NOTICE: This opinion is subject to modification resulting from motions for reconsideration under Supreme Court Rule 27, the Court’s reconsideration, and editorial revisions by the Reporter of Decisions. The version of the opinion published in the Advance Sheets for the Georgia Reports, designated as the “Final Copy,” will replace any prior version on the Court’s website and docket. A bound volume of the Georgia Reports will contain the final and official text of the opinion.
In the Supreme Court of Georgia
Decided: October 4, 2022
S22Y1156, S22Y1176. IN THE MATTER OF KAREN LYNN PASS.
PER CURIAM.
These two disciplinary matters are before the Court on the
consolidated report submitted by special master, Patrick H. Head,
who recommends that this Court impose a public reprimand with
conditions upon respondent Karen Lynn Pass (State Bar No.
480920) for her violations of Rules 1.15 (I) (a), 1.15 (II) (b), and 5.3
(b) of the Georgia Rules of Professional Conduct (“GRPC”), found in
Bar Rule 4-102 (d), in connection with two client matters. Neither
party has filed any exceptions to the report and recommendation,
see Bar Rule 4-218, and we agree that a public reprimand with
conditions is appropriate discipline in this case.
According to the special master, the matter underlying
S22Y1156 arose from a formal complaint charging Pass with
violating a number of rules during her representation of an
individual in a personal injury matter. But the special master found
that clear and convincing evidence showed only that Pass had
deposited funds from the settlement of her client’s case into her
IOLTA account at a time when that account also held funds
belonging to at least one other client and that Pass admittedly kept
no ledgers or other records from which she would be able to tell at
any given time the actual amount of funds in her IOLTA account
belonging to each client. Based on those facts, the special master
concluded that Pass had violated Rules 1.15 (I) (a)1 and 1.15 (II) (b),2
which rules, he noted, were somewhat duplicative in that Rule 1.15
1Rule 1.15 (I) (a) provides in relevant part that “[a] lawyer shall hold
funds or other property of clients or third persons that are in a lawyer’s
possession in connection with a representation separate from the lawyer’s own
funds or other property. Funds shall be kept in one or more separate accounts
maintained in an approved institution. . . . Complete records of such account
funds and other property shall be kept by the lawyer.”
2 Rule 1.15 (II) (b) provides in relevant part that “[n]o personal funds
shall ever be deposited in a lawyer’s trust account, except that unearned
attorney’s fees may be so held until the same are earned. . . . Records on such
trust accounts shall be so kept and maintained as to reflect at all times the
exact balance held for each client or third person. No funds shall be withdrawn
from such trust accounts for the personal use of the lawyer maintaining the
account except earned lawyer’s fees debited against the account of a specific
client and recorded as such.”
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(I) (a) requires an attorney to keep complete records of the trust
account in which she holds the “funds and other property” of any
client or third party, and Rule 1.15 (II) (b) requires that those
records be “kept and maintained as to reflect at all times the exact
balance held for each client or third party.”
With regard to S22Y1176, the special master noted that it
arose from a separate formal complaint charging Pass with
violations of a variety of the GRPC during her representation of a
client in an investigation she agreed to undertake. After considering
the evidence, however, the special master found that the Bar had
shown, by clear and convincing evidence, only that Pass had taken
money in advance from her client to be used for fees and expenses
connected to an investigation she was to perform for the client; that
she deposited the unearned expenses into her IOLTA account, but
then failed to review, audit, or otherwise reconcile that account; that
unbeknownst to Pass, her office manager—a longtime friend and
nonlawyer employee—was accessing Pass’s IOLTA account and
obtaining funds via forged checks; and that, as a result, there were
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multiple times where Pass’s IOLTA account carried a balance that
was less than the almost $4,000 she should have been holding in
trust on her client’s behalf. The special master found that Pass was
unaware of her employee’s illegal actions until several months after
that employee abruptly left Pass’s employment, absconding with a
firm computer and other office equipment and materials; that after
discovering the thefts, Pass was able, over time, to restore enough of
the stolen funds to replace the money she was required to return to
her client; and that those funds now have been returned to the
client. The special master specifically noted that there was no
allegation that Pass was involved in, or even contemporaneously
knew of, her employee’s withdrawal of the client’s funds from Pass’s
IOLTA account. The special master concluded that Pass had
violated Rule 1.15 (I) (a) and Rule 5.3 (b)3 in that she failed to
provide the proper oversight of a nonlawyer employee thereby
3 Rule 5.3 (b) provides that “with respect to a nonlawyer employed or
retained by or associated with a lawyer . . . a lawyer having direct supervisory
authority over the nonlawyer shall make reasonable efforts to ensure that the
person’s conduct is compatible with the professional obligations of the lawyer.”
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allowing that employee to misappropriate funds belonging to Pass’s
client from Pass’s IOLTA account; she failed to review, audit, or
reconcile her IOLTA account; and, therefore, she failed to
adequately safeguard her client’s property.
After finding those violations, the special master turned his
attention to determining the appropriate discipline in these two
cases. He noted the importance of looking only at the portions of the
rules found to have been violated and of focusing not on what
punishment the offense may warrant, but on what punishment is
required “as a penalty to the offender, a deterrent to others, and as
an indication to laymen that the courts will maintain the ethics of
the profession.” In the Matter of Dowdy, 247 Ga. 488, 493 (277 SE2d
36) (1981). He recited that this Court generally looks to the
Standards for Imposing Lawyer Sanctions, American Bar
Association Center for Professional Responsibility (“ABA
Standards”), for guidance in determining punishment in
disciplinary cases, see In the Matter of Morse, 266 Ga. 652, 653 (470
SE2d 232) (1996), and that those standards look to the duty violated,
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the lawyer’s mental state, the actual or potential injury caused by
the lawyer’s misconduct, and the existence of any aggravating and
mitigating factors in assessing discipline.
The special master found that Pass’s violations in both cases
implicated ABA Standard 4 (violations of duties owed to clients) in
that Pass’s failure to properly monitor her trust account and her
failure to properly supervise her nonlawyer employee both affected
her ability to preserve her client’s property. See ABA Standard 4.1.
The special master concluded, however, that Pass was merely
negligent in her dealings with the IOLTA account and her clients’
funds, noting Pass’s testimony that she is primarily a criminal
defense attorney and, therefore, rarely has client funds in her
IOLTA account. He further concluded that Pass did not have the
“conscious awareness of the nature or attendant circumstances” of
the actions of her nonlawyer employee, and, at worst, was merely
negligent in her supervision of that employee.
With regard to injury or potential injury, the special master
noted that, although the funds of the client in S22Y1176 were taken
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from Pass’s IOLTA account, Pass did not steal those funds and, once
the loss was discovered, she replaced them and returned the funds
to the client. And, with regard to S22Y1156, the special master noted
that there was no injury to the client in that none of that client’s
funds were lost or misappropriated in any way. Ultimately, the
special master concluded that there was no actual injury to either
client, but acknowledged that the potential for injury was present.
In terms of aggravating and mitigating factors, the special
master noted, in aggravation, that Pass had one instance of prior
discipline, having received a formal letter of admonition in 2011
related to a failure to communicate with a client, and that she had
substantial experience in the practice of law, having been admitted
to the Bar in 1994. See ABA Standards 9.22 (a) and (i). In
mitigation, he somewhat discounted Pass’s former discipline on the
grounds that it did not involve her trust account or her failure to
supervise a nonlawyer employee. See In the Matter of Kakol, 286 Ga.
469, 470 (689 SE2d 308) (2010) (“In mitigation of discipline . . . we
find that Kakol’s prior discipline did not involve [the] trust fund
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issues [involved in this case].”). He further noted that Pass had not
acted with a dishonest or selfish motive; that she made a timely and
good faith effort to rectify the consequences of the actions of her
nonlawyer employee; that she made full and free disclosure to the
State Bar; that she has had a cooperative attitude during the
proceedings; and that she has a good reputation in the legal
community. See ABA Standards 9.32 (b), (d), (e), and (g). The special
master further noted that, although neither aggravating nor
mitigating, neither client filed a grievance against Pass.4 See ABA
Standard 9.4 (f).
Ultimately, the special master concluded that this case was
most similar to In the Matter of Brock, 306 Ga. 388 (830 SE2d 736)
(2019) (Review Board reprimand where, unbeknownst to Brock, his
paralegal misappropriated $21,000 in trust account funds; Brock
kept no ledger or other record showing the balance belonging to each
4 Apparently, the discovery of the violations set out in S22Y1156 arose
during the Bar’s investigation of S22Y1176, which, in turn, arose from a
grievance filed by an attorney who alleged that he had been hired by a client
to conduct the same investigation Pass was hired to conduct.
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client in his trust fund account; the Bar’s investigation uncovered
several minor instances of Brock’s own misuse of his trust account;
and Brock replaced all missing client funds once he learned of the
theft), and In the Matter of Grant, 287 Ga. 131 (694 SE2d 647) (2010)
(Review Panel5 reprimand for violations of Rules 5.3 and 1.15 (I) and
(II) caused by Grant’s negligent failure to supervise her paralegal
and to reconcile or review her IOLTA account). Therefore, the
special master recommended, for Pass’s negligent violation of Rules
1.15 (I) (a), 1.15 (II) (b), and 5.3 (b), that she receive a public
reprimand and that she consult with the Law Practice Management
Section of the Bar within 60 days after this Court’s opinion and
follow its recommendations concerning her law practice.
Neither side has filed exceptions contesting the special
master’s factual findings, legal conclusions, and recommendations
for discipline. And, after review of the record, we agree with the
special master’s conclusions that Pass negligently violated Rules
5 The Review Panel is now known as the Review Board.
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1.15 (I) (a), 1.15 (II) (b), and 5.3 (b), and that Pass’s conduct was
similar to that of the respondents in Brock and Grant. Although we
imposed a Review Board reprimand in Brock and Grant, the
attorneys in those cases had no prior disciplinary history. See Brock,
306 Ga. at 389 (“[T]here are several mitigating factors in this
matter, specifically, the lack of a prior discipline record.”); Grant,
287 Ga. at 132 (“Grant offers in mitigation . . . that she has no prior
disciplinary record.”). Here, by contrast, Pass has previously been
disciplined. Under the circumstances, we agree with the special
master that a public reprimand is appropriate and sufficient to act
as a penalty to Pass, a deterrent to other lawyers, and as an
indication to the public that the courts will maintain the ethics of
the profession. Therefore, we accept the report and recommendation
of the special master and order that respondent Karen Lynn Pass
receive a public reprimand in accordance with Bar Rules 4-102 (b)
(3) and 4-220 (c), and that she provide certification to the Office of
General Counsel within 60 days after this Court’s opinion that she
has consulted with the Law Practice Management Section of the Bar
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and that she will follow its recommendations concerning her law
practice.
Public reprimand with conditions. All the Justices concur.
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