In the Matter of Robert E. Arnold III, (admitted as Robert Edward Arnold III) an attorney and counselor-at-law: Attorney Grievance Committee M-3730 for the First Judicial Department, Petitioner, Robert E. Arnold III, Respondent.
proceedings instituted by the Attorney Grievance Committee
for the First Judicial Department. Respondent, Robert E.
Arnold III, was admitted to the Bar of the State of New York
at a Term of the Appellate Division of the Supreme Court for
the First Judicial Department on April 15, 1996.
Dopico, Chief Attorney, Attorney Grievance Committee, New
York (Raymond Vallejo, of counsel), for petitioner.
Rosalyn H. Richter, Justice Presiding, Judith J. Gische,
Barbara R. Kapnick, Cynthia S. Kern, Peter H. Moulton,
Robert Edward Arnold III was admitted to the practice of law
in the State of New York by the First Judicial Department on
April 15, 1996. At all times relevant to this proceeding,
respondent maintained an office for the practice of law in
order entered June 12, 2018, the Supreme Court of Missouri
disbarred respondent from the practice of law for, inter
alia, misappropriating settlement proceeds, inadequate trust
fund records, violating client confidentiality and failing to
respond to a lawful demand of disciplinary authorities.
Attorney Grievance Committee (the Committee) now seeks an
order, pursuant to Judiciary Law § 90(2), the Rules for
Attorney Disciplinary Matters (22 NYCRR) § 1240.13 and
the doctrine of reciprocal discipline, disciplining
respondent predicated upon the discipline imposed by the
Supreme Court of Missouri and directing respondent to
demonstrate why discipline should not be imposed for the
underlying misconduct, or, in the alternative, sanctioning
respondent as this Court deems appropriate. Respondent has
also been disbarred in Connecticut and Kansas based upon his
misconduct in Missouri. Respondent was served with the
Committee's motion but he has not submitted a response.
August 2016, the Missouri Supreme Court Disciplinary
Committee charged respondent with misconduct arising out of
his representation of a client, who he represented in a child
custody and support case (family law case) as well as a
personal injury case related to a motor vehicle accident.
Respondent entered into a retainer agreement for the family
law case and had a written contingency fee agreement for the
personal injury case, pursuant to which he would receive 33%
of a settlement plus expenses.
submitted an answer denying many of the allegations made
against him and requesting a disciplinary hearing. He also
filed a second amended answer in which he admitted he failed
to maintain sufficient funds in his trust account to satisfy
certain medical liens until such time as the liens were
resolved in an interpleader action filed with the court.
hearing was held in April and August 2017 by the Advisory
Committee to a Disciplinary Hearing Panel where respondent,
represented by counsel, testified on his own behalf,
presented testimony from several character witnesses and
offered exhibits. In a decision dated November 21, 2017, the
Disciplinary Hearing Panel found, inter alia, that respondent
settled the personal injury case for the $25, 000 limit of
the at-fault driver's insurance policy and deposited the
funds into his trust account. He thereafter transferred all
of the settlement funds into his operating account despite
the fact that his client never gave her consent for
respondent to keep the entire settlement amount. After his
client threatened to sue him for misconduct, respondent filed
an attorney lien against his client's family law case,
alleging his client owed him more than $15, 000, and then
filed a civil interpleader action against her regarding the
distribution of the settlement proceeds. Without her informed
consent and without her implied authorization, respondent
attached an affidavit in support of the interpleader action
that included personal information about his client related
to his representation of her in the family law case.
Following a July 2014 trial in the interpleader action, the
court awarded $8, 276 to the client, $6, 350 to her health
care providers and $10, 373 to respondent. Respondent
eventually satisfied these awards. The disciplinary
proceeding followed the verdict.
decision, the Hearing Panel found respondent's conduct to
have violated numerous Rules of Professional Conduct by
failing to keep the settlement funds in his trust account;
withdrawing more than his contractual fee from his trust
account; failing to correct his original representation to a
Kansas disciplinary investigator that the funds belonging to
his client and the medical lien holders remained in his trust
account; failing to maintain complete records of his
client's trust funds; failing to respond to a lawful
demand for information from a disciplinary authority by not
producing various requested documents; failing to provide his
client an itemized statement; misappropriating the settlement
proceeds; denying his client the opportunity to have the fees
reviewed if she so desired pursuant to the retainer
agreement; and by revealing certain personal information
about his client relating to matters not directly related to
the distribution of the proceeds from the settlement of the
personal injury case without his client's consent.
considering evidence in aggravation and mitigation, the
Hearing Panel recommended that respondent's license to
practice law be suspended indefinitely with no leave to apply
for reinstatement for one year, suspension to be stayed and
respondent to be placed on probation for one year.
submission of the complete record before the Disciplinary
Hearing Panel to the Supreme Court of Missouri, the court
issued a one-page order finding respondent violated
Missouri's Rules of Professional Conduct 4-1.5(a) (a
lawyer shall not make an agreement for, charge, or collect an
unreasonable fee or an unreasonable amount for expenses);
4-1.5(c) (failure to promptly provide a contingency fee
remittance statement); 4-1.6 (a lawyer shall not reveal
confidential client information); 4-1.15(d) (failure to
maintain complete trust account records); 4-1.15(i)
(misappropriation of trust funds); 4-8.1(c) ...