Sunday, August 28, 2016

After The Fall

An attorney who has been charged by the Illinois Administrator with assisting his disbarred spouse's subsequent unauthorized practice has filed an answer denying any misconduct.

From the complaint (which also charges an "affiliated" attorney with facilitating unauthorized practice)

On June 27, 2013, a default hearing was held in relation to Commission number 2012PR00162, after which the Hearing Board issued a report and recommendation recommending that Ms. Niew be disbarred.

On November 20, 2013, the Court entered an order disbarring Ms. Niew as a result of her mishandling of her client's $2.34 million.

Shortly after November 20, 2013, Respondent Niew learned that Ms. Niew had been disbarred...

Between November 20, 2013 and about early June 2014, Ms. Niew maintained an office in the Jorie Boulevard suite, and she was physically present in the office four to five times per week. During that same period of time Respondent Niew observed Ms. Niew talking on the office telephone, writing letters on the office computer, and conducting meetings. Although Respondent Niew knew that his wife had been disbarred, he encouraged her to deposit money into the firm's client funds account that he knew or should have known was client money for legal services...

Between November 2013 through May 2014, Respondent Allegra, an affiliated attorney at the Law Offices of Stanley Niew, participated in meetings between Ms. Niew and at least six legal clients, including Harry Haralampopolous, Maciej Wilhelm, Peter Vhalos, Julia and Michael Maloney, and John Hryn. Respondent Allegra accepted instructions from Ms. Niew regarding legal work to be completed by Respondent Allegra on behalf of at least one client, Arno Reichel.

The answer responds

[Respondent] Stan denies the allegation that he was a partner with his wife Kathleen at NiewLegal Partners, at any point in time. Stan lacks sufficient information to definitively admit or deny the details of Allegra's affiliation with Niew Legal Partners, subject to the qualification that he believes at one point Allegra was a contract attorney for and subsequently employed by Niew Legal Partners.

 Whether he learned of the disbarment shortly after it had occurred

Admitted, subject to the qualification that Stan lacks sufficient information to admit or deny when he learned that his wife, Kathleen, had been disbarred.

Thereafter

Stan admits that at various points in time, on or near the dates alleged, his wife, Kathleen, was physically present at the Jorie Blvd. Offices, but not to engaged in the practice of law, and that, at some point, his wife, Kathleen, ceased to be present at the Jorie Blvd. Office.

The Chicago Tribune had reported on the criminal case against Kathleen Niew

Oak Park couple Jamal and Leda Khoury thought they were investing their life savings wisely when they transferred $2.3 million into their real estate attorney’s escrow account three years ago to buy commercial real estate properties in the area.

But within hours of the cash landing in the supposedly secure account, their attorney, Kathleen Niew, was stealing it to invest in an ill-fated scheme, federal prosecutors say. Over the next several weeks, Niew wired millions of dollars to mining company investors in far flung places like Singapore and Australia, expecting to make a hefty commission for herself in the deal.

The mining companies failed. Niew never made a penny. And by the time the Khourys realized something was wrong, their nest egg was gone.

On Wednesday, the couple watched silently as Niew, once a seemingly successful author, radio host and seminar speaker, pleaded guilty to 10 fraud counts in a surprise move in Chicago’s federal court. She had been scheduled to go to trial next month. She pleaded guilty “blind,” meaning she had no deal with prosecutors on the length of her sentence...

The guilty plea marked a swift fall from grace for Niew, a self-styled real estate and probate law guru known for her Saturday morning call-in radio show on WIND-AM 560.

The show was canceled in March 2013, shortly after the Tribune detailed Niew's mounting legal troubles, including a lawsuit filed by the Khourys over the missing funds, business associates who accused her of swindling them and state regulators pushing to revoke her law license.

Niew was arrested by federal agents last August at her Oak Brook law office. Three months later, she was disbarred by the Illinois Supreme Court.

Records show Niew, who began practicing law in 1981, had a history of disciplinary proceedings that dated back to 1989. In 2001, justices suspended her license for nine months based on allegations she forged clients' signatures, record show. In 1989 the state disciplined her for falsely stating that she was single when she married again.

In addition to prison time, prosecutors are seeking $2.34 million in forfeiture as well as her 5,500-square-foot Burr Ridge home and a 2009 Lexus LS sedan, records show.

Niew also faces separate federal charges in South Carolina alleging she defrauded investors by promising their money “could not be lost and that the rate of return was guaranteed and far in excess of normal investment returns,” court records show.

Her six-year sentence was reported by the LaGrange Patch.

Niew was a fast rising financial advisor and attorney, founding Niew Legal Partners, LLC, in Oak Brook, along with her husband, Stanley. Among the many accomplishments Niew touts in her online about.me bio, she is a former Republican Businesswoman of the Year, author of two books, a radio probate law guru, and a star on the seminar circuit with her “Money Talks For Women” series.

No answer has been posted for Mr. Allegra. (Mike Frisch)

August 28, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Practice Pointer: Termination Means Stop Filing Pleadings

The Idaho Supreme Court has imposed disbarment of an attorney after a hearing in which the attorney had admitted some of the charges and contested other allegations.

From the summary on the web page of the Idaho State Bar

Count One related to Mr. Robinson’s representation of an 18-year-old charged with felony lewd conduct with a child under 16 years of age. Mr. Robinson admitted that he violated I.R.P.C. 1.2(a) [Scope of Representation] and I.R.P.C. 1.4 [Communication], and the Hearing Committee concluded that the ISB proved by clearing and convincing evidence that Mr. Robinson violated I.R.P.C. 1.1 [Competence], I.R.P.C. 1.6(a) [Confidentiality], I.R.P.C. 1.16(a)(3) [Representation Following Discharge], I.R.P.C. 1.16(d) [Failing to Return Papers and Property to Client Following Termination], I.R.P.C. 3.1 [Meritorious Claims and Contentions], I.R.P.C. 3.3 [Candor Toward the Tribunal], I.R.P.C. 4.4 [Respect for Rights of Third Persons] and I.R.P.C. 8.4 [Conduct Prejudicial to the Administration of Justice].

Those rules violations were based primarily on pleadings Mr. Robinson filed in his client’s criminal case. In that case, Mr. Robinson filed pleadings, after his representation was terminated by his client, containing untrue statements that were prejudicial to his client and the client’s family. Substitute counsel filed motions to strike those pleadings and requested the court seal those pleadings to prevent public disclosure of private, untrue facts which could unduly prejudice the case and the rights of a victim in another criminal case. The court agreed and struck those pleadings from the record and sealed them from public disclosure. The court’s order provided that it appeared at the time the pleadings were filed, Mr. Robinson had already been discharged by his client, the pleadings were filed without client authority and based upon facts which were untrue, or, unverified, irrelevant and beyond the scope of any relevant issue before the court. The Hearing Committee concluded that the timing of those pleadings indicated that Mr. Robinson’s primary purpose was to harass his client and the client’s family for terminating his representation and that he provided no justification or reasonable explanation for filing those documents.

In a civil matter

The Hearing Committee concluded that Respondent continued to act on behalf of his clients after they had terminated his representation and repeatedly requested that he cease communications with opposing counsel on their behalf, and that he disclosed confidential information to opposing counsel that was detrimental to the clients’ case. The Hearing Committee concluded that Mr. Robinson communicated threats to one client that he had information that could affect the client’s real estate license and continued to seek money from his former clients after they settled the case with the City. The Hearing Committee concluded that Mr. Robinson actively campaigned against his clients’ interests in communicating with opposing counsel, which had the potential to severely damage their case.

Boise Weekly reported a story from the McCall Star-News that he was serving as Adams County prosecutor when bar charges were filed. (Mike Frisch)

August 28, 2016 in Bar Discipline & Process | Permalink | Comments (0)

A Multitude Of Crimes

Permanent disbarment has been imposed on a convicted attorney by the Kentucky Supreme Court.

In considering the appropriate penalty for this ethical violation, the Board [of Governors of the Kentucky Bar Association] considered the multitude of felonies for which Coffman was convicted, the fraudulent nature of those crimes, the Board's prior history of recommending permanent disbarment for members convicted of crimes involving knowing dishonesty and misappropriation of client funds, and relevant provisions of the American Bar Association Standards for Imposing Lawyer's Sanctions.

The crimes are described in this report from the Lexington Herald Leader.

A former Lexington lawyer was sentenced Wednesday in federal court to 25 years in prison and was ordered to pay restitution for his role in an oil- and gas-drilling scheme that defrauded at least 594 investors out of more than $36.5 million.

Bryan S. Coffman, 48, was ordered to report to the federal medical correctional center on Leestown Road in Lexington on May 16. Coffman, at times breaking into tears, told U.S. District Judge Karen Caldwell before he was sentenced that he had said goodbye to his 13-year-old daughter earlier Wednesday morning. Coffman's wife, Megan, who was acquitted of money laundering charges in the case, and his two sons, who are college students, were in the federal courtroom in Lexington to hear the sentence.

Coffman asked the judge that he be held in a medical center-type prison because he has diabetes and arthritis.

Coffman also asked for a short sentence.

He maintained his innocence throughout his speech before the judge, but he acknowledged he was tried by a jury of his peers, who found him to be "wanting."

"I have to take responsibility for what occurred, regardless of my role in it," he said. He said he'd lost his law practice, his law license, his reputation and some of his assets, and now he faced losing his liberty.

He said that he was sorry for the victims and that he never intended to deceive them.

Assistant U.S. Attorney Ken Taylor told the judge about victim impact statements he reviewed. There were 95 of them.

"They tell the story of just extreme agony over what happened to them," he said. "Finally, some closure can be given to these people."

Taylor said he was offended by Coffman's claim of innocence and said Coffman's court statement marked the first time he'd uttered a syllable of contrition.

Taylor said later that some of the victims lost their retirement money, the ability to pay for their children's college educations, or their homes, or had suffered serious health problems.

Defense attorney Steve Romines said he would file an appeal in Coffman's case on Thursday. Romines said a new trial will be sought.

"I expected her to give us a big sentence, but we'll keep fighting," Romines said.

Caldwell said that the schemes were "predatory in nature" and that "subterfuge and deceit are readily apparent."

The amount involved in the case was one of the largest the court had seen, the judge said.

In May 2011, Coffman and Gary Moss Milby, a Campbellsville businessman, were convicted by a jury of multiple counts of mail fraud and wire fraud. Coffman also was convicted of two securities fraud counts and was found guilty of 10 counts of money laundering and one count of money-laundering conspiracy. Milby also was convicted of one securities fraud count. He was acquitted of two counts of money laundering.

From 2004 to 2008, Milby and Victor Tsatskin of Canada solicited money from investors across the United States and from Canada. They gave them bogus predictions and guarantees about potential profits of the oil and gas well drilling programs, according to the U.S. Attorney's Office for the Eastern District of Kentucky.

Coffman provided legal and business advice with knowledge of the scheme and helped hide the scheme from investigators, according to the U.S. attorney's office.

Coffman and Milby used the money to pay for boats and vehicles, real estate, jewelry, personal trips, parties, family travel and trust funds, according to the U.S. attorney's office.

Recently, Coffman was ordered to forfeit $3.1 million in cash, a yacht and a condo in South Carolina.

Milby is to be sentenced Thursday. Tsatskin is serving a prison sentence in Canada.

(Mike Frisch)

August 28, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Saturday, August 27, 2016

From Defense Attorney To Defendant

A one-year suspension was imposed by the South Carolina Supreme Court for an attorney's federal criminal conviction.

Respondent represented a client who was indicted by the U.S. Attorney's Office for trafficking. However, respondent was relieved as counsel for the client after the U.S. Attorney's Office informed the federal court that respondent was being investigated for money laundering in connection with payments made by the client and other criminal clients to respondent.

As part of the investigation, federal agents requested respondent provide records of payments made to him by criminal clients. Respondent provided the requested records; however, the records indicated he had received cash payments for legal fees from multiple clients in amounts greater than $10,000. When questioned by federal agents, respondent denied knowing that he was required by the Internal Revenue Service to file a Form 8300 when the aggregate amount received from a client exceeded $10,000 for one transaction, such as legal representation. He stated he thought the form was only required for single payments over $10,000. However, respondent did know about the reporting requirement and therefore, his assertion was untruthful.

Respondent was charged with violating 18 U.S.C. § 1001 by knowingly and willfully making "a materially false, fictitious, and fraudulent statement and representation in a matter within the jurisdiction of the Executive Branch of the Government of the United States; to wit: he told a Special Agent from the Department of the Treasury that he was not aware of the reporting requirements of Form 8300." Respondent pled guilty and was sentenced to three years' probation, with electronic monitoring for six months. On December 9, 2015, respondent's motion for early termination of parole was granted, and he has now fully satisfied all conditions of his criminal conviction.

In a second matter

Respondent represented a client at various times for criminal charges. Two fee agreements between respondent and the client contained the following provision: "Client acknowledges and agrees that if balance of above agreement is not paid in full as agreed upon, the Law Office of [respondent] will collect by garnishment and/or a lien on any and all client's future tax refunds and/or wages." Respondent admits he does not have the legal authority to garnish wages or tax returns in South Carolina. Another fee agreement between the two referenced payment for representation by a third party, but only referenced the identity of the payor and amount paid, without reference to the scope of representation provided in exchange for the payment.

The attorney gets credit for time served on an interim suspension.

The Palmetto State reported on the sentencing

Chaplin, 47, earlier had pleaded guilty to making a false statement to an IRS agent, telling the agent he didn’t know about reporting requirements for the IRS Form 8300.

That form requires anyone depositing more than $10,000 or more in related cash fees to file a report with the IRS.

“According to court records, Chaplin’s false statements to federal agents occurred when he was questioned in relation to a drug and firearm investigation,” according to a federal press release on the matter issued Wednesday.

During an investigation, “it was determined that Chaplin was directing his criminal defendant clien6ts to pay his fees in a structured manner to avoid reporting those payments to the IRS,” the federal press release said.

(Mike Frisch)

August 27, 2016 in Bar Discipline & Process | Permalink | Comments (0)

South V. North (It's All Carolina)

An attorney admitted in South Carolina was sanctioned for unauthorized practice in North Carolina.

In 2011, respondent entered into an agreement for discipline by consent in South Carolina for her conduct underlying the North Carolina State Bar's letter of caution. As a result of the agreement, this Court issued the confidential admonition referenced in footnote 1.

In April 2014, respondent conducted a closing for the purchase of residential property in North Carolina. The purchaser, whom respondent represented, subsequently filed a complaint against respondent with the North Carolina State Bar and the South Carolina Commission on Lawyer Conduct.

In February 2015, the Authorized Practice Committee of the North Carolina State Bar again issued a letter of caution, finding probable cause that respondent had engaged in the unauthorized practice of law. The committee found respondent provided the complainant with legal advice and services and held herself out in numerous emails and communications with the complainant as having a law office in North Carolina. The committee also found respondent negotiated with the seller's attorney on the complainant's behalf, holding herself out as an attorney licensed in North Carolina in the process. The committee demanded respondent stop engaging in the unauthorized practice of law and requested respondent respond to the letter of caution within fifteen days; however, respondent did not respond as requested.

Approximately six weeks after closing, the complainant began inquiring by email and telephone about the title insurance policy that was supposed to have been purchased. Although the complainant initially received responses, respondent's law firm did not obtain the policy, did not adequately follow up on the issue, and later stopped responding to the complainant's inquiries.

Respondent states she thought her paralegal was handling the issue of the outstanding policy, as well as keeping the complainant informed, but respondent failed to supervise the paralegal and later learned that was not the case. Respondent learned about the paralegal's failure to handle the policy issue approximately four months after the closing, at which time respondent told the complainant she would take care of the issue herself. However, respondent became busy and the complainant's concerns "fell through the cracks."

After the complaint was filed in this matter, respondent contacted the title insurance company to learn what steps needed to be taken to secure the policy. However, after taking some action, which she did not document, respondent did not follow up and erroneously assumed the policy had been issued. Respondent did not investigate further until after ODC made multiple inquiries about the status of the policy. Respondent secured the policy in September 2015, well over a year after the closing. Respondent states she mailed the complainant the original policy with no cover letter and did not follow up to ensure he received it. When advised by ODC that the complainant did not receive the policy, respondent arranged for another copy to be mailed to him, which he received.

The complainant filed suit against respondent in North Carolina. Respondent appeared in the matter and has paid the $575 judgment the court awarded to the complainant.

The court imposed a nine-month suspension with conditions. (Mike Frisch)

August 27, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Friday, August 26, 2016

Asset Management

A rather lenient suspension order from the Kentucky Supreme Court in light of the misconduct.

Mabab Trade, LLC, entrusted Movant with $775,000.00 to be used in connection with a proposed investment transaction between Mabab, Jason Castenir, and four other investors. Movant initially and appropriately placed the funds into his office escrow account.

About seven weeks later, Mabab requested the return of the funds in their entirety. An attempt to wire the escrow funds back to Mabab was unsuccessful due to a lack of funds in Movant's escrow account. At the time of the refund request, the escrow account contained a balance of approximately $373,131.13. Following this unsuccessful transfer attempt, Movant wired Mabab $300,000.00 about two weeks later, and an additional $47,000.00 about two weeks after that.

The remaining $427,500.00 was eventually returned to Mabab; not from Movant's escrow account, however, but rather from Maverick Asset Management, who had originally received the funds from the escrow account via a transfer initiated by Jason Castenir, one of the original investors. Movant had given Castenir, who is not an attorney, access to the escrow account with instructions to obtain prior approval from Movant before making any transfers from the account. Castenir did not, however, get Movant's approval before initiating the transfer of funds to Maverick Asset Management.

In connection with his failure to immediately return the funds to Mabab upon request, Movant falsely told the Manager of Mabab that the funds were secure even though a portion of the funds had already been transferred to Maverick Asset Management; falsely told him that the escrow account could not be accessed temporarily due to an audit when, in fact, there was no audit; and falsely told him that the funds were "tied up" due to a pending lawsuit in Texas when, in fact, there actually was no such lawsuit.

Mabab filed a lawsuit against Movant and others in connection with the mishandling of its funds, and the case was eventually settled, with Movant's portion of the settlement being $95,000.00, which he has paid. In summary, Mabab has been made whole, and Movant has fully complied with his obligations under the settlement.

Sanction

Movant, Joseph Daniel Thompson, is suspended from the practice of law in the Commonwealth of Kentucky for 181 days, with 120 of those days suspended under the condition that he commit no further ethical violations during the suspension period.

There are places (D.C. is one) where these facts would get far more severe discipline. 

As the Everly Brothers might sing, "A man in Kentucky sure is lucky..."

If I can be permitted a moment of personal privilege, here is a link to a performance of Bowling Green by the Everlys as I remember them at the Celler Door in Georgetown (the location, not the Law School) in about 1973.

My buddies and I went to see the warm up act - a comic named George Carlin - who we met outside the club and chatted with for awhile. A great memory. I asked George to sign a copy of his album and asked that he write something clever.

He wrote: "I can't think of anything clever, How's f*** you?"  

The Everly Brothers opened with this song.

Miss you George. Miss you Phil Everly. Rock on Don.

Thanks for the memories. (Mike Frisch)

August 26, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Moot Point

A petition for reciprocal discipline has been denied by the Kentucky Supreme Court.

The attorney had been subject to a stayed 90-day suspension and probation in Indiana. By the time the reciprocal matter reached to Kentucky Supremes, the probation term had been completed.

On May 23, 2016, this Court issued a status order. The KBA responded, stating that McCall's probationary status in Indiana ended in October 2015 and that it had received no information that McCall had not been compliant with the terms and conditions of his probation.

Based on the preceding, it is hereby ordered that the KBA's petition for reciprocal discipline is denied as moot.

(Mike Frisch)

August 26, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Rank Injustice?

The Kentucky Supreme Court has affirmed the order of its Court of Appeals granting an evidentiary hearing on claims of ineffective assistance of counsel.

The case

Rank was a practicing psychiatrist who developed a romantic relationship with a former patient named Misty Luke, who would become the victim of his assault. The couple lived together at Rank's residence located in the same building as his professional office. After a heated argument with Rank, and apparently believing that he had left the building, Luke texted a message to Rank telling him that she was ending their relationship and leaving. Rank, still on the premises, reacted immediately by returning with a sword and attacking Luke. He stabbed her four times. Other residents in the building heard the commotion and intervened. They overpowered Rank, took the sword, and removed Luke from the scene.

Rank was arrested; his bail was set at $50,000.00 cash. Through the advice of an attorney-friend, Patrick Hickey, Rank hired Gettys for his criminal defense. Rank claims that Gettys and Hickey advised him not to post bond. Gettys obtained Rank's power-of-attorney so that he would have control , over Rank's assets, ostensibly to protect them from a possible civil suit by Luke.

The issues

Rank's RCr 11.42 motion alleged several specific deficiencies in Gettys' representation. Rank claims that Gettys failed to explore the possibility of an [extreme emotional disturbance]  defense and that he failed to explain to him the legal concept of EED. He also claims that the effectiveness of Gettys' representation was compromised by the conflicts of interest inherent in Gettys' fee arrangement. Rank also claimed that Gettys failed to file a formal discovery motion, failed to follow criminal practice and procedure, failed to assist him in posting bond, and failed to adequately counsel him in making a knowing and intelligent decision to plead guilty. He also claimed that Gettys failed to present effective mitigating evidence at the sentencing hearing...

Rank's motion raised a material question as to the reasonableness of Gettys' investigation of the potential for an EED defense or, framed differently, whether it was reasonable for Gettys not to pursue an EED defense.. See Hodge v. Commonwealth, 68 S.W.3d 338 (Ky. 2001) (an evidentiary hearing is required to determine whether counsel's decision was "trial strategy or an abdication of advocacy"). Gettys' knowledge and understanding of the relevant facts relating to a potential EED defense are not evident on the face of the record. An evidentiary hearing on Rank's RCr 11.42 motion was required to ascertain those facts.

But no hearing on conflicts claims

Rank alleges that his acquaintance and personal attorney, Patrick Hickey, not only recommended that he hire Gettys, but also acted as Gettys' co-counsel. As described by Rank, Hickey's role as co-counsel' is demonstrated by Hickey visiting him in jail, advising him (in conjunction with Gettys) not to post bond and to liquidate his assets, counseling him about whether or not to plead guilty, providing materials to the expert witness, and sitting at counsel table during sentencing. Hickey had previously represented Luke in an eviction case and Rank contends that that representation created a conflict of interest for Hickey.

The court rejected a hearing on this and other claims of deficient performance of counsel.

AZCentral.com reported on the criminal case.

A psychiatrist was sentenced Tuesday to 15 years in prison for using a sword to stab a patient he had sex with and plied with narcotics.

Dr. Douglas Rank was sentenced after pleading guilty in October to first-degree assault. Rank, 52, will not be eligible for parole until he serves 85 percent of his sentence.

The charge was punishable by 10 years to 20 years in prison. Commonwealth's Attorney Rob Sanders had recommended 15 years.

 The victim, Misty Luke of Covington, Ky., attended the sentencing hearing but declined to speak with a reporter.

"She has some residual physical effects from the attack, but now most of the lasting effects are mental anguish - difficulty from being attacked by someone she cared about," Sanders said after the hearing.

Rank's lawyer, Robert Gettys, argued for the minimum sentence.

Gettys also called his client's rabbi and former dance partner to testify on Rank's behalf.

"Not one person mentioned he did a terrible thing," Judge Gregory Bartlett said. "Why is that? Why is (it) all the people come and talk about what a great ballroom dancer he is and how passionate he is? They didn't mention he did a terrible thing.

"He could have killed somebody."

Rank did not speak during the 90-minute hearing.

Rank attacked Luke on Feb. 21 in an apartment above his one-room medical office after she broke off their relationship, Sanders said.

He used a Civil War-era sword with a two-foot-long blade taken from a military memorabilia shop and museum located in the same building as Rank's apartment and medical office. Rank's license to practice medicine in Kentucky is currently suspended.

(Mike Frisch)

August 26, 2016 | Permalink | Comments (0)

Thursday, August 25, 2016

"Among The Most Shocking, Unethical, And Unprofessional [Misconduct] As Has Ever Been Brought Before This Court"

The Florida Supreme Court has permanently disbarred two attorneys who set up opposing counsel for a DUI

The Respondents in these two cases, Adam Robert Filthaut and Robert D. Adams, were members of a law firm, Adams & Diaco, P.A., in Tampa, Florida. Stephen Christopher Diaco was also a member of this firm and also took part in the events that are the subject of these proceedings. As a result of disciplinary action against Diaco and the withdrawal of his petition seeking review of the referee’s report, which jointly addressed Adams, Filthaut, and Diaco, Diaco has been permanently disbarred. See Fla. Bar v. Diaco, No. SC14-1052 (Fla. Jan 28, 2016).

The misconduct giving rise to the disciplinary actions against these three attorneys is among the most shocking, unethical, and unprofessional as has ever been brought before this Court. A brief summary of the facts, as found by the referee in his report, is as follows, and the full referee’s report is attached to this opinion. In January 2014, Adams & Diaco, P.A. was defending a radio network and one of its disc jockeys, “Bubba the Love Sponge” Clem, in a civil suit.

Opposing counsel included attorney Phillip Campbell, who represented another disc jockey named Todd Schnitt. Schnitt brought the action against Clem. The lawsuit was hotly contested for over five years and received substantial media coverage in the Tampa area. On the evening of January 23, 2013, while the trial was in recess for the night, Campbell and his cocounsel, Johnathan Ellis, walked to a nearby restaurant, Malio’s Steakhouse, for dinner and a drink. Unbeknownst to Campbell, a paralegal who worked for Respondents happened to be at Malio’s with a friend. Campbell did not know the paralegal, Melissa Personius, but she recognized Campbell as she was leaving the bar.

Personius contacted Adams after she left Malio’s to inform him she had seen Campbell at the bar. Adams then notified Diaco and called Personius back. After this call from Adams, Personius returned to Malio’s. Filthaut called his friend Sergeant Raymond Fernandez of the Tampa Police Department, informing him that Campbell was at Malio’s drinking and might drive while intoxicated. Filthaut did not inform Fernandez that Campbell was opposing counsel in the Schnitt versus Clem litigation.

Upon returning to Malio’s, Personius and her friend took a seat next to Campbell at the bar. Personius told Campbell, Ellis, and another attorney present that she was a paralegal but lied about where she was employed. Personius openly and obviously flirted with Campbell, encouraged him to drink, and bought him drinks. All the while, without Campbell’s knowledge, communications continued among Respondents, Personius, and Fernandez. Personius kept Respondents informed about what was transpiring with Campbell inside Malio’s. Fernandez assigned another officer to stake out Malio’s to see if Campbell would drive while intoxicated.

By 9:30 or 9:45 p.m., Personius’ friend and the other attorneys with Campbell had left Malio’s. Personius also had learned during the evening that Campbell had walked to Malio’s and intended to walk home—he lived a few blocks away. Witnesses who observed Personius that evening testified that she appeared to be intoxicated. Campbell observed the same, and he offered to call her a cab. She told him her car was in valet parking. He offered to see if it could be kept overnight. She told him that she needed to get to her car. He took her valet ticket, had the car brought up, and confirmed with the valet that it could be left overnight. She then refused to leave her car and insisted that it needed to be moved to a secure public parking lot where she could have access to it. He tried to convince her to leave the car, but she insisted that it had to be moved. Out of frustration, he agreed to move the car to a lot near his apartment building and call her a cab from there.

Shortly after leaving Malio’s driving Personius’ car, Campbell was pulled over by Fernandez and subsequently arrested for DUI and taken to jail. Additionally, Campbell inadvertently left his trial bag in Personius’ car. Personius and her car were later driven to her home by an associate attorney in Respondents’ firm.

The next day, Stephen Diaco made several statements to the media about the DUI of his opposing counsel Campbell, how the arrest caused the trial to be continued, and how Campbell’s behavior was a mockery of the judicial system and an embarrassment to Diaco as an attorney. Additionally, the Respondents were in possession of Campbell’s trial bag for several hours and made no attempt to inform him or return the bag until after Personius’ identity was discovered and Campbell’s cocounsel, Ellis, demanded return of the bag.

Sanction

Given all of these circumstances, we conclude that the referee’s recommendation of permanent disbarment is warranted and appropriately serves the three-pronged purpose of attorney discipline: (1) it is fair to society; (2) it is fair to the Respondents; and (3) it is severe enough to deter other attorneys from similar misconduct. See Fla. Bar v. Lawless, 640 So. 2d 1098, 1100 (Fla. 1994). We can only hope that our unanimous decision to approve the referee’s recommendation to permanently disbar these attorneys, a sanction not contested by and already imposed upon the third attorney involved, Stephen Diaco, will serve to warn other attorneys of the high standards of professional conduct we demand of all attorneys. And we hope in some small way, it will send a message to the public that this Court will not tolerate such outrageous misconduct on the part of attorneys admitted to practice law in Florida.

(Mike Frisch)

August 25, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Death Be Not Planned

A new one on me.

A deceased attorney has been chided by the New York Appellate Division for the Third Judicial Department for dying without a succession plan for his solo practice.

James R. Hickey Jr. (hereinafter decedent) was admitted to practice by this Court in 1980. He maintained an office for the practice of law in the City of Ithaca, Tompkins County.

Decedent died intestate on July 14, 2016 without any plan in place for the continuity of his solo law practice. The Tompkins County Bar Association (hereinafter TCBA) now accordingly moves pursuant to Rules of the Appellate Division, Third Department (22 NYCRR) § 806.11 for an order appointing one or more attorneys as custodian of the files of decedent's clients for the purpose of protecting the interests of those clients. TCBA also moves pursuant to Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.15 (g) for the appointment of an attorney to serve as successor signatory to decedent's law office and escrow bank accounts. Both the Committee on Professional Standards and the Lawyers' Fund for Client Protection advise that they do not oppose the motion. The Committee additionally indicates that the requested relief would serve to protect the public.

Under the particular circumstances presented, we grant the motion to the extent that TCBA is hereby appointed the limited custodian of decedent's law office files (see generally Matter of Van Zandt, 53 AD3d 982 [2008]). That part of the application seeking the appointment of a successor signatory for decedent's law office and escrow bank accounts is denied, without prejudice to the appropriate application being made to a Justice of the Supreme Court within the Sixth Judicial District (see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.15 [g] [2]).

 Note comment 5 to Model Rule 1.3. (Mike Frisch)

August 25, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Tamm Negotiated Discipline Imposed

The ethics saga of DOJ whistleblower Thomas Tamm ended after more than a decade with the adoption of a negotiated public censure by the District of Columbia Court of Appeals.

Based upon respondent’s recognition that during the course of his employment as a lawyer for the United States Department of Justice Office of Intelligence Policy and Review he provided a reporter with information that constituted "confidences" or "secrets," he admittedly violated Rule 1.6 of the District of Columbia Rules of Professional Conduct. The Committee considered the following circumstances in mitigation: (1) respondent cooperated with Disciplinary Counsel; (2) respondent’s sole intent was to further government compliance with the law; (3) respondent made limited disclosure of the information; (4) respondent did not receive any financial compensation from disclosure of the information; and (4) the investigation of this matter had been stressful and expensive. As a result, Disciplinary Counsel and respondent negotiated the imposition of discipline in the form of a public censure. The Committee reviewed the amended petition and supporting affidavit and concluded, after the limited hearing on the revised petition, that the revised petition for negotiated discipline should be approved.

We accept the Committee’s recommendation because it properly applied D.C. Bar R. XI § 12.1 (c) to arrive at this conclusion, and we find no error in the Committee’s determination. Based upon the record before the court, the negotiated discipline of a public censure is not unduly lenient considering the existence of mitigating factors and the discipline imposed by this court for a typical Rule 1.6 violation without any aggravating factors

 The disclosures at issue here took place in 2005. Disciplinary Counsel had the matter under investigation since 2009.

 The negotiated discipline was accepted by a panel consisting of Associate Judges Thompson and Beckwith and Senior Judge Farrell.

I was honored to be a part of the defense team in this matter led by Paul Kemp and Cary Feldman. (Mike Frisch)

August 25, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Crimes Of The Hate

An attorney convicted of "hate crimes" has been suspended for two years by the New York Appellate Division for the Second Judicial Department.

On August 20, 2014, the respondent pleaded guilty to 3 counts of a 33-count indictment before the Honorable Danny K. Chun, in the Supreme Court, Kings County. Specifically, he pleaded guilty to one count of strangulation in the second degree as a hate crime, in violation of Penal Law §§ 121.12 and 485.05(1)(b), a class C felony, and two counts of menacing in the third degree as a hate crime, in violation of Penal Law §§ 120.15 and 485.05(1)(b), a class A misdemeanor. The respondent entered his plea subject to the following conditions: he was required to complete a 12-week anger management program, perform 60 days of community service, and apologize on the record to the two complaining witnesses.

Sanction

In mitigation, the respondent testified at the disciplinary hearing to an earlier incident during which he was assaulted. He claimed that as a result of this earlier incident he suffers from post-traumatic stress disorder, a condition which allegedly contributed to his criminal conduct. The respondent, however, failed to offer any medical documentation or testimony by a medical expert to support his claim. In the absence of any supporting medical evidence, the Special Referee did not credit the respondent's claim. No other mitigating evidence was presented.

At the time of the hearing, the respondent had no prior disciplinary history. We note, however, that a separate disciplinary proceeding was commenced against the respondent by order to show cause dated January 12, 2016, under Appellate Division Docket No. 2016-00437. In that proceeding, by decision and order on motion dated April 25, 2016, this Court immediately suspended the respondent pursuant to 22 NYCRR 691.4(1)(l)(i) and (iii), finding that he constituted an immediate threat to the public based on evidence that he failed to submit answers to three complaints of professional misconduct filed against him, failed to comply with the Grievance Committee's investigation, and misappropriated client funds.

In view of the nature of the criminal conduct in this matter, particularly, the hate crime element of the respondent's conviction, and the absence of any credible mitigating factors, we find that a suspension from the practice of law for two years is warranted.

The court imposed the same sanction on an attorney who facilitated mortgage fraud by his paralegal

Although it is true that the respondent was not charged or prosecuted by the federal authorities in connection with the mortgage fraud, and that no evidence was presented in this case establishing that the respondent had actual knowledge of the fraud, it is undisputed that he allowed non attorneys to exercise control over his law practice. More specifically, he allowed his two paralegals to conduct hundreds of real estate closings, without his supervision, and went so far as to allow them to use his signature stamp and/or sign his name on real estate documents and to issue checks from his operating and escrow accounts. We reject the respondent's contention that his misconduct "had nothing whatsoever to do with the criminal activity." The respondent overlooks the fact that his role as the settlement agent was necessary to finalize the real estate transactions and loans. As an attorney, the respondent gave his imprimatur to the transactions and disbursed the funds. Without his part, the transactions could not have been completed and the fraudulent scheme could not have been carried to fruition. As a consequence, the respondent enabled or facilitated the mortgage fraud scheme.

In view of the respondent's wholesale disregard of his duty to supervise his paralegals and his duty to comply with the disciplinary rules, we conclude that a suspension of two years from the practice of law is warranted.

(Mike Frisch)

August 25, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Wednesday, August 24, 2016

Former County Attorney Disbarred

The Wyoming Supreme Court has disbarred a attorney convicted of a "serious crime"

KOWB 1290 reported on the criminal charges

Charges have been filed against Albany County Attorney Richard Bohling stemming from allegations of using county funds to purchase cameras, computer equipment, and other items for personal use. Charges of six felonies and three misdemeanors were filed yesterday.

Bohling faces felony charges of four counts of Larceny. Other felony charges include Wrongful Taking or Disposing of Property and False Swearing in Non-judicial or Non-administrative Proceeding (False Claims or Vouchers).

Misdemeanor charges include Official Misconduct, Wrongful Appropriation of Public Property, and Misuse of Office.

Bohling has been summoned to appear in Circuit Court this afternoon.

The charges come about seven months after a search warrant was served to Bohling in May.

According to court documents, a “quiet audit” of the spending in the Albany County Attorney’s Office was conducted, and a list was created of 196 items purchased between August 3, 2011 and November 5, 2013. Out of those items, only 15 could be identified by a confidential source as being used in the office. The remaining 181 items on the list totaled $14,690.68, according to court documents.

Authorities say Bohling had possession of these items himself and did not bring them to the office until after he received word in April of a possible investigation. The affidavit filed in Albany County Circuit Court states that the property was “concealed by Bohling by keeping it at some location away from the Albany County Attorney’s Office, which was the rightful owner of that property.”

A representative from the Wyoming Department of Criminal Investigation was not immediately available for comment. Their department helped in conducting the investigation.

Bohling first took office as County Attorney in 2003. He did not run for reelection in the November.

(Mike Frisch)

August 24, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Falsified GPA On Resume Leads To Bar Admission Denial

The Maryland Court of Appeals has denied admission to an applicant who had passed the February 2013 bar examination

We consider whether to grant the application for admission to the Bar of Maryland of Deirdre Paulette Brown (“Ms. Brown”), who failed to disclose a prior felony theft charge on her application for admission and provided no credible explanation for her omission; intentionally misrepresented her grade point average (“GPA”) on her law school resume in order to enhance her qualifications with a prospective employer; and demonstrated a pattern of financial irresponsibility with credit account debt.

The Character Committee for the Seventh Appellate Circuit (“Committee”) recommended Ms. Brown’s admission to the Bar of Maryland by a vote of three to two. The State Board of Law Examiners (“Board”) voted four to three to adopt the recommendation of the Committee. Upon consideration of the recommendations of the Committee and the Board, and based upon our independent review of the record, we hold that Ms. Brown has not met the burden of establishing that she currently possesses the requisite moral character and fitness for admission to the Bar.

The court found that the debt issues were not an impediment to admission.

The problems lay elsewhere

In 1992, Ms. Brown was charged with making a false statement to a police officer and felony theft. She only disclosed the charge of making a false statement on her Bar application. The charges arose from an alleged robbery that occurred on or about October 10, 1992, while Ms. Brown was a manager in a retail clothing store in Prince George’s County.

The committee found that her testimony about the criminal matter was candid.

She had falsified her GPA

The Committee found Ms. Brown’s “admitted intentional misrepresentation of her [GPA] during the final semester of law school[,]” most egregious. Ms. Brown provided an April 24, 2012 reprimand letter from her law school’s Academic Standards Committee, which reported that she submitted a resume to the school’s Director of Career and Professional Development that falsely reported her GPA to be 3.71, when her GPA was only 2.71. The letter also noted that Ms. Brown failed to correct the misrepresentation when the Assistant Director of the career development office congratulated her on the false GPA. 

In deciding to issue a reprimand, the Academic Standards Committee considered the following: 1) Ms. Brown’s “estimable record of accomplishments;” 2) her “civic engagement and respect by her classmates;” 3) “the isolated nature of the incident;” and 4) the “sincerity of Ms. Brown’s regret regarding her conduct.” During the hearings, Ms. Brown admitted she placed false information on her resume in order to secure an on campus interview with a prospective employer, who required a minimum GPA of 3.0. Ms. Brown also testified that she withdrew her application with the prospective employer after the interview, reasoning that her conduct was “dishonest,” “unethical,” and “stupid.”

Although Ms. Brown acknowledged that her misrepresentation would have been exposed when the employer obtained her law school transcript, she admitted that she would not have reported it had she not been caught by the career development staff. The Committee accepted mitigation evidence relative to the resume incident. The Committee observed that three years had elapsed since the event leading to her academic reprimand, and that during that time, Ms. Brown held a real estate license, has been a notary public, and has worked for at least two title companies. The Committee also observed that within that period, no complaints had been lodged against her, and the accuracy and integrity of her work had not been questioned.

The court

Ms. Brown admitted that she had been financially irresponsible, failed to disclose the felony theft charge on her Bar application, and falsified material information on her resume during law school. Nonetheless, Ms. Brown avers that these incidents were not indicative of her present moral character and fitness for admission to the Bar of Maryland.

With the exception of Ms. Brown’s patterns of financial irresponsibility, which, in our view, she has since rehabilitated based on the record before us, we disagree.

Relative to the failure to disclose information, Ms. Brown alleges that she was not aware of the felony theft charge, and therefore, did not disclose it on her Bar application. However, the record reveals the contrary. Specifically, during Ms. Brown’s testimony at the February 2015 hearing, she stated, in relevant part: “I was very clear with [Mr. Herschfeld] . . . that I never said I committed theft of anything of that nature[,]” and that “[a]t first [the police officer] charged me with making a false statement. Then at some point he did do the theft, I do remember that, but I remember the theft either—I don’t know if it got tied into the stet or if it went away.” (emphasis added). Contrary to these assertions, Ms. Brown thereafter, affirmatively denied having recalled the felony theft charge, by stating, “I don’t remember that particular charge [(i.e., the felony theft charge)][,]” and “I don’t ever remember being charged with [felony] theft.”

...our cases demonstrate that an applicant’s lack of candor, truthfulness, or full disclosure, as reflected by an applicant’s inconsistent or contradictory testimony, or other evidence, also supports the denial of admission to the Bar.

...Ms. Brown’s explanations of her of failure to disclose, as reflected in the record and her representations during oral argument before this Court, are inconsistent, and tend to minimize the extent of her responsibility. We further observe that Ms. Brown failed to disclose a known criminal charge, despite signing an affirmation attesting to the accuracy of the information provided on her Bar application.

The coup de grace

Even more troubling, is Ms. Brown’s falsification of information on her resume during the last semester of law school. Ms. Brown alleges that this conduct displayed a “lapse in judgment” that was not indicative of her character, suggesting that the candid confession of her culpability and requisite remorse, should be viewed favorably towards her admission to the Bar. We disagree. Ms. Brown deliberately altered her GPA on her resume to advance employment prospects which she would not have qualified for, had her true GPA had been disclosed. Ms. Brown was cognizant that her actions were misleading. Ms. Brown also candidly admitted that the motivation behind her actions were calculated and purely designed for her own personal gain.

Ms. Brown further testified that had her law school not confronted her regarding the falsified GPA, she would not have taken the initiative to correct the misinformation. Specifically, Ms. Brown admitted that she did not correct the misrepresentation, even when the Assistant Director of the law school’s career development office congratulated her for achieving an “outstanding GPA,” and did not do so during an on-campus interview with the prospective employer. In furtherance of this act of deception, Ms. Brown testified that she only withdrew her resume from consideration because of her fear of being caught, and the fact that her actual GPA would have ultimately been revealed when compared against her law school transcript...

Although we accord great weight to the Board’s determination, our independent review of the record, which includes argument before this Court, where Ms. Brown appeared and responded to questions, and the proceedings before the Committee and the Board, leads us to conclude that Ms. Brown has failed to unequivocally meet the burden of establishing that she presently possesses the good moral character and fitness required for admission to the Bar of Maryland. In 2012, which was approximately four years ago, Ms. Brown revealed to the Committee and the Board that she deliberately falsified her GPA to enhance her qualifications with a prospective employer, and was less than candid regarding a previous felony theft charge.

Justice Hotten authored the court's opinion. (Mike Frisch)

August 24, 2016 in Bar Discipline & Process, Blogging | Permalink | Comments (0)

The Rights Of The Disbarred

As a follow on to my post about a D.C. Board on Professional Responsibility rule that was used to exclude relevant evidence in the reinstatement hearing of a convicted and disbarred felon, I reprint the section of my article No Stone Left Unturned, Georgetown Journal of Legal Ethics Vol. XVIII, No. 2 (Spring 2005) that discusses the Rule at issue

The Header: The Rights of the Disbarred

The Board is empowered with the authority to "adopt rules, procedures, and policies not inconsistent with [Rule XI] or any other rules of [the] Court." An examination of the rule promulgated by the Board to protect the supposed rights of attorneys who have been either disbarred or suspended with a fitness requirement is instructive in terms of understanding the agenda of the District of Columbia's volunteer lawyer system. Board Rule 9.9, which applies to reinstate­ment petitions, styled "evidence of unadjudicated acts of misconduct" can only be characterized as an elaborate procedure designed out of a wellspring of concern for the rights of the disbarred. The Rule reflects the Board's fixation on its view of due process and its utter lack of concern for the protection of the public from attorneys who have by their adjudicated misconduct demonstrated their unfitness to practice law.

Disciplinary proceedings, as has been previously noted, exist to promote confidence in the competence and integrity of the legal profession. The rules of evidence are not strictly applied, as any evidence relevant to the fitness of the attorney must be considered. There is no statute of limitations for any disciplinary offense, as the focus of all such proceedings is on the present fitness of the accused attorney. Criminal concepts such as venue also are not applied to these matters. One would think that the open consideration of all relevant evidence would apply with particular force to a reinstatement proceeding, involving as it does the present fitness of a disciplined attorney whose past conduct has shown a serious inability to adhere to minimum standards of ethical behavior. The Board's rule, motivated by an apparent desire to protect such lawyers, is the work of an entity "drunk on due process."'

Board Rule 9.9 prohibits Bar Counsel from introducing evidence at a hearing on a petition for reinstatement of any acts of misconduct that occurred prior to the order of disbarment or suspension with fitness unless Bar Counsel (i) proves that the attorney received notice that Bar Counsel reserved the right to present the facts and circumstances of the unadjudicated acts of misconduct and (ii) gives notice of its intent to raise the misconduct at reinstatement in the Answer to the Petition. Then, Bar Counsel is required to make a written proffer of its evidence to support admissibility of the evidence and satisfy the hearing committee chair that the misconduct can be established by a preponderance of the evidence. Because the rule, by its terms, applies to allegations about which Bar Counsel is aware at the time the attorney is disciplined, undiscovered misconduct that occurred before disbarment but later comes to light apparently is inadmissible.

This rule simply makes no sense, unless one is inclined to view the disbarred as a class worthy of special consideration and treatment. When an attorney has engaged in misconduct meriting lengthy suspension or disbarment, there often is a pattern of behavior that is undiscovered for years. Bar Counsel's limited resources do not permit the luxury of continuing to prosecute cases working their way through the system that are unresolved when the attorney is suspended or disbarred.  Any act or omission by a Bar applicant that reflects adversely on the applicant's present character and fitness to practice law is considered in the determination whether or not to grant the license. Any rule that operates to place technical hurdles in front of the disciplinary prosecutor in the process of evaluating the present fitness of a previously disciplined attorney frustrates the fundamental purpose of regulation. The Court has never had occasion to review this rule and presumably would invalidate it if relevant evidence is ever excluded by its operation. Its mere existence signals a misunderstanding on the part of the Board of its role in the disciplinary system.

I have omitted the accompanying footnotes except this one, which I particularly enjoyed writing

The Board's overarching concern for the rights of accused lawyers also finds expression in a practice that I believe is unique to the District of Columbia. The Board will appoint counsel to "indigent" lawyers and pay appointed counsel from bar dues. BOARD RULES Rule 16.5. While other jurisdictions appoint counsel in matters involving allegations of mental incompetence or disability, D.C. stands alone in giving free lawyers to lawyers who are not disabled. I made a series of requests to the Board for information regarding the identities of the appointed attorneys and the amounts paid. I was advised that "[t]hese documents are not public records; they are treated as confidential," and later that "[the Board isj not obliged to devote our limited resources to compiling data in response to your request." Letters from Executive Attorney to author (May 28 and June 29, 2004). The Board was kind enough to send me an application for appointed counsel and a list of attorneys who accept appointments in case I am ever in need.

I am pleased to report that I have not needed counsel (appointed or otherwise) for a bar discipline matter in the eleven years since the article was authored.

Also note that Criminal Justice Act vouchers are public records.

Why are payments to appointed counsel from mandatory dues a big secret? Answer: See above. (Mike Frisch)

August 24, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Taxing Tom Clancy

The Maryland Court of Appeals has decided a case involving the estate of the late author Tom Clancy.

A second codicil, executed several years after a will, had the effect of qualifying a family trust, created from the residuary estate, for the marital deduction for federal estate tax purposes. A savings clause, also in the second codicil, restricted the personal representative from paying taxes on property allocated to the marital deduction to avoid diminution of the marital deduction. As a result, the family trust was exempt from liability for federal estate taxes.

From the opinion

"The avoidance of taxes is the only intellectual pursuit that still carries any reward.” – John Maynard Keynes

“The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” – Justice George Sutherland

Acclaimed author Thomas L. Clancy, Jr., (“Decedent” and “Testator”) died in October of 2013, survived by his second wife, Alexandra M. Clancy (“Mrs. Clancy”) and a minor child by that marriage, as well as four adult children (“The Older Children”) from Mr. Clancy’s first marriage. Mr. Clancy died, leaving a will, as well as various amendments; the issue before us involves the interpretation of Mr. Clancy’s Will, as amended by a Second Codicil, with respect to not only the payment of federal estate taxes, but also to the question of upon which beneficiaries the burden of such taxes should be placed at the time of Mr. Clancy’s death. 

 Judge McDonald dissented

The Majority opinion appears to be based on the premise that the pre-eminent value for any testator is the avoidance of taxes. Perhaps there are people like that. If so, one would expect them to have bought a Yugo years ago and scrupulously maintained it to minimize and thereafter avoid the automobile excise tax.

In fact, while paying no more taxes than necessary is significant, most people have other values that also inform important decisions for their lives – and for their heirs. In the purchase of a car, for example, interests in function, reliability, comfort, and safety may dissuade a person from purchasing the cheapest – and least taxed – car, although that may mean paying more in tax. So also is the case in devising an estate plan. As this Court has observed, “[m]inimizing estate and inheritance taxes for beneficiaries ... may not always be the ultimate driving force behind the testator’s decisions regarding the provisions contained in his or her will.” Noble v. Bruce, 349 Md. 730, 757, 709 A.2d 1264 (1998)

In essence, the Majority opinion, without explanation, reads the Second Codicil as expressing Mr. Clancy’s intent that the distribution of his estate maximize the marital deduction at all costs. There is simply no basis for this interpretation.

Two colleagues joined the dissent. (Mike Frisch)

 

August 24, 2016 | Permalink | Comments (0)

Tuesday, August 23, 2016

Chicago-Style Pizza Unauthorized Practice Alleged

A New York attorney has been charged with unauthorized practice by the Illinois Administrator.

On July 1, 2005, Respondent leased an apartment from Dennis Martinek ("Martinek") at 111 Groveland Avenue in Riverside, Illinois ("the Groveland apartment"). Shortly thereafter, Respondent informed Martinek that he was a New York attorney.

From February 5, 2008, to August 12, 2011, Martinek was an investor in a business, Politico, LLC d/b/a Vini’s of Lincoln Park, which operated a pizza restaurant, Vini’s Pizza, at 2429 N. Lincoln Avenue in Chicago (hereinafter, collectively "Vini’s").

In August 2010, Martinek informed Respondent about a number of legal problems that Martinek had encountered in connection with Vini’s, including alleged fraud and mismanagement by the then-General Manager of the company, Rosendo Diaz ("Diaz").

Between August 2010 and September 2010, Respondent and Martinek agreed that Respondent would represent Martinek and Vini’s in at least eight different legal matters. Those matters included:

a. a tax claim by the State of Illinois because Diaz had allegedly failed to pay sales tax on pizza sales at Vini’s;
b. a claim against Diaz related to his purported mismanagement of Vini’s;
c. the defense of four creditors’ claims against Vini’s for accounts receivable, including claims by:

i.   DePaul University;
ii.  S&S Heating and Cooling, Inc.;
iii. Ice Town Leasing;
iv. Sysco Chicago, Inc.

d. An eviction matter related to a 5-day notice that had been served on Vini’s on September 10, 2010 to vacate its business premises on Lincoln Avenue in Chicago;
e. An alleged banking error by Vini’s credit card processing company, First Merit Bank, wherein Vini’s had purportedly not been credited with $5,000 in pizza sales proceeds.

Between August 2010 and September 2010, Respondent and Martinek began negotiating as to the fees that Respondent would be paid for the legal work...but they did not enter into a specific agreement as to the amount of those fees at that time.

Between September 2010 and August 2011, Respondent provided legal advice and services to Martinek and Vini’s on the matters... During that period, Respondent corresponded with Vini’s creditors and their counsel, reviewed and analyzed documents related to the respective claims, performed legal research on those claims, drafted letters to creditors for Martinek’s signature, and advised Martinek as to how to proceed in each matter.

In or about July 2011, Respondent and Martinek agreed that Martinek would barter monthly rent payments from Respondent’s rental of the Groveland apartment by applying those amounts as payments toward Respondent’s legal fees for the matters...The monthly rental amounts were $1,000 from July 1, 2011 through July 1, 2012. For legal services that Respondent provided on Martinek’s behalf in 2011 and 2012, Martinek waived a total amount of $12,000 in rental payments.

It is further alleged that Martinek sued to evict him and that he and his spouse filed for bankruptcy.

He also allegedly failed to cooperate in the investigation. (Mike Frisch)

August 23, 2016 in Bar Discipline & Process | Permalink | Comments (0)

Monday, August 22, 2016

Drunk On Due Process: Hearing Committee Rules Evidence Inadmissible In Reinstatement Proceeding

I have been waiting a long time for a case to come along that would provide District of Columbia Bar (now Disciplinary) Counsel with an opportunity to test the single most public protection-unfriendly rule of the Board on Professional Responsibility, the infamous Board Rule 9.8

Evidence of unadjudicated acts of misconduct occurring prior to the Court’s order of disbarment or suspension with fitness (“unadjudicated acts”) may be introduced by Disciplinary Counsel at a hearing on reinstatement only if: (i) Disciplinary Counsel demonstrates that the attorney seeking reinstatement received notice, in Disciplinary Counsel’s letter dismissing the complaint alleging the unadjudicated acts, that Disciplinary Counsel reserved the right to present the facts and circumstances of the unadjudicated acts at a reinstatement hearing; and (ii) Disciplinary Counsel gives notice in the Answer to the petition for reinstatement that he intends to raise the unadjudicated acts at reinstatement.

Let me say it plainly: No legitimate public policy purpose underpins any rule that excludes relevant evidence in the reinstatement hearing of a disbarred attorney.

Question: who in their right mind dreams up a procedural rule to exclude evidence in a reinstatement matter on grounds other than its merits?

Answer: the District of Columbia Board on Professional Responsibility.

My prayers are answered in the reinstatement proceeding of an attorney who had consented to disbarment while facing bar charges that his federal false statement conviction involved moral turpitude on its facts

Petitioner filed the instant Petition for Reinstatement on June 14, 2015. See DX 1 (Responses to Reinstatement Questionnaire for Petition for Reinstatement, Reinstatement Questionnaire, and Petition for Restatement). On October 15, 2015, Disciplinary Counsel opposed the Petition for Reinstatement and asked that a Hearing Committee be assigned to hold a hearing on the Petition. See DX 2 (Disciplinary Counsel’s Answer to Petitioner’s Petition for Reinstatement). The Board assigned the matter to the present Hearing Committee.

The Hearing Committee held a prehearing conference on January 22, 2016. Petitioner and Disciplinary Counsel submitted a set of twenty-three stipulated facts on February 3. In addition, Petitioner submitted four exhibits and Disciplinary Counsel submitted twenty-five.

On March 9, 2016, Petitioner objected to Disciplinary Counsel’s proposed Exhibits 9 and 16 through 25. Disciplinary Counsel filed responses to Petitioner’s objections on March 11. Exhibits 16 through 25 related to the 2006 criminal matter. Disciplinary Counsel’s Exhibit 9 was the Specification of Charges submitted for Contact Member review on February 28, 2011. Exhibit 16 was a Department of Labor investigative report, and Exhibits 17 through 25 were Department of Labor interview reports and FBI interview reports, all of which concerned the underlying criminal matter.

The Hearing Committee held a hearing on March 14, 2016. At that hearing, the Hearing Committee excluded Disciplinary Counsel’s Exhibit 9 and Exhibits 16 through 25, except for the cover page that constituted the first page of Exhibit 9. Hearing Tr. 20:7-14, 24:8-11. The Hearing Committee concluded that the exhibits alleged unadjudicated acts of misconduct before the effective date of the disbarment and that Disciplinary Counsel had failed to satisfy the condition for their admissibility – that it had provided notice to Petitioner reserving the right to present evidence of the unadjudicated acts on reinstatement, as required by Board Rule 9.8(a). Hearing Tr. 20:7-14. Disciplinary Counsel objected to that ruling on the record. Hearing Tr. 23:17-18.

Does the reader understand that this hearing committee refused to hear relevant evidence by operation of a ridiculous procedural rule intended to do nothing but tie Disciplinary Counsel's hands in conducting a fair reinstatement inquiry?

Notably, it appears that these reports do not involve "unadjudicated acts of misconduct." Rather, reports on the nature of underlying offense involve the circumstances surrounding the misconduct. I'd say those circumstances are worth knowing before you let a convicted felon get his law license back.

This is exactly what Disciplinary Counsel was exploring in its charges when the attorney threw in the towel and consented to disbarment.

Now

At the hearing, Petitioner testified credibly that the “material facts” to which he agreed in the affidavit in support of consent to disbarment were the facts set out in the criminal information and the plea agreement. Hearing Tr. 98:10-12, 99:18-20, 100:15-21, 102:19-21. He stated that he never admitted to other allegations in the draft Specification of Charges, and he denied the truth of the additional allegations related to the underlying criminal case.

This may or may not be true. The Hearing Committee prevented Disciplinary Counsel from presenting the evidence that well might disprove it. 

And the Ad Hoc Hearing Committee recommends reinstatement!

The case is In re Chris Yum. 

In No Stone Left Unturned, I predicted that if this "drunk on due process" rule ever got before the Court of Appeals it would go down in flames.

I hope I was right.

The "drunk on due process" comment on this "rule" is not original with me but quotes a judge of the Court of Appeals in an oral argument many years ago where the rule came up.

I was there and loved it. (Mike Frisch)

August 22, 2016 in Bar Discipline & Process | Permalink | Comments (1)

Magistrate At The Museum (Not Starring Ben Stiller)

The South Carolina Advisory Committee on Standards 0f Judicial Conduct has opined on the propriety of a magistrate's service on a museum board

A full-time magistrate judge has requested an opinion as to the propriety of a judge serving on the Board of Trustees for a local museum and cultural center dedicated to preserving the town’s history and heritage. The purpose of the museum is: 1) to collect, preserve, exhibit and document the past of the area; 2) to provide educational programs, activities and exhibits for all age groups; and 3) to promote art and culture that relates to and will enrich the lives of the present and future generations.

Conclusion

A full-time magistrate judge may be a member of the Board of Trustees for a local museum and cultural center provided that the judge does not participate in fundraising/soliciting funds.

With this limitation

Under the facts presented, one of the responsibilities of the Board of Trustees is a “commitment to fundraising.” As discussed, a judge is not permitted to actively solicit funds on behalf of an organization, although a judge may participate in the management of such funds. However, if, as member of the Board of Trustees of the museum, the judge is exempted from fundraising, this Committee sees no other prohibition to the judge serving as a member of the Board, provided that the judge shall not lend the title of his or her office to any of the museum’s activities.

(Mike Frisch)

August 22, 2016 in Judicial Ethics and the Courts | Permalink | Comments (0)

Sunday, August 21, 2016

No Class

An opinion from the United States  Court of Appeals for the Third Circuit affirms the denial of class certification to students suing Widener Law

This is an interlocutory appeal of a denial of class certification in a suit alleging that Widener University School of Law defrauded a putative class of law students by publishing misleading statistics about its graduates’ employment, which caused the students to pay “inflated” tuition. The District Court found, among other things, that the plaintiffs failed to meet the requirement in Rule 23(b)(3) of the Federal Rules of Civil Procedure that common questions predominate over individual questions in order for a class to be certified. We conclude that, although the District Court labored under a few misconceptions about the plaintiffs’ theory of the case, the errors were harmless and the court ultimately reached the correct result. Even when properly characterized, the plaintiffs’ theory is insufficiently supported by class-wide evidence, and therefore the plaintiffs have not established that common questions will predominate. For that reason, we will affirm.

The allegations

they allege the following. Between 2005 and 2011, Widener reported that 90-97% of its students were employed after graduation. These numbers were widely and deliberately advertised in print and online publications, along with oral presentations, targeting prospective students. But in reality, only 50-70% of Widener graduates ended up in fulltime legal positions, which Widener knew. The school was including non-legal and part-time positions in its published statistics without reporting the breakdown. When Widener did provide a breakdown in its materials, it was a breakdown by employer type (private firm, business and industry, etc.) within the category of full-time legal employment, further misleading prospective students into believing that the 90- 97% number represented full-time legal employment. Beginning in 2011, Widener improved its reporting somewhat, by including a breakdown that distinguished between full-time legal positions and other jobs. But, according to the plaintiffs, Widener continued to gather information about its graduates in a manner that distorted the statistics by, for example, crediting unreliable secondhand accounts of graduates’ employment and avoiding responses from unemployed graduates.

The plaintiffs claim that publishing misleading employment statistics enabled Widener to charge its students “inflated” tuition — that is, higher tuition than what Widener would have received if full and accurate statistics were published instead. Joint Appendix (“J.A.”) 90 (Amended Compl. ¶ 1). And they seek damages equal to the amount of tuition that students allegedly overpaid. Widener moved to dismiss the case, but the motion was denied on March 20, 2013. The parties then engaged in discovery related to class certification.

As to class action 

The plaintiffs have...failed to propose a cognizable theory of damages that is sufficiently supported by class-wide evidence. And because the fact of damages (an “ascertainable loss” having a “causal relationship” with Widener’s conduct) is a crucial issue in the case, the inability to resolve it in class-wide fashion will cause individual questions to predominate over common ones, which precludes class certification.

August 21, 2016 in Current Affairs | Permalink | Comments (0)