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In re Rivers, Opinion

Supreme Court of South Carolina

July 16, 2014

In the Matter of William Jones Rivers, III, Respondent

Submitted June 13, 2014

Appellate Case No. 2014-001185.

Lesley M. Coggiola, Disciplinary Counsel, and Sabrina C. Todd, Assistant Disciplinary Counsel, both of Columbia, for Office of Disciplinary Counsel.

William Jones Rivers, III, of Darlington, Pro se.



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[409 S.C. 81] PER CURIAM:

In this attorney disciplinary matter, respondent and the Office of Disciplinary Counsel (ODC) have entered into an Agreement for Discipline by Consent (Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court Rules (SCACR). In the Agreement, respondent admits misconduct and consents to disbarment with conditions prior to seeking readmission. We accept the Agreement and disbar respondent from the practice of law in this state. In addition, respondent shall comply with each of the conditions set forth hereafter in this opinion prior to seeking readmission to the practice of law in this state. The facts, as set forth in the Agreement, are as follows.


A. Self-Report and Background

In November 12, 2012, after learning his firm's trust account was being investigated by ODC, respondent self-reported his conduct to ODC. He explained that his law partner, John Schurlknight (Partner), handled all of the firm's accounts, including its trust accounts. Respondent admitted [409 S.C. 82] that approximately six years before his self-report, Partner told him that the firm had a shortage in the trust account. Partner's plan to resolve the issue was to use money belonging to other clients to keep the account afloat. Respondent did nothing to prevent the implementation of this plan and, as a result, the firm began the self-perpetuating cycle of misappropriation of client funds. Respondent actively participated in this process.

In May 2011, Partner told respondent that the trust account was short a large sum owed to clients, Mr. and Mrs. A, and that Mr. and Mrs. A agreed to accept monthly payments until the entire amount was repaid. Again, respondent took no action to protect the firm's clients, the firm's future clients, or

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third parties. On June 1, 2011, respondent and Partner signed and gave Mr. and Mrs. A a promissory note acknowledging they owed them $1,695,000 and promised to pay $12,000 per month until the debt was satisfied. The debt was owed because Partner had misappropriated proceeds on claims he settled without Mr. and Mrs. A's knowledge.

Although the exact manner in which the funds were misappropriated varied to some extent from case to case, the firm settled many cases without the respective clients' knowledge or consent and misappropriated some or all of the proceeds. Attorneys and other staff members of the firm routinely signed the names of clients to settlement documents and endorsed their names on settlement checks. Respondent and Partner routinely lied to clients, medical providers, and other lienholders about the status of individual cases.

The ODC investigation that triggered respondent's November 12, 2012, self-report arose from Partner's handling of Mrs. B's personal injury case and her husband's loss of consortium's claim. Partner failed to keep Mr. and Mrs. B informed of the status of their claims and settled their case for $103,000. The settlement documents bearing the couple's purported signatures were forgeries and the funds were misappropriated. Mrs. B's medical bills, which exceeded the amount of settlement, were not paid. Frustrated at her inability to receive information from Partner, Mrs. B went to attorney J. Ashley Twombley. Partner would not respond to Mr. Twombley's efforts to facilitate communication with Mr. and Mrs. B [409 S.C. 83] and ignored demands for the file after Mrs. B hired Mr. Twombley. Mr. Twombley discovered the settlement without Partner's assistance and filed a complaint. Mr. B also filed a complaint.

Partner committed suicide on November 13, 2012. On November 20, 2012, the Court placed respondent on interim suspension. In the Matter of Rivers, 408 S.C. 137, 758 S.E.2d 483, (S.C. S.Ct. filed November 20, 2012) (Shearouse Adv. Sh. No. 42 at 153). Many of the clients first learned their cases had been settled after they collected their files from the attorney to protect clients' interests. The firm's accounts were overdrawn at that time. Many clients also discovered their medical bills went unpaid and that their credit has been damaged.

For most clients, respondent or Partner held an extremely broad power of attorney secured at the onset of representation. The power of attorney gave the attorney the authority to:

sign [the client's] name to any documents, pleading, draft, release, or other instrument in connection with this case or the settlement of the same and, to endorse and deposit for payment any negotiable instrument and to disburse the proceeds received.

Although respondent and others at the law firm routinely signed clients' names to settlement checks and documents, they never noted the signatures were affixed pursuant to a power of attorney.[1]

Respondent contends he did not personally take any of the stolen funds, but acknowledges that the firm's collection of fees in these cases as well as his collection of any attendant salary was entirely inappropriate. Although respondent produced some bank statements to Disciplinary Counsel during an interview, he was unable to produce the vast majority of financial records required by Rule 417 because the records [409 S.C. 84] were not maintained. As a result, a complete picture of receipts and disbursements is not available.

On February 6, 2014, respondent pled guilty to one count of mail fraud in violation of 18 U.S.C. § 1341. He has yet to be sentenced, but in his plea agreement he agreed to surrender all assets that would be subject to forfeiture, to make full restitution in an amount to be determined at sentencing, and to confess a monetary judgment in the

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amount of $1,248,135 representing the gross proceeds of the conduct underlying his conviction.

The Lawyers' Fund for Client Protection (Lawyers' Fund) received more than $1,286,000 in claims from respondent's clients and more than $3,800,000 in claims from Partner's clients. After investigating these claims and limiting individual claims to $40,000 per client, the Lawyers' Fund approved more than $605,000 of the claims involving respondent and $746,000 of those involving Partner. The Lawyers' Fund then paid the maximum of $200,000 to respondent's clients and $200,000 to Partner's clients, with each client receiving a pro rata share of the available funds. See Rule 411, SCACR.

B. Respondent's Cases

Matter I

In February of 2012, respondent settled Client C's workers' compensation case for $110,000 without his client's knowledge and submitted a forged document to the Workers' Compensation Commission. To conceal the settlement, respondent then began sending Client C checks in roughly the amount of his temporary disability payments and explained that the change in the amount was an administrative issue. Client C discovered that his case had been settled only when he investigated why the last two checks he received from the firm bounced.

Matter II

In March of 2011, respondent settled Client D's workers' compensation case for $25,000. Respondent submitted a forged document to the Workers' Compensation Commission and told Client D the case was still pending. The funds were misappropriated. Client D learned ...

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