Mason attorney admonished for co-mingling settlement funds

By Lawrence Smith | Jan 9, 2009



CHARLESTON – The state Supreme Court has sanctioned a Point Pleasant attorney for mishandling the proceeds of a settlement awarded to a Mason County physician five years ago.

Finding that he "co-mingled client finds with his own business funds," a hearing panel subcommittee of the Lawyer Disciplinary Board, the prosecutorial arm of the state Bar, recommended Raymond G. Musgrave be reprimanded for his action.

In addition to a reprimand, the Board also recommended the Court order Musgrave's practice to be supervised for a year, he establish a client trust account with the Bar's Foundation, complete six additional hours of continuing education in the area of law office management and pay the cost of the disciplinary proceeding.

The Board's recommendation came following a statement of charges the Office of Disciplinary Counsel, the Bar's investigative arm, filed against Musgrave in April. The statement of charges completed a three-year investigation into a complaint filed against Musgrave by Dr. Danny R. Westmoreland.

According to court records, Westmoreland lodged his complaint on March 30, 2005. In his compliant, he alleged that after a year of receiving assurances "the check is in the mail," Musgrave failed to turn over a $15,000 settlement Westmoreland won from Gary Barry, a Gallipolis, Ohio, contractor, in 2004.

In its investigation, ODC found that Musgrave on April 15, 2004, deposited the $15,000 and withdrew $5,000 to cover his fee for handling the Barry case. According to court records, Musgrave "made no disbursement to [Westmoreland] or any other party of the remaining $10,000."

Following Westmoreland's complaint, Musgrave provided ODC with a billing statement of work he provided to both Westmoreland and his wife, Kimberly, between 2001 and January 2005. The invoices totaled $10,865.72.

Though now reconciled, the Westmorelands divorced during the course of the Barry case with Musgrave serving as Kim's divorce attorney. They disputed the work performed by Musgrave in the invoices while he maintained they were well aware the services he rendered.

However, following the statement of charges, Musgrave admitted he failed to produce an itemized invoice until Westmoreland filed his complaint. In addition to admitting he should have provided invoices in a timely manner, Musgrave admitted he should have kept the disputed funds in a separate account until the matter between he and Westmoreland was resolved.

"Respondent (Musgrave) acknowledges he continued his general practice of withdrawing funds from his special account even after being served with the ethics complaint and after receipt of Dr. Westmoreland's civil complaint," Lawyer Disciplinary Counsel Charles A. Jones wrote in his Aug. 15 report to the subcommittee.

In addition to the ethics complaint, Westmoreland filed a lawsuit against Musgrave in Mason Circuit Court in an attempt to recover the $15,000. The suit has been put on hold due to Musgrave's pending bankruptcy filed in October 2005.

Despite being a lawyer for 44 years, the Board felt his "free and full disclosure" to ODC and health problems incurred during the time of the dispute with Westmoreland should serve as mitigating factors in punishing him for his misconduct.

On Nov. 5, the Court agreed with all the Board's recommendations except the reprimand. Instead, the Court issued Musgrave an admonishment.

The West Virginia Record attempted to get a comment from Musgrave's attorney Stephen R. Crislip with the Charleston law firm of Jackson Kelly, concerning the Court's decision. However, he was out of town, and not immediately available for comment.

According to the ODC, Musgrave still has one open complaint against him.

West Virginia Supreme Court of Appeals Case No. 33914

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