{ "id": 243581, "name": "James NEAL, Director, Committee on Professional Conduct v. Perlesta Arthur HOLLINGSWORTH", "name_abbreviation": "Neal v. Hollingsworth", "decision_date": "1999-06-24", "docket_number": "98-1456", "first_page": "251", "last_page": "277", "citations": [ { "type": "official", "cite": "338 Ark. 251" }, { "type": "parallel", "cite": "992 S.W.2d 771" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "579 A.2d 190", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 7356987 ], "year": 1990, "opinion_index": 0, "case_paths": [ "/a2d/579/0190-01" ] }, { "cite": "236 S.E.2d 812", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 2136982 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/sc/269/0170-01" ] }, { "cite": "409 A.2d 1153", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1979, "opinion_index": 0 }, { "cite": "140 A.2d 1197", "category": "reporters:state_regional", "reporter": "A.2d", "year": 1995, "opinion_index": 0 }, { "cite": "966 P.2d 1040", "category": "reporters:state_regional", "reporter": "P.2d", "case_ids": [ 11688311 ], "year": 1998, "opinion_index": 0, "case_paths": [ "/p2d/966/1040-01" ] }, { "cite": "257 Ark. 673", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8722935 ], "weight": 2, "year": 1975, "opinion_index": 0, "case_paths": [ "/ark/257/0673-01" ] }, { "cite": "964 S.W.2d 199", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 377627, 377623 ], "year": 1998, "opinion_index": 0, "case_paths": [ "/ark/332/0182-01", "/ark/332/0148-01" ] }, { "cite": "332 Ark. 148", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 377623 ], "year": 1998, "opinion_index": 0, "case_paths": [ "/ark/332/0148-01" ] }, { "cite": "289 Ark. 550", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1875355 ], "weight": 5, "year": 1986, "opinion_index": 0, "case_paths": [ "/ark/289/0550-01" ] }, { "cite": "337 Ark. 353", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1241015 ], "weight": 2, "year": 1999, "opinion_index": 0, "case_paths": [ "/ark/337/0353-01" ] }, { "cite": "334 Ark. 357", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1655524 ], "weight": 2, "year": 1998, "opinion_index": 0, "case_paths": [ "/ark/334/0357-01" ] }, { "cite": "331 Ark. 242", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1604738 ], "weight": 2, "year": 1998, "opinion_index": 0, "case_paths": [ "/ark/331/0242-01" ] } ], "analysis": { "cardinality": 1511, "char_count": 46371, "ocr_confidence": 0.737, "pagerank": { "raw": 3.2756668868377986e-07, "percentile": 0.8704671585100136 }, "sha256": "6d8ac254cf998c877821209fdb4eddd5932a987e354c623eb0ad2ca68983a501", "simhash": "1:5b2cc73ab7eed8ca", "word_count": 7514 }, "last_updated": "2023-07-14T15:43:54.470477+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "James NEAL, Director, Committee on Professional Conduct v. Perlesta Arthur HOLLINGSWORTH" ], "opinions": [ { "text": "Annabelle Clinton Imber, Justice.\nThe appellant, James A. Neal, in his capacity as Executive Director of the Committee on Professional Conduct, filed a complaint for disbarment against the appellee, Perlesta A. Hollingsworth, alleging numerous violations of the Model Rules of Professional Conduct. The trial court dismissed certain allegations contained in Paragraph 10(b) of the complaint due to lack of notice and then proceeded to conduct a bifurcated hearing on the remaining allegations in Mr. Neal\u2019s complaint. The first phase of the hearing pertained to the issue of whether Mr. Hollingsworth had violated any of the Model Rules and the second phase pertained to the issue of sanctions. Based upon the evidence presented during the hearing, the trial court found that Mr. Hollingsworth violated the Model Rules of Professional Conduct and ordered that Mr. Hollingsworth be suspended from the practice of law for a period of six months. Mr. Neal now appeals the trial court\u2019s decision, asserting that disbarment was the appropriate sanction and that the trial court erred in dismissing certain allegations in the complaint. We reverse and remand.\nIn January, 1987, Mr. Hollingsworth commenced the representation of the Estate of Samuel S. Sparks, deceased, in a probate proceeding in Woodruff County, Arkansas. On June 1, 1987, Mr. Hollingsworth sent a letter to Mrs. Joyce Sparks, Mr. Sparks\u2019s widow and the executrix of his estate, that confirmed the fee arrangement for representing the estate. Specifically, Mr. Hollingsworth\u2019s law firm would charge for services to the estate in accordance with the schedule set forth in the Arkansas Probate Code \u201cunless special or unusual services to the estate are required\u201d and would bill the estate periodically for costs and out-of-pocket expenses. In connection with probating the Sparks estate, Mr. Hollingsworth undertook to \u201cprepare and present to the probate court all necessary notices, petitions, orders, appraisals, bills of sale, deeds, leases, contracts, agreements, inventories, financial accounts, reports, and all other proper and necessary legal instruments during the entire six (6) months, or longer when necessary, while said estate is required by law to remain open.\u201d The letter also referenced the collection of certain notes receivables due to the estate as involving \u201cspecial or unusual services anticipated in connection with administering the estate\u201d and established a special contingency-fee arrangement, which was twenty-five percent of any funds collected on the notes. No other special matters or fees were noted, and there was no reference to hourly billing for any matters.\nAt the time Mr. Hollingsworth negotiated the fee arrangement for representing the estate, he was aware that other matters existed in connection with his representation of the estate. These included a determination-of-heirship claim and claims by creditors on two promissory notes that were endorsed or guaranteed by Samuel Sparks. Mr. Hollingsworth also instituted a wrongful death action against Dave\u2019s House of Guns in 1988. No fee arrangements were reduced to writing for any of these matters.\nAfter commencing representation of the Sparks estate, Mr. Hollingsworth successfully defended the determination-of-heir-ship claim by Ms. Shirley Hodges and represented the estate in two lawsuits filed in federal district court by the Small Business Administration and Planters Bank and Trust Company to recover $144,809.38 and $119,498.16, respectively, on the promissory notes guaranteed by Mr. Sparks. Mr. Hollingsworth also filed several lawsuits on behalf of the estate. He obtained a judgment against Mr. Warren Barge for $10,000.00 and represented the estate in an unsuccessful claim against Mr. Bobby Smith. The estate\u2019s wrongful death action against Dave\u2019s House of Guns went to trial but ultimately culminated in a directed verdict in favor of the defendant. Finally, with regard to the notes receivables that were the subject of the special fee arrangement, Mr. Hollingsworth filed two separate lawsuits in federal district court in 1997. In the first lawsuit, the Sparks estate sued Mr. James M. Griffin to collect $100,000.00 that Mr. Griffin owed Mr. Sparks on a promissory note. In the second lawsuit, the estate sued Mr. Griffin and the United National Bank of Washington, D.C., to secure the release of a $100,000.00 certificate of deposit that Mr. Sparks had given as collateral on a loan to Mr. Griffin by United National Bank.\nWhile representing the estate, Mr. Hollingsworth collected various funds belonging to the estate. When the $100,000.00 certificate of deposit was released by United National Bank in 1988, Mr. Hollingsworth deducted his twenty-five percent contingency-fee of $25,000.00 and gave the balance of $75,000.00 to Mrs. Sparks. All other estate funds collected by Mr. Hollingsworth were deposited into his firm\u2019s trust account. Those funds included $5000.00 for a retainer fee, $1,640.60 for expenses, $8,500.00 derived from the sale of a Lincoln automobile and $136,235.77 recovered over a two-year period (May 1987 \u2014 May 1989) on the Griffin promissory note. Mr. Hollingsworth maintained that these monies were placed in his firm\u2019s trust account in order to facilitate the payment of litigation expenses incurred by the estate. Some of those expenses were in fact paid out of the firm\u2019s trust account. Although Mr. Hollingsworth suggested that Mrs. Sparks agreed to this arrangement, she testified otherwise. For several years, Mrs. Sparks thought that the estate\u2019s funds were being held in a separate estate account. Only after she began to make persistent inquiries about the estate\u2019s account did Mrs. Sparks learn from Mr. Hollingsworth that the estate\u2019s funds were being held in his firm\u2019s trust account.\nMrs. Sparks\u2019s inquiries about an accounting of the estate\u2019s funds began in 1992. On February 10, 1992, she wrote a letter to Mr. Hollingsworth requesting a statement of expenses incurred by the estate for the year 1991 and a statement of the money being held in the \u201cEstate trust account.\u201d When no accounting was forthcoming after several months, Mrs. Sparks wrote another letter in November of 1992. In fact, the record reflects that Mrs. Sparks wrote almost twenty letters between 1992 and 1994 asking for an accounting. Mr. Hollingsworth never directly responded to her request for an accounting. Rather, his letters to Ms. Sparks during that time period were merely status reports on the litigation being pursued by the estate. Mrs. Sparks\u2019s letters also reflect that Mr. Hollingsworth made repeated excuses for failing to provide an account of the estate\u2019s funds. For instance, when Ms. Sparks visited his office in November 1992, he informed her that the estate files were not on his computer because the estate was opened before his office acquired computers. On another occasion in 1993, he told Mrs. Sparks that his former secretary destroyed part of the estate\u2019s files when she quit working for him. Mr. Hollingsworth also told Mrs. Sparks that the accounting was \u201cin the mail.\u201d\nMs. Sparks continued to request, and then to demand, access to the records for the estate\u2019s trust account. Finally, in May, 1993, when Mrs. Sparks discovered that the estate funds were being held in the law firm\u2019s trust account and not in a separate account, she expressed concern \u201cespecially since you have admitted to me that you have not kept accurate records.\u201d Mrs. Sparks\u2019s letters also reflect that Mr. Hollingsworth never sent her an itemized fee statement and that he unilaterally and without notice charged her hourly rates. She repeatedly asked Mr. Hollingsworth for some indication of when the estate could be closed, noting in her letters that the estate had been open for over five years.\nMrs. Sparks never denied that Mr. Hollingsworth performed valuable services for the estate. Nor did she ever accuse him of stealing. However, the many letters she wrote to Mr. Hollingsworth vividly conveyed her building frustration with the manner in which he was handling the estate\u2019s affairs. On July 15, 1994, Ms. Sparks terminated Mr. Hollingsworth\u2019s services as the attorney for the estate. She further advised him that she had filed a formal complaint against him with the Supreme Court\u2019s Committee on Professional Conduct.\nEven before his services were terminated in July 1994, Mr. Hollingsworth had been notified by letter dated March 7, 1994, that Mrs. Sparks had contacted the Committee\u2019s office. Mr. Hollingsworth filed a response in the form of an affidavit on May 19, 1994. The Committee then began to investigate Mr. Hollingsworth\u2019s representation of the Estate of Samuel Sparks. During the two-year investigation, Mr. Hollingsworth provided the Committee with canceled checks, deposit slips, correspondence, explanations of expenses, and a computer printout of bank statements on his firm\u2019s trust account, all in response to the Committee\u2019s requests for all documents and information pertaining to the Sparks estate.\nThe Committee\u2019s investigation revealed that Mr. Hollingsworth failed to keep accurate records on the estate\u2019s funds and expenditures. Specifically, the trust account checks that Mr. Hollingsworth produced to document estate expenses were made payable either to third parties or to the Hollingsworth law firm\u2019s operating account. Other than Mr. Hollingsworth\u2019s written explanations in a letter to the Committee, there was little, if any, documentary proof, such as invoices or receipts, that the canceled checks were for expenses attributable to the Sparks estate. Some checks, especially those made payable to a court clerk, process server, court reporter, or expert, contained a specific reference to the Sparks estate. However, other checks made payable to credit card companies, common carriers, or the firm\u2019s operating account, contained no specific reference to the Sparks estate. Although Mr. Hollingsworth testified at the disbarment proceeding that his attorney\u2019s fees were paid out of the firm\u2019s trust account, he admitted that he could not locate or produce any trust account checks to support that assertion. He also conceded during the disbarment proceeding that checks were written on the firm\u2019s trust account to make other clients \u201cwhole\u201d when his firm suffered serious shortfalls after a former partner misappropriated substantial funds from the law firm\u2019s accounts. Although Mr. Hollingsworth did not produce canceled checks to document this testimony, it is clear from a compilation of bank statements on the firm\u2019s trust account that the canceled checks provided to the Committee by Mr. Hollingsworth were a mere fraction of the checks written on the firm\u2019s trust account between 1987 and 1994.\nBased upon the documentation provided by Mr. Hollingsworth, the Committee made \u25a0 a comparison of balances in the Sparks estate with balances in the firm\u2019s trust account beginning in February 1987 and ending in November 1994. Beginning in late 1987, the trust account balance was consistently below the balance in the estate. By November 1989, the estate\u2019s balance reached $107,888.07 and stayed at that level through November 1994. However, the trust account balance for that five-year period always remained well below the estate\u2019s balance. In fact, the balance in the trust account went as low as $186.21 in October, 1991, when the Sparks estate should have had a balance in the trust account of $107,888.07.\nOn September 20, 1996, Mr. Neal filed a complaint for disbarment against Mr. Hollingsworth in which he alleged numerous violations of the Model Rules of Professional Conduct. The complaint not only included allegations concerning Mr. Hollingsworth\u2019s handling of the Sparks estate, but also added a charge concerning another client in a separate matter. With regard to the added charge, Mr. Neal alleged that Mr. Hollingsworth failed to disclose his relationship with an attorney who had been appointed guardian ad litem for the minor child in a divorce proceeding in which he was representing the child\u2019s father. The trial court granted Mr. Hollingsworth\u2019s motion to dismiss this added charge on grounds of lack of notice.\nThe hearing on Mr. Neal\u2019s complaint for disbarment was held on August 6-8, 1998. During the violations phase of the bifurcated hearing, Mr. Neal presented his case-in-chief through the testimony of Ms. Leslie Fryxell, staff attorney for the Committee, Mrs. Joyce Sparks, and Mr. Hollingsworth and through the introduction of several exhibits. Mr. Hollingsworth\u2019s defense included his own testimony and that of his associate, Mich\u00e9le Strauss.\nDuring the sanction phase of the bifurcated hearing, Mr. Hollingsworth presented mitigating evidence through the testimony of Judge Marion Humphrey, Judge Robert Faulkner, Senator William L. Walker, Jr., and Rev. Steven Arnold, with each witness attesting to Mr. Hollingsworth\u2019s reputation for integrity and good character. Mr. Hollingsworth testified that in almost thirty years of practice he had never- been cited for a violation of the Model Rules. He also expressed his intention to make complete restitution to Mrs. Sparks. While conceding only a \u201ctechnical violation\u201d of the Model Rules, he expressed remorse and regret, stating that he was sorry this had happened. Mr. Neal rested on the evidence of aggravating factors already contained in the record.\nBy order entered on August 24, 1998, the trial court found that Mr. Hollingsworth violated Rules 1.1, 1.3, 1.4(a), 1.5(a) (b), 1.15(a)(b)(c), 3.2, 4.1, and 8.4(c)(d) of the Model Rules of Professional Conduct. In connection with its duty to determine the appropriate sanction for the listed violations, the trial court made specific findings regarding the aggravating and mitigating circumstances before concluding that Mr. Hollingsworth should be suspended from the practice of law for a period of six months. The trial court also required that Mr. Hollingsworth reapply with the Committee for reinstatement to the practice of law. Mr. Neal now appeals the trial court\u2019s decision, asserting that the sanction should have been disbarment and that the trial court erred when it dismissed the added charge against Mr. Hollingsworth involving another client in a separate matter. Neither party appeals the trial court\u2019s specific findings regarding rule violations or aggravating and mitigating circumstances.\nI. Whether the Trial Court Erred When It Imposed a Six-Month Suspension From the Practice of Law in a Bifurcated Disbarment Proceeding.\nA. Determination of Proper Standard of Review\nDisciplinary proceedings are neither civil nor criminal but are sui generis, meaning of their own kind. See Procedures of the Ark. Sup. Ct. Regulating Prof. Conduct of Attorneys at Law, Section 1(C); Black\u2019s Law Dictionary 851 (6th ed. 1990). The standard of review that governs appeals from disbarment proceedings is clearly articulated in Section 5(L)(4) of the Procedures of the Arkansas Supreme Court Regulating Professional Conduct of Attorneys at Law:\n(4) Appeals from any judgment of a Circuit court in a disbarment proceeding shall be heard in accordance with the rules governing appeals in civil cases.\nThese Procedures were originally adopted by the Supreme Court by per curiam order dated July 1 of 1990. They have been amended by per curiam order dated January 8, 1998, and effective January 15, 1998. The language in Section 5(L)(4) is identical in both versions of the Procedures, although Section 5(L)(4) was formerly numbered Section 5(H)(4).\nDisbarment proceedings are tried by the circuit court without a jury. Procedures, Section 5(K)(1), formerly Section 5(G)(1). Under the Arkansas Rules of Civil Procedure, the standard of review on appeals from bench trials is whether the trial judge\u2019s findings were clearly erroneous or clearly against the preponderance of the evidence. See Ark. R. Civ. P 52(a); McQuillan v. Mercedes-Benz Credit Corp., 331 Ark. 242, 961 S.W.2d 729 (1998); Ford Motor Credit Co. v. Ellison, 334 Ark. 357, 974 S.W.2d 464 (1998). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Wade v. Arkansas Dept. of Human Servs., 337 Ark. 353, 990 S.W.2d 509 (1999); AD-Razorback Ltd. Partnership v. B.G. Coney Co., 289 Ark. 550, 713 S.W.2d 462 (1986). The court must view the evidence in a light most favorable to the appellee, resolving all inferences in favor of the appellee. Id. Disputed facts and determinations of the credibility of witnesses are within the province of the fact-finder. Id.\nApplying the clearly erroneous standard of review mandated by Section 5(L)(4) of the Procedures, we now consider Mr. Neal\u2019s assertion that the trial court erred when it imposed a six-month suspension from the practice of law instead of disbarment.\nB. Appropriateness of Trial Court\u2019s Sanction.\nThe purpose of disciplinary actions is to protect the public and the administration of justice from lawyers who have not discharged their professional duties to clients, the public, the legal system, and the legal profession. See American Bar Association Model Standards for Lawyers Sanctions \u00a7 1.1 (1991). In Arkansas disbarment proceedings, if the trial court finds that an attorney has violated the Model Rules of Professional Conduct, then the trial court \u201cshall caution, reprimand, suspend or disbar such attorney as the evidence may warrant.\u201d Procedures, Section 5(K)(2), formerly 5(G)(2). With regard to whether the evidence warrants suspension or disbarment, Section 7 of the Procedures divides violations of the Model Rules into two separate categories of misconduct: serious misconduct and lesser misconduct. Procedures, Section 7(B) and (C). Serious misconduct warrants a sanction terminating or restricting the lawyer\u2019s license to practice law, whereas lesser misconduct does not. Id. Conduct will be considered serious misconduct if any of the following considerations set forth in Procedure Section 7(B) apply:\n(1) The misconduct involves the misappropriation of funds;\n(2) The misconduct results in or is likely to result in substantial prejudice to a client or other person;\n(3) The misconduct involves dishonesty, deceit, fraud, or misrepresentation by the lawyer;\n(4) The misconduct is part of a pattern of similar misconduct;\n(5) The lawyer\u2019s prior record of public sanctions demonstrates a substantial disregard of the lawyer\u2019s professional duties and responsibilities; or\n(6) The misconduct constitutes a \u201cserious crime\u201d as defined in the Procedures.\nLikewise, when the trial court finds that the Model Rules have been violated by either serious or lesser misconduct, the trial court must proceed to the penalty phase during which the defendant attorney and the Committee\u2019s Executive Director are allowed to present evidence and arguments regarding aggravating and mitigating factors in order to assist the trial court in making its determination of the appropriate sanction. Wilson v. Neal, 332 Ark. 148, 964 S.W.2d 199 (1998). Those factors developed by the American Bar Association Joint Committee on Professional Standards and adopted by this Court in Wilson are:\nAggravating Factors:\n(a) prior disciplinary offenses;\n(b) dishonest or selfish motive;\n(c) a pattern of misconduct;\n(d) multiple offenses;\n(e) bad faith obstruction of the disciplinary proceedings by intentionally fading to comply with the rules or orders of the disciplinary agency;\n(f) submission of false evidence, false statements, or other deceptive practices during the disciplinary process;\n(g) refusal to acknowledge [the] wrongful nature of [the] conduct;\n(h) vulnerability of [the] victim;\n(i) substantial experience in the practice of law;\n(j) indifference to making restitution;\n(k) illegal conduct, including that involving the use of controlled substances;\nMitigating factors:\n(a) absence of prior disciplinary record;\n(b) absence of dishonest or selfish motive;\n(c) personal or emotional problems;\n(d) timely good faith effort to make restitution or to rectify [the] consequences of [the] misconduct;\n(e) full and free disclosure to [the] disciplinary board or cooperative attitude towards [the] proceedings;\n(f) inexperience in the practice of law;\n(g) character or reputation;\n(h) physical disability;\n(i) mental disability or chemical dependency including alcoholism or drug abuse when\n(1) there is medical evidence that the respondent is affected by a chemical dependency or mental disability;\n(2) the chemical dependency or mental disability caused the misconduct;\n(3) the respondent\u2019s recovery from the chemical dependency or mental disability is demonstrated by a meaningful and sustained period of successful rehabilitation;\n(4) the recovery arrested the misconduct and recurrence of that misconduct is unlikely.\n(j) delay in [the] disciplinary proceedings;\n(k) impositions of other penalties or sanctions;\n(l) remorse;\n(m) remoteness of prior offenses.\nWilson, supra. Additionally, the Procedures now identify the following factors as appropriate for the Committee\u2019s consideration in determining the sanction to be imposed:\n\u2022 The nature and degree of the misconduct.\n\u2022 The seriousness and circumstances surrounding the misconduct.\n\u2022 The loss or damage to clients.\n\u2022 The damage to the profession.\n\u2022 The assurance that those who seek legal services in the future will be protected from the type of misconduct found.\n\u2022 The profit to the lawyer.\n\u2022 The evidence of reputation.\n\u2022 Whether the conduct was deliberate, intentional, or negligent.\n\u2022 The deterrent effect on others.\n\u2022 The maintenance of respect for the legal profession.\n\u2022 Matters offered by the lawyer in mitigation or extenuation.\nSee Procedures, Section 7(F) adopted by per curiam Order dated January 8, 1998.. While these factors are not classified as either aggravating or mitigating circumstances, we believe they are harmonious in their objectives and their focus with the factors adopted in Wilson II.\nDuring the penalty phase in this disbarment proceeding, Mr. Neal presented no evidence, opting instead to rest on the evidence already in the record from the first phase of the hearing. This is reflected in the following colloquy between the trial court and counsel:\nThe Court: The burden is on the court for me to consider whatever evidence you gendemen want to put on in regard to those two [sets of] factors. I\u2019m not sure who has the burden.\nMr. Brown: It\u2019s my position that the Committee has the burden. The standards address two [sets of] factors, that is, aggravating and mitigating .... [I] t seems to me that they have the burden of proof of establishing the violation, they would have the burden of proof of trying to convince the court what the appropriate sanction is.\nThe Court: Any aggravating factors they wanted me to consider that are not already in the record, I\u2019m not sure anything further is necessary in a case, it\u2019s whatever you lawyers feel.\nMr. Everett: If I have the burden, I do not offer evidence as the offeror in Phase Two. I may do some cross-examination, if I have the burden, I yield.\nThe Court: You are resting in both phases?\nMr. Everett: Except, as the Court said, whatever evidence is in the record, yes, sir, I\u2019m resting in both phases.\nMr. Hollingsworth proceeded with the presentation of mitigating evidence. In that regard, Mr Hollingsworth testified that he had been in practice for almost thirty years without any prior caution or reprimand by the Committee. He also testified that he was deeply sorry for what had happened, and that he had no dishonest or deceitful motive in his actions with regard to the Sparks case. However, he conceded only to committing a \u201ctechnical\u201d violation of the rules and continued to assert that his actions had been undertaken in the belief that he was acting in the best interest of his clients. He testified that he had made restitution of all sums due to Mrs. Sparks, except for some interest which he intended to pay Mrs. Sparks and thereby make her whole again. Mr. Hollingsworth also admitted that he made payments out of the firm\u2019s trust account to make other clients \u201cwhole.\u201d Mr. Hollingsworth testified to his full cooperation with the Committee and to his promptness in responding to discovery requests. This was corroborated by Ms. Leslie Fryxell in her testimony during the first phase of the hearing.\nWith regard to his character and reputation in the community, Mr. Hollingsworth presented the testimony of several witnesses. Judge Marion Humphrey testified that he had known Mr. Hollingsworth for over twenty years and that during that time he had formed the opinion that Mr. Hollingsworth was a diligent servant of the law with a good reputation in the community. Judge Humphrey also testified that Mr. Hollingsworth had taken on causes which contributed to the advancement of African-Americans within the judicial system in this state. Judge Robert Faulkner of the United States District Court, Eastern District of Texas, testified that he had known Mr. Hollingsworth for over thirty years. Mr. Hollingsworth was working as Governor Rockefeller\u2019s legal representative to the prison system when Judge Faulkner first became acquainted with him. Judge Faulkner testified that he was familiar with Mr. Hollingsworth\u2019s reputation for truthfulness and veracity and that his employment history with Governor Rockefeller corroborated that reputation because the position of legal representative to the prison system required someone with a good reputation for honesty. Judge Faulkner testified that Mr. Hollingsworth took on unpopular causes and that he was known as a champion for causes and an outstanding attorney. Judge Humphrey and Judge Faulkner both testified that Mr. Hollingsworth was still able to make a contribution to the community as an attorney in light of his reputation and character. Mr. Hollingsworth\u2019s pastor, Rev. Stephen Arnold, and Mr. Sparks\u2019s godson, Senator William L. Walker, Jr., both testified to Mr. Hollingsworth\u2019s reputation for honesty and integrity and to his sincerity.\nBy order entered on August 21, 1998, the trial court made the following findings pertaining to aggravating factors:\n\u2022 That [Mr. Hollingsworth] entered into a written fee agreement regarding his representation of the estate of Sam Sparks, deceased, then pending in the Probate Court of Woodruff County, Arkansas. At the time of the agreement, three (3) claims had been filed against the Estate. Generally, the fee agreement called for the statutory fee plus a twenty-five percent (25%) contingency fee for the collection of notes and monies receivable by the Estate. The defendant was also to bill the Estate periodically for named costs.\n\u2022 That the defendant did not file required annual accountings in the probate action nor did he send notices to interested parties appropriately. That, in the representation of the Estate of Sam. Sparks, the defendant acted almost entirely without obtaining the Probate Court\u2019s authority, treating the assets of the trust funds owned by the Estate as if they were his own.\n\u2022 That, between November, 1989, and November, 1994, the Estate of Sam Sparks should have had a balance in the defendant\u2019s trust account of $107, 888.07 but the account had only a fraction of that sum and, at one point, in October 1991, the account had only $186.21.\n\u2022 That the Court finds that the defendant knowingly diverted the funds of the Estate of Sam Sparks for his own use and did so over a period of time exceeding five (5) years. Further, the Court finds that his failure to file annual accountings in the probate action were due to the fact that his diversion of funds would have been discovered had such accountings been filed.\n\u2022 That there is no basis in the evidence for the defendant\u2019s claim that the shortage of funds in his trust account was based on his belief that he could bill the Estate for hourly work on certain matters and the Court finds that the defendant\u2019s assertion to the contrary was an attempt to explain away the shortages in the account.\n\u2022 At least by 1992, the Executrix of the Estate of Sam Sparks began to repeatedly ask the defendant for an accounting of the trust account funds but that the defendant stonewalled those requests. Only at the time he was fired did the defendant make an attempt to make restitution by sending Seventy Thousand 00/100 Dollars ($70,000.00) to the attorney substituting him.\n\u2022 That the defendant was subsequently ordered by the Probate Court to pay the Estate of Sam Sparks the sum of Thirty Thousand and 00/100 Dollars ($30,000.00) and has now paid such sum in full excepting only for the accrued interest on such sum of money.\nAfter listing these findings, the trial court found that, as a mitigating factor, Mr. Hollingsworth had \u201cbeen in practice for almost thirty (30) years [sic] and has no prior disciplinary offense.\u201d Further, the trial court found that the evidence of extenuation and mitigation represented by the community leaders who testified on Mr. Hollingsworth\u2019s behalf was impressive and that the acts complained of were not a pattern of conduct.\nThe trial court considered the aggravating and mitigating factors before concluding that Mr. Hollingsworth should be suspended from the practice of law for six months. By imposing the sanction of suspension from the practice of law, the trial court recognized that Mr. Hollingsworth\u2019s conduct was serious and warranted \u201ca sanction terminating or restricting . . . [his] license to practice law.\u201d Procedures, Section 7(B). Mr. Neal, however, strongly contends that the trial court\u2019s limited sanction does not match the seriousness of the misconduct committed and that the only appropriate sanction is disbarment.\nIn order to determine whether the trial court\u2019s imposition of a six-month suspension instead of disbarment was clearly erroneous, we review the trial court\u2019s specific findings regarding rule violations and aggravating and mitigating factors. First, the trial court found that Mr. Hollingsworth had treated the assets of the trust funds owned by the Sparks Estate as if they were his own and that Mr. Hollingsworth \u201cknowingly diverted the funds of the Estate of Sam Sparks for his own use and did so over a period of time exceeding five (5) years.\u201d The trial court also found that between November 1989 and November 1994 the Sparks Estate should have had a balance of $107,888.07 in the trust account, but the trust account only had a fraction of that sum and at one point dipped as low as $186.21. Mr. Hollingsworth admitted that he used the estate\u2019s funds to pay claims against his law firm by other clients. When asked whether he would characterize his use of the estate\u2019s money as dishonest or selfish, Mr. Hollingsworth testified as follows:\nQ: Let me ask you, sir, if you would agree with me that if what you did was to take money out of your trust account, owned by the Estate of Sam Sparks, and used that money to pay claims of other clients, as you have described that you had done, don\u2019t you agree that is dishonest to use the estate\u2019s money to pay claims against your law firm by other clients, do you agree with that?\nA: I cannot characterize it as dishonest.\n\u2021 ^ ^\nQ: Do you think it is selfish to use funds belonging to one client to pay claims lodged by another client, do you think that\u2019s selfish to the extent that you are protecting your own self against those claims from other clients, do you think that\u2019s selfish?\nA: I do not consider it selfish, I cannot characterize that by using that adjective.\nNext, the trial court found that Mr. Hollingsworth did not file required annual accountings in the probate action because \u201chis diversion of funds\u201d would have been discovered. Similarly, when Mrs. Sparks, as executrix of the Sparks Estate, began to ask Mr. Hollingsworth in 1992 for an accounting of the trust account funds, he \u201cstonewalled\u201d her requests. The letters Mrs. Sparks wrote to Mr. Hollingsworth are particularly poignant. Mrs. Sparks was the victim of the misuse and clearly was kept in the dark about what was happening. What follows is a sampling from some of her many letters:\nNovember 26, 1992:\nIf there is a reason you can\u2019t provide me with this information please let me know. I have requested this information several times in the past three years and have not received it and I am uncomfortable with your reluctance to provide me with an accounting of the money you are holding in trust for the Estate of Sam Sparks.\nDecember 18, 1992:\nThere is still a misunderstanding regarding my concerns about the estate. When I met with you on October 6th, I left with the idea that you would give me a statement of the amount that is in the trust account the following week. When I didn\u2019t receive the statement I felt I needed to remind you that I was expecting one. Since I have not had a statement I can only guess at the amount and since I don\u2019t know how much the expenses were from the gun suit my estimate will be unenlightened. All I want is a bank statement or something similar.\nFebruary 6, 1993:\nI am still waiting for the statement of the amount you are holding in the Estate of Sam Sparks .... I want access to all bank statements and canceled checks written on the Estate of Sam Sparks. Please have copies of these files available for me so I can pick them up on Thursday February 11th.\nFebruary 15, 1993:\nYour letter was disturbing to me because in November when I saw you in your office, after I had purchased a computer, you told me that the Estate files weren\u2019t on your computer since the Estate of Sam Sparks was opened before you got your office computers. Now you tell me that your former secretary destroyed part of the files when she quit working for you. The latest bank statement that you have received on the Estate of Sam Sparks trust account will be sufficient for now. I expect the rest of the bank statements, receipts for expenses and any other information concerning the trust account and other funds collected on the behalf of the Estate within the week following your receipt of this letter. If you cannot provide this information by Friday, please understand that I plan to make a claim against the law firm for negligence and malpractice.\nFebruary 21, 1993:\nI have been trying to get a statement from you of how much cash is in the account you are supposed to be holding in trust. I can\u2019t understand how this request is so difficult to fulfill when bank statements showing balances and debits should be easy for you to obtain.\n* * *\nWhat I want from you is a bank statement showing the balance in the Estate account and when your records are complete, I expect a full accounting of your expenditures. I expect this by March 5th.\nApril 5, 1993:\nIn your letter to me dated February 23, 1993, you said that the attorney client relationship had deteriorated to a point of complete distrust and breakdown, this is true because you have not provided me with the account of the Estate that I am entitled to and you have been telling me it is in the mail when no such report exists. Throughout our attorney-client relationship you have been telling me one thing when I meet with you and the complete opposite the next time we meet, as a result the question of credibility, trust and confidence has been lost.\n* * *\nI want the name of the bank or banks and the account numbers of all accounts where you have placed money belonging to the Estate of Sam Sparks immediately.\nApril 19, 1993:\nThere was no bank statement and canceled checks included in the information I received. I want to be provided with a copy of the latest bank statement for the account and copies of the canceled checks from the account used to pay expenses.\nMay 3, 1993:\nI regret that my correspondence has caused you concern, however I have been concerned over the length of time you required to give me any form of accounting. None of this would have taken place if you had provided me with a statement following our meeting on October 6, 1992, as promised. If our roles were reversed I feel that you would not have been as patient as I have been.\nOur phone conversation on Sunday also concerned me since I assumed the Estate of Sam Sparks account was separate from any others. When you told me that the account was in your firm\u2019s trust account and not in a separate account, I was very bothered, especially since you have admitted to me that you have not kept accurate records.\nNovember 29, 1993:\nIn my letter to you dated October 21, 1993, I requested that you send my accountant all the expenses and fees you have deducted from the money you are holding that belongs to the estate. We have not received that information from you. I would like the balance of the money that belongs to the Estate of Sam Sparks placed in a separate account from your firm\u2019s trust account in a different bank.\nI feel that you have taken advantage of our friendship ignoring my requests, making promises to me that you had no intention of keeping and charging me by either percentage or hourly whichever suited you best. I don\u2019t like the feeling of having to fight with the person I hired to protect my interests.\nJanuary 18, 1994:\nI think we must have different concepts of a full accounting because I haven\u2019t received what I would call one. I think a full accounting includes all expenses along with receipts and canceled checks, monies collected and interest earned.\nFebruary 4, 1994:\n... I don\u2019t know the amount of my entitlement or the value of the estate. The only way that can be accomplished is to do a final inventory and accounting, which I have been requesting for over a year. In your letter dated January 7, 1994, you stated that you had already given me a full accounting. Please send me a copy of that accounting.\nApril 4, 1994:\nI still want the accounting you said you were recapitulating sent to Holda Ward.\nApril 18, 1994:\nI want only the full accounting and the location of the bank where the estate funds are kept sent to Holda Ward.\nWhen asked why he did not respond to Mrs. Sparks\u2019s letters, Mr. Hollingsworth testified as follows:\nA: I did respond to her letters, obviously, I did not give her the information that she wanted. How I missed that, I don\u2019t know .... I just didn\u2019t get the point that she was asking for an accounting until she hit me in the face with it.\nWith regard to restitution, the trial court found that no attempt to make restitution was made by Mr. Hollingsworth until after he was fired by Mrs. Sparks, which according to the record was in July 1994. Mr. Hollingsworth actually sent a cashier\u2019s check in the amount of $70,244.51 to her new attorney in February 1995, several months after the Committee began its investigation. The trial court also found that Mr. Hollingsworth was subsequently ordered by the probate court to pay the Estate an additional $30,000. The probate court\u2019s order was entered on August 26, 1997. At the time of the disbarment hearing in August, 1998, Mr. Hollingsworth had paid the sum ordered by the probate court except for some accrued interest.\nFinally, the trial court found that Mr. Hollingsworth violated the following Model Rules:\nRule 1.1 \u2014 Competence\nRule 1.3 \u2014 Diligence\nRule 1.4(a) \u2014 Communication\nRule 1.5 (a)(b) \u2014 Fees\nRule 1.15 (a)(b)(c) \u2014 Safekeeping Property-\nRule 3.2 \u2014 Expediting Litigation\nRule 4.1 \u2014 Truthfulness in Statements to Others\nRule 8.4(c) (d) \u2014 Misconduct\nMr. Hollingsworth admitted on direct examination that he was \u201cin a technical violation of one of the professional rules.\u201d When cross-examined about this testimony, Mr. Hollingsworth testified as follows:\nQ: Mr. Hollingsworth, you have described your misconduct as being in technical violation of the rules, that\u2019s the words you used early on in your testimony, and I want to know from you, if you believe that your misconduct is only technically in violation of the rules, or do you believe and can you tell the court that your conduct impacted the underpinnings of this profession, that it was much greater than a technical violation, that it was a substantive and egregious violation of the rules.\nA: I don\u2019t agree my conduct with [sic] an egregious violation of the rules, if I understand what the word egregious means.\nQ: It means awful bad, Mr. Hollingsworth, that\u2019s what I think it means.\nA: I don\u2019t think my conduct was awful bad.\nQ: Do you think it\u2019s fair to say that your conduct was only technically in violation of the rules, that it\u2019s a technicality you\u2019ve been called in on?\nA: No, I\u2019m saying that there\u2019s a violation of the rules, I have violated the rules, I did not intend to violate the rules.\nQ: I\u2019m going to get to that. I just wonder why, when you were being examined by your lawyer, you described your conduct as a technical violation of the rules, I want to know if that was a misstatement or do you agree that it was much more than technical, it was substantial.\nA: I don\u2019t agree with you it was substantial or egregious.\nThe trial court\u2019s findings with regard to mitigation include the fact that Mr. Hollingsworth had been in practice for almost thirty years without any prior disciplinary offense. The trial court found other evidence of extenuation and mitigation to be impressive. A number of community leaders came forward to attest to Mr. Hollingsworth\u2019s contributions to the advancement of African-Americans within the State\u2019s judicial system and to his reputation for integrity and good character.\nBased upon our review of the evidence and the trial court\u2019s findings, we conclude that the record in this case supports the following aggravating factors:\n(1) dishonest or selfish motive;\n(2) a pattern of misconduct with respect to Mrs. Sparks;\n(3) multiple offenses over more than five years;\n(4) refusal to acknowledge the wrongful nature of the conduct;\n(5) vulnerability of Mrs. Sparks;\n(6) substantial experience in the law practice; and\n(7) indifference to making restitution until fired and disciplinary investigation instituted.\nWe also conclude that the evidence supports the following mitigating factors:\n(1) absence of prior disciplinary record;\n(2) full cooperation with the Committee\u2019s investigation;\n(3) character and reputation; and\n(4) expression of remorse.\nWhen these mitigating factors are compared to the trial court\u2019s findings that Mr. Hollingsworth knowingly diverted more than $100,000.00 of the Sparks Estate\u2019s funds to his own use over a period of five years and that he attempted to postpone discovery of that misconduct by fading to account to the probate court and by stonewalling Mrs. Sparks\u2019s requests for an accounting, we are left with a firm and definite conviction that the trial court committed a mistake when it imposed a short period of suspension from the practice of law. Mr. Hollingsworth\u2019s actions of misusing and misappropriating funds from the Sparks estate clearly come within four out of six considerations for \u201cserious misconduct\u201d under Section 7(B) of the Procedures. Notwithstanding ample proof that he violated numerous provisions of the Model Rules, the record unequivocally reflects that Mr. Hollingsworth does not recognize or appreciate the gravity and seriousness of his misconduct. The evidence in this case demonstrates a pattern of misconduct over the course of several years in which Mr. Hollingsworth misappropriated his client\u2019s funds and concealed his wrongdoing from the client and the court. This type of misconduct can only be characterized as serious, substantial, and egregious. Under these circumstances, we hold that the trial court clearly erred when it imposed a mere six-month suspension from the practice of law. The only appropriate sanction commensurate with Mr. Hollingsworth\u2019s actions is disbarment. The misconduct in Weems v. Supreme Court Committee on Professional Conduct, 257 Ark. 673, 523 S.W.2d 900 (1975), which involved less than $12,000.00 and lasted less than one year, certainly pales in comparison to the long-term pattern of misconduct here.\nOther jurisdictions have also held that the intentional misappropriation of a client\u2019s funds and the misrepresentation of that fact to the client warrants disbarment. See, e.g., People v. Torpey, 966 P.2d 1040 (Col. 1998); In the Matter of Barlow, 140 A.2d 1197 (N.J. 1995); In Matter of Wilson, 409 A.2d 1153 (N.J. 1979); In the Matter of Lake, 236 S.E.2d 812 (S.C. 1977); In the Matter of Nicholas Addams, 579 A.2d 190 (D.C. Ct. App. 1990).\nWe conclude that Mr. Perles\u00eda A. Hollingsworth should be, and hereby is, disbarred from the practice of law in the State of Arkansas. Accordingly, we reverse and remand for entry of judgment consistent with this opinion.\nII. Whether The Trial Court Erred When It Dismissed The Added Charge Against Mr. Hollingsworth\nFor his second point on appeal, Mr. Neal asserts that the trial court erred when it dismissed the allegation concerning Mr. Hollingsworth\u2019s failure to disclose his relationship with an attorney who had been appointed guardian ad litem for the minor child in a divorce proceeding in which he was representing the child\u2019s father, Mr. Ted Skokos. In view of our holding that the only appropriate sanction commensurate with Mr. Hollingsworth\u2019s actions is disbarment, we need not address Mr. Neal\u2019s second point on appeal.\nReversed and remanded.\nSection 7(B) and (C) were added to the Procedures in the amendments adopted by per curiam order dated January 8, 1998, and effective January 15, 1998.\n\u201cSerious crime\u201d is defined in Procedure Section 1(E)(8) as follows:\n(8) \u201cSERIOUS CRIME\u201d means any felony or any lesser crime that reflects adversely on the lawyer\u2019s honesty, trustworthiness, or fitness as a lawyer in other respects, or any crime a necessary element of which, as determined by the statutory or common law definition of the crime, involves interference with the administration of justice, false swearing, misrepresentation, firaud, deceit, bribery, extortion, misappropriation, theft or an attempt, conspiracy or solicitation of another to commit a \u201cserious crime.\u201d", "type": "majority", "author": "Annabelle Clinton Imber, Justice." } ], "attorneys": [ "Everett & Mars, by: David D. Stills and John C. Everett, for appellant.", "Darrell F. Broum & Associates, by: Darrell F. Brown, for appellee." ], "corrections": "", "head_matter": "James NEAL, Director, Committee on Professional Conduct v. Perlesta Arthur HOLLINGSWORTH\n98-1456\n992 S.W.2d 771\nSupreme Court of Arkansas\nOpinion delivered June 24, 1999\n[Petition for rehearing denied September 9, 1999.]\nEverett & Mars, by: David D. Stills and John C. Everett, for appellant.\nDarrell F. Broum & Associates, by: Darrell F. Brown, for appellee." }, "file_name": "0251-01", "first_page_order": 279, "last_page_order": 305 }