In Re: Edward J. Mccloskey

Supreme Court of Louisiana
March 14, 2023
Chief Deputy Clerk of Court
For the Court
The Supreme Court of the State of Louisiana
IN RE: EDWARD J. MCCLOSKEY
No. 2022-B-01680
_ _
_ _ _ _
I
N RE: Disciplinary Counsel - Applicant Other; Findings and Recommendations
(Formal Charges);
_ _ _ _ _ _
March 14, 2023
Discipline imposed. See per curiam.
Weimer, C.J., dissents and assigns reasons.
Hughes, J., dissents and would impose a lesser sanction.
PDG
SJC
JTG
WJC
JBM
03/14/2023 "See News Release 013 for any Concurrences and/or Dissents."

S
UPREME COURT OF LOUISIANA
NO. 2022
-B-1680
I
N RE: EDWARD J. McCLOSKEY
AT
TORNEY DISCIPLINARY PROCEEDING
P
ER CURIAM
This disciplinary matter arises from formal charges filed by the Office of
Disciplinary Counsel (“ODC”) against respondent, Edward J. McCloskey, an
attorney licensed to practice law in Louisiana.
UNDE
RLYING FACTS
In August 2018, the ODC received notice from Capital One Bank that four
checks drawn on respondent’s client trust account were return ed unpaid for
insufficient funds. Respondent attributed the overdrafts to an accounting error by
his CPA.
In connection with its investigation of the overdrafts, the ODC’s forensic
auditor, Angelina Marcellino, reviewed respondent’s trust account records for the
period from September 1, 2017 through August 31, 2018. Ms. Marcellino
determined that during this period, respondent collected at least $1,476.17 in refunds
from various clerks of court for unused cost deposits. Although these refunds were
owed to respondent’s former clients, respondent acknowledges that he did not make
any attempt to contact the clerks of court to determine which clients were owed the
funds, nor did he refund the money to his former clients. Instead, respondent
deposited the funds into his trust account under a miscellaneous income sub-account
number (50003) and then disbursed the funds to himself, typically to pay himself for
03/14/23

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pro bono or non-billable work he performed for current clients.1 Respondent advised
the ODC that he had handled the refund checks in this manner for more than ten
years because “the fees associated with reviewing the client files and writing letters
to return the checks would have exceeded the amounts received.”
In addition to the deposits during the one -year audit period, an additional
$15,775.33 was deposited to respondent’s sub-account number 50003 during the five
years preceding the audit (April 1, 2012 through August 31, 2017). Based on the
records provided to the ODC, it could not be determined if each deposit made during
this five -year period is a clerk of court refund, but the practices described by
respondent suggest it is likely that the sum of $15,775.33 includes clerk of court
refunds that would be due to clients.
Ms. Marcellino also determined that respondent made disbursements from his
trust account in excess of the associated client balances. However, based upon the
records provided to the ODC, the exact balances that should remain in the trust
account at the end of the audit period could not be quantified.

DISCIPLINARY PROCEEDINGS
In July 2021, the ODC filed formal charges against respondent, alleging that
his conduct as set forth above violated the following provisions of the Rules of
Professional Conduct: Rules 1.15(a) (safekeeping property of clients and third
persons) and 8.4(c ) (engaging in conduct involving dishonesty, fraud, deceit, or
misrepresentation).
Respondent answered the formal charges and admitted that four checks drawn
on his client trust account were returned for insufficient funds. Respondent denied
that he intentionally converted the clerk of court refunds to his own use, suggesting

1 Respondent created invoices for each payment, and the checks he wrote from the trust account
referenced these invoices.

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that any misconduct in this regard was the result of negligence. He also denied that
he intentionally made disbursements from his trust account in excess of the
associated client balances.
In light of respondent’s answer, the matter proceeded to a formal hearing on
the merits.

Formal Hearing
The hearing committee conducted the he aring on January 25, 2022 .
Respondent testified that he obtained accounting records from the Jefferson Parish
Clerk’s Office (which includes the 24
th JDC, First Parish Court, and Second Parish
Court) showing that from 2008 to 2018, he received cost refunds totaling $9,950.05.
Of that amount, respondent sent refunds totaling $6,299.52 to the clients he could
determine from his research. These refunds were made in January 2022, two weeks
prior to the formal hearing. For the remaining $3,650.53, respondent “didn’t know
who the client was,” so he paid the funds to the Louisiana Bar Foundation, also in
January 2022. Respondent admitted that he should have taken these steps “sooner,”
but it did not occur to him, even after the disciplinary complaint was opened in 2018.
Respondent also acknowledged that he obtained some cost refunds from the St.
Tammany Parish Clerk of Court and the Lafayette Parish Clerk of Court, as
identified in Ms. Marcellino’s audit report, but he maintained he could not determine
who these funds belonged to. Nevertheless, respondent testified that he does not
have any more client funds in his possession.

Hearing Committee Report
The hearing committee found respondent violated Rules 1.15(a) and 8.4(c) of
the Rules of Professional Conduct by the manner in which he handled the clerk of
court refund checks. Based on the evidence and testimony presented at the hearing,

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the committee concluded that respondent’s misconduct “falls in a gray area between
negligent and knowing, and … was akin to gross negligence.” The committee
explained:
The committee finds that Mr. McCloskey’s conduct
exceeds a breach of mere ordinary care that a reasonable
and prudent lawyer would, and should, exercise in
handling funds that belong to current or former clie nts.
Rather Mr. McCloskey’s misconduct represents a
departure significant from the standard of care required by
Rule 1.15(a) and was a gross deviation from what is
expected of lawyers handling client or third- party funds.
Moreover, the committee finds that Mr. McCloskey’s
conduct borders closely on a wanton and reckless
disregard for the property rights of his clients and the
Rules of Professional Conduct, but it is not squarely within
the bandwidth of wanton and reckless conduct. Although
Respondent’s misconduct was closer to “knowing” than
“negligent,” the committee does not find that Respondent
had a conscious desire to deprive clients or others of funds
not belonging to Respondent. Rather, the committee finds
that Mr. McCloskey perceived the refunds and having to
deal with them as a nuisance or inconvenience.
Respondent knew or should have known that he was
improperly handling client property that caused, or could
cause, harm to his clients.

The amounts of money involved, either individually or in
whole, were not financially consequential to McCloskey,
though from a public perspective the total amount of funds
at issue is significant. The committee believes that
laziness, not greed or a conscious, dishonest desire, was
the foundation of Respondent’ s decision to avoid the
required process and efforts to associate the refunds with
persons he previously represented, and make an effort to
remit the money to the rightful owners of it. Mr.
McCloskey chose an easier, softer way than the Rules of
Professional Conduct require, and it was a violation of
Rules 1.15(a) and 8.4(c) to do so. [Internal footnote
omitted.]

The committee found respondent violated duties owed to his clients or former
clients, causing harm. The applicable baseline sanction is suspension.
The committee determined the following aggravating factors are present: a
dishonest or selfish motive, a pattern of misconduct, multiple offenses, and
substantial experience in the practice of law (admitted 1971). The committee

5

determined the following mitigating factors are present: the absence of a prior
disciplinary record, timely good faith effort to make restitution or to rectify the
consequences of the misconduct, full and free disclosure to the disciplinary board
and a cooperative attitude toward the proceedings, and character or reputation.
Based on these findings, and considering the prior case law, the committee
recommended that respondent be suspended for two years, with all but six months
deferred, followed by a one -year period of probation governed by the following
conditions: respondent shall attend the Louisiana State Bar Association’s Ethics and
Trust Accounting Schools, and responde nt shall engage a CPA approved by the
ODC to perform monthly audits of his trust account during the probationary period.
The committee also recommended that respondent be assessed with all costs of this
proceeding.
The ODC filed an objection to the hearing committee’s report.

Disciplinary Board Recommendation
The disciplinary board determined that the hearing committee’s findings of
fact are supported by the record and adopted same, with the following exceptions
and additions:
In her audit report, Ms. Marcellino identified $15,775.33 as the total amount
of money deposited under the 50003 file number from 2012 to 2017, and the
committee apparently found this sum represented the amount of clerk of court
refunds which respondent received and paid to himself for his own use. However,
respondent testified that most, but not all, of the money deposited under the 50003
file number consisted of clerk of court refunds. Therefore, the board found there is
insufficient evidence in the record to determine exactly how much of the $15,775.33
represented clerk of court refunds.

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Respondent testified that he deposited the clerk of court refunds into his trust
account and then paid the money to himself from the time he began his solo practice
in 2008 through the end of the audit period on August 31, 2018. It is not possible to
determine from the record the exact total amount of the clerk of court refunds
respondent received during this period. However, the clear and convincing evidence
shows that the amount of refunds respondent received and paid to himself through
his trust account totaled at least $10,288.15. By his own accounting, using records
he obtained from the Jefferson Parish Clerk of Court, respondent received
approximately 130 chec ks totaling $9,950.05 in refunds from the Jefferson Parish
Clerk of Court during this time period. Additionally, during the audit period from
September 1, 2017 through August 31, 2018, Ms. Marcellino identified six court
refunds from St. Tammany Parish an d one from Lafayette Parish which totaled
$338.10. The evidence suggests that respondent very likely received some amount
of court refunds from parishes other than Jefferson Parish prior to the audit period.
However, the record contains no evidence of th e amounts of court refunds
respondent may have received from St. Tammany Parish or any parish other than
Jefferson Parish from 2008 through August 31, 2017. Therefore, the board could
find only that the amount of refunds respondent received and paid to himself through
his trust account was at least $10,288.15 ($9,950.05 + $338.10).
The board also determined the committee erred in its finding that respondent’s
improper handling of the clerk of court refunds was negligent, and found he acted
knowingly. Respondent is a very experienced lawyer who knew the refunds did not
actually belong to him. He was consciously aware that the court refunds were
refunds of client court costs and not earnings due to him. Although respondent’s
objective or purpose was not to take money from his clients or to enrich himself, his
actions were motivated by laziness and not wanting to take the time to properly

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handle what he saw as the nuisance of receiving checks of often low dollar amounts
after billing had been completed.
Respondent engaged in misrepresentation and dishonest behavior by creating
invoices for work he performed for other clients (with no intention of charging those
clients) to justify the payments to himself of monies received from the court refunds.
This misconduct was at least knowing. However, the purpose apparently was a
means of showing what respondent considered to be nuisance income in order to
declare the income on his tax returns.
Based on these findings, the board determined that respondent violated Rules
1.15(a) and 8.4(c) of the Rules of Professional Conduct.
The board determined respondent violated duties owed to his clients, the
public, and the legal profession. He acted negligently in connection with the errors
in accounting that may have re sulted in the overdrafts and the disbursements from
the trust account in excess of the associated client balances which were later
rectified. He acted knowingly in converting the clerk of court refunds to his own
use. Individually, the clerk of court refund checks which have been identified ranged
in amount from approximately $5.00 to $280.00. The harm to any one individual
client from the loss of any one check may not be considered significant. However,
in the aggregate, the amount of the over 135 refund checks identified to date which
were converted by respondent totals $10,288.15, which is a significant amount.
Further, some clients, including those whose refund amounts were paid by
respondent to the Louisiana Bar Foundation, may never be able to be identified and
personally reimbursed due to respondent’s failure to identify and properly reimburse
the client when the refund checks were initially received. After considering the
ABA’s Standards for Imposing Lawyer Sanctions , the board determined that t he
applicable baseline sanction ranges from suspension to disbarment.

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The board determined the following aggravating factors are present: a
dishonest or selfish motive, a pattern of misconduct, multiple offenses, and
substantial experience in the practice of law. The board determined the following
mitigating factors are present: the absence of a prior disciplinary record, timely good
faith effort to make restitution or to rectify the consequences of the misconduct (only
as to the overdraf ts and the disburse ments from the trust account in excess of the
associated client balances which were identified in the audit report, not as to the
conversion of the clerk of court refunds), full and free disclosure to the disciplinary
board and a cooperative attitude toward the proceedings, and character or reputation.
The board specifically rejected the committee’s finding that respondent
should be credited in mitigation with a timely good faith effort to make restitution.
The board noted that in 2018, respondent requested from the Jefferson Parish Clerk
of Court a list of all refunds he had received during the entire period of his practice.
However, respondent did not make restitution to any client until January 2022, after
formal charges were filed and approximately two weeks prior to the hearing of this
matter. Moreover, respondent has not made restitution to any client for the refunds
issued by the St. Tammany Parish Clerk of Court or the Lafayette Parish Clerk of
Court. Finally, respondent did not present convincing evidence that he exercised
reasonable due diligence to locate the owners of the funds he received from Jefferson
Parish which he remitted to the Louisiana Bar Foundation as unclaimed or
unidentified funds.
Considering these circumstances, and the case law concerning similar
misconduct, the board determined that respondent’s misconduct warrants a more
severe sanction than that recommended by the committee . Accordingly, the board
recommended that respondent be suspended from the practice of law for two years,
with all but one year deferred, and that following the active portion of his suspension,

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respondent be placed on probation for a period of one year, governed by the
following conditions:
1. During the probationary period, Respondent shall
be required to obtain, at his cost and expense,
monthly audits of his IOLTA trust account to be
performed by a certified public accountant of his
choosing, subject to the approval of the ODC, and
the reports of the audits, in a form and manner
approved by the ODC, shall be promptly submitted
to the ODC;

2. Within one year of the imposition of sanction,
Respondent must successfully complete both the
Louisiana State Bar Association’s Ethics School
and the Louisiana State Bar Association’s Trust
Accounting School;

3. Within three months of the imposition of sanction,
Respondent must make restitution for the refund
checks received by him from the St. Tammany
Parish Clerk of Court (six checks) and the Lafayette
Parish Clerk of Court (one check) identified in the
ODC’s audit performed by Ms. Marcellino; and

4. Any failure of Respondent to comply with the
conditions of probation or any misconduct during
the probationary period will be grounds for making
the deferred suspension executory, or for imposing
additional discipline, as appropriate.

The board further recommended respondent be assessed with the costs and expenses
of this proceeding.
One board member dissented and would adopt the sanction recommended by
the hearing committee.
Neither respondent nor the ODC filed an objection to the disciplinary board’s
recommendation.

DISCUSSION
Bar disciplinary matters fall within the original jurisdiction of this court. La.
Const. art. V, § 5(B). Consequently, we act as triers of fact and conduct an
independent review of the record to determine whether the alleged misconduct has

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been proven by clear and convincing evidence. In re: Banks, 09-1212 (La. 10/2/09),
18 So. 3d 57. While we are not bound in any way by the findings and
recommendations of the hearing committee and disciplinary board, we have held the
manifest error standard is applicable to the committee’s factual findings. See In re:
Caulfield, 96 -1401 (La. 11/25/96), 683 So. 2d 714; In re: Pardue , 93-2865 (La.
3/11/94), 633 So. 2d 150.
Respondent converted at least $10,288.15 in clerk of court refunds owed to
his clients. He paid the se funds to himself based on invoices he created for work
performed for other clients for which he never intended to charge those other clients.
Respondent also allowed his trust account to become overdrawn and made
disbursements from his trust account in excess of the associated client balances. This
misconduct violated Rules 1.15(a) and 8.4(c) of the Rules of Professional Conduct
as charged.
Having found evidence of professional misconduct, we now turn to a
determination of the appropriate sanction for respondent’s actions. In determining
a sanction, we are mindful that disciplinary proceedings are designed to maintain
high standards of conduct, protect the public, preserve the integrity of the profession,
and deter future misconduct. Louisiana State B ar Ass’n v. Reis, 513 So. 2d 1173
(La. 1987). The discipline to be imposed depends upon the facts of each case and
the seriousness of the offenses involved considered in light of any aggravating and
mitigating circumstances. Louisiana State Bar Ass’n v. Whittington, 459 So. 2d 520
(La. 1984).
Respondent violated duties owed to his clients, the public , and the legal
profession. He acted knowingly in converting the clerk of court refunds to his own
use, and caused actual harm. He acted negligently in mishandling his client trust
account. The applicable baseline sanction ranges from s uspension to disbarment.

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The aggravating and mitigating factors found by the board are supported by the
record.
Turning to the issue of an appropriate sanction, the board has recommended
that respondent be suspended for two years, with all but one year deferred, followed
by a period of probation with conditions. We agree that the record supports this
sanction, given that respondent’s conduct was not motivated by greed or self-
enrichment. Moreover, the mitigating factors present are significant, in particular
the fact that respondent is an accomplished and respected lawyer who has practiced
for more than fifty years without any prior discipline. Under these circumstances,
we will adopt the board’s recommended sanction.

DECREE
Upon review of the findings and recommendations of the hearing committee
and disciplinary board, and considering the record, it is ordered that Edward J.
McCloskey, Louisiana Bar Roll number 9152, be and he hereby is suspended from
the practice of law for a period of two years . It is further ordered that all but one
year of this suspension shall be deferred. Following the completion of the active
portion of his suspension, respondent shall be pla ced on probation for a period of
one year governed by the conditions recommended by the disciplinary board. A ny
failure of respondent to comply with the conditions of probation, or any misconduct
during the probationary period, may be grounds for making t he deferred portion of
the suspension executory, or imposing additional discipline, as appropriate. All
costs and expenses in the matter are assessed against respondent in accordance with
Supreme Court Rule XIX, § 10.1, with legal interest to commence thirty days from
the date of finality of this court’s judgment until paid.