Attorney for Respondent
Kevin P. McGoff
Attorney for the Indiana Supreme Court Disciplinary Commission
Donald R. Lundberg, Executive Secretary
Dennis K. McKinney, Staff Attorney
Indiana Supreme Court
In The Matter Of
Mark Eugene Small ________________________________
November 23, 2004
We find today that Respondent Mark Eugene Smalls mismanagement of his attorney trust
account warrants his suspension from the practice of law in this state for
six months. We will stay the period of suspension subject to conditions designed
to ensure his compliance with basic provisions governing management of such accounts.
This attorney disciplinary action began on May 24, 2004, when the Disciplinary Commission
filed a verified complaint for disciplinary action against the respondent, alleging several acts
of attorney misconduct involving his attorney trust account. In resolution of the
complaint, the Commission and the respondent have submitted for this Courts approval a
Statement of Circumstances and Conditional Agreement for Discipline pursuant to Ind.Admission and Discipline
Rule 23(11). In that agreement, the respondent admits to misconduct and agrees
with the Commission that a 6-month stayed suspension is an appropriate sanction for
his misconduct. We today approve this agreement and herein recount the facts
and circumstances of this case. The respondents admission to this states bar
in 1989 confers jurisdiction in this matter.
The parties stipulate that the respondent opened a trust account on January 25,
2000. The next day, the respondent deposited $650 into the account on
behalf of a certain client. Thereafter, through a series of disbursements
made on the clients behalf, the respondent by April 13, 2000
the funds he held on the clients behalf to $30. On May
30, 2000, he drew a check for $500 on the account, payable to
himself, for attorneys fees for legal work he provided to the client, despite
the fact that the account by that time held only $30 in trust
for the client. Similarly, on August 1, 2000, the respondent disbursed $2000
from the account on the clients behalf, despite having exhausted the client funds
he held in trust. On August 11, 2000, he deposited $500 into
his trust account to partially replace funds of other clients or third parties
that he had wrongly disbursed when he disbursed more money on behalf of
the client than he held in trust for the client.
Similarly, in February 2000 the respondent was obligated to hold $584.50 in trust
for a third party creditor after settling a lawsuit on another clients behalf.
On February 24, 2000, he wrote a check for $584.50 to
the third party creditor. The creditor did not present the check
for payment until October 10, 2000, at which time the account held insufficient
funds to satisfy the obligation and which resulted in the bank notifying the
Commission of an overdraft of the respondents trust account, pursuant to Admis.Disc.R. 23(29).
In fact, the accounts balance had fallen below sufficient levels on
several occasions between February 24 and October 10, 2000. The Commissions investigation
of the respondents trust account overdraft revealed that the respondent had failed properly
to distinguish between trust and non-trust funds, that he failed to account separately
for funds he held in trust for each client or entity, that he
failed adequately to account for his own funds that he allowed to accumulate
in the account, and that he failed adequately to reconcile his own trust
account records with monthly trust account bank statements.
The respondent mismanaged his trust account in other ways as well. In
September 2000, the respondent disbursed $100 from the trust account, with a check
payable to himself, to pay a filing fee for a client for whom
the respondent held no funds in trust. Although the respondent intended
that the disbursement come from his personal funds, the account did not contain
sufficient personal funds for that purpose. Accordingly, the disbursement invaded money the
respondent was holding in trust for other clients and third parties. On
other occasions, bank service charges invaded client and third party funds held in
the account. The parties agreement recites that, although the respondent inadvertently held
some of his personal funds in the account, he did not do so
with the intent of maintaining an identified pool of his own funds to
maintain a nominal balance, as permitted by Prof.Cond.R. 1.15(a). See footnote
We find that the respondent violated Prof.Cond.R. 1.15(a) by failing to hold in
his attorney trust account all of the client and third party funds he
was obligated to hold in trust and by failing to keep adequate records
of his attorney trust account.
We find further that he failed to
abide by Admis.Disc.R. 23(29)(a)(2) and (3) by his failure to maintain adequate trust
The respondent and the Commission today ask us to approve his six-month suspension
from the practice of law, stayed to a two-year period of probation subject
to specific conditions designed to assure the respondents compliance with required attorney trust
account management provisions. Relevant to the determination of the adequacy of this sanction
are factors in mitigation. Accordingly, the parties cite the respondents previously unblemished attorney
disciplinary record and the fact that he cooperated with the Commission during its
investigation and prosecution of this matter. The parties stipulations indicate that the
respondents funds mismanagement was the product of neglect, oversight, and ignorance of governing
strictures and not a calculated plan to convert client and third party funds.
With this in mind, are satisfied that the agreed sanction, with its
probationary conditions designed to educate the respondent and protect his clients, is adequate
in this case.
It is, therefore, ordered that the respondent, Mark Eugene Small, is hereby suspended
from the practice of law for a period of six (6) months, with
the entire six months to be stayed, and the respondent placed on probation
for two years, subject to the following terms and conditions of probation:
The respondents term of probation will begin on the date this Court accepts
the terms of this agreement and his probation will run for two years
Within six (6) months of the beginning of his probation term, the respondent
will attend an ethics seminar with a trust account management section of at
least one hour in length.
The respondent will have his trust account monitored by a CPA to criteria
acceptable to the Disciplinary Commission, who will then report quarterly to the Commission
on the respondents compliance with the Rules of Professional Conduct and the Admission
and Discipline Rules for lawyer trust accounts.
The respondent will comply in all respects with his obligations, duties, and responsibilities
under the Indiana Rules of Professional Conduct for Attorneys at Law.
The respondent will report to the Disciplinary Commission any changes in his business
or home address or employment with fourteen (14) days of the change.
The respondent will be responsible for any other costs arising from his probation.
In the event it is established pursuant to Admis.Disc.R. 23(17.2) that the respondent
has violated the terms of his probation, then the stay of his six-month
suspension shall be vacated, and the respondent will be suspended from the practice
of law in Indiana for six months, with automatic reinstatement to the practice
of law in Indiana thereafter.
The respondent will immediately report to the Disciplinary Commission any failure by him
to comply with the terms of his probation. Such report is to
be made in writing within 14 days of the compliance failure and must
specifically identify the type and circumstance of his failure to comply with the
terms of his probation.
The Clerk of this Court is directed to provide notice of this order
in accordance with Admis.Disc.R. 23(3)(d), to the hearing officer, and to 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.
Costs of this proceeding are assessed against the respondent.
The conditional agreement refers to April 13, 2002, but the sequence of
events indicates the proper year is 2000.
Footnote: Admission and Discipline Rule 23(29)(b) provides:
(b) Overdraft Notification Agreement Required. A financial institution shall be approved
as a depository for trust accounts if it files with the Commission an
agreement, in a form provided by the Commission, to report to the Commission
whenever any properly payable instrument is presented against a trust account containing insufficient
funds, irrespective of whether or not the instrument is honored. The Commission
shall establish rules governing approval and termination of approved status for financial institutions,
and shall annually publish a list of approved financial institutions. No trust
account shall be maintained in any financial institution that does not agree so
to report. Any such agreement shall apply to all branches of the
financial institution and shall not be canceled except upon thirty (30) days' notice
in writing to the Commission.
Footnote: In this respect, Indiana Professional Conduct Rule 1.15(a) provides that a lawyer
shall hold property of clients or third persons that is in a lawyers
possession in connection with a representation separate from the lawyers own property, and
that [a] lawyer may deposit his or her own funds reasonably sufficient to
maintain a nominal balance.
Indiana Professional Conduct Rule 1.15(a) provides, in full:
A lawyer shall hold property of clients or third persons that is in
a lawyer's possession in connection with a representation separate from the lawyer's own
property. Funds shall be kept in a separate account maintained in the
state where the lawyer's office is situated, or elsewhere with the consent of
the client or third person. Other property shall be identified as such
and appropriately safeguarded. Complete records of such account funds and other property
shall be kept by the lawyer and shall be preserved for a period
of five years after termination of the representation. A lawyer may deposit
his or her own funds reasonably sufficient to maintain a nominal balance.
Footnote: Those provisions provide:
Maintenance Of Trust Funds In Approved Financial Institutions; Overdraft Notification
(a) Clearly Identified Trust Accounts In Approved Financial Institutions And Related Recordkeeping Requirements.
(1) Attorneys shall deposit all funds held in trust in accounts clearly identified
as "trust" or "escrow" accounts, referred to herein as "trust accounts" and shall
inform the depository institution of the purpose and identity of the accounts.
Funds held in trust include funds held in any fiduciary capacity in connection
with a representation, whether as trustee, agent, guardian, executor or otherwise. Attorney
trust accounts shall be maintained only in financial institutions approved by the Commission.
(2) Every attorney shall maintain and preserve for a period of at least
five (5) years, after final disposition of the underlying matter, the records of
trust accounts, including checkbooks, canceled checks, check stubs, written withdrawal authorizations, vouchers, ledgers,
journals, closing statements, accounting or other statements of disbursements rendered to clients or
other parties with regard to trust funds or similar equivalent records clearly and
expressly reflecting the date, amount, source, and explanation for all receipts, withdrawals, deliveries
and disbursements of the funds or other property held in trust.