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STATE OF OKLAHOMA OKLAHOMA BAR ASSOCIATION v. PHILIP KLEINSMITH – Medical Newspaper

Supreme Court of Oklahoma.

STATE OF OKLAHOMA ex rel., OKLAHOMA BAR ASSOCIATION, Complainant, v. PHILIP M. KLEINSMITH, Respondent.

Case Number: SCBD-6585

    Decided: January 17, 2018


Katherine M. Ogden, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, Oklahoma, for Complainant.

RESPONDENT DISBARRED AND NAME STRICKEN FROM ROLL OF ATTORNEYS EFFECTIVE FROM THE DATE OF THIS OPINION

¶1 Respondent Philip M. Kleinsmith (Respondent), OBA No. 13857, is an lawyer licensed to observe legislation within the State of Oklahoma and was admitted to the Oklahoma Bar Association on October 12, 1989. This disciplinary matter comes earlier than the Court pursuant to Rule 7.7 of the Rules Governing Disciplinary Proceedings (RGDP), 5 O.S. Supp. 2015, ch. 1, app. 1-A 1 , primarily based upon an opinion of the Supreme Court of the State of Colorado affirming Respondent’s disbarment from the observe of legislation.

¶2 The Supreme Court of Colorado decided that Respondent violated Colorado Rules of Professional Conduct (Colo. RPC) eight.four(c) and 1.15A (in addition to the previous Colo. RPC 1.15(b)), by committing realizing conversion / misappropriation.2 The courtroom decided Respondent knowingly misappropriated roughly $57,338. The quantity in query was billed to Respondent’s agency Kleinsmith & Associates, PC (through which he was a solo practitioner) by First American Title Company, LLC and First American Title of Montana, Inc. (collectively, First American) for title providers in reference to Respondent’s illustration of a shopper, U.S. Bank. Respondent obtained the $57,338 from his shopper U.S. Bank by billing for “title commitment” however proceeded to make use of the funds U.S. Bank gave him for his agency’s unrelated working bills moderately than paying First American the quantity it was owed. First American subsequently filed a lawsuit and obtained a judgment for $55,782 towards Respondent’s agency, which it has been largely unable to gather.three

¶three After the instigation of disciplinary proceedings, respondent was disbarred by the Hearing Board and ordered to pay restitution to First American. Respondent subsequently appealed. The Supreme Court of Colorado rejected Respondent’s arguments that he didn’t knowingly convert funds from U.S. Bank as a result of underneath the Colo. RPC these funds had been the property of his agency, not First American. The courtroom additionally rejected Respondent’s constitutional claims regarding his rights to due course of and equal safety underneath the legislation.

¶four The opinion of the Supreme Court of the State of Colorado, submitted to this Court by the Complainant pursuant to Rule 7.7(b), RGDP, constitutes the cost and is prima facie proof that Respondent dedicated the acts described therein. Rule 7.7(b), RGDP, 5 O.S. Supp. 2015, ch. 1, app. 1-A; State ex rel. Okla. Bar Assoc. v. Wintory, 2015 OK 25, ¶16, 350 P.3d 131; State ex rel. Okla. Bar Ass’n v. Rymer, 2008 OK 50, ¶four, 187 P.3d 725; State ex rel. Okla. Bar Ass’n v. Henderson, 1999 OK 29, ¶four, 977 P.second 1096. The burden is positioned on Respondent to indicate that the findings forming the idea of the Colorado disbarment weren’t supported by the proof or that the findings usually are not adequate grounds for self-discipline in Oklahoma. Rymer, 2008 OK 50 at ¶four; Henderson, 1999 OK 29 at ¶four. In an order filed on November 14, 2017, this Court directed Respondent to indicate trigger in writing by December 5, 2017, why a closing order of self-discipline shouldn’t be imposed. The November 14, 2017, order additionally gave Respondent the chance to submit a quick or proof in mitigation in addition to a transcript to problem the Colorado findings. Respondent has failed to reply in any capability.four

¶5 This trigger isn’t the primary time Respondent has discovered himself topic to reciprocal disciplinary proceedings earlier than this Court pursuant to Rule 7.7, RGDP. In State ex rel. Okla. Bar Ass’n v. Kleinsmith, this Court publicly censured Respondent primarily based upon self-discipline in Arizona for negligently submitting improper arbitration certificates and for failing to inform the General Counsel of his self-discipline in Arizona as required by Rule 7.7, RGDP. 2013 OK 16, ¶6, 297 P.3d 1248.

¶6 The Supreme Court of Oklahoma possesses a nondelegable, constitutional accountability to manage the observe of legislation and the licensure, ethics, and self-discipline of authorized practitioners on this state. State ex rel. Okla. Bar Ass’n v. Wintory, 2015 OK 25, ¶14, 350 P.3d 131; State ex rel. Okla. Bar Ass’n v. Wilcox, 2014 OK 1, ¶2, 318 P.3d 1114; State ex rel. Okla. Bar Ass’n v. McArthur, 2013 OK 73, ¶four, 318 P.3d 1095. In disciplinary proceedings, this Court acts as a licensing courtroom within the train of our unique authentic jurisdiction. Wintory, 2015 OK 25 at ¶14; Wilcox, 2014 OK 1 at ¶2; State ex rel. Okla. Bar Ass’n v. Garrett, 2005 OK 91, ¶three, 127 P.3d 600.

¶7 In a reciprocal disciplinary continuing, it’s inside this Court’s discretion to go to the identical self-discipline as that imposed within the different jurisdiction or one in all higher or lesser severity. Kleinsmith, 2013 OK 16 at ¶four; State ex rel. Okla. Bar Ass’n v. Patterson, 2001 OK 51, ¶33, 28 P.3d 551. We additionally try to impose a quantum of self-discipline upon an offending lawyer that’s in line with that imposed upon different attorneys for comparable acts misconduct. State ex rel. Okla. Bar Ass’n v. Hyde, 2017 OK 59, ¶30, 397 P.3d 1286; Kleinsmith, 2013 OK 16 at ¶four. Complainant asserts that the report is full and adequate for this Court’s de novo assessment, and additional asserts that disbarment is warranted underneath these circumstances. We agree.

¶eight This Court has beforehand famous that the model of Colo. RPC eight.four(c) in impact on the time of Respondent’s misconduct 5 is an identical to Rule eight.four(c) of the Oklahoma Rules of Professional Conduct (ORPC), 5 O.S. 2011, ch. 1, app. three-A.6 Rymer, 2008 OK 50 at ¶5. Colo. RPC 1.15A(a)7 can be considerably much like Rule 1.15(a), ORPC, 5 O.S. 2011, ch. 1, app. three-A.eight

¶9 Respondent’s disbarment for realizing misappropriation egregious sufficient to violate Colo. RPC eight.four(c) is in line with the self-discipline imposed by this Court in comparable instances involving misappropriation of funds. This Court acknowledges three ranges of culpability when evaluating the mishandling of funds: 1) commingling; 2) easy conversion; and three) misappropriation, i.e., theft by conversion or in any other case. State ex rel. Okla. Bar Ass’n v. Parsons, 2002 OK 72, ¶12, 57 P.3d 865; State ex rel. Okla. Bar Ass’n v. Taylor, 2000 OK 35, ¶17, four P.3d 1242. These ranges of culpability apply no matter whether or not the funds in query had been these of a shopper or these of a 3rd get together. Parsons, 2002 OK 72 at ¶¶11-12; Taylor, 2000 OK 35 at ¶¶16-18; See Rule 1.15(a), ORPC, 5 O.S. 2011, ch. 1, app. three-A.

¶10 Concerning, misappropriation, this Court famous in State ex rel. Okla. Bar Ass’n v. Parsons:

The third, and most critical infraction, happens when funds are misappropriated. This occurs when an lawyer purposefully deprives a shopper or third particular person of cash by the use of deceit and fraud. See State ex rel. Oklahoma Bar Ass’n v. Johnston, 1993 OK 91, 863 P.second 1136. For an lawyer to interact in conduct involving dishonesty and deceit is skilled misconduct. Rule eight.four(c), ORPC.

2002 OK 71 at ¶14.

A lawyer discovered responsible of deliberately inflicting grave financial hurt in mishandling purchasers’ funds is deemed to have dedicated this most grievous diploma of offense. Taylor, 2000 OK 35 at ¶17 n.25; State ex rel. Okla. Bar Ass’n v. Johnston, 1993 OK 91, ¶25, 863 P.second 1136.

¶11 This Court has beforehand held that conversion of funds by a Colorado lawyer in violation of Colo. RPC eight.four deserves disbarment in Oklahoma. In State ex rel. Okla. Bar Ass’n v. Rymer, this Court decided disbarment was the suitable self-discipline for an lawyer who was disbarred in Colorado for knowingly changing / misappropriating $268,247.95 in belief funds, an act this Court deemed in violation of Rule eight.four(c), ORPC. 2008 OK 50 at ¶5. See People v. Rymer, 180 P.3d 443, 447 (Colo. 2007). We defined:

Rule eight.four(c) of the Oklahoma Rules of Professional Conduct, 5 O.S.2001 & Supp. 2008, ch. 1, app. three-A, is identical as Rule eight.four(c) of the Colorado Rules of Professional Conduct, the rule which served as the idea for disbarment there. The misconduct for which Rymer was disbarred by the Colorado Supreme Court, changing belief funds, constitutes a violation of Rule eight.four(c) of the Oklahoma Rules of Professional Conduct. Disbarment is in line with self-discipline imposed by this Court in comparable instances. State ex rel. Okla. Bar Ass’n v. Arnold, 2003 OK 31, 72 P.3d 10 (disbarment correct self-discipline for changing cash entrusted to a lawyer by a shopper).

Rymer, 2008 OK 50 at ¶5.

¶12 The report earlier than this Court is evident that Respondent engaged in deceitful billing practices that resulted in his shopper paying $57,338 for First American’s providers. That quantity was then knowingly misappropriated by Respondent and as a substitute used for different functions, inflicting substantial hurt to First American. The conduct for which Respondent was disbarred in Colorado warrants disbarment in Oklahoma, given Respondent’s failure to contest the Complainant’s suggestion, the shortage of mitigating circumstances, and Respondent’s prior disciplinary historical past. It is hereby ordered that Respondent Philip M. Kleinsmith be disbarred and his title stricken from the roll of attorneys. As Complainant didn’t file an software to get better the prices of this disciplinary continuing, no prices are assessed.

RESPONDENT DISBARRED AND NAME STRICKEN FROM ROLL OF ATTORNEYS EFFECTIVE FROM THE DATE OF THIS OPINION

FOOTNOTES

1.   Rule 7.7, RGDP, 5 O.S. Supp. 2015, ch. 1, app. 1-A, gives:(a) It is the responsibility of a lawyer licensed in Oklahoma to inform the General Counsel at any time when self-discipline for lawyer misconduct has been imposed upon him/her in one other jurisdiction, inside twenty (20) days of the ultimate order of self-discipline, and failure to report shall itself be grounds for self-discipline.(b) When a lawyer has been adjudged responsible of misconduct in a disciplinary continuing, besides contempt proceedings, by the very best courtroom of one other State or by a Federal Court, the General Counsel of the Oklahoma Bar Association shall trigger to be transmitted to the Chief Justice a licensed copy of such adjudication inside 5 (5) days of receiving such paperwork. The Chief Justice shall direct the lawyer to seem earlier than the Supreme Court at a time sure, not lower than ten (10) days after mailing of discover, and present trigger, if any he/she has, why he/she shouldn’t be disciplined. The paperwork shall represent the cost and shall be prima facie proof the lawyer dedicated the acts therein described. The lawyer could submit a licensed copy of transcript of the proof taken within the trial tribunal of the opposite jurisdiction to assist his/her declare that the discovering therein was not supported by the proof or that it doesn’t furnish adequate grounds for self-discipline in Oklahoma. The lawyer may additionally submit, within the curiosity of explaining his/her conduct or by the use of mitigating the self-discipline which can be imposed upon him/her, a quick and/or any proof tending to mitigate the severity of self-discipline. The General Counsel could reply by submission of a quick and/or any proof supporting a suggestion of self-discipline.

2.   The opinion of the Supreme Court of Colorado makes use of each “knowing conversion” and “knowing misappropriation” to discuss with Respondent’s misconduct. Matter of Kleinsmith, 2017 CO 101, ¶¶13-15, — P.3d —. It is obvious from the Kleinsmith opinion and different Colorado precedent that the 2 phrases are equal:Knowing conversion or misappropriation happens when a lawyer takes cash that has been entrusted to her or him by a shopper or third get together, realizing that it’s the shopper or third get together’s cash and that the shopper or third get together has not licensed the taking, no matter whether or not the lawyer supposed to deprive the shopper or third get together of that cash completely. Kleinsmith, 2017 CO 101 at ¶14. See People v. Varallo, 913 P.second 1, 10-11 (Colo. 1996).

three.   The Supreme Court of Colorado famous that as of the date of its choice, First American had been in a position to acquire solely $1,179.20 from Respondent’s agency by financial institution garnishments. Matter of Kleinsmith, 2017 CO 101 at ¶5.

four.   The Proof of Service of Notice of Order of Discipline submitted to this Court by the Complainant on November 30, 2017, signifies Respondent acquired a duplicate of the Notice of Order of Discipline by way of licensed mail, signed for on November 17, 2017.

5.   The model of Colo. RPC eight.four in impact on the time of Respondent’s misconduct offered:It is skilled misconduct for a lawyer to:(a) violate or try and violate the Rules of Professional Conduct, knowingly help or induce one other to take action, or achieve this by the acts of one other;(b) commit a prison act that displays adversely on the lawyer’s honesty, trustworthiness or health as a lawyer in different respects;(c) have interaction in conduct involving dishonesty, fraud, deceit or misrepresentation;(d) have interaction in conduct that’s prejudicial to the administration of justice;(e) state or suggest a capability to affect improperly a authorities company or official or to attain outcomes by implies that violate the Rules of Professional Conduct or different legislation;(f) knowingly help a choose or judicial officer in conduct that could be a violation of relevant guidelines of judicial conduct or different legislation;(g) have interaction in conduct, within the illustration of a shopper, that reveals or is meant to enchantment to or engender bias towards an individual on account of that particular person’s race, gender, faith, nationwide origin, incapacity, age, sexual orientation, or socioeconomic standing, whether or not that conduct is directed to different counsel, courtroom personnel, witnesses, events, judges, judicial officers, or any individuals concerned within the authorized course of; or(h) have interaction in any conduct that straight, deliberately, and wrongfully harms others and that adversely displays on a lawyer’s health to observe legislation.Rule eight.four was amended by order efficient September 28, 2017, and Rule eight.four(c) now gives:(c) have interaction in conduct involving dishonesty, fraud, deceit or misrepresentation, besides lawyer could advise, direct, or supervise others, together with purchasers, legislation enforcement officers, or investigators, who take part in lawful investigative actions;

6.   Rule eight.four, ORPC, 5 O.S. 2011, ch. 1, app. three-A, gives:It is skilled misconduct for a lawyer to:(a) violate or try and violate the Rules of Professional Conduct, knowingly help or induce one other to take action or achieve this by the acts of one other;(b) commit a prison act that displays adversely on the lawyer’s honesty, trustworthiness or health as a lawyer in different respects;(c) have interaction in conduct involving dishonesty, fraud, deceit or misrepresentation;(d) have interaction in conduct that’s prejudicial to the administration of justice;(e) state or suggest a capability to affect improperly a authorities company or official or to attain outcomes by implies that violate the Rules of Professional Conduct or different legislation; or(f) knowingly help a choose or judicial officer in conduct that could be a violation of relevant guidelines of judicial conduct or different legislation.

7.   Colo. RPC 1.15A(a) gives:(a) A lawyer shall maintain property of purchasers or third individuals that’s within the lawyer’s possession in reference to a illustration separate from the lawyer’s personal property. Funds shall be stored in belief accounts maintained in compliance with Rule 1.15B. Other property shall be appropriately safeguarded. Complete information of such funds and different property of purchasers or third events shall be stored by the lawyer in compliance with Rule 1.15D.

eight.   Rule 1.15(a), ORPC, 5 O.S. 2011, ch. 1, app. three-A, gives:(a) A lawyer shall maintain property of purchasers or third individuals that’s in a lawyer’s possession in reference to a illustration separate from the lawyer’s personal property. Funds shall be stored in a separate account maintained within the state the place the lawyer’s workplace is located, or elsewhere with the written consent of the shopper or third particular person. Other property shall be recognized as such and appropriately safeguarded. Complete information of such account funds and different property shall be stored by the lawyer and shall be preserved for a interval of 5 years after termination of the illustration.

COMBS, C.J.:

CONCUR: COMBS, C.J., KAUGER, WINCHESTER, EDMONDSON, COLBERT, REIF, and WYRICK, JJ.
CONCUR IN JUDGMENT: GURICH, V.C.J.

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