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: May 14, 2024
S23Y0622. IN THE MATTER OF JAMES W. DAVIS, III.
PER CURIAM.
This disciplinary matter is before the Court on a Notice of
Discipline, recommending the disbarment of James W. Davis, III,1
(State Bar No. 283824) for his role in intercepting a multi-milliondollar payment from an insurance company to its policy holder. As
reflected in the record, Davis acknowledged service of the State
Bar’s Notice of Discipline for Disbarment (“Notice of Discipline”) on
March 27, 2023, but failed to file a Notice of Rejection. Therefore,
Davis is in default, has waived his right to an evidentiary hearing,
and is subject to such discipline and further proceedings as may be
1 Davis was admitted to the State Bar in 1997 and was authorized to
practice law at the time of the conduct at issue, but has since become an
inactive member of the State Bar.
determined by this Court. See Bar Rule 4-208.1 (b).2
The facts, as deemed admitted by Davis’s default,3 are as
follows.4 In December 2018, Coface North America Insurance
Company (the “Insurer”), a company specializing in commercial
trade credit insurance, agreed to pay one of its policyholders a claimrelated payment in the amount of $3,093,085.50. On December 18,
2018, the Insurer requested payment instructions from the
policyholder’s insurance broker and received payment instructions
via email from a policyholder representative, which included wire
transfer information for a bank account in the name of the
policyholder at Citibank, N.A. On December 19, 2018, an unknown
individual purporting to be the same policyholder representative
2 This rule provides that, “[u]nless the Notice of Discipline is rejected by
the respondent as provided in Rule 4-208.3, (1) the respondent shall be in
default; (2) the respondent shall have no right to any evidentiary hearing; and
(3) the respondent shall be subject to such discipline and further proceedings
as may be determined by the Supreme Court of Georgia.”
3 See In the Matter of Head, 317 Ga. 512, 512 (893 SE2d 706) (2023)
(noting that, because the respondent attorney failed to file a Notice of
Rejection, the underlying facts were “deemed admitted by [his] default”).
4 The record includes the State Bar’s Notice of Discipline, a
memorandum of grievance issued by the State Bar to Davis, and orders filed
in a lawsuit against Davis and others in the United States District Court for
the Northern District of Georgia.
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sent an email to the Insurer, instructing the Insurer to disregard the
payment instructions transmitted the previous day and to instead
wire the funds to a bank account held by the policyholder’s attorney.
Attached to the email was a letter of authorization and declaration
that included new wiring instructions to a Wells Fargo account in
the name of J. Davis – Attorney at Law, LLC IOLTA (“Davis’s
IOLTA”). On December 21, 2018, the Insurer wired $3,093,085.50
to Davis’s IOLTA account.
On December 31, 2018, the Insurer was informed that its
emails with the policyholder had been compromised and that the
funds at issue were never received by the policyholder. The Insurer
reported the incident to Citibank and the FBI, and on January 3,
2019, counsel for the Insurer sent a “cease and desist” letter to Davis
demanding return of the funds. The Insurer was subsequently
notified that Wells Fargo credited $2,540,319.30 from Davis’s
IOLTA account to the Insurer, which left $552,755.20 unaccounted
for by Davis. Additionally, the payment from Davis’s IOLTA
account to the Insurer included $3,500.00 belonging to clients of
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Davis, of which Davis was aware.
Davis initially denied any knowledge of or participation in the
misappropriation of these funds and claimed that he was also a
victim in this scheme. However, the factual allegations of the Notice
of Discipline—which Davis has admitted by virtue of his default—
state that Davis was “a knowing and intentional participant in the
interception and theft of the [funds]” and “knowingly used his
attorney trust account to carry out the interception and theft of the
[funds].”5
The State Disciplinary Board’s (the “Board”) memorandum of
grievance, which is also included in the record, demonstrates that
the Board initiated a grievance against Davis based upon
information suggesting that Davis “may have violated one or more
of the Georgia Rules of Professional Conduct.” See Bar Rule 4-203
(2). Specifically, the Board learned that, on January 14, 2019, the
Insurer filed a lawsuit against Davis and numerous “John Does” in
5 The record does not reflect whether Davis was ever charged with any
crimes arising from this conduct.
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the United States District Court for the Northern District of Georgia
(the “federal case”), raising claims for conversion, RICO, common
law fraud, and civil conspiracy, among others.
On June 21, 2019, the district court issued an order in the
federal case addressing several motions filed by the parties,
including Davis’s motion to dismiss and the Insurer’s motion for a
preliminary injunction. The district court granted the Insurer’s
request for injunctive relief and partly granted Davis’s motion to
dismiss, but only as to certain of the Insurer’s claims. In so ruling,
the district court observed that, in litigating the federal case, Davis
had explicitly acknowledged and admitted to the following: (1) “in
his role as an attorney,” Davis “serves as a paymaster” for certain
entities, and it was in this role as paymaster that he came to acquire
the funds at issue from the Insurer; (2) “[t]he first transfer of
$3,093,085.50 was wired to Mr. Davis’s IOLTA [a]ccount on
December 21, 2018”; (3) Davis was “informed by Citibank that the
transfer was the result of false wiring instructions”; (4) Wells Fargo
returned funds in the amount of $2,540,319.30 to the Insurer; (5)
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“[f]unds in the amount of $552,766.20 were paid out to Mr. Davis as
his fee for services rendered as paymaster for what he believed was
a legitimate transaction” with the Insurer; (6) Davis “used his fee
monies to pay outstanding bills/debts”; and (7) Davis’s “involvement
in the subject transaction was in his role as an attorney with the law
firm J. Davis, Attorney at Law, LLC.” The district court held that
Davis’s “version of the facts” set forth above was “a binding judicial
admission.” The record reflects that the Insurer and Davis later
settled the federal case, and the case was administratively closed in
October 2019.
Having reviewed the record and considered the facts deemed
admitted by Davis’s default, the State Disciplinary Board found
probable cause to believe that Davis violated Rules 1.15 (I), 1.15 (II)
(a)6, and 8.4 (a) (4). The maximum sanction for a violation of Rules
6 Based on the underlying facts, it does not appear that Davis violated
Rule 1.15 (II) (a), which provides that
[e]very lawyer who practices law in Georgia, whether said lawyer
practices as a sole practitioner, or as a member of a firm,
association, or professional corporation, and who receives money
or property on behalf of a client or in any other fiduciary capacity,
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1.15 (I), 1.15 (II) (b), and 8.4 (a) (4) is disbarment.
As aggravating factors, the Board considered Davis’s
substantial experience in the practice of law and, as a mitigating
factor, his absence of prior disciplinary history. The Board advised
that Standard 4.11 of the American Bar Association’s Annotated
Standards for Imposing Lawyer Sanctions was applicable to Davis’s
violations of Rules 1.15 (I) and 1.15 (II), which provides that
disbarment is generally appropriate when a lawyer knowingly
converts client property and causes injury or potential injury to a
client. See ABA Standards for Imposing Sanction 4.11. See also In
the Matter of Morse, 266 Ga. 652, 653 (470 SE2d 232) (1996) (stating
that this Court looks to the ABA Standards for guidance in
determining appropriate disciplinary sanction). The Board
shall maintain or have available one or more trust accounts as
required by these Rules. All funds held by a lawyer for a client and
all funds held by a lawyer in any other fiduciary capacity shall be
deposited in and administered from a trust account.
More likely, Davis violated Rule 1.15 (II) (b), which provides, in pertinent part, that “[n]o 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.” This discrepancy
ultimately has no bearing on the recommended discipline in this case.
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concluded that Davis “knowingly converted the property of his
clients when he included client funds from his trust account to make
partial reimbursement of the funds at issue.”
The Board further advised that Standard 5.11 (b) of the ABA
Standards for Imposing Sanctions was applicable to Davis’s
violation of Rule 8.4 (a) (4), which provides that disbarment is
generally appropriate when a lawyer engages in intentional conduct
involving dishonesty, fraud, deceit, or misrepresentation that
seriously adversely reflects on the lawyer’s fitness to practice. See
ABA Standards for Imposing Sanction 5.11 (b). See also In the
Matter of Morse, 266 Ga. at 653. The Board concluded that
“[t]hrough his knowing and intentional participation in the
interception and theft of the [funds at issue], [Davis] engaged in
intentional conduct involving dishonest, fraud, deceit, or
misrepresentation that seriously adversely reflects on [Davis’s]
fitness to practice.”
Having reviewed the record and considered Davis’s factual
admissions herein, we conclude that disbarment is the appropriate
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sanction in this disciplinary matter and is consistent with similar
cases in which an attorney utilized fraud to misappropriate funds
and defaulted during the disciplinary process. See, e.g., In the
Matter of Fagan, 314 Ga. 208, 213 (876 SE2d 242) (2022) (disbarring
attorney who engaged in professional misconduct involving
dishonesty and fraud, misappropriated client funds, and failed to
respond to the formal complaint); In the Matter of Cheatham, 304
Ga. 645, 646 (820 SE2d 668) (2018) (disbarring attorney who
converted client funds to his own use and failed to respond to
disciplinary authorities); In the Matter of Mathis, 297 Ga. 867, 868
(778 SE2d 793) (2015) (disbarring attorney who misappropriated
client funds that had been wired to him in advance of a real estate
closing and failed to respond to disciplinary authorities).
Accordingly, it is hereby ordered that the name of James W. Davis,
III be removed from the rolls of persons authorized to practice law
in the State of Georgia. Davis is reminded of his duties pursuant to
Bar Rule 4-219 (b).
Disbarred. All the Justices concur.
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