggravating factors, the PCC considered the respondent's failure to

§ 9.32(c). depression for which he has received treatment. See Standards, supra argument to this court, that, since the misconduct, he has been diagnosed with the hearing before the hearing panel, and alluded to this again in oral he was a new attorney. See Standards, supra § 9.32(f). Further, he testified at See Standards, supra § 9.32(b). Moreover, at the time of these transgressions, previously, there was no evidence that the respondent had a dishonest motive. The record reveals additional mitigating factors as well. As discussed

the issues and was facing them maturely." See Standards, supra § 9.32(1). § 9.32(a), (d). The hearing panel found that the respondent"fully understood small and he repaid the funds a client actually lost. See Standards, supra prior disciplinary record, the actual amount of money involved was relatively As mitigating factors, the PCC considered that the respondent has no

aggravating factors with respect to this sanction. respondent's misconduct, we next consider the effect of mitigating or Having concluded that suspension is the suitable sanction for the

since repaid. owed $77,000. Here, the respondent owed one client $39. p. 6 60, which he has by more than $70,000. In Woiccak's Case, 131 N.H. at 739-40, one client was Eshleman's Case, 126 N.H. at 2, the attorney's trust account was out of trust the time the account was frozen, it was out of trust by more than $3,000. In here. In Farley's Case, 147 N.H. at 477, one client was owed $6,000 and, by attorneys for trust account irregularities are much larger than those at issue Also, the amounts at issue in the cases in which we have disbarred

respondent's lack of knowledge was genuine. days after this amount was deposited, the hearing panel here found that the investigate even after learning that the account was missing $ p. 7 70,000 only four 38, was willfully blind to the irregularities in his firm's trust account, failing to to the hearing panel. While the attorney in Woiccak's Case, 131 N.H. at 737been arrested for grand theft, the respondent here testified candidly, according his disciplinary hearing and failed to notify the PCC or this court that he had 7

BRODERICK, C.J.