Saturday, April 6, 2013
Resolving an issue of first impression, the Missouri Supreme Court has held that a disciplinary panel issued an overbroad order directing that a disciplinary proceeding against an attorney be treated as confidential.
Documents that have been treated as non-public by a Missouri court will not be part of the public record in the disciplinary proceeding, unless the sealing court rules otherwise. All other proceedings are public unless good cause is shown for confidentiality.
From the court's summary:
Pursuant to Rule 5.31, the disciplinary hearing panel is prohibited from enforcing its prior blanket protective order making all proceedings confidential. It is directed to follow the requirements of the rule, which require the remainder of this or any disciplinary hearing to be open to the public, except as provided in Rule 5.31. The standards set forth in that rule and this opinion shall be applied to future days of hearing in this matter and should be applied promptly in reviewing portions of the hearing already undertaken to determine what should be made public under the rule.
The rule, which was revised in January 2013, is linked here.
The case was brought by a media organization. (Mike Frisch)
Friday, April 5, 2013
An attorney's depression caused his unethical conduct, consisting primarily of neglecting bankruptcy and mortgage/refinance matters.
As a result, the New York Appellate Division for the First Judicial Department suspended him indefinitely based on his present inability to practice law.
The mental health issues came to light in the attorney's deposition:
In March 2011, in furtherance of the Committee's investigation, respondent was deposed by the Committee and testified as follows: In 2008, respondent's depression, with which he had been afflicted since the age of 22, was greatly exacerbated by the traumatic death of two individuals, - his life partner, who died after his car careened off a mountain in October 2008, and his niece, who died after she hit a tree while skiing in March 2009. Despite the aforementioned deaths, respondent took no time away from his practice to grieve because at the time the number of loan modification cases which he was retained to handle significantly increased. Moreover, shortly after the death of his life partner, respondent began to consume large quantities of alcohol, becoming an alcoholic. Although respondent joined Alcoholics Anonymous in March 2009, shortly after his niece's death, and began therapy for his depression in November 2009, he nevertheless found it difficult to both manage his law practice and focus on recovering from his depression and alcoholism. Lastly, in 2009, respondent's paralegal, who was critical to respondent's practice, quit. Accordingly, with respect to the circumstances giving rise to the client complaints against him, respondent attributed any deficiencies in the handling of his client's cases to the sudden growth of his practice at a time when, due to worsening depression, alcohol addiction and the loss of a valued employee, he was ill-equipped to manage it properly.
While at the time of his deposition, respondent had been sober and in recovery, was seeing a therapist for his depression, was on 10mg per day of Lexapro, a depression medication, and was still running his practice, he nevertheless testified that running his practice was very challenging. Specifically, respondent testified that he was "at a point in [his] practice where [he was] actively trying to downsize and perhaps take a break." After his deposition, by his own account, respondent's depression worsened and hefound it increasingly difficult to practice law. In September 2011, respondent sent aletter to the Committee informing itthat he was closing his practice because his health had worsened and he wanted to continue his recovery. In November 2011, whenrespondent was again deposed by the Committee he reiteratedthat since his depression had worsened and he couldn't both run a law practice and effectively treat his depression and alcoholism, he had stopped practicing law,closed his law practice, vacated his office, and with the assistance of other lawyers, referred active matters to other attorneys, refunded unearned legal fees, and where necessary, sought court permission to withdraw from pending matters.
Here, respondent's testimony at his depositions establishes that he is afflicted with severe depression, that he became an alcoholic as a result thereof, and that he cannot both practice law and focus on his recovery and therapy. Moreover, within his affidavit, respondent admits that his depression has contributed to the neglect of his clients' legal matters, such that his clients have filed complaints against him. Lastly, respondent's treating psychiatrist corroborates respondent's assertions, and to the extent that she recommends that respondent cease the practice of law, she establishes that respondent's condition renders him incapable of practicing law.
Thus the suspension is not discipline for misconduct. (MIke Frisch)
Thursday, April 4, 2013
This notice appears on the web page of the District of Columbia Bar:
The D.C. Bar Budget Committee has unanimously approved a proposed budget for the Bar’s fiscal year that begins July 1. A public hearing to answer member questions on the proposed budget will be held at 1:30 p.m. on April 9 at the Bar’s headquarters.
The committee, chaired by President-Elect Andrea Ferster, is recommending a balanced budget for dues–funded programs, and sufficient surplus to fund reserves at recommended levels. The Bar’s strategic plan guided the development of both the operating and capital budget proposals. The committee’s proposal would increase annual dues from $255 to $265 for active members and from $127 to $130 for judicial members, while dues for inactive members would remain the same at $130. (Full budget details appear in the April 2013 Washington Lawyer.)
After receiving and considering public comments, the Budget Committee will recommend a final proposed budget to the Bar’s Board of Governors for approval in mid–April.
The hearing will be held at the Bar’s headquarters, located at 1101 K Street NW, room 205.
If you click on the link, you will see that the so-called "full budget details" are, in fact, a one-page summary that tells the reader next to nothing about how dues are really spent.
I strongly encourage members to attend this session and demand some real information and accountability for the use of mandatory dues. (Mike Frisch)
An attorney who converted the inheritance of an incarcerated client was suspended for two years by the Oklahoma Supreme Court:
When released from prison in March 2011, the client requested all of his remaining funds to be delivered to him in lump sum. Respondent initially told the client that the funds were "unavailable," but eventually revealed that she had spent the funds. She promised she would "recoup it as quickly as possible." At this time, Respondent gave client $1,000 and told him that she was going to get a loan to repay the entire amount. From March to June 2011, Respondent had several conversations with client and made two more payments of $1,000. In each conversation with client, Respondent told client he had the right to file a complaint with the bar association or report this matter to the district attorney. Respondent's initial application for a loan was denied.
In June, 2011, Respondent made a second application for a loan. This loan took almost three months to complete, but when approved, its proceeds were used to repay client. During the time the loan was being processed, Respondent went to Mississippi, was hospitalized, and did not return to Oklahoma until September 27, 2011. Upon her return to Oklahoma, she told client that she would repay him from the loan that was due to close on September 30, 2011.
When client did not hear from Respondent at the beginning of September, the client hired a new attorney to help him recoup the funds. On September 19, 2011, the new attorney wrote a letter to the General Counsel of the Bar Association stating that he had been in contact with Respondent and that while she had promised payment, it had not been forthcoming to date. Less than three weeks later, the new attorney sent the General Counsel a letter on October 7, 2011, reporting that Respondent came to his office and paid the client in full plus interest. The letter further stated: "[Respondent] had worked very hard to obtain these funds and was very concerned about making [the client ] whole in this transaction. Health problems simply prevented her from handling it in a timely manner." The new lawyer did not charge client for the assistance he provided in facilitating the repayment to client.
The repayment, full cooperation and other factors led to a sanction less than disbarment:
...due regard need also be given to the fact that Respondent has had no other grievances or ethical violations in eight years of practice prior to this incident. Due regard need also be given to as her past pro bono work in the Lawyers for Hero's project and her representation of clients who could not fully pay her for the work she performed.
While these circumstances do not excuse the misconduct that occurred, nor lessen the seriousness of that misconduct, they do deserve to be weighed in determining the appropriate discipline we impose to protect the public, the legal profession and administration of justice.
An attorney who deposited a cashier's check purported drawn on a JP Morgan Chase bank account into his trust account sued the bank when it dishonored the check.
The New York Appellate Division for the Second Judicial Department affirmed the dismissal of the action against the bank.
On January 6, 2011, the plaintiff allegedly received a cashier's check from a third party in the amount of $295,500, and deposited that check into its Interest On Lawyer Account Fund (hereinafter IOLA) bank account at Citibank. The cashier's check purportedly was drawn on the defendant JP Morgan Chase Bank, N.A., a subsidiary of the defendant JP Morgan Chase & Co. Relying on the validity of the cashier's check, the plaintiff transferred the sum of $272,250 from its IOLA account to another third party on January 7, 2011. On January 12, 2011, the defendants allegedly dishonored payment on the cashier's check. The plaintiff commenced this action against the defendants to recover damages for negligence and fraudulent concealment, alleging, among other things, that the defendants were negligent in failing to safeguard their cashier's checks, in failing to inform the public that forged or counterfeit checks bearing the defendants' names were being circulated throughout the banking system, and in failing to investigate the matter after receiving the subject cashier's check for deposit.
...the only duty which the defendants owed to the plaintiff was to pay the check, return the check, or send notice of dishonor (see Greenberg, Trager & Herbst, LLP v HSBC Bank USA, 17 NY3d at 577-578). As the complaint failed to allege that, upon the defendants' failure to pay the check, they breached their duty to either return the check or send notice of dishonor, the Supreme Court properly granted those branches of the defendants' motion which were to dismiss the first three causes of action, all of which sounded in negligence.
The Indiana Supreme Court imposed a stayed sixty-day suspension with "at least" two years of probation in a matter that started with a trust account check overdraft.
The attorney claimed it was a "mistake, but in the next three years of communication with the [Disciplinary] Commission, he could not adequately explain the reason for the overdraft or account for trust account funds."
The commission had directed the attorney to retain a CPA to audit the trust account "but the CPA could not perform an audit due to lack of documentation."
The commission then did an audit, which revealed that personal and business expenses were paid from the trust account, at least 55 overdisbursements and 14 cash withdrawals.
Fortunately, there was no invasion of client funds because the attorney "kept more than a nominal amount of personal funds in the trust account..."
Some might call that a benefit of commingling. (Mike Frisch)
An attorney's fifth disciplinary proceeding in the past ten years has resulted in a three-year suspension by the Pennsylvania Supreme Court.
The attorney had been informally admonished twice, privately reprimanded, reprimanded and finally suspended for three months stayed. He then engaged in additional instances of neglect as well as failure to communicate and return unearned fees. He also continued to practice after his administrative suspension for failure to fulfill CLE obligations.
Two justices would impose a five-year suspension. (Mike Frisch)
Wednesday, April 3, 2013
The April 2013 edition of the California Bar Journal reports the following disciplinary disposition:
[An attorney] was suspended for two years, stayed, placed on two years of probation with a six-month actual suspension and he was ordered to take the MPRE and comply with rule 9.20 of the California Rules of Court. The order took effect Feb. 14, 2013.
[He] stipulated that his criminal convictions in two separate matters do not involve moral turpitude but do warrant discipline.
In the first matter, he was convicted in 2011 of evading a police officer with reckless driving and assault with a deadly weapon (his car). He was behaving erratically and parked so that his car blocked northbound lanes of the Pacific Coast Highway. When an off-duty fireman who was riding a motorcycle stopped out of concern for [his] safety and concern that he might be suicidal, [the attorney] tried to run him down with his car.
He fled the scene and was stopped, standing through the sunroof of his car, yelling and shaking his fists at other cars. He fled again when a police officer approached, throwing an open beer can from his car. After he was arrested, tests found the presence of marijuana and a trace amount of alcohol in [the attorney's] system. [editor's note -- the summary uses a different last name for the attorney starting with this reference]
In the second matter, [the attorney] was convicted in 2011 of two misdemeanor violations for public nudity after exposing himself twice in separate incidents hours apart.
[He] received limited mitigation for cooperating with the bar’s investigation and for 12 years of discipline-free practice. He also completed a 90-day in-patient drug and alcohol treatment/recovery program.
The stipulation of misconduct is linked here. (Mike Frisch)
The New Hampshire Supreme Court has affirmed a decision of the Bar Association Public Protection Fund Committee ("PPFC") that denied a claim for reimbursement for fees paid to an attorney.
The PPFC concluded that the claimant "failed to demonstrate that the funds at issue were lost as a result of [the attorney's] embezzlement, conversion, or theft."
The case arose from a disciplinary matter that resulted in the attorney's suspension for two years. The misconduct involved conflicts of interest but not conversion. The court declined to disbar the attorney due to the absence of a selfish or improper motive.
The court noted that the standard of review of an PPFC denial of payment was a question of first impression.
The PPFC "sustainably exercised its discretion when it denied the...claim for failing to prove by a preponderance of the evidence that [the] losses resulted from the conversion or theft of client funds by [the attorney]..." (Mike Frisch)
What happens when an attorney resigns from a federal district court bar while there are pending disciplinary charges?
An attorney who resigned from a district court in the face of witness intimidation, missed deadlines, repeated violations of local court rules and altering court document charges was suspended for one year by the Oklahoma Supreme Court.
The court considered mitigating evidence in setting an appropriate reciprocal sanction
In his Response, Respondent admitted to substantially all the acts that gave rise to the disciplinary proceedings. He offered explanations, that he acted impulsively - a result of his ADHD. It does appear that he is taking steps to manage his symptoms. Hiring an "organized" assistant and implementing a system to timely manage cases is a laudable effort, but it does not address the overriding issue of Respondent's honesty.
Although Respondent testified he has experienced the symptoms of ADHD all of his life, he only sought help following his suspension in federal court. Furthermore, testimony revealed the Respondent does not have a typical doctor/patient relationship with the psychiatrist currently treating his condition. The psychiatrist has never billed Respondent for his services, does not maintain records of his treatment, and is not willing to prescribe additional medications to manage Respondent's condition. As illustrated by hearing testimony, Respondent continued to engage in questionable actions after being prescribed medication intended to reduce his impulsive behavior.
While it is possible that Respondent may suffer from an illness which makes it more difficult for him to manage himself, his affairs or the affairs of others, it does not remove from him the responsibility of acting with honesty and integrity.
Dissenting justices would suspend the attorney for two years and a day. (Mike Frisch)
Tuesday, April 2, 2013
The New York Appellate Division for the First Judicial Department has disbarred an attorney as reciprocal discipline for a sanction imposed in the Virgin Islands.
There were two instances of misappropriation, one of the particularly ugly variety:
The second matter involved Fitzgerald Morris, a blind man who retained respondent to represent him in a lawsuit. Although respondent settled Morris' action for $250,000, he retained $37,654.98 of the settlement proceeds and promised that payment would be forthcoming. Respondent, however, failed to remit the funds to Morris, who, in September 2005, filed a grievance with the EGC.
The New York Court of Appeals has affirmed an Appellate Division conclusion that a trial court had improperly discharged the defendant's Legal Aid Society attorney.
The case involved robbery charges and "was marked by multiple adjournments, over a course of 15 appearances by a total of ten different assistant district attorneys (ADAs), and defendant's assigned counsel, the Legal Aid Society."
The judge accommodated several prosecution adjournment requests and set a trial date.
The Legal Aid Society attorney then advised the court he was leaving the office and requested a control date rather than a trial date. The court refused, removed the attorney (over a Legal Aid Society supervisor's objection) and set the case for trial.
The case was assigned to another judge and led to a guilty plea.
The Appellate Division majority found that the trial judge had granted "numerous requests for adjournments" from the People while "disparaging" defense counsel.
The court here found the plea no bar to review.;
Here, the claim to counsel is so deeply intertwined with the integrity of the process in Supreme Court that defendant's guilty plea is no bar to appellate review. A claim that removal of counsel was part of a court's disparate, unjustifiable treatment of defense counsel goes to the fundamental fairness of our system of justice. While the right to counsel of choice is qualified, and may cede, under certain circumstances, to concerns of the efficient administration of the criminal justice system, we have made clear that courts cannot arbitrarily interfere with the attorney-client relationship, amd interference with that relationship for the purpose of case management is not without limits, and subject to scrutiny.
The court found that the Appellate Division did not abuse its discretion in concluding that the request for adjournment should have been granted. (Mike Frisch)
The Louisiana Supreme Court accepted a petition for consent discipline and imposed a deferred suspension of three months of an attorney who was accused of violating Rule 8.2 by making a false statement concerning a judge.
Two justices indicated that they would reject the consent petition. (Mike Frisch)
Monday, April 1, 2013
From the April 2013 California Bar Journal:
[An attorney] was disbarred Feb. 14, 2013, and was ordered to make restitution and comply with rule 9.20 of the California Rules of Court.
The State Bar Court found that [the attorney] committed eight acts of misconduct in two matters, both stemming from the actions of a non-attorney who worked virtually unsupervised for [him].
[The attorney] was a criminal defense attorney who, in an effort to increase his client base, hired Nancy De Duling, who had operated a translation and interpreting business in the San Fernando Valley for a number of years. She also conducted short sales, foreclosure avoidance and loan modification work and although [he] had little interest in such work, he saw it as a potential source of future criminal defense work.
He opened a law office in Van Nuys which essentially was run by De Duling. She interviewed and accepted clients, entered into fee agreements and had authority to handle matters on behalf of the clients. When clients began to complain about how their matters were being handled and demanded refunds of their fees, [the attorney] either ignored them or forwarded the inquires to De Duling, who continued to use [his] name and letterhead even after disciplinary charges were filed against him.
In the first of the two matters for which he was disbarred, a couple hired [the attorney] to modify their home loan. De Duling advised them to try to have their mortgage reduced from $3,119 per month to $2,400 and to make payments to her instead of the bank. They did so, giving her a total of $38,400 that she never gave to the bank or deposited in a client trust account. The clients had never met [him] and when they sent him a lengthy letter detailing their complaints because their house was about to be foreclosed, he made no effort to contact them. When they fired him and demanded a refund of their money, he “flipped his lid,” but waited to discuss the matter with De Duling, who assured [him] everything “was good.”
The couple lost their home and their equity and believe they will never be able to buy another home. They live in a trailer inherited from the woman’s mother. Although [the attorney] told the State Bar all their money had been turned over to the bank, two checks he provided as proof were forged. At the time of his trial, he had not reported De Duling to the police.
Judge Donald Miles found that [he]failed to deposit client funds in a trust account, pay out client funds promptly or perform legal services competently, and he misappropriated funds through gross negligence of his employee.
In the second matter, a client whose car was about to be repossessed hired Sanz and gave De Duling $3,000 that he thought would be given to the car financing company. The client received papers from [his] office that bore a court stamp that was in fact falsified. [He] eventually returned $3,000 to the client.
Miles found that [he] failed to perform legal services competently, deposit client funds in a trust account or returned unearned fees, and he misappropriated funds through gross negligence of his employee.
In mitigation, [the attorney] had no prior discipline record, presented evidence of his good character and he cooperated with the bar’s investigation. Nonetheless, Miles recommended his disbarment, citing his “unacceptable indifference” to his professional obligations, allowing an employee to hold a position in which she could steal money from clients, and continuing to defend De Duling despite the complaints about her. Further, Miles said, [his] “claim of ignorance is not‘bliss’ in this case; it is intolerable. The future protection of the public and the profession require that he be disbarred from the practice of law.”
The Illinois Administrator has filed a complaint alleging billing fraud in three foreclosure actions.
The complaint contends
Respondent’s entries on the billing statements provided to [client] Garcia were false, and Respondent knew they were false, because Respondent double-billed, and, in some instances, triple-billed Garcia for the performance of identical work on each billing statement. In addition, Respondent billed excessive time at her attorney rate of $175 per hour for administrative tasks such as photocopying client documents and organization of client files, and also billed time for meetings and phone calls that never took place.
The New Jersey Supreme Court has suspended an attorney for three months and until further court order.
The Disciplinary Review Board noted that
...respondent's conduct recealed a disturbing pattern that permeates most of the counts in the ethics complaint; she agreed to represent a criminal defendant, accepted a fee, performed little or no services, displayed a lack of knowledge about criminal practice and procedure, and resorted to blaming and criticizing the grievants after ethics charges had been filed against her.
The DRB noted that the respondent had practiced for twenty-four years without discipline but found that factor "more than offset by the aggravating factors" principally her lack of credibility and "hearing diatribes [that] displayed a lack of respect for the disciplinary process." (Mike Frisch)