In re Clayter

Opinion

 [*278]   [**1319]   [****791]  This case presents this court with an opportunity to admonish the bar of this State that it is absolutely impermissible for an attorney to commingle his funds with those  [*279]  of his client or with money he holds as a fiduciary. Unfortunately, many attorneys are either unaware of, or indifferent to, this proscription.

In this disciplinary proceeding the Administrator of the Attorney Registration and Disciplinary Commission filed a one-count complaint charging the respondent, Richard Leon Clayter, with commingling and conversion of earnest money that had been deposited with him by the parties to a contract for the sale of real estate. A hearing panel of the Commission found that the conduct of the respondent constituted a wrongful conversion of funds entrusted to him and a wrongful commingling of funds with his own. It recommended [***2]  that the respondent be suspended from the practice of law for a period of three months. The Review Board affirmed the recommendation of the hearing panel.

The respondent was licensed to practice law in Illinois in 1957. He had, prior to the incident in question, represented Myrna Gulley on various matters and on February 10, 1976, the respondent represented her in the sale of her house to Mr. and Mrs. Sinclair McGaughy. On that date a contract for the sale of the house was executed. The purchaser paid $ 1,000 as earnest money, which was deposited with and held by the respondent, as provided in the contract. The buyers took possession of the house about March 6, 1976, and were to pay rent in the amount of $ 270 per month on a month-to-month basis.

On February 11, 1976, the respondent deposited the earnest money check in an account in the Southside Bank and Trust Company in Chicago. This account was in the name of Noel Realty. It was a business account which had been opened for use in the operation of an apartment complex in which the respondent was a partner. The authorized signatures for this account were the respondent's and his son's. This was neither a clients' trust [***3]  account nor an escrow account.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.