November 28, 2008
A law firm that had consisted of two equal partners ended in bad feelings and litigation. Among the claims that each had brought against the other were charges of "stubborn litigiousness." The Georgia Supreme Court held that the trial court had properly appointed a receiver to deal with the ongoing dispute. Specifically, the receiver will collect fees due to the former firm and determine distributions. The court noted disputed evidence that one of the partners had engaged in improper conduct during the course of the partnership and found it unnecessary to resolve that dispute in its disposition of this appeal. (Mike Frisch)
Conviction Results In Automatic Disbarment
An attorney who was convicted of conspiracy to obtain fraudulent student visas and inducing aliens to reside unlawfully in the United States as well as related substantive offenses was disbarred by the New York Appellate Division for the Second Judicial Department. The attorney had been serving as director of foreign students at Morris Brown College in Atlanta, Georgia.
The court imposed the automatic disbarment for a felony conviction (here under federal law) that has an equivalent felony under New York law. The New York felony was filing a false instrument in the first degree. (Mike Frisch)
Disbarment For Multiple Thefts
An attorney who had defaulted on charges of theft of entrusted funds was disbarred by the North Dakota Supreme Court. The court described the charges as follows:
The Petition alleges Sletten was the attorney for Anita Hopkins, an elderly widow. Sletten informed Hopkins her estate could have a substantial tax burden and she should reduce her estate through a gifting plan. Hopkins turned over approximately $300,000 in certificates of deposit and other investments to Sletten, which he held in his trust account. Hopkins died in November, 2005, without having named any gift beneficiaries. By June 2007, Sletten transferred funds held for Hopkins from his trust account for his personal use, along with an additional $40,000 belonging to another client.
On July 24, 2007, an Amended Petition for Discipline was filed. The Amended Petition asserts that in 2005 Sletten assisted in the sale of a farm owned by Richard and Elizabeth Conklin. The proceeds from the sale totaled approximately $180,000, which was held in Sletten's trust account. Approximately $84,000 of the Conklins' money was used for Sletten's personal or office use without the client's knowledge or consent.
The Amended Petition further asserts Sletten held money in his trust account for client Sally Mehlhoff. Sletten gave Mehlhoff a check from his trust account in the amount of $11,822.95, but when Mehlhoff tried to negotiate the check she was told there were insufficient funds to pay the check. The money was used for Sletten's personal or office use without the client's knowledge or consent.
The Amended Petition further asserts Sletten was the attorney for the Nels Peterson Estate and took in excess of $100,000 from the Estate for personal or office use without the client's knowledge or consent. Finally, the Amended Petition asserts Sletten was the attorney for the John Vanderwerff Estate, which owned lots in Garrison. Sletten sold the lots for $12,000, and after taxes, the remaining amount of $5,835.76 was paid to the Sletten Law Office. After paying some minor costs, Sletten took approximately $5,508.76 from the Estate for his personal or office use without the client's knowledge or consent.
The court also ordered restitution as part of the discipline. (Mike Frisch)
Accountant License Suspension
The Massachusetts Supreme Judicial Court upheld a three year license suspension of an accountant convicted of a felony theft offense and false concealment of the conviction in an application for license renewal:
Based on the petitioner's larceny conviction and his false statement on his renewal application, the board, in May, 2006, issued to the petitioner an order to show cause why it should not suspend, revoke, or take other action against his license. Prosecuting counsel for the division of professional licensure moved for summary decision. See 801 Code Mass. Regs. § 1.01(7)(h) (1998). The board allowed the motion, concluding that the undisputed evidence showed the petitioner had been convicted of larceny over $250, and had lied about that conviction on his renewal application. See G.L. c. 112, §§ 61 and 87C 1/2 . The board rejected the petitioner's claim that he had mistakenly thought his larceny conviction had been "stayed" pending appeal--he presented no evidence to support his claim, and the board rejected his explanation of the different answers he gave on his applications to renew his accountant's license and to become a notary public as "linguistic splitting of hairs." See 801 Code Mass. Regs. § 1.01(7)(h) (summary decision appropriate where no "genuine issue of fact"). The board also concluded that, even if the petitioner had not intended to deceive the board, he knew or should have known that his statement in the renewal application was false.
A sanctions hearing took place, at which the petitioner and his defense counsel in the larceny case testified. Thereafter, the board issued a final decision in which it incorporated its earlier decision allowing the motion for summary decision; found no mitigating circumstances; found aggravating circumstances (a pattern of similar financial misconduct shown by the G.L. c. 93A matter and the petitioner's criminal charges above and beyond the larceny conviction; and the petitioner's demeanor during the hearing); and ordered his accountant's license suspended for three years.
The case is Kaplan v. Board of Public Accountancy, decided November 26. (Mike Frisch)
November 27, 2008
Be Thankful for Lawyers on this Thanksgiving Day
Not only did lawyers (well, only Abe Lincoln of the Illinois Bar) invent some important patents, but a lawyer invented that canned congealed cranberry sauce that you will eat today. It's delicious, plus it is fun to try to get it out of the can. So please do not bash the legal profession, today of all days.
Update: Just told my mom that lawyers invented cranberry sauce, and she replied, "No wonder it's so sour." Lawyer bashing, even at home.
November 26, 2008
The California Commission on Judicial Performance recently admonished a superior court judge for an array of improper conduct that included advancing a trial date without notice, unwarranted removal of a public defender from a pending case and a series of rude and condescending remarks to lawyers and litigants. The offending remarks are set out in the commission's decision. (Mike Frisch)
Malpractice Claim Timely Filed
In a malpractice claim by a criminal defendant against his former public defender, the New Jersey Supreme Court reversed a decision below that had dismissed the case on statute of limitations grounds. The defendant had pleaded guilty to an offense unaware of the consequence of deportation to Trinidad and Tobago. The court held that the statute commences when post-conviction relief is granted; here, the malpractice claim had been filed in a timely manner. (Mike Frisch)
The West Virginia Supreme Court of Appeals filed an opinion denying the petition for rehearing of a lawyer who had been suspended earlier this year. The court found no merit to the petition, and specifically reaffirmed its decision not to find mitigation based on a drug addiction:
It should be noted that during his testimony before the Subcommittee on January 18, 2007, respondent Duty admitted that he committed several violations of the Rules of Professional Conduct as described in the Statement of Charges. However, Duty explained that much of his conduct was the result of his chemical dependency upon OxyContin, an addictive, pain relief medication which Duty asserted depleted his finances...
It is noted that the evidence demonstrates that respondent has been addicted to OxyContin for two to three years. While there is medical evidence that respondent was affected by this chemical dependency, it does not establish that the chemical dependency caused respondent's misconduct. * * * Respondent did not seek treatment for his addiction until after or about the time the Statement of Charges in this matter was served upon him.
A review of the testimony elicited during the January 18, 2007, hearing suggests that respondent Duty's chemical dependency upon OxyContin, although warranting continuing treatment, did not rise to the level of an avoidance of responsibility with regard to any of the five Counts contained within the Statement of Charges. Consequently, this Court is in agreement with the conclusion of the Subcommittee.
The court's initial decision in linked here. (Mike Frisch)
Bar Admission For Non-Citizens
Louisiana has amended its bar admission rules to permit resident non-citizens and those in the United States on work visas to seek admission in Louisiana. The new rule also contains a provision for bar admission based on study of law in the United States. (Mike Frisch)
No Complainant Necessary
Effective January 1, Maine has amended its bar regulation rules to permit Bar Counsel (the inimitable Scott Davis) to investigate possible misconduct even if no one comes forward to file a complaint against the attorney. As the comment explains, information that might establish a possible Code violation often comes to the attention of bar counsel through media reports, judicial decisions or other sources. The disciplinary authorities should not be forced to ignore those reports because no one seeks a bar investigation.
We have long had such a rule in the District of Columbia. Investigations premised on media reports often go nowhere but have resulted in enough matters worthy of serious inquiry to justify an expansive authority for bar inquiries. Judicial decisions criticizing lawyer conduct, by contrast, more frequently merit careful investigation. Sometimes the investigation reveals more in the way of judicial pique than lawyer ethics violations.
The new rule is linked here. (Mike Frisch)
No Cause Of Action For Buyer's Remorse
Attorney approval provisions--which allow either the buyer or seller of real property to rescind the sales contract within a three day period of execution--are common in upstate New York. A husband and wife buyer who had second thoughts instructed their attorney to invoke the provision. The sellers sued and prevailed on a theory of bad faith. The New York Court of Appeals reversed.The court concluded that the bar association approved language was not subject to a bad faith exception. (Mike Frisch)
November 25, 2008
An Illinois hearing board has recommended a six-month suspension of an attorney for conflicts of interest in representing sellers in two real estate transactions where she had an undisclosed romantic relationship with the buyer:
At the same time the Respondent was representing Elsie Hamilton in the sale of Hamilton’s farm to Gale Griffith, the Respondent also had a personal, financial, and professional relationship with Griffith. The Respondent lived with and had a romantic relationship with Griffith for several years. In fact, the Respondent described Griffith as her "life partner." Also, since 2003 the Respondent and Griffith were co-owners, with four others, of a business named Crooked House. Crooked House purchased houses and then operated them as rental properties.
The board further found that the conflicts did not involve fraud or dishonesty:
We also find that the evidence did not prove that the Respondent acted with the intent to cheat or defraud her clients Elsie Hamilton or Howard Doy. We note that the Respondent was not charged with engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. The overall circumstances shown by the evidence, including the Respondent’s testimony and demeanor, indicate that the Respondent thought that, by arranging the sale of her clients’ real estate for the exact price they sought, she acted in full accord with her clients’ wishes and interests. It is clear from the evidence...that the Respondent acted with the intent to aid Gale Griffith financially by assisting Griffith to purchase the farms of the Respondent’s clients at a price very favorable to Griffith. Thus, although the Respondent had a clear conflict of interest and effectively put the interest of Griffith, her life partner, above the interest of her clients Elsie Hamilton and Howard Doy, the evidence does not prove that the Respondent intended to harm either Hamilton or Doy.
The attorney had no record of prior discipline. (Mike Frisch)
Affirmed With Harsh Words
In a case that had previously been remanded based on a finding that counsel had violated the "no contact" provision of Rule 4.2, the Rhode Island Supreme Court held that the trial court properly had vacated a default: "It would be an understatement to describe the life and travel of this case as tortuous."
As to the Rule 4.2 issue:
We said in Pleasant Management I, 870 A.2d at 446, that “confusion reigned in the wake of the violation of the anti-contact rule.” Unfortunately, the hearing below only further clouds the landscape of this case, and we are disappointed that the lower court did not follow our direction and determine whether Murray’s violation of the anti-contact rule occasioned excusable neglect by defendants to an extent sufficient to vacate the default.
The court held that the trial court had ignored its ruling and conducted a hearing that led to a finding contrary to the court's legal determination: "the opinions of this Court speak forthrightly and not by suggestion or innuendo...Nor is it the role of the trial justice to attempt to 'read between the lines' of our decisions." Nonetheless, the decision came out correctly as to the default and was affirmed. (Mike Frisch)
Self-Defense Exception To Confidentiality Rule
A decision today from the New York Appellate Division for the First Judicial Department:
Order, Supreme Court, New York County (Michael D. Stallman, J.), entered June 28, 2007, which, to the extent appealed from, permitted defendant Sullivan to testify at a deposition and ordered production of documents concerning certain topics even if his responses revealed information or communications that Gramercy Financial Group claimed were privileged and/or confidential, unanimously affirmed, without costs.
Code of Professional Responsibility DR 4-101(C) (22 NYCRR 1200.19[c]) provides: "A lawyer may reveal: . . . (4) Confidences or secrets necessary . . . to defend the lawyer . . . against an accusation of wrongful conduct." We decline to make defendants' invocation of this rule dependent on plaintiff's demonstration of a prima facie case of defendants' liability (see Justice Stallman's later ruling on a related matter in this case, 18 Misc 3d 673, 683 [December 17, 2007]).
The issue of whether plaintiff was defendants' client is to be tried (see id. at 684), so Gramercy should not assume that plaintiff is a non-client. Even if plaintiff were not defendants' client, DR 4-101(C)(4) does not require the non-client's allegation of wrongful conduct to involve criminal or regulatory charges rather than malpractice (see Restatement [Third] of Law Governing Lawyers § 64, Comment c).
Gramercy's argument that the motion court should have deferred decision until after summary judgment (even though neither plaintiff nor defendants have moved for summary judgment) is without merit. It is not for Gramercy to dictate the litigation decisions of the parties.
Grammercy was a non-party appellant in the litigation. (Mike Frisch)
Mitigation Not Established
The Louisiana Supreme Court ordered a two year suspension in a bar discipline matter involving charges of misconduct in two matters. The accused attorney failed to respond to the charges and did not participate in the disciplinary proceeding. The misconduct involved severe neglect of a plaintiffs' claim arising out a fire and the failure to have his clients execute documents that led to the revocation of a settlement agreement. Mitigation based on what he had described as "bleeders in my eyes"--causing temporary blindness--was rejected as unproven. Two justices would have imposed harsher (but unspecified) discipline. (Mike Frisch)
One Charge Proven
An Arizona hearing officer has recommended probation of one year and censure of an attorney in a case where the Bar had filed charges in three matters. Interestingly, one of the charges was resolved by the grant of summary judgment to the accused attorney (I am not aware of many jurisdictions that allow for dismissal of discviplinary charges by motion).
One of the remaining cases involved fees in a domestic relations case. The hearing officer found that communication regarding the fees could have been better but that the allegation that the lawyer charged an unreasonable fee had not been proven. The hearing officer found that the lawyer had engaged in a conflict of interest in a probate case that had been sent to the Bar by a judicial officer. The attorney had a substantial, but remote in time, record of prior discipline. (Mike Frisch)
November 24, 2008
Colorado Bar's Legal Ethics CLE (on Dec. 4 or Jan. 8) Emphasizes Leadership Skills
"Tired of the same old lectures on the ethics rules? Looking for a fresh approach to exploring key Rules of Professional Conduct from the perspective of leadership principles and the varying dimensions of individual contribution? ...You can earn [three hours of] CLE Ethics credits while acquiring the tools to further your leadership skills from a most distinguished team of inspirational and proven professionals." The program is called Legal Ethics: From Bedrock to Beacon, and it is live 12/4/08 in Denver, with video replays in various CO cities on 1/8/09. [Alan Childress]
An attorney handling an insurance matter was privately reprimanded by the Indiana Supreme Court for misuse of process. The lawyer had served a series of subpoenas prior to the institution of litigation and has stipulated that the conduct violated Rule 4.4 (respect for rights of third persons). The court explained its relative leniency:
By using subpoenas, Respondent purported to issue orders on behalf of a court, rather than simply making requests on behalf of an insurance company. Respondent's improper use of subpoenas tended to give the third party (who apparently was unrepresented) the false impres-sion that he could be held in contempt of court if he failed to appear and produce the documents requested.
An offense of this gravity would usually have warranted discipline more severe than a private reprimand, but in light of the lack of adverse consequences and Respondent's cooperation with the Commission, the Court approves the agreed discipline.
No Lesser Sanction
The District of Columbia Board on Professional Responsibility had recommended reciprocal discipline based on a Florida sanction imposed on Montgomery Blair Sibley. The attorney had been suspended for three years in Florida and must petition for reinstatement. The board here rejects a collateral attack on the legitimacy of the Florida process as well as the contention that the misconduct (intentional disobedience of court-order support obligations and asserting frivolous claims) merited substantially different discipline in the District of Columbia.
In an unrelated reciprocal matter from Massachusetts, the board rejected claims for greater discipline from Bar Counsel as well for lesser discipline from the lawyer, who had made unauthorized payments for his own benefit as general counsel to Houghton Mifflin Company. The lawyer had used the funds to pay his rent and for a summer vacation rental in Rhode Island. Bar Counsel sought disbarment, contending that the strict rule of disbarment for misappropriation applied. The attorney contended that he should get mitigation based on alcohol addiction. The board rejected both claims--the attorney had failed to raise alcoholism in the Massachusetts case--and recommended the functionally-equivalent discipline of a three-year suspension. (Mike Frisch)
A hearing committee in the District of Columbia has recommended a 90 day suspension of former White House domestic policy advisor Claude Allen. The hearing committee accepted a stipulation of facts and concluded that the conviction did not involve a crime of moral turpitude, which would require disbarment under D.C. Code section 11-2503:
Here, the Hearing Committee finds that Bar Counsel has not provided any evidence that Respondent’s actions were of a vile or depraved nature justifying a finding of moral turpitude based on the facts. Simply committing a fraudulent act that is a misdemeanor does not rise to moral turpitude by itself. Furthermore, while the Hearing Committee agrees with Bar Counsel that Respondent’s actions were not designed to benefit...we cannot agree that the actions could be pecuniary in nature. Respondent did not profit from his crime. The stolen items had a nominal value and the evidence shows that Respondent did not need the items for personal use. Therefore, Respondent’s actions, while dishonest, fraudulent and immoral, do not cross over into the realm of moral turpitude.
The accused had engaged in a scheme to fraudulently return items to Target and was convicted of theft of property valued at less than $500. (Mike Frisch)