BEFORE THE HEARING BOARD
OF THE
FI1 Ems
1 Em
B
ILLINOIS ATTORNEY REGISTRATION
AUG 2 5 2014
AND
DISCIPLINARY COMMISSION
ATTY REG &DISC COMM
CHICAGO
In the Matter of:
JOHN JOSEPH PAPPAS,
Comm. No. 2014PR00088
Attorney-Respondent,
No. 2141493.
ANSWER
COUNT I
[Alleged Misuseof$10,054.08 in relation to Aaron Muller)
1.
On or about June 8, 2012, Anna Maria Muller ("Anna Maria") filed a petition
for dissolution of marriage against Aaron Muller ("Muller"). The case was captioned Anna
Maria Muller v. Aaron Muller, case number 12 D3 30575 in the Circuit Court of Cook County.
ANSWER:
Respondent admits the allegations contained in paragraph 1 upon information
and belief.
2.
On or about July 10, 2011, Muller was involved in an incident in which the
vehicle he was driving collided with a vehicle operated by Hitesh A. Shah ("Shah") in Cook
County, Illinois. As a result of the collision, Muller sustained various injuries and incurred
medical expenses.
ANSWER:
3.
Respondent admits the allegations contained in paragraph 2.
On or about August 1, 2011, Respondent and Muller agreed that Respondent
would represent Mullerin a personal injury claim against Shah relating to the July 10, 2011
incident. Respondent and Muller agreed that Respondent's receipt of a fee would be
contingent upon Respondent recovering a settlement or award on behalf of Muller, and that
Respondent would receive as his fee an amount equal to twenty-five percent of any such
recovery, plus costs.
ANSWER:
4.
Respondent admits the allegations contained in paragraph 3.
On or about October 30, 2012, the court in case number 12 D3 30575 entered
an order requiring that any proceeds, settlement, or monies received as a result of the
personal injury claim asserted by Muller, after payment of medical liens, attorneys' fees, and
any other related expenses or liens, were to be held by Respondent in escrow until further
order of court.
ANSWER:
5.
Respondent admits the allegations contained in paragraph 4.
On or about November 14, 2012, Muller agreed to release his claims against
Shah and his insurer, Member Select Insurance Company, in exchange for the payment of
$251,000 ($250,000 from Member Select Insurance Company and $1,000 from Shah).
ANSWER:
6.
Respondent admits the allegations contained in paragraph 5.
On or about December 20, 2012, Respondent received Member Select
Insurance Company check number 0000000234668 in the amount of $250,000. Check
number 0000000234668 represented the proceeds owed by Shah's insurer to Respondent,
the Illinois Department of Health and Family Services, Muller, Anna Maria, and/or any other
interested parties as would be determined by court order in case number 12 D3 30575 in
settlement of Muller's claim against Shah.
ANSWER:
7.
Respondent admits the allegations contained in paragraph 6.
On December 20,2012, Respondent deposited check number 0000000234668
into an account he maintained at Popular Community Bank, entitled "Pappas, Healy &Pappas
LLC, Client Fund Account," which ended in the four digits "5816" ("client fund account").
Respondent used that account as a depository of funds belonging to Respondent's clients, to
third parties, or, presently or potentially, to Respondent.
ANSWER:
8.
Respondent admits the allegations contained in paragraph 7.
Pursuant to his contingency fee agreement with Muller, Respondent was
entitled to no more than 25% of the settlement proceeds received from Shah and his insurer,
or no more than $62,750 as his attorney's fee, and $984.89 for costs incurred in connection
with the matter. At the time of the settlement, the Illinois Department of Health and Family
Services, a lien holder, claimed that it was entitled to receive $35,727.76 for payment of the
lien. The disbursement of the balance of the settlement, $151,537.35, was to be determined
by court order in case number 12 D3 30575.
ANSWER:
9.
Respondent admits the allegations contained in paragraph 8.
On December 27, 2012, Respondent, or someone at his direction, drew check
numbers 239 and 240 on his client fund account made payable to his law firm in the amounts
of $62,750, for payment of his attorney's fee, and $984.89, for reimbursement of the costs
incurred in connection with the matter.
ANSWER:
10.
Respondent admits the allegations contained in paragraph 9.
On December 28, 2012, Respondent, or someone at his direction, drew check
number 241 on his client fund account made payable to the Illinois Department of Health
and Family Services in the amount of $35,727.76 for payment of the lien.
ANSWER:
11.
Respondent admits the allegations contained in paragraph 10.
On or about January 2,2013, Respondent received Shah's check number 1287
in the amount of $1,000. Check number 1287 represented additional funds Respondent was
to hold pendinga decisionby the court in case number 12 D3 30575 about how the proceeds
would be distributed.
ANSWER:
12.
Respondent admits the allegations contained in paragraph 11.
On January 9, 2012, Respondent deposited draft number 1287 into his client
fund account.
ANSWER:
13.
Respondent admits the allegations contained in paragraph 12.
As of January 9, 2012, Respondent should have been holding $151,537.35 of
the settlement funds received from Shah and his insurer in his client fund account pending a
decision by the court in case number 12 D3 30575 about how the proceeds would be
distributed.
ANSWER:
14.
Respondent admits the allegations contained in paragraph 13.
On March 22, 2013, prior to any decision by the court in case number 12 D3
30575, the balance in Respondent's client fund account fell to $141,483.27, as Respondent
drew checks on the account in payment of his business and personal obligations.
ANSWER:
Respondent admits that the records of Popular Community Bank show that
the balance in the client fund account was $141,483.27 as of March 22, 2013.
Respondent further admits that as of March 22,2013, the court in case number
12 D3 30575 had not entered an order relating to the disposition or
disbursement of the funds Respondent was holding on behalf of the parties in
case number 12 D3 30575.
Further answering, Respondent specifically denies that he wrote checks on the
client fund account in satisfaction of his own personal or business obligations.
Further answering, Respondent states that a bank error that occurred in
March 2013, of which he was not aware at the time, affected the balance in the
client trust account. Respondent denies the remaining allegations contained in
paragraph 14.
15.
As of March 22, 2013, Respondent used, for his own business or personal
purposes, at least $10,054.08 of the settlement proceeds he was to hold pending a decision
by the court in case number 12 D3 30575 about how the proceeds would be distributed.
ANSWER:
16.
Respondent denies the allegations contained in paragraph 15.
At no time did Muller, or any other interested parties as would be determined
by court order in case number 12 D3 30575, authorize Respondent to use any portion of the
settlement proceeds for Respondent's own business or personal use.
ANSWER:
17.
Respondent admits the allegations contained in paragraph 16.
Respondent's conduct in using the settlement funds proceeds he was to hold
pending a decision by the court in case number 12 D3 30575 about how the proceeds would
be distributed without authority constitutes conversion of those funds.
ANSWER:
Respondent neither admits nor denies the allegations contained in paragraph
17, as those allegations are not factual but state conclusions of law. To the
extent an answer is deemed required, Respondent denies the allegations
contained in paragraph 17.
18.
On August 14, 2013, the court entered a judgment for the dissolution of
marriage in case number 12 D3 30575. Pursuant to the judgment for the dissolution of
marriage, the net proceeds of Muller's personal injury action, which the court mistakenly
determined to be in the amount of $151,000 being held by Respondent in escrow, rather than
the $151,537.35 Respondent had actually received but not disbursed, were to be distributed
to Anna Maria in the amount of $53,741, Anna Maria's attorneys, Carponelli and Krug, in the
amount of $20,176.60, and the balance of the proceeds, $77,082.42, to Muller.
ANSWER:
Respondent admits the allegations contained in paragraph 18.
19.
Between August 14, 2013, and September 3, 2013, Respondent paid
$20,176.60 to Carponelli and Krug, $77,082.42 to Muller, and $53,741 to Anna Maria, by
checks drawn on the client funds account as required by the August 14,2013 court order in
case number 12 D3 30575.
ANSWER:
20.
Respondent admits the allegations contained in paragraph 19.
By reason of the conduct described above, Respondent has engaged in the
following misconduct:
a.
failure to hold property (the settlement funds of Muller,
Anna Maria, and/or any other interested parties as
determined by court order in case number 12 D3 30575)
of clients or third persons that is in the lawyer's
possession in connection with a representation separate
from the lawyer's own property, by conduct including
conversion of the settlement funds received from Shah
and
his
insurer
received
in
connection
with
the
representation, in violation of Rule 1.15(a) of the Illinois
Rules of Professional Conduct (2010);
b.
conduct involving dishonesty, fraud, deceit, or
misrepresentation, in violation of Rule 8.4(c) of the
Illinois Rules of Professional Conduct (2010), by conduct
including conversion of the settlement funds received
from Shah and his insurer in connection with the
representation without authority; and
c.
conduct prejudicial to the administration of justice, in
violation of Rule 8.4(d) of the Illinois Rules of
Professional Conduct (2010), by conversion of the
settlement funds received from Shah and his insurer in
connection with the representation prior to an order by
the court in case number 12 D3 30575 about how the
proceeds would be distributed.
ANSWER:
Respondent neither admits nor denies the allegations contained in paragraph
20, as those allegations are not factual but state conclusions of law. To the
extent an answer is deemed required, Respondent denies the allegations
contained in paragraph 20.
COUNT II
(Alleged Misuse of$8,198.05 in relation to Anthony Griffin]
21.
On or about June 23, 2011, Anthony Griffin ("Griffin") was involved in an
incident in which the vehicle he was driving collided with a vehicle operated by Ricardo
Bastida ("Bastida") in Cook County, Illinois. As a result of the collision, Griffin sustained
various injuries and incurred medical expenses.
ANSWER:
22.
Respondent admits the allegations contained in paragraph 21.
On or about November 23, 2011, Respondent and Griffin agreed that
Respondent would represent Griffin in a personal injury claim against Bastida relating to the
June 23, 2011 incident. Respondent and Griffin agreed that Respondent's receipt of a fee
would be contingent upon Respondent recovering a settlement or award on behalf of Griffin,
and that Respondent would receive as his fee an amount equal to one-third of any such
recovery, plus costs.
ANSWER:
23.
Respondent admits the allegations contained in paragraph 22.
On or about March 26, 2013, Griffin agreed to release his claims against
Bastida's insurer, State Farm Insurance Company, in exchange for the payment of
$13,978.84.
ANSWER:
24.
Respondent admits the allegations contained in paragraph 23.
On or about March 28, 2013, Respondent received State Farm Insurance
Company check numbers 101267310 and 101267305 in the respective amounts of
$11,298.84 and $2,680. Check numbers 101267310 and 101267305 represented the
proceeds owed to Respondent, Griffin, and Blue Cross Blue Shield ("BCBS"), a lienholder, in
settlement of Griffin's claim against Bastida. At the time of the settlement, Medicare held a
lien on Griffin's settlement proceeds.
ANSWER:
25.
Respondent admits the allegations contained in paragraph 24.
On April 3, 2013, Respondent deposited check numbers 101267310 and
101267305 into an account he maintained at Popular Community Bank entitled "Pappas,
Healy & Pappas LLC Client Fund Account," which ended in the four digits "5816" ("client fund
account"). Respondent used that account as a depository of funds belonging to Respondent's
clients, third parties, or, presently or potentially, to Respondent
ANSWER:
26.
Respondent admits the allegations contained in paragraph 25.
Pursuant to the contingency fee agreement, Respondent was entitled to no
more than one third of the settlement proceeds received from Bastida's insurer, or no more
than $4,659.61 as his attorney's fee, and $1,121.18 for costs incurred in connection with the
matter.
ANSWER:
27.
ANSWER:
28.
Respondent admits the allegations contained in paragraph 26.
At the time of the settlement, BCBS and Medicare were lien holders.
Respondent admits the allegations contained in paragraph 27.
On April 11, 2013, Respondent, or someone at his direction, drew check
numbers 279 and 280 on his client fund account made payable to his law firm in the amounts
of $4,659.61,for payment of his attorney's fee,and $1,121.18, for reimbursement ofthe costs
incurred in connection with the matter.
ANSWER:
Respondent admits the allegations contained in paragraph 28.
29.
As of April 11, 2013, Respondent should have been holding $8,198.05 of the
settlement funds received from Bastida's insurer in his client fund account for the benefit of
Griffin and/or lienholders BCBS and Medicare.
ANSWER:
30.
Respondent admits the allegations contained in paragraph 29.
On September 3, 2013, prior to any distribution of settlement funds to Griffin
and/or lienholders, BCBS and Medicare, the balance in Respondent's client fund account was
overdrawn by $5,134.59, as Respondent drew checks on the account in payment of his
business and personal obligations.
ANSWER:
Respondent admits that the records of Popular Community Bank show that
the balance in the client fund account was overdrawn by $5,134.59 as of
September 3, 2013. Respondent further admits that as of September 3, 2013,
no settlement funds had been disbursed to Griffin, BCBS, or Medicare.
Respondent denies the remaining allegations contained in paragraph 30.
Further answering, Respondent specifically denies that he wrote checks on the
client fund account in satisfaction of his own personal or business obligations.
Further answering, Respondent states that a bank error that occurred in
March 2013, of which he was not aware at the time, affected the balance in the
client trust account. Respondent denies the remaining allegations contained in
paragraph 30.
31.
As of September 3,2013, Respondent used at least $8,198.05 of the settlement
proceeds belonging to Griffin and/or lienholders, BCBS and Medicare, for Respondent's own
business or personal purposes.
ANSWER:
32.
Respondent denies the allegations contained in paragraph 31.
At no time did Griffin, BCBS, Medicare, or any representatives on their behalf,
authorize Respondent to use any portion of the settlement proceeds for Respondent's own
business or personal use.
ANSWER:
Respondent admits the allegations contained in paragraph 32.
33.
Respondent's conduct in using the funds of Griffin, BCBS, and Medicare
without their authority constitutes conversion of those funds.
ANSWER:
Respondent neither admits nor denies the allegations contained in paragraph
33, as those allegations are not factual but state conclusions of law. To the
extent an answer is deemed required. Respondent denies the allegations
contained in paragraph 33.
34.
Between December 20, 2014 [sic] and January 13, 2014, Respondent paid
$530.18 to Medicare, $2,680 to BCBS, and $4,987.87 to Griffin, which represented the
proceeds owed to them from the settlement of Griffin's claim against Bastida.
ANSWER:
35.
Respondent admits the allegations contained in paragraph 34.
By reason of the conduct described above, Respondent has engaged in the
following misconduct:
a.
failure to hold property (the settlement funds of Griffin,
Medicare, and BCBS) of clients or third persons that is in
the lawyer's possession in connection with a
representation separate from the lawyer's own property,
by conduct including conversion of $8,198.05 of the
settlement proceeds belonging to Griffin and/or
lienholders, BCBS and Medicare, in violation of Rule
1.15(a) of the Illinois Rules of Professional Conduct
(2010);
b.
conduct involving dishonesty, fraud, deceit, or
misrepresentation, in violation of Rule 8.4(c) of the
Illinois Rules of Professional Conduct (2010), by conduct
including conversion of $8,198.05 of the settlement
proceeds belonging to Griffin and/or lienholders, BCBS
and Medicare for his own personal or business purposes
without authority.
ANSWER:
Respondent neither admits nor denies the allegations contained in paragraph
34, as those allegations are not factual but state conclusions of law. To the
extent an answer is deemed required, Respondent denies the allegations
contained in paragraph 34.
RESPONDENTS DISCLOSURE PURSUANT TO COMMISSION RULE 231
1.
Respondent is admitted to practice law in the State of Illinois, the District Court
for the Northern District of Illinois, and the District Court for the Central District of Illinois.
Other than that, he has never been admitted to practice law before any other state court,
federal court, or administrative agency; He has also been admitted to practice pro hac vice in
Florida, Maryland (on several occasions, including most recently in Frederick County,
Maryland), the District Court for the Northern District of Maryland, and the Office of
Administrative Hearings for the State of Maryland. Respondent has not been admitted to
practice law in any other jurisdictions or before any other courts or tribunals.
2.
Respondent holds no other professional licenses other than his license to
practice law.
Respectfully submitted,
John J. Pappas, Sr., Respondent
BY:
James A. Doppke, Jr.
Robinson Law Group, LLC
333 West Wacker Drive, Suite 450
Chicago, IL 60606
(312) 676-9878
jdoppke(5>robinsonlawillinois.com
James A. Doppke, Jr.
Attorney for John J. Pappas, Sr.