Opinion
UWYCV176034284S
12-01-2017
OFFICE OF CHIEF DISCIPLINARY COUNSEL v. Douglas BREAKSTONE
UNPUBLISHED OPINION
OPINION
Mark H. Taylor, Judge
I
BACKGROUND
The Office of Chief Disciplinary Counsel filed this presentment to the Superior Court on April 3, 2017, alleging that Attorney Douglas Breakstone of Waterbury, Connecticut, is guilty of misconduct. The reviewing committee issued a decision on February 24, 2017, having found that Attorney Breakstone engaged in unethical conduct in violation of subsections (b), (e) and (h) of rule 1.15 of the Rules of Professional Conduct and Practice Book § 2-27(a). The Statewide Grievance Committee thereafter ordered that he be presented to a judge of the Superior Court for discipline. After reviewing the record and holding an evidentiary hearing on November 21, 2017, the court reprimands Attorney Breakstone for failing to maintain funds in his office account for a check issued to a client from that account, by agreement. No other discipline is warranted, in the court’s view, under the unusual facts of this case.
Attorney Breakstone had one prior instance of discipline imposed on February 24, 2006, in which he was ordered to attend a continuing legal education course in legal ethics in grievance complaint # 04-1199, Quick v. Brickstone. Additionally, on July 28, 2016, the Statewide Grievance Committee for the Judicial District of Ansonia-Milford Grievance Panel found probable cause that Attorney Breakstone violated Rules 1.5(b), (c) and (h), and 8.1(2), of the Rules of Professional Conduct and Practice Book § 2-27(a).
Rule 1.15 of the Rules of Professional Conduct provides in relevant part: (b) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded ... (e) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client or third person, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. (h) Notwithstanding subsections (b), (c), (d), (e) and (f), lawyers and law firms shall participate in the statutory program for the use of interest earned on lawyers’ clients’ funds accounts to provide funding for the delivery of legal services to the poor by nonprofit corporations whose principal purpose is providing legal services to the poor and for law school scholarships based on financial need. Lawyers and law firms shall place a client’s or third person’s funds in an IOLTA account if the lawyer or law firm determines, in good faith, that the funds cannot earn income for the client in excess of the costs incurred to secure such income ..." (Emphasis added.) Rules of Professional Conduct 1.15.
Practice Book § 2-27(a) provides: " Consistent with the requirement of Rule 1.15 of the Rules of Professional Conduct, each lawyer or law firm shall maintain, separate from the lawyer’s or the firm’s personal funds, one or more accounts accurately reflecting the status of funds handled by the lawyer or firm as fiduciary or attorney, and shall not use such funds for any unauthorized purpose ." (Emphasis added.)
Douglas Breakstone, Juris # 308613, is an attorney duly admitted to the bar of the State of Connecticut and has been so since December 8, 1988. On March 25, 2015, Attorney Breakstone was notified of a random audit to be conducted by the Statewide Grievance Committee for the time period between September 1, 2014, and February 28, 2015. The audit concluded that Attorney Breakstone’s IOLTA account (IOLTA hereinafter) did not consistently maintain sufficient funds during the audited period to safeguard the amount of $9, 157.95 belonging to the Gaspard estate.
The IOLTA account was used to transfer funds to an operating account, by agreement, so that a check could be issued to Mr. Gaspard immediately. Apparently, neither of these two accounts held funds sufficient to cover the check during the entire period of time it could have been cashed.
The undisputed facts show that Attorney Breakstone wrote a check from his IOLTA on June 23, 2013, to Paul Gaspard in the amount of $9, 157.95, representing a full disbursement of recently discovered client’s funds from the estate of his mother. The check was never negotiated or cashed. Mr. Gaspard subsequently contacted Attorney Breakstone on or about September 8, 2014, and requested an immediate replacement check. Attorney Breakstone had recently run out of checks for his IOLTA and, upon contacting Webster Bank, found that temporary checks were no longer available to its clients. Upon agreement with Mr. Gaspard, Attorney Breakstone transferred the client’s funds from his IOLTA to his operating account and wrote a second check, number 1302, on September 10, 2014, to Mr. Gaspard in the amount of $9, 157.95. This second check was never negotiated or cashed by Mr. Gaspard.
The audit of Attorney Breakstone’s IOLTA showed a beginning balance of $9, 158.21 on September 1, 2014, and a transfer of $9, 106.65 on September 9, 2014, leaving a balance of $50.41 in the account. The funds in the IOLTA account on September 1, 2014, were funds Attorney Breakstone had been holding and owed to the Estate of Gaspard after the estate had been probated. According to Attorney Breakstone, the second check was negotiable for one year subsequent to its issuance pursuant to the Uniform Commercial Code, and he forgot, and therefore neglected, to place the client’s funds back into his IOLTA. The bank statements presented to the auditor showed insufficient funds in the IOLTA to cover the amount due to the Estate of Gaspard from September 2014, to October 2015. In addition, Attorney Breakstone failed to consistently maintain sufficient funds in his office account to support payment of check number 1302, while it was negotiable. Attorney Breakstone represented to the court, however, that he always maintained sufficient funds in other accounts to cover the check. No other evidence was submitted to the court to either prove or contradict this statement.
On March 24, 2016, Attorney Breakstone represented to the auditor that he had deposited $9, 157.95 into his IOLTA on December 10, 2015, and those funds would remain in the account until the matter was resolved. On October 17, 2016, Mr. Gaspard returned the second check, number 1302, to Attorney Breakstone, as it had grown stale, who then issued a third check, number 1400, to Mr. Gaspard in the amount of $9, 157.95. This third check was never cashed. Hence, on June 26, 2017, Attorney David N. Feliu acknowledged receipt of a trustee account check in the amount of $9157.95 on behalf of the Estate of Marion Gaspard.
II
DISCUSSION
" A court disciplining an attorney does so not to punish the attorney, but rather to safeguard the administration of justice and to protect the public from the misconduct or unfitness of those who are members of the legal profession ... Inherent in this process is a large degree of judicial discretion ... A court is free to determine in each case, as may seem best in light of the entire record before it, whether a sanction is appropriate and, if so, what that sanction should be ... Accordingly, a court may accomplish the goal of protecting the public and the courts by imposing a sanction that deters other attorneys from engaging in similar misconduct." (Citations omitted.) Statewide Grievance Committee v. Fountain, 56 Conn.App. 375, 378, 743 A.2d 647 (2000).
The court concludes, based upon the record and evidence provided, that Attorney Breakstone removed clients funds from his IOLTA by agreement with his client in order to fulfil his additional obligation to " promptly deliver to the client ... any funds or other property that the client or third person is entitled to receive ..." pursuant to rule 1.15(e) of the Rules of Professional Conduct. Attorney Breakstone inadvertently failed to safeguard his client’s funds, however, throughout the six-month period the second check was viable pursuant to General Statutes § 42a-4-404. Notably, and regardless of the amounts contained in his IOLTA or operating account, all four checks issued by Attorney Breakstone appear to have been supported by sufficient funds when issued. Furthermore, three of the checks, including the second one at issue, were never presented for payment, and there is no direct evidence that client’s funds were intentionally misused by Attorney Breakstone.
General Statutes § 42a-4-404 provides in relevant part: " A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months after its date ..."
The mistake made by Attorney Breakstone was in not properly safeguarding client’s funds placed in his operating account by agreement for the period of time the second check was viable by law and, otherwise, not immediately replacing those client’s funds in his IOLTA. The court concludes that for his bookkeeping error, a reprimand is appropriate because this is a matter of innocent neglect and not malfeasance. Although " scienter is generally not required to establish a violation of our rules of professional responsibility, " Disciplinary Counsel v. Parnoff, 158 Conn.App. 454, 468-69, 119 A.3d 621 (2015), aff’d, 324 Conn. 505, 152 A.3d 1222 (2016), the facts of this case do not rise to the level of a more serious sanction, such as suspension.
III
CONCLUSION
For the reasons stated in this memorandum of decision, the court issues a formal reprimand for Attorney Breakstone’s violation of subsections (b), (e) and (h) of rule 1.15 of the Rules of Professional Conduct.