In Re Behles

Office of Director New Mexico
2019.10.25 Compilation
Commission
'00'06- 09:46:14
IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

Opinion Number: 2019-NMSC-016

Filing Date: September 23, 2019

NO. S-1-SC-37393

IN THE MATTER OF
JENNIE DEDEN BEHLES

An Attorney Disbarred from
the Practice of Law Before the Courts
of the State of New Mexico

Released for Publication November 5, 2019.

Anne L. Taylor
Albuquerque, NM
for Disciplinary Board

Wilfred Thomas Martin, Jr.
Carlsbad, NM

Marion James Craig, III
Roswell, NM

for Respondent

OPINION

VIGIL, Justice.

I. INTRODUCTION

{1} In this opinion we address the failure of Jennie Deden Behles (Behles) to comply
with the Rules of Professional Conduct and Rules Governing Discipline related to client
trust accounts and reasonable fees. Though Behles has led a long career as a member
of the New Mexico bar, this failure and her past disciplinary record demand her
disbarment. The Court reviewed Behles’s conduct on the recommendation of the
Disciplinary Board (the Board) to sustain charges and impose discipline for violations of
Rule 16-105 NMRA (fees), Rule 16-115 NMRA (safekeeping property), and Rule 16-
804(D) NMRA (engaging in conduct prejudicial to the administration of justice).

{2} The Board adopted the hearing committee’s findings of fact that Behles
expended client funds she had been ordered to hold in trust, failed to maintain complete
records of her client trust account, failed to keep client money separate from her own,
and unreasonably charged a contingent fee on the return of her client’s court bond.
These findings supported the Board’s ultimate conclusion that Behles violated the
aforementioned rules. Specifically noting that Behles’s conduct met a host of
aggravating factors—including “prior discipline, a dishonest and selfish motive, a pattern
of misconduct, commission of multiple offenses, refusal to acknowledge the wrongful
nature of her conduct, and substantial experience in the practice of law”—the Board
recommended that this Court disbar Behles.

{3} The Court adopted the Board’s findings of fact and conclusions of law in their
entirety. Accepting the Board’s recommended discipline, the Court permanently
disbarred Behles. 1 See Rule 17-206(A)(1) NMRA. Additionally, the Court ordered
Behles to pay restitution in the amount of $19,239.00, plus interest at the statutory
judgment rate, to her client, Dubalouche, LLC (Dubalouche), see Rule 17-206(C), as
well as to pay costs to the Board for these disciplinary proceedings.

{4} We write to emphasize the longstanding principle that “stealing client funds is
perhaps the most egregious violation of a lawyer’s ethical responsibilities[.]” In re
Zamora, 2001-NMSC-011, ¶ 12, 130 N.M. 161, 21 P.3d 30 (per curiam) (quoting In re
Kelly, 1995-NMSC-038, ¶ 8, 119 N.M. 807, 896 P.2d 487 (per curiam)). This Court will
not condone misconduct that irreparably erodes the sacred bond of trust shared
between attorney and client.

II. BACKGROUND

{5} Behles has been licensed to practice law in New Mexico for nearly fifty years.
Her practice at the Behles Law Firm (BLF) focused largely on bankruptcy and
construction law. This is the second time Behles has been subject to discipline from this
Court for her failure to properly manage her client trust account.

{6} In 2006, Behles consented to discipline for violating Rule 16-115 (safekeeping
property) and Rule 17-204 NMRA (trust accounting). As a result, the Court indefinitely
suspended Behles for a minimum of three years. That suspension was deferred so long
as Behles complied with certain probationary requirements. The probationary
requirements mandated that she meet with a supervising accountant at least once per
month to receive instruction on correct record keeping and management of her trust
account. Before being reinstated, Behles was required to prove that (1) her trust
account was in compliance with Rules 16-115 and 17-204, (2) she understood the
requirements of those rules, (3) she adequately supervised all transactions to and from
her trust account, and (4) she maintained the required records for her trust account.
Having met these requirements, Behles was eventually reinstated, but her conduct
underlying these proceedings demonstrates that the lessons once learned were not
indelible.

1
The Court originally set the effective date of disbarment for March 31, 2019 but extended that date to April 30,
2019 by granting Behles’s motion for extension.
A. Behles’s Representation of Dubalouche

{7} Dubalouche owned and leased out an expensive commercial property in
Albuquerque. Dubalouche’s tenant hired a general contractor, AIC General
Construction, Inc. (AIC), to renovate the building. In turn, AIC hired Precision Service
Electric, LLC (Precision) and Floorshield, LLC (Floorshield) as subcontractors. When
none of these contractors were paid in full by the tenant, each company filed liens on
Dubalouche’s property.

{8} Dubalouche sought Behles’s legal assistance because Dubalouche intended to
sell the building and therefore needed to evict the tenants and remove the liens.
Moreover, Dubalouche contended that one or all of the contractors had damaged the
building’s foundation, devaluing the property. In December 2014, Behles agreed to
represent Dubalouche.

{9} Behles’s misconduct that brings her before the Court arises from two fee
agreements she had with her client Dubalouche and her commingling of client money
paid under those fee agreements, as well as her improper accounting and retention of
client resources with respect to a settlement.

1. First fee agreement and the $7,500.00 retainer

{10} Under the original fee agreement, Dubalouche agreed to pay Behles $7,500.00
as “collateral to secure payment of fees.” Behles agreed to charge on an hourly basis
and to draw against the retainer only if Dubalouche defaulted on payments. This
agreement also provided Behles an attorney’s charging lien and a retaining lien “against
any funds . . . which [are] recovered, preserved, maintained, released, awarded as a
result of Attorneys’ efforts.” Chad Aldawood paid the full amount of the retainer on
December 22, 2014. Though it was client money paid in advance, Behles did not
account for this payment in her trust account ledger. Instead, Behles deposited the
$7,500.00 check directly into the BLF operating account. There is no evidence in the
record that Behles sent Dubalouche invoices reflecting fees earned in the time between
the ratification of the fee agreement and the date she deposited the retainer in her
operating account. According to Behles’s transaction listing for Dubalouche, Behles did
not bill Dubalouche for services until February 6, 2015.

2. Dubalouche debts and the $25,000.00 flat fee under the second fee
agreement

{11} On July 5, 2015, Behles notified intent to assert an attorney’s charging lien and
retaining lien in Dubalouche’s lawsuit against the contractors to cancel the liens on the
property. At the time she gave notice of her intent to assert the liens, Behles claimed
Dubalouche owed $28,176.47. Behles sought to attach a charging lien to “[a]ll accounts,
residuals, proceeds, issues, profits, and money payable to, awarded to, or secured by
Dubalouche, LLC, by virtue of any claim or settlement agreements or judgments
entered with respect” to the lawsuit.
{12} Following Behles’s assertion of the liens, Dubalouche made several payments to
BLF. By July 13, 2015, Dubalouche had paid a total of $27,600.00 to BLF, leaving an
owing balance of $576.47. That same day, Behles billed Dubalouche for an additional
$7,834.39. On July 31, 2015, Dubalouche paid Behles $8,000.00, bringing the owing
balance to $410.86. On August 3, 2015, Behles billed Dubalouche for $16,535.70. At
this point, it would appear that Dubalouche owed a total of $16,946.56 to BLF.
Dubalouche did not make another payment until after the ratification of a second fee
agreement.

{13} On September 9, 2015, Behles and Dubalouche entered into a second fee
agreement, in which Dubalouche agreed to pay BLF a flat fee of $25,000.00 that would
cover “all work to be performed from the date of September 9, 2015 forward.” On
September 14, 2015, Behles informed Dubalouche’s out-of-state counsel that the
outstanding amounts owed by Dubalouche were “included/forgiven” within the flat fee.
On September 16, 2015, the $25,000.00 flat fee payment was deposited directly into the
BLF operating account. Behles’s trust account ledger does not account for
Dubalouche’s payment of the flat fee, even though the payment was explicitly
designated for future work under the second fee agreement.

3. Disbursement of a portion of Dubalouche’s court bond

{14} In order to remove the contractors’ liens from the building, Dubalouche was
required to deposit a bond with the district court to secure the amounts claimed to be
owed. Precision claimed it was owed $9,084.00; Floorshield claimed it was owed
$18,450.00; and AIC claimed it was owed a total of $185,639.28, which included the
amounts owed to its subcontractors, Precision and Floorshield. The district court
ordered Dubalouche to deposit a $151,889.57 bond with the court registry to secure all
three liens. From this amount, $20,812.00 was credited to secure Precision’s lien, and
$30,926.00 was credited to secure Floorshield’s lien, for a total of $51,738.00 credited
to secure both subcontractors’ liens.

{15} In December 2015, Dubalouche, Precision, and Floorshield entered into a
settlement agreement in which Dubalouche agreed to pay Precision and Floorshield a
combined total of $32,500.00 to satisfy their respective liens. Under the settlement
agreement, Dubalouche, Precision, and Floorshield released all claims or potential
claims against each other. This release included Dubalouche’s potential counterclaims
for the alleged damage to the building. The district court approved the settlement and
directed the registry to disburse $32,500.00 to the trust account of the Moses Law Firm,
which represented Precision and Floorshield. The district court ordered that the
remaining $19,239.00 (of the $51,738.00 credited to secure both liens) be disbursed “to
Behles Law Firm Trust Account for Dubalouche, LLC.” 2 The balance of Dubalouche’s

2
The district court order contains an error in the amount of the disbursement to BLF for Dubalouche. The correct
remainder of Dubalouche’s $51,738.00 court bond after settling payment to the subcontractors is $19,238.00. This
correct amount is reflected in the language of the district court’s order, but the parenthetical numerical value is
incorrect by one dollar. The order states that “an additional Nineteen Thousand Two Hundred Thirty-Eight and
total court bond remained with the court registry pending resolution of the claims
between Dubalouche and AIC.

4. Behles’s accounting and retention of the $19,239.00 disbursement

{16} On January 11, 2016, Behles’s paralegal deposited the $19,239.00 check from
the court registry into the BLF client trust account. Throughout the remainder of
January, Behles transferred amounts exceeding the $19,239.00 disbursement from the
trust account to the BLF operating account. According to the January bank statement
for the BLF trust account, on January 12, Behles transferred $6,500.00 from the trust
account to the operating account. On January 13, she transferred $4,500.00. On
January 15, she transferred $6,000.00. On January 19, she transferred $1,000.00. On
January 20, she transferred $1,200.00. On January 26, she transferred another
$1,000.00. Finally, on January 29, she transferred $175.00. It is important to note that
Behles did not have invoices for work performed for Dubalouche to support the transfer
of these amounts.

{17} Behles claimed to have sent Aldawood a billing letter on January 21, 2016, along
with a check for the funds issued from the court registry. In her letter, Behles did not
state the amount of the check she was sending, and there is no copy of this check in the
record. Aldawood claimed that he never received the January 21 letter nor the check
from Behles. One month later, Dubalouche’s out-of-state counsel asked Behles about
the disbursement from the court registry. In response to this inquiry, Behles wrote, “Got
me we will check- I know it has not come back.” On March 2, 2016, Behles wrote to
Aldawood that she was holding Dubalouche’s portion of the $19,239.00 “on hand.” On
two more occasions, in another letter to Aldawood and in her response to the
disciplinary complaint filed by Aldawood, Behles claimed that she had issued
Dubalouche a check for its share of the $19,239.00 disbursement, minus costs she had
incurred since the date of the settlement order. Behles’s trust account records do not
indicate that she ever issued a check to Dubalouche as she had claimed on several
occasions.

{18} Behles’s trust ledger for Dubalouche was created after the initiation of the
Board’s investigation. The trust ledger shows that Behles retained the entire $19,239.00
disbursement from the court registry for herself, which she accounted for as follows:
$8,555.29 as her 40% contingent fee, $2,113.89 for some costs advanced, and
$8,569.82 for a portion of the flat fee that she considered outstanding even after
Dubalouche had transmitted the check for $25,000.00.

{19} Behles’s claim to a 40% contingent fee on the $19,239.00 disbursement arises
from the second fee agreement. Under that agreement, Behles would receive a 40%
contingent fee on any “amount recovered” on Dubalouche’s counterclaim against AIC,
Floorshield, and Precision for building damage. As we will explain, we adopt the Board’s

No/100 Dollars ($19,239.00) should be disbursed.” Ultimately, the district court disbursed the incorrect amount of
$19,239.00.
determination that Behles did not secure a recovery on behalf of Dubalouche and
therefore was not entitled to any contingent fee.

{20} Aldawood filed a disciplinary complaint against Behles in May 2017 alleging that
Behles was “improperly holding funds that the [district c]ourt authorized be paid to
Dubalouche[.]” Following an investigation, disciplinary counsel filed a specification of
charges against Behles claiming the following violations of the Rules of Professional
Conduct: charging an unreasonable fee in violation of Rule 16-105, failing to hold client
money separate from her own and failing to keep complete records of her trust account
in violation of Rule 16-115, “knowingly making a false statement of material fact in a
disciplinary matter” in violation of Rule 16-801, “engaging in conduct involving fraud,
deceit or misrepresentation” in violation of Rule 16-804(C), and “engaging in conduct
that is prejudicial to the administration of justice” in violation of Rule 16-804(D).

{21} Following two days of testimony, the hearing committee made findings of fact
and concluded that Behles violated Rules 16-105, 16-115, and 16-804(D). As discipline,
the hearing committee recommended suspending Behles for a period of six months,
requiring Behles to make full restitution to Dubalouche in the amount of $19,239.00 plus
interest, requiring Behles to attend five hours of continuing legal education in “law office
management and trust account management[,]” and upon conclusion of her suspension,
placing Behles on a twelve-month supervised probation period and assigning her a
supervising attorney to monitor her records and management of her trust account.

{22} Upon review, the Board adopted the hearing committee’s findings of fact and
conclusions of law that Behles violated Rules 16-105, 16-115, and 16-804(D). The
Board recommended a modification and increase of the recommended discipline based
on the type of violations at issue, numerous aggravating factors, and the lack of any
mitigating factors found by the hearing committee. Citing this Court’s precedent
instructing that disbarment is appropriate when an attorney violates the Rules of
Professional Conduct mandating safekeeping of client property and proper trust
accounting, the Board recommended that Behles be disbarred. See, e.g., In re Kelly,
1995-NMSC-038, ¶ 8; In re Rawson, 1992-NMSC-036, ¶¶ 1, 9, 24, 113 N.M. 758, 833
P.2d 235 (per curiam).

{23} We consider the recommendations of the Board and assess Behles’s misconduct
in the following instances. First, we consider whether Behles violated Rule 16-115 when
she (1) deposited the $7,500.00 retainer directly into her operating account, (2)
deposited the $25,000.00 flat fee directly into her operating account, and (3) transferred
funds in an amount exceeding that of the $19,239.00 disbursement from her trust
account to her operating account absent any invoices to Dubalouche reflecting work
performed. Next, we consider whether Behles violated Rule 16-105 when she charged a
40% contingent fee on the return of Dubalouche’s court bond in the form of the
$19,239.00 disbursement. Finally, we consider whether Behles’s misconduct was
prejudicial to the administration of justice in violation of Rule 16-804(D).

III. DISCUSSION
{24} In reviewing the disciplinary proceedings before the Board and imposing the
discipline it recommends, we view the evidence in the light most favorable to the
Board’s findings of fact. See In re Bristol, 2006-NMSC-041, ¶ 28, 140 N.M. 317, 142
P.3d 905 (per curiam). We review the Board’s conclusions of law de novo. See id. ¶ 18.
In doing so, we adopt the Board’s findings of fact and conclusions of law in their
entirety.

A. Behles Was Afforded Due Process of Law Throughout the Disciplinary
Proceedings

{25} Before the hearing committee, the Board, and this Court, Behles argued that her
right to due process was violated when the Board made findings of fact and
recommendations for discipline based on her failure to hold in trust the $7,500.00
retainer and the $25,000.00 flat fee. She asserted that neither payment was identified in
the specification of charges to support the charge that she violated the rules of proper
trust accounting. For this reason, she argued that she was not given adequate notice of
the charge or an opportunity to defend herself in regard to her handling of the $7,500.00
retainer and $25,000.00 flat fee.

{26} Attorneys facing discipline are “entitled to procedural due process, which
includes fair notice of the charge.” In re Ruffalo, 390 U.S. 544, 550 (1968).

The specific requirements of procedural due process depend on the facts
of each case, and could encompass any number of the following
components: (1) notice of the basis for the government action; (2) a
neutral decision maker; (3) the opportunity to orally present a case against
the state; (4) the opportunity to present evidence and witnesses against
the state; (5) the opportunity to cross-examine witnesses; (6) the right to
have an attorney present at the hearing; and (7) a decision based on the
evidence presented at the hearing accompanied by an explanation of the
decision.

Mills v. N.M. State Bd. of Psychologist Exam’rs, 1997-NMSC-028, ¶ 14, 123 N.M. 421,
941 P.2d 502.

{27} Behles’s argument that she was denied due process is not persuasive because
the specification of charges clearly identified Behles’s mishandling of her trust account
as one basis for discipline. This encompassed her failure to deposit the $7,500.00
retainer and $25,000.00 flat fee into her trust account. Before neutral decision makers at
each level of the disciplinary proceedings, Behles’s counsel presented evidence,
including witness testimony, refuting the charge that Behles mismanaged her trust
account. We adopt the Board’s finding that Behles “defended all issues with respect to
her trust account including, but not limited to, an advance payment of $7,500.00 . . . and
a flat fee payment of $25,000.00 paid by Dubalouche.” We note that the findings of fact
regarding Behles’s trust accounting violations are based in part on the account records
that Behles herself provided. We conclude that the specification of charges adequately
alerted Behles that her trust account records were under investigation, and Behles was
afforded due process of law.

B. Behles’s Professional Misconduct

{28} Behles’s continued habit of ignoring the Rules of Professional Conduct and Rules
Governing Discipline related to trust accounting and fees is intolerable. In her
representation of Dubalouche, Behles violated the rules regarding trust accounting in
several instances. Behles’s trust account records, where present, are abysmal. Not only
did she demonstrate, in the words of the Board, “a fundamental lack of understanding
regarding trust accounts and her obligations” under Rules 16-115 and 17-204, she also
unreasonably charged her client a contingent fee on the return of the client’s own
money in violation of Rule 16-105. These instances of misconduct amount to a violation
of Rule 16-804(D).

1. Behles commingled client property with her own and failed to keep
complete records of her trust account in violation of Rules 16-115 and 17-
204(A)

{29} The mandate of Rule 16-115 is clear: lawyers must hold client money in a
separate trust account and maintain complete records of that account. Rule 16-115(A).
“Any retainer or flat fee not yet earned” is client money that “must be safely kept and
held in trust for the client, separately from the lawyer’s own property.” In re Montclare,
2016-NMSC-023, ¶ 19, 376 P.3d 811.

In order for lawyers and their clients to know what portion of a flat fee or
retainer may properly be withdrawn from trust, lawyers must inform their
new clients of the basis upon which they will compute the amount of fee
earned and maintain records that will enable them to determine the
ongoing status of the fee, even when the fee arrangement is for a flat
fee[.]

In re Dawson, 2000-NMSC-024, ¶ 12, 129 N.M. 369, 8 P.3d 856 (per curiam) (citation
omitted). Complete records of a client trust account consist of account balances,
reconciliations, bank documents, fee agreements, invoices, and statements detailing all
transactions to and from the trust account. Rule 17-204(A).

{30} Behles did not keep complete records of her trust account in violation of Rule 17-
204(A). First, Behles’s trust account ledger does not list the $7,500.00 retainer nor the
$25,000.00 flat fee, both of which were unearned fees at the time they were received.
Second, the record is devoid of any invoices corresponding to the seven transfers
Behles made from the trust account in January 2016. This dearth of accounting records
is a clear violation of Rule 17-204(A).

{31} Behles violated Rule 16-115(A) on three separate occasions when she
commingled Dubalouche’s money with that of her firm’s operating account. The initial
retainer, flat fee payment, and $19,239.00 court disbursement was client money when it
was received by BLF. Accordingly, it was to be held in trust and properly recorded. See
Rule 16-115(A); Rule 17-204(A). This was not done.

{32} Behles’s handling of the $7,500.00 retainer, the $25,000.00 flat fee, and the
$19,239.00 disbursement amount to specific violations of Rule 16-115(C)-(E). We
address each instance of misconduct in turn.

a. Behles violated Rule 16-115(C) when she deposited the $7,500.00 retainer
directly into her operating account

{33} All client money that is paid to the lawyer in advance must be deposited into the
client trust account “to be withdrawn by the lawyer only as fees are earned or expenses
incurred.” Rule 16-115(C) (emphasis added). Under the initial fee agreement between
Behles and Dubalouche, the $7,500.00 retainer was collateral to secure Dubalouche’s
payment of fees. The agreement stated that Behles would not draw upon the funds
unless Dubalouche was in default. Therefore, the $7,500.00 retainer was client money
paid in advance and should have been deposited in Behles’s trust account pursuant to
Rule 16-115(C). Behles violated Rule 16-115(C) when she deposited the $7,500.00
retainer directly into her operating account.

{34} Behles argued that it was permissible for the retainer to be deposited into her
operating account because “this work had already been done[.]” This assertion is
unsupported by evidence as Behles failed to produce a client invoice to show she had
completed work for Dubalouche at the time she deposited the retainer in her operating
account. Her transaction record for the Dubalouche account does not list an invoice until
February 6, 2015, more than one month after Behles deposited the initial retainer in her
operating account. Behles’s failure to deposit the $7,500.00 retainer into her trust
account is her first violation of Rule 16-115(C) in this disciplinary case.

b. Behles violated Rule 16-115(C) when she deposited the $25,000.00 flat fee
directly into her operating account

{35} Behles violated Rule 16-115(C) a second time when she failed to deposit
Dubalouche’s flat fee payment under the second fee agreement into her trust account.
“[A] flat fee for future legal services cannot be considered as earned when paid and
must be held in trust until earned.” In re Yalkut, 2008-NMSC-009, ¶ 26, 143 N.M. 387,
176 P.3d 1119 (per curiam). Under the second fee agreement, Dubalouche agreed to
pay a $25,000.00 flat fee for work to be performed from the date of the agreement
forward. Behles did not provide an invoice for services between the date of the
agreement and the date she deposited the flat fee payment into her operating account.
This means that Dubalouche’s payment of $25,000.00 was an unearned fee at the time
Behles improperly deposited it into her operating account.

{36} Behles argued that she did not violate Rule 16-115(C) in this instance because
Dubalouche’s check for $25,000.00, received shortly after the execution of the second
fee agreement, was not the flat fee payment but was instead meant to satisfy the
August 3, 2015 bill for $16,535.70. She claimed that once the August 3, 2015 bill was
satisfied, the remainder of the $25,000.00 was partial payment of the flat fee under the
second fee agreement.

{37} This argument fails for two reasons. First, we adopt the Board’s finding that
Behles was paid in full for her representation of Dubalouche once she accepted the
$25,000.00 flat fee. Two days before the $25,000.00 was deposited into her operating
account, Behles informed Dubalouche’s out-of-state counsel that the outstanding
amounts due to BLF were “forgiven/included” in the $25,000.00 flat fee under the
second fee agreement. Therefore, the August 3, 2015 bill of $16,235.70 was forgiven
when Dubalouche paid the flat fee on September 16, 2015. Behles should not have
credited any amount of the $25,000.00 flat fee to the August 3, 2015 bill. Second, even
if we accepted her argument that part of the $25,000.00 was meant to satisfy the
August 3, 2015 bill, Behles did not deposit the remainder of the flat fee payment into her
trust account. That remainder was unquestionably an unearned fee when paid. It should
have been held in trust until Behles could account for how it was earned. See In re
Dawson, 2000-NMSC-024, ¶ 12. Because she did not deposit the payment of the
$25,000.00 flat fee into her trust account, Behles violated Rule 16-115(C).

c. Behles violated Rule 16-115(D) when she failed to account for and deliver
the $19,239.00 court disbursement to Dubalouche

{38} When a lawyer receives funds belonging to a client (i.e., proceeds from a
settlement or recovery) the lawyer must “promptly notify the client” of the receipt,
“promptly deliver” the funds to the client, and upon request by the client, render a “full
accounting.” Rule 16-115(D). Behles violated Rule 16-115(D) when she failed to
account for and deliver the $19,239.00 court disbursement to her client.

{39} The $19,239.00 disbursement was a return of Dubalouche’s own money. It was
the remainder of Dubalouche’s $51,738.00 court bond following the $32,500.00
payment to Precision and Floorshield pursuant to the settlement agreement. The district
court ordered Behles to hold the $19,239.00 disbursement in trust for Dubalouche.
Despite this order and the requirements of Rule 16-115(D), Behles failed to deliver the
$19,239.00 disbursement to Dubalouche.

{40} Though she repeatedly stated that she was holding the funds from the
disbursement on hand and planned to remit payment, Behles’s bank records bely those
assertions. Behles had transferred the full $19,239.00 out of the client trust account and
into the BLF operating account by January 26, 2016. She did so absent concurrent
documentation that she earned any amount from the disbursement. Because Behles
was required to account for and deliver the funds to which her client was entitled, we
conclude that she violated Rule 16-115(D).

{41} Behles believed she was owed the full amount of the disbursement in fees and
costs and argued that her assertion of an attorney charging lien and a retaining lien
gave her the right to recover those fees and costs out of the $19,239.00 disbursement.
We disagree. Charging and retaining liens only attach to a client’s property when the
client has failed to pay the attorney for legal services. See In re Venie, 2017-NMSC-
018, ¶ 39, 395 P.3d 516; Computer One, Inc. v. Grisham & Lawless, P.A., 2008-NMSC-
038, ¶ 12, 144 N.M. 424, 188 P.3d 1175. As we have explained, Behles was paid in full
for her representation of Dubalouche when she received the $25,000.00 flat fee
payment on September 16, 2015. Since Dubalouche was not in default, no charging or
retaining liens attached to the disbursement from the court registry.

d. Behles violated Rule 16-115(E) when she failed to maintain the $19,239.00
court disbursement in trust despite her client’s claims to the funds

{42} Should any dispute arise between the lawyer and client regarding each party’s
interest in certain funds, the lawyer is required to keep the funds separate “until the
dispute is resolved.” Rule 16-115(E). Behles violated Rule 16-115(E) when she
unilaterally transferred the $19,239.00 out of the trust account despite Dubalouche’s
claim to the full amount of the disbursement. Clearly there was a dispute between
Dubalouche and Behles regarding their interests in the disbursement from the court
registry. The appropriate response would have been for Behles to hold the funds in trust
until the dispute was resolved. See id. However, Behles paid no heed to this
requirement and took from her client what she felt she deserved.

{43} For the foregoing reasons, we conclude that Behles commingled client property
and failed to keep complete trust account records in violation of Rules 16-115 and 17-
204(A).

2. Behles violated Rule 16-105 when she charged an unreasonable contingent
fee on the return of Dubalouche’s court bond

{44} Rule 16-105(A) mandates that lawyers “shall not . . . charge or collect an
unreasonable fee.” Under the second fee agreement, Behles was entitled to a 40%
contingent fee on the “amount recovered” on Dubalouche’s counterclaims against AIC,
Precision, and Floorshield for alleged damage to the building. Dubalouche received
money back under the settlement agreement with Precision and Floorshield, but that
money was not a recovery on its counterclaims.

{45} Behles argued she was owed a 40% contingent fee because Dubalouche
recovered $19,239.00 pursuant to the settlement agreement and subsequent court
disbursement. She claimed $19,239.00 was a recovery because it was a sum of money
she “got back or regained for the benefit of Dubalouche.” We disagree with Behles’s
characterization and adopt the Board’s findings that Behles was not entitled to a
contingent fee because Dubalouche did not recover any amount on its counterclaims.

{46} The following supports the Board’s finding that there was no recovery for which
Behles could charge a contingent fee. First, the settlement agreement did not specify
that the subcontractors paid any damages on Dubalouche’s counterclaims. Second, as
we have explained, the $19,239.00 disbursement was a return of the remainder of
Dubalouche’s court bond following the settlement with the subcontractors. The fact that
Dubalouche deposited a bond in a greater amount than was ultimately used to settle the
litigation does not mean that Dubalouche recovered $19,239.00. The $19,239.00
disbursement was a return to Dubalouche of the balance of the court bond that it had
paid to secure the release of liens. As such, it was not a recovery.

{47} Behles argued that the $19,239.00 was a recovery because she was able to
leverage Dubalouche’s potential counterclaims to reduce the amount Precision and
Floorshield claimed they were owed during the settlement negotiation. The record does
not support this argument. Precision’s and Floorshield’s liens on the property totaled
$27,534.00. Under the settlement, Dubalouche agreed to pay Precision and Floorshield
$32,500.00 to satisfy the liens and secure a mutual release of claims. Ultimately,
Dubalouche paid approximately $5,000.00 more than the initial amount of the
subcontractors’ liens. Behles’s own testimony before the hearing committee is the only
evidence in the record to support her claim that Precision and Floorshield settled for a
lesser amount than their initial demand in exchange for Dubalouche’s release of its
counterclaims. This specific bargain is not memorialized in the settlement agreement.

{48} Because we view the evidence in the light most favorable to the Board’s findings,
we adopt the finding that Dubalouche did not recover on the counterclaims. We
conclude that it was unreasonable and a violation of Rule 16-105 for Behles to charge a
contingent fee on the $19,239.00 disbursement from the court registry.

3. Behles’s misconduct is prejudicial to the administration of justice in
violation of Rule 16-804(D)

{49} “It is professional misconduct for a lawyer to . . . engage in conduct that is
prejudicial to the administration of justice[.]” Rule 16-804(D). Misconduct involving
“dishonesty [and] breach of trust” fall into the category of offenses that “reflect adversely
on fitness to practice law.” Rule 16-804 Comm. commentary [2]. Behles’s misconduct is
an affront to the legal profession. She has repeatedly engaged in professional practices
riddled with deceit to the detriment of her client, as well as the reputation of all lawyers
in this state. Lawyers play an integral role in the justice system, granting their clients
access to the law’s remedies and protections. When the integrity of one lawyer is put
into question, the integrity of the entire justice system is put into question. This will not
stand. Because she failed to deliver the $19,239.00 disbursement to Dubalouche while
misrepresenting that she was holding that money in trust, Behles has engaged in
conduct prejudicial to the administration of justice in violation of Rule 16-804(D).

C. Behles’s Misconduct Requires Her Disbarment From the Practice of Law

{50} In our order of March 5, 2019, we adopted the Board’s recommendation for
discipline and permanently disbarred Behles from the practice of law. In dispensing
discipline, we are guided by our prior decisions regarding similar misconduct and the
American Bar Association’s Standards for Imposing Lawyer Sanctions (ABA
Standards). In re Key, 2005-NMSC-014, ¶ 5, 137 N.M. 517, 113 P.3d 340 (per curiam).

{51} The presumptive form of discipline for knowingly misappropriating client funds is
disbarment. See In re Reynolds, 2002-NMSC-002, ¶¶ 13-14, 131 N.M. 471, 39 P.3d
136 (per curiam). “A lawyer’s trust account should be held sacred; wilfully taking funds
from a trust account cannot and will not be tolerated by this Court.” In re Zamora, 2001-
NMSC-011, ¶ 12 (quoting In re Kelly, 1995-NMSC-038, ¶ 8). Our view is consistent with
ABA Standard 4.11, which provides that disbarment is appropriate when attorneys
knowingly or intentionally misappropriate client property, causing their client injury. See
Am. Bar Ass’n, Annotated Standards for Imposing Lawyer Sanctions, Standard 4.11,
Annotation, at 132 (2015) (explaining that courts focus on “deliberate conduct” when
determining whether disbarment for misappropriation is warranted).

{52} We conclude that Behles knowingly commingled her client’s property with her
own when she (1) deposited the $7,500.00 retainer into her operating account, (2)
deposited the $25,000.00 flat fee into her operating account and (3) transferred
$19,239.00 of her client’s money out of the trust account and into her firm’s operating
account. Without any concurrent invoices demonstrating that she earned fees from
these amounts, Behles took for herself the $7,500.00 retainer, the $25,000.00 flat fee,
and the $19,239.00 disbursement. This conduct caused her client undeniable injury.
Adding insult thereto, Behles repeatedly misrepresented to her client that she had
maintained the $19,239.00 disbursement in trust and planned to remit payment.

{53} In addition to her serious failure to conform to the Rules of Professional Conduct
at issue in this case, there are many aggravating factors we consider in our imposition
of discipline. In particular, Behles’s prior discipline for similar misconduct, her
substantial experience in law, and her refusal to acknowledge the wrongfulness of her
behavior lead us to conclude that disbarment is the only way to protect the public from
the grave consequences of Behles’s transgressions. See Rule 17-Preface NMRA (“The
purpose of discipline of lawyers is the protection of the public, the profession[,] and the
administration of justice[.]”).

IV. CONCLUSION

{54} We adopt the Board’s findings of fact and conclusions of law in this case and
permanently disbar Behles from the practice of law, effective April 30, 2019. In addition,
we order her to pay costs to the Board in the amount of $3,127.93 and to pay restitution
to Dubalouche in the amount of $19,239.00 consistent with our March 5, 2019 order.

{55} IT IS SO ORDERED.

BARBARA J. VIGIL, Justice

WE CONCUR:
JUDITH K. NAKAMURA, Chief Justice

C. SHANNON BACON, Justice

DAVID K. THOMSON, Justice