FOR THE RESPONDENT FOR THE INDIANA SUPREME COURT
Kevin McGoff Donald R. Lundberg, Executive Secretary
Suite 400 Seth Pruden, Staff Attorney
8900 Keystone Crossing 115 West Washington Street
Indianapolis, IN 46240 Suite 1165
Indianapolis, IN 46204
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) Case No. 29S00-9911-DI-662
CHARLES F. HEAR )
September 28, 2001
Attorney Charles F. Hear partnered with a non-lawyer to run a debt collection
business out of the non-lawyers home. Respondent Hear allowed the non-lawyer unrestricted
and unsupervised access to Hears letterhead, signature stamp, and business and trust accounts
in exchange for a portion of the fees from the debt collection business.
Today we approve a Statement of Circumstances and Conditional Agreement for Discipline
between the respondent and the Indiana Supreme Court Disciplinary Commission, which calls for
the respondents suspension from the practice of law for this misconduct. See
Ind. Admission and Discipline Rule 23, Section 11.
Having been admitted to the bar of this state in 1993, the respondent
is subject to our disciplinary jurisdiction.
The parties agree to the following facts. The respondent engaged the
services of a non-lawyer to solicit debt collection clients and to administer and
manage the debt collection cases the non-lawyer solicited. The respondent authorized the
non-lawyer to use letterhead captioned Charles F. Hear, attorney at law and which
listed the home address and telephone number of the non-lawyer in Anderson.
The respondent never maintained a law office at the non-lawyers home, but that
fact was not known to collection clients or others dealing with the non-lawyer.
The respondent also authorized the non-lawyer to use a rubber stamp of the
respondents signature for use on letters and to make deposits into the respondents
trust account. The respondent turned over physical control of his trust and
business accounts by having all checks, deposit slips, and monthly bank statements of
his accounts mailed to the non-lawyer.
The non-lawyer, on behalf of the respondent, solicited collection work from a company
in the business of purchasing accounts receivable from other companies and thereafter attempting
to collect those receivables. That company agreed to send a few collection
files to the respondent and to pay the respondent 40 percent of all
amounts collected, with the remainder of the funds to be remitted to the
company. The respondent and the non-lawyer thereafter agreed that the non-lawyer would
be paid a percentage of the 40 percent their business would retain under
The company sent to the respondent a matter involving a credit card debt
of approximately $1,700. The non-lawyer used the respondents letterhead in corresponding with
the debtors. The debtors tendered their first payment of $200 to the
non-lawyer in the form of a check made payable to Charles Hear, attorney
at law as instructed by the non-lawyer. Upon receipt of the check,
the non-lawyer deposited it into the respondents business account. The debtors continued
to make payments to the respondent, and the non-lawyer deposited each payment into
the respondents business account. By the end of 1996, the debtors had
made at least $800 in payments.
None of the $800 was remitted to the company. Instead, the non-lawyer
stole the funds by writing checks to himself or on his behalf from
the respondents business account. All of the checks bore the rubber stamp
signature of the respondent.
In 1997, the debtors paid $700 to the respondent, no portion of which
was remitted to the company. The non-lawyer deposited the money into the
respondents trust account, which also contained about $5,500 in funds belonging to one
of the respondents clients. The non-lawyer stole a total of $3,524 from
the trust account by writing checks to himself or on his behalf and
signing them with the rubber stamp of the respondents signature. The non-lawyers
misdeeds went undetected because the respondents account records were sent to and maintained
by the non-lawyer, and the respondent never reviewed them.
The respondent and the non-lawyer terminated their relationship in 1997. In 1998,
the debtors discovered their payments had not been credited and attempted to contact
the respondent at the address listed on the letterhead they received. They
were unsuccessful, as the non-lawyer had vacated the premises and the telephone had
We find that by failing to safeguard the creditor companys funds in his
trust account, the respondent violated Ind. Professional Conduct Rule 1.15(a), which requires a
lawyer to hold in a separate account funds belonging to clients or third
persons that are in a lawyers possession in connection with a representation.
By failing to notify the creditor company and promptly remit its funds, the
respondent violated Prof.Cond.R. 1.15(b), which requires that lawyers promptly notify a client of
receipt of funds belonging to the client and promptly deliver those funds to
the client. By allowing funds paid by the debtors to be deposited
into his business account, the respondent violated Prof.Cond.R. 1.15(c), which provides that when
in the course of a representation a lawyer is in possession of property
in which both the lawyer and another person claim interests, the property shall
be kept separate by the lawyer until there is an accounting and severance
of their interests.
We further find that the respondent, by failing to supervise the non-lawyer, violated
Prof.Cond.R. 5.3(a), which requires that a partner in a law firm make reasonable
efforts to ensure that the firm has in effect measures giving reasonable assurance
that the conduct of a non-lawyer employed or retained by or associated with
the firm is compatible with the professional obligations of the lawyer. The
respondent, by failing to make reasonable efforts to ensure that the non-lawyers conduct
complied with the respondents professional obligations, also violated Prof.Cond.R. 5.3(b), which provides that
a lawyer having direct supervisory authority over the non-lawyer shall make reasonable efforts
to ensure that the persons conduct is compatible with the professional obligations of
the lawyer. By sharing fees from the collection business, the respondent violated
Prof.Cond.R. 5.4(a), which prohibits lawyers or law firms from sharing legal fees with
a non-lawyer except under circumstances not present here.
The respondent, by engaging the non-lawyer to solicit collection work on his behalf,
violated Prof.Cond.R. 7.3(a), which prohibits a lawyer from seeking or recommending by in-person
contact (including by telephone) the employment, as a private practitioner, of the lawyer
or the lawyers firm to a non-lawyer who has not sought his advice
regarding employment of a lawyer or assisting another person in doing so.
By paying the non-lawyer a commission for the business he recruited, the respondent
violated Prof.Cond.R.7.3(f), which prohibits a lawyer from compensating or giving anything of value
to a person to recommend or secure the lawyers employment by a client
except under circumstances not present here.
Given our finding of misconduct, we must determine an appropriate discipline. The
parties agree that a 100-day suspension from the practice of law is warranted.
Where an attorney allowed non-lawyers to list him as counsel of record
in bankruptcy cases in which the non-lawyers rendered all of the advice and
prepared all filings, we imposed a 90-day suspension.
Matter of Gillaspy, 640
N.E.2d 1054 (Ind. 1994). Thus, we find that the 100-day suspension to
which the parties have agreed is an appropriate sanction for the respondents misconduct.
Accordingly, the respondent, Charles F. Hear, is hereby suspended from the practice of
law for 100 days, beginning October 30, 2001, at the conclusion of which
he shall be automatically reinstated.
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 Clerk of each
of the United States Bankruptcy Courts in this state with the last known
address of the respondent as reflected in the records of the Clerk.
Costs of this proceeding are assessed against the respondent.
The Commission has withdrawn charges that the respondent violated Prof.Cond.R. 8.1(a) and
8.4(c) by providing false information to the Commission during its investigation of this
case. In preparing his response, the respondent relied on information provided by
the non-lawyer, who falsified the information as part of his efforts to conceal
his misdeeds. While the parties agree the respondent acted recklessly in continuing
to rely on the non-lawyer for information after the allegations of misconduct were
submitted to the respondent, the parties agree the respondent did not possess the
intent to deceive the Commission when he made the erroneous statements to the