FOR THE RESPONDENT FOR THE INDIANA SUPREME COURT
Frederick T. Work Donald R. Lundberg, Executive Secretary
504 Broadway Avenue Dennis K. McKinney, Staff Attorney
Gary, IN 46402 115 West Washington Street, Suite 1060
Indianapolis, IN 46204
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) Case No. 45S00-9705-DI-308
CHARLES H. GRADDICK )
November 19, 1999
The Indiana Supreme Court Disciplinary Commission and the respondent, Charles H. Graddick, agree
that he violated the
Rules of Professional Conduct for Attorneys at Law by
failing diligently to represent his clients, failing to return unearned fees to a
client after being discharged, and failing to hold funds collected on behalf of
a third party in a trust account.
This case is now before us for approval of a
Statement of Circumstances
and Conditional Agreement for Discipline entered into by the parties pursuant to Ind.Admission
and Discipline Rule 23, Section 11(c). Our jurisdiction here arises from the
respondent's admission to this state's bar on April 9, 1974.
Under Count I, the parties agree that a client hired the respondent in
August 1989 to represent her in a claim against her employer, a city
school system. The respondent filed a notice of claim with school officials
in September 1989. In April 1991, the respondent filed suit against the
school alleging, on behalf of his client, breach of contract and retaliatory firing.
In the spring of 1993, the respondent's office notified the client that
the school had scheduled her deposition for May 18, 1993. The respondent
did not attend the deposition with the client; instead, an attorney associate of
the respondent attended. On March 18, 1994, the client's case was dismissed pursuant
to Ind.Trial Rule 41(E). In September 1994, the respondent wrote to the
client, advising her that, after reviewing her deposition, he concluded that she had
no legal grounds to pursue her claim. The respondent was unaware that
the case had been dismissed and therefore did not inform the client that
her case had been dismissed.
We find that the respondent violated Ind.Professional Conduct Rule 1.2(a)
by failing to
abide by his client's decision to prosecute the case; and Prof.Cond.R.1.3
to act with reasonable diligence and promptness in representing the client.
Under Count II, the parties agree that in 1989, a client hired the
respondent to represent her in a personal injury claim. In 1994, the
client's case settled for $57,500. The respondent did not deposit the settlement
check into his trust account. Instead, he negotiated the check, kept $19,166
in attorney fees pursuant to a contingency fee agreement, paid the client a
$10,000 advance and retained $28,334 of the settlement proceeds to satisfy the client's
outstanding medical expenses in a series of money orders. At that time,
the client's medical claims were more that the amount the respondent had retained.
However, the respondent was able to negotiate settlements with the client's medical
providers such that the aggregate of their claims was less than the amount
of the money retained. After payment to the medical providers, the respondent
distributed the remaining amount to the client's heirs, since by that time the
client had passed away.
Indiana Professional Conduct Rule 1.15(a) provides, in relevant part, that funds of a
client or third party held in a lawyers possession in connection with a
representation shall be held in a separate account maintained in the state where
the lawyers office is situated, or elsewhere with the consent of the client
or third person. The comment to that rule states that client or
third party funds in the possession of the lawyer should be held in
one or more trust accounts. There is nothing in the record before
us indicating that the medical creditors or his client consented to the settlement
funds being held by the respondent outside of an account. Accordingly, we find
that the respondent violated Prof.Cond.R. 1.15(a) by failing to hold the funds earmarked
for payment of medical creditors in such an account.
Under Count III, the parties agree in 1994 a guardianship was opened in
LaPorte Superior Court No. 3 for an elderly woman. Due to problems
with the original guardian, the LaPorte County Council on Agings Guardianship Program was
appointed as successor guardian. The program was overseen by its director and
represented in the matter by counsel of record. The program petitioned
the court to sell the wards personal property, which motion the court granted.
The wards niece hired the respondent to request a hearing on the sale
of the wards property. At that time, the respondent employed in his
office a disbarred lawyer.
After the respondent filed his appearance on behalf
of his client, the disbarred lawyer called the director of the guardianship program
and identified himself as an employee of the respondent's law firm. The
disbarred lawyer told the director that if the guardian program continued to pursue
selling the ward's personal property it would be in direct violation of the
law. At no time during the conversation did the disbarred lawyer disclose
to the director that he was no longer licensed as an attorney.
After the telephone conversation, the director delayed the sale, although the property was
eventually sold. The disbarred lawyer was later found to be in contempt
of this Court, inter alia, for his telephone call to director.
See Matter of Contempt of DeLoney, 689 N.E.2d 431(Ind. 1997). The evidence
at the contempt hearing indicated that the disbarred lawyer made the telephone call
to the director at the instigation of someone other than the respondent.
The parties also agree that the respondent had no knowledge of the
disbarred lawyers telephone contact with the director.
The disbarred lawyer, over whom the respondent had directly supervisory authority, called the
director of the program to speak to him about the guardianship matter instead
of speaking with the attorney of record for the program. Professional Conduct
Rule 4.2 provides that, in representing a client, a lawyer shall not communicate
about the subject matter of the representation with a party the lawyer knows
to be represented by another lawyer in the matter, unless the lawyer has
the consent of the or is authorized by law to do so.
Professional Conduct Rule 5.3(c) imputes the conduct of a lawyers nonlawyer employees to
the lawyer under certain circumstances, and that is in essesnce the commissions charge
against the respondent.
Under Prof.Cond.R. 5.3(c)(2), a nonlawyer employees acts are imputed
to the supervising attorney, but only if the attorney knows of the conduct
at a time when its consequences can be avoided or mitigated but fails
to take reasonable remedial action. Similarly, under Prof.Cond.R. 5.3(c)(1), the acts are
imputed only if the attorney orders the offending conduct or, with knowledge of
it, ratifies it. The parties in this case agree that the respondent
knew nothing of the disbarred lawyers telephone call. Further, the tendered agreement
provides that the telephone call was made at the instigation of someone other
than the respondent. Accordingly, we decline to find that the respondent violated
Prof.Cond.R. 5.3(c) under the agreed facts of Count III.
The parties agree that under Count IV, the respondent was hired in 1995
to defend a client against a series of traffic charges filed in Hammond
City Court. The client paid the respondent $500 as partial payment towards
the balance of the respondent's fee. During the next year, the respondent
failed to appear for at least six trial settings. Additionally, the respondent
continued the client's case at least three times on short notice, one to
three days before trial. In May 1996, the client discharged the respondent
and requested that the respondent refund her $500 and return to her case
file materials which she was entitled. The respondent did neither.
The respondent's failure to defend diligently his client's case and his subsequent failure
to return unearned fees and the client's file after being discharged violated Prof.Cond.R.1.3
The Commission and the respondent agree that the respondent's conduct warrants a public
reprimand. Among the factors this Court weighs when considering an appropriate disciplinary
sanction are mitigating and aggravating circumstances. Matter of Christoff and Holmes, 690
N.E.2d 1135 (Ind. 1997). The parties agree on a number of
mitigating factors. With respect to Count I, they agree that the respondent
was not personally on notice of the cases dismissal until after he wrote
to the client. Under Count II, the respondent and the Commission stipulate
that, even though the respondent did not keep the $28,334 in settlement proceeds
in a trust account, he did keep it separate from his personal funds.
All of the settlement proceeds were distributed to the appropriate recipients.
After the events leading to that count, the respondent voluntarily attended a course
on trust account management. Finally, during his neglect of the client's traffic
matters in Count IV, the respondent had been hospitalized and was recovering from
Despite these factors, the respondent's actions warrant sanction. The respondents action in
Count I resulted in his clients case being dismissed. The respondent then
proceeded to make a bad situation even worse by providing his client erroneous
information as to the status of the case. His other acts under
Counts II and IV reveal similar instances of poor case management and negligent
treatment of this clients and their concerns. Accordingly, conclude that his
conduct deserves public reprimand.
It is, therefore, ordered that Charles H. Graddick, is hereby publicly reprimanded and
admonished for his conduct.
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 are assessed against the respondent.
Shepard, C.J., and Dickson, Sullivan and Boehm, JJ., concur.
Indiana Professional Conduct Rule 1.2(a) provides, in relevant part, that a lawyer
shall abide by a client's decision concerning the objectives of representation and shall
consult with the client as to the means by which they are to
Indiana Professional Conduct Rule 1.3 provides that a lawyer shall act with reasonable
diligence and promptness in representing a client.
The disbarred lawyers employment in the respondents law office predated this
Courts 1998 amendment to Admis.Disc.R. 23(26)(b), which now provides that a disbarred lawyer
shall not maintain a presence or occupy an office where the practice of
law is conducted.
Indiana Professional Conduct Rule 5.3(c) provides that with respect to a nonlawyer employed
or retained by or associated with a lawyer, a lawyer shall be responsible
for conduct of such a person that would be a violation of the
Rules of Professional Conduct if engaged in by a lawyer if: (1) the
lawyer orders, or with the knowledge of the specific conduct, ratifies the conduct
involved or (2) the lawyer is partner in the law firm in which
the person is employed, or has direct supervisory authority over the person, and
knows of the conduct at a time when its consequences can be avoided
or mitigated but fails to take reasonable remedial action.
It may be that the agreed facts constitute a violation of
Prof.Cond.R. 5.3(a), which provides that a partner in a law firm shall make
reasonable efforts to ensure that the firm has in effect measures giving reasonable
assurance that nonlawyer employeesconduct is compatible with the professional obligations of the lawyer,
or Prof.Cond.R. 5.3(b), which provides that a lawyer having direct supervisory authority over
the nonlawyer shall make reasonable efforts to ensure that the persons conduct is
compatible with the professional obligations of the lawyer. However, since the verified
complaint in this case charged only a violation of Prof.Cond.R. 5.3(c), we are
precluded from making such a finding.
Indiana Professional Conduct Rule 1.16(d) provides that upon termination of representation, a lawyer
shall take steps to the extent reasonably practicable to protect a client's interests
such as giving reasonable notice to the client, allowing time for employment of
other counsel, surrendering papers and property to which the client is entitled and
refunding any advance payment of fee that has not been earned. The
lawyer may retain papers relating to the client to the extent permitted by