January 8, 2011
The Paperless Chase
A recent opinion of the District of Columbia Bar Legal Ethics Committee deals with obligations to maintain client files. The opinion summary:
As a general matter, there is no ethical prohibition against maintaining client records solely in electronic form, although there are some restrictions as to particular types of documents. Lawyers and clients may enter into reasonable agreements addressing how the client’s files will be maintained, how copies will be provided to the client if requested, and who will bear what costs associated with providing the files in a particular form; entering into such agreements is prudent and can help avoid misunderstandings. Assuming no such agreement was entered into prior to the termination of the relationship, however, a lawyer must comply with a reasonable request to convert electronic records to paper form. In most circumstances, a former client should bear the cost of converting to paper form any records that were properly maintained in electronic form. However, the lawyer may be required to bear the cost if (1) neither the former client nor substitute counsel (if any) can access the electronic records without undue cost or burden; and (2) the former client’s need for the records in paper form outweighs the burden on the lawyer of furnishing paper copies. Whether (1) a request for electronic files to be converted to paper form is reasonable and (2) the former client’s need for the files in paper form outweighs the lawyer’s burden of providing them (such that the lawyer should bear the cost) should be considered both from the standpoint of a reasonable client and a reasonable lawyer and should take into account the technological sophistication and resources of the former client.
January 7, 2011
Great Strides Not Sufficient To Secure Reinstatement
The Mississippi Supreme Court has denied the second reinstatement petition of an attorney disbarred in 2004. The petitioner was convicted in federal court on charges that he had paid a deputy sheriff to absent himself as a witness in five DUI cases.
The court found that the attorney had made "great strides" in rehabilitation but had falsely answered a question concerning expunged matters. The favorable post-disbarment activities are set forth in the opinion:
[The petitioner] now details more of his civic, church, and community involvement: (1) joining his son and the Boy Scouts on a one-week,thirty-mile hike along the Appalachian Trail and on a week-long summer camp; (2) serving as a member of the Nutrition Board for the Gulfport City Schools; (3) serving on the Board of Directors of the Orange Grove-Lyman Chamber of Commerce; (4) volunteering for the Korean MIA Project, which helps connect the remains of lost servicemen with their families or hometowns; (5) participating in six community-theater productions; (6) volunteering regularly to clean up beaches in Harrison County; (7) serving as a poll worker during the 2008 general election; (8) serving actively in the Harrison County Republican Women; (9)
helping sponsor the Heritage Festival in Laurel, which celebrates Celtic music and heritage;
(10) spearheading efforts to clean up a cemetery in Tallahatchie County where several of
[his] distant relatives are buried; (11) re-indexing a seventy-year-old Works Project
Administration cookbook and a fifty-year-old Wesleyan Guild cookbook; and finally (12)
serving as a member of the Sons of Confederate Veterans
A dissent would hold that the asserted basis for the denial was improper because the Bar has no right under law to inquire about expunged matters. (Mike Frisch)
January 6, 2011
A Louisiana hearing committee has recommended disbarment in a one-page report that notes that the accused attorney and the Bar had entered into a stipulation that the attorney violated ten ethics rules over a period of eight to ten years. He had played "fast and loose" with client funds, failed to do work despite payment and lied under oath.
The attorney sought mitigation for the lapses because of "marital problems." The hearing committee noted that the ethical violations took place both before and after the marital problems and:
...if going through a divorce was an excuse to violate ethics rules roughly fifty percent of the population would at one time or another have that problem.
A Louisiana hearing committe has recommended permanent disbarment of an attorney who had "pleaded guilty to accepting bribes in exchange for fixing criminal matters filed and pending in Baton Rouge City Court..." The attorney was a senior prosecutor who failed to answer the bar disciplinary charges adjudicated by the hearing committee.
NBC33tv.com reports that the arrest and conviction was part of an investigation dubbed Operation Illegal Motion. (Mike Frisch)
One License Left Standing
An attorney who was disbarred in Delaware and then reciprocally disbarred in Pennsylvania has been sanctioned with a public censure by the New Jersey Disciplinary Review Board. The attorney had defaulted on the Delaware charges, which involved engaing in and assisting in unauthorized practice and related violations. The attorney was never admitted to practice in Delaware.
Notwithstanding the attorney's failure to report the Delaware and Pennsylvania disciplinary actions, the Board concluded that "substantially different discipline" would be imposed for comparable conduct in New Jersey. The attorney was inexperienced at the time of the misconduct. Futher, the Board gave "great weight" to the finding of the Delaware disciplinary board that the conduct had been negligent. The Board noted that the Delaware Supreme Court disagreed with its own board's negligence finding.
You don't see many cases where an original disbarment turns into a reciprocal censure. This one did not when Pennsylvania considered the appropriate disposition.
Also note that it is possible to get disbarred in a jurisdiction that has not admitted the attorney to practice. (Mike Frisch)
If I Were A Carpenter
The Illinois Administrator has filed an amended complaint in a case where an attorney is alleged to have made a false statement to obtain health care benefits. The attorney was retained by a carpentry and siding contractor which was a party to a collective bargaining agreement with the United Brotherhood of Carpenters and Joiners (the "UBC"). He applied for membership in the union.
According to the complaint:
Respondent’s UBC membership application and union membership...were false and misleading, and Respondent knew or reasonably should have known that they were false and misleading, because Respondent was not a carpenter or any craftsman listed in the craft section of the UBC membership application and Respondent only completed the UBC membership application and maintained his union membership in order to receive union health and pension benefits to which he was not entitled.
Respondent applied for UBC membership and maintained UBC membership from January 6, 2004, to December 12, 2008, in order to receive union health and pension benefits to which he was not entitled because he was not a member of or employed in a craft qualifying for union membership and benefits.
January 5, 2011
After the settlement of a divorce case, the ex-wife sued the ex-husband for fraud based on the submission of "deceptive, misleading, and incomplete information" to an independent appraiser who had valued the husband's business. The matter was settled while a judgment in favor of the wife was on appeal.
The wife then sued the husband's attorneys on the same claims. The district court held that the attorneys were in privity with their client for purposes of res judicata and granted summary judgment to the defendants.
The Minnesota Supreme Court agreed with the Court of Appeals that there are issues of material fact that preclude summary judgment. The court rejected the contention that the attorneys and client were in privity because they were not so identified in interest as to represent the same legal right. The court also rejected the principal-agent analogy as a basis to establish privity. While attorney and client have a common interest in achieving a favorable outcome, "that level of common interest...is not the kind of estate, blood, or legal interest that would give rise to privity for purposes of the fraud action." (Mike Frisch)
Four Divorce Matters
From the January 2011 California Bar Journal:
[An attorney] was suspended for three years, stayed, placed on five years of probation with a two-year actual suspension and until she proves her rehabilitation, and she was ordered to take the MPRE and comply with rule 9.20 of the California Rules of Court. The order took effect May 27, 2010.
[The attorney] stipulated to 24 counts of misconduct in four consolidated divorce matters.
In the first, she represented the father of a minor. The mother made plane reservations for the child to visit her in Hawaii during a break from school, but [the attorney] cancelled the reservations by impersonating the mother on the phone. Because the mother had faxed the ticket information to [her], she knew the confirmation number and other flight details.
When the father appeared at the airport to put his son on the plane, he learned the ticket was cancelled. When the mother tried to find out what happened, [the attorney] wrote to the son’s lawyer and implied the mother cancelled the flight. That lawyer filed an order to show cause against the father because she was able to trace the phone call to the airlines to [the attorney's] office.
While testifying at an unrelated matter before the Commission on Judicial Performance, [the attorney] was questioned about the airlines matter and omitted material information about her conduct. She stipulated to six acts of misconduct stemming from the matter: three counts of moral turpitude, disobeying a court order, failing to maintain respect to the court and failing to perform legal services competently.
She represented the husband in another divorce matter, and agreed to offset part of his legal fees in exchange for construction work on her house. The client left his tools, valued at about $14,000, in her garage, although she disputes their value. He eventually fired her, hired a new lawyer and asked for the return of the tools. [The attorney] claimed the work was defective; the client’s new lawyer claimed she was keeping the tools in order to gain an advantage in the dispute over the construction work. She kept the tools for more than five years.
The client was ordered by the Contractors State Licensing Board to pay [the attorney] more than $19,000 for construction defects and for reimbursement for an entertainment center. Three years later, a court confirmed the award, the client paid [her] but she did not return the tools.
He eventually sued [the attorney], who, during the course of the litigation, served him with a Judicial Council form that she altered. The former client was left with the mistaken impression that he had to adhere to shorter timelines to provide discovery. He asked [her] again to provide an inventory of the tools, but she did not do so. During negotiations in the lawsuit, she returned tools to the contractor, who questioned whether she returned all the tools and whether they were the same tools he left at her home.
She stipulated to six more counts of misconduct: two acts of moral turpitude, failing to account for or return client property and failing to obtain her client’s written consent to the terms of the offset agreement. She also entered into a business transaction with a client without satisfying the necessary requirements.
[The attorney] committed an act of moral turpitude in another matter by submitting to the court a pleading purportedly signed by her client. In fact, the client did not sign the document. And in the fourth matter, she communicated with the opposing party and his employee; the opposing party was represented by a lawyer.
In mitigation, she cooperated with the bar’s investigation.
January 4, 2011
Be Not Afraid To Run For Office
The Montana Supreme Court has concluded that a public reprimand recommended by the Judicial Standards Commission cannot be imposed against the justice of the peace of Big Horn County (Leroy Not Afraid ), who ran for the tribal office of Crow Tribal Chairman. The tribal position is not an "elective public office" and thus the candidacy did not implicate the Code of Judicial Conduct, which prohibits a sitting judge from seeking an elective office.
Justice Nelson concurred in the result but "strongly disagree[d] with the Court's rationale." (Mike Frisch)
"A Triable Factual Issue"
The New York Appellate Division for the First Judicial Department has held that summmary judgment was improperly granted to a law firm suing for unpaid fees:
Summary judgment was improperly granted on plaintiff's account stated cause of action. Plaintiff alleges that defendants retained and did not object to a billing statement that was issued only one day before plaintiff brought a prior action on the claims asserted in this action. According to the instant complaint, that was the only statement defendants allegedly retained without objection. The prior action was dismissed on defendants' cross motion for summary judgment. In making their cross motion, defendants challenged, among other things, the amount allegedly due for plaintiff's services. Given this history, there is, to say the least, a triable factual issue as to whether defendants held the statement without objection.
A disbarment reported by the California Bar Journal:
Controversial civil rights attorney STEPHEN G. YAGMAN [#69737], known for his longtime crusade against police brutality, was summarily disbarred Dec. 22, 2010. Yagman, 66, had been on interim suspension since Aug. 23, 2007, following federal convictions of one count each for tax evasion and bankruptcy fraud and 17 counts of money laundering. The State Bar Court’s review department found that because bankruptcy fraud is both a felony and involves moral turpitude, it meets the criteria for summary disbarment. It rejected Yagman’s argument that the crime does not constitute moral turpitude.
Yagman was convicted of attempting to avoid payment of more than $100,000 in federal taxes and sentenced to three years in federal prison. His sentencing hearing took three days, and the prosecutors’ request for a nine-year sentence was reduced to three, as well as two additional years of supervised release after the prison term.
Prosecutors said Yagman transferred his Venice Beach home into his girlfriend’s name, hid money by depositing his income in her bank account and declared bankruptcy in New York without disclosing his California assets.
The indictment alleged that Yagman filed federal income tax returns for 1994 through 1997, but paid only a small portion of the taxes that, according to his own returns, were owed and he accumulated federal income tax liabilities totaling more than $158,000. He also failed to pay significant amounts of federal payroll taxes owed during that time by his then-law firm, Yagman & Yagman, P.C.
As part of a scheme to conceal his assets and impede IRS collection efforts, prosecutors said Yagman deposited hundreds of thousands of dollars into various bank and brokerage accounts in his girlfriend's name to disguise his personal assets including approximately $776,000 that was transferred to him by relatives. He used the accounts to pay for personal purchases and to conduct the majority of his personal financial transactions. When he filed both personal and corporate bankruptcy in 1999, prosecutors said he made numerous misrepresentations and omissions.
Yagman claimed he was singled out for prosecution in retaliation for his long history of battles with the government, who he often accused of failing to uphold civil rights laws. His lawyer, Barry Tarlow, argued during the trial that Yagman transferred the deed of his house to his girlfriend in order to give her a sense of security.
Prosecutors denied that Yagman was targeted for his civil rights battles and Judge Stephen V. Wilson, who presided over the 2007 trial, said he became convinced of Yagman’s guilt and “the jury was right.” Wilson called Yagman’s testimony “transparently untrue in so many areas.”
An appeals court upheld the conviction.
In 2002, Yagman was part of a group who filed court challenges to the detention of terror suspects at Guantanamo Bay. In the late 1990s, he was deputized in Idaho as a special prosecutor and pursued charges against the FBI sniper who killed the wife of white separatist Randy Weaver in the Ruby Ridge shootings. He represented victims of alleged police brutality in Los Angeles beginning in 1980 and often targeted the LAPD’s Special Investigations Section (SIS), an elite cadre that coordinated surveillance of criminal suspects. Yagman characterized the group as a death squad.
He also called the late former LAPD chief Daryl Gates “the personification of evil,” and said U.S. District Court Judge Manuel Real, who fined him $250,000 for his courtroom behavior, suffered from “mental disorders.” (The fine was later dismissed on appeal.) Yagman compared the judge to the head of the Spanish Inquisition and later filed a complaint against Real, who was publicly reprimanded by a judicial discipline panel in 2006 in an unrelated case.
After calling U.S. District Judge William Keller an anti-Semitic bully, Yagman was suspended from practice before the federal court for two years. He successfully appealed that move as well, claiming that Real had a role in instigating the disciplinary proceedings.
Yagman also was twice suspended by the State Bar, in 1998 and 1989, for charging unconscionable fees and being “aggressive, hostile and forceful” with his clients.
January 3, 2011
"Badges Of Fraud"
The January 2011 online edition of the California Bar Journal reports an order of discipline:
[An attorney] was suspended for two years, stayed, placed on two years of probation with an actual 90-day suspension and he was ordered to take the MPRE and comply with rule 9.20 of the California Rules of Court. The order took effect May 30, 2010.
[The attorney's] former clients won a judgment against him of almost $425,000 in a case involving fraud, breach of fiduciary duties and legal malpractice. Around the same time, he was going through a divorce and structured a settlement that transferred cash assets of more than $1 million to his wife in exchange for keeping his pension fund, which he considered exempt from judgment. When he told his former clients he did not have the assets to pay the judgment, they filed an involuntary bankruptcy petition against him.
Ultimately, a bankruptcy appellate panel found that transfer of assets was fraudulent, made to avoid collection of the $425,000 judgment. The panel also found circumstantial evidence of “badges of fraud,” including facts that the transfer occurred after a substantial debt was incurred and it rendered [him] insolvent.
[The attorney] stipulated that his actions involved moral turpitude and he failed to report the judgment against him to the State Bar, as required.
In mitigation, [he] has no prior discipline record.
January 2, 2011
Posted by Jeff Lipshaw
I'm watching the Colts-Titans game, and I have now seen two lawyers with whom I've worked in the past. The buff referee Ed Hochuli is a Phoenix, Arizona lawyer who did some products liability litigation for us when I was the general counsel of Great Lakes Chemical. Either the field judge or the side judge is my long-time friend, Ron Torbert, a Harvard Law School educated lawyer, my former associate at Dykema Gossett in Detroit, the general counsel of our safety restraint business at AlliedSignal, and now the general counsel of Barton-Malow, a big construction company in Michigan. Ron has spent the last twenty or more years working his way up the referee chain, from high school to Division II to the MAC to the Big Ten, and now he's an NFL official. Very cool. Congrats, Ron.