Court: Supreme Court of Louisiana; March 25, 2004; Louisiana; State Supreme Court
Formal charges have been filed by the Office of Disciplinary Counsel (ODC) against attorney Paul E. Graugnard, licensed in Louisiana. Two sets of charges were submitted: the first on October 29, 1999, under docket number 99-DB-112, and the second on September 8, 2000, under docket number 00-DB-113, which included three counts of misconduct. Both sets were consolidated on October 26, 2000.
Under docket number 99-DB-112, related to the Hatten Matter, Graugnard received a $9,000 personal injury settlement in August 1997 but improperly endorsed his clients' names on the settlement check, deposited it into his trust account, and subsequently transferred the funds to his personal account. He failed to pay his client Robert Hatten $5,000 despite multiple inquiries and provided false testimony to the ODC claiming he had disbursed the funds. This conduct violated several Louisiana Rules of Professional Conduct, including those regarding safekeeping client property, making false statements, and engaging in dishonesty.
Under docket number 00-DB-113, in the Larsen Matter, Graugnard received a $40,000 settlement in June 1996 for client Wayne Villar but failed to pay a statutory lien owed to Larsen Physical Therapy, totaling $4,171. After the lienholder obtained a court order to prevent disbursement of settlement funds, Graugnard continued to refuse payment and abandoned a meritless appeal. His lack of cooperation during the ODC investigation and continued refusal to pay led to further allegations of professional misconduct, violating similar provisions of the Rules of Professional Conduct as noted in the first set of charges.
In Count II related to Edward Thompson’s personal injury case, it was established that Thompson retained the respondent in April 1997 for a claim arising from a car accident on April 5, 1996. Although the respondent filed suit to interrupt the prescription period, he subsequently took no further action, resulting in the loss of Thompson’s claim due to abandonment under Louisiana law. The respondent failed to inform Thompson about this abandonment and concealed his inaction. Additionally, the Office of Disciplinary Counsel (ODC) accused the respondent of not cooperating with the investigation regarding Thompson's complaint, leading to violations of several Rules of Professional Conduct, including Rules 1.3 (diligence), 1.4 (communication), and 8.4 (misconduct).
In Count III concerning Garland Coleman, who paid the respondent $500 for an uncontested divorce, the respondent abandoned his practice without notifying Coleman and did not communicate regarding the divorce proceedings. He also failed to refund any unearned fees. The ODC similarly alleged a lack of cooperation during the investigation into Coleman’s complaint, with violations of Rules 1.3, 1.4, and 1.5 (fee arrangements), among others.
Following delays in the respondent's response to formal charges, a stipulation of facts was reached, leading to a mitigation hearing on November 28, 2001. During this hearing, the respondent admitted to the charges and acknowledged an obligation to make restitution, which he subsequently failed to document within the allotted time.
The hearing committee found that in the Hatten matter, the respondent improperly converted client funds for personal use and misled the ODC, violating multiple rules. In the Larsen matter, he failed to pay owed sums and mismanaged client funds, which also constituted dishonesty. In the Thompson matter, the committee confirmed the respondent's lack of action beyond the initial filing and noted his failure to communicate with Thompson regarding the case's status and potential abandonment.
Respondent was found to have violated Rules 1.3 and 1.4 due to misconduct related to client representation, while there was insufficient evidence for violations of Rules 8.1(c), 8.4(c), or 8.4(g). In the Coleman matter (Count III of 00-DB-113), the respondent prepared divorce pleadings but failed to have them signed or filed, nor did he refund the $500 fee despite acknowledging the need to do so. This led to violations of Rules 1.3, 1.4, 1.5(f)(6), and 1.15, with no evidence found for violations of Rules 8.1(c) or 8.4(g).
The committee recommended disbarment under Standard 4.11, as the respondent knowingly converted client funds, causing actual injury. Additionally, the respondent failed to act on Mr. Thompson's case, resulting in potential injury due to neglect, aligning with Standard 4.42. Under Standard 7.1, the respondent's dishonesty during the disciplinary process further aggravated his misconduct, causing serious harm to clients and the legal system.
Mitigating factors included the absence of a prior disciplinary record, but aggravating factors cited were dishonest motive, a pattern of misconduct, multiple offenses, submission of false statements, and indifference to restitution. The disciplinary board upheld the hearing committee's findings and recommendations, confirming that the respondent's conduct warranted disbarment and restitution to affected clients, as his actions led to unpaid judgments and potential losses for clients. The board found the baseline sanction of disbarment appropriate based on the misconduct and relevant standards.
The board recommended that the respondent be ordered to make restitution to his clients and Larsen Physical Therapy, with no objections raised by either the respondent or the Office of Disciplinary Counsel (ODC). The court has original jurisdiction over bar disciplinary matters and is tasked with independently reviewing the record to ascertain if misconduct has been proven by clear and convincing evidence. Although the court is not bound by the findings of the hearing committee, it applies a manifest error standard to their factual determinations. The hearing committee found that the respondent mishandled client and third-party funds, neglected client matters, failed to communicate, did not refund unearned fees, and engaged in dishonest conduct prejudicial to justice.
Given the seriousness of the respondent's actions, including the neglect leading to delays and losses for clients, particularly the conversion of client funds, the court outlines criteria for determining appropriate sanctions. In cases of conversion, elements supporting disbarment include bad faith actions, fraudulent conduct, extensive deprivation, significant damage to clients, and failure to make timely restitution. The respondent's actions reflect these elements, with significant financial deprivation impacting clients, including long delays in payments owed. The respondent has failed to make any restitution and lied under oath when confronted with evidence. Consequently, the court concludes that the respondent acted in bad faith, leading to a baseline sanction of disbarment, compounded by aggravating factors such as dishonest motives, a pattern of misconduct, multiple violations, and false statements during the disciplinary proceedings.
The absence of a prior disciplinary record is deemed an insufficient mitigating factor to warrant a deviation from disbarment. The disciplinary board's recommendation for disbarment is accepted. Consequently, Paul Eugene Graugnard’s name is ordered to be removed from the Louisiana Bar Roll, and his law license is revoked. He is required to pay restitution of $5,000 plus legal interest to Robert Hatten and $500 plus legal interest to Garland Coleman. Additionally, Graugnard must fulfill the judgment in favor of Larsen Physical Therapy, Inc. from suit number 95-350 in the 26th Judicial District Court of Louisiana. All associated costs and expenses are to be borne by Graugnard, with legal interest accruing thirty days post-judgment until payment is made. The court notes that neither the hearing committee nor the disciplinary board addressed the alleged Rule 3.1 violation related to the Larsen case, despite it not being raised by the Office of Disciplinary Counsel (ODC).
