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In Re Cohen



Disciplinary proceeding.


The amended complaint in this disciplinary proceeding charged respondent, Ray Jeffrey Cohen, who was licensed to practice law in 1965, with commingling and converting funds belonging to a client as well as funds which were entrusted to him by clients for the purpose of paying bills for medical services. The relevant facts were undisputed.

With respect to the charge of converting funds belonging to a client, the facts were that, after settling a personal injury claim for the client, the respondent on June 17, 1977, deposited the $7,000 insurance company draft in his business account at the Water Tower Bank. On that day he also drew and delivered to his client a post-dated check drawn on his Water Tower Bank account in the amount of $4,027.92, representing the settlement amount payable to the client less attorney fees and expenses. This check, dated June 24, 1977, was deposited by the client on the day it was dated in another bank. It reached the Water Tower Bank on June 27 but was returned by that bank the same day to the client's bank marked "NSF" (not sufficient funds).

After four months the client, who had not yet received payment, filed a complaint with the Attorney Registration and Disciplinary Commission, and approximately two weeks later, the respondent gave his client a cashier's check in the amount due to him. From the time the NSF check was drawn until restitution was made to the client, the respondent's account at the Water Tower Bank was overdrawn on several occasions; the only days on which the account showed a balance sufficient to cover the check given the client were between June 30 and July 4, 1977, and between July 6 and July 10, 1977. Although the Water Tower Bank credited the respondent's account with the $7,000 deposit on the date it was made, June 17, 1977, by June 24, 1977, there were no longer sufficient funds in the account to cover that check. The highest balance in the account during August and September 1977 was $1,061 on September 16, 17 and 18.

The second charge against the respondent related to withholding of payments which were owing to a physician for his medical services. The facts were that the respondent withheld payments from disbursements to 16 clients in personal injury suit settlements in amounts sufficient to pay the fees of the treating physician, Dr. Janin J. Raoul. These sums were withheld for a period of more than two years, although the respondent had personally guaranteed the payment of the fees in order to obtain medical reports from Dr. Raoul. During that period, the withheld sums amounting to $2,175 were deposited in the respondent's general business accounts, and these accounts were overdrawn on various occasions.

The third charge was similar to that with respect to failing to pay Dr. Raoul, but involved another physician, Dr. Sidney Alpert, and the failure to pay $2,125 in medical bills owed by 12 of the respondent's clients.

The respondent did not make complete restitution to Dr. Raoul until 10 months after the doctor filed a complaint with the disciplinary commission and to Dr. Alpert until seven months after Dr. Alpert filed a similar complaint.

The respondent acknowledged that he failed to maintain a fiduciary account. His explanation regarding the NSF check was that he routinely sent his bank statements to his accountant without examining them and was therefore unaware that the check he gave his client was dishonored until the client filed his complaint with the disciplinary commission. Had he known earlier that the client had not received the money to which he was entitled, he would have made the check good. He testified that the client did not contact him about the NSF check and, as soon as he learned from the disciplinary commission that the client had not received payment, he delivered a cashier's check in the full amount he owed the client. The client died prior to the taking of evidence in this case, and there is no evidence in the record of any communications between the client and the respondent during the period between the time the check was dishonored and the client filed his complaint with the disciplinary commission on October 26, 1977. The respondent denied that there were any such communications or that he had any knowledge prior to correspondence from the Commission that the check had been dishonored. The respondent testified that although he kept a running balance on his checking account in his checkbook, he never reconciled his bank account but instead left the matter of reconciliation entirely to his accountant.

The respondent blamed his failure to pay Dr. Raoul and Dr. Alpert on his poor bookkeeping practices; he conceded, however, that there were instances where he had withheld funds from his distribution to his clients in order to pay physician's fees and then neglected to pay them. Although both doctors eventually sent him a list of the fees they claimed they were owed, the respondent attributed his delay in paying these amounts to difficulties he encountered in verifying them because of problems in locating check stubs, cancelled checks and old files and also to marital difficulties which resulted in a prolonged separation from his family attended by severe emotional distress. He explained that because of his depression over his marital situation he found it hard to concentrate on activities which required a great deal of effort, such as locating and examining old files.

The Hearing Board's view was that the incidents of commingling and conversion were neither inadvertent nor "technical," as the respondent claimed. Rather, it concluded that the respondent's conduct resulted from a dishonest motive, finding as a matter of fact that the respondent engaged in dishonesty, fraud and misrepresentation.

The Hearing Board recommended a one-year suspension, and the Review Board recommended a three-year suspension. The Administrator complains in this court that the sanction recommended is too lenient and that the respondent should be disbarred. The respondent on the other hand argues that based on precedent, the facts presented by the Administrator, the commendable past conduct of the respondent and mitigating circumstances, no discipline is warranted, but if he is to be disciplined nothing more severe than censure is appropriate.

An attorney is accountable for funds coming into his possession which belong to a client. Countenancing the mishandling of client's funds by an attorney because of inattention to them and to the handling of the attorney's own bank accounts unacceptably diminishes the importance of this serious responsibility. (In re Grant (1982), 89 Ill.2d 247, 254.) Had the respondent maintained a trust account, as he was required to do, instead of commingling his own funds with those of his client, and had the trust account been responsibly supervised, it would have contained adequate funds to cover the check the respondent gave to his client, and the funds withheld to pay the physicians would not have been used for the respondent's personal purposes. This court warned in In re Clayter (1980), 78 Ill.2d 276, 281, and in In re Grant (1982),89 Ill.2d 247, 253, that commingling often results in wrongful conversion, and the difficulty in which the respondent finds himself is striking proof of the accuracy of that observation. This is why this court has repeatedly announced that commingling is an unacceptable practice regardless of why it occurred. In re Grant (1982), 89 Ill.2d 247, 253.

It is clear that the respondent must be sanctioned for his misconduct in failing to maintain a trust account, commingling funds and conversion of funds belonging to clients. The severity of the sanction depends on whether the conclusion of the Hearing Board that the respondent was guilty of dishonest motives is based on clear and convincing evidence or whether, as the respondent claims, his problems are attributable only to neglect, sloppiness, inadvertence, and inattention. In re McLennon (1982), 93 Ill.2d 215, 221; In re Clayter (1980), 78 Ill.2d 276, 283. With respect to the NSF check, it is clear that the respondent used his client's funds for four months. We are hampered, however, in searching for support for the Hearing Board's finding by the unavailability of the client. Were the client available to testify, perhaps the record would be far different than it is. On the basis of the record as it exists, however, and on which we must rely, there is no evidence that the client complained to the respondent or that the respondent knew his check had been dishonored. The respondent acted promptly after being notified by the disciplinary commission that the client had complained to it to restore the client's funds by delivering a cashier's check to him. We cannot assume that the client notified the respondent of the NSF check when no such evidence is in the record, even though it is unlikely that the client did not complain to the respondent or at least try to reach him to complain. Moreover, had the client redeposited the check on the date it was returned to his bank, it is likely that it would have reached the Water Tower Bank at a time when the respondent's ...

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