Judge orders disbarment of Ogden attorney who spent Roy widow's lawsuit settlement

By MARK SHENEFELT

OGDEN — A judge has ordered that an Ogden attorney be disbarred for withholding a Roy widow’s lawsuit settlement, spending it on himself and trying to cover it up when caught.

“Misappropriation of client funds is a particularly heinous charge that undermines the trust and confidence that the public should be able to place in attorneys,” 2nd District Judge Noel Hyde said in ordering the delicensure of Richard H. Reeve. Every time an attorney misappropriates a client’s money, the judge said, “the reputation of the legal profession and the legal system as a whole is diminished.”

The Utah Office of Professional Conduct filed a disciplinary case against Reeve in 2017 alleging he had deposited Jean Tonioli’s settlement share, about $254,000, into his personal credit union account in 2015. Tonioli had won the payout from a drugmaker over her husband’s wrongful death.

Over the next several months, Reeve spent $167,000 of her money on expenses such as trips to San Antonio, Las Vegas and Jackson Hole, Wyoming, plus marriage chapel and wedding ring purchases, according to evidence presented by the Office of Professional Conduct.

After Reeve’s employer learned of the diversion, Reeve provided a “misleading” screenshot of Tonioli’s account to the woman and his employer that “neither revealed he had used her money for his own personal benefit or that he had to obtain money from a separate source to pay her after he was caught,” Hyde wrote in his order, dated July 2.

Reeve “violated his duties to the public and as a professional ... by engaging in conduct involving dishonesty, deceit and misrepresentation” over Tonioli’s money, the judge said.

Hyde said there were instances in the disciplinary bench trial in January when Reeve “was not forthright or truthful.” He determined Reeve’s mental state was “intentional and knowing,” despite Reeve’s claims that he had been under extreme professional and personal pressures in 2015.

Reeve repeatedly lied to Tonioli in 2015 about the settlement by telling her it remained pending, when in fact he had it and was spending it, the judge said.

During a sanctions hearing in May, Reeve said, “I deeply regret the conduct I demonstrated.” He argued there was no lasting harm because he paid Tonioli all she was owed, plus interest. But Hyde said it was “actual injury, serious harm” against a vulnerable victim, no matter that Reeve paid her after his actions were discovered.

In considering aggravating and mitigating circumstances, the factors considered pointed toward disbarment, according to the ruling.

Hyde said it was unclear to him whether Reeve “would have ever paid Ms. Tonioli if his conduct had not been uncovered.”

Hyde also found that Reeve mishandled two other, smaller settlements and violated ethical prohibitions by engaging in a fee-splitting arrangement with his paralegal.

Since Hyde’s ruling, Reeve appealed the decision to the Utah Supreme Court and successfully sought an order from Hyde allowing him to keep practicing law while the appeal is in progress.

Barbara Townsend, who handled the court case for the Office of Professional Conduct, argued unsuccessfully against allowing Reeve to continue practicing during the appeal.

“Mr. Reeve has not demonstrated that his continued practice of law poses no substantial threat of irreparable harm to the public,” she said in a court document. “Moreover, his tendency toward dishonesty suggests that there is a substantial threat of irreparable harm to the public.”

Reeve and Townsend did not respond to requests for comment on the case.

According to the Office of Professional Conduct, disbarments are relatively rare in Utah. There were two in 2020, plus 24 lesser disciplinary rulings. The agency had 515 open cases at the end of 2020.

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Judge orders disbarment of Ogden attorney who spent Roy widow's lawsuit settlement