Caroline G. Douglas (2007)

The retention agreement provided that VanderKruik would reimburse the Marjorie VanderKruik retained the respondent to represent her in her divorce. The referee made the following findings of fact. On June 14, 1994,

disbarment. recommends disbarment. We conclude that the respondent's conduct warrants recommended a five-year suspension as a sanction. The committee Rules of Professional Conduct (Rules) 1.15(a)(1), 1.15(c), 8.4(c) and 8.4(a), and clear and convincing evidence that the responderit violated New Hampshire respondent, Caroline G. Douglas. The Judicial Referee (Horton, J.) found by Professional Conduct (committee) filed a petition seeking disbarment of the BRODERICK, C.J. On July 11,2003, the Supreme Court Committee on

Caroline G. Douglas, of Concord, by brief, pro se. Conduct. R. Green on the brief, and Mr. Green orally), for the Committee on Professional Abramson, Brown & Dugan, of Manchester (Kenneth C. Brown and Jared

No. LD-2003-004 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 Errors may be reported by E-mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial 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

that Attorney Bowers authorize the bank to wire the balance of the escrow Consequently, VanderKruik signed a statement on August 18, 1997, requesting was obligated to ensure that the check was made out to VanderKruik. signed by her should specify that"; otherwise under the escrow agreement he the account closed out and a check made payable to her, then the statement "wishes to have the funds wired to [the respondent's] account, rather than have requesting the release of the escrow funds. He wrote that if VanderKruik could close the account, he needed a signed statement from VanderKruik respondent about closing the escrow account. He indicated that before he On August 18, 1997, Attorney Bowers responded to an inquiry from the

turned over to VanderKruik directly, Mr. Douglas would take them. from Mr. Douglas. The respondent told VanderKruik that if the funds were respondent's trust account so that she could protect them and keep them safe VanderKruik that the funds in the escrow account be forwarded directly to the the residence, as required by the divorce decree. The respondent suggested to to pay the remaining debts and financial obligations associated with the sale of use the funds, which were partial proceeds from the sale of the marital home, Bowers, who represented VanderKruik's ex-husband. VanderKruik intended to awarded VanderKruik the funds in an escrow account held by Attorney Robert and judgment in the case was entered on September 8, 1997. The decree The final decree in VanderKruik's divorce was entered on June p. 2 23, 1997,

VanderKruik's divorce case. lien would be determined in the respondent's divorce case, not in court ordered that issues regarding the validity, amount and payment of the the law firm of Douglas & Douglas in VanderKruik's divorce. The superior VanderKruik in the amount of approximately $65,000 for services rendered by whom she was in the process of divorcing, filed an attorney's lien against On June 10, 1997, the respondent's then-husband, Charles Douglas,

another fee agreement, finding that such testimony lacked credibility; testimony by the respondent that she and VanderKruik later entered into portion left over would be returned to VanderKruik. The referee rejected balance left in the retainer account would be used to pay the final bill and any reduced, she could be asked to replenish it. At the end of representation, any out of the retainer account. She also agreed that whenever the retainer was to pay a $5,000 retainer and that the amount of each bill would first be paid satisfactory agreement" was made. Under the agreement, VanderKruik agreed would be paid upon presentation of the statement"unless [another] mutually agreement provided that"fees for legal services and other chargeable expenses" statement to VanderKruik that detailed the time and expenses incurred. The agreement further provided that, each month, the firm would render a incurred that were directly related to the legal services provided. The respondent's law firm, Douglas & Douglas, for all costs advanced and expenses p. 3 3

[VanderKruik's) retainer account." The respondent did not inform VanderKruik accounting within two weeks and that· she would"forward the balance of informed VanderKruik that her billing department would send a final your funds have been improperly attached by Charles Douglas." She further that she would"work to obtain a release of the attachment of your funds if and advising her to obtain another attorney. She also advised VanderKruik VanderKruik, informing her that the respondent was closing her law practice On September 22, 1997, the respondent sent another letter to

respondent for VanderKruik's benefit. the respondent had withdrawn the $49,000 that had been wired to the The letter did not inform VanderKruik that, before the attachment was issued, affected the respondent's and VanderKruik's access to VanderKruik's funds. hold your trust funds." The respondent told VanderKruik that the attachment Caroline G. Douglas bank accounts," which included"the account in which I advising that Mr. Douglas had"placed an attachment on all of the Law Office of On September 17, 1997, the respondent sent VanderKruik a letter

order. otherwise withdraw any funds she held for VanderKruik until further court court granted the motion, ordering that the respondent not cash or negotiate or heard the respondent discussing withdrawing $49,000 from that account. The that a partner of his was at the respondent's bank at 10:00 a.m. that day and moved ex parte for an attachment of the respondent's trust account, alleging Mr. Douglas. At approximately 4:00 p.m. on September 15, 1997, Mr. Douglas and VanderKruik, between her and Mr. Douglas, or between VanderKruik and of the $49,000 in anticipation of a dispute about its disposition between her clients, paying her payroll and paying her operating bills. She did not hold any approximately $22,000, paying fees to new attorneys who were taking her Shortly after withdrawing the money, the respondent spent

care of her for years." VanderKruik, who was living with a multi-millionaire boyfriend who had"taken because she was"in a cash crunch" and"really needed [it)," in contrast to money from the trust account as her fee. She justified taking the money into Traveler's Checks and put them into a safe. She testified that she took the Douglas"would take it somehow." She took the money in cash, converted it the $49,000 because she had a"premonition" that if she did not do so, Mr. to her, leaving approximately $790. The respondent testified that she withdrew withdrew the $49,000 from her trust account that Attorney Bowers had wired case. Instead of attending the hearing, the respondent went to the bank and On September 15,1997, a hearing was held in the respondent's divorce

completed the wire transfer of $ p. 4 49,790.44 from the escrow account. account to the respondent's trust account. On August 25, 1997, the bank 4

necessary to inform VanderKruik that she withdrew the $ p. 4 49,000. fees were earned, it was not credible that the respondent would have believed it agreement with VanderKruik to withdraw funds from her trust account as her additionally found that if, as the respondent asserted, she had a standing that she called VanderKruik on September 15, 1997,"disappeared," and The referee rejected the respondent's claim that the phone records showing VanderKruik that, in fact, she had withdrawn all but $790 from that account. the proceeds in the escrow account if, on September 15, 1997, she had told telling VanderKruik that she had asserted a lien of approximately $50,000 on that the respondent would not have written the September 23, 1997 letter, withdrawn the $49,000 from the trust account. Furthermore, the referee found September 15, 1997, the respondent had informed her that the respondent had would not have written the letter to the court on October 8, 1997, if, on credible than that of the respondent. The referee found that VanderKruik The referee concluded that VanderKruik's version of the events was more

respondent had not yet been reconciled. my taxes and other financial obligations" and because her bill with the permission, she would have refused it because she"needed the money to pay $ p. 4 49,000 to her fees. She testified that had the respondent asked her ever took place. She also denied giving the respondent permission to apply the nine thousand dollars" to"protect" it. VanderKruik denied that this phone call "just went to the bank, because I had a feeling that I needed to take the forty­ on September 15, 1997, shortly after she took the money and told her that she The respondent testified that she called VanderKruik on her cell phone

respondent or Mr. Douglas,"since it's not theirs to have." the court"not release the money in the escrow account" to either the in the amount of $ p. 4 49,790.44, which [Mr.] Douglas has attached" and requested asserting that, as of that date, the respondent was"keeping an escrow account In addition, on October 8, 1997, VanderKruik wrote to the superior court

reasonably believed that the $ p. 4 49,000 remained in the trust account. The referee found that, based upon this correspondence, VanderKruik the proceeds of the escrow account and was in the process of spending them. outstanding bill. She did not inform VanderKruik that she had already taken immediately to"arrange a written agreement for installment payments" on the $50,000" on the proceeds. She requested that VanderKruik contact her previously held by Attorney Bowers and that she had a"lien of approximately that she was claiming and attaching the proceeds of the escrow account On September 23, 1997, the respondent informed VanderKruik by letter

and applied it to VanderKruik's fees. that, in fact, she had already withdrawn the $ p. 4 49,000 from her trust account p. 5 5

reached an agreement regarding the fees. taken the $49,000 as her fee. The respondent and VanderKruik eventually billing statement which, for the first time, documented the fact that she had answered a number ofVanderKruik's questions about her legal bill and sent a Soon after VanderKruik's letter to the bar association, the respondent

yelling at [her]," and she was unable to afford legal counsel. "ha[d] a very difficult time standing [her] ground when [the respondent] starts are entitled to." She requested help from the bar association because she looking for another $120,000.00. They have already taken far more than they excess of $11 p. 5 5,000.00 and it looks like between the two of them, they are stated that"[a]s of now [the respondent and Mr. Douglas] have received in "many errors" in the expense sheet that the respondent had given her. She committee of the New Hampshire Bar Association, alleging that there were On January 7,1998, VanderKruik wrote to the fee dispute resolution

not cooperate and that VanderKruik"knew roughly what her bill was." a final bill. The respondent asserted that this was because VanderKruik would statements from September 1997 through December 1997, and never received statements on a monthly basis, VanderKruik did not receive any itemized respondent and VanderKruik required the respondent to send itemized the same information. Although the retainer agreement between the sent VanderKruik another copy of the income-expense worksheet, asking for arrangement" to payoff her final bill. On September p. 5 5, 1997, the respondent letter, the respondent informed VanderKruik that she needed to make"some worksheet and asked her to"annotate any questions or discrepancies." In this the respondent sent VanderKruik another copy of the income-expense August and September 1997 about payment of the bill. In late August 1997, The respondent and VanderKruik had several heated conversations in

to pay the bill. respondent's fees, and absent an explanation from the respondent, she refused respondent that she had several questions and concerns about the expense worksheet, which VanderKruik reviewed. She informed the and asked the respondent for more detail. The respondent gave her an income­ account. At some point, VanderKruik expressed concerns about the May bill VanderKruik sent an additional $10,000 to be deposited in the retainer VanderKruik's retainer account was $1,000. At the respondent's request, May 21,1997. The bill indicated that the total amount remaining in the amount of$ p. 5 59,155.20 for services rendered between April 10, 1997, and In late May 1997, VanderKruik had received a bill from the respondent in p. 6 6

that the respondent violated Rule 1. 15(a)(I). the evidence presented, that the referee's factual findings are reasonable and knowledge or permission, and applied it to her legal fees. We hold, based upon respondent withdrew the money from the trust account, without her client's safeguarding this money, which she was keeping in trust for her client, the was VanderKruik's property as set forth in her divorce decree. Instead of VanderKruik's divorce to the respondent's trust account and that such money $49,790.44 from an escrow account he was maintaining in connection with The referee found that on August 25, 1997, Attorney Bowers wired

conversion. See id. Applying client funds to the client's bill without permission is an example of intentionally takes or uses client funds for his own or the law firm's use." Id. 24, 2007). "Conversion in the extreme sense occurs when a lawyer conversion." ABA/BNA Lawvers' Manual on Professional Conduct 45:501 (Jan. third party's funds for his own or his law firm's purposes. Such misuse is The duty to safeguard property means that"[aJ lawyer may not use a client's or property of the client, promptly upon receipt; and (4) safeguard that property. the New Hampshire Supreme Court Rules; (3) identifY all other property as or more clearly designated trust accounts in accordance with the provisions of third persons separate from the lawyer's own property; (2) deposit funds in one Rule 1. 15(a)(l) requires an attorney to: (1) hold the property of clients or

73 p. 6 6,738 (2001) (quotation and brackets omitted). substitute them for the judgment of the referee." Sheridan's Case, 146 N.H. evidence presented." Id."It is not our role to make independent findings and whether a reasonable person could reach the same conclusion based upon the (quotation omitted)."We review the findings made by the referee to determine so, the appropriate sanction." Coffey's Case, 152 N.H. 503, 507 (2005) found, a violation of the rules governing attorney conduct has occurred and, if record, we retain the ultimate authority to determine whether, on the facts "[AJlthough we defer to the referee's factual findings if supported by the

Rule 8.4(a), which prohibits an attorney from violating any of the Rules. writing letters to VanderKruik that misrepresented the status of the funds; and engaging in conduct involving dishonesty, fraud, deceit or misrepresentation by whether the $49,000 should be applied to VanderKruik's bill; Rule 8.4(c) by her fees despite the fact that the respondent and VanderKruik disagreed as to permission; Rule 1. 15(c) because she withdrew the funds and applied them to client and by removing those funds from her trust account without her client's violated: Rule 1. 15(a)(l) by failing to safeguard certain funds belonging to her The referee found, by clear and convincing evidence, that the respondent

escrow account and asserting a lien on them in the amount of approximately VanderKruik that she was claiming and attaching the proceeds from the Attorney Bowers remained in her trust account when she informed respondent again led VanderKruik to believe that the funds wired to her by respondent had withdrawn $49,000. In the September 23 letter, the Attorney Bowers remained in her trust account despite the fact that the respondent led VanderKruik to believe that the funds she received from misrepresented the status of her client's funds. In the September 1 p. 7 7 letter, the to VanderKruik dated September 17,1997, and September 23,1997, that The referee found that the respondent violated this Rule by writing letters

rule." Id.at 101:403. "[m]isuse of funds entrusted to a lawyer is dishonest conduct that violates this information may constitute misconduct under this rule." Id. Moreover, Conduct 101:402 (Jan. 21, 1998)."A lawyer's failure to disclose important client, tribunal, or others." ABA/BNA Lawvers' Manual on Professional premise of Rule 8.4(c) is that a lawyer may not make misrepresentations to a in conduct involving dishonesty, fraud, deceit or misrepresentation."A basic Under Rule 8.4(c), it is professional misconduct for an attorney to engage

and we conclude that the respondent violated Rule l.lS(c). applied them to her fees." The record supports the referee's factual findings, account until these disputes were resolved, she withdrew the funds and respondent violated Rule l.IS(c) when, instead of leaving the funds in her trust been resolved. The referee concluded that,"[u]nder these circumstances, the VanderKruik's concerns and questions about the respondent's fees had not respondent's fees, and that when the respondent took the money as fees, interest in the $49,000, that there was a dispute between them about the The referee found that both VanderKruik and the respondent claimed an

untiHhedispute is resolved in court, by an arbitrator, or by the parties." Id. disputed amount of the fee should be left untouched in the client trust fund withdraw her fees from the client funds." Id. at 4S: 1112."Instead, the (July 2S, 200 p. 7 7). "A lawyer may not in the event of a fee dispute unilaterally retaining lien." ABA!BNA Lawvers' Manual on Professional Conduct 4S: 1101 unilaterally seize the property, even if the lawyer believes that she has a valid segregate the disputed assets until the dispute is resolved. The lawyer cannot (including the lawyer) claim interests in the same property, the lawyer must lawyer until the dispute is resolved." Under this Rule,"if two or more persons their respective interests, the portion in dispute shall be kept separate by the accounting and severance of their interests. If a dispute arises concerning interests, the property shall be kept separate by the lawyer until there is an possession of property in which both the lawyer and another person claim Under Rule 1.1S(c), when"[i]n the course of representation a lawyer is in p. 8 8

her fees." Accordingly, disbarment is the proper sanction. Standards, supra account, without Ms. VanderKruik's knowledge or permission, and applied it to VanderKruik's property when she withdrew the $49,000 from her trust VanderKruik. As the referee found, "the respondent knowingly converted Ms. personal integrity, and that her conduct caused injury or potential injury to preserve her client's property, the duty to be candid and the duty to maintain The referee concluded that the respondent knowingly violated the duty to

misconduct." Richmond's Case, 152 N.H. at 160 (quotation omitted). generally should be greater than the sanction for the most serious instance of misconduct among a number of violations; it might well be and imposed should at least be consistent with the sanction for the most serious case of mUltiple charges of misconduct, the ABA recommends that the sanction existence of aggravating or mitigating factors.". Standards, supra § 3.0."In the potential or actual injury caused by the lawyer's misconduct; and (d) the imposing sanctions: "(a) the duty violated; (b) the lawyer's mental state; (c) the Under the Standards, courts are to consider the following factors when (Standards) for guidance. See Richmond's Case, 152 N.H. 155, 160 (2005). We look to the ABA Standards For Imposing Lawver Sanctions (1992)

152 N.H. 710, 714 (2005). we consider the case on its own facts and circumstances." Wolterbeek's Case, Nardi's Case, 142 N.H. 602, 606 (199 p. 8 8). "In deciding the appropriate sanction, integrity of the legal profession, and preventing similar conduct in the future." protecting the public, maintaining public confidence in the bar, preserving the sanction of disbarment, we focus not on punishing the offender, but on N.H. 475, 476-77 (1999). "When determining whether to impose the ultimate for a violation of the rules governing attorney conduct." Morgan's Case, 143 "We retain the ultimate authority to determine the appropriate sanction

harsh." referee's and the committee's recommendations are "excessive and overly appropriate sanction in this case. The respondent asserts that both the Hampshire for five years. The committee contends that disbarment is the factors, that we suspend the respondent from the practice of law in New for a violation of Rule 1. 15(a)(I), he recommended, based upon mitigating Although the referee concluded that disbarment is the proper sanction

prohibits an attorney from violating any of the Rules. Finally, we conclude that the respondent violated Rule p. 8 8.4(a), which

findings were reasonable, and that the respondent violated Rule p. 8 8.4(c). $50,000. Based upon the evidence presented, we hold that the referee's factual p. 9 9

escrow account remained intact. Id. fact, wrote a letter to him shortly thereafter that led him to believe that the her bill. Id. at 540. She failed to inform Foster that she had done this and, in respondent withdrew the funds from the escrow account and applied them to and before the dispute between Foster and his spouse was resolved, the funds belonged. Id. at 53 p. 9 9-40. Without obtaining her client's authorization between Foster and his ex-wife about to whom and in what proportion the whom she was representing in his divorce. Id. at 539. There was a dispute the respondent was maintaining an escrow account for her client, Mr. Foster, strikingly similar behavior. Douglas' Case, 147 N.H. 538 (2002). In that case, at 717. In 2002, the respondent was disciplined by this court for engaging in actions constitutes an aggravating circumstance." Wolterbeek's Case, 152 N.H. supra § 9.22."[TJhe fact that the respondent has had other disciplinary refusal to acknowledge the wrongful nature of her misconduct. See Standards, disciplinary offenses, dishonest or selfish motive, pattern of misconduct, and factors. The referee found the presence of aggravating factors including prior Weighing against the mitigating factors are several serious aggravating

146 N.H. at 73 p. 9 9. periods. Independent violations warrant discrete sanctions." Sheridan's Case, unnecessary misses the mark. Sanctions relate to conduct, not to time same general time frame as the case before us render any further sanction action,"[tJo suggest that prior sanctions on unrelated matters occurring in the currently suspended from practicing law because of a separate disciplinary his misconduct was a mitigating factor). As to the fact that the respondent is 716 (rejection of respondent's argument that ten-year"passage of time" since proceedings presents a mitigating factor. Cf. Wolterbeek's Case, 152 N.H. at Under these circumstances, we decline to find that the delay in disciplinary committee of the respondent's misconduct in a separate disciplinary matter. to practice law, and the overlapping investigation and prosecution by the the respondent, time spent on a medical evaluation of the respondent's fitness by VanderKruik's absence from the state, the committee's difficulty contacting reach finality is the result of a lengthy discovery process that was complicated Standards, supra § 9.32(j). Here, the time it has taken for these proceedings to in disciplinary proceedings presents a mitigating factor in this case. N.H. _, _ (decided Oct. 30, 2007). However, we do not agree that the delay personal or emotional problems are a mitigating factor. See Grew's Case, 156 years. See Standards, supra § 9.32. We acknowledge that the respondent's sanctions, the referee recommended that the respondent be suspended for five delay in disciplinary proceedings, and imposition of other penalties and Based upon mitigating factors including personal or emotional problems,

(quotation omitted). clearly justify an attorney's disbarment." Nardi's Case, 142 N.H. at 606 of funds entrusted to him demonstrates such lack of common honesty as to § 4.11; see Coddington's Case, 155 N.H. 66,68 (2007). "An attorney's misuse p. 10 10

DALIANIS, DUGGAN and GALWAY, JJ., concurred.

Rule 37(19)). case, see Sup. Ct. R. 37(16) (repealed and replaced effective Jan. 1,2004, by reimburse the committee for its expenses in investigating and prosecuting this Case, 152 N.H. at 717. We order the respondent disbarred and order her to of the legal profession and prevent similar conduct in the future. Wolterbeek's protect the public, maintain public confidence in the bar, preserve the integrity the only sanction that attains the goals of the attorney discipline system to After considering all of the relevant factors, we find that disbarment is

at 717. imposed." Richmond's Case, 152 N.H. at 161; see Wolterbeek's Case, 152 N.H. "an aggravating factor that justifies an increase in the degree of discipline add that this case presents the commitment of multiple violations of the Rules, of her conduct, see Coffey's Case, 152 N.H. at 515. To those factors we also misconduct, and the respondent's refusal to acknowledge the wrongful nature lied to cover up her actions, Wolterbeek's Case, 152 N.H. at 717, a pattern of respondent stole money from her client to use for her own personal needs and factors, including evidence of a dishonest or selfish motive in that the In addition, the record supports the existence of other aggravating

unilateral withdrawal of Foster's funds. had made professional conduct complaints against her based upon her withdrew VanderKruik's funds that two attorneys and a superior court judge account." Id. at 545 (quotation omitted). The respondent was aware when she clearly articulate that the funds should have been maintained in the escrow arguable question of professional duty because Rules 1. 15(a)(l) and 1.15(c) account, as when she similarly withdrew Foster's funds, "there was no When the respondent withdrew VanderKruik's funds from her trust

months. Id. at 545-46. we suspended the respondent from the practice of law for a period of six that her conduct violated her ethical obligation to safeguard her client's funds," Based upon these violations and "the respondent's inability to comprehend until an accounting occurred, the respondent violated Rule 1. 15(a)(I)." Id. without her client's permission and by failing to keep the funds segregated agreed "with the referee's conclusion that by withdrawing the escrow funds applying them to Foster's legal fees violated Rule 1.15(c). Id. at 544. We also actions of the respondent in withdrawing the entire escrow account and whether Foster should receive the entire amount of the escrow funds, the We affirmed the referee's findings that because there was a dispute as to