Bella Vista lawyer placed on interim suspension for mishandling client funds

The Arkansas Supreme Court’s Office of Professional Conduct (OPC) has placed a veteran Bella Vista attorney on interim suspension for allegedly mismanaging funds from a client’s trust account.

Tom C. Morris III, a privately practicing attorney with more than 30 years of experience, was placed on suspension Friday (April 21) while an investigation continues into the handling of money from his firm’s Interest on Lawyers Trust Account (IOLTA).

Stark Ligon, executive director of the OPC, said Morris has been notified of the suspension and he has the opportunity to file a motion to vacate or modify the interim suspension order. The suspension ends after 90 days, unless further action is taken by the OPC during the course of its formal disciplinary proceedings.

Such suspensions are rare, Ligon said, and are usually driven by client trust account shortage issues. The OPC imposed one such suspension all of last year. Morris is the only one so far in 2017.

“The next step by this office would be the filing of a formal complaint against Mr. Morris regarding the underlying conduct, to which he could respond.” Ligon wrote in an email to the Northwest Arkansas Business Journal. “Then the file would go to a committee panel for whatever action it determines is appropriate.”

Morris did not return a phone message Monday seeking comment.

The OPC filed a petition April 18 in Pulaski County Circuit Court seeking to put a partial freeze on Morris’ IOLTA trust account held by Arvest Bank. The OPC is investigating whether Morris misappropriated nearly $320,000 in client funds that should have been held in the IOLTA trust account.

An IOLTA account is mandatory for Arkansas lawyers and law firms that receive, maintain or disburse client or third-party funds. An IOLTA account generally contains funds from multiple clients.

According to the filing, Morris admitted to the OPC in an email written April 17 that his IOLTA account had been mishandled, that he had made a “spectacular lapse” on the trust account, and that he was trying to raise money to replace what was missing in the account. The petition says the amount of money currently missing from the account is believed to exceed $300,000 for just one client alone.

Morris is also alleged to have used IOLTA funds related to the estate of one client to make unrelated payments to heirs in a separate estate.

The petition also says IOLTA trust account records for February and March this year, which were filed under seal, show Morris removed from the trust account “by multiple, un-itemized, untraceable-to-a-specific-client-matter electronic transfers” to other accounts in his name $29,000 in February and $28,000 in March. The petition alleges that was a “continuing pattern” of similar transfers going back several months.

“Whether the conduct here is gross negligence or conversion [theft] remains to be determined, but it is serious misconduct,” the petition stated.

The OPC has been investigating the irregularities with Morris’s IOLTA account since last September, according to the petition.