Disciplinary Reporter Case Digest

Attorney ID 40798
Attorney Name Yates III, William Jeffrey
DBP Docket No. 38 DB 2005
Supreme Court Docket No. 1151 DD No. 3
County Lycoming
Disciplinary Counsel Joseph J. Huss
Counsel for Respondent None
Decision Date 2006-07-25
Effective Date 2006-08-25
Case Digest Respondent was prosecuted in connection with two unrelated complaints. In the first matter, Respondent was to hold $50,518.00 in insurance proceeds generated by the destruction of his client’s marital domicile by fire. A written escrow agreement set forth the specific requirement that none of these funds were to be disbursed without the written consent of both Respondent’s client, as well as that of the client’s estranged spouse, the parties being involved in a divorce. Nevertheless, between Respondent’s receipt of these proceeds in May 2000 and the court’s final approval of the Master’s report in January 2004, Respondent disbursed all of this money. While some ($9,400.00) was properly disbursed, the balance (approximately $41,000.00), plus approximately $2,000 of funds belonging to other clients, was disbursed by Respondent to his client, or to third parties on the client’s behalf. No disbursements were made to the estranged spouse, despite the Master’s finding that he was entitled to half the funds held by Respondent. As of the date of the Disciplinary Hearing, Respondent had not paid any restitution to the estranged spouse. In the second matter, Respondent was retained in June 2002 to file a Common Pleas complaint on behalf of a client who had successfully obtained a District Justice judgment, which had been appealed by the defendant. The client paid Respondent a flat fee of $500, which he deposited in his general office account upon receipt, even though there was no agreement this money was “non-refundable.” Between late 2002 and June 2003, the client repeatedly contacted Respondent seeking information about her case. When no information was forthcoming, she traveled to the Prothonotary’s office, where she discovered that a complaint had never been filed. She then sent a demand letter to Respondent, which he failed to answer for five months. It was only after being contacted by the Office of Disciplinary Counsel that he refunded the client’s $500.
Rule Violation(s) First Matter: 1.15(a) 1.15(b) 1.15(c) and 8.4(c). Second Matter: 1.3, 1.4(a)&(b), 1.15(a), 1.15(b), 1.16(d)
Discipline Imposed Suspension for three months followed by one year probation, with conditions.
Points of Law In this matter the Disciplinary Board found that a flat fee, which is not designated “non-refundable,” is client money, and thus must be held separate and apart from the attorney’s funds until earned. A lawyer who holds funds in which a third party, not his client, has an interest is bound by the requirements of RPC 1.15 and may be subject to discipline if he makes disbursements of those funds inconsistent with that interest, even to his client.
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