S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court,
In the Matter of George
K. Lyall, Respondent.
Opinion No. 24700
Submitted Septembr 4, 1997 - Filed October 13, 1997
DEFINITE SUSPENSION
Wilburn Brewer, Jr., of Columbia, for respondent.
A. Camden Lewis, Special Disciplinary Counsel.
PER CURIAM: In this attorney disciplinary matter, respondent
admits he has committed misconduct and consents to a suspension of up to nine
months. We accept respondent's admissions and suspend him from the practice
of law for nine months.
Padgett Trust Matter
Respondent and his wife served as co-trustees of a trust established
on behalf of their children by respondent's father-in-law, Christian D. Padgett.
In the past several years, Mr. Padgett would forward appropriate documents to
respondent and his wife, request their endorsement as co-trustees, and have
them return the documents to Mr. Padgett for filing, recording, deposit, or
negotiation. Included in the documents were checks made payable to respondent
and his wife as co-trustees.
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In January 1995, respondent, in his capacity as co-trustee, received
a check in the amount of $23,000 from Mr. Padgett to invest in stock for the
children's trust. Instead of investing the funds as Mr. Padgett intended,
respondent converted the money to his own use to pay South Carolina state
taxes owed by him and his wife. Respondent has made cash restitution to the
children's trust.
In November 1996, respondent received a check representing the
proceeds of the sale of certain real estate by Mr. Padgett on behalf of the
children's trust. The check was made payable to respondent and his wife, in
their capacity as co-trustees, in the amount of $26,057.01. Mr. Padgett intended
for respondent and his wife to endorse the check, then return it to him for
deposit into the children's trust.
Instead, respondent endorsed the check and endorsed his wife's
signature without her prior consent or knowledge. He personally took the check
to a bank and negotiated it for two cashier's checks. Respondent negotiated one
cashier's check in the amount of $23,566.14 to Richland County Treasurer to pay
1994 delinquent taxes on three properties owned by the 1325 Partnership, of
which respondent was a partner. Respondent negotiated the second cashier's
check in the amount of $2,490.87, payable to himself, and used the funds for his
own purposes.
Respondent wrote a letter to Mr. Padgett in February 1997,
apologizing for his conduct but not revealing what he had done with the
$26,057.01 check. In March 1997, five months after demands were made of him
to explain the missing check, respondent sent Mr. Padgett an "assignment and
bill of sale" of his partnership interest in the 1325 Partnership. Respondent
stated in a letter that he was resigning as co-trustee and transferring his
partnership interest to the children's trust in exchange for the missing check.
The 1325 Partnership agreement provides that any transfer or assignment of a
partner's interest must be approved by the remaining partners. The other
partners had no knowledge of respondent's assignment of his partnership
interest. Respondent admits creating the assignment and bill of sale in early
1997 and backdating it to November 1996. Respondent has made cash
restitution to the children's trust.
1325 Partnership Matter
Respondent was the managing partner of the 1325 Partnership,
formed in 1986 to invest in real estate. As managing partner, respondent was
in charge of all records and the checking account.
An examination by the state Attorney General's Office of the
partnership's financial records from 1992 to 1997 revealed that respondent had
withdrawn, in about forty-five check transactions not authorized by the
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partnership, a total of $47,587.42 for his personal use. The transactions began
in late 1992 and continued through 1996. In an effort to make up for the
withdrawals, respondent during the same period deposited into the partnership
account or paid on the partnership's behalf the total sum of $36,656.43.
Respondent has agreed to make full restitution to the partnership.
Hathcock v. Navistar Matter
Michael Hathcock and his wife brought separate civil actions
against Navistar International Transportation Corp. ("Navistar") after Mr.
Hathcock was badly burned in an accident in which the truck he was driving
burst into flames after a collision. Hathcock alleged that Navistar,
manufacturer of the truck, had negligently designed the fuel system, making it
defective and unreasonably dangerous. Navistar retained respondent as local
counsel in 1992.
Hathcock's counsel served detailed interrogatories and requests for
production on respondent as local counsel for Navistar. In the preamble of the
discovery requests, Hathcock's counsel defined certain terms specifically,
including the term "fuel system." In an interrogatory, Hathcock's counsel asked
Navistar to provide certain information on prior lawsuits regarding the fuel
system in Hathcock's truck or any similar fuel systems in other vehicles
manufactured by Navistar.
In response, respondent signed answers listing eighteen prior
lawsuits, but unilaterally limited the answers to only those suits involving post-
collision fuel-fed fires and allegations involving the fuel system of the particular
type of truck Hathcock was driving. Hathcock's counsel asked respondent to
supplement Navistar's responses, and again informed respondent that the
interrogatories were not limited to the particular type of truck Hathcock was
driving. Respondent again denied knowledge of any additional suits in
supplemental responses.
Hathcock's counsel obtained information from sources other than
Navistar about three past lawsuits filed against Navistar by plaintiffs named
Podvin, Ryan, and Shilts. Respondent, in consultation with Navistar, had not
listed those suits in answers to interrogatories or provided any information
about them. In August 1993, Hathcock's counsel informed respondent he had
located two of the prior plaintiffs and intended to call them at trial.
Two weeks later, respondent notified Hathcock's counsel that he had
documents from the Podvin and Shilts cases, and produced hundreds of
documents from those cases. Respondent admits the three suits involved in-cab
fires in Navistar trucks with essentially the same type of fuel system as the
truck Hathcock was driving. The Shilts case involved the same type of truck as
the one Hathcock was driving; the other two cases involved a medium-duty truck
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IN THE MATTER OF LYALL
and a pickup truck.
In other interrogatories, Hathcock's counsel asked respondent to
identify all employees who helped answer the interrogatories and all employees
who would have information about prior claims. Counsel also asked for
background information about the employees. In response, respondent objected
to identifying those individuals and suggested Hathcock's counsel depose one
Navistar official and then determine whether additional information was needed.
In an internal letter from respondent to Navistar concerning this discovery
request, respondent stated,
[Ilt is my understanding we would rather not produce
the information currently available. It is my belief [the
federal court] would require us to produce some
background information if the issue were brought before
[it]; therefore, we need to consider whether we should
voluntarily produce a document of our choice or face the
risk of producing a document we would rather not
produce.
Respondent admits there is an appearance of impropriety and
misconduct in the discovery process in Hathcock's case, and respondent
acknowledges he is responsible for that appearance.
Conclusion
In the Padgett Trust and 1325 Partnership matters, respondent
admits he converted money belonging to another to his own use, concealed and
refused to explain what he had done with the money, improperly created and
backdated an assignment and bill of sale of his interest in a partnership, and
endorsed his wife's signature on a check without her prior consent. We conclude
respondent engaged in conduct involving a criminal act that reflects adversely
upon his honesty, trustworthiness, and fitness as a lawyer. He engaged in
conduct involving moral turpitude. He acted in a dishonest and fraudulent
manner, and engaged in conduct tending to pollute the administration of justice
or to bring the courts and legal profession into disrepute. By his actions,
respondent violated Rules 8.4(b), (c), (d), and (e) of the Rules of Professional
Conduct contained in Rule 407, SCACR, and Rule 7(a)(5) of the Rules for
Lawyer Disciplinary Enforcement contained in Rule 413, SCACR.
Finally, a lawyer has an obligation to not unlawfully obstruct
another party's access to evidence, and to make reasonably diligent efforts to
comply with proper discovery requests. Rules 3.4(a) and (d) of Rule 407,
SCACR. Respondent's actions in the Hathcock matter clearly create the
appearance that respondent has violated those provisions.
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We find that respondent's conduct warrants a definite suspension of
nine (9) months from the practice of law. Within fifteen (15) days of the date of
this opinion, respondent shall file an affidavit with the Clerk of Court showing
he has complied with Rule 30 of Rule 413, SCACR. In addition to all other
requirements respondent must meet to be reinstated under Rule 413, SCACR, no
petition for reinstatement shall be accepted until respondent has filed proof that
he has made full restitution to the 1325 Partnership as he has agreed to do.
DEFINITE SUSPENSION
Finney, C.J., not participating
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