FOR THE RESPONDENT
Samuel J. Goodman
9013 Indianapolis Blvd.
Highland, Indiana 46322
FOR THE INDIANA SUPREME COURT DISCIPINARY COMMISSION
Donald R. Lundberg, Executive Secretary
115 West Washington Street, Suite 1060
Indianapolis, IN 46204
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) CASE NO. 45S00-9908-DI-442
CHRIS P. KOUROS )
September 11, 2000
Today we find that the respondents temporary use of clients funds (which
he held in trust) for purposes unrelated to the clients, without his clients
knowledge or consent, warrants a suspension from the practice of law for at
least twelve months.
This attorney disciplinary matter is now before us for final resolution upon a
Statement of Circumstances and Conditional Agreement for Discipline tendered for our approval by
Respondent Kouros and the Disciplinary Commission. The respondents admission to the bar of
this state in 1992 confers our jurisdiction in this case.
Under Count I, the parties agree that in March 1998, the respondent represented
two clients in unrelated matters. He agreed to pay a $2,500
settlement on behalf of the first client with his own funds. He
agreed to pay a $750 settlement in behalf of the other client, again
with his own funds.
On March 16, 1998, the balance in the respondents client trust account was
about $83. That day, he issued a check for $2,500 to settle
the first clients case. The next day, he issued a $750 check
to settle the seconds. The following day, he deposited into the account
a $750 check from the second client, as well as another deposit of
$1,750. The balance of the account that day after the deposits was
$2,583.70. On March 20, 1998, the $2,500 check cleared the account,
reducing its balance to $83.70. The result of that transaction was
to cause the second clients funds to be used to settle the first
clients case, without the knowledge or consent of the second client. Five
days later, the respondent deposited $750 of his own funds to cover the
second clients settlement.
Under Count II, the parties agree that the respondent represented a client in
a civil damages action. The parties agreed to settle the matter by
the clients payment of $5,000. The client provided the respondent with the
money, but the respondent failed to deposit it in his client trust account
and instead used it for purposes unrelated to the client. At about
that time, the balance in the respondents trust account was $78.70.
The respondent also represented a second client, whose case had settled for $7,500.
The opposing partys insurer provided the respondent with a check for that
amount, which he deposited in his trust account, creating a balance of $7,578.70.
The respondents agreement with the client was for a 1/3 contingency fee,
although the agreement was never reduced to writing.
The respondent during this time also represented a third client, who had provided
the respondent with $137 earmarked to pay a diversion fee. The respondent failed
to deposit the funds in his trust account and instead used them for
purposes unrelated to the third client.
During the ensuing weeks, the respondent issued several checks drawn on the account
in satisfaction of various obligations related to these clients and their settlements.
The net effect of these withdrawals, coupled with his failure initially to
deposit into the account all client funds or funds he held on their
behalf, left it with an insufficient balance to cover their outstanding obligations or
amounts owed to third parties. On June 19, despite depositing $7,500 he
borrowed from his cousin to replenish the account and withdrawing $600 for his
own use, the account contained insufficient funds to cover $10,000 he was to
have been holding at that time for the benefit of the first and
second clients. On June 22, after two checks for client obligations cleared,
the account contained an insufficient balance to cover a $5,000 obligation to the
second client. Between June 23 and June 26, the respondents withdrawal of
$550 further depleted below $5,000 the balance in the account, again depleting the
second clients funds without the clients knowledge or consent. On June 29,
checks drawn for the benefit of the second client (totaling $5,500) cleared, leaving
the account with a balance of -$1,208.30.
Pursuant to Count III, we now find that the respondent received a $500
settlement check on behalf of the minor daughter of individuals who were otherwise
the respondents clients and for whom he was maintaining funds in his trust
account. The respondent failed to deposit the check into his trust account
and instead used the funds for purposes unrelated to the minor without her
or her parents knowledge or consent. Later, when the respondent issued a
$500 check to the parents for the minors benefit after having never deposited
the initial settlement proceeds, the effect of issuing that check was to deplete
the funds the respondent was otherwise holding for the parent-clients.
Under Count IV, we now find that on June 29, 1998, a day
when the respondents trust account posted a balance of -$1,208.30, the respondent issued
a $1,370.11 check, representing the net proceeds of a real estate transaction, payable
to a client. The next day, the respondent deposited $2,442.11, the proceeds
from the clients real estate closing, into the account, to create a
balance of $1,233.81, an amount less than the $1,370.11 he was obligated to
pay to the client. During the next week, the respondent removed another
$1,150 from the account for his own benefit without the knowledge or consent
of his client, and on June 30 allowed a bank fee of $23.95
to be debited against the account. By the time those transactions concluded,
the accounts balance was $59.86. On July 7, the $1,307.11 check to
the client cleared, leaving its balance at -$1,310.25. On July 17, the
respondent deposited $1,400 of his own funds into the account.
As to Count V, the parties agree that the respondent received a check
for $750 on behalf of a client who was a workers compensation claimant.
Instead of depositing the proceeds into this client trust account, the
respondent used the funds for his own benefit. He later issued
a $750 check from his trust account to the client. Six days
later, he deposited into the account $764.50 representing released bail bond funds related
to his representation of another client, increasing the accounts balance to $834.25.
That day, the workers compensation clients $750 check cleared, reducing the balance in
the account to $84.25.
As for Count VI, the parties agree that the respondent settled a matter
on behalf of a client, receiving $5,603.24. Pursuant to agreement, the clients
net proceeds were to total $3,735.49. The respondent deposited the gross settlement
proceeds into his client trust account, which before the deposit posted a balance
of $81.80. After the deposit, the respondent withdrew his fee of $1,867.50,
leaving the account with a balance of $3,817.54. Thereafter, while he
should have maintained a balance of at least $3,735.49 to cover his obligation
to his client, the respondent withdrew $500 from the account, lowering its balance
to $3,317.54, without the clients knowledge or consent. He also allowed a
$1.50 bank service charge to be deducted from the account. Over one
month later, the respondent issued a check drawn on the account to his
client for $3,235.49, $500 less that the proceeds due to the client. That
same day, he issued another check to his client, drawn on his office
operating account, for $500.
A lawyer should hold property of others with the care required of a
professional fiduciary. Comment to Ind.Professional Conduct Rule 1.15. A component of
this duty is contained in Prof.Cond.R. 1.15(a), which requires lawyers to hold
the property of clients or third persons that is in a lawyers possession
in connection with a representation separate from the lawyers own property.
See footnote This
anticommingling provision exists to safeguard client funds from attachment by a lawyers creditors,
and from misappropriation or inadvertent misuse by the lawyer or others. The respondent
repeatedly infused his own funds into his client trust account to cover shortfalls
occasioned by his own misuse of the funds, and by so doing violated
The parties further agree that by allowing client funds held in trust to
be used for purposes unrelated to the client without the clients knowledge or
consent, the respondent converted the clients funds. Conversion, under Indiana law,
is defined as knowingly or intentionally exerting unauthorized control over the property of
See IC 35-43-4-3. The respondent converted his clients
funds by allowing one clients funds to be used for the benefit of
another, by permitting bank charges to be deducted from client funds, and by
using client funds for personal obligations. Professional Conduct Rule 8.4(b) provides that
it is professional misconduct for a lawyer to engage in a criminal act
which reflects adversely on his honesty, trustworthiness, or fitness as a lawyer in
other respects. By intentionally or knowingly exerting unauthorized control over his clients
funds, we find he violated the rule. Those acts also involved dishonesty,
fraud, deceit, and misrepresentation and thus violated Prof.Cond.R. 8.4(c).
Finally, in Count II, by failing to reduce his contingency fee agreement with
his client to writing, the respondent violated Prof.Cond.R. 1.5(c).
The parties agree that the appropriate discipline for the respondents violations of the
Rules of Professional Conduct is a suspension from the practice of law for
a period of not fewer than twelve months, after which time he will
be required to petition this Court for reinstatement should he desire to regain
admission to the profession. In support of this sanction, they point to
several factors in mitigation, noting the respondents lack of prior discipline from this
Court, his cooperation during this proceeding, and the fact that, due to his
banks decision to cover trust overdrafts, no client was at any time deprived
of use of funds as a result of the respondents actions.
They also note that during the time of the respondents trust fund mismanagement,
he suffered from a gambling addiction and used client funds to cover gambling
debts. They state further that the respondent acknowledged his addiction, is receiving
counseling for it, participates in Gambling Anonymous, and is in recovery.
The respondents misuse of client funds is remarkably similar to that of the
respondent in Matter of Towell, 699 N.E.2d 1138 (Ind. 1998). There, a
lawyer, after receiving a workers compensation settlement on behalf of a client, deposited
the proceeds into his client trust account, only to later use significant portions
of the funds for the benefit of unrelated third parties. We
noted that the lawyer purposely used funds belonging to one client to pay
the obligations of another out of his pooled client trust account in the
apparent good faith belief that other client funds would soon arrive to cover
the expenditures. We noted further that
[The Court is] not persuaded that the respondent's actions were totally inadvertent or
unwitting; however, we are convinced that he did not intend to deprive his
worker's compensation client of the value or use of his funds sufficient to
find theft of the funds. What he did was intentionally and without
authorization use one client's funds for the benefit of others, intending all along
to replace the money "very shortly" when the expected "replacement" funds became available.
Unfortunately for everyone, the other client funds did not materialize for some
time. . . we view his acts as somewhat less culpable than outright
theft. However, even in the absence of a finding that the respondent
stole his client's money, his gross mishandling of funds held in trust for
others nonetheless indicates serious professional shortcomings deserving of significant sanction, primarily for the
protection of other clients.
Towell at 1142.
While it is true that, in the present case, the respondent temporarily used
at least some client funds to cover his gambling debts, like in Towell
the agreed facts here evidence no intent permanently to deprive clients of their
funds. This conclusion is fortunate for the respondent, since outright theft of client
funds generally warrants very severe sanction, up to and including disbarment. Id.,
citing Matter of Good, 632 N.E.2d 719 (Ind. 1994); Matter of Shumate, 647
N.E.2d 321 (Ind. 1995). Given that the parties agreement calls for
a lengthy period of suspension, and in light of our policy of favoring
agreed resolution of disciplinary complaints, we find that it should be approved.
Accordingly, it is hereby ordered that the respondent, Chris P. Kouros, is suspended
from the practice of law in this state for a period of not
fewer than twelve (12) months, beginning October 23, 2000, at the conclusion of
which his readmission to the practice of law, should he choose to pursue
it, shall be conditioned upon his successful petition before the Court pursuant to
Ind.Admission and Discipline Rule 23(4).
The Clerk of this Court is directed to provide notice of this order
in accordance with Admis.Disc.R. 23(3)(d) and to provide the clerk of the United
States Court of Appeals for the Seventh Circuit, the clerk of each of
the United States District Courts in this state, and the clerks of the
United States Bankruptcy Courts in this state with the last known address of
respondent as reflected in the records of the Clerk.
Costs of this proceeding are assessed against the respondent.
Professional Conduct Rule 1.15(a) provides a limited exception to the anticommingling
rule and permits a lawyer to deposit his or her own funds reasonably
sufficient to maintain a nominal balance into a client trust account.
That rule provides, in relevant part, that contingent fee agreements shall
be in writing and shall state the method by which the fee is
to be determined, including the percentage or percentages that shall accrue to the
lawyer in the event of settlement, trial or appeal, litigation and other expenses
to be deducted from the recovery, and whether such expenses are to be
deducted before or after the contingent fee is calculated.