Utah attorney disbarred for taking from client's settlement funds
The Utah Supreme Court on Tuesday decided a Utah attorney's alleged conduct was so egregious that he should be disbarred.
In its ruling, the court said Clayne Corey, who prior to Tuesday was allowed to practice law, should be disbarred because the court found he knowingly and intentionally misappropriated a client's settlement fund.
In 1999, "law school chums" Clayne Corey and Randall Lund formed the law firm Corey & Lund and were retained by a client to represent her in a personal injury case, the court's opinion shows. In February 1999, their client accepted a settlement offer of $122,500 and received a check from an insurance company that was made out to both the client and Corey. But instead of giving the funds to the client, Corey put all the money into his operating account and wrote checks against it, court records show. In a matter of months, the balance plummeted from $128,916.14 to less than $3,000, the ruling shows.
While the firm later paid the client back some of what she was owed, the client later sued Corey to recover the rest about $50,000, court papers show.
At the conclusion of that suit, the Office of Professional Conduct initiated disciplinary action against Corey and recommended disbarment. A district court judge, however, ruled that suspension rather than disbarment was most appropriate, but then stayed the suspension finding that Corey "did not intend to cause harm or injury."
But in making its ruling, the Utah Supreme Court noted that Corey had previously been suspended in 1993 relating to the misuse of a client trust account.
In 2003, Corey's law partner, Lund, in an unrelated matter, pleaded guilty to drug distribution and buying a car with a bad check, and was ordered to serve jail time. Facing disciplinary action, he had previously resigned from the Utah State Bar.