December 14, 2012
Judging While Intoxicated
A New York State town court justice who is also an attorney agreed to be removed from office and never return to the bench. The matter was closed by the New York Commission on Judicial Conduct.
According to a stipulation in the case, the justice was charged with attempting to use her position when charged with a failure to report property damage and leaving the scene offenses after she had backed into another car and left the scene in Ticonderoga, New York.
She had previously been censured for similar conduct.
The justice also was charged with appearing in court both as a judge and representing a client while under the influence of alcohol. During a break in proceedings where she was counsel, she "smelled of alcohol, laid down on a bench in the courtroom and napped for approximately 45 minutes before a court officer roused her when proceedings were ready to resume." (Mike Frisch)
Looking Out My Backdoor
An Arkansas Committee on Professional Conduct panel has reprimanded an attorney for conduct while defending a medical malpractice action.
The attorney violated Rule 4.4(a) by sending an e-mail to his client that suggested use of "backdoor ways" to pressure a plaintiff's expert to not testify in the case. The rule prohibits a lawyer's use of means that have no substantial purpose other than to embarrass, delay or burden a third party.
The client then sent three e-mails to the Department Chair at the University of Michigan, where the expert was employed. The client's conduct amounted to a Rule 8.4(a) violation.
The attorney consented to the discipline. He was sanctioned in the underlying case and had no prior discipline. (Mike Frisch)
Suspended Attorney Failed To Supervise Two Embezzling Paralegals
The South Carolina Supreme Court ordered a two-year suspension, effective as of the date of a previously-imposed interim suspension, of an attorney found to have engaged in misconduct in a number of matters.
Among the violations were his failure to properly supervise not one, but two, embezzling paralegals.
One of the paralegals was the subject of a criminal case as a result; the attorney declined to press charges against the other. (Mike Frisch)
Former Cozen O'Connor Attorney Disbarred
The web page of the Pennsylvania Diwsciplinary Board reports the consent disbarment of an attorney convicted of tax fraud.
The criminal case is described in this September 24, 2012 release from the United States Attorney's Office for the Eastern District of Pennsylvania:
Charles M. Naselsky, 52, of Philadelphia, was convicted today in a tax evasion scheme committed while he worked as an attorney specializing in real estate transactional law. Naselsky’s scheme also defrauded his employer, the law firm of Cozen O’Connor. Naselsky was convicted of two counts of tax evasion, two counts of filing false tax returns, three counts of wire fraud, and two counts of obstruction of justice.
Naselsky instructed some of his clients to pay him directly for professional services, despite knowing that the payments belonged entirely to the firm. He then hid that income from the IRS in order to avoid paying taxes on it and filed false income tax returns. When he became aware that he was being investigated by the IRS for tax offenses, he obstructed the investigation by fabricating evidence, including emails, that claimed the monies were loans from a company called U.S. Equity Investors LLC (USE).
In total, Naselsky had taxes due and owing of approximately $112,000 for failing to report $365,000 in income for the years 2005 and 2006.
December 13, 2012
Till Death Do Us Disinherit
The Rhode Island Supreme Court resolved a question of first impression, holding that the stepchildren of a deceased person could not inherit under the will because the primary beneficiary had caused the death.
The slayer was the deceased's husband. She died by drowning. The will was executed shortly before the marriage. The husband was the beneficiary with the stepchilden the sole contingent beneficiaries.
The criminal conviction of the husband was overturned. He was found liable in a wrongful death action initiated by the deceased's parents. This finding made him the slayer for purposes of the Act.
His children intended to use the inheritance to fund his murder defense.
The court majority concluded that the Slayer's Act operates to deny the inheritance claims of contingent beneficiaries such as the slayer's children.
A dissent would hold otherwise (as dissents so often do). According to the dissent, the Act only prevents the slayer and those who inherit through the slayer from benefitting from the will. Here, the stepchildren neither slayed or inherited through the slayer.
Turnto10.com had this report concerning the criminal case. The deceased died while scuba diving in the British Virgin Islands. (Mike Frisch)
Fouling Out In Hoosierland
The Indiana Supreme Court has affirmed a $1.75 million judgment with some pointed language directed to counsel:
...this decision does not lessen our dissatisfaction and frustration with the behavior of counsel during the trial, particulary plaintiff's counsel.
Professionalism and civility are not optional behaviors to be displayed only when one is having a good day. Professionalism and civility are the mainstays of our profession and the foundations upon which lawyers practice law. The public expects it. Fellow lawyers expect it. Our profession demands it.
The court noted excessive objections by both sides and "unnecessary sparring and outright contemptuous conduct of each attorney directed toward the other...by any conservative measure there were at least ten instances of questionable behavior by each attorney."
[a] jury trial is not a free for all...it is similar to an athletic event with two opposing teams competing and a referee observing to ensure that all of the rules are followed. In this trial, [both counsel] committed fouls... It is important that attorneys not lose control of their passion for their client or cause and become too emotionally involved and make the cause personal. In such circumstances, they risk harm to thier client, their reputation, and our profession.
All attorneys in Indiana take an oath and each and every statement in the oath is sacred.
It coming from his home state, I expect Chief Justice Roberts would appreciate the "referee" analogy. (Mike Frisch)
Blogging Liability In Wawayanda
Internet forums are venues where citizens may participate and be heard in free debate involving civic concerns. It may be said that such forums are the newest form of the town meeting. We recognize that, although they are engaging in debate, persons posting to these sites assume aliases that conceal their identities or "blog profiles." Nonetheless, falsity remains a necessary element in a defamation claim and, accordingly, "only statements alleging facts can properly be the subject of a defamation action Within this ambit, the Supreme Court correctly determined that the accusation on the newspaper site that the plaintiff was a "terrorist" was not actionable. Such a statement was likely to be perceived as "rhetorical hyperbole, a vigorous epithet." This conclusion is especially apt in the digital age, where it has been commented that readers give less credence to allegedly defamatory Internet communications than they would to statements made in other milieus. Accordingly, we conclude that this statement constitued an expression of opinion, and, as such, is nonactionable.
Turning to the other posting described in the fourth cause of action, it is not clear on the face of the posting whom the poster was accusing of dumping a horse head in Gail Soro's pool, as the posting is essentially just a cross-reference to the Wawayandafirst blogspot. Since the statements contained on the Wawayandafirst blogspot form the basis of the first and second causes of action, the mere reference to those statements is duplicative of those causes of action.Therefore, the Supreme Court correctly granted that branch of the Skinner defendants' motion which was for summary judgment dismissing the fourth cause of action insofar as asserted against them. (citations omitted)
The horse head allegation was actionable on this basis:
The published allegation that the plaintiff put a severed horse head in a Town Board member's swimming pool constituted defamation per se under this standard and, therefore, did not require the plaintiff to plead special damages. Moreover, the accusation that the plaintiff placed a
horse head in a political rival's pool, if true, describes conduct that would constitute serious crimes. A false published allegation that a person committed a serious crime is also a ground for asserting a cause of action to recover damages for defamation per se, thus relieving the plaintiff from pleading special damages. (citation omitted)
More In New York
An attorney who was suspended for three months in New Jersey has been suspended for six months and until further court order as reciprocal discipline by the New York Appellate Division for the Second Judicial Department.
In 2003, Walter Richardson retained the respondent to pursue the return of funds he believed an individual named Patricia Royster had taken from his retirement dinner. Royster was in charge of organizing the retirement party. After the party, Royster gave Richardson a cash gift of $500 (five $100 bills) and a $500 travel gift certificate. Richardson believed that Royster shortchanged him. When Richardson met the respondent in September 2003, Richardson gave the respondent, as evidence for his case against Royster, the five $100 bills and the gift certificate. Richardson paid the respondent a retainer, and the respondent thereafter filed a summons and complaint in Middlesex County Special Civil Part on Richardson's behalf. Royster defaulted, and Richardson obtained a default judgment against Royster for approximately $6,400. The respondent was to obtain an execution of Royster's wages, but failed to do so. Despite numerous and repeated attempts by Richardson to contact the respondent, the respondent did not communicate with Richardson, aside from sending a letter stating that he owed the respondent more money.
The New Jersey Supreme Court also found that the attorney had lied to an investigator during the bar's inquiry. (Mike Frisch)
December 12, 2012
The Oklahoma Supreme Court has suspended an attorney for two years and a day.
The attorney was convicted on his Alford plea to a misdemeanor attempt to bride a police officer to miss a license revocation hearing.
There was some mitigation:
Several mitigating factors must be taken into consideration when deciding on the correct discipline in this case. Respondent was twenty-eight years old when the bribery incident occurred and had been an attorney less than a year. The respondent's uncle, David Ogle, was his principal employer and undoubtedly exercised more influence over him than would normally be found in an employer-employee relationship, given the added component of familial relationships. Respondent did not initiate the illegal scheme and acted under the direction of his supervisors, Josh Welch and David Ogle. No evidence indicates Respondent benefitted personally from the bribery conspiracy. The Respondent has cooperated with the Bar Association and with other authorities investigating the matter and has agreed to assist in future prosecutions. No other grievances have been filed against the Respondent and he has complied with the terms and conditions of his deferred sentence.
The court nonetheless concluded that the conduct was sufficiently serious to warrant a substantial sanction. (MIke Frisch)
The Indiana Supreme Court has suspended an attorney for six months with all but sixty days stayed on conditions in a case where the attorney used his trust account for personal and client-related expenses after the IRS placed a levy on his personal account.
This sort of operation usually goes badly for the attorney.
Here, he paid for a program of the Commission for Continuing Legal Education with a trust check. The Commission, in turn, notified Disciplinary Counsel. The attorney also bounced a trust check due to a mistaken belief he have sufficient personal funds and made the check good on the following day. (Mike Frisch)
Theft Of Hospital Bequest Results In Permanent Disbarment
From the web page of the Ohio Supreme Court:
The Supreme Court of Ohio has permanently revoked the law license of Cincinnati attorney Robert Leon Schwartz for misconduct that resulted in his convictions on felony counts of mail fraud and filing a false income tax return. Schwartz, whose law license has been under an interim suspension since the court was informed of his June 2010 felony convictions, was sentenced to a four-year term in federal prison.
In a 6-0 per curiam opinion announced today, the court adopted findings by the Board of Commissioners on Grievances & Discipline that Schwartz admitted using the U.S. mail in a scheme to defraud Hadassah Hospital of more than $2.4 million from a bequest the hospital was supposed to receive from the estate of a deceased client of Schwartz’s, Beverly Hersh. Prior to her death in 2005, Hersh named Schwartz administrator of her estate, which included assets of more than $12 million, and appointed him as trustee of two trusts funded by the estate from which Schwartz was to make contributions to tax-exempt charitable organizations and deserving individuals.
By 2008, Schwartz had distributed over $9 million from the discretionary trust over which he had complete control, which was significantly more than the percentage of Hersh’s estate allocated to that trust, but had distributed less than $50,000 to recognized charities from the charitable trust and only $210,000 of the $2.6 million bequest Hersh had left to Hadassah Hospital.
Schwartz also admitted filing a false federal income tax return for 2007 in which he failed to report income of more than $800,000, consisting of money he had disbursed to himself from the Hersh trust funds, money he diverted from the trust funds to pay for the care of his mother, and income from other legal fees.
The court agreed with the board’s conclusions that Schwartz’s actions violated the state disciplinary rules that prohibit an attorney from engaging in illegal conduct that reflects adversely on the lawyer’s honesty or trustworthiness, engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; and engaging in conduct that reflects adversely on an attorney’s fitness to practice law.
In imposing the board’s recommended sanction of permanent disbarment, the court rejected Schwartz’s arguments in favor of a less severe penalty. The court noted that, in addition to misappropriating funds and filing a false tax return, Schwartz violated the trust of his client by failing to carry out her instructions to distribute much of her estate to charitable causes, and violated the right of Hadassah Hospital to promptly enjoy the benefit of the bequest Hersh intended it to receive.
The court’s opinion was joined by Chief Justice Maureen O’Connor and Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Terrence O’Donnell, Judith Ann Lanzinger and Robert R. Cupp. Justice Sharon L. Kennedy did not participate in the court’s deliberations or decision in the case.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
2012-0644. Disciplinary Counsel v. Schwartz, Slip Opinion No. 2012-Ohio-5850.
On Certified Report by the Board of Commissioners on Grievances and Discipline, No. 11-008. Robert Leon Schwartz, Attorney Registration No. 0000818, is permanently disbarred from the practice of law in Ohio.
O’Connor, C.J., and Pfeifer, Lundberg Stratton, O’Donnell, Lanzinger, and Cupp, JJ., concur.
Kennedy, J., not participating.
The link to oral arguments in bar discipline cases provides a great educational tool.
I showed an argument in a misappropriation case before the Illinois Supreme Court to my Advanced Legal Ethics class. The attorney's (actually quite competent) pro se argument was particularly interesting. The class was struck by the fact that the disciplined lawyer looked and sounded like you or me.
The case is In re Mark Mulroe and the decision is linked here. (Mike Frisch)
December 11, 2012
Loyalty Trumps Mobility In New Mexico Decision
In a case of first impression, the New Mexico Supreme Court has held that disqualification is mandatory when an associate who played a 'substantial role" in litigation and possesses confidential information moves to a firm involved in the litigation against her former client.
Both the moving associate and her new firm are barred from further representation.
The court noted that it had adopted a more restricted version of Rule 1.11than the ABA Model Rule, and that its rule does not permit screening to prevent imputed disqualification.
While the rule may have a chilling consequence for lawyer mobility, the court emphasized that the public policy considerations that underpin the loyalty to clients justifies the result:
In the practice of law, there is no higher duty than one's loyalty to a client.
"Truly Compelling Mitigating Circumstances" Not Found In Utah Disbarment
The Utah Supreme Court has held that a district court does not have discretion to depart downward from the presumptive sanction of disbarment for misappropriation absent "truly compelling mitigating circumstances."
The court further held that the attorney, who had used an advanced fee as his own, did not present such evidence.
The court rejected a number of asserted mitigating factors as insufficient to meet its standard.
The attorney's lack of prior discipline and inexperience did not help. Indeed, the court remarked that it was "unremarkable" that he had no prior discipline as he only was admitted in 2005.
The attorney's pro bono efforts, favorable character evidence, asserted remorse and efforts to reform his practice likewise were not treated as truly compelling mitigation. Finally, his health, family and financial pressures did not establish such mitigation. (Mike Frisch)
December 10, 2012
Massachusetts Adopts Written Fee Agreement Rule
An important notice for Massachusetts lawyers from the web page of the Board of Bar Overseers:
On October 24, 2012, the Supreme Judicial Court issued an order amending Mass. R. Prof. C. 1.5(b) to require in paragraph (b)(1) that, in most circumstances, the scope of the representation and basis or rate of the fee and expenses be communicated to the client in writing. The amendment is a major change from the prior version of Rule 1.5, which required (and will still require) that contingent fee agreements be written but only that other types of fee arrangements “preferably” be communicated in writing. The effective date of the amendment is January 1, 2013.
New comment 2 to the rule amplifies on what is required, making it clear that “a simple memorandum or copy of the lawyer’s customary fee schedule is sufficient if the scope of the representation and the basis or rate of the fee is set forth.” The comment further notes that the lawyer ordinarily should send the written fee statement to the client before any substantial services are rendered.
There are, however, a few exceptions to the mandate of a writing. Section (b)(2) of the revised rule creates exemptions to the requirement of a written statement for a single-session legal consultation and for a situation in which the lawyer reasonably expects the total fee to the client will be under $500. This section additionally specifies that, where an indigent representation fee is imposed by a court, a writing is not required because no fee agreement has been entered into between a lawyer and a client.
Finally, the same SJC order also amends Mass. R. Prof. C. 6.5, concerning non-profit and court-annexed limited legal services programs, by adding a new paragraph (a)(1) indicating that lawyers providing short-term limited legal services under the auspices of such programs are not subject to Rule 1.5(b).
These amendments to Rule 1.5 are more fully discussed in an article on this website.
The Serial Defaulter
The New Jersey Supreme Court added two years of suspension to a one year suspension of an attorney that was scheduled to be completed in January 2013. The attorney engaged in neglect of several client matters.
The Disciplinary Review Board detailed the attorney's "egregious disciplinary history" and noted that he was a "serial defaulter" who had "demonstrated no sign of any intention to comply with the Court's directives in the [earlier] suspension order."
Further, he failed to learn from his past mistakes in a manner that showed 'a disturbing pattern of disregard for the ethics system in general." (Mike Frisch)
From Debt Relief To Disbarment
The December 2012 California Bar Journal reports a disciplinary sanction:
[An attorney] was disbarred Oct. 6, 2012, and was ordered to make restitution and comply with rule 9.20 of the California Rules of Court.
[He] stipulated to 52 counts of misconduct in 13 cases, all but one involving his representation of clients who were attempting to obtain loan modifications. He agreed to make restitution totaling $1.226 million in 11 of the matters.
[The attorney] ran a law firm called Debt Relief Law Center that handled loan modifications, settlements of second mortgages and bankruptcy. In a typical matter, he accepted an advance fee as well as substantial sums from clients wishing to settle second mortgages, but he did no work, misappropriated the money and did not refund unearned fees. He closed his law office without notifying his clients or taking steps to protect their interests and said he was filing for bankruptcy. He also broke state law by accepting advance fees for loan modification work, violating the civil code.
One client was told that [he] had settled his second mortgage for $97,500 and he needed to deposit that amount in [his] client trust account immediately. [He] did not provide a copy of a settlement agreement, despite several requests, and when the client went to his office and reviewed the file, he learned there was no settlement.
[He] deposited some client funds in his business account, rather than his trust account, and did not settle any matters. He misappropriated $318,032.41 from one couple, nearly $175,000 from another individual and $153,092.38, $111,135.90 and $143,680.06 from others.
[He] stipulated that he was having severe financial problems at the time due to separating from his wife, and he cooperated with the bar’s investigation and stipulated to disbarment. He was publicly reproved in February 2012 for failing to perform legal services competently, return client files, refund unearned fees or communicate with clients.