March 1, 2013
Stayed Suspensions In Colorado
The Colorado Presiding Disciplinary Judge has approved a conditional admission of misconduct and imposed a stayed six-month suspension in a case where
After meeting with and accepting payment from a client, [the attorney] determined that the client had overpaid him by $182.00. For a period of approximately a week, he kept the overpayment in his desk drawer and did not record the overpayment or notify his law firm or his client of the overpayment.
The attorney must complete a two-year probation.
Another Colorado attorney received a stayed six-month suspension for being unable to pay a restaurant bill after becoming "extremely intoxicated" at the establishment. The attorney must complete a three-year period of probation. (Mike Frisch)
The Iowa Supreme Court has ordered a 60-day suspension of an attorney whose misconduct took place "because [he] had an untreated substance abuse problem."
The attorney was admitted in 1984. His practice focus was federal criminal defense work. There were a substantial number of favorable testimonials regarding his professional work and character.
However, his alcohol consumption "was regular and became problematic, by his own admission." He used marijuana "casually" and was convicted in 2003 of a federal misdemeanor when he sought to bring some through airport security. He was privately admonished as a result.
He divorced and testified that the resulting depression along with alcohol "led him to try crack cocaine." He was arrested in 2011 after being targeted by a DEA sting operation. He pled to a federal felony that would have been an aggravated misdemeanor under Iowa law, spent 15 days in jail and reported himself to Iowa disciplinary authorities.
The court considered his remorse and treatment in imposing a sanction. He must provide the court with evaluations indicating fitness to practice law in order to secure reinstatement. (Mike Frisch)
Court Rejects Bias Claim In Imposing Disbarment
In a case in which "[t]he evidence relating to the charges of failing to cooperate is central to all of the issues presented," the Nebraska Supreme Court has disbarred an attorney who was admitted to practice in 2001.
The court found that that the attorney's approach to the complaint of a client in a criminal case was "antagonistic, evasive, and untruthful throughout the investigation and the disciplinary hearing" and agreed with the referee that she demonstrated "not only a reluctance to cooperate, but belligerence and a pattern of stalling."
The attorney contended that the imposition of disbarment would demonstate the court's bias against minorities.
The court's response
We do not note in our disciplinary opinions the race of the attorney under discipline, because that is not relevant. As discussed above, disbarment is frequently the sanction in any case involving misappropriation of client funds, failure to cooperate with Counsel for Discipline, anf lying during a disciplinary investigation. This is true regardless of an attorney's gender, race, ethnicity or religion.
Come On Down
An attorney who retired from New Jersey practice in 2004 violated unauthorized practice rules by providing legal services post-retirement with an entity called "I've Got You Covered - Associates On The Go! . "
When the disciplinary authorities contacted her, she paid her required dues and was reinstated to active practice.
But the matter did not end there.
Disciplinary authorities advised her that she also was required to appear for an interview.
There were a series of telephone calls with a bar investigator. The attorney questioned the need for an in-person interview, saying that the bar was "making a mountain out of a molehill."
When pressed in the final call, she responded with an "expletive - laden rant" and asked why the investigator was "f***ing harassing" her.
The Disciplinary Review Board found that the attorney had failed to cooperate with the disciplinary investigation, noting that the interview was an important component of the process.
The DRB proposed, and the Supreme Court impose, a reprimand. (Mike Frisch)
February 28, 2013
Disbarment Proposed For Foreign Legal Consultant
The Illinois Review Board has filed a recommendation that an attorney licensed as a "foreign legal consultant" be disbarred.
The review board rejected claims that the attorney's practice was properly confined:
While Respondent may have been authorized to assist his clients in immigration matters, that authorization did not extend to assisting them with incorporating and establishing businesses in Illinois. Supreme Court Rule 712(e) expressly limited Respondent to providing legal services in Illinois only on the law of the foreign country where he was admitted to practice. It prohibited Respondent from rendering advice on Illinois law (see Supreme Court Rule 712(e)(8)).
The preparation of articles of incorporation has been found to involve the practice of law in Illinois. Illinois State Bar Association Advisory Opinion 97-5 considered the question and concluded that, "while an individual may complete the forms for him/herself without receiving assistance, anyone giving advice to another in the completion of the corporate documents, such as the articles of incorporation, is unlawfully engaged in the practice of law, regardless of whether compensation is received." (Ill.St. Bar. Assn. 1995). While Respondent disagrees with this position, he has not provided us with a persuasive reason to disregard it.
The review board noted the absence of sanction precedent for misconduct by a licensed foreign legal consultant:
As the Hearing Board noted, there is no Illinois precedent for discipline of foreign legal consultants other than Respondent's prior disciplinary proceeding. Nonetheless, the circumstances of this case clearly reveal that Respondent is neither willing nor able to abide by the limitations upon a foreign legal consultant's practice. Despite Respondent's representations to the Administrator in his first disciplinary matter that he understood those limitations, he abused the privilege of his foreign legal consultant status, gave clients and other attorneys the false impression that he was licensed to practice in Illinois without limitation, and profited from his misrepresentations. Respondent's recidivism is a significant factor in aggravation that supports disbarment...
We recognize that Respondent has placed himself on inactive status and is no longer on the Master Roll of Attorneys, but we do not believe that he should have the opportunity to return to active status. We consider it unlikely that he would abide by the applicable ethical rules if he were to return to practice in the future. Therefore, we recommend that Respondent be disbarred as a foreign legal consultant. The purpose of our recommendation is not to punish Respondent, but to protect the public, maintain the integrity of the profession and protect the administration of justice from reproach.
The New York Appellate Division for the First Judicial Department has affirmed the dismissal of legal malpractice claims involving the handling and distribution of insurance payments for a business that was located in the World Trade Center on September 11, 2001.
The attorneys had initiated a chapter 11 proceeding on behalf of the business in August 2011.
The defendant attorneys had, by the time of the payment, moved their practice to the Marc Dreier firm.
This complicated things.
Defendants could not release the escrowed funds to their clients until the bankruptcy case was formally dismissed. They sought a "structured dismissal" of the case, negotiating with the creditors' committee and the U.S. trustee as to when and how the various interested parties would be paid by the estate. Defendants had advised plaintiffs that winding up the estate could "take some time." On September 26, 2008, after agreement with all of the necessary parties had been reached, Fox submitted a motion to the bankruptcy court to approve the voluntary dismissal of the bankruptcy proceeding. The bankruptcy court approved the dismissal in an order dated October 30, 2008. The order provided, in relevant part, for distribution of the cash held for plaintiffs within 15 days, with U.S. trustee fees being paid first, administrative expenses in the amount of $61,972.94 second, and all remaining cash to be paid to the secured creditors in partial satisfaction of the secured claim.
Following the bankruptcy dismissal order, Fox distributed $61,972.94 from a
TBF escrow account to pay the administrative fees, which largely consisted of its own legal fees. On December 2, 2008, after reconciliation of outstanding accounts with the U.S. trustee had been finalized, $3,475 was paid out of the TBF escrow account to the U.S. trustee in full satisfaction of fees. The remaining cash in the TBF escrow account belonged to plaintiffs, and was paid to them. Onthe same date, Fox sent an internal email to Dreier LLP accounting personnel requesting that a check payable to plaintiffs for $350,000 be drawn from the 5966 account and forwarded to Fox for delivery to plaintiffs.
Unfortunately and coincidentally, Marc Dreier was arrested the next day. Upon learning of the arrest, Traub immediately repeated his demand that Dreier LLP transfer funds being held in the 5966 account to the TBF escrow account. Dreier LLP acceded to this request, and the next day wired $441,145.58 to the TBF escrow account. These monies included the settlement payment to plaintiffs, as well as funds belonging to other clients of defendants. After the monies were transferred, Fox and Traub resigned from Dreier LLP and returned to TBF. On December 10, 2008, a federal district judge appointed a receiver for Dreier LLP and restrained the firm's assets. On December 16, 2008, Dreier LLP filed for bankruptcy.
The court found no basis for malpractice liability:
What separates this case from the cases cited by plaintiffs is the nature of the escrow account in which the subject funds were placed. Because the 5966 account had been used by Marc Dreier to operate his Ponzi scheme, the settlement funds became part of the pool to be distributed on a pro rata basis with the victims of the fraud (see Securities & Exch. Comm. v Credit Bancorp., 290 F3d at 89-90). Accordingly, the analysis performed in Carlson and OPM Leasing Servs. as to when the funds became the property of the intended beneficiary of the funds is irrelevant. Further, contrary to plaintiffs' argument, it makes no difference that when defendants transferred the funds to the Dreier LLP bankruptcy trustee they had been transferred to the TBF escrow account and were no longer in the escrow account which Marc Dreier had used to perpetrate his Ponzi scheme. Plaintiffs do not dispute defendants' position that the funds were transferred into the TBF escrow account with the understanding that they would not be released to plaintiffs without prior approval by whoever was ultimately assigned the tasks of sorting out the various claims which were sure to be made against the Dreier LLP bankruptcy estate.
A Louisiana Hearing Committee has recommended a year and a day suspension of an attorney based on a criminal conviction reported by the attorney's "former tenant/roommate."
On July 2, 2009, the attorney
led law enforcement officers on a high-speed chase from Mississippi into Louisiana, As police units follwed Respondent with lights and sirens on, she traveled in and out of traffic and ran other vehicles off the road. Respondent finally stopped at a Rest Area and was ordered to get on the ground. She refused and was then handcuffed.
The attorney was convicted of DWI first offense and failed to cooperate with the probation imposed. There has been a warrant for her arrest out since September 2011.
Also, the attorney did not participate in the disciplinary matter. (Mike Frisch)
Disqualification Where Defense Counsel Had Represented Witness
The Maryland Court of Special Appeals affirmed a conviction for second degree murder and other offenses.
The court rejected the contention that the defendant's desired trial counsel had been improperly disqualified.
The State had sought disqualification because defense counsel had previously represented a witness in the case.
Defense counsel asserted that his representation of the witness was brief and limited. He offered to set up a screen and have unaffiliated counsel cross-examine the witness. He further contended that, because the witness had filed a bar complaint against him, any privilege was waived.
The trial court nonetheless disqualified defense counsel, stating that: "there  really is a conflict were this case to go to trial with [defense counsel] at the table."
The court here:
In the circuit court's view, the risk of conflict outweighed appellant's right to counsel of choice. We agree.
Ironically, the witness refused to testify at trial.
The court also rejected the screening proposal
The circuit court was not required to adopt the use of co-counsel as a solution where the court perceived that the risk of conflict would persist.
February 27, 2013
Thy Brother's Keeper
The New York Appellate Division for the Second Judicial Department reaffirmed an eariler determination to impose a two-year suspension in circumstances described by the court:
Whether, and to what extent, attorneys are subject to discipline under circumstances where a defalcation was occasioned by someone other than the attorney within the attorney's firm, depends on a number of factors: (1) the subject attorney's partnership status and/or level of experience; (2) the presence (or absence) of "early warning signs" of financial improprieties, whether such signs were ignored and, if so, for how long; (3) whether the proper authorities were notified of defalcations upon their discovery; (4) the presence (or absence) of monetary loss to clients and the magnitude thereof; and (5) whether the attorney attempted to reimburse client losses caused by another (citations omitted) The foregoing factors were all considered in this matter, particularly the presence of "warning signs" and "red flags;" the extent of the clients' monetary losses; and the fact that there has been no reimbursement of the client losses caused by the respondent's brother.
The cases proffered by the respondent in support of his argument that he should be, at most, publicly censured, are inapposite. Unlike those cases, the respondent herein was charged with having been unjustly enriched by the use of clients' funds for his personal benefit, and that charge was sustained.
The most fundamental obligation of attorneys entrusted with client funds is the duty to safeguard those funds. As the Court of Appeals stated, that duty, if no other, is "crystal clear" and " a reasonable attorney, familiar with the Code and its ethical strictures, would have notice of what conduct is proscribed'" Matter of Galasso, 19 NY3d 688, *4, quoting Matter of Holtzman, 78 NY2d 184, 191). We reiterate that the respondent failed to maintain appropriate vigilance over his firm's bank accounts, resulting in actual and substantial harm to clients.
The ABA Journal had this earlier coverage. (Mike Frisch)
Cutting Edge Scholarship In Georgetown Journal Of Legal Ethics
The Winter 2013 (Vol. XXVI, No. 1) of the Georgetown Journal of Legal Ethics has just been released.
The volume has the following:
What If Legal Ethics Can't Be Reduced To A Maxim? by Andrew B. Ayers
Achieving Procedural Goals Through Indirection: The Use Of Ethics Doctrine To Justify Contingency Fee Caps In MDL Aggregate Settlements by Morris A. Ratner
Supreme Court Recusal From Marberry To Modern Day by James Sample
Law Firm Ethics In The Shadow Of Corporate Social Responsibility by Christopher J. Whelan and Neta Ziv
Kudos to the journal editors for their fine work.
Disclosure: I am (along with my colleague Mitt Regan) co-faculty advisor to the journal. (Mike Frisch)
An attorney represented an organization in defense of several employment matters from 2002-2004. The relationship ended when the client sued the attorney for malpractice.
The organization moved for disqualification in a pending case in which the attorney represented a plaintiff suing it in an employment matter. The trial court denied a motion to disqualify.
The South Carolina Supreme Court held that interlocutory appeal of the denial is not an available remedy. The issue can be addressed on appeal of the judgment. (Mike Frisch)
A Level Of Transparency
The web page of the Pennsylvania Disciplinary Board has a recent post that gives the public easy access to information about its work:
The Disciplinary Board has published a table of discipline numbers for 2012. In all, discipline was ordered in 272 cases, down about 10 percent from last year’s 300, but right at the average for the last seven years. Public reprimand, a new form of discipline last year, was ordered in nine cases. Other forms of public discipline, including probation, censure, suspension, and disbarment, were within the ranges of recent years. Private discipline, including informal admonition and private reprimand, were down by about a quarter. Reinstatements were back to typical level, after a two-year surge following the adoption of new rules on administrative suspension.
Statistical junkies can see the numbers here.
Here is a very detailed annual report for 2011 on operation of the Illinois ARDC. As in Pennsylvania, this report is easily found on the ARDC web page.
The Michigan system also makes information about its disciplinary operation readily available.
Massachusetts weighs in here.
If you visit this blog, you have heard this before. In the District of Columbia, I am unaware of any effort to let the public have access, much less ready access, to this type of information. (Mike Frisch)
February 26, 2013
The Bachelor Had A Wife
The New York Appellate Division for the First Judicial Department has imposed a six-month suspension for an attorney's bigamy:
The underlying facts are undisputed. Respondent married Theresa Wong in 1985. In or about 1995 he entered into an amorous relationship with Radiah Givens. Although married to Wong, respondent traveled with Givens to Jamaica, falsely informed a Jamaican government official that he was a "bachelor," executed marriage documents indicating that he was then a bachelor, and participated in a ceremony by which he and Givens were "officially married" under Jamaican law. According to respondent, Givens understood that their purported marriage was not a legal union, and they had no plans to cohabit after the Jamaican ceremony.
The court rejected public censure as the sanction:
That respondent's misconduct involves his personal life only, does not necessarily warrant a sanction less severe than suspension (see Matter of Gurevich, 94 AD3d 39 [1st Dept 2012] [18-month suspension for misconduct arising in the context of a commercial real estate transaction to which therespondent was a party]; Matter of Zulandt, 93 AD3d 77 [1st Dept 2012] [three-year suspension for misconduct stemming from an incident of domestic violence resulting in a misdemeanor assault conviction]; Matter of Bikman, 304 AD2d 162 [1st Dept 2003], lv denied, 100 NY2d 506  [18-month suspension for deceiving the landlord of a rent controlled apartment by submitting rent checks purportedly bearing the signature of the respondent's deceased sister]). On this record, we find that a six-month suspension is the appropriate sanction.
The Kansas Supreme Court has imposed disbarment of an attorney who, among other things, entered into a contingent fee agreement with a domestic relations client, engaged in a sexual relationship with a client, converted and commingled client property and other trust account violations, and provided a court with a false billing statement.
The attorney did not advance his position effectively in oral argument before the court:
At oral argument in this case, respondent demonstrated no real perception of the significance of his numerous violations of the rules of professional conduct. Nor did he fully accept responsibility for his violations, instead describing himself as "a white knight" who allowed himself to be led by his heart. Respondent's inability to understand or take responsibility for the nature and breadth of his professional misconduct underscores the signidicance of the misconduct and engenders our decision that disbarment from practice is the appropriate sanction.
A minority of the court would impose an (unspecified) lesser sanction. (Mike Frisch)
February 25, 2013
New Frontier In Florida
The case involves Great American assurance Company's use of a single law firm to defend the University of Florida and MagiCamp, which ran a summer swim camp for children on the UM campus.
The suit was brought by the parents of an injured child.
The court held that there is a disqualifying conlict between the two defendant clients as they blame each other for negligence.
A dissent states that "[t] he court today opens a new frontier in insurance litigation of benefit only to the legal profession."
According to the dissent, the case involves obnly a conflict among insureds and would affirm summary judgment to the insurancr company. (Mike Frisch)
An attorney who engaged in a conflict in interest in an adoption matter has been reprimanded by a panel of the Arkansas Committee on Professional Conduct.
The attorney represented the birth mother, the newborn child (as court-appointed temporary guardian), and the couple seeking the adoption. She also had a personal conflict of interest.
The attorney also had failed to disclose her conflicts in a conference call and correct statements made during that call. (Mike Frisch)
Suspended Only From Appellate Practice
An Arkansas Committee on Professional Conduct panel imposed discipline on an attorney who had failed to file a timely appeal and brief in a criminal matter.
When the brief was filed, he failed to cite any authority for an argument that the evidence was insufficient or that the trial court had committed error.
One interesting aspect -- the attorney is suspended from appellate practice before the Court of Appeals and Supreme Court of the state for a period of twelve months. He will remain free to practice everywhere else in Arkansas. (MIke Frisch)
Plaintiff's Counsel In Kilpatrick Litigation Suspended, But With Time Served
The Michigan Attorney DIscipline Board has ordered a 30 day suspension in the second disciplinary matter brought against the attorney for the plaintiffs in the noted Kwame Kilpatrick whistleblower cases.
The board rejected the attorney's claim that the proceeding was barred by the doctrine of res judicata.
The board attaches the decision of the hearing panel and notes that the "general factual background for this and other discipline cases arising from the settlement of thoase civil cases is generally well-known."
The misconduct revolved around efforts to keep certain text messages confidential.
The hearing panel had imposed a reprimand, with a dissent that would have suspended the attorney for 90 days.
The attorney will receive credit for time served on the 30 day suspension imposed in the first disciplinary case. (Mike Frisch)