Wednesday, November 27, 2013
In three related actions to recover legal fees, the New York Appellate Division for the Second Judicial Department has held that an order to produce a non-party's application for bar admission was improper:
In these three related actions involving disputes over legal fees, the Supreme Court, by order dated August 21, 2012, directed the production of materials relating to the pending application of nonparty Magnus Essunger for admission to practice law in the State of New York, including all documents submitted by Troutman Sanders, LLP, Albert Jacobs, LLP, Albert Jacobs, or any individuals on their behalf, for an in camera inspection. Essunger thereafter moved, in effect, to vacate so much of the order dated August 21, 2012, as directed the production of those materials. The Supreme Court denied the motion.
The Supreme Court lacked the discretion to direct the production of Essunger's application, including supporting documents, for admission to the bar. Judiciary Law § 90(10) mandates that "all papers, records and documents upon the application or examination of any person for admission as an attorney and counsellor at law . . . shall be sealed and be deemed private and confidential," except that, upon good cause shown, the justices of the Appellate Division may, in their discretion, permit disclosure of such materials. "The provisions for confidentiality set forth in subdivision 10 of section 90 . . . were enacted primarily, if not only, for the benefit of the attorney" (Matter of Capoccia, 59 NY2d 549, 554).
Contrary to the respondent's contentions, under the circumstances of this case, the Supreme Court did not have discretion to direct the production of Essunger's bar application simply because the respondent sought the materials directly from Essunger, and not from the Committee on Character and Fitness (cf. Matter of Rodeman, 65 AD3d 350, 352 [counsel violated Judiciary Law § 90(10) by disclosing materials in his possession related to a disciplinary proceeding]). Under circumstances such as those presented here, allowing a party to obtain these confidential materials by the simple expedient of demanding them from the applicant would unreasonably circumvent the protection afforded by Judiciary Law § 90.
The Chronicle of Higher Education had this article on the life and career of the person whose estate is at issue in the litigation. (Mike Frisch)
An attorney was suspended for two years and a day by the Oklahoma Supreme Court as a result of a drug conviction.
NewsOK reported on the situation:
Soderstrom's eight-year sentence was deferred, pending successful completion of Lincoln County Drug Court, the state Supreme Court said.
Soderstrom was accepted into the drug court on Nov. 24, 2012, and less than a month later tested positive for methamphetamine, the state Supreme Court said.
Soderstrom told a professional responsibility tribunal that he visited friends he thought were “clean,” but found them smoking methamphetamine when he arrived. Soderstrom told the tribunal he put the pipe in his mouth, but did not light it, resulting in the positive drug test.
A couple of months later, on Feb. 13, Soderstrom showed up at the drug court under the influence of Percocet without a prescription, the state Supreme Court said.
The court imposed the suspension so that the attorney could establish a sustained period of recovery prior to any reinstatement effort. (Mike Frisch)
An attorney who engaged in a pattern of bad faith litigation tactics and false allegations against judicial officers and others was indefinitely suspended with no possibility of reinstatement for nine months by the Minnesota Supreme Court.
The court rejected a referee's findings that the attorney's cooperation and lack of prior discipline were mitigating factors.
The conduct took place over eleven filings in five matters on behalf of a single client - the Dr. R.C. Samanta Roy Institute of Science and Technology.
Among other allegations, the attorney called a Wisconsin judge part of a "secretive racist society."
The pleadings also made reference to "black robed bigots," "dirty Catholics," and compared the justice the client received to justice meted out to Jews by Hitler.
The Southern Poverty Law Center has information about the underlying dispute.
Above the Law had this earlier coverage. (Mike Frisch)
The New York Appellate Division for the First Judicial Department imposed a public censure as reciprocal discipline for an attorney's deficient handling of immigration appeals before the United States Court of Appeals for the Second Circuit:
In or about November 2007, the Second Circuit directed respondent to show cause why he should not be subject to disciplinary or other corrective measures based on his pattern of submitting deficient and untimely briefs in connection with petitions for review that he filed in immigration cases. In response, respondent stated, inter alia, that his deficient performance stemmed from his inexperience and unfamiliarity with the applicable rules, his heavy caseload as a solo practitioner, and the pressing deadlines in his various cases. Respondent also stated that he had retained an attorney with experience in immigration appeals and that he would refrain from representing individuals in immigration appeals without his assistance.
By order entered on May 27, 2008, the Second Circuit publicly censured respondent. The court found:
"that a reasonable person in [respondent's] position would have familiarized himself with the applicable rules and known that his briefs did not satisfy various important Rule 28 requirements; that his behavior put his client's interests in significant peril; and that his briefing deficiencies and his scheduling defaults caused significant inconvenience to the judges and staff of this Court. Although the conduct described n our prior order generally would warrant a significantly greater sanction, we conclude that a lesser sanction is appropriate in light of the circumstances described in [respondent's] response to that order and the other corrective measures [imposed by the court]."
These corrective measures directed respondent not to file new appeals or documents in pending cases unless an experienced attorney appeared as cocounsel; to notify the panel of every case before the court in which respondent would perform legal services within a specified time period, and to provide the panel with copies of all future briefs and certain motions filed with the court within a specified time period. Respondent was also warned that future deficient performance before the court could result in further disciplinary action and/or corrective measures and strongly encouraged to attend CLE courses in appellate practice, legal writing, and immigration law if he continued to file appeals or to practice immigration law.
Tuesday, November 26, 2013
The Medina (Ohio) Gazette Online reports
The Ohio Supreme Court on Thursday revoked the law license of a Wadsworth attorney convicted last month of trafficking in a dangerous drug.
Harry E. Jackson, 65, of 5534 State Road, is spending four years at Lorain Correctional Institution in Grafton on a charge of aggravated drug trafficking and two counts of complicity in aggravated drug trafficking involving bath salts. The charges are second- and fourth-degree felonies.
Jackson, who was convicted after pleading guilty to the charges in Summit County Common Pleas Court, owns The Odd Corner — a tobacco supplies store at 360 E. Exchange St., Akron. Undercover police reported they bought bath salts from a store clerk there on March 23, 2012.
At the time of his conviction, Jackson was not practicing law and his law license is listed as inactive on several online directories of lawyers.
In addition to prison time, Jackson was fined $25,000 and his driver’s license was suspended for five years at his Oct. 11 sentencing hearing before visiting Judge Judy Hunter.
Jackson had three codefendants — Daniel I. Dearment, Dannielle L. Hileman and Eugene B. Hoover — and all have been convicted.
The investigation was completed by University of Akron police in conjunction with city police.
Jackson’s attorney, Kirk Migdal, is appealing the conviction.
Wikipedia has information about bath salts.
The order of interim suspension (not revocation, as reported above) is linked here. (Mike Frisch)
A three-year suspension is the sanction for an attorney convicted of armed robbery, imposed by the Wisconsin Supreme Court.
Attorney Hubatch was admitted to the practice of law in Wisconsin in 2004. His law license was suspended effective October 31, 2007, for failure to pay State Bar dues. His license remains suspended. Attorney Hubatch has not previously been the subject of professional discipline.
The stipulation states that on January 11, 2013, Attorney Hubatch donned a Bucky Badger hat and robbed a Madison, Wisconsin, credit union of $500 while in possession of a toy gun. Within the following week, after being spotted publicly wearing the Bucky Badger hat, Attorney Hubatch confessed to a Madison detective that he had robbed the credit union.
Attorney Hubatch was charged with one count of armed robbery in violation of Wis. Stat. § 943.32(2) in Dane County Circuit Court Case No. 2013CF117. Attorney Hubatch pled guilty to the charge on February 21, 2013. On April 16, 2013, the circuit court sentenced Attorney Hubatch to two years in prison, followed by three years of extended supervision. Attorney Hubatch is currently incarcerated at the Oshkosh Correctional Institution.
Wikipedia on Bucky Badger.
There are some places where a conviction for armed robbery will result in disbarment. (Mike Frisch)
An attorney who was convicted of two criminal offenses and failed to notify the Bar was suspended for five years by the Kentucky Supreme Court.
The attorney had moved to West Virginia and did not (as required) provide a current address to the Kentucky Bar.
The first incident involved a fight with his wife. When she sought to leave with their four-year-old, the attorney "smashed a propane tank into the rear window of the vehicle." No one was hurt and the wife admitted that she had struck him with the car before he threw the propane tank.
He entered a plea to two counts of wanton endangerment.
The second incident involved a fight with a client who had come to his home office. The attorney claimed that the client "removed the front door and proceeded to hit [him] in the head with a piece of concrete." The client claimed the attorney struck him several times with a baseball bat.
The attorney pleaded guilty to felony unlawful wounding in the second degree.
The Trial Commissioner noted that the conduct took place when the attorney had "hit rock bottom" after two divorces and a drinking problem. He claims sobriety since 2010. (Mike Frisch)
Monday, November 25, 2013
The Kentucky Supreme Court reinstated the judgment of conviction of an attorney "with extensive experience in the practice of criminal law" who was convicted of failure to file five years of state income tax returns.
The court commented on his experience with the law: "[S]uch knowledge appears remiss from his professional and personal choices."
The attorney/defendant represented himself "until the day before a previously continued jury trial was scheduled to begin." He then sought a continuance to secure counsel, which was denied in light of his own professional background. The trial court denied the continuance but failed to conduct a proceeding advising the defendant/attorney of the dangers of self representation (a so-called Faretta hearing).
The evidence at trial showed that he "used his fiduciary status to launder money through clients' bank accounts" misuing a power of attorney of a homeless client.
The Court of Appeals had reversed the conviction for failure of the trial court to conduct the Faretta hearing.
...we hold that criminal defendants who are experienced criminal trial attorneys are not entitled to a Faretta hearing or inquiry prior to representing themselves.
Giving the benefits of Faretta under the circumstances "would offend the very purpose and integrity of Faretta and its progeny." (Mike Frisch)
The Maryland Court of Appeals has imposed an indefinite suspension of an attorney who was admitted in 1997.
The attorney had retired for medical reasons from the Office of the Attorney General. He then opened his own office.
The court found he had engaged in incompetent representation, lacked diligence and failed to communicate with clients in two matters. In one matter, he also had facilitated the unauthorized practice of law by a disbarred lawyer.
The court declined to impose disbarment in light of findings that the attorney suffers from depression, anxiety and post-traumatic stress.
Thus, "indefinite suspension is the more appropriate sanction..." (Mike Frisch)
The Kentucky Supreme Court affirmed the holding of the Court of Appeals that there were genuine issues of material fact precluding summary judgment to a law firm that had been sued for malpractice.
The trial court had held the plaintiffs lacked standing "because they did not have an attorney-client relationship" with the defendants.
The Court of Appeals reversed on two grounds.
First, there was a factual issue concerning the existence or not of an attorney-client relationship. Second, the plaintiffs were two minor children when the estate came into existence, and as "statutorily-identified beneficiaries of the wrongful death claim" were owed professional duties by the attorneys.
The suit arose from an accident that killed a man survived by a wife and four children. He was driving a van that struck a wall. A suit against the company charged with maintaining the van was dismissed after experts were excluded. No appeal was filed.
The malpractice suit was filed two years later. By then, one of the minor children had reached the age of majority.
The court majority found that the minor children "were real parties in interest with regard to the wrongful death claim....As intended beneficiaries of the claim," the actions of the attorneys were taken on their behalf.
The statute of limitations was tolled as to the malpractice claim "until they reached the age of majority."
Justices Noble and Scott concurred and dissented, both writing opinions expressing concerning for the position the decision places wrongful death attorneys who may face malpractice actions years in the future when children reach majority age.
Justice Noble would require the personal representative to bring ancillary claims on behalf of children in a timely manner.
Justice Scott laments the dilemma of the attorneys who must now serve multiple masters in the conduct of litigation.
in his view, the majority holding "simply doesn't contribute to an efficient system of litigation; not to mention the conflicts it now raises with one counsel having duties to potentially antagonistic multiple parties. We shouldn't be leaving one hundred years or more of good, workable precedent." (Mike Frisch)
Sunday, November 24, 2013
An attorney who was disbarred in Florida received an indefinite suspension in Massachusetts with reinstatement conditioned on his readmission in the Sunshine State.
The decision of a single justice of the Supreme Judicial Court notes that the attorney had engaged in a comflict of interest and a prohibited business transaction with an elderly client.
The attorney had served as "estate planner, trustee, financial products salesman. personal representative and attorney..."
The justice rejected the attorney's suggestion that the misconduct found in the Florida proceeding did not amount to a Rule 1.8(a) violation. (Mike Frisch)
Friday, November 22, 2013
Is there anyone out there who thinks a six-month suspension with all but sixty days stayed is a tad (or more) light given this summary:'
After a large judgment was awarded against his client, Schtul knowingly permitted the client to deposit over $120,000.00 of company funds into his law firm’s trust account, which resulted in those funds being hidden from the judgment creditor. Schtul then signed checks that were issued from the trust account to the client. After Schtul’s firm filed for Chapter 7 bankruptcy for the client, the client revealed to opposing c0unsel that his company’s funds had been deposited in the law firm’s trust account and then had been withdrawn to pay wages and taxes and to distribute profits. Schtul’s actions led to the evasion and delay of collection efforts and also prompted the bankruptcy trustee to investigate the matter and lodge fraudulent transfer charges against Schtul, which were resolved in a confidential settlement. In this matter, Schtul violated Colo. RPC 1.15(c) (a lawyer shall keep disputed property interests separate until there is an accounting and severance) and 8.4(d) (conduct prejudicial to the administration of justice).
In a second matter, Schtul neglected to adequately designate exhibits, failed to prosecute his client’s appeal, and filed a frivolous claim. That conduct violated Colo. RPC 8.4(d) as well as Colo. RPC 1.1 (competency), 1.3 (diligence and promptness), 1.4 (communication with clients), and 3.1 (frivolous claims). Schtul also failed to adequately communicate with clients in two additional representations, and in one of those matters he did not exercise reasonable diligence and promptness.
The Colorado Presiding Disciplinary Judge approved the sanction. (Mike Frisch)
A Nebraska attorney was suspended for violating the durt of confidentiality (see below).
A Colorado attorney got suspended for a year and a day, with all but six months stayed, for an excess of zeal.
The summary from the Colorado Supreme Court web page:
In a juvenile theft case, Lee believed her client, the defendant, had been misidentified by the victim. At trial, she arranged for her client to sit in the back of the courtroom and for a friend of her client to sit at counsel table. During her opening statement, Lee pointed to the client’s friend, saying "my client is innocent." This stratagem worked to her client’s detriment, since the victim accurately identified the defendant in the gallery. The judge found Lee in contempt and granted the defendant a new trial based upon Lee’s fraud upon the court.
There were trust account violations in another count. (Mike Frisch)
The Nebraska Supreme Court has imposed an indefinite suspension of no less than three years of a criminal defense attorney who failed to respond to charges that she "disclos[ed] confidential information regarding criminal charges against a former client in order to ensure the client's conviction."
The attorney was retained to defend a client charged with first degree sexual assault. The client and his family hired another attorney and terminated her representation.
The attorney then called the prosecutor to discuss the case, told him "she knew that her former client was guilty, and that she wanted to make sure the prosecutor sent [him] to prison." She gave the prosecutor the names of witnesses and discussed the expected defense strategy.
The prosecutor called Disciplinary Counsel and informed the new attorney for the defendant.
The court declined to disbar the attorney, notwithstanding her failure to respond to the charges.
It is unfortunate that the attorney defaulted, as there must be a lot more to this story. A cursory google search suggests that there may have been mitigation evidence that did not get presented. (Mike Frisch)
As we used to say at Bar Counsel
Another day, another batch of disbarments.
Here's one from the Iowa Supreme Court that involves "an experienced real estate attorney, [who] is serving a three-year sentence in federal prison after a jury convicted him on nine felony counts, aleging bank fraud, wire fraud, and conspiracy."
The crimes involved nine real estate transactions where the HUD - 1 statements" overstated the sales prices to secure inflated mortgage loans."
The attorney had offered to surrender his license if the conviction was affirmed. The court noted that he made no furtjher submission after it was affirmed and instead ordered license revocation. (Mike Frisch)
An attorney who misappropriated funds while serving as guardian of a now-deceased Brooklyn civil court judge was disbarred by the New York Appellate Division for the First Judicial Department.
The court applied collateral estoppel effect to findings in the guardianship matter:
Particularly, following a framed-issue hearing, Justice Ambrosio imposed the following surcharges: $197,416.08 for legal fees which respondent improperly withdrew from guardianship accounts without court authorization; $52,500 for fees respondent improperly took as a brokers commission in connection with the sale of estate property by court auction; $120,215.37 for dissipating guardianship funds by using said funds to renovate property not owned by Phillips' estate; $3,832.78 for using guardianship funds to pay her mortgage; and $29,184.63 for the unaccounted balance of a down payment from the sale of estate property located at 132-140 Herkimer Street in Brooklyn. Based on these surcharges, Judge Ambrosio granted the Phillips estate a judgment against respondent for $403,148.86, plus interest, and found that respondent forfeited all right to compensation due to the breach of her fiduciary duty.
The court rejected the attorney's claims:
At the hearing, respondent testified that her misconduct was the result of mistakes, and that there was no intent to defraud. Respondent acknowledged that she has not paid any of the $403,148.86 in surcharges imposed against her because, in her view, despite Justice Ambrosio's finding that she was not entitled to compensation, she is owed approximately $700,000 from Judge Phillip's estate based on quantum meruit. As evidence in aggravation, the Committee introduced a 2004 Admonition respondent received for improperly notarizing a surrender agreement in a real estate matter, and claimed that respondent engaged in the practice of law while suspended and lacked remorse for her misconduct.
An attorney who had misappropriated (that is to say, stole) insurance proceeds meant to pay for medical care of a severely injured client was disbarred by the New Jersey Supreme Court.
The client had been struck by a car traveling a 50 miles per hour while raking leaves.
The client's family was forced to sue him after he delayed payment. The attorney also provided false documentation concerning his handling of the settlement proceeds.
This kind of situation is one where I would hope the bar's client security trust fund would make the victim whole. with full interest. (Mike frisch)
Thursday, November 21, 2013
A legal malpractice claim for allegedly negligent tax advice was time-barred, according to a decision of the New York Appellate Division for the Second Judicial Department:
On March 5, 2003, the defendants, Richard Reichler, Snow Becker Krauss, P.C., and Meltzer, Lippe, Goldstein, and Breitsone, LLP, allegedly advised the plaintiff in an opinion letter that his proposed sale of certain property would not result in the loss of his tax deferment status. In 2007, the Internal Revenue Service (hereinafter the IRS) notified the plaintiff that its determination was to the contrary, and directed him to remit back taxes, along with penalties and interest, totaling approximately $5 million. The plaintiff allegedly retained the services of the defendants to represent him against the IRS. On March 31, 2009, the IRS concluded that its determination was correct. One month later, on April 30, 2009, the plaintiff discharged counsel and retained new counsel. He filed a petition in the United States Tax Court challenging the IRS's determination, but, ultimately, on July 25, 2011, the court concluded that the IRS's determination was correct. On December 29, 2011, the plaintiff commenced this action alleging, inter alia, legal malpractice against the defendants, and they moved, inter alia, to dismiss that cause of action as time-barred.
The court affirmed the Supreme Court's dismissal
The plaintiff, in opposition to the defendants' showing, relies on the continuous representation doctrine as a toll of the three-year statute of limitations; however, he failed to raise a question of fact in this regard. As evidenced by, inter alia, the more than four-year period of time between the issuance of the opinion letter and the plaintiff's alleged retention of the defendants in July 2007, during which no further legal representation was undertaken with respect to the subject matter of the opinion letter, the parties did not contemplate that any further representation was needed.
The District of Columbia Court of Appeals has ordered disbarment of an attorney convicted of obstruction of justice and other offenses.
The court held that the crime inherently involves moral turpitude, for which disbarment is mandated under governing federal statute.
Huffpost Crime had details of the offenses in this June 2012 post:
A U.S. lawyer who worked for some of the country's most prestigious firms was sentenced on Monday to a record 12 years jail for an insider trading scheme which lasted 17 years and netted more than $37 million between 1994 and 2011.
Matthew Kluger's sentence is the longest ever handed down in an insider trading case and is one year longer than the 11 year jail term imposed last year on Galleon Group hedge fund founder Raj Rajaratnam for insider trading charges.
Kluger was sentenced by U.S. District Judge Katharine Hayden of Newark federal court. Hayden also sentenced stock trader Garrett Bauer to nine-years jail for his role in the scheme and a third person, Kenneth Robinson, is scheduled to be sentenced on Tuesday.
"The severe sentences imposed today are a warning to anyone trying to game the financial markets for their own enrichment," said New Jersey U.S. Attorney Paul Fishman in a statement.
An attorney for Kluger said he planned to appeal against the sentence. "It is unduly harsh and fails to reflect that Mr Kluger received only a fraction of the proceeds from the offense," said attorney Alan Zegas.
An attorney for Bauer did not return a call seeking comment.
Federal prosecutors and securities regulators accused the trio of trading on inside information ahead of at least 11 corporate deals.
The three men used merger secrets gathered by Kluger while he worked as a corporate attorney for prominent law firms, including Cravath Swaine & Moore; Skadden, Arps, Slate, Meagher & Flom; and Wilson Sonsini Goodrich & Rosati.
In one instance, Kluger tipped Robinson on Oracle Corp's impending acquisition of Sun Microsystems Inc in 2009. In another, the trio traded ahead of Intel Corp's takeover of McAfee Inc in 2010.
Bauer kept the majority of the proceeds, using some of the profits to buy a $6.65-million condominium on Manhattan's Upper East Side and an $875,000 home in Boca Raton, Florida.
Robinson acted as a middleman between Kluger and Bauer in an elaborate scheme that involved the use of public payphones and prepaid disposable cell phones in an attempt to hide their activities from law enforcement. Prosecutors said the men netted more than $37 million between 1994 and 2011.
The three men have agreed to pay back their ill-gotten gains plus interest. Bauer agreed to pay $31.6 million, Kluger will pay $516,000 and Robinson settled for $845,000, an amount regulators said reflected his willingness to aid authorities.
Both Bauer and Kluger pleaded guilty in December to one count each of conspiracy to commit securities fraud, securities fraud, conspiracy to commit money laundering and obstruction of justice. Robinson pleaded guilty in April 2011 to one count of conspiracy to commit securities fraud and two counts of securities fraud.
While the court noted that the concept of moral turpitude is not subject to precise definition, obstruction of justice fits comfortably into the court's jurisprudence that defines the concept. (Mike Frisch)
An attorney who had cashed four refund checks from courts that were client funds was indefinitely suspended by the Ohio Supreme Court.
The bar matter arose after his legal assistant sent him an e-mail inquiring about a refund check for $2,644.74 from the Lorain County Court. He was confronted by two of his law firm partners, had no satisfactory explanation, and was fired:
He was escorted back to his office and then was escorted out of the building with only his briefcase; he was not permitted to remove any other items from his office.
The attorney remitted the amount of the check and the firm filed a bar grievance. Three other instances of similar conduct were uncovered. One involved a $5 check.
The other misconduct involved the attorney's failure to pay for five CLE seminars. He had attended seminars and told bar staff that he had preregistered and prepaid. In fact, he had not. He claimed credit for the seminars and bounced checks for two sessions.
He eventually paid by bank check and explained that he was employed as a golf caddy and that his cash flow was "pretty tight."
The disciplinary panel found that the CLE situation amounted to theft of services.
The court agreed. (Mike Frisch)