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In re Bacon

Supreme Court of South Carolina

April 19, 2017

In the Matter of Robert Glenn Bacon, Respondent. Appellate Case No. 2016-002271

          Submitted March 28, 2017

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

          Susan Batten Lipscomb, Lipscomb Law Firm, PA., of Chapin, for respondent.

          PER CURIAM

         In this attorney disciplinary matter, the Office of Disciplinary Counsel (ODC) and respondent 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 the imposition of a public reprimand or a definite suspension not to exceed nine (9) months. We accept the Agreement and impose a definite suspension of six (6) months from the practice of law.

         Facts and Law

         The Loan Modification Matters

         Prior to November of 2012, Mark Andrew Brunty, an attorney licensed to practice in South Carolina, hired INMN, Inc. (INMN), a marketing company, to solicit out- of-state clients interested in modifying their home loans. Brunty hired Integrity Partners, LLC (Integrity), to process the loan modifications. This Court placed Brunty on interim suspension on November 21, 2012, In re Brunty¸ 405 S.C. 572, 748 S.E.2d 777(2012), and disbarred him on February 25, 2015, In re Brunty, 411 S.C. 434, 769 S E.2d 426 (2015). About the time Brunty was placed on interim suspension, he introduced respondent to Terry Walden, the principal officer of Integrity, contemplating that respondent could assume Brunty's work with INMN and Integrity. Respondent questioned Walden multiple times to determine whether he could pursue the venture ethically. Respondent wrongly accepted Walden's assurances that Integrity and INMN were complying with federal laws and regulations and had a network of local attorneys licensed to practice in every jurisdiction in which clients were accepted.

         Subsequently, respondent hired INMN to solicit out-of-state clients interested in mortgage modifications and to hire Integrity to process the modifications, as Brunty had. However, he did not instruct Integrity regarding issues related to Brunty's existing loan modification clients. Integrity employees continued working on some of these clients' files when no licensed attorney was involved in the matter. Integrity employees also incorrectly advised many of Brunty's clients that their files had been assigned to respondent's firm. Some of Brunty's clients later became respondent's clients, but others did not. Finally, Integrity employees charged installment payments of fees to the credit cards of some of Brunty's clients. Although the clients originally authorized these payments to be made to Brunty, their credit cards were charged in favor of respondent's firm.

         Respondent admits he violated federal rules against unfair or deceptive acts or practices with respect to loan modification matters.[1] Because respondent was not licensed to practice in any of the jurisdictions in which he accepted loan modification clients, he was not authorized to accept any fees before the client executed a loan modification agreement. Further, respondent failed to deposit the fees he received into a trust account, failed to maintain separate ledgers for his clients, and failed to properly supervise those who had access to the accounts into which loan modification clients' fees were deposited.

         Respondent also failed to properly supervise INMN's marketing of his loan modification services. INMN salespeople identified themselves as employees of respondent's firm when communicating with prospective clients despite a contractual obligation to disclose their actual connection with the firm. When respondent learned of this practice, he insisted that it stop immediately. After respondent ceased using INMN's marketing services, he learned the company had created a website without his approval which INMN shared with prospective clients.

         Respondent acknowledges he did not take sufficient efforts to ensure the nonlawyer employees of Integrity and INMN conducted themselves in a manner compatible with respondent's own professional obligations. Additionally, respondent admits he failed to fully investigate whether he could properly accept and represent loan modification clients in other jurisdictions. Respondent is not licensed to practice law in any other state. Consequently, respondent engaged in the unauthorized practice of law in several jurisdictions.

         A. The California Matter

         Client A agreed to hire respondent's firm after an INMN employee told him that if he hired respondent and then changed his mind about pursuing a loan modification, he would be entitled to a refund of any unearned fees. Three days after making an initial payment, Client A decided to file for bankruptcy using a California law firm. Client A immediately informed his INMN contact and requested a refund. He was promised a refund of one-half of the $1, 500 payment he made, but respondent cannot show a refund was issued. By charging and collecting an upfront fee in a loan modification case, respondent admits he violated California Civil Code § 2944.7. Furthermore, respondent admits his conduct constituted the unauthorized practice of law in violation of § 6125 of the California Business and Professional Code and Rule 1-300 of the California Rules of Professional Conduct.

         B. The Connecticut Matters

         Clients B and C, who were married, hired and paid Brunty to obtain a modification of their mortgage. Upon Brunty's suspension, Integrity employees continued working on Client B and C's file for a period of time. They notified the couple their file had been transferred to respondent's firm. Integrity employees also asked the couple to complete a form authorizing their bank to communicate with respondent's firm. However, the couple never became respondent's clients. Respondent admits his failure to properly supervise Integrity employees caused confusion for Clients B and C. He also admits he failed to clarify the situation to the couple in writing, violating Rules 1.16 and 5.3(1) of the Connecticut Rules of Professional Conduct.

         Client D originally hired Brunty and made two of three payments to his firm. A payment of $966 was charged in favor of respondent's firm without Client D's authorization. Respondent was required by Connecticut rules to hold the funds in an IOLTA account at an institution authorized to do business in Connecticut but admits he failed to do so.

         Respondent admits his conduct violated Rules 1.15(d), (h), and 5.5(c) of the Connecticut Rules of Professional Conduct.

         C. The Georgia Matter

         Client E received an email solicitation from an INMN employee who identified himself as an Underwriting Specialist for respondent's office. The INMN employee advised Client E her payment would be deposited into a trust account where it would remain until earned and that it would be immediately ...

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