February 25, 2011
No Suspension For Escrow Account Violations
The South Carolina Supreme Court has imposed a public reprimand with terms on an attorney for failure to properly administer his escrow account. The facts:
Until 2006, respondent's secretary conducted monthly reconciliations of his trust account. In 2006, the secretary left the law firm and, at that time, reported to respondent that she had been unable to balance his books for some period of time. Respondent stopped his monthly reconciliations at that time.
Between December 2008 and August 2009, respondent's paralegal, Ann Pressley, issued twenty-nine checks payable to herself for a total of $117,000.00 on respondent's trust account. Ms. Pressley issued the checks by either forging respondent's signature on the checks or signing her name to others. Ms. Pressley was not entitled to these funds and respondent did not authorize issuance of these checks. Respondent had not given Ms. Pressley signatory authority on the account; however, he did delegate the preparation of trust account checks to her and allowed her to sign his name on those checks.
Respondent did not discover Ms. Pressley's misappropriation because he did not review his monthly bank statements or conduct monthly reconciliations of his trust account. On three occasions between April and July 2009, respondent did ask Ms. Pressley for his bank statements, but she did not comply with his request.
In August 2009, respondent discovered the defalcation when he obtained copies of his bank statements and checks. Ms. Pressley had been able to remove funds from the trust account without detection because she did not issue checks to clients and third parties who were entitled to funds from the account. If respondent had conducted monthly reconciliations, he would have discovered a significant number of outstanding checks, some more than four years old.
In August 2009, a warrant was issued for Ms. Pressley's arrest in connection with the checks drawn on respondent's trust account. Respondent fully cooperated with law enforcement in the investigation and prosecution of Ms. Pressley. Respondent also retained an outside accountant to reconcile his account and to determine the extent of the misappropriation. Further, he replaced his clients' funds with personal funds, and he opened a new trust account and made arrangements with his bank to insure that outstanding checks were paid from the new account. Respondent reissued checks to replace outstanding checks that had not been delivered. He self-reported this matter to ODC in January 2010.
Respondent admits he violated other provisions of the Court's rules. In particular, he admits he failed to adequately account for law firm funds maintained on deposit in his trust account to cover bank charges and fees, resulting in overdrafts to that subaccount. Further, he did not prepare settlement statements on all of his contingency cases in violation of Rule 1.5, Rule 407, SCACR. Moreover, respondent's firm had a practice of disbursing checks to clients and to his firm prior to actually depositing and collecting the funds to cover the disbursements.
In addition, respondent issued at least two checks to cash. Although he has been able to document the purposes of those checks and demonstrate the funds were properly paid, respondent acknowledges he violated the provision of Rule 417, SCACR, that requires trust account checks be made payable to a named payee and not to cash. Finally, on two occasions following the opening of his new trust account, respondent inadvertently wrote checks from the wrong account, resulting in insufficient funds. The errors were corrected upon discovery and no client funds were lost.
...within six months of the date of this order, respondent shall complete the Legal Ethics and Practice Program Trust Account School and, for a period of one year from the date of this opinion, respondent shall submit his monthly trust account reconciliations to the Commission on Lawyer Conduct.
This was a consent disposition (and, in my view, a very favorable result for the attorney). There are places where inattention to an escrow account for a perod of years will get a lawyer suspended from practice. (MIke Frisch)
February 24, 2011
A Flawless But Unethical Plan
A Louisiana Hearing Committee has recommended a fully-stayed suspension of an attorney who had provided legal assistance to impeached federal judge Thomas Porteous and his spouse.
After failed attempts to achieve a non-bankruptcy workout for debt problems, the attorney advised his clients to file a chapter 13 petition by using the name "Ortous" and a post office box address. The committee found that the attorney concocted and "sold" the idea to the judge and his spouse in which they would "purposefully misspell their names" on the initial petition in order to
protect then Judge Porteous and his wife's identities from the press and the public. Apparently, during this time the local newspaper, the Times Picayune, would publish the names of all those persons who filed for bankruptcy. The data used to compile the information for these publications were solely the initial petitions.
According to the committee, "the plan worked flawlessly." The attorney sought to amend the next day with the correct names and address, claiming it was a typo. The trustee testified that he would have recommended a bad faith dismissal if he had known the truth.
The committee recommendation is for a downward departure from the baseline sanction of suspension for such misconduct. The attorney has no record of prior discipline.
WWLTV.com had this report (with video) of the attorney's testimony at the impeachment trial. (Mike Frisch)
Attorney Refunds Fees After Sex With Client
The Indiana Supreme Court has imposed a 30-day suspension of an attorney who had a sexual relationship with a client who he represented in a dissolution matter. After the sexual relationship began, the attorney refunded the fees paid by the client but continued to represent her for about two months. The court then granted his motion to withdraw his appearence. The client and her spouse reconciled and dismissed the dissolution action.
The attorney will be automatically reinstated after the suspension. He has no prior discipline and a history of pro bono and community service. (Mike Frisch)
Permanent Disbarment Sought For Former Assistant City And District Attorney
The Louisiana Attorney Disciplinary Board has recommended the permanent disbarment of a former New Orleans assistant city and district attorney convicted in federal court of "misusing his formal official positions...to commit sexual assaults and rapes of young women in the New Orleans area." The charges involved evidence from five victims who had been forcibly raped or sexually assaulted over a six year period from 1998 to 2004.
The attorney was sentenced to life in prison. As to sanction, the board concluded
By his actions, respondent has revealed he falls far short of the high ethical standard expected of attorneys in this state, particularly given his role as a public official when the acts were committed.
Lawyer Guardian Suspended
The web page of the Ohio Supreme Court reports:
The Supreme Court of Ohio has suspended the license of [a] Cleveland attorney...for two years, with the final 18 months of that term stayed on conditions, for mishandling and misappropriating funds belonging to an incompetent ward and failing to properly supervise her employees resulting in the filing of a false guardian account and forged affidavit.
The Court adopted findings by the Board of Commissioners on Grievances & Discipline that after being appointed successor guardian for an incompetent person by the Cuyahoga County Probate Court, and deducting her court-approved fees, [the attorney] held $16,972 of the ward’s remaining assets in her law office trust account. As part of stipulations by the parties in the case, [the attorney] admitted that over an ensuing six month period she wrote 25 checks payable to herself from the trust account that completely exhausted the client’s funds.
While [the attorney] subsequently restored the full amount of the ward’s funds to her trust account and made an additional deposit of $2,000 as compensation for interest that would have accrued on those funds, the Court agreed with the board’s conclusion that [her] conduct violated, among others, the state disciplinary rules that require an attorney to hold property of clients in a dedicated account separate from the lawyer’s own property, and that prohibit an attorney from engaging in conduct involving fraud, deceit, dishonesty or misrepresentation and conduct that adversely reflects on an attorney’s fitness to practice.
In staying the final 18 months of the suspension, the Court specified that [she] must be monitored by another attorney during that period, remain in compliance with an alcohol and mental health recovery contract with the Ohio Lawyers Assistance Program, and complete extra continuing legal education course work in law office management.
The court's opinion is linked here. The sanction determination was influenced by evidence that depression had contributed significantly to the misconduct. (Mike Frisch)
Failure To Continue Case Reversible Error
The Maryland Court of Appeals has held that a trial court committed reversible error in a medical malpractice case by refusing to grant a continuance sought for a religious observation that had been sought by the plaintiff and his counsel.
Shavous fell in the middle of the ten-day trial. Plaintiff and his counsel had on four occasions sought a continuance during the two days. Defense counsel objected and the court refused to grant any delay. Plaintiff rested prior to Shavous but the court allowed the defense (on behalf of the hospital) to go forward in the absence of the palintiff and his counsel. They returned in time to get the losing result.
There are two concurring opinions. (Mike Frisch)
February 23, 2011
A majority (the two attorneys) of a Louisiana Hearing Committee has recommended a fully-deferred three month suspension of an attorney who sued a number of law firms who had represented his client in connection with litigation in federal court that grew out of a 1995 explosion of a chemical plant in Bogalusa, Louisiana. The majority rejected a number of charges relaing to disobeying court orders and vexatious litigation.
After judgment was entered in the underlying litigation and his client was awarded attorneys' fees and costs, the attorney e-mailed opposing counsel that he would not provide his firm's statement, "At least, not until the next trial." Counsel responded: "in light of the rulings and verdict, haven't we had our last trial?" Rejoinder:
You Wish!!! No, I plan to make your firm a lot a money, not to mention mine. As long as they pay you sooner than my client. See you at the 5th--I hope you have that appeal bond ready.
The majority rejected charges based on the e-mail, as well as a number of other alleged rule violations.
The federal court had imposed sanctions of over $27,000 in attorneys' fees and costs against the respondent.
The lay member dissented (Bravo for not rubber-stamping the conclusions of the lawyers) and would find a number of additional violations.
The use of the word "vexation" to me means a lot, looking up the definition of this word is: the act of harassing. The use of the word "vex" one finds in its defintion: to agitate, to bring trouble, distress. So I do hope that the Disciplinary Board will find that respondent did violate the rules stated by Disciplinary Counsel.
The lay member would impose a period of actual suspension of a year and a day. (Mike Frisch)
Judge Reprimand For Improperly Issued Subpoenas
The Mississippi Supreme Court has approved the proposed public reprimand of a chancery court district chancellor who appointed a youth court public defender. After news of the appointment was released to the media, the judge asked members of the county board of supervisors to appear before him "to determine who was upset about the appointment and who had released the information to the media.
The judge had subpoenas issued to two supervisors without indicating a title or cause number. The judge granted a motion to quash the subpoenas he had issued, admitted he had failed to comply with the law, and "stated he was unconcerned that he had failed to comply."
The public reprimand will be read in open court "on the first day of the next term of that [county circuit] court in which a jury venire is present after this decsion becomes final." (Mike Frisch)
Traffic Accident Leads To Indefinite Suspension
From the web page of the Ohio Supreme Court:
The Supreme Court of Ohio today indefinitely suspended the law license of [a] Columbus attorney...for professional misconduct arising from her indictment for possession of cocaine and heroin and admitted addictions to alcohol and drugs. [The attorney] was arrested on the drug possession counts after being involved in a serious traffic accident when police investigating the crash found a used crack cocaine pipe and syringes containing heroin residue in her car.
In a 7-0 per curiam opinion, the Court adopted findings by the Board of Commissioners on Grievances & Discipline that [the attorney] had violated the state disciplinary rules that prohibit an attorney from engaging in an illegal act that reflects adversely on the lawyer’s honesty or trustworthiness, and engaging in conduct that adversely reflects on the lawyer’s fitness to practice law.
In setting the sanction for [her] misconduct, the Court noted that she had previously received administrative license suspensions for failure to comply with state attorney registration procedures and failure to complete required continuing legal education requirements. The Court adopted the board’s recommended sanction of an indefinite suspension and also specified that any future application for reinstatement of [her] license will be conditioned on proof that she has successfully completed treatment for substance abuse and is capable of returning to the competent, ethical and professional practice of law.
The opinion is linked here. (Mike Frisch)
February 22, 2011
Court Clerk Disbarred
The South Carolina Supreme Court has disbarred a former county court clerk as a result of a criminal conviction:
On July 30, 2009, while respondent was the Beaufort County Clerk of Court, she was indicted and charged with writing checks on two Clerk's Office accounts between August 2006 and April 2009 for uses unrelated to her role as a lawyer or duty as the Clerk of Court. The checks totaled $23,500. On September 21, 2009, following a trial, respondent was convicted of three counts of embezzlement of public funds less than $5,000, one count of embezzlement of public funds more than $5,000, and one count of misconduct in office.
Respondent was sentenced to five years on each of the three counts of embezzlement of public funds less than $5,000, six years on the count of embezzlement of public funds more than $5,000, and one year on the count of misconduct in office, all of which were suspended upon service of five years of probation. The sentences were ordered to run concurrently. All of the funds have been repaid.
The attorney consented to the discipline. (Mike Frisch)
February 21, 2011
The Law Firm Of Me, Myself and I
A three-judge court in Virginia Beach, Virginia has imposed a suspension of 30 days followed by a year of probation in a matter involving a number of disciplinary violations.
The attorney had, among other things, advertised his practice as himself "& Associates" when in fact he had a solo practice. He also had a video linked to his web page in which a non-attorney was presented as a member of the firm. The web page listed non-existent firm practice groups, and falsely indicated that he had three office locations and decades of experience.
The probation requires the attorney to retain a practice consultant approved by Bar Counsel. If the attorney engages in further misconduct or fails to follow office procedures, he will be suspended for three years. (Mike Frisch)
New York Amends Rules Regarding Legal Services in A Major Disaster
The New York Court of Appeals recently adopted rules regarding the provision of legal services in the wake of a major disaster. The amended rule governs the provision of pro bono legal services on a pro hac vice basis after the Governor or other authority declares that a disaster has occurred. (Mike Frisch)
Conditional Admission Granted
The Louisiana Supreme Court conditionally admitted an applicant who had withdrawn an application for admission in 2007 in light of information that he had not fully disclosed his criminal history in his law school admission application. The court noted that he had entered treatment for alcoholism and completed a year-long aftercare program. The court relied on the findings of a commissioner:
The commissioner made a factual finding that petitioner carried his burden of
proving rehabilitation not only from his alcohol-related issues, but also from the
lack of candor he demonstrated in his admitted omissions from his law school
application. Based on these findings, the commissioner recommended that
petitioner be conditionally admitted to the practice of law, subject to the terms and
conditions of his LAP agreement. Neither petitioner nor the Committee objected
to that recommendation.
The conditional admission involves a probationary period and compliance with conditions set by the Lawyers' Assistance Program. (Mike Frisch)
February 20, 2011
Job Interview Ethics
What information concerning legal experience may a law graduate provide to a prospective employer without running afoul of confidentiality obligations? The North Carolina Bar has a January 21, 2010 formal opinion:
Providing Conflicts Information to Hiring Law Firm
Opinion rules that a hiring law firm may ask an incoming law school graduate to provide sufficient information as to his prior legal experience so that the hiring law firm can identify potential conflicts of interest.
After his second year of law school, a law student worked as a summer clerk for Law Firm A in Raleigh. One of the many projects Law Firm A assigned to the law student was legal research that was part of Law Firm A’s preparation of Lawsuit X.
After the law student graduated from law school, Law Firm B hired the now law graduate as an associate in its Chicago office. After the law graduate left Law Firm A, but before he joined Law Firm B, Law Firm A filed Lawsuit X. After Lawsuit X was filed, lawyers in the Charlotte office of Law Firm B were retained to defend the case.
The law graduate was unaware that Lawsuit X had been filed, or that Law Firm B had been retained to defend it. Before the law graduate joined Law Firm B, the firm asked him to provide information about the identity of the client matters he worked on at Law Firm A so that potential conflicts could be addressed. The law graduate contacted Law Firm A, which directed him not to disclose any information about matters he had worked on or clients for whom he had worked.
Law Firm A learned that law graduate was associated with Law Firm B in Chicago and moved to disqualify Law Firm B from Lawsuit X. Law Firm B established a screen immediately upon learning that law graduate had worked on Lawsuit X.
Does law graduate have a conflict of interest that is imputed to the other lawyers in Law Firm B, disqualifying those lawyers from the representation of the defendant in Lawsuit X?
No. A law firm may hire a law graduate although the law firm is representing a client in a matter on which the law graduate previously worked for the opposing party while clerking at another law firm. Conflicts of interest created by work performed as a law clerk are not imputed to other members of a law firm under Rule 1.10. See Rule 1.10, cmt. . Nevertheless, the law graduate should be screened from any participation in the matter. Id. (Note that Rule 1.10(c) allows a law firm to hire a lawyer who previously worked for the opposing party while employed at another law firm so long as the lawyer is timely screened from any participation in the matter and written notice is given to any affected former client.)
Will a Rule 1.0(1) screen of the law graduate from Lawsuit X implemented when Law Firm B learned of law graduate’s involvement in Lawsuit X be deemed “timely” and protect the lawyers of Law Firm B from disqualification?
In order to be effective, screening measures must be implemented as soon as practical after a law firm knows or reasonably should know that there is a need for screening. Rule 1.0, cmt. . The purpose of screening is to assure the affected parties that confidential information known by the disqualified individual remains protected. Rule 1.0, cmt. . If the screen is implemented prior to any participation by the law graduate in the matter and prior to the communication of any confidential information, the purpose for the screening procedure will have been effectuated.
Is it improper for a law firm to ask law graduates or graduates not yet admitted to the practice of law, who have worked as law clerks, to identify client matters on which they worked as law clerks so that the hiring law firm can identify potential conflicts of interest?
No. When a new law school graduate, or any new lawyer, joins a firm, the hiring firm has an obligation to protect their clients against harm from conflicts of interest. See Rule 1.7. Comment  to Rule 1.7 provides that, to determine whether a conflict of interest exists, a lawyer should adopt reasonable procedures to determine in both litigation and non-litigation matters the persons and issues involved. However, the identity of the persons and issues involved in a matter are protected client information under Rule 1.6(a).
Rule 1.6(a) of the Rules of Professional Conduct provides that a lawyer shall not reveal information acquired during the professional relationship with a client unless (1) the client gives informed consent; (2) the disclosure is impliedly authorized; or (3) one of the exceptions set out in Rule 1.6(b) applies. One of the exceptions set out in Rule 1.6(b) provides that a lawyer may reveal confidential information to comply with the Rules of Professional Conduct. Rule 1.6(b)(1).
The ABA Standing Committee on Ethics and Professional Responsibility recently opined that lawyers moving between firms should be permitted to disclose the persons and issues involved in a matter because the prohibition of such disclosure would preclude lawyers from conforming with the conflicts rules. ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 09-455 (2009). Similarly, it is appropriate for a law firm to ask an incoming law school graduate to provide sufficient information so that the hiring law firm can identify potential conflicts of interest.
However, as noted in the ABA opinion, “any disclosure of conflict information should be no greater than reasonably necessary to accomplish the purpose of detecting and resolving conflicts and must not compromise the attorney-client privilege or otherwise prejudice a client or former client.” Id. In addition, a lawyer or law firm receiving conflict information may not reveal such information or use it for purposes other than detecting and resolving conflicts of interest.
Is a law firm that a law graduate worked for permitted to disclose to a different law firm the identity of clients and matters that the law graduate worked on at the law firm so that the hiring firm can identify potential conflicts of interest?
Yes. See Opinion #3.