Tuesday, October 13, 2015
The Ohio Supreme Court continues with its public-friendly web page traditions with this announcement of ethics charges against seven attorneys.
The announcement in turn links to the charges against each attorney.
This case involves allegations agaist an attorney retained the defend a woman charged with participation in a marijuana growing operation.
The key allegations relate to the fee. The client agreed to the attorney's proposed terms but did not have the cash. She had a 22 acre parcel of farmland that she offered to sell to pay the fee.
The client alleges that she signed over the farmland with the expectation that the attorney would sell it, deduct his fee and remit the balance. Rather, he treated the farmland as his own.
In the meantime, he learned that the charges would be substantially reduced against his client if she cooperated against her (now ex)-boyfriend, which she did.
It is further alleged that the attorney made false represntations to secure dismissal of the client's complaint. The Bar investigation was reopened after the dismissal.
The attorney is charged with violation of the business transaction with client rule (Rule 1.8), false statements (Rule 8.1) and conduct prejudicial to the administration of justice (Rule 8.4).
Note that there are very few places where disciplinary charges (public documents in most places) are available online. Illinois and North Carolina may be the only exception. If disciplinary counsel know of other jurisdictions where these public documents are readily available (i.e. posted), please let me know.
This Court News link is a model of public-friendly information and takes the reader to a summary of a case up for oral argument today
- The board that reviews the character and fitness of people who apply to be lawyers in the state recommends disapproval of the application of a man convicted in the late 1990s for sexual offenses involving minors. The man, who has attended law school in northern Kentucky and is in his 60s, maintains in In re Application of Tynes that he has fully disclosed the crimes, has taken responsibility for his actions, and hasn’t been charged with any other crimes.
The argument can be viewed in real time.
Kudos Ohio! (Mike Frisch )
Monday, October 12, 2015
The Colorado Presiding Disciplinary Judge disbarred an attorney who defaulted on charges of msappropriation.
After he was ordered to return a real estate buyer's $400,000, it came back $100,000 short
Respondent represented Ernst Kappeli in a contract dispute arising out of the sale of real property. In 2006, Kappeli decided to sell a parcel of land to Alice Brien for $6,000,000.00. When the contract for sale was executed, Brien tendered $400,000.00 to Kappeli on the contract. Thereafter, Brien repudiated the contract and litigation followed.
During the course of the litigation, the trial court ordered Kappeli to return the $400,000.00, plus interest, to Brien. In compliance with the court’s order, Kappeli wiretransferred $400,000.00 to Respondent’s trust account on January 17, 2012. Instead of returning $400,000.oo to Brien as the court ordered, Respondent returned just $300,000.00 to Brien and knowingly converted $100,000.00 for own use and benefit. He then concealed his conversion until approximately November 2013...
This evidence presents a clear case of conversion of a substantial sum of money— misconduct compounded by Respondent’s effort to conceal his misappropriation for years. Respondent’s misconduct has caused his former client substantial financial harm. Furthermore, his disrespect for these proceedings after converting $100,000.00 from his client and thereafter absconding from Colorado demonstrates that Respondent has irreparably severed the bonds of trust he forged with his clients and betrayed the confidence of the Colorado bar. Respondent is not fit to practice law and is not worthy of the appellation of attorney. The Court disbars Respondent.
The Wet Virginia Supreme Court of Appeals affirmed the denial of habeas corpus relief to a person convicted of sex offenses who claimed, among other things, ineffective assistance of counsel.
His attorney had been suspended after a motorcycle accident caused a traumatic brain injury. He was reinstated before the trial and committed suicide after,
The constant theme throughout each of the Petitioner’s ineffective assistance of counsel claims was that due to his trial counsel’s traumatic brain injury that caused “cognitive difficulties” his trial counsel was so ineffective that “there is a reasonable probability that a jury would have acquitted . . . [the Petitioner]” but for his trial counsel’s performance. The Petitioner over and over again tries to paint a picture of his trial counsel being so confused and mentally inept due to his traumatic brain injury that he was wholly deficient in his representation of the Petitioner. Despite the Petitioner’s assertion, it is significant that at the close of this trial, after the jury had been excused to deliberate, Judge Gina Groh, who presided over the trial before her appointment to the United States District Court for the Northern District of West Virginia, stated on the record to both the prosecutor and the Petitioner’s counsel: “I want to compliment you all on your professionalism, and I think this case can go either way due to the good efforts put in by both the state and the defense counsel. I think you both did an excellent job.” (Emphasis added). Our review of the record comports with the trial court’s observations.
Justice Benjamin concurred
To the extent that the majority’s reasoning may be read to imply that the primary purpose of an omnibus hearing is automatically defeated where trial counsel is unavailable, I disagree. It is my opinion that, while important, the availability of trial counsel to testify at a hearing alone does not weigh for or against the need to hold an omnibus hearing. The facts of the case determine the primary purpose for an omnibus hearing and whether testimony from trial counsel or others is necessary. Because the facts of the present case show that an omnibus hearing was unnecessary, I agree with the circuit court’s decision to deny the petition for habeas corpus without holding an omnibus hearing.
Saturday, October 10, 2015
Two attorneys should be disbarred for misconduct, according to a recent report of recommendation of the California State Bar Court Review Department
Respondents Stevan John Henrioulle and Ronald Veridiano Uy appeal the disbarment recommendations of a hearing judge who found they engaged in a widespread scheme to defraud their clients by charging and collecting legal fees without any intent to perform legal services or by filing meritless lawsuits. The hearing judge also found they were culpable of other misconduct in nine client matters, including the failure to perform with competence, communicate with clients, return unearned fees, render an accounting, and aiding and abetting the unauthorized practice of law (UPL) by a former attorney who had resigned with disciplinary charges pending.
This misconduct occurred during a two-and-a-half-year period when Henrioulle and Uy were suing lenders for predatory practices on behalf of homeowners facing foreclosures. Henrioulle and Uy deny committing any fraud, although they admit much of the misconduct, which they characterize as simple negligence due to their high-volume litigation practice.
We have independently reviewed the record (Cal. Rules of Court, rule 9.12) and adopt most, but not all, of the hearing judge’s culpability determinations. As we discuss more fully below, we do not find that Henrioulle and Uy engaged in an intentional scheme to defraud their clients. Nevertheless, when viewed holistically, we find that their misconduct was reckless, amounting to a habitual disregard of their clients’ interests, which constitutes moral turpitude, in violation of Business and Professions Code, section 6106. -2- 1
Ultimately, we conclude that the evidence in mitigation is insufficient to outweigh the aggravation and the widespread misconduct, which resulted in significant harm to numerous clients. Having considered the Rules of Procedure of the State Bar, title IV, Standards for Attorney Sanctions for Professional Misconduct and the relevant decisional law, we recommend disbarment for both Henrioulle and Uy.
The review department rejected the effort of one of the attorneys to lay blame on the other
Uy argues that Henrioulle was solely responsible for handling the litigation in several client matters and thus Uy may not be held vicariously liable since he was unaware of Henrioulle’s misconduct. We reject his argument because it is not supported by the record. Uy admits in his brief on appeal: “While there was an agreed upon division of labor between Mr. Uy and Mr. Henrioulle, Mr. Uy and Mr. Henrioulle understood that as the attorneys of record for each of the clients, they both were individually responsible for the entirety of a client’s file and the management of the office.” Henrioulle also stipulated that “both [Henrioulle and Uy] were jointly and severally responsible for the representation of all of the clients mentioned in this Notice of Disciplinary Charges.”
The attorneys had employed a resigned former attorney and established a loan-modification practice
The habitual disregard of client interests in this case began with Henrioulle and Uy’s money-getting scheme involving a broadly based intake process that brought them far more clients than they could properly handle. They advertised their services to financially distressed individuals for whom English was their second language. In Henrioulle’s own words, the firm grew from a “mom-and-pop practice to an explosion of clients.” The chaos was increased by their lack of supervision of a resigned attorney who was not entitled to practice law, but who, acting in his capacity as the firm’s litigation manager, nevertheless made several untrue and unwarranted representations to prospective clients, all the while holding himself out as entitled to practice.
It was a system designed to fail. The breadth of Henrioulle and Uy’s incompetence, coupled with the non-refundable retainers and monthly fees collected regardless of whether services were provided, greatly exacerbated the harm sustained by highly vulnerable clients, many of whom lost their causes of action and endured foreclosures and evictions.
In weighing the appropriate discipline, we have considered the evidence in mitigation, which includes 36 years of discipline-free practice for Henrioulle, Uy’s emotional difficulties, their cooperation in these proceedings, good character evidence, and community and pro-bono activities. But, ultimately, this evidence is insufficient to outweigh the harm caused by Henrioulle and Uy’s widespread incompetence and disregard of their clients’ interests, combined with their refusal to return unearned fees and their failure to supervise an employee who was not entitled to practice law. A discipline less than disbarment simply is not warranted by the standards or the decisional law.
The review department also recommends that restitution be paid to a number of clients. (Mike Frisch)
A recent opinion of the California State Bar Court Review Department
We are asked to decide the narrow issue of whether the State Bar Court hearing judge correctly dismissed this disciplinary proceeding after the Office of the Chief Trial Counsel of the State Bar (OCTC) presented its case, but before respondent Eric Bryan Seuthe presented his case. For the reasons below, we have decided that the hearing judge’s order was incorrect, and we remand this case to the Hearing Department for further proceedings...
There was sufficient evidence of a failure to account for entrusted funds to proceed
Under the facts, OCTC presented a prima facie case that Seuthe did not furnish an appropriate accounting when requested. The hearing judge therefore erred in dismissing this case prior to the presentation of Seuthe’s defense.
The dismissal order was vacated and the matter remanded. (Mike Frisch)
Friday, October 9, 2015
The Kansas Supreme Court accepted findings of misconduct but resoundingly rejected a proposed public censure of a prosecutor who threatened criminal procedings on behalf of a private client.
The attorney serves as the elected county prosecutor of a rural Kansas county that (according to his statements at oral argument) has only three lawyers.
Suspension was imposed
At the hearing before this court, the Disciplinary Administrator's office and respondent both recommended censure by the Kansas Supreme Court and that the censure should be published in the Kansas Reports. The hearing panel has also recommended published censure, adding suggestions that respondent investigate membership with the Kansas County and District Attorney's Association so he may avail himself of the continuing education and networking opportunities offered by that organization...
The uncontested findings demonstrate respondent committed multiple acts of professional misconduct, specifically: (1) using his office as Rawlins County Attorney to threaten felony criminal charges against a civil litigant as a means to force settlement of a civil suit; (2) failing to provide the court in an ex parte proceeding with all material facts known to respondent that would have enabled the tribunal to make an informed decision about the entry of default judgment; (3) creating a concurrent conflict of interest between his civil client and his prosecutorial responsibilities as Rawlins County Attorney; and (4) initiating a civil action against an individual without a factual basis for doing so. The hearing panel and Disciplinary Administrator's office concede this misconduct points to suspension as the appropriate sanction.
Respondent's misuse of his position as county attorney by attempting to effect a civil litigation settlement by threatening criminal prosecution strikes this court as especially egregious. As noted, a critical discretionary stage in our system of criminal justice is the prosecutor's determination to charge someone with a crime. The public's trust in the appropriate, good-faith exercise of that discretion is seriously challenged by respondent's bullying of his opposing counsel by writing: "Anyway, if you guys want to keep pushing the issue of default judgment, I will just dismiss the [civil] case and file two felony theft charges against [the civil defendant] instead." This, coupled with the other incidents of misconduct and the arguments to this court, compel us to conclude the respondent is presently unable "to fulfill the professional role of attorney." See KRPC 8.4, comment 4 (2014 Kan. Ct. R. Annot. 681). Accordingly, a majority of the court holds that respondent should be suspended from the practice of law for a period of 2 years.
We further hold that respondent should be permitted to file a motion with this court for early reinstatement after the first 6 months of his suspension. Prior to filing this motion, respondent must have the Disciplinary Administrator's office's written approval of an 18-month probation plan with terms and conditions acceptable to that office. Those terms and conditions must encompass appropriate supervision of respondent's practice of law, including suitable supervision if respondent returns to the practice of criminal prosecution. See, e.g., In re Campbell, 290 Kan. 504, 505, 231 P.3d 562 (2010) (respondent required to develop relationship with another criminal prosecutor and meet regularly to review pending cases). The written approval and plan of supervision must be filed as exhibits to respondent's motion for early reinstatement. A minority of the court would impose a lesser sanction.
The oral argument in the case is linked here.
Update: I've had a chance the view the video of the oral argument.
These oral arguments are a great learning tool for law students and ethics professors.
This one gives a citizen a previously-unavailable opportunity to see attorney discipline in action.
The court sharply questioned both parties about the non-suspensory sanction and the abuse of public office. It does not defer to the lenient proposed sanction
This is the second Kansas oral argument I've seen where the respondent attorney addresses the court after the argument of his counsel. (Mike Frisch)
An attorney has been suspended by the Indiana Supreme Court for his failure to cooperate in a bar investigation.
The HeritageBulletin.com reports on the ethics complaint
Indiana State Police are investigating a criminal complaint of theft against Anderson attorney Stephen Schuyler and a disciplinary commission wants his license suspended for not responding to allegations of professional misconduct.
The allegation of theft was made by the heirs of an estate for which Schuyler was the executor.
“I’m still waiting on my money and I shouldn’t have to,” said Ruth Siverling in a telephone conversation. “That money does not belong to Mr. Schuyler – that’s for damn sure.”
Scott, Siverling’s twin brother, died March 7, 2013.
Schuyler had acted as the executor to the Scott estate until February when Magistrate Steve Clase removed him from any cases where he had fiduciary responsibility. Clase’s order removed Schuyler from more than 135 cases.
The Madison County Prosecutor’s Office is also investigating Schuyler for any criminal wrongdoing related to his fiduciary roles.
According to the Indiana State Police, the allegation of theft by Siverling and her family was filed at 8:48 a.m. Monday.
For almost a year, Siverling said, Schuyler refused to return her phone calls about the estate. Siverling said all communication with Schuyler stopped after she wrote several letters to the Madison County courthouse asking for a judicial review of her brother’s estate.
The Indiana Supreme Court has suspended an attorney as a result of a felony conviction.
The Indychannel reported on the charges
The former clerk-treasurer of the east-side town of Warren Park was charged with using the town’s money to pay for his gambling addiction.
Harold Bean, 74, was arrested on charges of theft and official misconduct.
Town officials were notified by Chase Bank of irregularities in their account. According to court documents, Bean wrote himself 50 checks for nearly $21,000.
Bean told investigators that he had a gambling problem and spent the money at casinos in Shelbyville and Anderson.
The attorney had previously been reprimanded for judicial misconduct.
The Indiana Lawyer had a story on his contentious dovorce. (Mike Frisch)
Thursday, October 8, 2015
An opinion on attorney-client privilege from the New York Appellate Division for the First Judicial Department
This appeal arises from a discovery dispute in which the managers of a limited liability company and corporate counsel invoke the attorney-client privilege in opposition to document requests by one of the company's investors. The investor argues that it is entitled to the so-called fiduciary exception to the privilege because it is a beneficiary of the attorney-client relationship that exists between the company's managers and counsel. The managers and counsel, on the other hand, contend that because the investor had interests that were adverse to the company's interests, the fiduciary exception is inapplicable. Supreme Court found that the parties were not adverse, and ordered the production of all the documents claimed to be privileged.
We conclude that "adversity" is not a threshold issue in determining whether the fiduciary exception is applicable in a given case, but one of several factors to consider in making that determination, and that adversity cannot be determined without a review of the purportedly privileged communications. Therefore, we remand the matter for an in camera review of the withheld documents and a full analysis of whether the exception is applicable in this case. Absent a more deliberate review and analysis, the risk of disclosure of privileged communications is manifest.
The case was an appeal from a special referee's production order.
The court recognized the "fiduciary" exception and held
although defendants do not take issue with the motion court's finding of good cause — they focus on the determination that there never was an adversarial relationship between NAMA and Alliance — we conclude that the case must be remanded for the court to conduct a comprehensive good-cause analysis. The court, given its discretion under CPLR article 31, may not need to evaluate each factor listed in Garner. However, where a court finds that a shareholder has demonstrated good cause to apply the fiduciary exception and pierce the corporate attorney-client privilege, it must at least address those factors that support such a finding. This type of scrutiny is vital to ensure that courts do not arbitrarily order disclosure of corporate attorney-client communications...
The adversity question is therefore not one of timing, as defendants contend, but is answered by the communications' content. For this reason, we reject defendants' argument that, if NAMA were adverse to Alliance at some point, all subsequent communications between the Managers and the Attorneys would rest beyond the fiduciary exception's reach. Communications regarding defendants' alleged breach of fiduciary duties could have occurred at the same time as attorney-client communications regarding how to deal with NAMA (for example, during the California arbitration); it would frustrate the balancing of interests in attorney-client privilege cases to permit defendants to withhold communications that might reveal the alleged wrongful conduct simply because the parties were adverse at some point in the past. Thus, the motion court correctly stated that whether communications that occurred after an adversarial relationship developed are privileged depends on their content.
This is where a court's ability to conduct in camera review of the communications is crucial (see Spectrum Sys. Intl., 78 NY2d at 378 ["whether a particular document is or is not protected is necessarily a fact-specific determination, most often requiring in camera review"] [*12][internal citation omitted]; see also Stenovich, 195 Misc 2d at 102 [discussing court's in camera review of arguably privileged documents]). Absent a review of the communications (or at least a sampling thereof), it would be impossible to determine whether they involved advice concerning the instant litigation or "how to deal with" NAMA.
The matter was remanded for further proceedings. (Mike Frisch)
The Florida Supreme Court has permanently disbarred an attorney who had failed to comply with the requirements of a previously-imposed suspension.
The suspension involved this misconduct
In that case, Respondent made threatening and disparaging statements to a senior judge, who had been appointed to serve as a provisional director by civil trial Judge Dresnick. This misconduct violated Rules Regulating the Florida Bar 4-8.2(a) (a lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, mediator, arbitrator, adjudicatory officer, or public legal officer) and 4-8.4(a) (a lawyer shall not violate or attempt to violate the Rules of Professional Conduct).
Respondent also demonstrated unprofessional and antagonistic behavior during numerous hearings in the civil case. Respondent’s behavior was offensive to both Judge Dresnick and successor Judge Valerie Manno Schurr. His conduct also disrupted the proceedings, in violation of rule 4-3.5(c) (a lawyer shall not engage in conduct intended to disrupt a tribunal).
Finally, Respondent made approximately ten disparaging or humiliating statements to opposing counsel. Respondent yelled insults at opposing counsel in the hallway of a courthouse in front of other attorneys. Respondent shouted in front of a judicial assistant and other attorneys that opposing counsel was a liar. Such misconduct was in violation of rule 4-8.4(d) (prohibiting an attorney from engaging in conduct in connection with the practice of law that is prejudicial to the administration of justice, including to knowingly, or through callous indifference, disparage, humiliate, or discriminate against other lawyers on any basis).
The ABA Journal reported on the suspension.
In the present case, the Bar was granted summary judgment on his violation of the suspension order. The court sustained the summary judgment.
We also approve the referee’s recommendation with regard to the Bar’s motion for sanctions. As found by the referee in his report, Norkin’s e-mails to bar counsel referred to bar counsel as “evil” and “despicable”; called the proceedings against him “the most unjust act in judicial history”; stated that bar counsel had no conscience; and stated, “I’m preparing the lawsuit against you. Keep an eye out.” At the hearing on the motion for sanctions, the referee questioned Norkin about the e-mails and his behavior during the public reprimand administered by this Court. In response, Norkin asserted his “right to speak freely and to express his beliefs in the manner of his choosing,” and freely admitted that during the public reprimand, he intentionally smirked and stared down each Justice one by one. We have disciplined attorneys for similar conduct as a violation of rule 4-8.4(d)...
The court found disbarment to be "amply supported. "
The Miami New Times wondered whether he is (now was) Florida's most obnoxious lawyer. (Mike Frisch)
An attorney who had practiced after a two-year suspension was found in contempt by the Indiana Supreme Court.
the Commission alleges Respondent entered his appearance as counsel for the mother in a paternity action on or about the date his active suspension began, and, two months later (after the court had ordered Respondent’s appearance be withdrawn due to his suspension), Respondent filed with the court a minute entry purporting to represent the mother as her “translator” and requesting a final hearing be set. The Court issued an order to show cause on September 1, 2015, and Respondent filed a response on September 10. Respondent largely does not dispute the salient facts but denies those facts constitute the practice of law in violation of his suspension.
This Court has not attempted to provide a comprehensive definition of what constitutes the practice of law. See Matter of Patterson, 907 N.E.2d 970, 971 (Ind. 2009). Nevertheless, it is well-established that the “practice of law includes making it one’s business to act for others in legal formalities, negotiations, or proceedings.” Id. (citing Matter of Mitthower, 693 N.E.2d 555, 558 (Ind. 1998)).
It is not entirely clear from the parties’ submissions whether Respondent’s initial filings in the paternity action as counsel for the mother occurred on the first day of Respondent’s suspension or on the previous day. However, we conclude that the minute entry requesting a final hearing, which Respondent filed on the mother’s behalf purportedly as her “translator,” unquestionably constitutes the practice of law during his suspension. Accordingly, we find that Respondent is guilty of indirect contempt of this Court.
Sanction: a $500 fine and costs. (Mike Frisch)
The Wisconsin Supreme Court has issued opinions in two disciplinary matters that both involve escrow account violations.
One attorney got a 60-day suspension; the other got nine months.
The 60-day case involved an attorney who practices in Tomahawk.
He had previously been suspended for a year in one matter and privately reprimanded in another..
He stipulated to the misconduct and joint recommendation.
The only real issue here is whether the stipulated level of discipline (a 60-day suspension) is an appropriate level of discipline. Precedent in the area of failing to hold funds in trust is clustered on two extremes. The most egregious trust account misconduct, misappropriation, can merit revocation or a lengthy suspension. Other cases, however, warrant a much less severe level of discipline, such as a reprimand or short suspension. Attorney Runyon's conduct lies closer to the lower end of the two extremes.
Although it was improper for Attorney Runyon to deposit personal funds into his trust account, his motive was to make the trust account whole.
Nine months was imposed on an attorney with a prior record of discipline but less aggravated than the other case
During the OLR's investigation, the OLR discovered systemic trust account anomalies. On December 1, 2011, the OLR sent Attorney Mulligan a letter requesting copies of his trust account records for the years 2008 through 2011, inclusive. Attorney Mulligan provided the requested copies but did not provide client ledgers or monthly reconciliation statements because he did not maintain them. Attorney Mulligan's check stubs did not show a running balance, did not show the source for all deposits, and did not consistently show the identity of the client for whom funds were deposited or disbursed.
The OLR reconstructed Attorney Mulligan's trust account and, according to the complaint, between December 17, 2007 and December 31, 2011, Attorney Mulligan and his wife, the only authorized signatories to the trust account, deposited personal funds totaling $45,380.57 into the trust account. During the same period, Attorney Mulligan disbursed $54,869.01 from the trust account for personal obligations, including income taxes, property taxes, and attorney fees. The disbursements from Attorney Mulligan's trust account included some $6,593 in cash withdrawals, which are specifically prohibited by SCR 20:1.15(e)(4)a...
Attorney Mulligan clearly believes that because he sought to ensure that sufficient personal funds were available to avoid overdraft, this excuses his trust account violations. The record evidence, however, demonstrates that by extensive commingling of personal and client monies, Attorney Mulligan misrepresented the balance of client funds in his trust account at any given point in time.
Attorney Mulligan's effort to characterize his misconduct as trivial is...unpersuasive. The record demonstrates that between 2007 and 2011, Attorney Mulligan failed to properly maintain trust account records, deposited personal money into his trust account, disbursed money from his trust account for personal expenses, and regularly deposited client funds into his business account. Attorney Mulligan's actions are not mere "technical deficiencies." The record before us also reveals a persistent pattern of failure to abide by the requirements of our rules of professional conduct.
Justice Abrahamson concurred but expressed concern
I have difficulty reconciling the significantly different levels of discipline imposed in these two trust accounting cases.
The District of Columbia Court of Appeals has disbarred an attorney based on multiple findings of ethical misconduct
This appeal involves three separate disciplinary matters that were consolidated after two Hearing Committees found several rule violations. In the first matter, Mr. Barber was accused of violating Rule of Professional Conduct 3.1 (asserting and pursuing frivolous claims) and Rule 8.4 (d) (seriously interfering with the administration of justice) for his actions in pro se litigation with his residential landlord. The Board found that Mr. Barber filed several “groundless and repetitive pleadings and appeals, which were intended to increase his opponent‟s fees, and had that effect.” When those appeals reached our court, we called his claims “frivolous” and stated that “[w]e do not believe that appellant reasonably could have entertained the faintest hope of prevailing on the merits of this appeal” and that “the trial court characterized the argument he presents on appeal as „crazy.‟” Mr. Barber was subsequently sanctioned by the trial court, but he never paid the roughly $87,000 of legal fees incurred by his landlord.
In the second matter, Mr. Barber was accused of violating fourteen Rules of Professional Conduct—thirteen that were sustained by the Board—during his representation of three clients in litigation against their landlord, Tenacity Group, LLC. Several charges arose from statements Mr. Barber made and actions he took while attempting to collect his legal fees from his clients and from Tenacity directly. These included misrepresentations to an arbitrator that the fee was not in fact contingent; statements breaching the settlement agreement, which resulted in his clients losing their valuable settlement; threats to report counsel for Tenacity to the bar if counsel did not pay him; and “[l]aunch[ing] a [l]itigation [b]arrage [a]gainst Tenacity” that one trial judge called “highly disturbing” and “baseless.” In addition, Mr. Barber was found to have failed to communicate with a client regarding the client‟s appeal and to have used an improper trade name.
The third matter against Mr. Barber consisted of allegations of misconduct during Bar Counsel‟s investigation—primarily false statements. Mr. Barber was also cited for his “palpable disdain” and failure to adhere to Hearing Committee orders during the formal disciplinary proceedings.
The court rejected the attorney's claim that his Fifth Amendment rights were violated when Bar Counsel called him as a witness
Unlike in a criminal trial, however, Mr. Barber did not have a Fifth Amendment right to decline to take the witness stand. He instead was free to invoke his Fifth Amendment right on a question-by-question basis if, in responding to a question, Mr. Barber would be providing evidence that could be used to convict him of a crime.
A host of other procedural and substantive objections were also found insufficient to avoid disbarment. (Mike Frisch)
An attorney whose deficient pleadings drew a two-month suspension by the United States Court of Appeals for the Second Circuit importuned the New York Appellate Division for the Second Judicial Department to forgo a reciprocal suspension.
The federal proceedings
Specifically, the respondent had (1) filed a number of nearly identical "summary judgment" motions in at least nine cases that were not authorized by any rule of appellate procedure; (2) failed to comply with an April 2011 order directing him to either withdraw the summary judgment motions or explain their legal basis; (3) failed in 17 cases to file scheduling notification letters, in violation of the court's rules; (4) failed in 11 cases to comply with deadlines imposed by the court, resulting in the dismissal of 2 cases; and (5) failed to oppose the Government's motion for summary affirmance in at least one case.
The CAG also found that the respondent's explanations for his failure to comply with the April [*2]2011 order were "inconsistent, disingenuous, and lacking in credibility," and that his lack of candor during the CAG's hearing violated New York Rule of Professional Conduct (22 NYCRR 1200.0) 3.3(a)(1), which prohibits a lawyer from knowingly making a "false statement of fact . . . to a tribunal or fail[ing] to correct a false statement of material fact . . . previously made to the tribunal by the lawyer." After considering several mitigating factors and aggravating factors, the CAG recommended a public reprimand and attendance at CLE classes in appellate immigration law.
Upon review, the Second Circuit adopted the CAG's findings and recommendation. The Second Circuit, however, considered the respondent's lack of candor during the CAG's proceedings to be a significant aggravating factor, which warranted a period of suspension. The Second Circuit further noted that the lack of candor was "not especially egregious" in that "it concerned only one of several issues before the [CAG]; it was not part of a pattern; the underlying conduct (the failure to comply with the April 2011 order), by itself, would likely warrant no more than a reprimand; and the lack of candor did not seriously disrupt the [CAG's] proceedings or cause any other serious prejudice." Weighing all of the respondent's misconduct, and the mitigating and aggravating factors, including his lack of candor, the Second Circuit concluded that a two-month suspension was appropriate.
The court here both dismissed and accepted his plea for reciprocal mercy
the respondent filed a verified statement dated March 31, 2015, wherein he asserts that the imposition of reciprocal discipline would be unjust should this Court reciprocally impose a period of suspension. Since he has served his two-month suspension, which ended on or about May 11, 2015, he asserts that any period of suspension imposed by this Court will serve as a second suspension. He claims that this "will work a double harm" and "creates an unjust double jeopardy' situation." A second suspension will be devastating to his practice, says the respondent. The respondent suggests that this Court impose a public censure, with no suspension, or impose a two-month suspension, which should be deemed to have run concurrently with the Second Circuit's suspension. He also suggests that this Court could issue a sanction involving pro bono service or attendance at CLE classes. In order to expedite matters, the respondent expressly waives his right to a hearing.
Based on the findings of the Second Circuit, we find that reciprocal discipline is warranted. While we find no merit to the respondent's "double jeopardy" argument, considering all the relevant circumstances here, we deem a public censure to be an appropriate measure of discipline. Accordingly, the Grievance Committee's application to impose reciprocal discipline is granted, and the respondent is publicly censured.
The court imposed a public censure. (Mike Frisch)
Wednesday, October 7, 2015
A woman named Lauren Proctor and an insurance company filed a suit to recover gambling losses in a case decided today by the South Carolina Supreme Court
Lauren Proctor and Trans-Union National Title Insurance Company ("Trans-Union") brought this action against Whitlark & Whitlark, Inc., d/b/a Rockaways Athletic Club ("Rockaways") and Pizza Man, Forrest Whitlark, Paul Whitlark, Charlie E. Bishop, and Brett Blanks (collectively "Defendants") seeking to recover money Proctor lost while gambling on video poker machines located at Rockaways and Pizza Man over the course of several years, including a time period following the South Carolina Legislature's ban of video poker in 2000. The circuit court granted Proctor's motion for partial summary judgment on her claim under the South Carolina Unfair Trade Practices Act ("UTPA") as to the liability of Defendants...
We find our Legislature has enacted specific gambling loss statutes as the exclusive remedy for a gambler seeking recovery of losses sustained by illegal gambling. Accordingly, we now overrule our decisions that have implicitly authorized recovery beyond these statutes. As a result, we hold that one engaged in illegal gambling cannot recover under UTPA. However, based on the distinct facts of this case, we find that Proctor may pursue the portion of her UTPA claim for the losses she alleged that she sustained between 1999 and July 1, 2000, the day on which the ban on video poker became effective.
Beginning in 1995, Proctor started gambling on video gaming machines at various restaurants and bars in Columbia, South Carolina. From 1999 to 2005, Proctor frequently gambled on video poker machines located in Rockaways and Pizza Man, which are operated by Whitlark & Whitlark, Inc. ("Whitlark"). Forest Whitlark and Paul Whitlark are part owners of Whitlark. At the time, Charlie E. Bishop and Brett Blanks co-owned a limited liability company named Zodiac Distributing, LLC, which placed one coin-operated gaming machine at the Pizza Man restaurant.
According to Proctor, she lost between $1,000 and $5,000 per week while gambling at the restaurants. Proctor claimed the two restaurants provided her cash advances on her credit cards to enable her to fund her gambling, as well as free food, alcohol, and cocaine.
Proctor also funded her gambling with money illegally obtained from her employer State Title, which her mother owned. State Title provided real estate closing services to attorney Walter Smith. During the time period at issue, Proctor forged her mother's name on checks and stole money from Smith's trust account in order to play the video poker machines. As a result of Proctor's actions, Smith's trust account contained insufficient funds to satisfy the mortgages on several properties at closing. In turn, Trans-Union paid approximately $550,000 in claims stemming from the shortages in Smith's trust account.
The court held
Proctor is only entitled to seek recovery for those losses that were allegedly sustained prior to July 1, 2000, the effective date of the ban on video poker. In her pleadings, Proctor alleged that she sustained gambling losses "[b]eginning in 1999, and continuing until June 2005." Because it was legal for Proctor to engage in video poker prior to July 1, 2000, we find that she may pursue her UTPA claim for gambling losses allegedly sustained between 1999 and July 1, 2000. We emphasize that this case was presented in the posture of a summary judgment motion. Thus, Proctor still bears the burden of proving her alleged damages.
Chief Justice Toal concurred and dissented and would allow Proctor to pursue claims based on all her losses despite the view that she is "not a sympathetic figure..."
The attorney whose escrow account was invaded was suspended in 2006. (Mike Frisch)
An interesting decision yesterday from the New York Appellate Division for the First Judicial Department
In this action, plaintiff Theodore F. Schroeder and two companies founded by him, plaintiffs Rendezvoo LLC (Rendezvoo) and Skoop Media Associates, Inc. (Skoop Media), allege that defendants Brian S. Cohen, New York Angels, Inc. (NY Angels), and Pinterest Inc. (Pinterest) stole and illegally used Schroeder's confidential ideas, technology and business plans in developing the popular website, Pinterest.com. According to plaintiffs, Schroeder conceived of a novel web application that would allow Internet users to share information about themselves by posting interests, ideas and pictures to their interface boards, a concept very different from then-existing popular social network sites like Facebook, MySpace and Friendster.
Schroeder and two friends embarked on the project and later invited Cohen, an investor and self-proclaimed "entrepreneurial mentor," to join the group. Plaintiffs allege that after learning all about Schroeder's ideas, technology and business plans, Cohen absconded with them, and gave them to Pinterest, which then used the information to develop its own highly- successful website. After subsequently learning that Cohen played a material role in the early stages of the Pinterest website, plaintiffs brought this action for, inter alia, breach of fiduciary duty, misappropriation and unjust enrichment.
The facts alleged in the complaint are as follows. In 2005, while attending Columbia Law School, Schroeder and a law school classmate, nonparty Brandon Stroy, developed an idea for a social network bulletin board where users could share their physical locations with their friends over the Internet. According to plaintiffs, no such website existed at the time. Lacking technological expertise, Schroeder taught himself computer programming, and spent more than 2,000 hours learning the necessary programming skills to develop the idea into a web application. Another law school classmate, nonparty William Bocra, came on board to further develop the idea and prepare a business model for the project.
Eventually, the three entrepreneurs formalized the project by forming Rendezvoo, a limited liability company in which Schroeder held a 65% interest, with Stroy and Bocra each holding a 17.5% interest. Schroeder was given a majority interest in the company because the idea was originally his, and because he was solely responsible for developing the web application and all technical processes. Schroeder was named president of Rendezvoo and was tasked with overseeing the day-to-day activities of the company, and performing all technical work in developing Rendezvoo's website. Under Rendezvoo's operating agreement, all members of the company owed each other fiduciary duties, and were expressly prohibited from unilaterally taking any corporate opportunities.
modified, on the law, to grant the Cohen defendants' motion as to the promissory estoppel claim, to deny the Cohen defendants' motion as to the misappropriation of trade secrets/ideas and breach of fiduciary duty claims, and otherwise affirmed, without costs. Appeals from the aforesaid orders, dismissed, without costs, as subsumed in the appeals from the judgment.
A two-year suspension of an entertainment law attorney has been imposed by the New York Appellate Division for the First Judicial Department.
Respondent focuses her practice on corporate transactions, with an emphasis on entertainment matters. Prior to April 23, 2010, respondent maintained a business operating account, a personal account, and an escrow account, all with Chase Bank. In May 2010, the Internal Revenue Service levied against respondent's personal and business accounts in connection with a tax lien, withdrawing approximately $24,000. Thereafter, respondent began depositing the legal fees she received into her escrow account and paying personal and business expenses therefrom. Continuing through September 2012, respondent deposited legal fees and other personal funds exceeding $500,000 into her Chase escrow account. Respondent also named her accountant, a non attorney, as a signatory on her escrow account. Between 2010 and 2012, the accountant signed numerous checks on the escrow account, which were payments of respondent's business and personal expenses. In addition, the accountant signed 14 escrow checks made payable to cash and effectuated other cash withdrawals from the escrow account.
Respondent testified before the Referee that she had received notice of the IRS levies, that she had discussed the matter with her accountant, and that she was aware that there were outstanding federal tax liens against her. In addition, respondent testified that, as of May 2010, in her view, her Chase escrow account was no longer an escrow account because no client funds were deposited into the account. Respondent testified that her escrow account had not held client funds since approximately 2006. According to respondent, although she discussed the IRS levies with her accountant, the two never spoke of her using the escrow account for personal and business purposes to avoid further levies. Respondent did not call her accountant as a witness.
By making her accountant, a non attorney, an authorized signatory on the escrow account, respondent violated Rule 1.15(e), and we therefore confirm the Hearing Panel's recommendation that we sustain charge two. By depositing legal fees and personal funds into her escrow account, using the account to pay business and personal expenses, and permitting her accountant to make cash withdrawals from the account, respondent violated Rule 1.15(b)(1) (a lawyer shall maintain separate accounts received incident to the practice of law) and Rule 1.15(e) (all special account withdrawals shall be made to a named payee and non lawyers are not authorized to be signatories). Accordingly, we confirm the Hearing Panel's recommendation to sustain charges one, three, and four.
Contrary to respondent's argument, the fact that she stopped depositing client funds into her escrow account does not exempt the account from Rule 1.15 requirements. The record supports the finding that respondent's misuse of her escrow account was for the intended purpose of shielding funds from the IRS in violation of Rule 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation) and Rule 8.4(d) (conduct prejudicial to the administration of justice). [*3]Accordingly, we confirm the Hearing Panel's recommendation sustaining charges five and six.
Respondent testified that she failed to provide some clients with letters of engagement or retainer agreements for matters which she knew at the time of retention would incur fees in excess of $3,000. We agree with the Hearing Panel's conclusion that such conduct violates Rule 8.4(d) and 22 NYCRR 1215.1, and therefore sustain charge eight.
Respondent was also charged with violating Rule 8.4(h) (conduct adversely reflecting on fitness as a lawyer) for filing a false affirmation by certifying in her "2011" biennial attorney registration that she was in compliance with Rule 1.15. In the pre hearing stipulation, however, the DDC alleged that respondent had falsely affirmed she was in compliance with Rule 1.15 when she filed her biennial registration statement on December 17, 2010. Although the DDC did not formally amend charge nine in the stipulation, nor did it request that charge nine be corrected at the hearing, we agree with the Hearing Panel that the incorrect reference to 2011 rather than 2010 in the charge was a typographical error. We also find that based upon the parties' pre-hearing stipulation, respondent was on notice that the actual year in dispute was 2010 and, in view of the violations concerning her escrow account during that year, the 2010 affirmation of compliance was a false statement. Therefore, we confirm the Hearing Panel's recommendation sustaining charge nine.
The attorney sought a public censure. The court rejected the suggestion. (Mike Frisch)
The New York Appellate Division for the First Judicial Department has suspended an attorney who did not cooperate in with the investigation of a complaint.
In April 2012 and February 2013, two complaints were filed against respondent involving settlements her then employer had obtained on behalf of two separate clients. One client alleged that after the law firm received a $27,000 settlement check, respondent called her in and asked her to sign a copy of a $13,000 check, representing her share of the proceeds. When the client refused to sign, respondent refused to give her the $13,000 check and threatened to donate the funds to charity. The other client alleged that respondent's law firm, without his consent, reached a settlement on an unpaid wages claim with his former employer.
Respondent initially cooperated by providing answers to these two complaints and appearing with counsel for a deposition in June 2013. However, more time was needed for further questioning and Staff Counsel advised respondent that a continued deposition would be required. Thereafter, respondent's cooperation became erratic and eventually ceased altogether.
In September 2013, pursuant to instructions given by respondent's attorney, the Committee sent the deposition transcript to respondent at a New Jersey address, which it later learned was a UPS office. The Committee inferred that respondent was no longer represented by counsel and, thereafter, sent letters to respondent at addresses in Queens and New Jersey, to two law offices previously associated with respondent, and her former employer requesting, inter alia, that she make contact to reschedule her continued deposition.
Finally, in January 2014, respondent wrote the Committee but declined to schedule a deposition, stating that "[s]uch a meeting would not be the most efficient use of your highly valuable time." This letter had no information indicating how respondent could be contacted. On February 6, 2014, the Committee wrote respondent at her employer advising her of her obligation to cooperate with the ongoing disciplinary investigation. On February 18, 2014, respondent telephoned the Committee, acknowledged receiving the recent letter, confirmed a Sunnyside, Queens address as her home address, and requested 30 days to retain counsel. Although new counsel for respondent informed the Committee on or about March 4 that he had been retained, he advised the Committee just two weeks later that the attorney/client relationship had been terminated. Thereafter, respondent did not retain new counsel or agree to a new deposition date.
On May 15, 2014, the Committee received a new complaint from a client against respondent, her former law firm, and another attorney. This client alleged that, inter alia, respondent provided her with either intentionally wrong or blatantly incompetent legal advice regarding the enforceablity of a promise made by her former paramour, resulting in her expending thousands of dollars in legal fees to defend against a lawsuit he filed against her. On June 5, 2014, a copy of the complaint was sent to respondent at her Sunnyside, Queens address, but the Committee discovered that respondent had changed her address on May 27, 2014 to an address in Jeonju, South Korea. On June 30, 2014, the Committee forwarded the complaint to the South Korea address. The letter was not returned and respondent did not submit an answer.
On October 24, 2014, the Committee mailed respondent a subpoena duces tecum requiring her to appear on December 11, 2014 to give testimony on the most recent complaint against her. This letter was mailed to respondent in South Korea by international registered mail. The Committee has received no return receipt card from respondent, nor has the letter been returned as undeliverable. Respondent did not appear for the deposition. That day the Committee sent respondent a letter to the South Korea address, by international registered mail, advising her that her failure to appear could constitute grounds for her immediate suspension from the practice of law. That letter has not been returned as undeliverable and no return receipt card has been returned to the Committee.
On November 18, 2014, the Committee learned of a summons and complaint filed in International Legal Consultants Inc. V TD Bank, N.A., et al., (Civ Ct, NY County, Index No. 011928/2014), that appeared to have been signed by respondent on behalf of another law firm. [*3]On November 21, 2014, by mail and email, the Committee wrote to a partner at that law firm requesting, inter alia, that he produce all court papers signed by respondent over the past four years for his firm, and to provide respondent's current business and residential addresses. The partner responded, stating that respondent had no connection to the firm, that she never signed any document or filed any court papers as an attorney at the firm, and he denied having any addresses for her.
On December 19, 2014, the Committee sent letters to respondent by first-class mail and certified mail, at four addresses at which she had registered with OCA or from which she has filed court papers in the previous three years, as well as the email address for the firm whose name appeared on the International Legal Consultants complaint, informing her of a final opportunity to cooperate by appearing for a deposition on January 13, 2015. One first-class letter was returned as undeliverable, and three out of four return receipt cards were signed by someone other than respondent and returned. When respondent did not appear for her deposition on January 13, 2015, the Committee wrote her about the consequences of her failure to appear and to cooperate. That letter was sent to South Korea as well as the aforementioned four U.S. addresses, and the law firm email address. Respondent has not responded to the letter.
The court's interim suspension will blossom into disbarment after six months unless cooperation is forthcoming. (Mike Frisch)
An Ohio attorney who is seeking to set aside default findings of misconduct has been ordered to re-file her objections in the proper form
2015-0243. Akron Bar Assn. v. Bednarksi.
This cause is pending before the court upon the filing of a certification of default.
Review of respondent’s amended objection filed October 5, 2015, reveals that the filing fails to comply with S.Ct.Prac.R. 3.08, which requires that all documents filed through the e-Filing portal be signed. Therefore, it is ordered by the court, sua sponte, that within seven days of the date of this entry, respondent shall file a second amended objection that is signed in accordance with S.Ct.Prac.R. 3.08(B).
The Oklahoma Supreme Court has reinstated an attorney despite his ongoing tax problems
the record...revealed that, as of November 19, 2014, Petitioner owed $133,263 in personal federal taxes, penalties, and interest. That amount included taxes owed for calendar years 2012 and 2013, despite Petitioner's monthly salary of $5,500.00. In essence, Petitioner failed to withhold sufficient funds over the years, resulting in an arrearage.
To be clear, it is incumbent upon all Oklahoma Bar members to satisfy their tax obligations. It is not only the law, but a moral obligation this Court takes seriously. But, this Court must apply this duty "fairly and consistently to achieve justice, to rehabilitate errant members of the bar, and to protect the public." Id. ¶ 5,240 P.3d 668.
The mere fact that Respondent took issue with Petitioner's statements-believed to be made in good faith-in the Offer in Compromise, cannot preclude Petitioner from reinstatement. From this Court's review of the record, it is clear that Petitioner followed the established procedures and is taking steps to resolve his tax liability. The IRS code contains provisions that allow a taxpayer, as here, to enter into negotiations to either settle or establish a payment plan in resolving an outstanding tax debt. Form 656 contemplates a taxpayer's offer of settlement despite the taxpayer's financial profile where full payment of the tax amount might impair one's ability to provide for oneself and one's family. This criteria alone, requires the taxpayer to tender his subjective belief of his ability to pay and produce supporting documentation. The ultimate decision on the Offer in Compromise rests with the IRS, not with this Court.
After considering the matter de novo, this Court concludes that Petitioner's reinstatement is warranted. Aside from Petitioner's tax arrearage, Petitioner has overcome the heightened standard for reinstatement. The record demonstrates, by clear and convincing evidence, that Petitioner has satisfied all the procedural requirements necessary for reinstatement. In addition, more than two years have passed since Petitioner was suspended. And, the underlying misdemeanor offense that led to Petitioner's discipline has been dismissed. Since Petitioner's suspension, Petitioner worked as a paralegal, timely filed his annual tax returns, and made substantial payments-in essence greatly reducing his tax obligations. The record also supports Petitioner's compliance with the IRS procedures and his continued cooperation in resolving the matter.
He had been suspended for two years and a day for a criminal scheme
The Respondent was a partner, along with Josh T. Welch, in the law firm Ogle & Welch, located in Oklahoma City. The Respondent's nephew, Robert Samuel Kerr, IV, joined the firm as a legal intern and then as an associate after being admitted to the Oklahoma Bar Association in 2006. In 2007, Ogle & Welch represented a client charged with the misdemeanor crime of driving under the influence of alcohol. Kerr was to represent the client before the Department of Public Safety (DPS). The firm actively took part in a series of transactions that led to an Edmond police officer receiving money as a bribe so that he would not appear at the DPS hearing. The firm made contact with a former Edmond police officer, Chris Caplinger, to assist in the bribe offer. An account of the facts appears in State ex rel. Oklahoma Bar Ass'n v. Kerr, 2012 OK 108, 291 P.3d 198.
This led to a misdemeanor conviction for obstruction of a public officer. (Mike Frisch)