S.E. 2d
THE STATE OF SOUTH CAROLINA
In the Supreme Court
In the Matter of William Gary
White, III, Respondent.
Opinion No. 24697
Heard August 18, 1997 - Filed October 13, 1997
PUBLIC REPRIMAND
William Gary White, III, pro se, of Columbia.
Charles Molony Condon, Attorney General, and James G. Bogle,
Jr., Senior Assistant Attorney General, both of Columbia, for
complainant.
PER CURIAM: In this attorney discipline matter, Respondent William
Gary White, III, is charged with seven acts of misconduct. A panel hearing
on this matter was conducted July 20-21, 1995.1 The panel filed its report
January 31, 1997, finding Respondent committed misconduct in three of the
matters charged. As to the other charges raised, the panel found the record
contained no clear and convincing, evidence of misconduct and recommended
they be dismissed. Regarding the appropriate sanction, it recommended
Respondent receive a public reprimand with certain conditions (as described
herein) for those matters constituting misconduct. The Interim Review
1 We granted Respondent's motion that this hearing be made open to the
public. However, we gave the panel chairperson the authority to close any
part of the hearing when the chairperson felt it necessary to protect those
persons having the right to confidentiality under Rule 413, SCACR, and who
did not request the confidentiality provisions be lifted.
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IN THE MATTER OF WHITE
Committee2 ("IRC") adopted the panel's findings of fact and conclusions of
law. The IRC agreed with the panel's recommended sanction, suggesting as
an additional condition that Respondent be directed to contact the Law Office
Management Assistance Program ("LOMAP").
After reviewing the record in this case, we agree with those findings
and conclusions made by the panel and IRC. We further agree the
appropriate sanction is a public reprimand, with conditions as set forth in
this opinion, for Respondent's misconduct in the following matters.
I. Magaline Cathy Smith Matter
Ms. Smith hired Respondent on a contingency fee basis to pursue a civil
action.3 After suit was filed and several depositions were taken, Ms. Smith
became dissatisfied with Respondent's representation and decided to
terminate his services. She sent him a letter to this effect April 1, 1994 in
which she requested her file. She had contacted another attorney about
taking her case, but he told her he needed to review the file before making
a decision.
On April 11, 1994, Ms. Smith filed a complaint with the Board of
Commissioners on Grievances and Discipline because Respondent had not
returned her file. Over the course of the next several months, Respondent
was repeatedly asked by the Board, Ms. Smith, her newly-consulted attorney,
and other counsel representing her in a lawsuit Respondent filed against
her,4 to return the file. He refused, claiming he was asserting a retaining
lien on the file.
2 The order adopting the new Rules for Lawyer Disciplinary Enforcement
provided that any disciplinary case in which a hearing had been held by a
hearing panel prior to January 1, 1997, would continue to conclusion under
the former Rule on Disciplinary Procedure. The Interim Review Committee
was created to fulfill the functions performed by the Executive Committee
under Paragraph 14(a) of the former Rule on Disciplinary Procedure in those
cases. Citations in this opinion to Rule 413, SCACR, will be to the former
Rule on Disciplinary Procedure.
3 The record does not disclose when Respondent was hired.
4 This lawsuit did not arise from any fee dispute between Respondent and
Ms. Smith, but apparently stemmed from a separate matter between them.
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IN THE MATTER OF WHITE
A petition for contempt was ultimately filed with this Court on June
30, 1994, seeking issuance of a Rule to Show Cause and an order requiring
Respondent to return the file. The day after this petition was filed,
Respondent returned the file. Part of the file included depositions of several
witnesses. However, Respondent only provided sealed depositions. The
Attorney General's office requested copies of the depositions on August 4,
1994. It was not until October 7, 1994, two days after the contempt hearing
held before this Court, that Respondent provided deposition copies.5 We then
dismissed the contempt petition, finding Respondent had delivered the
required information. Thus, it took approximately six months for Ms. Smith
to receive her complete file. During, this time, her newly-consulted attorney
had to request her case be removed from the active trial roster because he
could not evaluate her case without the depositions.6
The panel found Respondent engaged in misconduct in his refusal to
return Ms. Smith's file. It recommended Respondent receive a public
reprimand. We agree. Under the Rules of Professional Conduct, upon
termination a lawyer shall "take steps to the extent reasonably practicable
to protect a client's interests, such as ... surrendering papers and property
to which the client is entitled . . . ." Rule 1.16(d), Rule 407, SCACR. "The
lawyer may retain papers [i.e. as security for a fee] relating to the client to
the extent permitted by other law." Id. An attorney's assertion of a
retaining lien is not per se unethical. In re Anonymous Member of the Bar,
287 S.C. 250, 335 S.E.2d 803 (1985). Rather, the attorney must consider
whether retention of a file would be unethical on a case by case basis. Id.
We elaborated on what constitutes unethical retention of a client file in In
re Anonymous:
The application of this standard requires the lawyer to evaluate
his or her interests against interests of the client and of others
who would be substantially and adversely affected by assertion
of the lien. The lawyer should take into account the financial
situation of the client, the sophistication of the client in dealing
with lawyers, whether the fee is reasonable, whether the client
clearly understood and agreed to pay the amount now owing,
5 Respondent claimed the copies could not be found in his office. He
stated after he ordered replacement copies, the original copies were found in
another attorney's office who was associated on the case.
6 This attorney ultimately decided not to take Ms. Smith's case and as of
the panel hearing, she had no representation in it.
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IN THE MATTER OF WHITE
whether imposition of the retaining lien would prejudice
important rights or interests of the client or of other parties,
whether failure to impose the lien would result in fraud or gross
imposition by the client, and whether there are less stringent
means by which the matter can be resolved or by which the
amount owing can be secured.
Id. at 252, 335 S.E.2d at 805 (emphasis added) (internal citations omitted).
See also In the Matter of Tillman, 319 S.C. 461, 462 S.E.2d 283 (1995)
(attorney bears the burden of showing justification to assert lien because
client is financially able but deliberately refuses to pay a fee clearly agreed
upon and due).7
Considering these principles, we find Respondent's retention of Ms.
Smith's file exceeded ethical boundaries. At the panel hearing, Respondent
testified he retained the file because Ms. Smith owed him $600 in deposition
costs. However, Ms. Smith testified she thought she paid all of the
deposition costs. Respondent admitted he never billed her for these or any
other costs. Furthermore, the record shows, and Respondent admits, he
never clearly specified what amount he claimed was owed by Ms. Smith
during the time he was retaining the file.8 Respondent testified at the
7 In re Anonymous Member strongly suggests that if a client has good
cause to terminate representation, the attorney, can never assert a retaining
lien on the file. In other words the right to assert a retaining lien at all only
exists where an attorney has been terminated without good cause. See 287
S.C. at 252 n.1, 335 S.E.2d at 804 n.l. We decline to address whether Ms.
Smith had good cause to terrminate Respondent's representation, for we find
that even if she did not, Respondent's retention of her file was improper.
8 On April 5, 1994, Respondent wrote Ms. Smith's newly-consulted
attorney, asking, him to let Respondent know "whether or not you will protect
my interest in the file." This other attorney responded by letter dated April
8, 1994, in which he stated, "If you will be more specific as to what your
interests are that you would like protected, I would be glad to discuss that
with Ms. Smith." Respondent answered by letter dated April 13, 1994,
claiming Ms. Smith owed "around $1500" in deposition and other costs.
Respondent wrote this attorney another letter dated May 16, 1994 offering
to "get rid of the file" if the attorney would agree not to give any documents
therein to Ms. Smith and to "protect whatever interest I have in the file."
No monetary amount was requested. This attorney again responded by letter
dated May 17, 1994, that he could not agree to accept the file on the
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IN THE MATTER OF WHITE
hearing the amount owed was not important; he just wanted a general
assurance that whatever interest he may have would be protected. We hold
this is an improper basis upon which to assert a lien. From this record it is
clear this was not a situation where the client knew how much was owed and
deliberately refused to pay it. Here, the client was never made aware of
what was owed. Thus, we find Respondent has failed to meet his burden in
this case and committed misconduct in retaining Ms. Smith's file.
II. The Harry A. Hancock Matter
Respondent and attorney Harry A. Hancock were involved in a civil
action, filed in the Court of Common Pleas for the Eleventh Judicial Circuit,
entitled Harris v. White v. Harris. The original complaint was brought
against Respondent by his former investigator, Lee Harris. Hancock
represented Harris; Respondent represented himself. Respondent then filed
a cross-complaint against Ms. Smith (see supra note 4), Harris, and Hancock.
After Respondent was found in default in the original complaint, he
wrote a letter to the presiding judge ostensibly to address the default issue.
In this letter, Respondent commented on the facts and merits of the action,
discussed, inter alia, the opposing parties' trial strategy, and made
disparaging comments about Hancock and the parties he was representing.
Respondent did not send Hancock, as the opposing party's attorney, a copy
of this letter.
The panel found Respondent committed misconduct. It recommended
Respondent receive a public reprimand. We agree. Under Rule 3.5, Rule
407, SCACR, lawyers are prohibited from communicating ex parte with a
judge unless otherwise permitted by law. Respondent has offered no legal
exception justifying his letter, nor have we found one. Rather, he admitted
the communication was ex parte arguing, he merely "overlooked" sending
Hancock a copy of the letter.
condition he not give any materials to Ms. Smith. He then stated, "On two
occasions, you have asked me to protect your interest. I still don't know
what interest you claim. . . ." The record contains no other communication
by Respondent indicating what specific monetary interest he was claiming.
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IN THE MATTER OF WHITE
Ill. The Escrow Account Matter
Pursuant to a subpoena, Respondent provided information showing he
had written numerous checks out of his escrow account for personal expenses.
Respondent admits the checks were written for personal expenses, but states
they were drawn from funds representing fees he earned. Essentially,
Respondent was not transferring fees earned from his escrow account into a
separate account before paying his expenses; he simply paid his expenses
from the escrow accounts.9
The panel found Respondent's practice of "living out of" his trust
account constituted misconduct and recommended a public reprimand.
Additionally, it recommended Respondent's escrow account be audited for a
minimum of eighteen months "to ensure he has corrected the problem." The
panel also suggested that while this monitoring was occurring, Respondent's
complete office financial records be monitored "to determine whether
Respondent is maintaining an accurate record of his earnings, deposits, and
disbursements." The IRC agreed with the panel's findings and
recommendations, but recommended as an additional condition that
Respondent be directed to contact LOMAP
We agree Respondent's handling of his escrow account constitutes
misconduct. Commingling of an attorney's personal funds with client trust
funds is clearly prohibited. Rule 1.15(a), Rule 407, SCACR ("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").
See also Comment, Rule 1.15(a), Rule 407, SCACR ("All property which is the
property of clients of third persons should be kept separate from the lawyer's
business and personal property and, if monies, in one or more trust
accounts"). We have sanctioned attorneys for this offense regardless of
whether misappropriation of client funds resulted from the commingling.
See, e.g., In the Matter of Kenyon and Lusk, Op. No. 24692 (S.C. Sup. Ct.
filed September 22, 1997) (Davis Adv. Sh. No. 27 at 17) (writing personal
checks from lawyers' escrow accounts from funds earned as fees to avoid
having to withdraw the fees and place them in business account improper);
In the Matter of Amick, 288 S.C. 486, 343 S.E.2d 623 (1986); In re Drose,
275 S.C. 414, 272 S.E.2d 173 (1980); Robert M. Wilcox, South Carolina Legal
Ethics § 3.3.2 (1992) ("Discipline is not avoided simply because the clients
suffer no pecuniary loss").
9 There has been no allegation or findings Respondent misappropriated
client funds.
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IN THE MATTER OF WHITE
CONCLUSION
We find Respondent has committed misconduct in the above matters
warranting a public reprimand with the conditions recommended by the panel
and IRC.10 Thus, we find Respondent's trust and office accounts should be
monitored for a period of eighteen months to insure he is maintaining proper
separate accounts for client and personal funds, and to insure he is keeping
accurate records of earnings, deposits, and client disbursements.11 Finally,
Respondent shall contact LOMAP within thirty days of the filing of this
opinion to make arrangements to participate in the program.
PUBLIC REPRIMAND.
10 Regarding the other matters charged in the complaints, we agree with
the panel and IRC these allegations are not supported by clear and
convincing, evidence and therefore order they be dismissed.
11 This monitoring shall be accomplished by the Chairman of the
Commission on Lawyer Conduct, or his designee, in such a manner as is
approved by the Commission.
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