In re Mathis

312 Ga. 626

864 S.E.2d 40

In the MATTER OF Leonard T. MATHIS.

S21Y1269

Supreme Court of Georgia.

Decided: October 5, 2021

Richard F. Waddington, Douglas Vincent Chandler, Chandler Law, LLC, 4080 McGinnis Ferry Road, Bldg. 500, Suite 502, Alpharetta, Georgia 30005, for Appellant.

Paula J. Frederick, General Counsel, Jenny K. Mittelman, William Dallas NeSmith, III, Deputy General Counsel, James Stephen Lewis, Assistant General Counsel, State Bar of Georgia, 104 Marietta Street, N.W., Suite 100, Atlanta, Georgia 30303-2934, for Appellee.

Per Curiam.

This disciplinary matter is before this Court on the petition for voluntary discipline filed by Leonard T. Mathis (State Bar No. 976925) prior to the issuance of a formal complaint pursuant to Bar Rule 4-227 (b). In his petition, Mathis, who has been a member of the Bar since 2014, admits that, by his conduct in failing to ensure that his trust account was properly maintained, he has violated Rules 1.15 (I) (a) and 1.15 (II) (b) of the Georgia Rules of Professional Conduct, found in Bar Rule 4-102 (d), and he requests that, as a sanction for his admitted violations of the Rules, he receive either a State Disciplinary Review Board reprimand or a public reprimand. See Bar Rule 4-102 (b) (3), (4). The State Bar has filed a response, in which it suggests that this Court should accept Mathis's petition and impose a public reprimand.

In his petition, Mathis recounts that, in April 2020, he settled, with his client's authorization, a personal injury matter for $125,000 and shortly thereafter received a check for the settlement funds and deposited those funds into his trust account. Approximately one month later, Mathis issued a check to the client for approximately $47,000, which was the client's share of the settlement proceeds. Unbeknownst to Mathis, the client did not promptly negotiate the check, instead waiting approximately four months to do so. However, on the date on which the client did seek to negotiate the check, Mathis's trust account contained only $18,000, which resulted in the automatic generation by the bank of a notice of insufficient funds, which was directed to the State Bar.¹ Mathis became aware of the shortfall that evening, contacted the client the next morning to alert him to the situation, and made deposits from both his operating account and personal checking account to restore the balance of the trust account to $65,956. Mathis then presented the client with a new check, which, in addition to the settlement funds owed to the client, included an additional $100 to defray any costs incurred by the client. Mathis notes that the client was then able to negotiate the check without incident and that the client did not initiate the grievance in this matter. Mathis further notes that, when contacted by the Bar regarding the insufficient funds matter, he was forthright and cooperative, explaining the facts as he understood them and providing copies of relevant documents.

Mathis further recounts that, during the times in question, he had retained a CPA, whose duties included bookkeeping, monthly reconciliation of the trust account, and preparation of quarterly income statements for estimated tax filings. Mathis asserts that he believed in good faith that the CPA would keep him apprised of the status of the trust account, because the CPA's responsibilities included maintaining a ledger of each client's account and alerting Mathis to any discrepancies, such as outstanding checks drawn on the trust account. Mathis asserts that, "[d]ue in part to misplaced reliance on his CPA," on numerous occasions during the period at issue, he withdrew earned fees from his trust account without referencing a ledger detailing the amount of earned fees attributed to each client. Mathis also states that, on several occasions during that period, he transferred funds from his operating and personal accounts, and that many of these transfers were in response to his realization that the trust account did not contain funds sufficient to pay checks that were then outstanding.² Mathis acknowledges that the facts here reflect his own misunderstanding of proper trust account management, and he asserts that his references to his misplaced reliance on his now-former CPA are not intended to deflect responsibility for these failures onto the CPA, but are rather intended merely to demonstrate that these failures resulted from his being misinformed, rather than from any knowing and willful actions on his part.

Mathis acknowledges, as noted above, that his actions violated Rules 1.15 (I) (a) and 1.15 (II) (b). Mathis notes that, although his actions posed a potential threat of harm to the client, and although the client was unable to negotiate the initially tendered check for four days, the client did not file a grievance as to this matter and has not alleged that any actual injury occurred. As to the appropriate level of discipline, Mathis cites no factors in aggravation and cites in mitigation that he has no prior disciplinary record; that his actions do not demonstrate a selfish or dishonest motive; that he accepts responsibility for his reliance on his CPA and for managing his trust account without a proper understanding of bookkeeping and account procedures; that he quickly moved to remedy any potential harm caused by his conduct, by making corrective deposits to his trust account and by tendering a new check to the client, which included an additional $100 to cover any costs incurred by the client as a result of the insufficient funds issue; that he has implemented additional controls to ensure compliance with the standards applicable to the maintenance of a trust account, including by retaining a third-party reconciliation company, which is providing monthly three-way reconciliation of the trust account and monitoring his bookkeeping and accounting practices, by completing a 9.5-hour course on bookkeeping and trust compliance, and by overhauling his bookkeeping and accounting practices; that he has cooperated fully with the State...