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Righting Wrongs: Clients' Security Fund Pays Record Claims

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RIGHTING WRONGS
Clients’ Security Fund Pays Record Claims
BY LISA MCGRANE, CLIENT PROTECTION MANAGER
Every year since 1970, the Nevada Clients’ Security Fund has compensated the victims of dishonest acts by attorneys. I would like to say that last year was no different…except that it was. One can cite to the bad economy – lawyers taking on more cases than they can handle, or increased competition as the number of attorneys in the state continues to grow. Or, perhaps, it’s just that a small percentage of attorneys can cause a great deal of harm.
Whatever the reason, last year, the Clients’ Security Fund began the process of righting wrongs and paid out more than $346,000 in claims – a 36 percent increase from the previous four-year average. The stories from the victims of these attorneys can be astounding. Take Jane Smith (alias) for example. She hired Manuel Montelongo to represent her in a personal injury claim. Montelongo’s office accepted insurance settlement checks totaling $53,000 and distributed none of the money to Smith or her medical providers. Montelongo has since been disbarred and members of his staff have been indicted on multiple criminal charges. The Clients’ Security Fund approved Smith’s claim for more than $35,000 to cover medical liens and the settlement amount that should have been provided to her. Then there’s the story of Ann Jones (alias). She hired Douglas H. Clark to represent her and her family after her husband’s wrongful death. Clark took the money owed to him after the settlement – as well as the $160,000 that should have been used to pay the medical providers. Jones was unaware of the theft until she applied for a home loan modification and found the provider had placed a medical lien on her home. Clark’s license is currently suspended. The Clients’ Security Fund awarded Jones $50,000 – the maximum amount allowed under the fund’s rules of procedure.
And there are the many clients of Jeanne L. Winkler, a now-suspended lawyer who admitted to misappropriating her clients’ funds. Between 2008 and 2010, the Clients’ Security Fund has paid or approved close to $160,000 in reimbursements to her former clients. These attorneys and their conduct do not represent the majority of honest and hardworking attorneys in this state. Unfortunately, they can, and do, shed a bad light on the profession. In addition to the $346,000 in claims paid last year, there are another $356,000 in pending claims, $188,000 of those attributed to one attorney. The Clients’ Security Fund is here to help reverse a negative perception and make clients who have been wronged whole again. A portion of your bar dues ($25) is set aside every year specifically for the fund. Another $50 from every pro hac vice fee received goes to the fund. And there are those of you generous enough to voluntarily donate to the fund in their annual dues statements. In 2010, the fund received $4,461 in donations. The fund also works to maintain financial stability through per-claim caps of $50,000 and is currently seeking increased revenue in an administrative docket pending before the Nevada Supreme Court. If approved, pro hac vice fees will rise by $50, for a total of $100 per application dedicated to the fund. In addition to ensuring the fund is financially sound for years ahead, there is more you can do to help. Nevada’s legal community is still relatively small and the acts of these attorneys are often known by you before they are ever known to the state bar. While it may not be popular to file a disciplinary report against a fellow attorney, the ramifications to that attorney’s clients and to the perception of the profession can be devastating.
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10 Nevada Lawyer September 2010 Nevada Lawyer January 2011
Others have also pitched in by taking on the former clients of these attorneys and completing their cases for reduced fees (or for nothing at all). In addition to helping often desperate clients in a time of need, your services can reduce the total amount of money exhausted from the fund. For example, Scott Tisevich, an attorney in Reno, completed dozens of bankruptcy cases for the clients of Jeffrey Heath, an attorney currently suffering from a medical condition that has permanently prevented him from returning to practice. Tisevich charged as little as $0.01 to complete a bankruptcy filing, depending on the complexity and status of the case. The Clients’ Security Fund Committee took the value of his work into consideration when approving claims and was able to considerably reduce claim reimbursements because of him. Finally, I would like to thank the Clients’ Security Fund Committee members who volunteered countless hours of their time this year to investigate claims and make decisions on reimbursements. Without their
selfless service, this beneficial service would not be possible. Members who served on the Clients’ Security Fund in 2010 include: John Shook, Chair Edwin A. Keller, Vice-Chair Laurie Diefenbach, (Prior Vice-Chair) Ross Goodman Nathalie Gottschalk Jon S. Greene (lay member) Harvey Gruber Jennifer Henry Vernon (Gene) Leverty Terry McConnell (former lay member) Janet Pancoast Jeffrey Posin Kari L. Stephens (former member) Carl B. Weller (lay member) W. Chris Wicker For more information about the Clients’ Security Fund, please visit the State Bar of Nevada website at www.nvbar.org and click on “Clients’ Security Fund.”
ClaImS apprOvEd/paId1 IN 2010
attorney name
Steven Altig Stephen C. Amesbury Joseph Caramagno Charmaine L. Clark Douglas H. Clark Alex B. Ghibaudo Jeffrey Heath Joshua M. Landish Manuel O. Montelongo James Parsa Ronald Serota Philip Singer J.E. “Ring” Smith Stanley J. Steiber Jeanne L. Winkler
Status
Active (Previously Suspended) Deceased Disability Inactive CLE/Fee Suspended Discipline/CLE Suspended Discipline/CLE Suspended CLE Suspended Disability Inactive Disbarred Inactive Discipline Suspended Discipline/CLE Suspended Deceased Discipline/CLE Suspended Discipline Suspended
number of claims approved/Paid
8 2 1 1 4 4 28 2 4 1 1 1 3 1 3 ToTaL:
Total amount approved/Paid
$8,750 $750 $500 $3,200 $54,932.73 $4,400 $31,912 $10,815 $138,778.962 $2,500 $319,901.593 $8,477 $19,500 $2,400 $35,489.09 $642,306.37
LiSa McGrane is the State Bar of Nevada’s Client Protection Manager and oversees the administration of the Bar’s Fee Dispute and Client’s Security Fund programs. She can be reached at lisam@nvbar.org.
ToTaL aFTer Per cLaiM caP:
$346,161.69
1 Approved claims are not paid until clients sign subrogation agreements allowing the state bar to seek restitution to the fund. 2 One claim subject to $50,000 per claim cap 3 Subject to $50,000 per claim cap
See fee dispute volunteers list on page 22
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Nevada Lawyer
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FEE DISPUTE VOLUNTEERS THANK YOU!
The Fee Dispute Arbitration Committee relies on its vast network of volunteer mediators and arbitrators to resolve close to 300 fee disputes filed each year. These attorneys and lay members serve on regional panels in Carson City, Las Vegas, Reno and rural Nevada and assist parties in resolving fee disputes through mediation or hold arbitration hearings and render decisions. Their work provides expedited solutions to fee disputes and reduces the burden placed on Nevada’s court system. We would like to thank the following committee members for their efforts to resolve disputes in 2010:
Mark Alden*† Steven Anderson Peter M. Angulo†‡ Robert Apple James G. Armstrong† Corby Arnold Jason D. Bach Todd Bader Neil J. Beller Richard Blower Michael “Mickey” Bohn S. Bergstrom Brackney Lew Brandon Ken Brown* William Buchanan Craig Burkett Alan J. Buttell Kathleen T. Breckenridge William Brenske Bruce Breslow Carolyn Broussard E. Brent Bryson Hector J. Carbajal, II Blaine Cartlidge Edward S. Coleman† Stephanie Cooper Herdman Richard F. Cornell Amanda J. Cowley Margaret Crowley Philip J. Dabney† Scott E. Davis Steven L. Day Don Dees* Thomas D. Dillard Dustin Dingman Bryan D. Dixon Eric Dobberstein† Lee Drizin Robert M. Ebinger Paul F. Eisinger‡ Lewis M. Etcoff* Kurt C. Faux Michael A. Federico† Morton Friedlander† Marianne Gatti Susan Gaub*
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Paul M. Gaudet Robert Gerard Phillip S. Gerson Michael Golden Steven Goldstein Gregory Gordon Katherine Gordon Robert Gower J. Rusty Graf Joanna Grigoriev† David Hamilton Bill Hammer† Roger Harada John Dean Harper Dianna Hegeduis† Jack Hegeduis*† Dale W. Heidel*† John C. Hope‡ James W. Howard Robert G. Johnston‡ David Jones John Kelleher Todd Kennedy‡ Kevin B. Kirkendall*† James Kohl Jeffrey J. Kump‡ John Lambert Michael E. Langton James Laughton, Jr.* Pamela Lawson
Todd M. Leventhal Bryan Lewis David Liebrader Keith Loomis Kathy Luna Leland Lutfy† Terri MacTaggert*† Robert E. Marshall Paul A. Matteoni Terry McConnell* Brandon W. McCoy Raymond E. McKay Patrick K. McKnight† Michael McOsker Archie McRimmon, Jr.* Rea M. Melanson* Denise Mikrut† Lawrence Mitten† John T. Moran, III David Morris* Greta G. Muirheard Irene Navis* Michael Navratil Evan Needham Dee Newell*† Daniel O’Brien Garrett Ogata Ray Oster Mike E. Pavlakis Jeremiah Pendleton
Troy E. Peyton† Jeffrey S. Posin Luke PuschnigⱠ Jorge Ramirez Joyce E. Ramos R. Christopher Reade Nathanial Reed† E. Paul Richitt, Jr. Miriam V. Roberts Esther C. Rodriguez Miriam E. Rodriguez Lawrence D. Rouse Michael E. Rowe Daniel Royal Betty Ruark*† Kevin P Ryan . David Salmon Bruce D. Schupp Richard Scotti M. Nelson Segel Brian Shapiro Ara H. Shirinian† Veronica M. Sisinger† David Stanton Eric A. Stovall Lane Swainston* Kelly H. Swanson Thomas J. Tanksley Robert D. Tarte Richard M. Teichner*
Earl “Jack” Terry, Jr.* Wolfe Thompson Dawn R. Throne Janet Trost Charles Tucker* Michael C. Van Christopher Van Dyck Clark V. Vellis S. Brent Vogel Dan R. Waite James Wilkerson Sandra O. Wilson Shann D. Winesett Lew Wolfbrandt Bert Wuester† Nancy Yarbrough*† Jarold Young Thaddeus J. Yurek
KEY: * Designates Lay Member † Resolved five or more fee disputes in 2010 ‡ Designates Regional Chair Ⱡ Designates State Chair
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