This mаtter comes before us on the report of a division of the Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R. 35.11.
I. Procedural and Factual Background.
Sara Kersenbrock is an attorney licensed to practice law in Iowa. Kersen-brock is a member of the Iowa State Bar Association, Black Hawk County Bar Association, and the American Bar Association. Kersenbrock has no prior disciplinary history.
The Board filed a complaint against Kersenbrock in September 2011. The Board alleged Kersenbrock violated Iowa Rules of Professional Conduct 32:1.5(a) (collecting an unreasonable fee), 32:1.15(a) (failing to maintain adequate records), 32:1.15(c) (failing to deposit retainers into client trust account), and 32:8.4(c) (engaging in conduct involving misrepresentation).
Anderson testified for the Board at the hearing. Anderson worked for Kersen-brock as a paralegal from 2005 to 2010. Anderson testified Kersenbrock received retainers in most of her cases. She stated Kersenbrock did not deposit any retainеrs into the client trust account early on in her employment. About fifty to fifty-five percent of the retainers were checks, and forty-five percent were made by cash. Anderson explained that the vast majority of check retainers were deposited into Kersenbrock’s personal/operating bank account. Anderson further explained Ker-senbrock did not deposit cash retainers into the client trust acсount, but instead placed the cash retainer in a book or drawer and spent the cash as needed. In one matter in particular, Anderson stated Ker-senbrock received a $3000 cash retainer from Bullet Harding on February 17, 2010. According to Anderson, Kersenbrock gave Anderson a $100 bonus and placed the remainder into a book on Kersenbrock’s bookshelf. In addition to the client retainer problems, Anderson also testified that Kersenbrock prematurely took a second-half probate fee in the Schoonover estate. Anderson stated Kersenbrock received the complete $2500 payment for the Schoon-over estate before Kersenbrock filed the final report in the estate. Anderson further testified Kersenbrock did not perform trust account reconciliations during her employment.
Brinkmeyer also testified аt the hearing. Brinkmeyer stated he saw no indication Kersenbrock made regular deposits of retainers into her trust account. From 2005 through 2007, Kersenbrock made no deposits into her client trust account. The balance in, the trust account increased from $321 to $1665 in 2008, but it was unclear to Brinkmeyer how many deposits were made during .that time because some of the statements were missing. Brink-meyer found only three deposits in 2009. Also, in 2010 Kersenbroсk made five deposits, yet records show she received at least twelve retainers that year. While Brinkmeyer opined Kersenbrock failed to properly deposit client funds into the trust account, he conceded on cross-examination he did not know how much time she spent working on a client’s case before she received the retainer. Brinkmeyer therefore generally could not say whether Kersen-brоck earned the retainers, which would have eliminated the need for her to place the retainer into a client trust account.
Brinkmeyer did specifically testify, however, that Kersenbrock failed to properly deposit retainers in two matters. Kersen-brock received a $600 retainer from Greg
In addition, Brinkmeyer testified Ker-senbrock failed to maintain adequate records. Brinkmeyer noted that Kersen-brock had a manual client ledger book, but the entries were sporadic. He stated that Kersenbrock failed to “keep on any kind of a regular basis any list of clients with the balances that each client had in their trust account.” Kersenbrock also had an incomplete trust account register. Brinkmeyer stated it was impossible to reconcile the trust account with balances of individual clients because “[t]he records were not there.” Additionally, Brinkmeyer stated Kersenbrock did not have any trust account reconciliations. Brinkmeyer testified that, although Kersenbrock stated in her client security questionnaire she performed monthly reconciliations, he concluded these statements were not true.
Kersenbrock testified on her own behalf. She conceded she did not deposit many of the retainers she received from 2005 to 2010 into a client trust account. She stated, however, that it was unnecessary for her to do so because the retainers were already earned. Kersenbrock explained that, although records demonstrated she received a number of retainers between 2005 through 2010, none of the records admitted by the Board established how much work she had already performed for the clients from whom she received the retainers. Kersenbrock did admit, however, that she should havе deposited fifty to one hundred dollars into a trust account in the Stanek matter. She also stated she did not immediately deposit the Harding retainer and did not have a good reason for failing to do so. Kersenbrock recognizes she should have taken the Harding retainer to the bank. In the Schoonover matter, Kersenbrock testified she filed the final report within two or three days of sending the bill of $2500 to the administrator. Finally, Kersenbrock stated that she “had not done official reconciliation with the checkbook” despite telling the client security commission she did so in the questionnaire, but also stated she performed monthly reconciliations “in her head.”
Kersenbrock testified that her organizational skills are better now. She acknowledged inadequacies in her recordkeeping and has taken measures to correct them.
Following the hearing, the commission found Kersenbrock failed to deposit client retainers into a client trust account as required by rule 32:1.15(c), failed to maintain adequate records in violation of rule 32:1.15(a), collected an unreasonable fee because she received a premature probate fee in the Schoonover matter in violation of rule 32:1.5(a), and engaged in conduct involving misrepresentation by falsely certifying the status of her trust accounting procedures on annual reports to the client security commission in violation of rule 32:8.4(c). The commission recommended a public reprimand.
II. Standard of Review.
We review the findings of the commission de novo. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Johnson,
III. Ethical Violations.
A. Trust Account. Iowa Rule of Professional Conduct 32:1.15(c) states: “A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.” Iowa R. Prof'l Conduct 32:1.15(c); see Iowa Supreme Ct. Att’y Disciplinary Bd. v. Netti,
We conclude the Board has proven a violation of rule 32:1.15(c) by a convincing preponderance of the evidence in the Sta-nek and Harding matters. Although Anderson’s credibility was an issue at the hearing, the same is not true with respect to Brinkmeyer. Brinkmeyer testified that Kersenbrock stated she did not deposit the $600 retainer in the Stanek matter into the trust account even though “[s]he understood she should have.” Kersenbrock testified at the hearing that fifty to one hundred dollars of the retainer in the Stanek matter should have been placed in a trust account.
Moreover, in the Harding matter, Ker-sеnbrock was given a $3000 cash retainer on February 17, 2010. Kersenbrock testified she did not immediately deposit the retainer. Instead, she placed the retainer in her “sock drawer” for “a number of weeks.” Records show Kersenbrock withdrew $1360 of the retainer on June 20 for fees and costs. Then, on July 2, Kersen-brock finally deposited the balance of the retainer ($1420) into the client trust account. Kersenbrock testified she had no good reason for failing to deposit the retainer in the Harding matter when she received it.
Although we find the Board has proven a violation of rule 32:1.15(c) in the Stanek and Harding matters, on this record the Board has failed to establish additional violations. While it is true Brinkmeyer testified Kersenbrock did not regularly deposit retainers into the client trust account between 2005 and 2010, Kersenbrock argues she was not required to deposit them becаuse the fees were earned. The Board did not produce any evidence establishing the fees were unearned. Also, Brinkmeyer conceded he did not know how much time Kersen-brock spent working on a client’s case before receiving the retainer.
On these facts, we are satisfied the Board has met its burden in establishing Kersenbrock violated rule 32:1.15(c) by failing to deposit retainers into a’ client trust account in the Stanek and Harding matters.
B. Adequacy of Records. The Board alleges Kersenbrock violated rules 32:1.15(a), (f), and 45.2(2). Rule 32:1.15(a) provides, “Complete records of such [trust] account funds ... shall be kept by the lawyer and shall be preserved for a period of six years after termination of the representation.” Iowa R. Profl Conduct 32:1.15(a). The comments to this rule explain that a “lawyer should maintain on a
We conclude the Board has established a violation of these rules. Brinkmeyer’s audit revealed Kersenbrock failed to “keep on any kind of a regular basis a list of clients with the balances that each client had in their trust account.” For example, between May and August 2008, the balance of the trust account increased from $321 to $1665. Brinkmeyer tеstified that some of the statements were missing, though, so he could not tell how many deposits were made during that time period or from which client retainer the deposits derived. Similarly, Kersenbrock failed to provide sufficient information to determine the source of many of the deposits made into her operating account in 2009 and 2010. Thus, according to Brinkmeyer, “many of the deposits in the operating account remain unidеntified.” In his memorandum, Brinkmeyer noted he could “not put any amount of confidence in the details of either the check register or the client ledger” because the entries in the manual ledger were sporadic and the trust account register was incomplete. Brinkmeyer explained Kersenbrock had no electronic record keeping system, and she prepared only minimal manual records over a pеriod of several years. Brinkmeyer concluded in his memorandum that “[r]ecordkeeping by [Kersenbrock] is nearly non-existent,” and that “[tjhere is an abundance of evidence ... to clearly show that Kersenbrock has failed to keep accurate records as required.” He also stated Kersenbrock failed to adequately train or oversee proper record keeping for purposes of the client trust account. Kersenbrock herself acknowledged she needed to improve her bookkeeping procedure.
C. Premature Probate Fee. Our probate rules state that a lawyer is entitled to second-half probate fees “when the final report is filed and the costs have been paid.” Iowa Ct. R. 7.2(4); see Iowa Supreme Ct. Att’y Disciplinary Bd. v. Casey,
The Board alleges Kersenbrock received the first- and second-half fees in the Schoonover estate before the final report was filed. Records show Kersenbrock received the entire $2500 probate fee on February 25, 2010. The final reрort, however, was not filed until March 4, 2010. Kersenbrock concedes the second-half fees were collected prematurely, testifying that she sent a bill to the executor of the estate for the second-half fees two or three days before filing the final report. We therefore agree with the Board that Kersen-brock prematurely collected the second-half probate fees in violation of rule 32:1.15(а) of the Iowa Rules of Professional Conduct.
D. Misrepresentation. Iowa Rule of Professional Conduct 32:8.4(c) states it is professional misconduct for a lawyer to “engage in conduct involving dishonesty,
The Board alleges Kersenbrock engaged in conduct involving misrepresentation by stating in her annual client security questionnaires that she (1) kept “all funds of clients for matters involving the practice of law in Iowa in separate interest bearing trust acсounts located in Iowa”; (2) kept “all retainers, regardless of size ... deposited in [her] trust account”; (3) “train[ed] and supervised] [her] nonlawyer staffs involvement with [her] trust account”; and (4) performed monthly “reconciliations of [her] trust account balances with bank statement balances and individual client ledger balances.”
We agree with the commission that the Board has proven a violation of rule 32:8.4(c). As discussed above, Kеrsen-brock failed to deposit the retainers in the Stanek and Harding matters in an interest-bearing trust account. Kersenbrock admitted she knew she should have deposited the retainers. Moreover, Brinkmeyer testified it was impossible to reconcile the accounts because the records were inadequate. See Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Gottschalk,
Having found Kersenbrock violated rules 32:1.15(a), (c), (f), 32:8.4(c), and 45.2(2), we now turn to the appropriate sanction.
IV. Sanction.
The appropriate sanction is determined by the particular circumstances of each case. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Ackerman,
We first consider mitigating circumstances. Kersenbrock has no prior disciplinary history. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Denton,
There is, however, an aggravating circumstance. Because Kersenbrock did not keep adequate records, we have no way of knоwing whether the trust account violation outlined above was an isolated occurrence or a more frequent event. The persistent failure to keep appropriate records has the effect of preventing effective review of Kersenbrock’s accounting practices.
A public reprimand might be sufficient sanction for each of the ethical violations, standing alone. See, e.g., Denton,
V. Conclusion.
For the above reasons, we suspend the license of Sаra Kersenbrock to practice law in this state for thirty days. The suspension applies to all facets of the practice of law. Iowa Ct. R. 35.12(3). Kersen-brock must comply with the notification requirements of rule 35.23, and costs are taxed against her pursuant to rule 35.27(1). Unless the Board objects, Kersenbrock’s license will be automatically reinstated on
LICENSE SUSPENDED.
Notes
. Unless otherwise specified, all citations to the Iowa Court Rules are to the 2012 version, effective February 20, 2012.