Additional discrepancies found in Mason attorney's bankruptcy

By Lawrence Smith | May 16, 2008

Musgrave CHARLESTON – A closer examination of a Mason County attorney's bankruptcy petition reveals he may have not only falsified information about lawsuits involving former clients, but also his safekeeping of a settlement awarded to a Mason physician.

Musgrave

CHARLESTON – A closer examination of a Mason County attorney's bankruptcy petition reveals he may have not only falsified information about lawsuits involving former clients, but also his safekeeping of a settlement awarded to a Mason physician.

Last week, The West Virginia Record reported that Raymond G. Musgrave failed to report on his 2005 bankruptcy petition two judgments he won in civil suits filed earlier that year. Court records show Musgrave received default judgment against James Watterson and Okey Stanley for $3,861.08, and $1,724.22, respectively, on March 21, 2005.

On Oct. 13, 2005, Musgrave, along with his wife, Twila, filed for Chapter 13 bankruptcy. On the part of the petition where the debtor is asked to list all suits in which he or she was involved during the preceding year, the Musgraves left that blank.

Likewise, the Musgraves don't list a $15,000 settlement awarded to Dr. Danny R. Westmoreland from 2004. In fact, on the part of the petition where the debtor is asked to "list all property owned by another person that the debtor holds or controls," the Musgraves list "None."

However, this is disputed by a recently completed investigation by the State Bar into an ethics complaint Westmoreland filed against Musgrave for not turning over the settlement.

On April 4, the Lawyer Disciplinary Board, the Bar's prosecutorial arm filed a statement of charges against Musgrave stemming from Westmoreland's 2005 complaint. The Board's investigative panel found that probable cause existed that Musgrave violated at least two Rules of Professional Conduct including one dealing with the safekeeping of property.

According to its statement, the Board found that Westmoreland reached a settlement in a civil case with Gallipolis, Ohio, contractor Gary Barry on March 3, 2004. The terms of the settlement called for Barry to pay Westmoreland $15,000 within 30 days of the agreement.

Around April 15, 2004, the Board found that Musgrave received the settlement check from Barry and deposited the $15,000 into his business account. After depositing the $15,000, Musgrave withdrew $5,000 for himself.

The $5,000, Musgrave told the Board, was per an agreement with Westmoreland for payment of "previously earned attorney's fees." However, Westmoreland disputed such an agreement saying the first he ever heard of it was in response to his complaint.

When asked by the Board to produce written documentation of the alleged agreement, Musgrave could not produce any. In addition to citing him for charging fees without a written agreement, the Board also cited Musgrave for not turning the remaining $10,000 over to Westmoreland, or at least putting it into a separate account.

In its statement, the Board said Musgrave had a right to file a written reply within 30 days. As of presstime, Musgrave has yet to do so.

Regardless, the Board has already selected Wednesday, Aug. 13 as the date that its hearing panel subcommittee will hear the evidence against him. The hearing will take place at 9 a.m. in Mason County.

In regard to Musgrave failing to list the settlement on his bankruptcy petition, neither his attorney Andrew Nason nor Helen Morris, the bankruptcy trustee, could be reached for comment.

U.S. Bankruptcy Court for the Southern District of West Virginia, Case No. 05-31246

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