Background
Attorney F. Dennis Alerding moved for consensual discipline under Kentucky Supreme Court Rule 3.480(2). He admitted violating SCR 3.130(1.15)(a) and (e) after receiving a $5,000 unearned fee through a bail-refund check, cashing it, and keeping the money in an office drawer rather than a client trust account. He withdrew money as he performed work but maintained no records, and there was no signed fee agreement.
Alerding and the Office of Bar Counsel proposed a 61-day suspension probated for two years. The court reviewed Alerding’s disciplinary history, which included a 1996 public reprimand, a 2001 90-day suspension for a trust-account violation, a 2018 private reprimand for another trust-account violation, and a 2023 public reprimand for failing to deposit advance fees in a client account. The present matter was his fifth professional-conduct offense overall and his fourth involving SCR 3.130(1.15).
The Court’s Holding
The Kentucky Supreme Court denied Alerding’s motion for the proposed probated suspension, concluding that the negotiated sanction was too lenient given his repeated violations of the same trust-account rule. The court distinguished prior cases supporting probation or relatively short suspensions because those attorneys had materially less serious disciplinary histories or were first-time offenders.
The court remanded Alerding’s file to the Kentucky Bar Association for further disciplinary proceedings. If Alerding and Bar Counsel do not reach a different proposal for consensual discipline within 90 days of the order, the case must proceed as a contested disciplinary matter. Justice Keller dissented, joined by Justice Thompson, stating that she would accept the negotiated agreement and the Office of Bar Counsel’s recommendation.
Key Takeaways
- A negotiated disciplinary sanction is not binding on the Kentucky Supreme Court and may be rejected as inadequate.
- Repeated violations of the same client-funds rules can justify progressively more severe discipline, particularly when earlier sanctions failed to prevent recurrence.
- The court rejected a fully probated 61-day suspension but did not impose a final sanction, instead remanding for a new proposal or contested proceedings.
Why It Matters
The decision underscores that disciplinary history is central to evaluating consensual attorney discipline. Sanctions deemed sufficient for first-time misconduct may be inadequate when a lawyer has repeatedly violated the same rule, even when Bar Counsel supports the agreement.
For Kentucky practitioners, the opinion also reinforces the strict obligation to place advance fees and client property in an appropriate trust account and to maintain records. Informally safeguarding cash in an office does not satisfy those duties.