Tuesday, February 16, 2010

A Definite Suspension

The South Carolina Supreme Court imposed a definite suspension of one year in a matter involving improper real estate closings and a conflict of interest in representing a driver and passenger (who are cousins) in an automobile collision. As to the conflict and related neglect:

We find that Respondent's actions in the Longwood matter violated the rules on conflicts of interest as well as the rules on competence and diligence.  Longwood [the passenger] and Sumter [the driver] made a full disclosure to Respondent regarding the accident.  Respondent should have informed Sumter and Longwood of the potential conflict of interest before he agreed to represent both of them.  Respondent clearly neglected this matter by filing Longwood's suit after the statute of limitations had expired and by filing it against Sumter in direct contravention to Longwood's instructions.  We give no credence to Respondent's assertion that Longwood refused to come to his office to review the pleadings, for it was Respondent's responsibility to  ensure that his client review the pleadings before the eve of the expiration of the statute of limitations. 

The court rejected one of the charges in the real estate closings but found violations in other matters:

...we find that Respondent violated the Rules of Professional Conduct in the Cantey closing.  We agree with the Panel's findings that Respondent allowed a non-lawyer to conduct a real estate closing and sign his name to a HUD statement.  We find that Respondent's and Stallings' [his secretary and sister] assertion regarding a prior "dry closing" lacks credibility.  Neither Respondent nor Stallings mentioned a dry closing in their testimony at the Notice to Appear hearing.  Cantey unequivocally testified that she went to Respondent's office only one time, Respondent was not present, and there had been no dry closing.  Regardless of any purported dry closing, Respondent allowed Stallings to notarize a document indicating that Respondent was present on October 2, when in fact, he was not. 

In our view, the Price/Wright matter is extremely troubling and is the most serious of the allegations.  As stated above, we find Cantey's testimony that Respondent was not present at her closing is credible.  Thus, Respondent would likely not be in a position to identify Amos Price.  Moreover, one could reasonably question why Wright would provide false testimony, before the Panel and at his guilty plea, by asserting that he brought pre-signed documents to the closing.  In both proceedings, Wright's testimony was consistent, and he openly admitted his actions.  Wright did not shift blame or implicate anyone but himself and consistently maintained that neither Respondent nor Stallings was involved in or aware of his fraudulent scheme to assume Amos Price's identity. In our view, Stallings' and Respondent's version of events is problematic, yet we must examine the evidence through the lens of the clear and convincing standard. 

Applying this heightened standard, we find that ODC did not meet its burden of proving the allegation that Respondent actively participated in this fraudulent scheme.  Neither Respondent nor Stallings was ever indicted for any offense arising out of this matter, and the only evidence ODC presented in support of this allegation was Wright's testimony.  In our view, this does not rise to a level of clear and convincing evidence that Respondent was an active participant in the fraud and forgeries.  While we do not overlook or disregard the undisputed fact that serious criminal conduct occurred in Respondent's office, we do not find that ODC established Respondent’s knowing participation in the fraudulent scheme.  We view Respondent’s conduct in line with his general slack and casual approach to real estate closings, perhaps explaining Wright's choice of Respondent as the closing attorney for his fraudulent scheme. 

Finally, we agree with the Panel's finding that the numerous inaccurate closing documents reflect Respondent's loose approach in the handling of real estate closings.  The HUD statements and disbursement sheets reflected incorrect, inaccurate, and sometimes missing important information.  This court takes real estate transactions very seriously, and we have consistently issued harsh sanctions against attorneys who do not conduct closings in accordance with proper procedures. (citations omitted) Moreover, not only did Respondent's files indicate failure to follow proper closing procedures, they also reflected failure to properly maintain his trust account.  In our view, this evidence establishes a consistent pattern of negligence, inattention, failure to supervise, and an overall cavalier attitude and approach to real estate transactions, his client's interests, and the practice of law. 

As to sanction: 

We hold that a sanction of a one year definite suspension is warranted in light of Respondent's misconduct, especially his neglect in supervising real estate transactions.  In issuing this sanction, we especially considered the fact that serious criminal conduct was so easily perpetrated in his office while under his watch and control. (citations omitted)

Respondent has exhibited a pattern of a careless approach to real estate closings.  Accordingly, we suspend Respondent for one year effective the date of this opinion and direct Respondent to pay the costs of these proceedings.  We further order Respondent to participate in the LEAP program.

(Mike Frisch)


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