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In Re Cutrone



Disciplinary proceeding.


Rehearing denied June 2, 1986.

On November 12, 1982, the Administrator of the Attorney Registration and Disciplinary Commission filed a one-count complaint against respondent, James John Cutrone, who was licensed to practice law on November 15, 1971. The complaint charged respondent with wrongfully commingling and converting a client's funds, thereby breaching his fiduciary duties to his clients, which conduct is unethical, unprofessional and tends to bring the legal profession into disrepute, in violation of Rules 9-102(a) and (b) of the Code of Professional Responsibility (Code) (87 Ill.2d Rules 9-102(a), (b)); failure to properly maintain records, to render appropriate accountings, and to pay the client those funds which the client was entitled to receive, in violation of Rule 9-102(c) of the Code (87 Ill.2d R. 9-102(c)); engaging in conduct involving fraud, deceit, and misrepresentation in violation of Rule 1-102(a)(4) of the Code (87 Ill.2d R. 1-102(a)(4)); and prejudicing or damaging clients during the course of a professional relationship in violation of Rule 7-101(a)(3) of the Code (87 Ill.2d R. 7-101(a)(3)). Following a hearing, the panel of the Hearing Board recommended that respondent be disbarred from the practice of law. Respondent filed exceptions with the Review Board, which adopted the Hearing Board report and affirmed the recommendation that respondent be disbarred. The report was filed in this court, and we allowed respondent's motion that the exceptions filed to the Hearing Board report stand as exceptions to the report of the Review Board. 94 Ill.2d R. 753(e)(5).

The record shows that on or about July 10, 1980, Sandra Korb, who respondent had previously represented, was arrested in Venice, California, pursuant to an Illinois arrest warrant. She had fled the State of Illinois after the appellate court had affirmed her conviction for conspiracy to commit theft and forgery. Respondent had represented Ms. Korb before the appellate court in that matter. Following her arrest for "bail jumping" (Ill. Rev. Stat. 1977, ch. 38, par. 32-10) Ms. Korb contacted a friend, Fred Bresler, and her mother, Louise Korb, instructing them to contact respondent concerning her release from jail in California.

At respondent's request, Louise Korb, Sandra's mother, who lived in Kansas, wired $25,000 to respondent's bank in Chicago. Several days later Bresler delivered to respondent a check in the same amount. The funds received from Louise Korb, and Bresler's check, were deposited into respondent's escrow account, which was used to pay both office and personal expenses. Both Mrs. Korb and Bresler testified that they gave respondent the money because they were told that to effect Sandra's release would require the posting of bail in the amount of $5,000 in cash, none of which was refundable, or $50,000 in cash, all of which would be refunded. In late August 1980, respondent procured the services of the Lewis Bonding Company to act as surety for Sandra Korb's bail bond to secure her release from jail. The bonding company required a security deposit of $25,000, and on approximately August 26, 1980, respondent forwarded a $25,000 certified check to the bonding company. On August 27, 1980, Sandra Korb was released from custody in California.

On approximately September 23, 1980, respondent paid a nonrefundable fee of $7,000 to the bonding company for its services. On or about October 23, 1980, the $25,000 check posted as security was returned to respondent by the bonding company and the proceeds were deposited into respondent's escrow account. Respondent sent $2,257.26 to a California lawyer allegedly for the purposes of paying rent owed for Sandra's apartment, for packing and storage of personal property, and otherwise winding up her affairs.

The testimony is conflicting concerning what respondent was to do with the $50,000. Louise Korb, Sandra Korb, and Fred Bresler testified that the money was given to respondent with the understanding that bail would be posted in the amount of $50,000, and upon discharge of the bail the full amount would be refunded. Louise Korb and Bresler testified that they selected this plan in order to avoid the $5,000 fee incurred if an alternative method were used. Bresler and Mrs. Korb testified that at no time did they authorize respondent to employ a bonding company. Respondent testified that, although he had no conversation with Mrs. Korb concerning the matter, about two days after respondent received his check, Bresler called him on the telephone complaining because Sandra had not been released from custody. He explained to Bresler that the delay was caused by the time necessary to clear the check which Bresler had given him, but that to expedite the matter he could employ a bonding company. He stated that Bresler told him to do so. Bresler does not deny that he authorized respondent to pay the sum of $2,257.26 to the California lawyer, but denies that he at any time authorized an expenditure for a bond fee. Sandra, her mother, and Bresler all testified that they did not at any time discuss fees with respondent for his services, either in arranging bail in California or in representing her in the criminal proceeding involving the bail-jumping charge. Respondent testified that he told Bresler that his fee for representing Sandra was $25,000, and upon completion of the matters he would account to Bresler and Mrs. Korb for any refund to which they were entitled from the money which they had given him. There was also conflicting testimony concerning efforts of Sandra and Bresler to reach respondent, and respondent's testimony that Bresler, on a number of occasions, failed to keep appointments with him. The record shows, too, that respondent represented Sandra in the circuit court, that she pleaded guilty to the charge of bail-jumping, and was sentenced to one year in the penitentiary to be served concurrently with the previously imposed sentence for conspiracy. On April 12, 1984, approximately six days after the final hearing before the Hearing Board, and after suit had been filed by Bresler and Mrs. Korb against respondent in the circuit court of Cook County, respondent paid Louise Korb and Fred Bresler the sum of $7,946.37 each, and delivered to each of them a promissory note in the amount of $6,000.

The Hearing Board found that there was no agreement on the part of either Mrs. Louise Korb, Sandra's mother, or Bresler to pay respondent a fee and that the $50,000 which he received was "bond money." Although not stated in that precise manner, the Hearing Board apparently concluded that because respondent had represented Sandra on a previous occasion and been paid for his services, that he entered into the arrangement to which Mrs. Korb and Bresler testified without discussing his fee, intending to obtain his fee from Sandra. The Hearing Board found, too, that the sums retained by respondent after the settlement with Mrs. Korb and Bresler were greatly in excess of what would be reasonable payment for the services rendered in arranging bail for Sandra in California and representing her in the circuit court of Cook County.

The Hearing Board found that respondent had received $25,000 from Louise Korb and that she was entitled to a refund in that amount as of October 22, 1980; that respondent commingled those funds and converted them to his own use; that despite repeated efforts on her part to obtain a refund, she has not received an accounting or been paid any money; that Bresler had given respondent $25,000 and was entitled to a refund of that sum less the sum of $2,257.26 paid to a California lawyer; that respondent failed to account to either Mrs. Korb or Bresler; and that he converted the funds to his own use. The panel concluded:

"`Conversion' is a nice word for `theft,' and, purely and simply, Respondent stole the money in question.

We conclude that Respondent failed to preserve the identity of a client's funds, that he commingled client's funds with his own and that he converted funds of Mother [Louise Korb] and Friend [Bresler] to his own use. This conduct was unethical, unprofessional and tends to bring the legal profession into disrepute. Respondent failed to maintain records, failed to render accounts, failed to return funds to Mother and Friend paid to him for bail bond funds and, further, engaged in conduct involving fraud, deceit and misrepresentation. This misconduct warrants imposition of the severest of discipline."

The Hearing Board recommended disbarrment, and the recommendation was affirmed by the Review Board.

Respondent contends that the findings and recommendation of the Hearing Board are against the manifest weight of the evidence. Citing In re Enstrom (1984), 104 Ill.2d 410, he argues that although the court may give deference to the Hearing Board's findings, it is not required to accept them when they are not established by clear and convincing evidence. He argues that the Board based its findings of fact on the testimony of the Administrator's witnesses without regard to their credibility and the contradictions which appear in their testimony.

We note that in its report, as a preface to "Conclusions of Fact and Law," the Hearing Board panel stated that when testimony of witnesses is in direct conflict, the trier of fact must consider their credibility. The panel stated further that in judging the credibility of the witnesses and in making its decision concerning the weight to be given to the testimony of each of them, it had the opportunity to observe, and took into account, the witnesses, their manner of testifying, their interests, bias or prejudice, and the reasonableness of their testimony considered in light of all of the evidence. The ...

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