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IN THE SUPREME COURT OF THE STATE OF KANSAS No. 102,925 In The Matter of KEVIN PETER SHEPHERD, Respondent.

ORIGINAL PROCEEDING IN DISCIPLINE
Original proceeding in discipline. Opinion filed November 25, 2009. Three-year suspension.

Stanton A. Hazlett, disciplinary administrator, argued the cause and was on the formal complaint for petitioner.

John J. Ambrosio, of Ambrosio & Ambrosio Chtd., of Topeka, argued the cause, and Kevin Peter Shepherd, respondent, argued the cause pro se.

Per Curiam: This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against Kevin Peter Shepherd, of Topeka, an attorney admitted to the practice of law in Kansas in 2000.

On January 7, 2009, the office of the Disciplinary Administrator filed a formal complaint against the respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). On January 23, 2009, the respondent filed an answer to the formal complaint. On April 21, 2009, a hearing was held before a panel of the Kansas Board for Discipline of Attorneys, where the respondent appeared in person and was represented by counsel. The hearing panel determined that the respondent violated KRPC 1.15(a) (2009 Kan. Ct. R. Annot. 507) (safekeeping property), KRPC 1.15(d)(1) (preserving client funds), KRPC 1.15(d)(2)(iii) (maintain records of funds), KRPC KRPC 3.3(a)(1) (2009 Kan. Ct. R. Annot. 545) (candor toward tribunal), and KRPC 8.4(c) (2009 Kan. Ct. R. Annot. 602) (conduct involving dishonesty, fraud, deceit, or misrepresentation). Upon conclusion of the hearing, the panel made the following findings of fact and conclusions of law, together with its recommendation to this court:

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"FINDINGS OF FACT

....

"Representation of Larry Bailey

"2.

In September, 2003, the Respondent agreed to represent Larry Bailey in a

criminal case pending in the Shawnee County District Court for a flat fee of $10,000. Mr. Bailey had been charged with felony manufacture of methamphetamine and other misdemeanor charges.

"3.

At the time Mr. Bailey retained the Respondent, Mr. Bailey had $3,000 in his

Shawnee County jail account. From that money, the Respondent assisted Mr. Bailey in posting two bonds, each in the amount of $1,000. The Respondent paid himself $800 of the remaining money and provided the last $200 to Mr. Bailey.

"4.

In October, 2003, the Respondent agreed to represent Mr. Bailey in all of his

pending cases. At the time, Bailey also had numerous misdemeanor cases pending in the Shawnee County District Court and several cases pending before the Topeka Municipal Court. Further, Mr. Bailey also had a limited civil action pending before the Shawnee County District Court. Later, the Respondent represented Mr. Bailey in an action for divorce. The Respondent's fee for representing Mr. Bailey in all of the cases was a flat fee of $15,000.

"5.

On December 29, 2003, the Respondent prepared Power of Attorney for Mr.

Bailey's signature. Mr. Bailey executed the document and the Respondent was granted Power of Attorney. Mr. Bailey provided the Respondent with a Power of Attorney in order for the Respondent to sell real property in behalf of Mr. Bailey.

"6.

The Respondent sold Mr. Bailey's property and the Respondent received

$22,508.10 in proceeds from the sale. The Respondent paid himself his flat fee of $15,000. The Respondent provided the remaining $7,508.10 to Mr. Bailey.

"7.

While the Respondent initially deposited the $15,000 into his trust account, it

was withdrawn from his trust account, in its entirety, shortly thereafter.

"8.

In May, 2004, Mr. Bailey asked the Respondent to handle his financial affairs.

Meaning, Mr. Bailey asked the Respondent to receive and deposit his Social Security Disability checks, his Veterans Administration checks, and other monies, pay his bills, and distribute the

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remaining funds. The Respondent agreed. The Power of Attorney that Mr. Bailey previously granted to the Respondent was still in effect and allowed the Respondent to act in this manner.

"9.

Beginning in May, 2004, the Respondent received monthly Social Security

Disability checks in the amount of $666 and monthly Veterans Administration checks in the amount of $2,345. Additionally, the Respondent received bond refunds in behalf of Mr. Bailey in the total amount of $3,000. The Respondent and Mr. Bailey agreed that the Respondent was to be paid an additional $200 per month to handle Mr. Bailey's financial affairs.

"10.

The Respondent did not open a separate account for Mr. Bailey. Rather, the

Respondent deposited some of Mr. Bailey's checks into the Respondent's trust account, some of the checks into the Respondent's business account, and some of the checks into the Respondent's personal account. The Respondent also cashed some of Mr. Bailey's checks without first depositing the proceeds into any account.

"11.

In October, 2004, Mr. Bailey was incarcerated in the Shawnee County jail.

Later, Mr. Bailey was transferred to the Lansing State Penitentiary.

"12.

While Mr. Bailey was incarcerated, Mr. Bailey contacted the Respondent and

told him that his motor home had been impounded and that the Respondent needed to retrieve it before it was sold by the city. The Respondent failed to retrieve the motor home and the city sold it at auction. Because Mr. Bailey lost his motor home through the Respondent's lack of diligence, the Respondent credited Mr. Bailey's bill $1,500.

"13.

Robert Straub, Auditor for the Disciplinary Administrator's office, investigated

the Respondent's trust account. Mr. Straub asked the Respondent for his records relating to Mr. Bailey's financial affairs. However, the Respondent failed to keep complete records of Mr. Bailey's financial affairs. The Respondent pieced together some of the information for Mr. Straub.

"14.

Eventually, Mr. Straub was able to determine that the Respondent received

$51,656.50 but only paid out $46,513.17 on behalf of Mr. Bailey. Consequently, the Respondent should continue to have $5,143.33 in his trust account or a separate account for Mr. Bailey.

"15.

While the investigation was pending, Mr. Bailey died.

"16.

Prior to the hearing on this matter, the Respondent placed $5,143.33 in his trust

account to hold in behalf of Mr. Bailey's heirs.

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"17.

The Respondent commingled Mr. Bailey's money with his own. He failed to

maintain adequate records. The Respondent never provided Mr. Bailey with an accounting of his money. The Respondent failed to promptly disburse the remaining funds to Mr. Bailey, or later, Mr. Bailey's heirs. Finally, the Respondent converted Mr. Bailey's money and used it personally.

"18.

To date, the Respondent continues to owe Mr. Bailey's heirs $5,143.33. At the

hearing on this matter, the Respondent explained that while he knows that Mr. Bailey has two daughters, he has not attempted to locate them or provide them with the monies owed because they have serious drug problems.

"Bankruptcy

"19.

On October 14, 2005, the Respondent filed for the bankruptcy protection of

Chapter 7 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Kansas. Cary Standiferd represented the Respondent and Patricia Hamilton served as the Chapter 7 bankruptcy trustee on the Respondent's bankruptcy case.

"20.

In the Voluntary Petition filed in the bankruptcy case, the Respondent answered

certain questions regarding his personal property as of the time he filed the petition. Specifically, the Respondent was asked to divulge whether he had any outstanding accounts receivable as of the date of the filing. In Schedule B, the Respondent represented that he had no outstanding accounts receivable as of the date of filing the bankruptcy petition. At the time the Respondent filed the bankruptcy petition, he was required to sign a Declaration Concerning Debtor's Schedules. The declaration provides:

'DECLARATION CONCERNING DEBTOR'S SCHEDULES

'DECLARATION UNDER PENALTY OF PERJURY BY INDIVIDUAL DEBTOR

'I declare under penalty of perjury that I have read the foregoing summary and schedules, consisting of 14 sheets, and that they are true and correct to the best of my knowledge, information, and belief.'

The Respondent signed the declaration, electronically, on October 14, 2005.

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"21.

The first meeting of creditors was scheduled for November 17, 2005. The

Respondent failed to appear because he was in a jury trial. As a result, the Chapter 7[trustee] rescheduled the meeting for December 13, 2005.

"22.

On December 13, 2005, the Chapter 7 [trustee] held the first meeting of

creditors. The Respondent appeared with Mr. Standiferd. During the meeting, the Respondent testified under oath as follows:

'MS. HAMILTON: The schedules and Statement of Financial Affairs that have been filed on your behalf, did you sign those documents?

'MR. SHEPHERD: Yes, I did.

'MS. HAMILTON: And before you signed them had you read them?

'MR. SHEPHERD: Yes, I did.

'MS. HAMILTON: Is the information contained in the documents based on your own knowledge?

'MR. SHEPHERD: Yes.

'MS. HAMILTON: To the best of your knowledge, did you list all of your property?

'MR. SHEPHERD: Yes.

'MS. HAMILTON: And did you list all of your creditors?

'MR. SHEPHERD: Yes.

'MS. HAMILTON: And can you think of any changes or corrections that should be made to any of the documents?

'MR. STANDIFERD: We do have one change.

'MR. SHEPHERD: Adding a creditor.

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'MS. HAMILTON: All right. Aside from the addition of the creditor, can you think of any other changes or corrections?

'MR. SHEPHERD: No, ma'am.'

Later, in the first meeting of creditors, the following exchange occurred:

'MS. HAMILTON: All right. Let's go down the list. Now, on the date that you filed you don't have any accounts listed. Now, I presume that you bill on a monthly basis?

'MR. SHEPHERD: Yeah, but I do a lot of criminal work, and get my fees a lot of that is up front.

'MS. HAMILTON: Okay.

'MR. SHEPHERD: So, they pay a flat fee up front, and it takes them up until a certain point and then they pay another flat fee.

'MS. HAMILTON: Okay.

'MR. SHEPHERD: Some people are on payments.

'MS. HAMILTON: Okay. Well, that's what I need to know is those that are on payments and on the date you filed, I need

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