ANSWER. Comes Respondent, George Ernest Faber, by George B. Collins and Kathryne Hayes, his
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1 In the Matter of: *iuq BEFORE THE HEARING BOARD of the AUG 2 S 2014 ILLINOIS ATTORNEY REGISTRATION AND DISCIPLINARY COMMISSION ATTY REG & DISC COMM CHICAGO GEORGE ERNEST FABER, Attorney-Respondent, Commission No PR No ANSWER Comes Respondent, George Ernest Faber, by George B. Collins and Kathryne Hayes, his attorneys, and for his answer, denying the allegations of the prefatory statement, Answers the Complaint as follows: COMMISSION RULE 231 STATEMENT Respondent was licensed to practice law in the State of Illinois on November 19, Respondent is admitted to practice law before the United States District Court for the Northern District ofillinois. Respondent holds no other professional licenses. COUNT I (Alleged Conversion of$14, in proceedsfrom Zavalas' personal injury claim) 1. On or about August 5, 2007, Alexis Zavala ("Alex"), a minor, suffered a dog bite by a pit-bull terrier owned by Crystal Solorio ("Solorio") and Frank and Veronica Gutierrez ("the Gutierrezes") at or near North Street in Elgin, Illinois. As a result ofthe incident, Alex sustained various injuries and incurred medical expenses. ANSWER: Admitted. 2. In or about May 2009, Respondent and Alex's father, Alfonso Zavala ("Alfonso"), agreed that Respondent would represent Alfonso on behalf of Alex in claims against Solorio and the Gutierrezes relating to the August 5, 2007 incident. At that time,
2 Respondent and Alfonso agreed that Respondent's receipt of a fee would be contingent upon Respondent recovering a settlement or award on behalf of Alex, and that Respondent would receive as his fee an amount equal to twenty-five percent ofany such recovery, plus costs. ANSWER: Admitted. 3. At no time did Alfonso sign any contingent fee agreement with Respondent. ANSWER: Admitted. 4. On or about September 1, 2009, Respondent filed a civil suit for damages on behalf of Alfonso and Alex in the Kane County Circuit Court. The Clerk of the Circuit Court docketed the matter as Alexis Zavala, a Minor, by his Father and Next Friend, Alfonso Zavala, vs. Crystal Solorio, Frank Gutierrez, and Veronica Gutierrez, and assigned it case number 2009 L547. ANSWER: Admitted. 5. In August 2012, the parties agreed to settle case number 2009 L 547. Respondent then petitioned the court to accept a $100,000 structured settlement that had been offered by Solorio and the Guitierrezes' insurer, Allstate Insurance Company ("Allstate"). The structured settlement consisted ofan immediate $40,000 payout, with the remaining $60,000 paid in four annual disbursements of $17,665, commencing when Alex turned 18. Of the $40,000 initial distribution, Respondent would receive $25,000 as his attorney's fee, plus $710 for reimbursement of costs he incurred, the State of Illinois would receive $3,300 in payment of a subrogation lien, and Alfonso, on behalf of Alex, would receive $10,990. ANSWER: Admitted that in August, 2012 the parties agreed to settle case number 2009 L 547. Admitted that Respondent petitioned the court to accept a $100,000 structured settlement that consisted of an immediate $40,000 payout, with the remaining $60,000 paid
3 in four annual disbursements of $17,665. (Petition is attached hereto as Exhibit 1) Admitted Respondent received $25,000 as his attorney's fee. Denied as to the amount of costs Respondent was entitled to. Admitted that the State of Illinois held a $3,300 subrogation lien. Denied that Alfonso, on behalf of Alexis would receive $10,990; the correct amount is $10,000. Any remaining allegations are denied. 6. On or about August 28, 2012, Respondent filed a report of distribution in case number 2009 L 547, outlining the distribution of Zavala's settlement funds as described in paragraph five, above. On that date, the Court approved the proposed settlement and dismissed case number 2009 L 547. ANSWER: Denied. The report of distribution reflected was not identical to the Petition as outlined in paragraph number five. (Report of Distribution attached hereto as Exhibit 2.) As reflected in the Report of Distribution, Alfonso Zavala was paid $650 (check number 6191). 7. On or about August 20, 2012, Respondent received Allstate draft number , which was made payable to "Alfonso Zavala, Special Admin. Ofthe Estate of Alexis Zavala and George E. Faber, their Attorney" in the amount of $40,000. Draft number represented the portion ofthe settlement proceeds owed to Respondent for fees and costs, to Alfonso, on behalf of Alex, in settlement of Alex's claims against Solorio and the Gutierrezes, and the State of Illinois in satisfaction ofits lien. ANSWER: Admitted. 8. On or about August 22, 2012, Respondent deposited Allstate draft number into an account ending in the four digits "8179" at JPMorgan Chase Bank, N.A. That account (hereinafter "client fund account") was entitled "George E. Faber, Attorney at Law,
4 IOLTA Trust Account" and was used by Respondent as a depository of funds belonging to Respondent's clients, to third parties, or, presently, or potentially, to Respondent. ANSWER: Admitted. 9. In or about October 2012, Alfonso and Respondent executed a settlement agreement and release in connection with Alex's claims against Solorio, the Gutierrezes and Allstate in exchange for Allstate's agreement to pay the amounts set forth in paragraph five, above. ANSWER: Admitted that a settlement agreement and release were executed. Remaining allegations are denied; see Answer to Paragraph Between August 22, 2012, and May 10, 2013, prior to any distribution of settlement funds owed to Alfonso on behalf of Alex, or the State of Illinois, the balance in Respondent's client fund account fell to $108.66, as Respondent drew checks on the account in payment ofhis business and personal obligations. ANSWER: Admitted. The Zavala funds were not held in the Respondent's client fund account. Respondent deposited the funds owed to Alfonso on behalf of Alex into an investment account. Denied that Respondent drew from the funds owed to Alfonso on behalf of Alex for payment of his business and personal obligations. Respondent further represents that on or about May 10, 2014, check number 6250 in the amount of $10, was disbursed to Alfonso on behalfof Alex. 11. Between August 22, 2012, and May 10, 2013, Respondent used for Respondent's own business or personal purposes at least $14, of the settlement proceeds owed to Alfonso on behalfofalex and the State of Illinois. ANSWER: Denied.
5 12. At no time did Alfonso on behalf of Alex, the State of Illinois, or anyone on their behalf, authorize Respondent to use any portion ofthe settlement proceeds for Respondent's own business or personal purposes. ANSWER: Admitted there was no such authorization. Denied that Respondent used any portion ofthe settlement proceeds for Respondent's own business or personal purposes. 13. Respondent's use of the settlement proceeds constitutes conversion of funds of a client. ANSWER: Denied that a conversion took place. Denied that Respondent had the intent to permanently deprive the client of the $10,000 funds. Denied that the a failure to hold funds in a designated IOLTA account is a conversion. Denied that Respondent ever had the intent to permanently deprive the State ofillinois recovery for the services provided to Zavala. 14. By reason of the conduct described above, Respondent has engaged in the following misconduct: a. failure to reduce a contingent fee agreement to writing by conduct including beginning the representation of Alfonso on behalf of Alex for twenty-five percent of the recovery plus costs, without having Alfonso sign a written fee agreement which stated the method by which the fee is to be determined, including the percentage or percentages that shall accrue to Respondent in the event of settlement, and other expenses to be deducted from the recovery, in violation of Rule 1.5(c) of the Illinois Rules ofprofessional Conduct (2010); b. failure to hold property (Alex's settlement funds) of clients or third persons that is in the lawyer's possession in connection with a representation separate from the lawyer's own property, by drawing the balance in his client trust account below the amount he received in connection with the representation of Alfonso on behalf of Alex, thereby converting that property to his own use, in violation ofrule 1.15(a) of the Illinois Rules of Professional Conduct (2010); and c. conduct involving dishonesty, fraud, deceit or misrepresentation, by his unauthorized use of Alex's funds for his own personal or business purposes, thereby converting that property to his own use, in violation of
6 Rule 8.4(c) ofthe Illinois Rules ofprofessional Conduct (2010). ANSWER: Denied. WHEREFORE, Respondent respectfully requests that this cause be considered and that the Hearing Board make a just recommendation. Respectfully submitted, George B. Collins Kathryne Hayes COLLINS BARGIONE & VUCKOVICH Attorneys for Respondent One North LaSalle St., #300 Chicago, Illinois (312)
7 IN THE CIRCUIT COURT FOR THE SIXTEENTH JUDICIAL CIRCUIT KANE COUNTY, ILLINOIS ALEXIS ZAVALA, a Minor, by his Father and Next Friend, ALFONSO ZAVALA, Plaintiffs, vs. Case No. 09 L 547 CRYSTAL SOLORIO, FRANK GUITIERREZ, and VERONICA GITIERREZ, Honorable Keith Brown, Judge Presiding Defendants. PETITION TO APPROVE SETTLEMENT OF MINOR'S CLAIM The plaintiff, ALFONSO ZAVALA, father and next friend ofalexis ZAVALA, a minor, petitions the court to approve a proposed offer to settle his son's claim, and allege as follows: 1. Plaintiffs are represented by Attorney George E. Faber ofwest Dundee, Illinois. 2. The defendants are represented by Joseph Callahan of the Law Offices of Dale J. Sherman of West Chicago, Illinois. 3. The minor plaintiff is eight (8) years old and resides with his mother, father, and siblings in their home in Elgin, Illinois. 4. The defendants reside in Elgin, Illinois, and at the time ofthe incident were the owners and keepers of a mixed breed pitbull terrier dog, whose name was "Dumbo." 5. On August 7, 2007, ALEXIS ZAVALA was then fours years old and was playing outside of his home on a public sidewalk in Elgin, Kane County, Illinois.
8 The defendant, CRYSTAL SOLORIO came along on the same sidewalk walking le dog. Dumbo, and ALEXIS ZAVALA reached down to pet the dog. Dumbo, it attacked and severely bit ALEXIS ZAVALA on his face, head, cheeks and arms. 7. There are many witnesses to the dog-biting by Dumbo and that ALEXIS 2AVALA did not hit or provoke the dog and that ALEXIS ZAVALA was in aplace where he had a rightto be. 8. Plaintiff asserts thatthis attack by Dumbo is a clear violation of the Illinois Animal Control Act. 9. The minor, ALEXIS ZAVALA, was picked up at his home by the Elgin Fire Department paramedics on the day he was bitten and taken to the Sherman Hospital emergency room in Elgin, Illinois. 10. At the emergency room, ALEXIS ZAVALA was seen, his wounds were cleaned, lie was given antibiotics, stitches, observed for a period of time, and later released to his mother. 11. ALEXIS ZAVALA was at his home recuperating for two (2) days. An infection set in on his wounds. ALEXIS ZAVALA returned to the emergency room, where tests were taken, a serious infection was diagnosed, and he was then admitted to the hospital for further treatment. 12. While an in-patient, ALEXIS ZAVALA had a surgical operation performed on his wounds by Dr. Alan Arps, a plastic surgeon, removing the infection and skin, which was successful. ALEXIS ZAVALA was again given more antibiotics to counter the infection and released from the hospital after four (4) days.
9 Discovery and depositions have confirmed the defendants' liability and damages. 14. Treatment for the minor's injuries ofhospital and medical expenses were paid by the State of Illinois. 15. There are litigation costs expended in this matter in the amount of$ 1, Future medical care, including surgery will be needed to repair the scars on Alexis' face. 16. The defendants are insured for plaintiffs' claim, under a policy ofhomeowners insurance issued by Allstate Insurance Company with bodily injury limits of$100, per person. 17. The defendants' insurer has offered the plaintiffs $100, to settle the minor's claim and have provided plaintiffs father several structured alternatives. 18. All of the hospital and medical expenses were paid by the State of Illinois, and it has agreed to accept payment of its subrogation lien in the amount of $3, Counsel for the plaintiffs believes that the defendants' offer ofsettlement is fair and reasonable and should be accepted by his parents. The minor's parents have discussed the offer, agree to accept the settlement offer and ask the court to approve it. 20. The following is the financial structure ofthe ofthe defendants' offer to settle. A. Gross Settlement (Allstate Insurance Company) $100, (1) $40, cash (2) $60, structured, a copy of which is attached hereto. B. The following deductions will be from $40, payment: 1. Attorney Fees (25%) $ 25, Subrogation Lien /State ofillinois $ 3, Costs incurred:
10 a. Filing fee & Jury Demand $ b. Service ofprocess $ c. Deposition Transcript $ Janson Reporting d. Law Bulletin Pub. Co. $ e. Copies ofmedical Records $ f. City ofelgin- Ambulance $ g. Interprenet (Dep. Interpreters) $ Total Costs $ The following credits will be given for partial payment ofcosts $ Outstanding Costs $ C. Netamount of $40, to minor's parents $10, Plus structured portion ofsettlement on scheduled dates. 20. Counsel for the plaintiff requests that the court to consider the above described settlement and, if approved, order plaintiffs' counsel to accept and distribute the settlement funds, as indicated above. 21. A form of order has been submitted for the court's consideration. Respectfully submit George E. Faber
11 George E. Faber 510 Market Loop, Suite 203 West Dundee, Illinois Telephone: ARDC# CERTIFICATE OF MAILING The undersigned attorney certifies that he serviced the foregoing Petition to Approve Settlement of Minor's Claim on: Joseph P. Callahan E. Roosevelt Road, Suite 203 West Chicago, Illinois AAG William Arnold Illinois Attorney General's Office 100 N. LaSalle Street, Suite N 1000 Chicago, Illinois by faxing a true and correct copy of same to the parties listed above on August 7, George E. Faber George E. Faber 510 Market Loop, Suite 203 West Dundee, Illinois Telephone: ARDC#
12 DEFENDANT'S STRUCTURED SETTLEMENT PROPOSAL PLAN X: Guaranteed Payout Cost 1. Cash at time ofsettlement $40, $40, ^UiUWUU 2. $17, annually for 4years certain $70, $60, commencing at age 18 (11/1/2020), last payment at age 21 (11/1/2023) T0TALS $110, $100,000.00
13 IN THE CIRCUIT COURT FOR THE SIXTEENTH JUDICIA KANE COUNTY, ILLINOIS ALEXIS ZAVALA, a Minor, by his Father and Next Friend, ALFONSO ZAVALA, Plaintiffs, vs. Case No. 09 L CRYSTAL SOLORIO, FRANK CUITIERREZ, and VERONICA CITIERREZ, Honorable Keith Brown, Judge Presiding Defendants. REPORT OF DISTRIBUTION The plaintiff, Alexis Zavala, by his father and next friend, reports to the court rsgarding the settlement, as follows; 1. This court granted a petition to approve a minor's $100, settlement oj 8/9/ $60, ofthe structured settlement will be shortly. 3. $40, was received by check from defendants' insurer and will be distributed as follows: A. B. C. George E. Faber attorney fees Alfonso Zavala reimbursement for costs George E. Faber out of pocket expenses $25, $ $ 1, D. E. Payment ofstateoflllinois subrogation lien $ 3, Amount being held in trust account of George E. Faber to be deposited in an interest
14 bearing account pursuant to this Court's Order of 8/9/2012. $10, $40, Respectfully submitted, George E. Faber 510 Market Loop, Suite 203 Vest Dundee, Illinois P: F: 'George E. Faber
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