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.
