Tuesday, January 31, 2017
A law firm that had secured a judgment in excess of $28 million and sought fees from a guardianship trust won a significant victory in the Florida Supreme Court.
This case arose after the birth of Aaron Edwards, during which he sustained a catastrophic brain injury as a result of the negligence of employees at Lee Memorial Health System (Lee Memorial) in 1997. The law firm of Searcy Denney Scarola Barnhart & Shipley, P.A. (Searcy Denney) was retained by the family to seek compensation under a standard contingency fee agreement providing for a payment of 40 percent of any recovery if a lawsuit was filed, plus costs. The agreement also stated that “[i]n the event that one of the parties to pay my claim for damages is a governmental agency, I understand that Federal and Florida Law may limit the amount of attorney fees charged by [Searcy Denney], and in that event, I understand that the fees owed to [Searcy Denney] shall be the amount provided by law.”
Collection was limited by sovereign immunity but
Searcy Denney and various other firms were involved in litigation of the medical malpractice suit, the first appeal, and a subsequent two-year lobbying effort to secure a claims bill from the Legislature on behalf of the injured child and his parents. Because the waiver of sovereign immunity in section 768.28 limited the family’s recovery to only $200,000 of the $28.3 million judgment, a claims bill for the excess judgment amount was filed in the Florida Legislature in 2011, but was not passed during that legislative session. However, in 2012 the Legislature passed a claims bill, chapter 2012-249, Laws of Florida, directing Lee Memorial to pay $10 million, with an additional $5 million to be paid in annual installments of $1 million each to “the Guardianship of Aaron Edwards, to be placed in a special needs trust created for the exclusive use and benefit of Aaron Edwards, a minor.” Ch. 2012-249, § 2, Laws of Fla. The claims bill further stated that payment of fees and costs from funds awarded in the claims bill shall not exceed $100,000. No funds were awarded in the claims bill for the parents. In November 2012, the child’s mother petitioned to establish a guardianship over the minor son’s property, and Lee Memorial subsequently made its first payment of $10 million.
Searcy Denney, with the full support of the family, then petitioned the guardianship court to approve a closing statement allowing $2.5 million for attorneys’ fees and costs. This requested amount was based on the contract that existed with the Edwards family, as limited by the provisions of section 768.28(8), Florida Statutes. Section 768.28(8), a provision of the limited waiver of sovereign immunity statute, states in pertinent part, “No attorney may charge, demand, receive, or collect, for services rendered, fees in excess of 25 percent of any judgment or settlement.”
The right to contract for legal services in order to petition for redress is a right that is related to the First Amendment, and any impairment of that right not only adversely affects the right of the lawyer to receive his fee but the right of the party to obtain, by contract, competent legal representation to ensure meaningful access to courts to petition for redress...
This same constitutional right extends to a party’s right and practical ability to retain an attorney by contingency fee contract in order to have meaningful access to courts. The “draconian limitation” on the fees in this case, in contravention of the preexisting contract and the provisions of section 768.28, sets an unfortunate precedent that, if allowed to stand, would effectively chill the right of future litigants to obtain effective counsel to make their case for compensation due for injuries caused by the State or its agencies and subdivisions.
...we conclude that the $100,000 fee limitation contained in the claims bill impermissibly impairs the preexisting contract between Searcy Denney and the Edwards family, and that nothing has been presented to justify this violation of the family’s constitutional right to contract with legal counsel to seek full redress of injury, as well as Searcy Denney’s contract right to receive the agreed-upon fees. This is especially true where, as here, the services producing the judgment and claims bill, and the fee amount sought under the contract, are in accord with sections 768.28(5) and (8). The Legislature has expressly provided for both the claims bill mechanism and for fees payable from the judgments obtained under the limited waiver of sovereign immunity statute. We conclude the permissible fees based upon recovery of those funds include funds recovered pursuant to the claims bill process.
...we conclude there is no impediment to the law firms seeking contractual attorneys’ fees and costs in this case pursuant to the preexisting contract up to and including the amount previously sought—an amount that the Edwards family has urged the courts to award—based on the limitation contained in section 768.28(8), which is 25 percent of the initial $10 million payment made pursuant to the claims bill enactment.
There were dissents
CANADY, J., dissenting. I dissent from the majority’s decision regarding both the certified question and the issue of severability.
POLSTON, J., dissenting. I would answer the certified question in the affirmative. The Florida law limiting the amount of attorneys’ fees does not unconstitutionally impair a preexisting contract that expressly contemplates and accepts that Florida law may limit the amount of attorneys’ fees.
I have found much to appreciate in my recent discovery of discipline web pages in Canada.
A recent decision from the Law Society of Upper Canada Hearing Division Tribunal (Malcolm M. Mercer ) converted a "conduct application" proceeding into a much less ominous-sounding "invitation to attend."
As you might suspect, invitation accepted.
The tribunal noted a culture issue relevant to its decision
We do not always really appreciate the nature and significance of our culture and practices, including legal practices. But when, for example, an Ontario lawyer sees the approach taken in some American jurisdictions, it becomes more obvious that we have our own legal culture and that legal cultures differ.
In this case, Mr. Chima had practised in Nigeria. He came to Ontario and was called to the Bar in 2010. He is now in his late 40s. When the events in question occurred, Mr. Chima had been in practice in Ontario for only a few years.
I had the opportunity to work with Mr. Chima and with Law Society counsel in pre-hearing conferences. As a result of that opportunity and the hearing before me, I concluded it was appropriate that a discipline order not be made in this case but instead that Mr. Chima be “invited to attend” for the purpose of “receiving advice … concerning his or her conduct” as authorized by s. 36 of the Law Society Act, RSO 1990, c. L.8 (the “Act”). The Law Society does not oppose such an order.
I reach this conclusion based on my finding that Mr. Chima’s conduct is explained in part by his prior practice in another legal culture. In my view, that played a role in how Mr. Chima chose to conduct himself and how he perceived the conduct of others. I considered it important that Mr. Chima took responsibility for his actions and that he was clearly willing to learn from his experience. Said simply, I concluded that advice for Mr. Chima was more appropriate than discipline.
The allegations involved two domestic relations cases
Mr. Chima is alleged to have engaged in sharp practice contrary to then Rule 6.03(3) of the Rules of Professional Conduct (the “Rules”) by proceeding with an uncontested hearing when he knew that the other side intended to contest it or, alternatively, by failing to contact opposing counsel before proceeding.
Rule 6.03(3) provided that:
A lawyer shall avoid sharp practice and shall not take advantage of or act without fair warning upon slips, irregularities, or mistakes on the part of other legal practitioners not going to the merits or involving the sacrifice of a client's rights.
What is and what is not “sharp practice” depends on norms of practise. Despite rules of procedure establishing that default proceedings may be taken without notice in certain circumstances, it is considered sharp practice to do so when an intention to respond is known (see Law Society of Upper Canada v. Feldman, 2014 ONLSHP 6 (CanLII)). The second part of rule 6.03(3) is more explicit in its requirement of fair warning in the face of slips, irregularities and mistakes.
Underlying the prohibition against sharp practice is, at least in part, recognition that although procedural rules are intended to protect rights and ensure that legal disputes are fairly determined on their merits, their strict application can at times cause procedural and substantive unfairness. Lawyers, properly focused on their clients’ interests, must nevertheless recognize their obligations to the legal system.
The procedural posture
In Law Society of Upper Canada v. Desjardins, 2016 ONLSTH 79 (CanLII), the hearing panel discussed the approach to be taken when considering whether to convert a conduct application to an invitation to attend. As was observed, the Proceedings Authorization Committee (“PAC”) has the prosecutorial responsibility of deciding whether to authorize a conduct application, an invitation to attend, a regulatory meeting or other disposition including simply closing the file.
Significantly, PAC has access to and is entitled to consider information not ordinarily available to a hearing panel such as, for example, prior invitations to attend, other dispositions short of a discipline order and other outstanding investigations.
Given that PAC has the responsibility to decide how to proceed and may well have information unavailable to a hearing panel, hearing panels are not entitled to “second guess” PAC. That said, the panel may have the advantage of information and perspectives that were not available to PAC and, additionally, has a jurisdiction to be exercised.
In my view, I have the advantage of a perspective that was not available to PAC. I have the benefit of time spent with Mr. Chima in pre-hearing conferences and at the hearing and, significantly, can take comfort in the fact that the Law Society is unopposed to converting to an invitation to attend.
The attorney "attended" as invited and the conduct application was dismissed with $500 in costs. (Mike Frisch)
A 54-year career at the bar without discipline did not save an 80 year-old attorney from the ultimate sanction of disbarment by the Pennsylvania Supreme Court.
The attorney had engaged in "egregious" misconduct in three matters and failed to acknowledge any ethical violations.
The Disciplinary Board noted that Pennsylvania does not impose per se discipline for misconduct, although misappropriation of entrusted funds is dealt with harshly. Here, the board found that any one of the three matters warranted a severe sanction but together overcame the mitigation factor of a lengthy discipline-free practice.
He also had serious ongoing tax problems and made a false statement in bar registration.
Notably, the charges were filed in May 2015 and the process from charge to final disposition took about eight months.
The case is In re Raymond Quaglia and can be accessed at this link. (Mike Frisch)
An attorney who had failed to pay child support has been suspended for six months with the possibility of early reinstatement by the Colorado Hearing Board
(“Respondent”) violated Colo. RPC 3.4(c) and 8.4(d) by failing to obey a court order to pay monthly child support and to satisfy child support arrearages. Respondent’s failure to honor her court-mandated obligations tarnished the integrity of the legal system and harmed her child. Respondent’s misconduct calls for a suspension of six months. If Respondent comes into compliance with her court-ordered support obligations during that period of suspension, however, she may seek reinstatement early. Whenever Respondent seeks reinstatement, however, she must successfully complete an independent medical examination (“IME”).
The arrearages totalled over $17,000
Respondent did not dispute that the district court’s judgment is a valid order but contended that it is factually inaccurate. She averred that her ex-husband’s attorney moved for a modification of child support the day before Respondent’s financial disclosures were due, and in the motion the attorney alleged that Respondent could pay child support even though she had not provided disclosures. Thus, Respondent believes that the district court entered its judgment based on misinformation. Respondent also took issue with the fact that when she moved to reconsider in 2015, the new judge was not familiar with her financial circumstances. According to Respondent, she tried to correct the factual inaccuracies in the record by attempting to set a hearing with the district court and by contacting opposing counsel, but she testified that no one helped her.
Respondent also maintained that the district court’s child support order is unconscionable because she does not have the financial wherewithal to satisfy the judgment. Respondent testified that, as a lawyer in her forties, she had trouble finding employment after losing her position with Liberty Mutual and then becoming disabled. In addition, in 2014—after self-reporting her failure to pay child support—her law license was immediately suspended, and the Waterman Fund cut off her financial assistance because she was no longer an attorney in good standing. Thereafter, she worked some as a paralegal,but she found that most law firms did not want to employ a suspended lawyer. And, she said, other potential employers did not want to hire her because she has a J.D., and they believed she would soon leave for more gainful employment. In order to survive, she said, she sold the majority of her belongings and now works as a dog walker and house cleaner.
Respondent testified that her failure to pay child support did not injure her ex husband or her daughter. According to Respondent, her ex-husband makes over $100,000.00 annually and her daughter—now in her twenties—has supported herself, including paying for her own college education and for a trip around the world. Respondent said that she has given several thousands of dollars from an inheritance to her daughter, although she did not make these payments through the child support registry, believing her ex-husband would have kept those funds from her daughter.
The sanction was influenced by the emotional nature of the attorney's testimony
Respondent was very emotional while testifying, and as a result, her testimony was scattered and disorganized. The Hearing Board had some difficulty ascertaining a clear timeframe of the events about which she testified. According to Respondent, she is emotionally stable but has always been a “crier.”
Respondent explained to the Hearing Board that in 2000 she was diagnosed with major depression, anxiety, mood-swing disorder, and attention deficit disorder (“ADD”). Since that time, she has been prescribed a variety of medications—all of which take time to properly regulate—in order to treat those disorders...
Considering the presumptive sanction, the relevant case law, the substantial mitigation, and the totality of the circumstances here, we suspend Respondent for a period of six months. In addition, given the erratic and emotionally charged manner and demeanor Respondent exhibited on the witness stand, we have concerns about her ability to competently practice law, and we thus require her to undergo an IME prior to seeking reinstatement to the practice of law. We also find that the case law supports an early termination of Respondent’s suspension under certain circumstances: if Respondent files a verified petition for reinstatement within six months of the effective date of her suspension, showing that she has successfully completed an IME and that she has paid all past-due child support or negotiated a payment plan approved by the appropriate court, then she may be reinstated...
It does not appear to me from the report that this was a person who was callously indifferent to her obligations.
Given that, this strikes me as a very heavy-handed sanction. (Mike Frisch)
Monday, January 30, 2017
Kathleen Maloney previews an oral argument before the Ohio Supreme Court in a bar discipline matter that tangentially involved a Justice of the Court
Ashtabula County Bar Association v. Thomas C. Brown, Case no. 2016-1147
The Board of Professional Conduct recommends a six-month stayed suspension for a Geneva attorney whose business cards and sign in front of his office building indicated his law firm name was “O’Neill & Brown Law Office,” referencing a partnership with Ohio Supreme Court Justice William M. O’Neill.
In its report to the Court, the board concluded that Thomas C. Brown violated professional conduct rules that prohibit using the name of a lawyer who holds public office in a law firm name when the lawyer isn’t actively practicing with the firm and that ban false or misleading marketing materials about who practices in a law firm and the length of time the law firm has existed.
Brown Launches New Firm in 2015
Brown and O’Neill started a law firm together in the 1980s, but the two haven’t actively practiced law together since at least 1997, the board’s report stated. (Justice O’Neill was elected to the Ohio Supreme Court in 2012 and began his term in January 2013.)
In July 2015, Brown opened a law practice with the name “O’Neill & Brown Law Office,” and installed a sign in front of his office and distributed business cards with that name. The sign and business cards state that the law firm was established in 1981. Brown and Justice O’Neill spoke about the firm before Brown opened the office, and they agreed to the name. Justice O’Neill stated he was unaware at the time that using his name in this way would be a professional-conduct rule violation.
Complaint Filed a Few Months Later
That month the Ashtabula County Bar Association began an investigation into Brown’s law firm name, sign, and business cards and filed a disciplinary complaint against Brown in early November 2015. After a meeting with the bar association’s lawyer, Justice O’Neill told Brown to remove “O’Neill” from the sign.
Brown and the bar association stipulated in March 2016 documents that Brown had removed Justice O’Neill’s name from the sign and stopped using the business cards. Brown also testified at a hearing before the professional conduct board’s panel reviewing the case that he had taken these steps to address the misconduct.
When taking on a new client 10 days later, Brown handed the client’s wife the O’Neill & Brown business card. The bar association amended its complaint, alleging that Brown had made false statements about correcting his misconduct in his stipulations and before the panel. In his response, Brown stated that he mistakenly gave the woman an old business card from his wallet.
Board Concludes That Some Rule Violations Weren’t Proven
The board agrees that Brown violated professional conduct rules when using Justice O’Neill’s name in the law firm’s name and on the sign and business cards, and by indicating that the law firm had been in continuous operation since 1981. However, the board concludes that there wasn’t clear and convincing evidence that Brown knowingly lied in his stipulations and his testimony to the board’s panel, and recommends dismissal of those charges added by the bar association in May 2016.
In determining the appropriate sanction, the board notes that Brown has a prior disciplinary record, he kept the sign up and used the O’Neill & Brown business cards for four months after he was notified that he might be in violation of professional conduct rules, he gave out the business card after stating he had stopped using it, and he didn’t acknowledge that what he did was wrong. As mitigating factors, the board states that Justice O’Neill participated in Brown’s decision to use the justice’s name, Brown was cooperative during the disciplinary proceedings, and the matter didn’t negatively affect any clients.
The board recommended a six-month stayed suspension for Brown if he removes references that the firm was started in 1981, permanently fixes the name on the sign outside his office, destroys all “Brown & O’Neill” business cards, commits no further misconduct, and pays the proceeding costs.
Bar Association States Evidence Supports Additional Rule Infractions
The bar association objected to the board’s dismissal of the additional charges, arguing that Brown’s misconduct after filing stipulations and testifying at the panel’s hearing also warrant a sanction.
The bar association contends that Brown conveyed in a February 2016 letter that he both stopped using the business cards and removed “O’Neill” from the sign outside his office in September 2015. However, testimony revealed that the signage remained unaltered until near the end of November 2015, the bar association notes.
Brown’s misrepresentations about fixing his law firm sign and ceasing the use of inappropriate business cards, which he had just attended a disciplinary hearing about, demonstrate a lack of respect for the disciplinary violations he committed, the bar association maintains. In its view, Brown knowingly made a false statement in a disciplinary matter and engaged in dishonest conduct – two clear rule violations – to try to minimize the penalty for his misconduct. The bar association recommends that Brown be indefinitely suspended to “send a clear message to practicing Ohio attorneys that offering such misleading testimony will not be tolerated in future actions before the [b]oard of this Court.”
Attorney Submits No Objections or Response
Brown didn’t file objections to the board’s report or a response to the bar association’s brief. Based on Court rules, Brown has waived oral argument and won’t be permitted to argue his case before the Court.
- Kathleen Maloney
Representing Ashtabula County Bar Association: Harold Specht, 440.576.3009
Thomas C. Brown, pro se: 440.862.2788
On the docket for February 8. (Mike Frisch)
An upcoming Ohio Supreme Court oral argument is previewed by Dan Trevas
In re: Application of Michael A. Callam, Case no. 2016-1240
Board of Commissioners on Character and Fitness
The Board of Commissioners on Character and Fitness recommends that Michael A. Callam’s right to practice law be revoked and that he not be permitted to reapply for admission in Ohio. The board initiated an investigation of Callam after he was indicted in April 2015 for insurance-related crimes, and questions were raised about whether he fully disclosed material to the board before he was permitted to take the July 2014 bar exam.
Callam Sold Insurance Before Entering Law
Callam was admitted to practice law in 2014 and joined a Chagrin Falls law firm. Prior to entering law school in 2011, Callam obtained a license to sell insurance and opened a restaurant with his brother.
Callam’s father, William Callam, previously sold insurance but lost his license in 2007 and was convicted of a felony related to misappropriation of client funds. Callam said he was unaware his father didn’t have a license when his father met with prospective clients at Callam’s restaurant. Often William Callam would negotiate an insurance sale and his son would sign the application. On other occasions, Callam’s father would sign Callam’s name to the insurance application. Callam indicated he authorized the practice because he believed his father had an insurance license.
One of Callam’s insurance client’s complained to the insurer Equitrust that she was dissatisfied and that William Callam had misrepresented the policy to her. She told the insurer she dealt exclusively with Callam’s father, and when Equitrust contacted Michael Callam, he said that is when he learned his father lost his insurance license. Callam’s father drafted a response to Equitrust that Callam signed, stating Callam himself dealt personally with the client. The client’s claim was denied, and she sued the company and the Callams.
The incident prompted an investigation by the Ohio Department of Insurance, which interviewed Callam for about an hour and found that in several instances he claimed to meet with clients when only his father met with them and sold the policies. Callam filed his application to take the bar exam in March 2014, two months after the insurance department interview without mentioning any difficulties with the department to the Ohio Supreme Court’s Office of Bar Admissions. He later testified he believed the matter was resolved after the interview in spite of the fact that the department asked him to follow up with a list of insurance clients.
Callam also sold the restaurant in early 2014, and the buyer, LG Mayfield LLC, filed suit against Callam three weeks before the July bar exam. Callam didn’t disclose the lawsuit to the bar admissions office. In September 2014, the insurance department called Callam back for a second interview in which investigators presented evidence that found Callam had lied to them about his role in the insurance sales.
Callam expressed concern about his future legal career and ultimately agreed to surrender his insurance license, which happened while he was awaiting his bar exam results and was under the obligation to update his bar application. Callam didn’t update his application and began working at the Gertsburg Law Firm in Chagrin Falls. He joined the firm as a practicing attorney once he passed the bar and was admitted to practice law.
In 2015, Callam and his father were indicted for selling insurance without a license, and the Geauga County prosecuting attorney sent a letter to the bar admissions office expressing concern about Callam’s character.
Panel Considers Claims
A three-member panel of character and fitness commission heard testimony from Callam’s employer and his girlfriend, who is also an attorney, both of whom testified that Callam apologized for the mistakes in judgment he made, and believed that Callam should be able to continue to practice law.
In addition to questioning Callam’s handling of the insurance violation, the commission also considered his incomplete reporting of violations to the law school he attended. When registering for bar admission in 2012, Callam disclosed two operating a vehicle while intoxicated (OVI) convictions, one in 2001 and a second in 2011. Akron Bar Association attorneys screening Callam’s admission noted the second OVI had not been reported to his law school. Callam told the interviewers his attorney told him he didn’t need to report the incident, but he then agreed to report it.
Callam told the panel the reason he didn’t initially report the OVI was that his attorney told him not to report it “even after the situation was resolved.” However, Callam produced a letter from attorney Barry Doyle, who told him he didn’t have to disclose the letter on his law school application because the matter had not yet been resolved. The panel concluded it didn’t counsel him not to disclose the charge after the matter was resolved.
The panel also noted that Callam had disregarded his duty to disclose the LG Mayfield lawsuit and the lawsuit filed by the insurance client. The disclosures would have prompted an earlier investigation of his fitness to practice law before he was sworn in, the panel concluded.
“By failing to disclose, Mr. Callam was able to gain an advantage over applicants who followed the rules and were forthright in their disclosure. As a result, Mr. Callam has now been practicing law for eighteen months and can argue that he should be allowed to continue because nothing has occurred during that time to place his clients at risk. Among other things, this ignores the fact that he placed his employer at risk by not disclosing his felony indictment so it could be reported to his employer's malpractice carrier,” the panel wrote in its report. “Mr. Callam’s conduct was egregious and certainly impacts his ability to meet the essential eligibility requirements, specifically his ability to conduct himself with a high degree of honesty, integrity, and trustworthiness in all professional relationships and with respect to all legal obligations.”
Callam Maintains Sanction Unfair
In his response to the board’s recommendation, Callam argues that revocation of his law license and preventing him from reapplying is the equivalent of disbarment. He argues the sanction is greater than others accused of similar actions and he requests a stayed suspension.
The commission cites only the Supreme Court’s 2015 In Re Application of Wahidy as the basis for recommending Callam not be allowed to reapply for admission. Callam asserts the attorney in Wahidy failed to provide complete and accurate information on his application, during his screening interviews, and during a panel hearing. In contrast, Callam suggests he admitted his mistakes at his admission interview and testified candidly before the panel, acknowledging and explaining his mistakes.
Since Callam has practiced law for almost two years, he suggests his case be treated similar to an attorney discipline matter and that his sanction be based on those of penalties levied on other lawyers. He cited Dayton Bar Assn. v. Kinney (2000), where the Court presumed an actual suspension is warranted when an attorney engages in conduct involving dishonesty, fraud, deceit, or misrepresentation, and found that mitigating factors justify a sanction less than actual suspension.
“As a result of making misrepresentations to Equitrust and the Ohio Department of Insurance in an effort to protect his father, Michael Callam has surrendered his Ohio insurance license for cause, has been indicted, entered a plea to a misdemeanor and now has a criminal record; and is involved in these proceedings,” Callam’s response stated. “Did Michael Callam trust his father to his detriment? Yes. Should Michael Callam forever lose his license to practice law in Ohio? No.”
Callam argues that a stayed suspension still will “send a message” to bar applicants that failure to update their applications will result in sanctions.
An amicus curiae brief supporting Callam has been submitted by the Gertsburg Law Firm. The firm describes Callam as instrumental in serving its nearly 300 clients and that he has “an incredibly strong work ethic” and “cares deeply about the practice of law.” The firm states that Callam has learned his lesson and is remorseful, and it believes he will not repeat his mistakes.
The Akron Bar Association did not file a merit brief in the case and is not permitted to present oral arguments. The Court approved a request for Callam to share his oral argument time with the Gertsburg Law Firm.
- Dan Trevas
Representing the Board of Commissioners on Character & Fitness: Damien Kitte, 614.464.5482
Representing Michael A. Callam: Mary Cibella, 216.344.9220
The argument is scheduled for February 7. (Mike Frisch)
The California State Bar Court Review Department has dismissed a case in which the hearing judge had found misconduct and recommended disbarment
After a four-day trial, a hearing judge found Robert Howard Sack culpable of committing an act of moral turpitude by making false statements in connection with his personal application for unemployment mortgage assistance benefits. The judge recommended that Sack be disbarred, given his disciplinary history...
After independently reviewing the record (Cal. Rules of Court, rule 9.12), we conclude the evidence falls short of establishing that Sack committed the charged misconduct. We therefore dismiss this case with prejudice.
In a narrowly drawn Count One of the [Notice of Disciplinary Charges] , [Office of Chief Trial Counsel] alleged that Sack violated Business and Professions Code section 6106.2 It charged that he misrepresented he was "unemployed" and that "his only source of income was [California Employment Development Department (EDD)] benefits" in an application for personal mortgage assistance with a program called Keep Your Home California (KYHC). In finding culpability, the hearing judge found that "the record clearly establishes" that Sack "deliberately" made the alleged misrepresentations. Specifically, the judge found that Sack "applied for KYHC benefits based only on his being unemployed and not on his being underemployed." We find, however, that the evidence does not support either the allegation or the hearing judge’s finding...
We also acknowledge that our finding runs contrary to that of the hearing judge. We conclude, however, that the judge overlooked Wendorf’s credible testimony that the "Unemployment" box checked on the UMA application referred to Sack’s wife, not Sack, and that Sack had income other than EDD benefits from his part-time work as a paralegal. Further, some of the judge’s other findings were not supported by clear and convincing evidence. For example, the judge found that "KYHC’s record of an October 15, 2012 telephone conversation with [Sack] . . . supports a finding that [Sack] affirmatively misrepresented his employment status and the sources of his income to KYHC . . . ." In fact, no such call occurred, as shown in the KYHC record. Instead, this record merely indicated the date on which Wendorf entered information gleaned from Sack’s EDD file, including his award letter, into KYHC’s client notes.
The Review Department conclusion
In sum, OCTC failed to prove the specific misconduct alleged in the NDC. Count One charged that Sack made two misrepresentations on September 25, 2012 in his UMA application. OCTC did not amend the NDC to assert a new theory of professional liability. (See Rules Proc. of State Bar, rule 5.44(C) [court may permit amendment, but respondent entitled to reasonable time to respond and to prepare defense if he objects to evidence].) We must determine Sack’s culpability based on the allegations before us. Given the trial evidence, and resolving all reasonable doubts in Sack’s favor (Alberton v. State Bar (1984) 37 Cal.3d 1, 11), we find he is not culpable of making the misrepresentations charged in Count One. Accordingly, we dismiss this case with prejudice for lack of evidence.
Given the conclusion, no sanction analysis was considered. (Mike Frisch)
A suspension of a year and a day was imposed by a justice of the Massachusetts Supreme Judicial Court as a result of conduct described in this summary.
The attorney was appointed to represent a client charged with armed robbery
In February 2015, the respondent communicated with the client’s fiancée. Without the client’s consent, the respondent divulged confidential information to the client’s fiancée relating to the representation of his client including, but not limited to, statements by his client and details of his client’s case.
He "repeatedly sent sexually explicit messages and a picture to the fiancée and asked her to meet him at a hotel," presumably not with the intention of preparing her testimony.
The client pleaded guilty to larceny and received a 2 1/2 year prison sentence.
When the fiancee learned of the disposition, she complained
The next day, the respondent’s supervisor at Hampden County Lawyers for Justice contacted the respondent by text and requested that he meet with him at his office regarding the complaint and told him to feel free to call him. That day, the respondent telephoned the supervisor and falsely claimed that he “doesn’t even know them.” After the supervisor reminded the respondent that the client pled guilty the previous day, the respondent admitted that he knew the client, but stated that he didn’t know the fiancée. The following day, the respondent texted the supervisor and asked him what to bring to the meeting. The supervisor instructed the respondent to bring his file and his phone. The respondent texted that he had already cleared his phone when the case ended. The respondent failed to provide the supervisor with his file.
In March 2015, the respondent sent the supervisor threatening texts.
In May 2015, successor counsel requested that the respondent provide him with the client’s file, but the respondent failed to do so.
As to sanction
In mitigation, the respondent has a history of alcoholism, and at the time of the misconduct, the respondent was drinking heavily. The weight of this mitigation is limited because the respondent has not shown that his alcoholism caused his misconduct or that he has maintained sobriety for a significant period of time.
In their stipulation, the parties agreed that the appropriate discipline for the respondent’s misconduct was a suspension of a year and a day, and on August 8, 2016, the board voted unanimously to accept the stipulation and to recommend that the respondent be suspended for one year and a day.
An attorney who pleaded guilty to the crime of disruption of court proceedings was suspended for a year and a day by the Massachusetts Supreme Judicial Court.
Beginning in December of 2014, the respondent represented a defendant on criminal charges resulting from a traffic altercation in Cambridge. During the altercation, the client had allegedly uttered racial epithets at the victim, a native of Morocco. Shortly after the client’s arraignment, the respondent called the victim and offered him money to drop the case against the client.
The attorney met with the victim, paid him $2,500 in cash and tried to get him to sign an accord and satisfaction, which the victim declined to execute.
The respondent and the victim had additional conversations through May of 2015. The respondent continued to advise the victim to ignore the DA’s office. He also advised the victim that if they tried to subpoena him, he should “just duck it.” The victim told the respondent that he had received a call from the FBI about the case; the respondent told him not to return the call. At no point did the respondent inform the court of his contacts with or his payment to the victim.
The attorney "deeply regretted his actions" and had sought to rely on an inapplicable statute
that statute requires an acknowledgement by the victim in writing, which the victim was reluctant to provide. Further, the statute only applies to misdemeanors and one of the five criminal charges against the client, assault and battery with a dangerous weapon, was a felony.
Saturday, January 28, 2017
The Vermont Supreme Court recently admonished an attorney
Upon review of the hearing panel decision in this matter, the Court concludes as follows: The decision presents a well-reasoned discussion and resolution of a problem common in legal practice, particularly for small firms and solo practitioners. Accordingly, the Court orders review of the decision on its own motion, adopts the hearing panel decision in its entirety as a final order of this Court, waives briefing and oral argument, and orders that the decision be published in the Vermont Reports.
The parties stipulated that Respondent violated Rules 1.15A, 1.15A(a) and 1.15A(a)(2) of the Vermont Rules of Professional Conduct by failing to safeguard client funds. Respondent admits that he did not timely reconcile his IOLTA account and did not keep accurate records of the client funds he held in trust. Disciplinary Counsel also charged Respondent with violating Rules 1.15(a)(1) and 1.15(d) of the Rules of Professional Conduct, alleging Respondent commingled Respondent’s funds with client funds in his client IOLTA account. Respondent denied the charge that he violated Rules 1.15(a)(1) and 1.15(d). The parties did not stipulate to the sanction to be imposed. Disciplinary Counsel asked the Hearing Panel to issue a public reprimand for all violations. Respondent argued that private admonition was the appropriate sanction in this case. The parties jointly requested a hearing on the merits of the contested charges and on the issue of sanctions.
The attorney was admitted in 1992 and has a two-person practice
In June 2012, Disciplinary Counsel selected Respondent's IOLTA account for a compliance examination by the Professional Responsibility’s Program. Compliance examinations are part of the Program’s trust account oversight program.
Between 2003 and 2007, Respondent's Firm retained an independent contractor to serve as the Firm’s bookkeeper. The bookkeeper was responsible for maintaining the Firm's IOLTA account as part of the bookkeeper’s responsibilities. In 2007, Respondent’s Firm assigned the bookkeeping duties to one of its employees, paying the employee a monthly stipend for the work. The employee was responsible for maintaining the Firm’s IOLTA account, among other tasks.
At all times relevant to this disciplinary matter, Respondent’s Firm has used Quicken commercial bookkeeping software for financial record keeping. Respondent’s Firm used Quicken to record its deposits into, and withdrawals from, the Firm’s IOLTA account.
Shortly after the Firm was notified that Disciplinary Counsel would be conducting a compliance examination of the Firm’s trust accounts, the Firm’s bookkeeper suddenly quit the Firm. Respondent reviewed the Firm’s IOLTA account records and discovered the IOLTA account had not been reconciled for six months. The employee’s sudden departure caused Respondent significant concern, so Respondent hired an accountant to audit the Firm’s IOLTA account from 2007 to the present to determine if there were any improper transactions. Respondent’s independent audit commenced approximately three months before Disciplinary Counsel performed her compliance exam on September 19, 2012. Respondent also retained legal counsel to assist Respondent with his investigation. Part of counsel’s responsibilities included assisting Respondent with implementing accounting procedures that would bring, and keep, the Firm’s accounting practices in compliance with the Rules of Professional Conduct.
Disciplinary Counsel retained a CPA to conduct the audit, which led to a bar investigation.
Once the CPA examination was complete, Respondent took the initiative to retain a CPA, at Respondent’s sole expense, to assist Respondent in transforming his trust accounting practices so that Respondent was in compliance with the Rules of Professional Conduct. Respondent implemented his CPA’s recommendations.
Respondent acknowledged that his Firm did not reconcile its IOLTA account for approximately 9 months. Respondent admitted that, prior to the compliance examination, Respondent was not aware that the Rules of Professional Conduct required Respondent to maintain a record of each client’s IOLTA funds, including all deposits, disbursements, and running balances. Respondent rectified the error, taking advantage of all of the functions his Quicken software provides. Respondent is now able to identify the source of all receipts and disbursements recorded in the Firm’s IOLTA account, and has categorized all transactions by client.
As to the approximately $75,000 in stale outstanding checks, Respondent determined that these checks were related to real estate transactions Respondent handled. (During a real estate purchase, the buyer’s lawyer issues IOLTA checks to pay closing costs, including an IOLTA check to a title insurance company to pay the title insurance premium and another IOLTA check payable to the lawyer for the lawyer’s title insurance commission.) Respondent investigated these uncashed checks and determined that $74,714.00 was payable to the Firm for title insurance commissions. These checks were deposited or cashed by Respondent’s Firm between February 1, 2012 and September 19, 2012, the latter being the date of the compliance examination.
With respect to running balance of approximately $32,000.00, Respondent’s was able to resolve the issue. Respondent’s accountant found a few instances of transposed numbers and a double deposit entry that erroneously inflated the balance of Respondent’s IOLTA account. After correcting the IOLTA account entries, the balance accurately represented client retainers held for the payment of attorney fees once those fees are earned.
The parties disputed whether the attorney engaged in commingling and Disciplinary Counsel sought to amend the allegations
Not having the evidence necessary to prove commingling, Disciplinary Counsel asked to amend the charge to include violation of Rule 1.3, failure to exercise due diligence. Disciplinary Counsel argued that, taking Respondent at his word, Respondent took years, sometimes as many as 5 and 9 years, for Respondent to complete his post-closing duties. Disciplinary Counsel argued that Respondent was not diligent in completing his real estate duties.
Respondent argued that Respondent was completely unprepared to meet the new charge. As of the date of hearing, Respondent had not reviewed his real estate files and was unprepared to explain why, in any particular case, it took Respondent so long to complete his post-closing tasks so he could collect his fee and/or title insurance commission from the IOLTA account. Respondent argued that amending the charge without granting Respondent an opportunity to prepare and meet the charge was prejudicial.
The motion to add the diligence charge was properly denied.
Sanction for the violations
Respondent’s mental state was one of negligence. Respondent acted negligently when he failed to set up his Quicken accounting system in accordance with the Rules of Professional Conduct. For example, Respondent did not use Quicken to track IOLTA transactions by client or matter. Respondent was negligent when he failed to perform timely reconciliations of the IOLTA account. Respondent was also negligent when he failed to correct entry errors that led to an incorrect running balance of approximately $32,000. The Firm assigned the task of performing the bookkeeping tasks to an independent contractor, and then an employee. Respondent, however, was responsible for ensuring the trust account was administered according to the Rules of Professional Responsibility, and he failed to do so.
The Iowa Supreme Court has indefinitely suspended an attorney without possibility of reinstatement for six months.
The attorney represented a client in post-divorce litigation.
On a scheduled hearing day
On the morning of May 9, Vandel called Floyd’s attorney, Tyler Johnston, and told him the hospital notified her she needed to go in for a blood transfusion that day and asked if he would agree to a continuance. After Johnston agreed to the continuance, Vandel called Judge Gunderson and indicated she was medically incapable of attending the hearing. Vandel followed up with an email expressing her gratitude to Judge Gunderson and Johnston for understanding her need for the transfusion. Due to Vandel’s representations concerning her need for a blood transfusion, the court continued the hearing to the date of trial on May 20. Despite her representations, Vandel did not receive a blood transfusion on May 9.
It gets worse
During the modification trial, Nichole testified that Vandel told her three days before the trial she was going to withdraw as counsel on the first day of trial if Nichole did not pay her an additional $10,000. When Nichole told Vandel she was unable to pay $10,000, Vandel lowered the amount to $5000. Although Nichole did not make an additional payment, Vandel appeared for trial and did not file a motion to withdraw. However, throughout the trial, Vandel continued to tell Nichole that she was going to withdraw if she did not make an additional payment. Nichole explained to Judge Blane that Vandel’s threats to withdraw put her “under extreme stress,” and she felt like she was being “harassed . . . badgered, and . . . threatened.”
Additionally, on the first day of trial, Vandel presented Nichole with documents to sign in the form of a mortgage with a promissory note, attorney fee lien, assignment of income, judgment by confession, and assignment of wages. Vandel falsely told Judge Blane she did not present any documents for Nichole to sign during the trial. Further, when Vandel threatened to withdraw if she did not receive an additional payment, Vandel did not inform Nichole of the likelihood that the judge would grant or deny such a motion.
On May 28, Judge Blane found Vandel “guilty [beyond a reasonable doubt] of nine (9) counts of contempt of court by willfully counseling, thereby aiding and abetting the violation of the Court’s Decree of May 19, 2004, pursuant to Iowa Code section 665.2(3).”
Judge Blane also filed a complaint with the Board against Vandel. On June 6, Nichole filed a complaint with the Board against Vandel. In response to Nichole’s complaint, Vandel wrote a letter to the Board on July 2, continuing to claim she needed medical treatment on May 9. In Vandel’s appellate brief filed on April 8, 2014, she again asserted that she was unavailable for the hearing on May 9, 2013, because she “had to go in for a blood transfusion.” However, in a letter to the Board’s investigator on April 11, 2014, Vandel stated there were no medical records showing she had a blood transfusion on May 9, 2013.
The bar investigation revealed trust account violations with the fee.
The attorney defaulted on the charges but appeared at the hearing
At the hearing, Vandel asked the commission to take into consideration the fact that she does not intend to practice law in the future and her history of providing pro bono legal services throughout her career. Following the hearing, the commission recommended we suspend Vandel’s license to practice law with no possibility of reinstatement for a period of one year.
The court pointed to prior discipline and other aggravating factors but also found mitigation
We also take into consideration the mitigating factors present in this case. First, we acknowledge that Vandel was hospitalized for a severe illness near the time she requested a continuance for the hearing on May 9. Although Vandel did not have a blood transfusion on May 9, she was admitted to the hospital on May 7 for severe illness and pain. She left the hospital on the morning of May 8, despite being counseled against leaving because of the severity of her illness. “While personal illness will not excuse an attorney’s misconduct, such illnesses may influence our approach to discipline.” Netti, 797 N.W.2d at 606.
Second, we note Vandel has provided substantial pro bono legal work throughout her career and routinely performs work for low-income clients. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. McGinness, 844 N.W.2d 456, 467 (Iowa 2014) (stating community service is a mitigating factor)...
We suspend Vandel’s license to practice law in Iowa with no possibility of reinstatement for six months from the date of this opinion. This suspension applies to all facets of the practice of law.
The California State Bar Court approved a two-year suspension and probation by agreement of an attorney who had altered an expert report used in a criminal trial to make it appear more current and sound more favorable to the client.
The alterations came to light after the client had been convicted and sentenced.
From the hearing board report
On July 15, 2015, the Orange County District Attorney filed a criminal complaint in the Orange County Superior Court, case no. 15CM08004, charging respondent with one violation of Business and Professions Code section 6128(a) [deceit or collusion by an attorney] between December 13, 2012 and February 28, 2014, a misdemeanor.
On November 9, 2015, respondent entered a guilty plea to a violation of Business and Professions Code section 6128(a). Respondent was placed on informal probation for a period of 3 years, ordered to serve 90 days in county jail, pay a $1,000 fine plus penalty assessment, pay $10,000 to the Victim Witness Emergency Fund, pay various fees, abide by any punishment imposed by the State Bar, and complete ethics class as determined by the State Bar.
California has a specific "deceit or collusion by an attorney" crime.
Is that an offense elsewhere?
From the disposition
Respondent was admitted to practice law December 7, 1995 and has remained active at all times since. Respondent had been discipline-free for approximately 18 years of practice from admission to the misconduct in November 2013. Respondent currently works for a corporation in the human resources department. Respondent ceased representing clients and is not currently practicing law. Therefore, respondent is entitled to significant mitigation.
On the other hand
Respondent’s misconduct caused harm to his client, [the expert] Dr. Thomas, and the administration of justice. Respondent’s client was harmed by respondent’s misconduct because his client did not receive the full weight/benefit of the expert’s testimony in his criminal trial due to respondent’s criminal acts. Respondent’s misconduct caused Dr. Thomas embarrassment, harm to her professional reputation, and according to Dr. Thomas, she is no longer appointed by the Orange County District Attorney’s office as a psychiatric expert. Respondent’s misconduct caused harm to the administration of justice because respondent altered evidence presented to the judge and the jury, which resulted in Flores filing an appeal and petition for habeas corpus.
Friday, January 27, 2017
A recent order of the Hawai'i Supreme Court
Upon consideration of Petitioner Stefan Rozembersky’s Petition for Writ of Mandamus, Statement of Facts, Statement of Issues and Relief Sought, and Statement of Reasons for Issuing the Writ filed on January 4, 2017:
(1) Petitioner petitions the court to:
(a) amend certain supreme rules related to examination and admission to the State bar;
(b) allow attorneys, who are admitted and in good standing in another state, take the Hawai'i bar examination, regardless of law school accreditation;
(c) allow for “waiver by motion” which would allow applicant attorneys admission to the Hawai'i bar without examination; and
(d) award Petitioner costs and reasonable attorneys’ fees associated with bringing this matter before the court.
(2) A writ of mandamus is an extraordinary remedy that will not issue unless the Petitioner demonstrates a clear and indisputable right to relief. Straub Clinic & Hospital v. Kochi, 81 Hawai'i 410, 414, 917 P.2d 1284, 1288 (1996).
(3) Petitioner fails to demonstrate that he has a clear and indisputable right to the relief requested.
Therefore, IT IS HEREBY ORDERED that the petition for a writ of mandamus is denied.
The Illinois Review Board proposes disbarment of an attorney who has been in solo practice since 1991
The Administrator charged Respondent with violating multiple Rules of Professional Conduct based upon his conduct in three trust or probate matters.
In one matter, Respondent served as both trustee and trust counsel to trusts created by two elderly sisters. After both sisters died, Respondent took years to notify or pay any of the beneficiaries, still has not paid one of the beneficiaries, and did not provide required accountings to any of the beneficiaries. His inaction spurred a lawsuit by the Illinois Attorney General. Notwithstanding his inaction, between the last sister's death and his hearing, Respondent paid himself over $244,000 in fees from the trusts, including over $63,000 in fees for his defense in his disciplinary proceeding.
The two other matters involved probate proceedings in which Respondent represented the estates. In one, Respondent failed to notify the heirs or take the actions necessary to close the estate until sixteen years after he opened the estate. In the other, seventeen years after Respondent was retained to complete work on the matter, he had done very little work, and the estate remained open.
In all three matters, the Administrator charged Respondent with failing to provide competent representation and failing to act with reasonable diligence. In the matter involving the elderly sisters' trusts, he also charged Respondent with taking an unreasonable fee, failing to promptly deliver funds that others were entitled to receive, and engaging in dishonesty.
Following a hearing at which Respondent appeared pro se, the Hearing Board found that Respondent had committed all of the charged misconduct. It recommended that he be disbarred, based on the seriousness of his misconduct and the many aggravating factors present.
Respondent appealed, arguing that the Administrator had no authority to charge him with misconduct based on his actions as trustee, and that the Hearing Board's findings were against the manifest weight of the evidence.
The Review Board affirmed the Hearing Board's misconduct findings. It found that the Administrator charged Respondent with misconduct because of his actions as attorney for the trusts, and therefore that his disciplinary proceeding was properly before the Hearing Board. It also found that the manifest weight of the evidence supported the Hearing Board's misconduct findings.
The Review Board recommended that Respondent be disbarred for his misconduct. Among other things, it found that Respondent's failure to acknowledge any wrongdoing indicated that there was a significant risk that he would engage in similar misconduct in the future.
One member of the review panel dissented, finding insufficient evidence of dishonesty and disagreeing with the recommendation of disbarment. Instead, he recommended a suspension of two years, commencing on the date of the Court's order imposing an interim suspension.
The board described his handling of the estate of two sisters
From Helen's death in September 2010 through October 2014, Respondent took $244,320 in purported fees from the trusts. Thus, even though we do not know the amount of assets in the trusts upon Helen's death in 2010 - because Respondent has refused to provide an accounting - we can deduce that it was almost a quarter of a million dollars more in 2010 than in late 2014, when Respondent made his first distributions to the beneficiaries. We are particularly concerned that, as of the time of his hearing, Respondent still had made no distribution whatsoever to Mr. Larsen, who should have received $9,000 per year after Marie's death and $18,000 per year after Helen's death.
Respondent's conduct throughout his disciplinary proceeding gives us no confidence that he will be able to conform his future conduct to ethical norms. The Hearing Board found especially troubling, as do we, Respondent's total failure to take the slightest responsibility for his wrongdoing or even understand its wrongfulness. Respondent has even questioned the legitimate authority of agencies acting within their jurisdiction, such as the ARDC and the Illinois Attorney General, to investigate his conduct. As the Hearing Board noted, he seems to consider himself "above the law." (Hearing Bd. Report at 37.)
He has yet to express any remorse for the harm he caused the trusts and trust beneficiaries. He has yet to take any responsibility for his misconduct or acknowledge that he has engaged in any wrongdoing. The Hearing Board correctly concluded that, based on its observations at hearing, Respondent did not acknowledge any responsibility for his own behavior, demonstrated a pattern of shifting blame to others, and did not seem to recognize "even the slightest possibility of an error on his part or of any need to change his behavior." (Id.) Even at oral argument, he continued to insist that he did nothing wrong with respect to the Carstensen trusts. Indeed, Respondent stated in his brief to this Board:
There can be no dispute that appellant's conduct throughout the case as a whole reveals no misconduct, dishonesty, or neglect.
There was a dissent from James T. Eaton
Here, Respondent has no prior record of any disciplinary action. His conduct in the handling of these matters may have been incompetent, dilatory, and presumptuous, but in my opinion, it does not rise to a level justifying disbarment, because there is insufficient evidence as to corrupt motives or moral turpitude other than "deductions" based upon evidence that I believe are unwarranted. Suspension is a proper punishment where corrupt motives and moral turpitude are not clearly shown. Id. Most of the opinions cited by the majority opinion and relied upon by the Hearing Board in this matter are inapposite because they had clear findings that the respondents in those cases were using the monies for their own personal benefit, in contrast to this case where the overcharging for services was based on a purported assumption that the client would allow Respondent to bill her trust similarly after her death...
I agree with the conclusion that he was not remorseful and that he had an attitude at the hearings. But, as I have observed in other matters before this Board, where Respondents are pro se, they fail to act adequately remorseful presumably for fear of how that might be an admission of the underlying charges; they fail to put on adequate evidence of mitigation again because these proceedings cover both liability and sanctions and one might legitimately be concerned that mitigation evidence suggests guilt; and, more importantly, without the guidance of experienced disciplinary defense counsel, they are not counseled that defiance of the ARDC and, in this case, also the Illinois Attorney General, is not helpful...
Respondent is 78 years old. He failed his clients in these matters and overcharged in one of them. Based on this record, I would recommend a suspension of two years. I do not believe if he returns to practice in two years after this suspension that he would pose a serious danger to future clients. I would also time the suspension from the date that he was suspended by the Court, June 15, 2016.
A District of Columbia Hearing Committee proposes a 60-day suspension of an attorney.
In many ways, this is a straightforward case. The core question here is whether Mr. Robbins, the Respondent, had an attorney-client relationship with a man named Gary Day with respect to a particular transaction. There was no engagement agreement between the two that covered that transaction; no fee paid by Mr. Day for legal work on that transaction; no document that established an attorney-client relationship; and no testimony from any witness to a conversation where Respondent and Mr. Day agreed that they would enter into an attorney-client relationship. We nonetheless find that there was an attorney-client relationship, for the reasons set forth below.
On that threshold issue
We take very seriously Mr. Day’s testimony that he believed that Respondent was his lawyer. The Court of Appeals has held that “client’s perceptions are [an] important consideration in determining whether attorney-client relationship existed.” In re Bernstein, 707 A.2d 371, 375 (D.C. 1998) (citing Leiber, 442 A.2d at 156). As set out above, we find Mr. Day credible and believe his testimony about his understanding that Respondent represented him. In addition, Mr. Day testified that he agreed to sign the indemnification agreement based on his trust in Respondent. See FF 25. We find this, too, to be strong evidence of his understanding of Respondent’s role.
Moreover, Mr. Day’s belief was reasonable. Respondent had represented Mr. Day in the past in connection with a number of business deals. And Respondent’s work on the matter was consistent with what lawyers do in such situations; he negotiated a part of the agreement and memorialized it. As a result, we have little trouble concluding that Mr. Day’s belief was reasonable. This strongly supports a finding that there was an attorney-client relationship...
Finally, while Respondent makes much of the lack of documentation clarifying their relationship, we believe that door swings the other way. Respondent could have easily avoided this problem by simply telling Mr. Day that he was not representing him. He did not do so. This strongly supports the conclusion that Respondent represented Mr. Day. In re Schlemmer, BDN 444-99 (BPR Dec. 27, 2002) at 14 (“[W]hen a lawyer does not make the conditions of his retention clear, the client’s view of the creation of an attorney-client relationship will prevail.”), aff’d in relevant part and remanded for further consideration of sanction, 840 A.2d 657, 664 (D.C. 2004).
Mr. Pledger’s understanding that Respondent represented Mr. Day is wholly consistent with this view. He was a third party witness with no dog in the fight. Perhaps more importantly, what he describes is, again, highly consistent with what a lawyer would do. Lawyers tell opposing counsel to talk to them and not to their client. See Rule 4.2. Mr. Pledger explained that Respondent identified a conflict of interest that would prevent him from representing Mr. Day if a suit were to be filed. This is also consistent with Respondent functioning as counsel for Mr. Day.
Ultimately, we have little trouble finding that Respondent represented Mr. Day. Mr. Day reasonably believed Respondent was his lawyer; a disinterested third-party, Mr. Pledger, reasonably believed Respondent was Mr. Day’s lawyer; and Respondent acted like Mr. Day’s lawyer. There is little in the record to question this conclusion.
This finding led to conclusions that the attorney had failed to communicate with his client and engaged in both a concurrent client conflict of interest as well as a personal conflict (in other words, conduct in violation of two separate subsections of Rule 1.7):
Respondent simultaneously represented Persaud and Mr. Day. At the outset of the representation, Respondent knew that Persaud’s failure to perform on its contracts would cause Hudson to seek payment from Mr. Day. As a result, Mr. Day expected Respondent to protect Mr. Day’s interests by requiring the surety to seek indemnification from Persaud and Andy Persaud before Mr. Day. These protections were not written into the indemnity agreement, but Mr. Day nevertheless signed the agreement based upon assurances from Respondent. The potential conflict turned into an actual conflict when Respondent realized that Persaud was having financial and performance problems. At that point, Respondent was constrained by Rule 1.6 to protect Persaud’s confidences and secrets, but also obligated under Rule 1.4 to keep Mr. Day reasonably informed about the status of the matter. Despite this untenable position, instead of withdrawing from the representation, Respondent simply failed to inform Mr. Day of this development. (citations to record omitted)
Mr. Day walked into a transaction thinking he had a lawyer who was looking out for his interests. He was wrong. His lawyer stood to profit personally from the transaction and so did his lawyer’s other client. While Respondent characterizes this as bringing a good investment to Mr. Day (FF 15), it is clear that without Mr. Day, Respondent would have had to do more work to get this deal funded – assuming the deal could be funded at all. Respondent’s motives cannot reasonably be characterized merely as bringing an investment opportunity to a friend. He stood to benefit, as did his other client. He may have wanted this to work out for Mr. Day, but, to be clear, he wanted it to work out for himself and his other client too.
Respondent also failed to inform Mr. Day about Persaud’s failure to comply with his obligations as a part of the deal. Indeed, Respondent’s actions hurt Mr. Day’s ability to learn what was happening with his investment. Because of Respondent’s actions, Hudson’s lawyer, Mr. Pledger, did not communicate Hudson’s demands to Mr. Day. Instead of serving the purposes of Rule 1.4 – to keep a client informed – Respondent did not merely fail to keep his client informed, he affirmatively kept him from getting information about what was happening with his investment. And he appears to have done this for the most base of reasons – to avoid having his misconduct come to light.
We see this as serious misconduct...
Here, the character of the conflict of interest bears closest resemblance to [prior cases] Shay and Cohen, in which the respondents represented two parties with aligned interests that later diverged, and later withheld information from one client in order to favor the other. The conduct here is more serious than that in both of these cases in the sense that Respondent was motivated by personal financial gain. Respondent here stood to personally profit from the conflict; that suggests a more substantial sanction than where the attorney did not have such a personal motive in the case. At the same time, the misconduct at issue here is less serious than that in Shay. The active conflict of interest and withholding of information did not persist for six years and was not accompanied by dishonesty. Respondent’s conduct is also less serious than that in both Evans and Elgin, in which the Court imposed six-month suspensions, due to the absence of serious companion Rule violations and significant aggravating factors, such as prior discipline.
The case is In re Seth Robbins and can be found at this link by clicking on Disciplinary Decisions. (Mike Frisch)
The Maine Supreme Judicial Court answered a series of certified questions concerning a failed contraception procedure did not form the basis of a "wrongful birth" claim
[The plaintiff] alleg[ed] that in February 2012, at a community health center for which the United States was responsible, a physician negligently failed, as a result of Merck’s defective applicator, to insert into her arm an implant manufactured by Merck that was designed to prevent pregnancy for at least three years...
Doherty claims that she is entitled to damages resulting from injuries that she suffered when the failure of Merck’s product resulted in a non-remarkable pregnancy leading to the birth of her healthy child. That is precisely the claim barred by the very clear language of the statute. Doherty’s argument that the statute applies to the physician who treated her but not to Merck disregards the statute’s declaration that the birth of a healthy child is not a legally recognizable injury ab initio; therefore, it is not actionable against any defendant. As a result, unless the “failed sterilization procedure” exception contained in section 2931(2) and discussed infra applies, Doherty may not recover damages against either Merck or the United States for the birth and expense of raising her healthy child.
The court concluded that the "failed sterilization procedure" exception did not apply.
There was a concurring opinion
The federal court has not asked us to determine whether the wrongful life statute goes beyond declaring that the birth and the life of a healthy child do not constitute damages, that is, legally recognizable injury. 24 M.R.S. § 2931(1) (2016). Nor has it asked us to determine whether, if the statute does go beyond the gender-neutral declaration that a child is not an “injury,” doing so constitutes an unconstitutional violation of a woman’s right to equal protection under the law. Id
Moreover, in light of the questions presented, we are not required to consider whether a person may bring claims of ordinary medical malpractice for any negligent medical care provided to a person who sought medical care to avoid pregnancy as a result of a medical condition. For example, a person who suffers from certain illnesses may be seriously or fatally harmed by a pregnancy. In answering the questions presented, we are not required to consider whether a claim of medical malpractice for contraception failure may proceed in those circumstances. Put another way, those injuries would be factually distinct from the nature of the claim before the federal court related to the birth of an unanticipated but healthy child. In the end, we are not asked to determine whether that type of harm to a person, unrelated to the child, falls outside of the statute’s limitation on negligence actions.
Finally, although we cannot disagree with the Court’s careful parsing of the concepts of “sterilization,” particularly as used in other statutory contexts, it is clear from the lengths the Court goes to in attempting to distinguish various methods of permanent or semi-permanent contraception that medicine has outstripped the statutory definitions and that further attention to the language of 24 M.R.S. § 2931 (2016) is needed.
In sum, we write to clarify that we do not opine on the constitutionality of the statute, and we do not opine on whether a person may maintain a claim for other types of injuries—unrelated to the existence of a healthy child—arising from allegations of medical malpractice in the context of a pregnancy.
A conflict of interest has resulted in a 60-day suspension by the Iowa Supreme Court
In the transaction between Wieniewitz and Synergy, Willey represented two parties on opposing sides of a transaction. The interests of Wieniewitz as the party loaning the money, and Synergy as the party receiving the loan, were at odds from the beginning. That the two parties had competing interests is demonstrated throughout the transaction. Throughout the email correspondence, Willey was repeatedly caught between the interests of Wieniewitz and the interests of Wild. During the entire transaction, Willey continued to represent the interests of Wild and Synergy, charging and collecting tens of thousands of dollars in legal fees. At the same time, Willey was unable to adequately pursue the interests of Wieniewitz in obtaining the return of his original investment, let alone any of the future payments promised to him in the promissory note prepared by Willey on behalf of Synergy/Wild. Other than forwarding information from one client to another, Willey did nothing to advance the legal interests of Wieniewitz.
After Wieniewitz obtained new counsel, Willey expressed that he could not give certain information to Wieniewitz because of nondisclosure agreements and because dispersing the information could harm Wild. Clearly, Synergy was not in a position to return Wieniewitz’s money, and Willey was not able to adequately pursue Wieniewitz’s interest in obtaining a full refund of the money he provided under the promissory note. We agree with the finding of the commission and hold that the Board proved a violation of rule 32:1.7(a)(2) by a convincing preponderance of the evidence.
On informed consent
If there is a concurrent conflict of interest, our rules provide a mechanism for the attorney to cure the conflict and continue to represent both clients. Iowa R. Prof’l Conduct 32:1.7(b); see also Stoller, 879 N.W.2d at 210. If a concurrent conflict of interest exists, one of the steps an attorney must take to cure the conflict is to obtain “informed consent, confirmed in writing” from both clients. Iowa R. Prof’l Conduct 32:1.17(b)(4). When the conflict exists at the outset of representation, the attorney must obtain the written consent before undertaking the representation. Id. r. 32:1.7 cmt. 3. Contrary to the position taken by Willey, he never informed Wieniewitz of the concurrent conflict of interest, and certainly not the extent of his relationship with Wild or his involvement with Synergy. Willey failed to obtain any informed consent, confirmed in writing, from Wieniewitz before continuing to represent both parties in the loan transaction. We agree with the finding of the commission and hold that the Board proved a violation of rule 32:1.7(b)(4) by a convincing preponderance of the evidence.
While failing to disclose the conflict of interest to Wieniewitz, Willey repeatedly represented to Wieniewitz that his payment was forthcoming “soon,” whether in a few days or the next week. Willey continued to tell Wieniewitz the payment would be coming “just next week” for nearly two years. It was only much later that Wieniewitz learned of the conflict of interest, and then Willey advised him to seek other legal counsel. In our de novo review of the record, and considering all of the mitigating and aggravating circumstances in this case, we find that the aggravating factors weigh in favor of a longer period of suspension. We conclude a sixty-day suspension is appropriate.
Thursday, January 26, 2017
The dismissal of a legal malpractice claim against Alston & Bird was affirmed by the New York Appellate Division for the First Judicial Department
A focal point of this appeal is Brookwood's claim that A & B, in the patent action, negligently litigated defenses that were available to Brookwood pursuant to 28 USC § 1498. 28 USC § 1498 provides that when a patent is infringed for the benefit of the United States government, the patent holder's remedy is against the United States in the United States Court of Federal Claims. Brookwood alleges that had A & B not been negligent, the motions that A & B eventually brought based on 28 USC § 1498 would have been granted and Brookwood would have avoided the approximately $10 million it expended on defending itself at trial and on appeal. Important in this analysis is the fact that Brookwood ultimately prevailed in the underlying patent action, achieving a judgment of noninfringement. The theory of Brookwood's malpractice case is not that but for A & B's negligence it would have prevailed in the patent action; rather Brookwood's claim is that but for the manner in which A & B interposed the defenses available to Brookwood under 28 USC § 1498, Brookwood would have prevailed without incurring the additional legal fees it expended. In other words, but for A & B's negligence, Brookwood could have achieved the same result more expeditiously and economically. The Supreme Court granted A & B's motion and dismissed the complaint in its entirety, holding, among other things, that the allegations did not support a finding of attorney negligence or of proximate cause. We now affirm.
Second-guessing the strategy of counsel was an insufficient basis for a malpractice claim
Decisions regarding the evidentiary support for a motion or the legal theory of a case are commonly strategic decisions and a client's disagreement with its attorney's strategy does not support a malpractice claim, even if the strategy had its flaws. "[A]n attorney is not held to the rule of infallibility and is not liable for an honest mistake of judgment where the proper course is open to reasonable doubt" (Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1st Dept 1990]). Moreover, an attorney's selection of one among several reasonable courses of action does not constitute malpractice (see Rosner v Paley, 65 NY2d 736, 738 ; Rodriguez v Lipsig, Shapey, Manus & Moverman, P.C., 81 AD3d 551, 552 [1st Dept 2011]). Brookwood has not alleged facts supporting its claim that A & B's evidentiary decision, to rely on Nextec's expert, rather than compromise the merits of Brookwood's position on other arguments, was an unreasonable course of action.
Other hindsight arguments concerning the nature and quality of the evidence supporting the second summary judgment motion in the patent action fare no better. There is no factual basis to conclude that the governmental email to Brookwood about the inclusion of a broad patent infringement indemnity clause would have changed the outcome of the motion because the clause never made its way into the government's contract with ADS. Nextec's attorney's letter stating that Brookwood necessarily infringed on Nextec's patents is hearsay. Not only was it apparently sent by the attorney after the underlying lawsuit had been commenced, it was not based upon any personal knowledge. Thus, Brookwood's negligence claim is wholly speculative and "depend[s] on too many uncertainties" to support a conclusion that there would have been a more favorable, that is quicker, outcome in the underlying litigation (Estate of Feder v Winne, Banta, Hetherington, Basralian & Kahn, P.C., 117 AD3d 541, 542 [1st Dept 2014]; Sherwood Group v Dornbush, Mensch, Mandelstam & Silverman, 191 AD2d 292, 294 [1st Dept 1993]). Having prevailed in the underlying patent action and having otherwise failed to plead negligence, Brookwood has also failed to show that its litigation expenditures were damages proximately caused by A & B's alleged negligence (see e.g. Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer., 8 NY3d 438, 443 ).
The Idaho Supreme Court has issued this recent decision in a legal malpractice case.
On September 19, 2005, Molen was charged with lewd conduct with a minor child, S.Z. Molen pleaded not guilty at his arraignment. On the morning of trial, Christian arrived at the courthouse under the influence of alcohol. His blood alcohol content was measured at .329 and .344. The trial was vacated. An amended information was filed on May 11, 2007, and the case proceeded to jury trial on June 18, 2007.
Yes, the attorney showed up for trial with a blood alcohol content way north of legally intoxicated and just south of legally dead.
I might look for another lawyer right there.
At the rescheduled trial
On June 22, 2007, the jury returned a guilty verdict. Molen moved for a new trial arguing that the disclosure of the photographs of the colposcopic examination was unfair. The district court denied Molen’s motion. On June 4, 2008, Molen was sentenced to twenty years consisting of eight years fixed and twelve years indeterminate. Molen appealed his conviction, but the conviction was affirmed by the Idaho Court of Appeals.
Post-conviction relief was secured in 2014
The district court’s grant of postconviction relief was premised on the conclusion that Molen’s trial counsel’s performance fell below an objective standard of reasonableness in: (1) failing to consult with and/or retain an expert in pediatric sexual abuse; (2) failing to discover the existence of the colposcopic photographs prior to trial; and (3) failing to request either a continuance of the trial or a mistrial so that the new evidence could be reviewed by an expert in pediatric sexual abuse. The district court vacated the judgment of conviction entered on January 7, 2008, granted Molen a new trial, and ordered the Idaho Department of Corrections to release Molen from custody. In a hearing on July 10, 2014, the district court granted the State’s motion to dismiss the case.
The former client filed his legal malpractice claim in February 2015.
The court summary
In a case arising out of Ada County, the Idaho Supreme Court vacated the district court’s summary judgment dismissal of a legal malpractice action brought against Ronald Christian (“Christian”). The malpractice action stemmed from Christian’s defense of criminal charges brought against Michael Scott Molen (“Molen”). The crux of Molen’s appeal was whether the statute of limitations on his malpractice cause of action had accrued at the time of his initial criminal conviction in 2007 or when he was later exonerated in 2014. In granting summary judgment in favor of Christian, a district court made two holdings: (1) Molen’s malpractice cause of action against Christian accrued at the time of Molen’s initial conviction, and (2) whether actual innocence is an element of a legal malpractice claim arising from a criminal conviction would only be an issue if the Idaho Supreme Court adopts the exoneration rule. Generally, the exoneration rule requires a convicted party to obtain direct or collateral relief on that conviction prior to filing suit against a criminal defense attorney for legal malpractice.
The Idaho Supreme Court held that Molen’s malpractice cause of action did not accrue until he was exonerated, which occurred on July 10, 2014. The Court explained that if the exoneration rule was not adopted, a convicted defendant would have to file two lawsuits simultaneously: (1) a malpractice claim, and (2) an appeal and/or post-conviction relief proceeding. The malpractice claim would serve as a protective lawsuit to prevent the claim from being later barred by the statute of limitations, and the appeal and/or post-conviction proceeding, if successful, would be the basis for the malpractice action. The Court held that such a result would be contrary to this Court’s holding in City of McCall v. Buxton, 146 Idaho 656, 663, 201 P.3d 629, 636 (2009). That is, the Idaho Supreme Court does not favor protective lawsuits that must be filed only to be stayed.
Additionally, the Court held that actual innocence is not an element of a criminal malpractice cause of action because: (1) requiring a plaintiff to prove actual innocence is contrary to the fundamental principal that a person is presumed innocent until proven guilty beyond a reasonable doubt; (2) a criminal defendant can be harmed separately from the harm he or she incurs as a result of being guilty of a crime; and (3) requiring actual innocence would essentially eliminate a defense attorney’s duty to provide competent counsel to a client he or she knows to be guilty. Christian’s request for attorney’s fees on appeal was denied because he was not the prevailing party. Costs on appeal were awarded to Molen.
An attorney who had previously been suspended was disbarred by the Louisiana Supreme Court for a federal false tax filing offense.
Respondent testified that he was at an all-time low period in life when he committed the crime to which he pleaded guilty. As a result of years of physical and emotional abuse by his wife, he was depressed and anxious. He was also going through a divorce, owed back taxes, was maintaining two households, and was very angry at the government. For a short time, he received treatment for his depression through counseling with Dr. David Govener and through the use of antidepressants prescribed by Dr. Thomas Williams. Respondent testified he does not feel he is currently suffering from depression or anxiety. He also testified that he never anticipated receiving any refunds from his filing of fraudulent tax returns. He served eighteen months in prison, lived in a halfway house to serve 3.2 months of his sentence, and served 2.8 months of house confinement to conclude his sentence. He also consented to his interim suspension from the practice of law on February 26, 2014.
Dr. Govener was accepted as an expert in marriage and family therapy. He testified that he and respondent initially had a professional acquaintance that developed into a friendship. In 2008, he became concerned about respondent’s mental health because of anti-government statements respondent was making, and he suggested respondent engage in counseling. He counseled respondent for some time and referred him to Dr. Williams for a prescription for antidepressants. Dr. Govener testified that respondent suffered from a major depressive disorder with psychotic features. However, this diagnosis has resolved, and respondent is highly unlikely to repeat the type of behavior that led to the formal charges against him. Finally, Dr. Govener testified that respondent is no longer in treatment with him.
Attorney Robert Lee testified that he and respondent shared office space as practicing attorneys for approximately twenty years. Mr. Lee testified that respondent went above and beyond to help his clients with all aspects of their lives during his representation. He also testified that, on several occasions, respondent came to his house late at night or showed up at the office with evidence he had been the victim of physical abuse.
As to sanction
Here, respondent stands convicted of one count of making false, fictitious, or fraudulent claims to the IRS, arising out of his ill-advised effort to employ an "OID scheme" to claim more than $9.7 million in tax refunds over four years. In connection with his criminal conviction, respondent has acknowledged violating Rules 8.4(a), 8.4(b), and 8.4(c) of the Rules of Professional Conduct.
Through his guilty plea, it has been established that respondent knowingly presented a false claim to the IRS. The nature of respondent’s crime calls for a baseline sanction of disbarment under the ABA’s Standards for Imposing Lawyer Sanctions. In light of the aggravating factors present, especially respondent’s prior disciplinary record, we find that a downward deviation from the baseline is not warranted.
Accordingly, we will adopt the disciplinary board’s recommendation and disbar respondent, retroactive to the date of his interim suspension.