An Attorney Registration & Disciplinary Commission Review Board upheld a hearing board’s findings in the matter of a Belleville attorney charged with misconduct in the handling of client settlement funds and his response to the ARDC’s inquiries about the matter.
The hearing board found that the respondent, Paul M. Storment Jr., had committed some, but not all, of the charged misconduct because “his failures were found to be negligent rather than dishonest.”
The review board recommended disciplinary action of one year’s suspension, stayed after five months by probation.
The complaint against Storment alleges that he “used funds that he should have been holding in his client trust account for a lienholder, then provided false information to the ARDC when it inquired about the matter and, therefore, that he failed to properly safeguard client or third-party funds, knowingly made false statements of material fact in connection with a disciplinary matter and engaged in dishonesty.”
While representing Charles Rives in a personal-injury suit stemming from a car accident, Storment received a settlement check for $25,000, which he deposited into his client trust account in November 2017. He subsequently wrote checks from the account to himself, Rives and two lienholders, including Memorial Hospital of Belleville.
On Dec. 18, 2017, a check for $6,000 Storment wrote to himself cleared his client trust account when he deposited it into his business account. The trust account was left with $421, but the $3,500 check to Memorial Hospital had not yet cleared. Storment learned of the bounced check on Dec. 21, 2017, and began investigating the problem with the bank and an accountant and notified Rives of the issue.
When Storment contacted the hospital, he was told that Rives did not owe it any money, leaving Storment “confused” because he did not know whom to pay.
Months later, the hospital discovered its accounting department had mistakenly failed to remove the credit from Rives’ account after the check bounced, leading to the account showing a zero balance, though this only came to light as part of the ARDC inquiry.
When the ARDC learned of the overdraft in January 2018 it sent Storment a letter asking for an explanation and financial record copies. Storment replied days later stating that after receiving notice of the overdraft from the bank, he transferred money back into his client trust account. This was not true.
The ARDC followed up later in the month with another request for records, at which point Storment wrote that once he “received notice of what happened, I immediately corrected the problem.”
These letters are the basis of the false statements charges in the administrator’s complaint. Testifying before the hearing board, Storment explained the misstatement about paying the money back was an oversight because his secretary had drafted the response letter and he had not read it before signing and sending it.
He clarified that the funds had not been returned in his second letter. He also testified that the second letter contained no misstatement because he had begun investigating the problem immediately and he was “in the process of correcting the problem” at the time of the letter’s writing and that is what he had been referring to.
The hearing board found that while “respondent’s letters to the ARDC contained inaccurate statements of material fact, the administrator had not proved that they were knowing misstatements,” especially in the instance of the second letter where multiple interpretations of the statement were possible.
Therefore, the board determined that Storment had “engaged in dishonesty” and that he “acted with reckless disregard for the truth of the matters stated in his letters,” however since there was “no clear and convincing evidence that respondent knowingly made false statements” the board found him accountable for only one of the two misstatements violations alleged by the administrator.
A review of Storment’s records by the ARDC investigators and Storment himself revealed that the cause of the overdraft was inaccurate bookkeeping.
Storment “delegated all computerized accounting tasks to his secretary” as he did not know how to use his computer’s Quicken system. Usually his secretary would create computerized checks for Storment, but he would write checks by hand if he was having “secretarial problems” which he testified he was having at the time the check to Memorial Hospital was written.
When writing these checks, Storment would not consult the electronic account records on his computer, but rather rely on the settlement sheets and the costs and liens associated with each client’s file, all of which were prepared by his secretary.
ARDC investigator James Burton “found multiple inconsistencies, discrepancies and omissions’ when reviewing the records maintained by Stroment’s office. Based on his review of the documents, Burton testified that “respondent’s secretary’s work was unacceptable.”
Furthermore, Storment explained that at the time of his misconduct he took his fees out of his client trust account in “increments rather than in their entirety when earned.”
When he wrote himself the $6,000 check that caused the Memorial Hospital check to be rejected, he believed he was taking fees for another matter in which he was involved.
In that case Storment was entitled to a total of $124,000. He had already taken $121,000 in separate payments and “he knew he was entitled to some additional fees in that matter but did not know or check to determine exactly how much he was still due.”
Upon reviewing the evidence and testimony, the hearing board determined that Storment had indeed violated Rule 1.15(a) for failing to safeguard $3,464.50 of the $3,500 he should have been holding in his account on behalf of Rives for the Memorial Hospital payment.
However, the board determined that this misconduct was not dishonest, having “found no clear and convincing evidence that he used his client’s funds knowingly, rather than due to poor bookkeeping practices.”
The hearing board recommended disciplinary action of one year’s suspension, stayed after five months by probation with conditions to address his poor bookkeeping and account management practices.
On appeal, the administrator argued that the misconduct was based on “deliberate choices rather than deficiencies in bookkeeping” and requested the review board increase the punishment to either disbarment or “a suspension of at least two years and until further order, so that respondent will be required to prove rehabilitation before being allowed to return to practice.”
The review board concurred completely with the hearing board’s determination and recommended sanction.
Mitigating factors which led to this decision included Storment’s lack of previous discipline in a similar matter. Although Storment has previously faced discipline by the ARDC, the incidents in question were based on completely different conduct and happened more than 20 years ago.
Furthermore, the fact that no harm was done to any client in this matter and that Rives both continued to use Storment’s legal services and testified on his behalf after the Memorial Hospital problem arose was seen as “particularly significant.”
Finally, the hearing board found Storment credible because he “immediately told Rives about the check and did nothing to conceal his conduct.”
Storment was represented before the ARDC by James R. Williams of Williams, Caponi & Associates P.C. in Belleville. He was not available for comment.
The ARDC’s hearing process has the hearing board acting as a trial court and the review board as an appellate panel.
The final decision is made by the Illinois Supreme Court.