Yuille v. Parnoff
Rule 1.15 of the Rules of Professional Conduct provides that when a dispute about property exists, a lawyer can be required to keep the disputed portion of the funds in a trust account. The complainant, Darcy Yuille, had a workers' compensation claim and alleged bad faith by her employer. Yuille hired the respondent attorney, Laurence Parnoff, to represent her and agreed to pay Parnoff 40 percent of any verdict or settlement. In 2004, Yuille was awarded $1.096 million, and the respondent claimed that his contingency fee was $438,413. Yuille discovered that the statutory attorney's fee cap for personal-injury cases is less than 40 percent. Yuille disputed the respondent attorney's fee and claimed that he was entitled to $125,000. Yuille agreed to sign the settlement, if the balance of funds that were disputed were placed in escrow. Parnoff placed $313,413 in a trust account and sued Yuille for breach of contract. In 2010, a jury awarded Parnoff $252,044. Both sides appealed. Allegedly, Parnoff placed the funds that had been held in escrow in a certificate of deposit. When the certificate of deposit matured, he allegedly placed the funds in a personal account, and he used the money to pay bills. Yuille filed a grievance complaint. The Statewide Grievance Committee found, by clear and convincing evidence, that the respondent attorney violated Rule 1.15(f) of the Rules of Professional Conduct, because he did not keep the disputed legal fee in escrow. "The entire $363,960.87 should still be in escrow and should still be accruing interest," wrote the Statewide Grievance Committee. "[T]he Respondent has disbursed $302,582.14 to himself and returned $61,378.73 to an IOLTA account where it is not earning any interest." The respondent did not keep the escrowed funds separate from his personal funds until the dispute was resolved. He did not prove that Yuille abandoned the funds. Even if the funds had been abandoned, as a fiduciary he would not be entitled to keep them. The Statewide Grievance Committee ordered the respondent's presentment to Superior Court for discipline. Paul Pollock, of Bai Pollock, represented the respondent.