Saturday, May 23, 2009

Agreed Sanction

A Virginia lawyer agreed to a 30 month suspension for mishandling two client matters. One involved an accident case; the other a divorce. There was an agreed upon finding of dishonesty in both matters. According to the order, the attorney admitted to the bar's investigator that he had used marijuana on a recreational basis during the time period of the misconduct. (Mike Frisch)

May 23, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Friday, May 22, 2009

False Positive Claim Rejected

An Illinois hearing board has recommended a suspension for 18 months and until further court order in a case involving a conviction for cocaine possession and subsequent positive test for cocaine as revealed by a court-ordered urine test. The attorney had contended that he was subject to false positives on cocaine tests, a contention refuted by the bar's medical expert:

It was Dr. Henry’s opinion, given the totality of the circumstances, that Respondent’s explanation for the positive toxicology screens was not plausible. Although Dr. Henry acknowledged that the elevated lysozyme explanation was theoretically possible, if such were the case you would expect all of Respondent’s urine screens to be positive. With regard to Respondent’s explanation for the six negative screens, Dr. Henry indicated that while this also was theoretically possible, he believed that it was unlikely that someone would give blood six times in one year and that each of those instances would coincide with a negative drug test result. Dr. Henry also noted Respondent’s inability to provide documentation to verify that he had given blood on these six occasions. Dr. Henry said that given the ramifications that would flow from the positive test results, including the ARDC matters and possible incarceration in the criminal case, he expected that Respondent would have been able to provide documentation if in fact he had given blood six times during this time period.

In arriving at his opinion, Dr. Henry also considered the other circumstances in the case. This included the fact that Respondent tested positive for the same drug that was found in the car he was driving and his inability to identify the owner or account for the crack pipe that was also discovered in the vehicle. Putting all of this information together, Dr. Henry’s opinion was that Respondent was cocaine dependent and that the positive drug tests returned during the period of supervision were the result of him self-administering cocaine. 

(Mike Frisch)

May 22, 2009 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Continued Indifference To The Rule Of Law

The Nebraska Supreme Court disbarred an attorney for misconduct involving a federal criminal conviction as well as a series of client-related ethical violations. The conviction involved a series of $9,000 bank deposits in cash that the lawyer received as investment in an Internet business. The lawyer pleaded guilty to structuring the deposits to avoid reporting obligations. The court here did not buy his argument that the offense was "technical" or strict liability; rather, it was a knowing violation of well-established law. The court also was concerned that, after his suspension, the attorney engaged in unauthorized practice: his "failure to investigate the legality of his acting as a debt collector illustrates his continued indifference to the rule of law." (Mike Frisch)

May 22, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Brothers In Misconduct

The New York Appellate Division for the Third Judicial Department suspended two brothers for one year and until further court order but stayed the suspensions on completion of six credit hours in legal ethics and professionalism. The attorneys "may apply to terminate the suspensions after one year" on a showing that they have completed the CLE requirements set forth in the court's opinion.

The brothers were admitted in New York in 1961 and 1964. The referee had sustained charges of conversion of estate funds and distribution of advanced executors' commissions to themselves without court approval. The misconduct involved the administration of their uncle's estate and trusts created by his will. The court's opinion reflects findings that the attorneys had accelerated distribution of trust funds to themselves and a cousin, contrary to the express terms of the uncle's will. (Mike Frisch)

May 22, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Thursday, May 21, 2009

Pension Answer Book Not Firm Asset

The New York Appellate Division for the First Judicial Department affirmed a judgment on behalf of a departing lawyer against his former law firm but remanded for a recalculation of damages. The court held:

The finding that respondents were guilty of oppressive actions against petitioner was substantiated by corporate tax records of respondent law firm reflecting the uncompensated disgorgement of petitioner's 39 percent equity interest in the firm during his last year as a member.

The finding as to the fair value of petitioner's equity share in the firm was substantiated by the evidence offered by petitioner's expert appraiser, which included his report, with supporting documentation, and testimony. The asset values recommended by the expert were based on a cost/asset analysis, and the basis for the final values proposed by the expert can be gleaned from the record. Respondents elected not to submit a counter appraisal.

However, petitioner's expert's inclusion of the Pension Answer Book, that was co-written by Stephen J. Krass, one of the respondent partners, prior to formation of the firm, as an asset of the firm is unsupported by the record. The Referee found that while, during their 1984 discussion about merging their firms and forming a new law firm, petitioner and Mr. Krass discussed the book becoming an asset of the firm, that was never reflected in the firm's financial records. Krass not only owned and controlled the royalties paid on the book, and was taxed individually for the book's earnings but, although the royalties were listed on internal firm documents as a line of fee income, the firm's distributions to him were reduced by the amount of royalties he received. The fact that several of the firm's lawyers contributed legal work (on firm time) to subsequent revisions of the book, which was deemed a marketing tool for the firm, does not render it a firm asset.

Additional cash assets of the firm that allegedly had been earmarked for bonus compensation and other incentive payments to be distributed within a month after the filing of the petition on November 20, 2001 were properly treated as assets of the firm and subject to valuation. These cash assets remained within the firm's control to dispose of as necessary.

(Mike Frisch)

May 21, 2009 in Economics | Permalink | Comments (0) | TrackBack (0)

Corporate CEO Not A Vulnerable Client

A very interesting bar discipline case from Florida has resulted in the Supreme Court's rejection of the referee's proposed admonishment in favor of a suspension of 91 days. The attorney was charged with misconduct in two counts involving the same client, the CEO of publicly traded corporations who had defrauded investors of over $20 million and ended up with a 20 year prison term.The attorney represented the client in an SEC investigation but not in connection with criminal charges. When criminal charges were imminent, the attorney agreed to succeed the client corporate CEO and thereafter had acted in his self-interest and represented conflicting interests.

The court sustained findings of misconduct involving serious conflicts of interest in the lawyer's assuming corporate authority after the client was locked up. The court also sustained the finding that the attorney had not breached the duty of confidentiality. He had testified on the client's behalf at a bond hearing that the client was not a flight risk. He then wrote a letter to the prosecutor to advise that he had believed the testimony when given but later had reason to change his mind. He testified at the bar proceedings that he thought the client would flee when he saw the "look in his eyes." The referee found that the letter did not disclose confidential information.

The court discusses the various aggravating and mitigating factors that drive the determination of the appropriate sanction. The court rejected the bar's contention that the client was "vulnerable" because he was locked up. Rather, the client was a sophisticated con man.However, the fact that other sanctions had been visited on the attorney was not a legitimate mitigating factor. The bar had asked for a suspension of at least 60 days. (Mike Frisch)

May 21, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Insufficient Evidence Of Moral Change

The Minnesota Supreme Court denied a petition for reinstatement of an attorney who had been indefinitely suspended in 2007. The petitioner had expressed an interest in joining his son in law's practice. The court noted that he had been admonished on five occasions, reprimanded once and placed on probation prior to the suspension. Finding the character testimony and reformed practices evidence to be insufficient, the court was unpersuaded that he had "undergone the requisite moral change for reinstatement or recognizes that his conduct was wrong." (Mike Frisch)

May 21, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Snow Tubers Not Skiers

A snow tuber who had brought a negligence action against a ski area operator was not time-barred under the then-governing statute of limitations, held the Vermont Supreme Court. The alleged injuries had occurred on a run used exclusively for snow tubing activities. The court held that the prior statute of limitations (which also contained immunity provisions and notice requirements, as well as a two year statute of limitations) for actions brought by "skiers" did not apply to snow tubers. The Vermont legislature has now amended the provision to include snow tubing, snow boarding and snow shoeing. (Mike Frisch)

May 21, 2009 in Current Affairs | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 20, 2009

No Funds Left Behind

The Illinois ARDC Administrator has filed charges against an attorney for conversion of trust funds proceeds that the attorney, in his capacity of public administrator of estates. The funds were to be held for a minor beneficiary until he reached the age of 25. The charges allege that, prior to the birthday, the lawyer had retired and movd to Virginia without notice to the beneficiary. Also, it is alleged that the accused lawyer had long since spent the entrusted funds (over $30,000) on himself. (Mike Frisch)

May 20, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Let's Do Lunch

The web page of the Tennessee Board of Professional Responsibility reports a public censure imposed on an attorney for disruptive courtroom behavior. The incident that led to discipline was the subject of a Tennessee Court of Appeals decision affirming a finding of criminal comtempt. The attorney had run for the position of juvenile court judge but lost the Democratic primary. The newly-elected judge removed the attorney from three pending cases but the attorney appeared in one case unaware that her appointment had been vacated in that matter.

The lawyer appeared and got into a tiff with the judge, who did not feel that recusal was appropriate because they had not been opponents in the general election (the judge defeated the candidate who had won the Democratic primary). The contempt was predicated on the lawyer's questioning the judge's authority and then "making personal comments about lunch and being a gracious winner and...once again questioned the court's authority." The court noted:

...while [the attorney's] intent at the beginning of her conversation with [the judge] was to help her client's position, at some point during the conversation she began asserting a vindication of her own position, especially when she questioned the judge's experience in Juvenile Court, inquired into the judge's motivation behind her refusal to go to lunch, and impugned the judge's character with comments about whether she was a "gracious winner." The exchange became so heated that a bystander litigant described [her] conduct as belligerent. The audio demonstrates that [she] repeatedly raised her voice to talk over the judge, not allowing the judge to explain or accepting the given explanation.

(Mike Frisch)

May 20, 2009 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Admission Granted

The Louisiana Supreme Court unconditionally admitted a bar applicant who was a member of the Oklahoma Bar. The applicant had been initially denied permission to sit for the bar exam because of a negative reference from an Oklahoma attorney with whom the applicant had been associated. The applicant was later given permission to sit and had passed. After a character and fitness proceeding, the court determined that admission was appropriate. A dissent would grant conditional admission. (Mike Frisch)

May 20, 2009 in Professional Responsibility | Permalink | Comments (1) | TrackBack (0)

Tuesday, May 19, 2009

Tax Charges Lead To Interim Suspension

A report from WIS10 Columbia, South Carolina:

A Columbia attorney has been arrested on tax charges.

According to the South Carolina Department of Revenue, investigators arrested Frank R. Ellerbe, III, 51, and charged him with five counts of failing to file state tax returns in tax years 2001 through 2002 and 2005 through 2007. 

Department of Revenue investigators say Ellerbe earned income in amounts that exceeded the requirement to file. The tax owed for the period is $9,958.  

Ellerbe faces up to five years in jail and fines of up to $50,000 if convicted of the charges.

Ellerbe was being held at the Alvin S. Glenn Detention Center pending a bond hearing.

The South Carolina Supreme Court promptly suspended the attorney on an interim basis on motion of disciplinary counsel based on the charges.

The name is a well known one in South Carolina, one carried by a former Washington Senators baseball player who was the only son of a state governor (also of the same name) to play major league baseball. (Mike Frisch)

May 19, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Admission Denied

The Louisiana Supreme Court declined to certify for admission an applicant who had passed the essay portion of the bar exam. The character and fitness issues involved the applicant's failure to disclose a charge and warrant issued for bad checks, failure to comply with requests for information on credit delinquencies, an August 2005 arrest for DWI and an August 2007 arrest on charges of cocaine possession and illegal carrying of a weapon. (Mike Frisch)

May 19, 2009 in Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Determination Voided By Unauthorized Practice

From the web page of the North Dakota Supreme Court, reporting the holding of a case decided yesterday:

Pro hac vice admission is required for nonresident attorneys who engage in the practice of law by appearing, either in person, by signing pleadings, or by being designated as counsel in actions filed in administrative agencies, and a motion for pro hac vice admission must be filed no later than 45 days after the service of the pleading, motion, or other paper.

A hearing officer includes an agency head when presiding in an administrative proceeding, or any other person designated to preside in an administrative proceeding.

The case involved a workers compensation claim. The corporate defendant was represented by lawyers licensed only in Ohio. The lawyers had sought and obtained reconsideration of a prior award based on the contention that the plaintiff was an independent contractor. Here, the court found that the conclusion favorable to the corporation was void because no North Dakota lawyer had entered an appearance for the corporation. 

Under the plain language of Admission to Practice R. 3, pro hac vice admission for Plewacki and Stemen [the Ohio lawyers] was required because they prepared a request for reconsideration, were designated as counsel for Carlson's claim, and filed a legal brief in the administrative proceeding. Although N.D.R. Prof. Conduct 5.5(b)(3) provided Plewacki and Stemen with a safe harbor to appear in prepatory matters before pro hac vice admission so long as they reasonably expected to be authorized to be admitted pro hac vice, we decline to equate the request for reconsideration and the informal internal procedures before WSI to prepatory work. The definition of the practice of law includes a wide variety of services besides formal administrative proceedings and involves more than providing legal services in an adjudicatory proceeding in an administrative agency. See Strong, 23 S.W.3d at 239 (preparing and filing application for review before Commission as well as appearing on claimant's behalf at hearing constitute practice of law). Rather, Admission to Practice R. 3, when read together with N.D.R. Prof. Conduct 5.5, plainly says pro hac vice admission is required for nonresident attorneys who engage in the practice of law by appearing, either in person, by signing pleadings, or by being designated as counsel in actions filed in administrative agencies. That language is not limited to formal adjudicatory proceedings.

The court's decision is linked here. (Mike Frisch)

May 19, 2009 in The Practice | Permalink | Comments (0) | TrackBack (0)

Monday, May 18, 2009

Abuse Of Vulnerable Clients

A recently filed hearing officer report and recommendation from Arizona tells a truly horrifying tale of abuse of two vulnerable clients by an attorney. In one matter, the lawyer recruited another lawyer to do the real work while he billed for work not discernible to the client or co-counsel. He then deposited the settlement proceeds that had been secured by the other lawyer's efforts and took a contingency fee from the proceeds without notice to or consent of the client.

The hearing officer summarizes the findings:

Mr. Sikora [a client] was terminally ill from the outset of Respondent's representation. On the day Mr. Sikora died, Respondent shamelessly urged Mrs. Sikora to continue on with a case that she had concerns about, and to continue to pay fees she could not afford, to avoid disrespect to her husband's memory. While she endured extremely trying personal circumstances, Respondent continually urged her to borrow money from relatives and friends, to continue to pay Respondent's fees.

Mr. Derczo, an 83 year-old bipolar man, blind in one eye, with hearing problems, with no local family, was vulnerable as well. Respondent was in possession of documents from the Veteran's Administration that questioned Mr. Derczo's mental ability to handle his property and affairs. Despite Respondent's knowledge...he obtained Mr. Derczo's property by the power of attorney and will he prepared for Mr. Derczo and directed him to sign.

I must admit to a bit of surprise as to proposed sanction: six months and one day suspension, two years probation if reinstated, and restitution to Mrs. Sikora of amounts in excess of $200,000 in legal fees. Even though this sanction would trigger a fitness hearing prior to reinstatement, this kind of client abuse should be condemned in the strongest possible manner. (Mike Frisch)

May 18, 2009 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Racial Epithets, Lack Of Candor Result In Denial Of Bar Admission

The Louisiana Supreme Court denied bar admission to an attorney licensed in Minnesota. The applicant had "used racial epithets toward two employees of DePaul University College of Law" in an incident that had taken place in 2006. He "falsely denied making the offensive statements" in a proceeding brought under the school's anti-discrimination and harassment policy.

There was also a candor issue: "it was revealed that [he] failed to disclose several prior arrests and criminal convictions when he applied to law school in 1995. [He] acknowledged during the hearing that these omissions were knowingly and intentionally made because he feared he would not be admitted to law school in the face of an accurate disclosure. Moreover, [he] acknowledged that within days after submitting his law school application he was arrested and charged with DWI; nevertheless, he did not update his application, although he had signed an acknowledgement of his obligation to do so. [He] finally updated his law school application in 1996, at the end of his first year of law school, but the information was untruthful and incomplete." (Mike Frisch)

May 18, 2009 | Permalink | Comments (0) | TrackBack (0)

Court Disbars Lawyer Who Did Not Present Evidence

The Georgia Supreme Court disbarred an attorney who had been the subject of a bar investigation initiated when three checks written on his trust account bounced. He explained that the bounced checks were the result of thefts by an employee, but did not thereafter did not participate in the proceedings. He was served by publication and had earlier acknowleged that he was aware of the proceedings. The court did not consider his explanation because he had not presented evidence at the bar hearing. (Mike Frisch)

May 18, 2009 | Permalink | Comments (0) | TrackBack (0)