In the Supreme Court of Georgia
Decided: August 24, 2021
S21Y1097. IN THE MATTER OF CARL S. VON MEHREN.
PER CURIAM.
This disciplinary matter is before us on the Report and
Recommendation of Special Master Catherine Koura, who
recommends that this Court (1) accept the petition for voluntary
discipline filed by Respondent Carl S. Von Mehren (State Bar No.
728840) pursuant to Bar Rule 4-227 (c) after the State Bar filed a
formal complaint against him; and (2) impose a six-month
suspension for Von Mehren’s admitted violations of Rules 1.3, 1.15
(I) (a), and 1.16 (d) of the Georgia Rules of Professional Conduct
found in Bar Rule 4-102 (d). Having reviewed the record, we agree
to accept the petition and to impose a six-month suspension.
According to the Special Master, Von Mehren, who has been a
member of the Bar since 1987 and who asserts that he is not accepting new matters as he is in the process of winding down his
practice to retire, seeks to resolve two separate grievances, State
Disciplinary Board Docket (“SDBD”) No. 7195 and SDBD No. 7196.
With regard to SDBD No. 7195, the record shows that Von
Mehren conducted a real estate closing in which his clients were the
purchasers of certain property. Pursuant to the agreement, Von
Mehren was to retain $70,000 in his escrow account after closing for
later distribution. In the spring of 2017, both the seller and Von
Mehren’s clients demanded the funds, but Von Mehren declined to
distribute the money to either party because he was aware that a
dispute had arisen between the parties as to their entitlement to
those funds and that they were negotiating to resolve the dispute.
In the fall of 2017, the seller sued Von Mehren and the purchasers
for fraud, and Von Mehren deposited the funds into the trial court’s
registry pursuant to a motion for interpleader.1
1 That suit was later resolved when the trial court granted the defendants’ motions for summary judgment on the seller’s fraud claim.
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Although the Special Master found that Von Mehren acted
reasonably in declining to disburse the funds to either party, the
record showed that during the time he was supposed to be retaining
those funds, the balance of Von Mehren’s trust account often
dropped below $70,000 and that, while he denied ever using any
trust funds for his personal benefit, he acknowledged that he did not
keep accurate records that would have prevented the trust account
balance from falling below the $70,000 required amount. The
Special Master further noted that Von Mehren admitted that the
$70,000 should have remained in his escrow account until he moved
for interpleader; that between May 2017 and August 2017, Von
Mehren’s escrow account balance repeatedly fell below $70,000, and
sometimes for extended periods of time; and that, at one point, the
balance was as low as $21,227.26. The Special Master also noted
Von Mehren’s assertions that, throughout this time, his firm was
closing various real estate transactions involving large sums of
money; that no client was ever harmed; and that LandTech (the
management system used by his firm) was, and still is, a very
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common system used by real estate practitioners but that the system
identifies the funds by transaction, rather than attributing them to
a particular person. Based on the above, the Special Master found
that Von Mehren violated Rule 1.15 (I) (a) by failing to keep accurate
records that would have prevented the trust account balance from
falling below the required level of $70,000 and would have allowed
him to determine how much money he was holding for each client or
third party.
With regard to SDBD No. 7196, the record shows that, in
February 2015, a man approached Von Mehren about pursuing a
claim of adverse possession on his behalf against a business that
owned an adjacent property. Von Mehren agreed to initiate that
proceeding, but failed to do so because he misplaced the affidavit the
man provided him in support of the claim and never took steps to
obtain a replacement. In the meantime, the business mailed the
man a letter complaining about an outbuilding, which it contended
was encroaching on its property. Von Mehren communicated with
the business on behalf of the man, even though Von Mehren had not
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been retained or paid to do so, but the business nonetheless filed suit
against the man for trespass. Von Mehren and the man then
executed an engagement letter covering Von Mehren’s
representation of the man in that lawsuit.
In his petition for voluntary discipline, Von Mehren asserted
that he initially believed the man had a viable legal argument based
on the man’s staunch belief that his outbuilding was located entirely
on his own property. However, after learning that the results of a
survey showed the man’s outbuilding to be located mostly or entirely
on the property owned by the business, Von Mehren felt that the
survey destroyed the man’s claim of adverse possession as well as
his defense to the trespass suit. Von Mehren contended that even
though he communicated these concerns, the man remained
convinced that he could prevail, requiring Von Mehren to orally
advise the man that he would not continue the representation.
However, Von Mehren did not specifically tell the man that he would
not communicate with opposing counsel or file an answer on his
behalf as agreed upon in the engagement letter. Von Mehren now
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admits that the better practice would have been to inform the man
in writing that the professional representation had been terminated,
but Von Mehren asserts that he was never paid any fees and that
the man did not communicate a desire for Von Mehren to continue
representing him. Von Mehren did not communicate with the man
after that meeting and did not ensure that he had retained new
counsel. Thereafter, the man went into default. Although the man
hired another attorney who was able to get the default opened, he
ultimately had to settle the lawsuit after spending a substantial sum
of money because his defense was not viable. Based on these facts,
the Special Master concluded that Von Mehren violated Rules 1.3
and 1.16.
Having found violations of Rules 1.3, 1.15 (I) (a), and 1.16, the
Special Master turned her attention to the appropriate level of
discipline, noting that the maximum penalty for a single violation of
Rules 1.3 and 1.15 (I) (a) is disbarment, and the maximum penalty
for a violation of Rule 1.16 is a public reprimand. The Special Master
correctly recited that Georgia looks to the ABA’s Standards for
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Imposing Lawyer Sanctions for guidance in determining
punishment in disciplinary cases, see In the Matter of Morse, 266
Ga. 652, 653 (470 SE2d 232) (1996), and that ABA Standard 3.0
provides for consideration of the following factors in imposing
discipline: (1) the duty violated; (2) the lawyer’s mental state; (3) the
actual or potential injury caused by the lawyer’s misconduct; and (4)
the existence of aggravating or mitigating factors.
The Special Master then concluded that in SDBD No. 7195,
Von Mehren negligently dealt with his trust account by allowing the
balance to drop below the $70,000 threshold he was required to
retain and that, although the seller, who was not his client, made a
claim to the $70,000, the trial court ultimately found that the seller’s
claim lacked merit. The Special Master reasoned that, if Von
Mehren had filed an interpleader action immediately upon
determining that there was a dispute over the funds, the seller
would not necessarily have had to file her lawsuit, but she still would
have had to engage in the legal process associated with the
interpleader action. The Special Master considered the State Bar’s
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concession that it could not prove by clear and convincing evidence
that Von Mehren withdrew funds from the trust account for his
personal benefit as well as its argument that it could not do so, in
part, because Von Mehren did not maintain the required records
that would have allowed for such a determination and because he
did not otherwise provide an accounting of the $70,000.
With regard to SDBD No. 7196, the Special Master found that
Von Mehren acted negligently in his handling of the man’s affidavit
and in discontinuing the representation as he did, but she noted that
those violations resulted in little or no injury because the man was
able to open the default and because it is extremely unlikely that the
man could have prevailed either in the property dispute or the
adverse possession claim.
The Special Master noted that Von Mehren filed his petition
for voluntary discipline after negotiations with the Bar; that he
requested the imposition of a public reprimand as discipline, but
agreed to accept a suspension of up to six months; and that the Bar
did not object to acceptance of the petition, but argued that a six8
month suspension was the appropriate level of discipline. After due
consideration of those positions and the facts of these two cases, the
Special Master found that a six-month suspension would be
appropriate and consistent with prior similar cases; would best
serve the purpose of sanctioning Von Mehren for failing to maintain
proper records for a trust account, failing to maintain property in
trust, and failing to ensure that a client’s interests were protected;
and would remind practitioners that lawyer discipline also functions
to protect clients, courts, and the public. See In the Matter of
Duncan, 301 Ga. 898, 899 (804 SE2d 342) (2017) (six-month
suspension with conditions for reinstatement for violations of Rules
1.4, 1.15, and 1.16 (c) in two client matters; no prior disciplinary
history and mitigating factors); In the Matter of Graziano, 299 Ga.
7, 7 (785 SE2d 537) (2016) (six-month suspension with conditions for
violations of Rules 1.3, 1.4, and 1.16 in a single matter, which
resulted in dismissal of client’s suit and judgment against her on
counterclaim); In the Matter of Buckley, 291 Ga. 661, 662 (732 SE2d
87) (2012) (four-month suspension for violations of Rules 1.3, 1.4,
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and 1.16 in one client matter; prior disciplinary history, but
mitigating factors). And, although she considered the aggravating
factors of multiple offenses and substantial experience in the
practice of law, see ABA Standard 9.22 (d) and (i), and the mitigating
factors of no prior disciplinary history and no dishonest motive, see
ABA Standard 9.32 (a) and (b), the Special Master found that those
factors did not warrant modification of the recommended level of
discipline. Therefore, she recommends that this Court accept Von
Mehren’s petition for voluntary discipline and impose a suspension
of six months for his admitted violations.
Having reviewed the entire record in this case, we conclude
that a six-month suspension is an appropriate sanction in this case.
Accordingly, we hereby accept Von Mehren’s petition for voluntary
discipline and order that he be suspended from the practice of law
for six months. Because there are no conditions on Von Mehren’s
reinstatement other than the passage of time, there is no need for
him to take any action either through the State Bar or this Court to
effectuate his return to the practice of law. Instead, the suspension
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based on this opinion will take effect as of the date this opinion is
issued and will expire by its own terms six months later. Von
Mehren is reminded of his duties under Bar Rule 4-219 (c).
Petition for voluntary discipline accepted. Six-month suspension. All the Justices concur.
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