January 20, 2012
Posted by Jeff Lipshaw
My very good friend, Tina Stark, in my estimation, the country's leading educator on the subject of transactional lawyering skills, has announced her retirement from full time academia due to an ongoing chronic health issue. Tina has championed cutting edge programs in the law schools at Fordham, Emory, and Boston University. Here's the note she sent to the Legal Writing Professors list serv, including BU's announcement of a search for her replacement:
As some of you may know, I have had a chronic medical problem for many years. Unfortunately, it has now reached the state where I can no longer work as a fulltime academic. I'm sanguine that I'll find a way to stay involved - as an adjunct or some other capacity - but fulltime is just not possible. It has been my great pleasure to have worked with you.
California Schemin' (On Such A Winter's Day)
The California State Bar Court Review Department has recommended discipline against a husband and wife who operated a law firm. The Review Department agreed with an 18-month suspension as recommended by the trial court for the wife but concluded that the husband's proposed two-year suspension was insufficient. Rather, they recommend that the husband be disbarred.
The Review Department found that both engaged in multiple acts of misconduct and that their testimony lacked credibility. The findings of misconduct included failure to report sanctions and the use of a trust account to shield funds from creditors.
In an unrelated matter, the Review Board proposed disbarment of an attorney who received entrusted funds from a Malaysian multinational corporation on behalf of a client and misappropriated over $2 million. (Mike Frisch)
From Law School To Puerto Vallarta
An update on the Vanderbilt Law theft case from WKRN-TV news:
A second man has been arrested in connection to the theft of a large amount of money from Vanderbilt University.
According to Vanderbilt's newspaper, Samuel Wakefield was taken into custody Wednesday and charged with theft of more than $60,000.
The 30-year-old is the domestic partner of Jason Hunt, the former Vanderbilt law school employee accused of stealing $600,000 from the university.
Hunt was arrested last Friday in Arkansas.
Wakefield and Hunt reportedly moved to Puerto Vallarta, Mexico in December where they opened a nightclub.
No Violation In Threatening E-Mail
The Louisiana Hearing Board agreed with a hearing committee and found no ethical violation in a March 3,2008 e-mail sent by the charged attorney to another attorney in a dispute between their respective clients.
The Office of Disciplinary Counsel charged that the e-mail (reprinted in full in at page three the report) violated Rules 8.3(a), 8.4(g) and 8.4(a). You may note that the threatening penultimate paragraph is followed by one with a more conciliatory tone.
The board accepted the hearing committee's credibility determinations regarding the attorney-sender's motive and intent.
The most interesting discussion involves the proper interpretation of Rule 8.4(g). The rule makes it misconduct for an attorney to:
(g) Threaten to present criminal or disciplinary charges solely to obtain an advantage in a civil matter.
The board notes that the parties disagreed on the interpretation of the "solely" motivated language and notes the absence of a prior case interpreting the word. Nonetheless, the board found other elements of the rule violation not established.
...as an additional note, the Board feels that an attorney should exercise discretion and forethought before attempting to correct the conduct of another attorney with whom the attorney has an adversarial relationship.
My own view (confirmed by any cases I've seen) is the the sole motivation language renders the rule entirely unenforceable in the disciplinary context. (Mike Frisch)
Not Perfect, Not Unethical
A Louisiana Hearing Committee has concluded that two attorneys did noy engage in unethical conduct in their representation of a defendant charged in a road rage case. The committee recommends that no discipline be imposed.
The first attorney was retained for a $750 fee with a $375 advance payment. He does volume work and has an arrangement with Attorney Two to handle some court proceedings for him. It appears that the client did not object to the arrangement and he matter referred to Attorney Two, who was an experienced criminal practitioner.
Attorney Two was ready to try the case but the matter was continued. On the retrial date, Attorney Two arrived late from another court appearence. The trial had commenced in his absence. The client secured acquittal on his own (and, understandably, did not wish to pay the balance of the retainer).
The committee found Attorney One had no ethical lapse in the arrangement with Attorney Two. They further found Attorney Two's late arrival not a violation. (Mike Frisch)
Estate Neglect Draws Suspension
From the web page of the Ohio Supreme Court:
The Supreme Court of Ohio today suspended the license of [ a] Chardon attorney...for two years, with the final six months of that term stayed on conditions, for multiple violations of the Rules of Professional Conduct in her handling of a client’s husband’s estate.
The Court adopted a consent-to-discipline agreement between [the attorney] and the Office of
Disciplinary Counsel in which [she] admitted that over a three year period beginning in 2007, she failed to diligently represent her client in administering the estate, failed to maintain adequate records of estate and other funds held in her law office trust account, misappropriated estate funds, failed to promptly deliver funds that her client was entitled to receive, and made false representations to the probate court that certain debts of the estate had been paid when in fact they remained outstanding.
In setting the sanction for her violations, the Court noted the mitigating factors that [the attorney] has no prior history of disciplinary infractions, admitted her misconduct, cooperated fully with disciplinary authorities and has made more than full restitution to her client.
The opinion is linked here. (MIke Frisch)
January 19, 2012
Practice Pointer: Stop Using Letterhead When Suspended
The Pennsylvania Supreme Court imposed a two-year suspension of an attorney who, among other things, failed to secure a divorce for a client who had retained him for that purpose. The client died while still married.
The attorney was suspended for failure to complete CLE obligations. He did not advise the client of the suspension.
In a second matter, the attorney was retained in an adoption matter. When he later returned the fee, he did so using a letterhead that reflected he was an active bar member. He was not. The use of the letterhead was an additional ethical violation.
The attorney did not participate in the disciplinary case. (Mike Frisch)
The North Dakota Supreme Court has censured a district court judge for his delay in resolving assigned cases:
Judge Hagar was served Formal Charges alleging he did not promptly decide the case of Ringuette v. Ringuette, Civil Case No. 51-09-C-1744, when a trial was held before him on September 21, 2010, and Judge Hagar did not enter the Findings of Fact, Conclusions of Law and Order for Judgment and Judgment until March 10, 2011. It was further alleged that since some time in the year 2009, Judge Hagar had a number of cases assigned to him that he did not promptly decide which resulted in the Presiding Judge of the Northwest Judicial District entering an Order of Reassignment of Case Duties on July 11, 2011, which removed Judge Hagar from all new case assignments for a period of thirty days, and required Judge Hagar to devote himself full time to bring his docket current and resolve all matters pending before him which require immediate judicial decision. The order listed ten cases which Judge Hagar had not promptly decided as of the date of the order. Additionally, during this same period, the Presiding Judge spoke with, encouraged and counseled Judge Hagar to fulfill his duty to promptly decide all matters assigned to him. Nevertheless, Judge Hagar did not meet the obligation he had under the North Dakota Code of Judicial Conduct to decide matters assigned to him and to dispose of all judicial matters promptly. Finally, it was alleged Judge Hagar did not promptly decide the case of Thomas v. Jewett, Civil Case No. 51-08-C-728, when a bench trial was held before him on November 24, 2009, and Judge Hagar did not enter the Findings of Fact, Conclusions of Law and Order for Judgment and Judgment until August 5, 2011.
The Michigan Attorney Discipline Board has agreed with a Hearing Panel's decision that a 35 month suspension was the appropriate discipline for an attorney who had failed to provide competent representation to a couple that had retained the attorney in an adoption proceeding. The attorney also failed to communicate with the clients, made misrepresentations and "counseled [the clients] on how to regain the child by illegally offering money to the birth parents in exchange for their consent to adoption..."
The misconduct resulted in the "state's almost forcible removal of the child from the [clients'] custody after they had raised the child from birth to the age of two years and nine months."
Beyond the misconduct, the board noted that "respondent's problem appears to be an inclination to overcommit herself, both in terms of time and in competence which here resulted in disastrous consequences." Any reinstatement will "probe whether respondent has become appropriately self aware, and perhaps taken steps to address these issues." (Mike Frisch)
Jury Questionnaires In Chandra Levy Murder Trial Must Be Disclosed
In the case involving the murder of Chandra Levy, the District of Columbia Court of Appealls has reversed and remanded a trial court order denying the Washington Post access to completed jury questionnaires.
The Post's request was made after the trial jury had been selected and the trial had begun. The government contended that the request was thus untimely.
On remand, the trial judge must start with a presumption that the completed questionnaires should be completely disclosed. If any answers touch on "deeply personal matters," the judge may provide the jurors with an opportunity to raise concerns in camera. The court may then enter specific individualized findings on the necessity of redaction that a capable of appellate review. (Mike Frisch)
January 18, 2012
CFPB Claims to Pierce Privilege in Discovering Confidential Bank and Financial Records
In a harrowing story--or just more of the same, in the recent attempted onslaught by regulatory agencies on attorney-client and work-product privilege--the new Consumer Financial Protection Bureau (CFPB) issued Bulletin 12-01 on January 4, 2012, to clarify its role in the production of records from banks and other financial institutions as part of CFPB oversight. The discovery power is claimed to include privileged documents. Although CFPB then proposes to keep the documents confidential, the bulletin is upfront that the bureau may have to share those documents outside its agency, including release to state attorneys general and other agencies, as needed. Fuller story here, at the Payment Law Advisor blog.
Although the bulletin assures readers that the agency intends to use non-privileged sources when it can, it really does not effectively assure them that any production of privileged documents would not constitute a general waiver to plaintiffs' attorneys and others. Of course, it does claim that discovery to themselves is not waiver to all--but that view may be problematic, at least arguably so, in that the specific congressional authorization for such a power (or such a protection) is not so easily found for the CFPB as it is for other regulatory agencies. Says the PLA blog:
The Bureau’s conclusion was based largely on provisions of the Financial Services Regulatory Relief Act of 2006, which applies to the federal banking agencies (the OCC, Federal Reserve, FDIC, and formerly, the OTS), allowing the agencies to receive privileged documents from supervised entities without effectuating a waiver of privilege. But the statute does not expressly apply to the CFPB, leaving the Bureau’s position on privilege questionable. The CFPB asserts that Congress intended it to be treated as a prudential regulatory agency with respect to waiver; but, its position has yet to be challenged in court.
To me, the lack of clear congressional authorization to add a layer of waiver protection on the discovery may be either harrowing news, as it could basically end the concept of attorney-client privilege in financial representations. Or it could be the trojan pony (I name him Tarpy, but his preppy barn friends call him Chase) that would make a court stop the initial grab of documents by the agency. I am not sure a court wants to allow an agency to end the centuries-old concept of privilege and the sanctity of the attorney-client relationship by a post-holiday bulletin (well, OK, by previous adminstrative regulations that a bulletin clarifies). More generally, we ethics writers and teachers have to seriously consider not just the usual buried-body and Upjohny cases on privilege but also the phenomenon that administrative agencies increasingly just don't believe in privilege anymore: they purport to act like a judge (just show me the documents in chambers; we're cool) then suggest they may have to show them to the Rhode Island and Hawaii attorneys general, but without a judicial finding that they were not privileged in the first place. You waived because you complied with a discovery demand, any decent opposing attorney would think.
"No Just System"
The United States Supreme Court has held that there was cause to excuse the default of two departing Sullivan & Cromwell attorneys who "abandoned [a client's death penalty] case without leave of court, without informing [the client] that they could no longer represent him, and without securing any recorded sustitution of counsel."
Justice Ginsburg concluded for the majority that "no just system would lay the default at [the client's] death-cell door."
Justice Alito concurred:
What occurred here was not a predictable consequence of the Alabama system but a veritable perfect storm of misfortune, a most unlikely combination of events that, without notice, effectively deprived the petitioner of legal representation.
Justice Scalia, joined by Justice Thomas, dissented and would affirm the Eleventh Circuit's judgment. (Mike Frisch)
A Special Place For Lawyers?
The Idaho Supreme Court has held that a legal malpractice claim (and a related breach of contract claim) dies with the client.
Justice Horton dissents on the contract claim:
The majority expresses its concern that "[a] holding to the contrary would create a per se breach of contract action in every legal malpractice action." I would first note that this is a gross overstatement. The position I espouse only applies in instances involving express contractual undertakings. In this case, no one forced [the attorney] to enter into a contract prescribing the manner in which he would represent the client. Had he not elected to identify the manner in which he would perform his services, his duty to his client would be imposed by law, this action would sound in tort, and I would be joining with the majority.
I, too, have a concern for the result of this appeal. There is a very real concern that the decision of this Court will reinforce the perception, shared by many in our society, that courts will go out of their way in order to protect members of the bar. My position, which I believe to be well-grounded in existing law, simply recognizes that lawyers do not hold a special place in society that insulates them from the type of liability that any other party to a contract would face.
The claim involved allegations that the attorney failed to properly advise the client (who had been rendered a quadriplegic in an accident) of the effect of a settlement and release. (Mike Frisch)
Attorney Charged With Inappropriate Sexual Comments And Touching
The North Carolina State Bar has filed a disciplinary complaint that alleges an attorney made "inappropriate comments and inappropriately touched [two clients] in a sexual manner without [their] consent" during office meetings.
The alleged conduct involved, in the first instance, trying to put his tongue in the client's mouth, grabbing her buttocks and touching her breasts, telling her she "had to kiss him," and comments about oral sex.
The second alleged instance involves moving his chair so closely to the client's chair that "he was almost straddling her legs," grabbing her to force a kiss, "pulling her dress back in a manner as if he were looking down her top," and asking the client if she was blushing.
The accused attorney was admitted to practice in 1975. (Mike Frisch)
January 17, 2012
The Penn State Dickinson School of Law had named us their Blog of the Month.
Thanks for the honor and for reading us. (Mike Frisch)
Serving IHOP Hostess May Not Be Enough
A law firm that sued its former client for non-payment of fees appealed an order setting aside a default judgment. The South Carolina Supreme Court reversed and remanded the matter. On remand, the law firm can take discovery on the issue of sufficiency of service of process.
In 2007 Graham filed suit against Respondents MKKM, Inc., and Mohamed Makawi, individually and doing business as International House of Pancakes, seeking payment for professional services. Graham served both complaints on Makawi, who is MKKM’s president and registered agent for service of process, by certified mail, return receipt requested, restricted delivery, at the IHOP location in Florence, South Carolina. The documents sent to Makawi individually were signed for by Kim Richardson, while those mailed to him as agent for MKKM were signed for by Ana Carvajal. The circuit court found that Edward Graham of Graham Law Firm received a phone call from Makawi in which Makawi acknowledged receipt of the summons and complaint and asked for copies of the itemized bill.
Neither Makawi nor MKKM filed an answer to the complaint, and Graham’s motions for entry of default and default judgment were granted. Graham served a copy of the order granting default judgment by certified mail on Makawi and Makawi as registered agent of MKKM, and the return receipt was signed by [illegible] Makawi. In March 2009, counsel for respondents contacted Graham to request information about the judgment.
The trial court thereafter set aside the judgment based on an affidavit that denied the authority of the employees to accept service. The court here found that discovery was appropriate:
In this case, Graham’s claim of personal jurisdiction over Makawi and his corporation through service on their agents is not conclusory, frivolous, or attenuated. Kim Richardson, who signed the receipt for the summons and complaint sent to Makawi individually, may have had authority to accept them if she did serve as an office manager with significant authority as an employee of IHOP or by virtue of the services Graham alleges Richardson performed for Makawi personally.
With regard to MKKM, Graham has claimed no greater status for Carvajal as an MKKM employee than that she was a hostess at IHOP for a few months. Even if it seems unlikely that further discovery will demonstrate that she had sufficient authority or responsibility to be deemed an agent for purposes of service of process on MKKM, Graham’s claim that MKKM was properly served is not conclusory, frivolous, or attenuated, given that she was an employee of MKKM and signed the return receipt.
Habitual Recalcitrance Draws Suspension
An attorney has been suspended for nine months by the South Carolina Supreme Court.
The attorney was the subject of 23 complaints and had prior discipline:
We concur in the Panel's findings that Respondent's prior disciplinary history and pattern of misconduct are aggravating factors. Further, we are troubled by Respondent's habitual recalcitrance to respond to inquiries by ODC. We also consider Respondent's testimony in mitigation, although we do not believe the mitigation justifies a three-month suspension. We view the mitigation testimony alongside Respondent's persistent pattern of failures to communicate adequately with his clients, to exercise appropriate diligence in pursuing their objectives, to timely refund unearned fees, and to cooperate with ODC.
Accordingly, in light of the multitude of complaints (twenty-three) involving repeated violations of the same rules, we find a nine-month definite suspension is an appropriate sanction for Respondent's misconduct.
The Interest Of Justice
The New York Appellate Division for the First Judicial Department has reinstated a legal malpractice case that had been dismissed on statute of limitations grounds.
The pro se plaintiff had been represented in an arbitration claim. She filed her suit within the three-year limitation period but had trouble serving the law firm.
The court concluded:
Even if this case does not qualify for an extension under the "good cause" exception...we find that it qualifies under the "interest of justice" category. Under this prong of CPLR 306-b, the Court of Appeals has instructed that a court "may consider [plaintiff's] diligence, or lack thereof, along with any other relevant factor . . ., including expiration of the Statute of Limitations, the meritorious nature of the cause of action, the length of delay in service, the promptness of a plaintiff's request for the extension of time, and prejudice to defendant."
Here, plaintiff's attempted March 2008 service, although ultimately deemed defective, was a diligent attempt by a pro se plaintiff to hire a process server to serve defendants at their law firm, within 120 days of the timely filing of a summons with notice. By the time the court ruled on the motions in the 2007 Action, the statute of limitations had expired, precluding the filing of a new action. In addition, defendants were aware of the 2007 Action and appeared to demand a complaint as early as April 2008 - they were not prejudiced by the service errors and were afforded full participation in discovery. Finally, construing the pleading in the light most favorable to plaintiff, as is required on consideration of a CPLR 3211 motion to dismiss, we find that it asserts actions and omissions by defendants that support viable claims for recovery. (citations omitted)
Vanderbilt Law Employee Faces Extradition From Arkansas
A report on the Vanderbilt Law thefts from today's The Tennessean:
A former Vanderbilt Law School manager is awaiting extradition from Arkansas on charges that he stole more than $600,000 from the university.
Jason Hunt, 34, was arrested in Sims, Ark., on Friday by Montgomery County deputies and U.S. marshals. Hunt worked as an administrative services manager for the law school, hired first on a temporary basis in March 2005 and then permanently in July of that year. According to the university, he was fired in November after an internal investigation.
It's never a good thing thing to see a photo of a former law school employee in handcuffs. (Mike Frisch)
Probation For Billing Errors
An attorney who had overbilled the Office of the State Court Administrator "approximately $115,000 for her legal services" received a stayed 30 day suspension approved by the Colorado Presiding Disciplinary Judge. The summary on the web page of the Colorado Supreme Court states that the misconduct was a result of "billing errors." The attorney repaid the overbilled amounts.
The attorney must successfully complete a two-year period of probation with conditions. (Mike Frisch)