February 22, 2013
Reinstated Without A "Scarlet Letter Of Shame"
The Alaska Supreme Court has granted the reinstatement peition of an attorney who was disbarred in 1994.
He was disbarred primarily for an affidavit that falsely claimed that a judgment on behalf of a client was unpaid and forging a client's endorsement on a check.
Among the other violations were making sexual advances toward a client and kicking opposing counsel.
The petitioner has sought and been denied reinstatement on four prior attempts.Here, the court agreed with the favorable recommendation for reinstatement, concluded that he had matured and was rehabilitated.
The court concluded that reinstatement should be subject to a three year mentoring period, which was not "punitive or excessive."
However, the court did reject the imposition of a requirement that the petitioner "advise potential future clients of the fact and basis of [his] previous disbarment..." as proposed by the Disciplinary Board.
Such a "scarlet letter of shame" was not appropriate as the decisions leading to his disbarment and efforts to secure reinstatement are "readily available to any potential client who chooses to conduct research prior to retaining [him]." (Mike Frisch)
Learning To Live With Disappointment
The Kansas Supreme Court has imposed a six-month suspension and "hoped this period of suspension, sooner rather than later, will impress upon respondent the seriousness of his situation and the necessity that he seek professional counsel and assistance in order to regain his ability to practice law."
The court quoted the hearing panel report concluding that the attorney's modus operandi was to "make threats as a matter of standard practice." He
went from collecting a fee to a personal vendetta. When [he] personalized the litigation, [he] showed a serious lack of professionalism...[He] must come to realize that if he continues to practice law, he will be repeatedly disappointed in the results of his cases as are all lawyers and he has to learn to live with that instead of setting out to punish all who disagree with him.
In The (Forged) Name Of The Father
The Louisiana Supreme Court imposed a suspension of a year and day, with all but six months deferred, for the commission of a criminal and dishonest act.
The attorney "twice forged her deceased father's name on documents needed to transfer the title of a 1995 Dodge Neon to her name."
She also must make restitution to her parents' estate in the fair market value of the car. (Mike Frisch)
Heart In Montana But Iowa For Eternity
A woman executed a will that specified her wish to be buried in a "moderately priced wooden coffin" in a family plot located in Billings, Montana.
Her wishes in that regard were reaffirmed in a letter to her family prior to her death, where she noted that she had "bought a casket made by [Trappist] Monks" to hold her remains.
She also identified Billings as her earthly home and ended with this:
I know that you all love me and want to honor my final requests, and that is why I am writing this to you. I just want all of you to know that this is very important to me and because you all love and respect me I know that you will see my wishes are carried out.
When she passed away, her husband of sixty years decided to place her at permanent rest in Iowa.
The Iowa Supreme Court held today that the rights of the surviving spouse trump the wishes of the decedent and that the husband could proceed as he wished.
There is a dissent by Chief Justice Cady, joined by Justice Zager:
I am confident our legislature did not intend the result in this case, nor to render future generations of Iowans powerless to direct for themselves their funeral arrangements and final disposition of their remains.
The remains remained at an Iowa funeral home pending a final court order.
The Gazette reported yesterday that the husband is a retired attorney who had separated from the deceased in 1996. She took ill and died while visiting him in Iowa. (Mike Frisch)
New Jersey Upholds Denial Of Handgun Carry Permit For Outside Home
The New Jersey Appellate Division has rejected an asserted Second Amendment violation in a case that involves the denial of a permit to carry a firearm outside his home.
The applicant sought to establish his justifiable need to carry because he received substantial cash payments in connection with his landscaping business. The trial court rejected his contention regarding his justifiable need.
Both trial and appellate court rejected the constitutional claim, as stated by the Appellate Division:
...given the presumption of constitutionality, the lack of clarity that the Supreme Court in Heller intended the extend the Second Amendment right to a state regulation of the right to carry outside the home, and the Second Circuit's explicit affirmation of a law similar to ours, we affirm [the trial court's] determination that [applicant's] rights were not infringed.
The State had appealed a police chief's decision to issue a permit to the applicant. (Mike Frisch)
An Illinois attorney has moved by consent disbarment based on a statement of charges that alleges:
Between 2001 and 2012, Movant worked for the American Library Association ("ALA") as the General Manager of Booklist Publications, a non-legal position. In this capacity, Movant had the authority to request checks for amounts less than $5,000 in order to pay vendors. Movant’s supervisor, Bill Ott ("Ott"), who was required to approve Movant’s check requests, had given Movant permission to initial requests on his behalf.
On February 23, 2006, Movant opened a checking account at Washington Mutual (now Chase Bank). This account was entitled, "Mary Wilkens d/b/a MW Services." "MW Services" was a fictional entity created and used by Movant in order to give the appearance that she was requesting checks from the ALA to be paid to a legitimate business vendor for services rendered, when in fact Movant intended to personally receive the benefits of the checks’ proceeds.
Between 2006 and 2012, Movant made at least 29 fraudulent check requests to the ALA accounting department, requesting that the checks be made out to a vendor identified as "MW Services," in various dollar amounts. Movant placed Ott’s initials on all of the check requests made for "MW Services," without Ott’s specific knowledge as to the intended purpose of those check requests.
Between 2006 and 2012, the ALA accounting department authorized payment on, and subsequently delivered to Movant, at least 29 checks made payable to "MW Services." The amount of the checks made payable to "MW Services" totaled $174,300.53.
The statement also reflects that $175,000 was paid in restitution. (Mike Frisch)
February 21, 2013
Making A Bad Situation Worse
A recent complaint filed by the North Carolina State Bar alleges that the attorney engaged in sexual relations with a married client for several months in 2009. The accused attorney also was married.
The client's husband learned of the relationship and sued him for alienation of affection.
The attorney and his spouse filed a complaint against the husband. The attorney made statements that accused the (now former) client and her husband of falsely claiming the existence of a sexual relationship and creating false evidence.
The complaint alleges that the attorney's denials were false, that he made disclosures that violated the duty of confidentiality, that he prepared a false affidavit for the client to sign and that he threatened her.
Further, it is alleged that he tried to get his legal assistant to not reveal the relationship.
Her reply: "[S]he would not put her hand on the Bible and lie for anyone."
Finally, it is alleged that the attorney pleaded guilty to related criminal misdemeanor charges of communicating threats and obstruction of justice.
The Observer News Enterprise had this report on the criminal charges. (Mike Frisch)
Client May Discharge Attorney But Contingent Fee Remains Earned
The Rhode Island Supreme Court affirmed the grant of summary judgment to an attorney in a suit for fees against a former client.
The attorney had represented the client in actions against her late father's estate for a 15% contingency fee.
After the claim was reduced to settlement, the attorney collected his fees as payments were recovered. The client later discharged the attorney and claimed no obligation to continue to pay.
The court found that the attorney's rights under the contingent fee agreement had fully vested when the underlying claim was settled. Although the client was free to discharge the attorney, such action "does not alter his entitlement to fees already earned." (Mike Frisch)
A Boatload Of Reciprocal Discipline
The Wyoming Supreme Court has imposed a public censure as reciprocal discipline based on a public reprimand ordered in Utah.
The Utah sanction was imposed by consent and is appended to the Wyoming order.
The misconduct involved client-related misconduct in a single matter.
The Utah order reflects another notable fact.
Other than in Utah, the attorney is admitted in 25 state jurisdictions.
In other words, he is liable for bar dues and professional discipline in over half the states of the United States.
Alaska, Hawai'i, Maryland, Minnesota, Tennesse, Texas, Washington State, Wisconsin, North and South Dakota and on and on.
Is this a record? (Mike Frisch)
Out Of Wyoming
The Wyoming Supreme Court has disbarred an attorney who
improperly charged personal expenses for airfare, hotels, rental cars, meals and other travel - related expenses to [his] firm, representing that such expenses related to cases upon which he was working for clients pr for client development purposes.
The total improper billings amounted to $4, 520.13.
Although the attorney initially had denied misconduct when confronted by his partners, he now is remorseful and agrees that disbarment is appropriate. (Mike Frisch)
No Progressive Discipline
The Wisconsin Supreme Court has suspended an attorney for sixty days for mishandling a divorce matter.
the attorney had been disciplined on four previous occasions - a private reprimand, a public reprimand, a sixty day suspension in 2007 and a public reprimand in 2012.
Chief Justice Abrahamson dissented on sanction:
I would not accept the parties' stipulation of a 60-day suspension. The attorney has been disciplined four times previously for similar offenses, including a 60-day suspension in 2007.
This stipulation is not in keeping with the concepts of progressive discipline or with assisting Attorney Dade in changing his behavior to protect the public.
Justice Bradley joined the dissent. (Mike Frisch)
February 20, 2013
From National Lampoon To Prison Cell
The Indiana Supreme Court has imposed a suspension pending further disciplinary proceedings as a result an attorney's criminal conviction.
13WTHR.com had this report on the criminal case:
Tim Durham will spend the rest of his life in prison. Durham was convicted of cheating his clients out of $200 million in a Ponzi scheme, and on Friday, a judge sentenced him to 50 years behind bars.
U.S. District Judge Jane Magnus-Stinson sentenced Durham, a former chief executive of National Lampoon who was profiled in CNBC's "Rise of the Super-Rich" report in 2008, following his convictions in June on charges of securities fraud, conspiracy and 10 counts of wire fraud.
Durham, who ran the investment business Fair Finance, was sentenced to 50 years. Prosecutors had asked for life, while Durham wanted just three.
Two co-conspirators also learned their fate Friday. Durham business associate James Cochran was sentenced to 25 years while Rick Snow was sentenced to ten.
Durham and Cochran were convicted in June on federal fraud charges. Durham was convicted on 12 counts and Cochran was found guilty on eight counts. Snow was convicted of five different charges.
Prosecutors say the three plundered Akron, Ohio-based Fair Finance of its assets and used the money to fund luxurious lifestyles.
"Mr. Durham will never spend another day of his life in anything other than a federal prison," said Joe Hogsett, US attorney, following Friday's hearing.
Fifty years is effectively a life sentence for 50-year-old Tim Durham.
"What Tim Durham and his associates destroyed in his own self-indulgence is irreplaceable," said Hogsett.
Durham spoke briefly before learning his fate saying, "I feel terrible they lost all their investments. I did truly believe and never intended that these companies would not succeed. I feel really bad."
Durham said he has read all 1,035 letters sent to the court by investors who lost it all, and listened to the four who spoke in court.
A 74-year-old former nun was one of them. She squarely faced Durham and said, "Shame on you!"
Barbara Lucacik asked the judge for justice, saying it was the righteous thing to do. Even though she lost $125,000, she extended Durham grace.
"Absolutely, I forgave him. It's the right thing to do," she said.
"He did wrong and we all have to pay for what we do wrong," said Janey Kalina, investor.
Kalina's father lost $170,000, his life savings as a farmer. She told the court she wasn't out for revenge but justice and felt pity for Durham as he shuffled to a holding cell in handcuffs and shackles.
"I was very sad for them because I don't know where their heart is," said Kalina. "I know my Dad's rewards will be in heaven. I don't know where theirs will be."
Durham's sentencing hearing started with arguments over the losses suffered by investors of Fair Finance.
Durham's attorneys argued Fair Finance had as much as $281 million reflected on a balance sheet in November 2009 at the time the government raided the company.
Durham's attorney said that proved Durham had no intent of loss for any person and said the recommended 220-year prison sentence was excessive by decades and in essence it was a case of "the tail wagging the dog."
Despite Durham saying he felt badly for his investors who lost their life savings, the judge said, "While I accept you feel bad, you don't feel any real, sincere remorse."
Judge Magnus-Stinson told Durham she needed to make sure the laws are respected, and that the nature and circumstance of the crime was long-standing and many years in the making.
"You were raised better than that," the judge said to Durham.
She also said she couldn't wave a magic wand and return money to the victims.
Prosecutors wanted life sentences for all three men. They say the three stripped Akron, Ohio-based Fair Finance of its assets and used the money to buy classic cars and other luxury items and to keep another Durham company afloat.
Attorneys for both Cochran and Snow asked the judge for less substantial sentences than Durham claiming they did not have control of operations at Fair Finance.
"We're gonna let the judge make a decision. The verdict is what it is and we're gonna deal with that going forward," said defense attorney John Tompkins before the hearing.
Tompkins said Snow lived "within the salary that he was provided by the company" and didn't take anything beyond that.
US Attorney Winfield Ong argued that the victims of Fair Finance had not been compensated for their losses. "We would love to see some assets for the victims. Unfortunately, that has not happened," he said.
Instead Ong said trustees who spent two years trying to find assets only found what amounted to $5.5 million.
"The evidence was that they did plunder this company. There was nothing left," said Ong, who determined losses of $202 million from the fraud.
The Bondsman, Part Two
The Minnesota Supreme Court has approved an agreed disposition of an indefinite suspension for professional misconduct that took place in Colorado.
The attorney participated in a "scheme to alter bail bonds after the fact in anticipation of a market conduct examination by the Colorado Department of Insurance in order to misrepresent that the files of a bail bond business were in compliance with Colorado law..." (Mike Frisch)
Reprimand For Notice Failure After Suspension
An attorney who failed to advise a criminal client, the prosecutor and tribunal of his suspension from practice has been publicly reprimanded by the Wisconsin Supreme Court:
Attorney S. did not advise J.C., the presiding court, or the assistant district attorney that his license to practice law had been suspended. On October 17, 2007, J.C. telephoned Attorney S. to ask about the status of his case. Attorney S.'s telephone was disconnected. J.C. then sent Attorney S. an e-mail. Attorney S. responded and provided a new telephone number but he did not inform J.C. that his law license had been suspended.
J.C. telephoned Attorney S. multiple times and sent several e-mails seeking information about the status of his case. Attorney S. failed to provide meaningful responses to J.C.'s inquiries, and continued in his failure to inform J.C. that his law license had been suspended, that he could no longer represent J.C., and that J.C. should hire a new attorney.
J.C. learned through a source other than Attorney S. that Attorney S.'s law license had been suspended. On January 24, 2008, J.C. sent Attorney Smead an e-mail and specifically asked him to refund the $2,000 advanced fee. Attorney S. did not respond to the request and did not provide any refund.
J.C. subsequently retained another attorney to represent him in his criminal matter. In February of 2008, J.C. submitted a claim for reimbursement to the Wisconsin Lawyers' Fund for Client Protection ("the Fund"). The Fund approved payment of $2,000 to J.C. for reimbursement of funds lost as a result of Attorney S.'s conduct.
The court noted that the misconduct took place at the time of the suspension and that his approach to practice and attitude has improved. (Mike Frisch)
February 19, 2013
Title Officer's Conversion Leads To Disbarment Recommendation
An Illinois Hearing Board has recommended disbarment of an attorney for conversion of funds entrusted to him as the chief operating officer and managing partner of a title company:
Although Respondent's misconduct occurred while he was operating a business rather than conducting a traditional law practice, this does not insulate him from responsibility for his actions. It is well-settled that attorneys are subject to discipline for misconduct that occurs while acting in a private or business capacity, as well as that which occurs in a professional capacity as a lawyer. See In re Abbamonto, 19 Ill. 2d 93, 97, 166 N.E.2d 62 (1960). Thus, the Court has disciplined attorneys in circumstances similar to those present here, where attorneys acting as title agents convert funds they are holding in escrow on behalf of third parties. See In re Gwiazdzinski, 95 CH 726, M.R. 12828 (Sept. 24, 1996) (conversion of escrow funds while acting as principal shareholder and president of title company); In re Wells, 92 CH 576, M.R. 11735 (Dec. 1, 1995) (conversion of funds in escrow account while acting as title insurance agent).
After initially retaining counsel and responding to the investigation, the attorney failed to appear for his deposition and defaulted on the charges. The misconduct involved two checks in a total amount well in excess of half a million dollars.
In Illinois (unlike D.C.), default really means default:
In this case...Respondent's Answer was stricken and the Complaint allegations were deemed admitted. Thus, the Administrator was not required to submit evidence in support of the facts alleged or to otherwise prove those allegations in order to establish the misconduct charged. See In re Golden, 09 CH 88, M.R. 25509 (Nov. 19, 2012) (rejecting argument that Administrator was required to "prove-up" the charges of misconduct where answer was stricken and complaint allegations deemed admitted as discovery sanction pursuant to Supreme Court Rule 219).
I would describe the D.C. default process if I didn't find the subject so depressing. Suffice it to say that the governing rules are so unworkable that Bar Counsel virtually never seeks a default.
If you want see what a "default" rule looks like that requires Bar Counsel to fully prove its case anyhow and allows an attorney to get the result set aside, go to this link and check out Board Rule 7.8. (Mike Frisch)
Incapacitated By PTSB
The North Dakota Supreme Court ordered that an attorney be placed on incapacitated status in light of the following averments:
[The attorney] asserted that due to severe and chronic symptoms of Post-Traumatic Stress Disorder, his ability to practice law is adversely affected. He asserted the following facts. He experiences a high degree of anxiety, intrusive thoughts about Vietnam, flashbacks, and the emotional avoidance of people which has resulted in him being incapacitated to practice law. He is unable to concentrate on writing or on what filings need to be accomplished on behalf of his clients, is unable to remember case details from day to day, feels overwhelmed trying to accomplish the simplest details, is unableto write cogently, and cannot seem to recall what to do on the simplest cases. [ The attorney] provided a letter from his treating physician supporting his belief that he is currently unable to practice law. [He] requested that a trustee be appointed under N.D.R. Lawyer Discipl. 6.4
Claimed Disability Draws Interim Suspension
An attorney who is the subject of an ethics investigation alleged an inability to respond to the allegations due to her physical condition.
The New York Appellate Division for the First Judicial Department imposed an interim suspension:
Here, respondent's contention that her medical disability prevents her from adequately defending herself in proceedings before the Committee requires her immediate suspension from the practice of law pursuant to the Rules of the Appellate Division, First Department (22 NYCRR) § 603.16(c)(1), and accordingly the branch of the motion which seeks suspension is granted. However, the branches seeking an order staying the Committee's investigation and quashing the subpoena served upon respondent are held in abeyance pending a determination whether she can defend herself.
While the medical evidence that respondent submitted constitutes some evidence of her general incapacity, it does not conclusively demonstrate that she is incapable of defending herself in that she has continued to work as a fiduciary. For that reason, the Court seeks a further examination by qualified physicians.
Thus, the cross motion to suspend respondent for misconduct is held in abeyance pending a determination whether respondent's incapacity prevents her from adequately defending herself against those claims.
The court directed that a doctor's examination to explore the disability claim be conducted promptly.(Mike Frisch)
February 18, 2013
The Hawai'i Supreme Court has disbarred an attorney for numerous ethical violations in several matters.
The court found, among other violations, that the attorney engaged in conflicts of interest by serving as both counsel and bail bondsman to two clients.
The Star-Advertiser had this report on the attorney's April 2011 suspension by the court:
An attorney suspended by the Hawaii Supreme Court this week has had ethical and financial complaints dating more than five years.
KITV reported Wednesday investigative files show complaints against Honolulu attorney Frank M. Fernandez include misappropriation and misuse of client funds, coercion and mixing his law practice with Exodus Bail Bonds, which investigators say is owned by his wife.
He was suspended from practicing law on Monday.
The disciplinary counsel says a judge ordered Fernandez to keep his bail and legal businesses separate in 2006, but recent complaints say he kept bail money as payment for legal work.
No Fire To Light
The Pennsylvania Supreme Court accepted an attorney's resignation and imposed consent disbarment in matters that involved the defense of civil cases assigned to him by his firm.
The charges (appended to the court's order) allege that the attorney ageed to submit matters to arbitration without the knowledge or consent.
He was unable to deliver the proceeds of the resulting arbitration awards and falsely stated that he was trying to "light a fire" under his allegedly shoe-dragging client.
He also was charged with false bilings. (Mike Frisch)