Friday, March 29, 2013
The Illinois Review Board has recommended a three month suspension for misconduct in connection with the following circumstances:
...in approximately 1996, Respondent leased a 1996 Toyota 4Runner through Bank of America and insured the vehicle through Government Employees Insurance Company ("Geico"). As of November 2000, Respondent owed Bank of America approximately $25,000 on the lease. Pursuant to the Geico insurance policy, when Geico made a payment under the policy it became subrogated to the insured's rights of recovery against others, and the insured had an obligation to do whatever was necessary to secure Geico's rights and not do anything to prejudice those rights.
On or about November 1, 2000, the City of Chicago ("City") booted, seized and impounded Respondent's vehicle for unpaid parking tickets totaling approximately $2,000. Sometime thereafter, the vehicle was either destroyed or sold by the City of Chicago. On December 12, 2000, Respondent, who had years of experience dealing with insurance companies as a plaintiff's personal injury attorney, reported the loss to Geico. Respondent had several conversations with Geico representatives in late 2000 and early 2001. While the parties disputed the exact content of some of these conversations, Respondent agreed that he informed Geico he intended to sue the City of Chicago and was considering adding Geico as a party. Geico declined to be added as a plaintiff to any suit filed by Respondent. Respondent also agreed that Geico never stated, either verbally or in writing, that it was waiving its subrogation rights.
GEICO made a payment to Bank of America. The attorney was aware of the payment.
The attorney then negotiated a $21,000 settlement with the City but failed to disclose GEICO's interest:
...we agree with the Hearing Board's conclusion that Respondent's representation in the settlement agreement with the City of Chicago...was false and Respondent knew of the falsity. As noted by the Hearing Board, "The plain language that no other entity "has or has had' any interest in the claim asserted in the lawsuit is directly contrary to the provision in Respondent's insurance policy regarding Geico's subrogation rights upon its payment for a loss. Once Geico paid out on Respondent's claim, it stepped into the shoes of the insured, and could then pursue its subrogation rights if it chose to do so.
The Massachusetts Committee on Judicial Ethics has issued an opinion concluding that an associate justice of a trial court may accept pro bono representation from an attorney in connection with a matter before the Commission on Judical Conduct:
The Committee characterizes a judge's receipt of free legal services as a gift. Your acceptance of free legal representation from the Attorney does not violate the Code because the Attorney has not ever and likely will never appear before you. Your acceptance under these circumstances is also consistent with your broader obligations to promote public confidence in the integrity and impartiality of the judiciary and not to allow relationships to influence your judicial conduct or judgment.
The opinion notes that the CJC matter has generated publicity. (MIke Frisch)
Thursday, March 28, 2013
An attorney convicted of 30 felony counts, including grand theft, has been disbarred by the New York Appellate Division for the First Judicial Department.
The court described the offenses:
Essentially, respondent and his wife created a phony company called Puzzle Pieces as a way to fraudulently bill for special education and related services for their autistic son. The couple used Puzzle Pieces to over bill and obtain multiple reimbursements for the same services provided to their son by submitting fraudulent claims to their school district, respondent's former law firm Morrison & Foerster LLP, and a health insurance company.
The conviction occured in California. DIsbarment was automatic as a result of the conviction.
Care2 had this report on the criminal case. (Mike Frisch)
The Oregon Supreme Court rejected a trial panel's one-year suspension order and disbarred an attorney for criminal and dishonest conduct in his dealings with his partners.
The attorney made law firm shareholder distributions to himself and told his partners "that the firm lacked sufficient funds to make any distribution [to them]." The firm's accountant noticed the disparity while preparing the firm's 2007 corporate tax returns and notified the other partners.
The attorney promised to repay the debt and wrote an e-mail to his partners with a "mea culpa" subject line. He did not tell the partners that he had taken additional amounts that the accountant had not uncovered.
Then, the attorney went on a vacation to Hawai'i. While he was away, a partner and the firm's bookkeeper discovered that he used a firm credit card to pay his personal expenses.
The court concluded
...the distinction between business and personal expenses may not have always been precise, and there may have been a few, relatively minor instances where another partner failed to honor the distinction. However, those few instances provided no reasonable basis for the accused to believe that he was either entitled or authorized to take approximately $100,000 of the firm's funds to pay for remodeling his home, family vacations, and the like. Indeed, the act that the accused intentionally misrepresented his reasons for charging personal expenses to the firm is at odds with the claim that he reasonably believed he was entitled to do so.
The Florida Supreme Court has rejected a referee's proposed suspensions and disbarred two attorneys as a result of trust account deficiencies.
The matters involved two complaints that were consolidated. The referee found that "100's of millions of dollars passed through" the firm trust account and that the trust account "imbalance" was "roughly $4.38 million."
The attorneys claimed that a non-lawyer bookkeeper had embezzled that amount. The referee found that there was no evidence of misappropriation by the attorneys.
When the shortfall was discovered, the attorneys did not address the problem for several months. They eventually hired outside counsel and an outside accountant, restored most of the funds to the trust account from a number of souces including malpractice insurance, contacted the police and explained the situation on the Bar's ethics hotline.
However, the court noted that the attorneys had taken an excessive amount of time to resolve the deficiencies once discovered and that
...the actions that Respondents took to manage the drastic shortages in the trust account included additional acts of misconduct. Respondents accepted funds from client when Respondents knew the account was underfunded. This was a conflict of interest. They did not inform clients of the firm's financial issues when dealing with them, yet they continued to represent the cnts. In addition, they were using this "fresh money" from some clients to satisfy past due client liabilities.
One of the attorneys also solicited a personal loan from a client.
The court also rejected referee's "equitable adjustment" that reduced the costs awarded to the Bar. (Mike Frisch)
The District of Columbia Court of Appeals has ordered an eighteen month suspension with reinstatement conditioned on disgorgement of funds paid to a client by the Attorney-Client Arbitration Board ("ACAB").
The attorney had charged an unreasonable fee, commingled and failed to promptly return client funds after the ACAB award.
Additionally, the attorney "falsely testif[ied] that he received advice from the D.C. Bar Ethics Hotline to retain the disputed funds in his operating account" and "requir[ed] the client to withdraw [the] bar complaint against him pursuant to a settlement agreement."
The Board on Professional Responsibility ("BPR") had proposed a six-month suspension.
The court disagreed with the BPR on a number of issues.
Because the attorney claimed to have taken client funds shortly before learning they were in dispute, the BPR found that Rule 1.15 did not apply.
The court, which considered the public protection aspect of safeguarding entrusted funds, educated the BPR on the point:
We are unconvinced by the Board's reasoning that, once disbursed, funds can "no longer [be] client or protected funds." If disbursing funds from a client trust account automatically removed the funds from the protection of Rule 1.15, an attorney could easily circumvent the protections afforded by this rule by disbursing putatively earned fees without ever providing clients an opportunity to dispute the fee...We cannot accept an interpretation of the rule that would so easily allow an attorney to circumvent its protections.
Thus, the bar is placed on this notice:
...we hold that if a client in any future matter, with reasonable promptness, disputes an attorney's fee after the attorney has already withdrawn his fee from the client trust account, the attorney must place the disputed amount in a separate account in accordance with Rule 1.15. What is "reasonable promptness" will be a case - specific inquiry...Going forward, an attorney who, like [respondent], claims he learned of a dispute "later that same day" in circumstances such as these will be required to return the disputed funds to a separate account under Rules 1.15(a) and (c).
The court also found, contrary to the BPR, that the attorney's efforts to avoid paying the ACAB award was a violation of the duties on termination of the representation under Rule 1.16(d).
The court here makes new law in the area of conduct that interferes with the operation of the disciplinary process.
An important precedent and reassuring to know the court did not accept the BPR's pro-attorney/ anti-client approach to the duty to protect entrusted funds. (Mike Frisch)
From the Indiana Supreme Court comes a decision that succinctly states its conclusion:
When a prosecutor has neither filed a charge nor initiated a grand jury proceeding, may she nevertheless petition a court to compel a party to testify under a grant of use immunity, when that party is the primary target of the investigation and has asserted the constitutional privilege against self - incrimination? We think not.
The matter involves an infant who was removed from her parents' care after puncture wounds were seen by medical staff at a hospital. (Mike Frisch)
Wednesday, March 27, 2013
A Tennessee attorney who self-reported his misuse of client funds was suspended for one year by the Tennessee Supreme Court.
Arkansas Business had this story about the violations:
A former Little Rock attorney who made a name for himself representing country music celebrities in Nashville is facing a one-year suspension of his Tennessee law license for misusing tens of thousands of client dollars.
Philip K. Lyon, who separated his practice from the law firm now known as Jack Nelson Jones & Bryant in 2007, has until the end of the week to decide whether to appeal the judgment of a hearing committee of the Tennessee Board of Professional Responsibility.
“I’m trying to figure out what to do. There’s some extenuating circumstances,” Lyon told Whispers last week, but he declined to elaborate.
Lyon self-reported to the Tennessee BPR in May, a committee heard the case in December and in January it ordered the one-year suspension of Lyon’s license and restitution of $42,500.
According to the hearing committee’s report, Lyon admitted that in the fall of 2010 he covered “operating expenses” by using some $70,000 that a friend and client had given him “for safekeeping.” In early 2011, the client needed the money in order to close a real estate transaction, but Lyon was unable to come up with the cash and the client missed out on the deal “and suffered financial losses.”
In the summer of 2011, Lyon reimbursed the client using money from another client’s trust fund. When it came time to pay the second client and co-counsel in her case, Lyon ultimately emptied the woman’s trust account and his operating account and still had to come up with more than $21,500 to make her whole.
The $42,500 he was ordered to pay represents the first client’s “damages from not being able to consummate his real estate transaction,” according to the hearing committee’s report.
Although Lyon’s practice has been primarily in Nashville since the mid-1980s, he has maintained his Arkansas law license. That, too, may be subject to disciplinary action if he doesn’t successfully appeal the Tennessee suspension.
The attorney must sign a promissory note in favor of a client. (Mike Frisch)
The West Virginia Supreme Court of Appeals has adopted the recommendations of its Judicial Conduct Board and suspended a family court judge without pay for four years with other sanctions.
The judge conceded that he was repeatedly intemperate with litigants, showed disrespect for authority and was unable to properly manage his staff.
The court found 24 violations of nine Canons of Judicial Conduct.
Chief Justice Benjamin concurred, in the result but questioned the majority's use of inherent judicial powers to impose the sanctions.
Widespread publicity was given to this video of the judge in action. (Mike Frisch)
The Delaware Supreme Court reversed the dismissal of a civil action, concluding that the trial court abused its discretion in dismissing the case.
The court concluded that the strong policy interest in favor of deciding cases on the merits outweighed the interest of moving cases.
The matter involved allegations of medical malpractice. The plaintiff's first attorney discovered at a deposition that he had a conflict of interest and withdrew. The new attorney did not meet a discovery deadline for designating an expert. However, opposing counsel did not complain to the court and discovery proceeded. An expert was eventually identified and deposed.
Opposing counsel nonetheless filed an eve-of-trial motion to exclude the expert testimony for failure to comply with the scheduling order. The court granted the motion and ordered summary judgment for the defendants..
The attorney had sought a conference with the judge to discuss the need to modify the scheduling order. The judge refused the meeting and would not modify the order.
The court noted that
In Delaware, where civility is a cherished value, attorneys are likely to grant extensions to opposing counsel without "bothering" the court. That practice is commendable, and fosters good will. But it also leads to the pedicament that occured here.
Hee, opposing counsel had failed to notify the court of the problem and dealt with counsel for many months.
The court advised the Bar that where there is a failure to comply with a scheduling order, opposing counsel has "[t]wo choices -- resolve the matter informally or promptly notify the court."
While the result may be more motions and ill-will, the court concluded that such an approach was in the interest of justice. (Mike Frisch)
Tuesday, March 26, 2013
The convictions of Anthony Marshall and attorney Francis Morrissey in the criminal prosecution arising from the treatment of Brooke Astor were affirmed and remitted in part by the New York Appellate Division for the First Judicial Department:
...the judgment of the Supreme Court, New York County (A. Kirke Bartley, J.), rendered December 21, 2009, convicting defendant Anthony Marshall, after a jury trial, of grand larceny in the first degree, grand larceny in the second degree (five counts), criminal possession of stolen property in the second degree (two counts), offering a false instrument for filing in the first degree (two counts), scheme to defraud in the first degree, conspiracy in the fourth degree (two counts), and conspiracy in the fifth degree, and sentencing him to an aggregate term of one to three years, should be modified, on the facts, to the extent of vacating the second degree grand larceny conviction under the eighth count of the indictment and dismissing that count, and otherwise affirmed. The judgment of the same court and Justice, rendered December 21, 2009, convicting defendant Francis Morrissey of forgery in the second degree, scheme to defraud in the first degree, conspiracy in the fourth degree (two counts), and conspiracy in the fifth degree, and sentencing him to an aggregate term of one to three years, should be affirmed.
The New Jersey Supreme Court rejected the three-year suspension proposed by a majority of the Disciplinary Review Board and ordered the disbarment of an attorney who made repeated misrepresentations to his partners in a real estate business, submitted false documents to the Office of Attorney Ethics and Special Master in the ensuing disciplinary proceedings and in light of his record of prior similar misconduct.
The attorney was admitted in 1980 and had been privately reprmanded in 1989 and suspended for six months in 1999 for creating "false entries in his law firm's records to conceal from his law partner his expenditure of law firm funds..."
The disbarment was imposed even though the misconduct was outside the practice of law. (Mike Frisch)
The New York Appellate Division for the First Judicial Department has accepted the resignation of an attorney who has been suspended since 1986 on a tax conviction:
In the application now before us, the movant recounts the foregoing history and asks that he be permitted to resign from the bar "in the interest of justice." He states that he is 69 years of age and has no further desire to practice law. The Departmental Disciplinary Committee, which advises that there is no disciplinary proceeding or investigation currently pending with respect to the movant, does not oppose our granting the movant's request. The Committee on Character and Fitness takes no position on the matter.
This Court's Rules do not provide for a voluntary resignation from the bar by an attorney in the movant's situation, namely, an attorney suspended pursuant to a closed disciplinary proceeding and who is not subject to any pending investigation or proceeding (cf. 22 NYCRR 603.11[a] [providing for a resignation by an attorney "who is the subject of an investigation into allegations of misconduct or who is the subject of a disciplinary proceeding pending in the court"]). Nonetheless, given that the movant no longer wishes to practice law, we deem it appropriate, under these particular circumstances, to grant the movant's application to resign from the bar in the interest of justice.
The Arizona Presiding Judge has approved a reprimand of a former DEA agent who was convicted of impersonating a police officer.
The attorney was seen driving a vehicle commonly used by law enforcement ( a Crown Victoria) and using his headlights to "wig-wag" as police often do.
According to the agreement for consent discipline:
Respondent is a former DEA Special Agent who, as a private citizen, has maintained his empathy for and interest in law enforcement and his desire to support other law enforcement personnel. As a result, he has tried to stay prepared at all times to assist in the event of a need for citizen support of the police. On the night of his arrest, Respondent did not stop any civilian vehicles or engage in other acts demonstrating a clear desire and intent to deceive the public to think he was a police officer. The parties contend that his affinity with law enforcement, as a former DEA Special Agent, got the better of him and he engaged in a brief and isolated act relating to the "wig-wag" lights...
...in order to avoid any future allegations relating to his affinity with the police, he sold the Crown Victoria and no longer drives a vehicle that could be confused with a police vehicle. Nor does [he] travel with badges, handcuffs, batons or any other material commonly associated with the police.
Why was this case criminally prosecuted?
It was and the conviction was affirmed by the Court of Appeals and the Arizona Supreme Court. (Mike Frisch)
An Arizona attorney consented to a two-year suspension and probation in a matter involving a felony conviction for aggravated assault with a firearm and disorderly conduct.
The attorney was a deputy county public defender.
He was in Scotty's Bar on Whiskey Row in Prescott. The bar bouncer said that he became belligerent at closing time. He was escorted outside and things got pushy.
The bouncer left the bar a few minutes later and stopped at an alley next to the Drunken Lass, where he saw the attorney. The attorney pointed a handgun at the bouncer, who called the cops.
The police found the attorney walking down the road under the influence and with a loaded .38.
The attorney pleaded guilty to felony charges and entered an alcohol treatment program. He has been suspended for the conviction. (MIke Frisch)
The New York Court of Appeals has affirmed without discussion a judgment dismissing a claim for legal fees.
ThomsonReuters had this report on the decision of the Appellate Division:
Kasowitz Benson Torres & Friedman is not entitled to a multimillion-dollar fee stemming from its successful representation of drugstore chain Duane Reade, a divided New York state appeals court ruled Tuesday.
Kasowitz had claimed it was owed approximately $7 million for litigation over automated teller machine fees owed to Duane Reade.
In a 3-2 ruling, the Appellate Division, First Department, found that the two parties had negotiated a "precise" fee arrangement via email that did not permit Kasowitz to recover fees beyond a flat $1 million payment.
Alternative fee arrangements, rather than hourly fee structures, have become increasingly common in corporate litigation. But they can also lead to disagreements about interpretation.
The negotiations between Kasowitz and Duane Reade on the fee structure occurred with a simple email exchange, rather than a with formal contract, eventually leading to a dispute over the meaning of the emails.
Monday, March 25, 2013
The Colorado Presiding Disciplinary Judge imposed an agreed sanction of public censure as reciprocal discipline for a like sanction imposed in Virginia.
The attorney had "on behalf of his, a criminal defendant...offered money - which he described as further restitution - to the mother of a victim of child sexual assault in exchange for her more favorable sentencing recommendation regarding his client."
The conduct was prejudicial to the administration of justice. (Mike Frisch)
The Wisconsin Supreme Court has publicly reprimanded a defense attorney for misconduct in two criminal matters.
One of the matters involved an opening statement to the jury:
...Attorney Brittain appeared in court for the first day of a scheduled jury trial and made an opening statement on behalf of V.K. In the course of the opening statement Attorney Brittain told the jury, "I want to talk about violence. And, well, what it is like to be in an environment where people yell and scream. And I know that environment because I grew up in one, and my mom was very erratic, very emotionally unstable." Judge Davis immediately interrupted and admonished Attorney Brittain that it was inappropriate to reflect on personal matters in an opening statement. After Judge Davis asked that he refocus his remarks, Attorney Brittain approached his client, put his hands on his client's shoulders, and told the jury, "I know . . . a brave man when I see one."
Judge Davis immediately interrupted again and admonished Attorney Brittain that his conduct was inappropriate. Judge Davis directed Attorney Brittain to return to the lectern and instructed that he was not allowed to vouch for his client and that he should not put his hands on his client or talk about his client's character in that fashion.
Continuing his opening statement, Attorney Brittain told the jury:
Imagine what it is to be falsely accused of something, and to know what a conviction would emotionally unstable and erratic, and you're falsely accused, what that means.
I'm going to tell you what happened that day. I'm going to tell you about [the defendant].
I'm going to do it in the first person narrative as if I am [the defendant] so that you can know what happened.
Judge Davis again interrupted and said the court would not allow Attorney Brittain to make an opening statement in the form of a first person narrative. After Attorney Brittain said he would renew an earlier motion seeking Judge Davis's recusal based on alleged bias, Judge Davis excused the jury. In the conference that followed outside the presence of the jury, Judge Davis said Attorney Brittain was raising his voice and sticking his finger in the face of the assistant district attorney who was prosecuting the case. Attorney Brittain disagreed with Judge Davis's statements. He also continued to challenge rulings made by Judge Davis as to the form of the opening statement. Judge Davis reaffirmed his earlier rulings and instructed Attorney Brittain not to give any first person remarks, not to vouch for his client's credibility, and not to talk about his personal life experiences.
After the jury returned to the courtroom, Judge Davis sustained two more objections by the assistant district attorney based on Attorney Brittain making inappropriate comments during his opening statement. After Judge Davis sustained the second objection, Attorney Brittain turned to look at Judge Davis, paused, and then said to the jury, "And so, [l]adies and [g]entleman, under a lot of——a lot of obstacles, we are here today."
After opening statements were concluded, Judge Davis again excused the jury and found Attorney Brittain in summary contempt of court for the comment about "obstacles." Judge Davis sanctioned Attorney Brittain with a forfeiture of $50. On February 16, 2009, the court entered the written order of contempt against Attorney Brittain based on the oral contempt order of November 25, 2008. Attorney Brittain appealed the contempt order. The court of appeals affirmed Judge Davis's order holding Attorney Brittain in contempt.
Friday, March 22, 2013
The Louisiana Supreme Court has imposed a six-month suspension with all but 30 days stayed and probation in a case involving domestic violence.
The attorney came to his ex-wife's home to pick up his two daughters. The younger daughter did not wish to go with him. An assault took place against the ex-wife when the attorney pushed his way into her home.
The attorney was convicted but the court had declined to impose an interim suspension as a result. The conviction was later set aside.
The bar complaint was filed by the ex-wife's boyfriend, a Louisiana State trooper. The attorney responded that the complaint was "frivolous, and nothing more than an ex-wife's boyfriend whining and complaining."
Justice Victory dissented and would impose a harsher sanction. (Mike Frisch)
The Wisconsin Supreme Court approved the dismissal of ethics charges that had alleged that an attorney was dishonest in seeking reimbursement for expenses from the American Bar Association:
Attorney P. was a longstanding active member of the ABA, serving on numerous committees and holding numerous office positions. He was a member of the House of Delegates, was past-Chair of the Family Law Section, was Chair of the Individual Rights and Responsibilities Section, and also served as budget officer of the Senior Lawyers Division. Attorney P. frequently attended ABA section meetings and ABA House of Delegates meetings and often submitted requests for financial reimbursement to different ABA sections.
The OLR's complaint alleged that Attorney P. personally submitted three claims for expense reimbursement following the 2010 ABA midyear meeting in Orlando, Florida, that included separate requests for reimbursement of the same expenses. In total, Attorney P. sought reimbursement of $2,371.50 from the ABA.
Attorney P. then received a letter from the ABA advising him he had sent "compound" (duplicate) reimbursement requests. The ABA then conducted an audit of Attorney P.'s ABA reimbursement requests for the years 2007, 2008, and 2009, which revealed that Attorney P. had submitted duplicate requests for expense reimbursement to various ABA entities for those years. The total overpayment by the ABA to Attorney P. for these years was $1,155.80.
The court noted that the ABA's reimbursement policies were confusing, that the attorney had a reputation for honesty, no prior discipline and that he made restitution when the matter was brought to his attention.
The matter was pursued by a Tennessee attorney after the issues were resolved to the ABA's satisfaction.
The referee found:
[W]atching [Tennessee attorney] B. testify and considering the number of people within the ABA who now were aware of this matter; considering B.'s rush to judgment that P. was guilty of dishonesty from the very outset; considering B.'s obsession that P. should self-report this to OLR despite advice from others; considering that phone conversations with his so-called "friend" were silently being listened to by a notekeeper or ABA staff; this referee is reminded of the old adage that with friends like this, who needs enemies.The OLR had not appealed the dismissal recommendation. (MIke Frisch)