Monday, February 6, 2017

Publication Of Bar Action Not Substantial Mitigation

The Law Society of British Columbia Review Board affirmed imposition of a two-month suspension of an attorney for

professional misconduct by improper handling of clients’ trust funds, failure to maintain proper accounting records, intentional misrepresentation to the Law Society by backdating statements of account, and breaches of undertakings.

In brief overview, the citation in this case arose from the Respondent receiving funds from clients and depositing them directly into his general account in payment of fees for services when he had not issued or delivered statements of accounts.  After receiving notice of a compliance audit, and prior to the audit, the Respondent and his bookkeeper created numerous “backdated” statements of account, which made it appear as if the statements of account had been issued at the time that the funds were received.  The citation included a number of allegations related to this conduct, including improper handling of trust funds and failure to maintain accounting records.  The citation also included unrelated conduct involving the Respondent breaching undertakings imposed by ICBC that required him to obtain his clients’ signatures prior to disbursing settlement funds.

One interesting claim came post-hearing

The Respondent seeks to introduce evidence pertaining to events that have occurred since the release of the hearing panel’s decision.  The Respondent seeks to admit new evidence in relation to four issues:

(a)   The Law Society’s press release following his disciplinary matter, which the Respondent says was unfair and damaging (the “Press Release”).  The Press Release described the Respondent’s conduct as “misuse of trust funds,” which the Respondent says led readers to believe that he had misappropriated trust funds.  The Press Release did not report the hearing panel’s conclusion that the Respondent’s clients had not suffered any harm from his actions (nor had he gained from them);

(b)   An alleged breach of a publication ban by the Law Society with respect to a prior disciplinary matter involving the Respondent;

(c)   The Law Society’s online posting of incorrect information concerning the Respondent’s practice status in July, 2015; and

(d)   The general impact of the above on the Respondent’s character, reputation and professional standing.

The fresh evidence consists of two affidavits presented at the commencement of this Review on March 8, 2016 and at the continuation of the Review on May 31, 2016.

The "fresh evidence" was rejected

It is our view that the evidence regarding the impact of the publication of details regarding the disciplinary action upon the Respondent’s practice and reputation should not be admitted as fresh evidence in this Review.  The hearing panel considered at length the Respondent’s submissions concerning the stress and embarrassment caused by the disciplinary process.  The hearing panel expressly accepted that this matter involved a serious impact on the Respondent, stating at paragraphs 67 and 68:

The disciplinary process to date has caused the Respondent a great deal of embarrassment and stress.  He has been practising in the shadow of this process.  The decision on Facts and Determination is the second “hit” when his name is searched on Google.  He has also had people calling him to ask about the decision.  He has found those calls gut-wrenching and feels that he has let colleagues down.

The Panel finds that the suspension will have a serious impact on the Respondent and his practice.  His practice is his only source of income.  He has already endured substantial embarrassment and stress as a result of the disciplinary process.  The Panel finds this to be a mitigating factor in its consideration of the appropriate disciplinary action.

The evidence that the Respondent seeks to introduce is of a similar nature to the evidence already provided to the hearing panel.  Evidence regarding the effects of the disciplinary process on the Respondent’s practice and reputation was already before the hearing panel.  In our view, the additional evidence provided by the Respondent when taken with the evidence that was already presented at the penalty hearing, would not have affected the penalty imposed. 

Further, as set out in greater detail later in these reasons, it is this Review Board’s view that the impact of publication of disciplinary proceedings on a respondent lawyer should generally not attract much weight in determining the appropriate penalty.  We consider that publication is necessary to meet the statutory duties of the Law Society.  We also consider that publication will in most instances have a negative effect on the respondent lawyer, including stress, anxiety, embarrassment and loss of reputation.  These results are to be expected from disciplinary proceedings.  In our view, however, it should generally not have a substantial effect on the nature of the penalty imposed.

 We therefore find that the fresh evidence that the Respondent seeks to admit does not meet all elements of the Palmer test and as such cannot be admitted.  The application to admit fresh evidence is dismissed.

As to sanction review

The appropriate range approach acknowledges that there is no single correct result in penalty decisions.  It avoids second-guessing the hearing panel and avoids allowing any party “two kicks at the can.”  This is also reflected in the “no tinkering” admonition.  If the penalty is within the appropriate range, it should not be changed simply because the review board may have picked another spot on that range.  Notwithstanding the monetary examples given by the Benchers in Hordal, we are of the view that “no tinkering” is not only a quantitative admonition.  It is also qualitative in the sense that it discourages substitution of the review board’s assessment for that of the hearing panel unless the review board finds that the hearing panel’s decision was not within an appropriate range of outcomes based on the circumstances of the case.

(Mike Frisch)

February 6, 2017 in Bar Discipline & Process | Permalink | Comments (1)

Costs Denied Against Law Society For Abandoned Charges

An attorney's motion for costs against the Law Society of Upper Canada was denied by the Tribunal Appeal Division

the appeal is dismissed. There was ample reason for the hearing panel to deny the Lawyer an award of costs as against the Law Society, particularly having regard to the onus which lies upon the Lawyer under the provisions of Rule 25.01 of the Rules of Practice and Procedure, and, accordingly, the decision was reasonable. Similarly, the award of costs against the Lawyer under the second Order was a reasonable and justifiable exercise of the hearing panel’s discretion relating to costs of the motion which gave rise to the first Order.

The complaint was filed by a former client who sought refugee status

A Proceeding Management Conference (“PMC”) was set for April 13, 2015 but adjourned to April 27 after the Lawyer retained Pantea Jafari as his counsel. By letter dated April 29 the prosecutor advised the Lawyer that she was withdrawing the Notice of Application and enclosed her Notice of Abandonment. She had earlier advised the Lawyer that the Application would be abandoned, in a telephone call on April 24, and so advised the Tribunal at the PMC held on April 27, 2015.

But

The Lawyer filed a Notice of Motion seeking an award of costs against the Law Society on a number of grounds which can be summarized as an allegation that the Law Society failed, from 2013 forward, to discover the futility of its case. He submitted to the hearing panel that high-handed conduct by the Law Society should merit an award of costs in his favour for the hardship, time and expenditure incurred by him in defending against charges known to be spurious since January 2013.

The governing law

Under Rule 25.01, the onus is on the Lawyer to establish either that: (i) the proceeding was unwarranted; or (ii) the Law Society "caused costs to be incurred without reasonable cause or to be wasted by undue delay, negligence or other default." Even if the test is met under either branch, the panel retains the residual discretion to refuse to award costs.

The hearing panel did not find the proceeding to be unwarranted as there existed an arguable evidentiary basis on which a panel might reasonably have concluded that the Lawyer engaged in misconduct. There was no evidence of bad faith or patent unreasonableness.

Neither did the hearing panel find that the test for costs was met under the second branch. The panel noted that discontinuance of an application alone is not a basis on which to award costs. Discipline Counsel is not being procedurally wasteful or taking an unreasonable position by withdrawing an application on the basis that there is no longer a reasonable prospect of obtaining a finding.

A parting shot

The second matter of concern to us is the Lawyer’s repeated use of egregious and demeaning language when describing members of the PAC, the hearing panel, Discipline Counsel and investigators employed by the Law Society. While we disregarded this language in reaching our decision, we observe that unnecessary and inappropriate use of rude, abusive and unfounded descriptive language does nothing to advance the cause of the party engaging in such behavior. The Law Society Tribunal expects licensees and counsel to conduct themselves in accordance with the high standards of civility and proper decorum that are contemplated by our Rules of Professional Conduct.

(Mike Frisch)

February 6, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Unhappy Complainant Lacks Standing To Appeal Dismissal Of Bar Grievance

The New Hampshire Supreme Court dismissed a petition for writ of certiorari, holding that an unhappy complainant lacks standing to challenge dismissal of a bar grievance.

The petitioners, Sanjeev Lath and Barbara Belware, have petitioned for a writ of certiorari, see Sup. Ct. R. 11, challenging the decisions of the Office of General Counsel of the Attorney Discipline Office (ADO) and the Complaint Screening Committee (CSC). The ADO had dismissed a grievance filed by the petitioners against Attorney John F. Bisson. Upon the petitioners’ request for reconsideration, the CSC affirmed the ADO’s decision. In their petition, the petitioners argue that the ADO and the CSC erred by declining to docket their grievance as a complaint, and that the CSC erred by failing to answer the questions raised in the petitioners’ request for reconsideration. The respondents—the ADO and Attorney Bisson—challenge the merits of the petitioners’ claims, and also assert that the petitioners lack standing to bring this petition. Because we conclude that the petitioners lack standing, we dismiss the petition.

The posture

...the record reflects the following facts. On December 30, 2015, the petitioners filed a grievance with the ADO. The petitioners’ grievance arises out of the annual meeting of the Oak Brook Condominium Owners’ Association, which took place in November 2015. The petitioners are unit owners at Oak Brook Condominium. Attorney Bisson represented the condominium association at the meeting. The petitioners allege that, during the meeting, Attorney Bisson violated the Rules of Professional Conduct by, among other things, recording the meeting without the petitioners’ knowledge or consent.

The ADO reviewed the factual allegations in the petitioners’ grievance, along with the exhibits that the petitioners provided. On January 15, 2016, the ADO’s assistant general counsel sent a three-page letter to the petitioners, in which he reviewed the allegations, assessed the claimed violations, and explained the reasoning that led to his conclusion that “a hearing panel would not likely find clear and convincing evidence that” Attorney Bisson violated the Rules of Professional Conduct. Regarding the claim that Attorney Bisson made a recording without the petitioners’ knowledge or consent, he noted that one of the petitioners’ exhibits showed that, in fact, the meeting had not been recorded. Based upon the analysis of the petitioners’ allegations, the ADO declined to docket the petitioners’ grievance as a complaint.

A request for reconsideration was denied and the appeal followed.

...disciplinary proceedings are not treated as “lawsuits between parties litigant but rather are in the nature of an inquest or inquiry as to the conduct of the respondent [attorney].” Merski, 121 N.H. at 909 (quotation omitted). The grievant participates in the proceedings not to enforce his or her own rights, but to “supply evidence of the alleged attorney malfeasance.” Akinaka v. Disciplinary Board, 979 P.2d 1077, 1085 (Haw. 1999). This principle is reflected in the rules governing the attorney discipline system, which make clear that a grievant may not control the prosecution of a charge, see Sup. Ct. R. 37(18), and that the complainant is not a party to the disciplinary proceeding, Sup. Ct. R. 37A(I)(j).

Because attorney disciplinary proceedings are structured in this manner, no personal rights or remedies of the grievant are adjudicated in, or directly affected by, a disciplinary proceeding. The grievant neither receives a legally cognizable benefit when an attorney is disciplined, nor sustains a legally cognizable injury when the attorney is not disciplined. Rather, the benefit of attorney discipline is bestowed upon the public at large...

...in light of the nature and purposes of the attorney discipline system, we conclude that a grievant does not have a personal interest in the outcome of an attorney disciplinary proceeding that is sufficient to confer standing. In reaching this conclusion, we join the many courts that have likewise held that a grievant does not have standing to challenge the disciplinary authority’s disposition of a grievance.

(Mike Frisch)

February 6, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Recusal Denied

A claim of an improper ex parte Christmas party encounter did not establish sufficient bias for recusal in heated litigation, according to a decision of the Tennessee Court of Appeals. 

The allegation surfaced in this billing notation

11/21/14   At Schell & Davies law firm party in Franklin with Trevor. Meet Judges Woodruff and Binkley and others. Meet Virginia Story and discuss case.  1.50

From the judge's affidavit

I recall being at a Christmas party at Schell & Davies law firm in Franklin, Tennessee, at the end of the month in November 2014. I barely remember saying “hello” to Mr. Harris, Judge Woodruff, and Mrs. Story, attorney for [Mr. Nesmith], but I would not, certainly, under any circumstances, discuss with any attorney or party to a lawsuit, the facts of a case or even bring up the case itself for any reason whatsoever. I never had an ex parte communication with Mrs. Story or Mr. Harris regarding any case, much less the present case, at the Christmas party mentioned above on or about November 21, 2014.

The court

Other than the vague notation that counsel for a party in the circuit court action “met” Judge Binkley at a holiday party, there is simply no indication that any of the merits of the case were discussed or that the interaction was anything more than passing social contact. “The mere existence of a friendship between a judge and an attorney is not sufficient, standing alone, to mandate recusal.”

Nor did delay or a heating courtroom exchange establish bias for recusal

We cannot deny that we are troubled by the events in this case, including the trial court's repeated delay in disposing of motions and its clear violation of section 1.02 of Rule 10B. Moreover, we are particularly concerned with Mr. Nesmith's action in filing affidavits from court staff in support of his characterization of the May 20, 2016 hearing. Again, however, the court staff‟s characterizations of the events of May 20, 2016 appear to stem directly “from events occur[r]ing in the course of the litigation,” rather than any extrajudicial knowledge. Accordingly, we reiterate that for any bias on the part of the trial judge and his staff to necessitate recusal, it must be so pervasive as to deny Appellants the right to a fair trial. 

We have thoroughly reviewed the record in this case and conclude that Appellants have failed to meet their burden to show a bias so pervasive that it denies them their right to a fair trial. The record on appeal contains no indication that Judge Binkley has prejudged any of the issues in this case in favor of one party, despite the contentiousness of the proceedings among all participants. We agree that Judge Binkley did enter into a heated exchange with Appellants and their children at the May 20, 2016 hearing and was overly candid in his remarks regarding the presence of the children; however, Appellants have failed to show that this exchange, viewed in isolation, or in conjunction with the trial judge‟s multiple adverse rulings and delays, is evidence of a bias “so pervasive that it is sufficient to deny [Appellants] a fair trial,” see id., or that shows that Judge Binkley has an “utter incapacity to be fair.” Groves, 2016 WL 5181687, at *5. Accordingly, Judge Binkley did not err in denying Appellants' recusal motions.

(Mike Frisch)

February 6, 2017 in Judicial Ethics and the Courts | Permalink | Comments (0)

Treatment Leads To Dismissal Of Bar Charges

An attorney whose alcoholism led to multiple neglect entered treatment and had the bar charges dismissed by the New York Appellate Division for the Fourth Judicial Department.

Respondent was admitted to the practice of law over 10 years ago and maintains an office in the Seventh Judicial District. He has no prior disciplinary history. In March 2015, the Grievance Committee filed a petition alleging six charges of professional misconduct against respondent, including neglecting client matters, failing to communicate with clients, failing to refund unearned legal fees, failing to comply with attorney registration requirements, and failing to cooperate in the investigation of the Grievance Committee. Although respondent initially defaulted in answering the petition, he subsequently retained counsel and was granted leave to file a late answer, wherein he denied material allegations of the petition.

But the matter then took a different course

This Court thereafter appointed a referee to conduct a hearing. Prior to the hearing, however, respondent moved this Court for an order staying the proceeding and diverting him to a monitoring program for alcohol abuse. On the motion, respondent acknowledged that he had developed a substance abuse problem that affected his ability to function as a lawyer and established that he had recently sought assistance from the New York State Bar Association Lawyer Assistance Program (LAP). Respondent additionally submitted proof that he had resumed complying with attorney registration requirements and had repaid to certain clients a substantial portion of the unearned legal fees at issue herein. By confidential order entered September 16, 2015, this Court granted the motion for diversion, stayed the disciplinary proceeding, and directed respondent to complete a monitoring program for alcohol abuse under the supervision of LAP for a period of one year.

Leading to this result

In this case, the parties agree that the alleged professional misconduct occurred while respondent was suffering from alcohol abuse, and he has since successfully completed a Court-approved monitoring program for that condition and resolved all issues raised by the charges, including repaying all unearned legal fees owed to clients. In addition, respondent has remained sober and has not become the subject of any additional disciplinary complaints. Accordingly, after consideration of all of the factors in this matter, we conclude that the petition should be dismissed.

The identity of the attorney is not disclosed. (Mike Frisch)

February 6, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Saturday, February 4, 2017

Petty Thievery And Bar Discipline

A repeat-offender shoplifting attorney should be suspended for two years, as proposed in a stipulated disposition of the California State Bar Court Hearing Department. 

Respondent committed multiple acts of shoplifting at large retail stores between October and December 2014. Each time, respondent was caught by store security and the items he attempted to steal were recovered. This misconduct is serious and demonstrates a conscious disregard for the law. While respondent’s misconduct did not involve the practice of law, respondent was convicted of four separate crimes involving moral turpitude, making a lengthy period of actual suspension appropriate.  Nevertheless, disbarment is not required to protect the public under these circumstances. Taking into account the mitigating credit for entering into a pre-trial stipulation, and limited mitigation for his emotional and mental health difficulties, the appropriate level of discipline is three years suspension, stayed, four years of probation, with a two-year actual suspension, thus requiring a showing under Standard 1.2(c)(1) to terminate the actual suspension. Additional conditions of substance abuse and mental health monitoring are also necessary for public protection.

The crimes are described in a stipulation

On November 5, 2014, respondent went into a Wal-Mart store in Garden Grove. Respondent went to the store’s hardware department where he removed a toolbox from a display rack, and then proceeded to place other items of merchandise inside the toolbox.

Respondent walked to another section of the store, where he took the items he placed in the toolbox and concealed them his front waistband. These items consisted of work gloves, bungee cords, tape, a laser pointer/level, padlocks and a para-cord survival bracelet, with a total retail value of $127.69.

Respondent exited the store without paying for the items concealed on his person.

Then

On October 13, 2014 respondent went into a Target store in Garden Grove. While in the store, respondent used a magnetic "merchandise key," designed to remove security devices from retail items, to remove a video game from a loss-prevention device. He then hid the video game along with three DVD sets inside his waistband. This merchandise had a retail value of $137.96.

Next

On December 10, 2014 respondent went into a Home Depot store in Anaheim. Respondent walked through the store and picked up a cordless drill set packaged in a cardboard box with a retail value of $229. Respondent then ducked into an enclosure on another aisle, where he removed the drills and rechargeable batteries from the box and concealed them on his person, leaving the box and battery charger behind in the enclosure.

Respondent exited the store to the parking lot without paying for the drill set, where he put the drills and batteries into his car.

Respondent went back inside the store and returned to where he left the box from the drill set. Respondent removed the battery charger from the box and conceal it in his waistband. Respondent walked back outside the store to the parking lot, where two loss prevention employees detained him, having observed respondent’s conduct inside the store.

Finally

On October 24, 2014, Orange County Sherriff’s Deputies pulled over respondent in his car for a traffic stop in Yorba Linda, after respondent entered an intersection against a red light, proceeding straight from a left turn lane and into lanes for oncoming traffic. Other cars had to stop or swerve to avoid colliding with respondent.

Respondent told the deputies that he was looking at his phone and not paying attention to the road. He gave the deputies permission to search his car and his person. During the search, deputies found a small magnetic device used to apply and remove security devices on retail items, a lock pick set and a book on lock picking.

Respondent told the deputies he was going to meet a friend at a nearby motel, but text messages on his phone suggested that he was going to a nearby mail. The deputies were concerned that respondent was going to the mall to shoplift, having discovered respondent’s October 13, 2014 arrest at a Target store in Anaheim where respondent used a magnetic device to remove a security device from an item.

Notably, the stipulation identifies as a comparable prior case a matter that I mentioned in a recent blog post

At the lower end of the disciplinary range is Chadwick v. State Bar (1989) 44 Cal.3d 103, 106-107, where the attorney was found to have committed acts of moral turpitude for violating federal insider trading statutes and lying to the Securities Exchange Commission ("SEC"). Respondent was given mitigating credit for confessing his wrongdoing to the SEC, his remorsefulness and recognition of wrongdoing, having no prior record of discipline for eight years in practice prior to the misconduct, the five-year passage of time since the misconduct and from four character witnesses. (ld at 111-112.) The court noted that but for the attorney’s mitigation, disbarment may have been warranted, but instead a one-year actual suspension was imposed.

I am on record as viewing the Chadwick case and its companion District of Columbia cases (see here and here) as lenient in the extreme. 

I had argued for  three-year suspension in Hutchinson and advocated for joint consideration of the two cases in light of their effort to shift the blame on each other in the parallel proceedings.

Hutchinson had been a Supreme Court clerk and was a partner at a major firm. He had served as the Administrator of ERISA where Chadwick was his deputy. He then entered private practice.

From the District of Columbia en banc opinion

On January 21, 1982, Hutchinson received a telephone call from a close friend, a California attorney named William Chadwick, who told Hutchinson that he believed a tender offer was about to be made for the Brunswick Corporation. Chadwick said that he had invested in Brunswick, recommended that Hutchinson invest in it also, and offered to split any profits or losses if Hutchinson decided to buy Brunswick stock. When Hutchinson pressed for details, Chadwick said that he believed he did not have inside information and that his broker had verified this. Chadwick told Hutchinson that his conclusions about Brunswick were based on cocktail-party conversations and on independent analysis by him and a friend, whose identity he did not then disclose.

Within five minutes after talking with Chadwick, Hutchinson purchased forty Brunswick call options. The next day he bought one hundred more options through the same broker and attempted (unsuccessfully) to buy yet another fifty through a second broker in Florida. He also decided to pass along the recommendation to invest in Brunswick to another friend, Robert Chaloupka. Hutchinson first tried to call Chaloupka on Friday, January 22, but he was unable to reach him until Monday morning, January 25. By then trading in Brunswick stock had been suspended, although Hutchinson did not know this at the time. Chaloupka never bought any Brunswick stock or options.

On Monday, January 25, the Whittaker Corporation publicly announced its takeover of Brunswick, and trading in Brunswick stock was temporarily suspended. On the same day, an SEC attorney called Hutchinson's office to ask whether his law firm represented either Brunswick or Whittaker. Hutchinson was out of the office, but through his secretary he later sent word to the SEC attorney that his firm represented neither company. On January 26 Hutchinson himself called the SEC attorney and confirmed this. During that call he was asked to participate in an informal SEC inquiry and to answer questions about his personal trading in Brunswick options, and he agreed to do so.

The next day, January 27, Hutchinson called Chadwick to tell him that he had agreed to testify before the SEC about his Brunswick trading. Chadwick then told Hutchinson, for the first time, that his information about Brunswick had come not from his own analysis or that of his broker but from Martin Cooper, an officer of a Los Angeles bank in charge of the Whittaker account (the unidentified "friend" mentioned in the first telephone call). Chadwick said that both he and Cooper would be "sunk" if Hutchinson revealed their January 21 conversation to the SEC because the information from Cooper would undoubtedly be regarded as inside information, and trading on it would constitute insider trading, which is illegal. After some discussion, Hutchinson agreed to lie to the SEC about the nature and source of his information about Brunswick if he was asked about it.

Hutchinson was deposed under oath by the SEC staff on February 2, February 16, March 29, April 1, and April 30, 1982. At the first two meetings, at which he was not represented by counsel, Hutchinson denied that he had discussed his purchase of Brunswick options with Chadwick or with anyone other than his own broker and denied that he had recommended the purchase of Brunswick stock to anyone else. He also said that he first learned of the tender offer for Brunswick from his broker on January 25, the date of the public announcement by Whittaker of the takeover bid. He denied having had any information before January 25 that a tender offer might be made for Brunswick. He told the SEC investigators that his sudden interest in Brunswick had resulted from his own research in the financial press and his personal strategy of purchasing low-priced options on stock which had recently traded at or below the option price.

Sometime between February 2 and February 16, Hutchinson unsuccessfully tried to convince Chadwick to agree to let him tell the truth to the SEC. Finally, on March 12, Hutchinson met with Chadwick and Chadwick's attorneys, and all of them agreed that Hutchinson and Chadwick would both contact the SEC and tell the whole truth. After that meeting, Hutchinson for the first time retained his own counsel, who got in touch with the SEC and made arrangements for Hutchinson to correct and supplement his earlier statements.

At the depositions in March and April, Hutchinson recanted his prior testimony and testified truthfully about his conversations with Chadwick, his agreement with Chadwick to lie to the SEC, and his efforts to relay the advice about Brunswick to Robert Chaloupka. In addition, on April 29, 1982, he voluntarily deposited all the profits he had made from trading in Brunswick options into an escrow account.

The SEC then brought a civil enforcement action against Hutchinson, Chadwick, and Cooper in the United States District Court for the Central District of California. In that proceeding, without admitting or denying the allegations in the SEC's complaint, Hutchinson agreed in a consent order to surrender the profits he had made (approximately $72,000) from his trading in Brunswick securities. This money was eventually distributed to other sellers of Brunswick options. The consent order, which was entered on July 15, 1982, also provided for certain injunctive relief against Hutchinson.

About a year later, in the United States District Court for the District of Columbia, Hutchinson was convicted of a criminal violation of the federal securities laws.

Note how the D.C. court accepts the fact that Chadwick was the author of the plan to perjure that Hutchinson reluctantly accepted. 

Contrast with the California court

Petitioner [Chadwick] further testified that prior to his conversation with the SEC he did not believe that he had violated the law, and that his agreement to lie for Hutchinson was due to a "misguided sense of loyalty."

As I mentioned, District of Columbia Bar Counsel (by my former  and late colleague Jackson H. Rose) had charged the two as co-respondents and was ordered to stay the Chadwick charges by the Board on Professional Responsibility.

When I inherited the case from Jack, I moved to vacate the stay without success, although the board expressed some buyer's remorse of the earlier order. 

I suppose there is some irony in the fact that 25 years later the Chadwick disposition is relied on as precedent in a matter involving a petty thief. (Mike Frisch)

February 4, 2017 in Bar Discipline & Process | Permalink | Comments (0)

A Battery Of Crimes

An attorney who was convicted of offenses involving importation and sale of counterfeit goods from China has agreed to an actual two-year suspension accepted in the recommendation of the California State Bar Court.

The story is told in the stipulation

Between August 18, 2009 and May 31, 2013, Respondent was the treasurer of OHR, Inc. ("OHR"). OHR would wire money to Chinese corporations who would then produce counterfeit goods.

Specifically, OHR imported counterfeit housings and batteries for various cell phones (Sony, Blackberry, Motorola, etc.) and other electronics. Once obtained, a sister company of OHR owned by Respondent’s son-in-law would then sell the products through retail stores in Mexico.

The day to day management of the company was left to Respondent’s son-in-law. However, Respondent would handle the finances including the payment of invoices for the products imported from China.

Respondent made payments to the Chinese company for cellular products knowing that it would cause those products to be imported into Chula Vista, California.

Many of the products were counterfeit in that they bore an unauthorized trade mark registered with the U.S, Patent and Trademark office.

 Between August 18, 2009 and May 31, 2013, Respondent received nine notices from U.S. Customs advising Respondent that the items imported were counterfeit. Nevertheless, Respondent and OHR continued to acquire counterfeit items from the Chinese supplier.

In one instance, Respondent requested the return of some items that were seized by U.S. Customs. Customs had seized both counterfeit goods and non-counterfeit goods that had been commingled. Respondent’s request was denied.

On August 9, 2011, U.S. Customs seized boxes shipped from China from the same supplier that had previously shipped counterfeit goods to OHR. The boxes contained 206 Blackberry housings, 150 Nokia housings, 420 Motorola batteries, 260 Sony Ericson batteries, 190 Blackberry batteries, and 50 Samsung batteries all of which were counterfeit. The fair market value of the counterfeit goods was between $120,000 and $320,000.

There is mitigation

It is worth noting that the crime did not involve Respondent’s practice of law. Further, although Respondent acted~as the treasurer of OHR, he received only nominal compensation. Therefore, there was no substantial motive for pecuniary gain.

Respondent’s mitigation is substantial. He has thirty-two years of prior discipline-free practice. This lengthy time tends to indicate that the misconduct here is unusual for Respondent. Combined with the evidence of good character, the misconduct appears more aberrational and unlikely to be repeated. In addition, Respondent has mitigation in the form of pro bono work, community service, and emotional difficulties.

Although there is some aggravation in harm to the public, it is greatly outweighed by the mitigation present. In fact, the mitigation compels a deviation from disbarment. Given the compelling mitigation, Respondent should receive a five-year period of stayed suspension and a five-year period of probation with conditions including an actual suspension of two years and until a Standard 1.2(c)(1) showing is made. Doing so is sufficient to protect the public, the courts, and the legal profession; maintain the highest professional standards; and ensure public confidence in the profession.

(Mike Frisch)

February 4, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Convicted Stalker Attorney Faces Sanction; Has "Better Things To Do"

An attorney convicted of numerous offenses should be disbarred, according to a recommendation by the California State Bar Court Review Department

Between November 2011 and January 2012, respondent engaged in a campaign of threats, harassment and intimidation by sending emails to victims, targeting his wife, his 11-year old daughter, and others with sexual violence and death threats.

After a jury trial, respondent was convicted of violating 20 counts of stalking 11 victims, 9 counts of making criminal threats to 9 victims, 1 count of creating a disruptive presence at an elementary school, 1 count of resisting a peace officer by threat and 1 count of battery on that officer, and 15 counts of violating restraining orders.

In summary, the jury found respondent guilty of 30 felonies and 17 misdemeanors, involving 17 victims, as follows:

Eleven counts of Penal Code section 646.9, subdivision (a) [stalking];

Nine counts of Penal Code section 646.9, subdivision (b) [stalking in violation of restraining order];

Nine counts of Penal Code section 422 [criminal threats];

One count of Penal Code section 69 [resisting officer];

One count of Penal Code section 243, subdivision (b) [battery on officer];

One count of Penal Code section 626.8, subdivision (a) [disruptive school presence]; and

Fifteen counts of Penal Code section 166, subdivision (a)(4) [contempt of court by violating a civil harassment restraining order].

He was sentenced to a seven year prison term in 2013 and released in mid-2016.

After his release from prison, he informed the State Bar

On May 12, 2016, respondent sent an email to the State Bar, stating: "I have no use whatsoever for a legal license, and have better things to do with my time than waste it with the ease referenced in the subject line of this email. Do what you must with regards to the ease, but please do not send me any further communications by any means."

The Examiner (San Francisco) called him the San Francisco Stalker in a story by Mike Aldax.

A parking ticket became the catalyst for a bizarre stalking case in San Francisco a year and a half ago that had two downtown companies and a Pacific Heights elementary school on edge.

Now the many victims of 28-year-old city resident Anatoly Smolkin can rest easier, according to prosecutors, as the attorney is expected to be locked up after he’s sentenced today on 47 stalking-related counts.

Over a two-month period in 2011, prosecutors said, Smolkin threatened police and stalked several former employers, attorneys and their families, as well as the Town School for Boys on Jackson Street, which he had attended.

The widespread stalking campaign apparently began Oct. 26, 2011, when Smolkin found a parking ticket on his prized Nissan 370Z outside his office at 1 Bush St.

The licensed California attorney thought the building staff was out to get him and tried to make them pay for the ticket. Soon after, he was fired by TinyCo, where he had worked for less than four months, and he started stalking the company’s employees.

“He emails all former co-workers, sends texts, stands outside of the building … for several weeks,” prosecutor Nathan Quigley said, adding that he tried to hack into the company’s network, among other incidents of bizarre behavior.

Eventually, he was slapped with retraining orders, Quigley said. But then Smolkin began stalking another former employer, Evolv On Demand, where he had worked for nine months.

On Dec. 1, 2011, Smolkin reportedly tricked a former co-worker into letting him inside Evolv’s Second Street offices. Once inside, he immediately rushed to his former boss and threw a parking stub at him.

“He clearly believed there was some conspiracy against him,” Quigley said.

Smolkin’s stalking list only grew from there. When he was arrested Dec. 2, Smolkin threatened to kill a police officer. After receiving more restraining orders, he found a new target: his elementary school.

Smolkin began showing up and acting bizarrely at Town School. During a fire drill that brought teachers and students outdoors, Smolkin “flipped them off,” blasted music in his Nissan and began peeling out and doing doughnuts, Quigley said.

In Smolkin’s mind, Quigley said, the school was the “training ground for all the rich people who will run the world.”

Smolkin also reportedly responded to lawsuits against him with lawsuits of his own, and stalked attorneys representing his victims. In one case, he emailed a photo to an attorney of the attorney’s 11-year-old daughter at a swim meet.

Despite representing himself in the stalking case, Smolkin, who also taunted victims on his Facebook page, was convicted on 47 of 53 counts.

The Lowell High School graduate received a law degree at Northwestern University and an electrical engineering degree at UC Berkeley.

Additional reporting from the San Francisco Appeal. (Mike Frisch)

February 4, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Friday, February 3, 2017

Freezing Funds In Vermont

The Vermont Supreme Court affirmed an attachment brought against a criminal defendant by the estates of two men (an ex-boyfriend and his son) suing her for wrongful death

This interlocutory appeal presents the question of whether the Sixth Amendment right to assistance of counsel is violated when the plaintiff in a civil wrongful death action attaches funds the defendant intends to use for her legal defense to homicide charges stemming from the death at issue in the civil case. Defendant appeals a trial court decision permitting such an attachment. We affirm.

The relevant facts are as follows. Defendant is charged with aggravated murder and two counts of murder in the second degree in the deaths of two men. Her trial is pending and a private law firm represents her in that matter. Plaintiff is the estate of one of the deceased men, which pursuant to 14 V.S.A. § 1492 has brought a wrongful death action on behalf of the next of kin. In its filing, plaintiff obtained an attachment freezing defendant’s assets, including the retainer she provided for her criminal defense.

In response, defendant filed a motion arguing that a recent U.S. Supreme Court case, Luis v. United States, __ U.S. __, 136 S. Ct. 1083 (2016), held that the Sixth Amendment to the U.S. Constitution prohibited the attachment of untainted funds a defendant wished to use to hire counsel of choice as legal representation in a criminal matter. Plaintiff, unsurprisingly, read Luis differently and argued that the Sixth Amendment prohibited only a prosecutor from attaching untainted funds to be used for criminal legal defense. Following a hearing on defendant’s motion, the trial court issued a written decision finding that, though defendant’s arguments were persuasive, Luis was inapplicable to the attachment obtained in this suit. The court read Luis for the proposition that “[t]he evil the Sixth Amendment seeks to guard against is a prosecutor civilly seizing a defendant’s money to prevent him or her from hiring an attorney. Not the court’s issuance of an attachment on funds by any creditor, where the defendant also prefers to use the money to hire a lawyer.”

After an extended effort to read the Luis precedent, the court majority holds

While we acknowledge the scope of the Sixth Amendment right to provide defendant a lawyer of her choice, if she can fund such a choice, we cannot conclude that our decision in this case will have a significant effect on the caseloads of public defenders or impair the quality of representation defendant or others would receive. As we discussed above, we see no justification for the victim to subsidize the legal costs of defendant in defending her criminal case.

Justice Robinson dissents

The majority’s approach here would give a credit card company seeking to collect a past due obligation the ability to freeze funds in a lawyer’s trust account to secure a potential judgment, while frustrating a criminal defendant’s Sixth Amendment right to counsel. How would a lawyer ever know whether a criminal defendant client’s retainer would remain available to pay for the lawyer’s representation? By eschewing a balancing test altogether, the majority avoids grappling with the severe consequences of its position with respect to a fundamental constitutional commitment...

It’s true that this ruling may limit the ability of crime victims, or any other potential civil creditor with claims against a criminal defendant, to secure potential civil judgments in their favor from the untainted assets of the defendant. Parties seeking to attach untainted assets in civil court face numerous obstacles to their ability to secure potential future judgments. They cannot attach a debtor’s homestead up to a limit of $125,000 in value, 27 V.S.A. § 101; a debtor’s interest in a motor vehicle up to $2500, 12 V.S.A. § 2740(1); or a debtor’s professional or trade books or tools up to $5000 in value, 12 V.S.A. § 2740(2). Insurance payments of various sorts, 8 V.S.A. §§ 3706-3709, unemployment compensation benefits, 21 V.S.A. § 1367, and veteran’s benefits, 38 U.S.C. § 5301, are all exempt from trustee process or attachment.   Like the statutory exemptions, defendant’s Sixth Amendment rights operate in effect as an additional exemption; defendant’s funds, whether held in her own bank account or deposited in her lawyer’s trust account, are exempt from attachment to the extent they are necessary to pay for legal fees by the lawyer of her choice. Civil litigants seeking security for potential future judgments may be burdened by this exemption, like all the others. But the weight of defendant’s constitutional claim is no less strong than these statutory exemptions.

For these reasons, I would reverse the trial court. I would treat funds reasonably necessary for defendant’s criminal defense by a lawyer of her choice whom she can afford to pay as exempt from the court’s attachment, and would authorize attachment of those funds only to the extent that they are not reasonably necessary to her criminal defense.

Justice Eaton joins the dissent.

The New York Daily News reported on the crimes. (Mike Frisch)

February 3, 2017 in Billable Hours | Permalink | Comments (0)

Discipline For Identity Theft Conviction

The New Jersey Supreme Court has imposed a two-year suspension of an attorney convicted of identity theft.

The Disciplinary Review Board had proposed the sanction adopted by the court.

On May 24, 2010, a Pennsylvania magistrate judge approved the filing of a criminal complaint in Upper Saucon Township, Lehigh County, against respondent, charging him with the identity theft of Marco Orellana, in February 2009. On August 4, 2010, an information was filed against respondent in the Lehigh County, Pennsylvania Court of Common Pleas, formally charging him with three counts of identity theft, contrary to 18 Pa.C.S.A. §4120(a). Specifically, respondent allegedly had used identifying information of Orellana, without Orellana’s consent, to apply for three different credit cards. The information stolen by respondent included Orellana’s name, Social Security number, and date of birth.

 He activated one of the three credit cards and admitted to a gambling problem in the criminal case but failed to follow through on reporting obligations

At argument, respondent took responsibility for his failure to report the charge, conviction, and suspension, explaining that, at the time, his life was "in complete shambles." He also had been under the misapprehension that the reciprocity of discipline was automatic. Respondent learned of his specific obligation to report the conviction and the discipline to the OAE from the Pennsylvania disciplinary authorities, during the course of his reinstatement efforts in Pennsylvania.

 The board noted his continuing efforts to deal with his gambling addiction.

In our view, when weighed, the mitigating factors and aggravating factors do not warrant deviation from what should be a two-year suspension. We determine, however, that the suspension should be retroactive to June ii, 2014, the date on which respondent reported to the OAE that discipline had been imposed on him in Pennsylvania.

(Mike Frisch)

February 3, 2017 in Bar Discipline & Process | Permalink | Comments (0)

California Seeks Reciprocal Discipline For Federal Disbarment

The web page of the California State Bar Court reports  bar charges recently brought against an attorney as reciprocal discipline for a federal district court order of disbarment.

On or about March 22, 2013, the United States District Court - Northern District of California ordered that respondent be disciplined upon findings that respondent had committed professional misconduct in that jurisdiction as set forth in the Order Granting Petitioner’s Motion for Summary Judgment and a separate Order of Disbarment. Thereafter, the decision of the foreign jurisdiction became final.

The misconduct is described in the lengthy federal court order appended to the charges.

In litigation 

Counsel for the Regents [of the University of California] , R. Wesley Pratt, asserts that while he was attempting to fulfill his meet-and-confer responsibilities prior to the initial case management conference, Mr. Haynes refused to cooperate, and also responded to Mr. Pratt’s e-mails with profanity and unprofessional comments. For example, Mr. Haynes wrote an e-mail to Mr. Pratt accusing him of having "bitched repeatedly about receiving email," and telling Mr. Pratt to "read your fucking email." When Mr. Pratt responded in a professional manner, Mr. Haynes replied, "Fuck you. I got no respect for you because you are a lying bitch."

After Mr. Pratt reported this conduct and other uncivil behavior to the court, the Hon. Jeffrey S. White issued an order to show cause why Mr. Haynes should not be sanctioned for failure to meet and confer in good faith. Mr. Haynes responded with a declaration asserting that he had always met and conferred in good faith, and that many of Mr. Pratt’s allegations were false or incomplete. At the hearing, Judge White admonished counsel regarding appropriate conduct towards each other, but declined to impose sanctions at that time.

Eventually the attorney's conduct led to an investigation

The Committee contends that Mr. Haynes has demonstrated, by his conduct in a number of cases, that he cannot be expected to conform his future conduct to professional norms, as he has repeatedly treated his duties to his clients as optional, failed to meet court deadlines, disregarded his discovery obligations, and mistreated opposing counsel and court personnel. Even in this proceeding, the Committee notes, Mr. Haynes has ignored the court’s directions, filed papers that lack any coherent argument, filed documents that are not authorized under the local rules, arrived late for court, raised innumerable irrelevant issues, engaged in baseless delaying tactics, and generally shown contempt for the process. In many respects, the Committee asserts, his conduct of this litigation resembles that of a pro se litigant, but he is a lawyer.

Key conclusions

It is undisputed that during the October 8, 2009 incident outside Judge James’ courtroom, Mr. Haynes told Mr. Zaheer to "grow the fuck up" and to "shut the fuck up;" called Mr. Zaheer "a little fuckhead;" and said "I should have knocked the shit out of you earlier." Mr. Haynes does dispute that he called Mr. Zaheer a "little bitch" or a "goddamn bitch," although he conceded that he might have said "goddamn bitch" with reference to the "whole process" because he was "frustrated" by Mr. Zaheer. However, Ms. Phillimore, the only witness who was not personally involved in the incident, clearly recalled hearing Mr. Haynes call Mr. Zaheer a "bitch" and a "little bitch." Mr. Larsen also heard Mr. Haynes call. Mr. Zaheer a "little bitch."

Mr. Haynes also disputes that his actions were abusive or threatening, but the witnesses who appeared at the evidentiary hearing confirmed that Mr. Haynes was yelling, that he walked towards Mr. Zaheer making threatening and abusive remarks, and that he pushed up close to Mr. Zaheer, forcing him to move backwards towards the courtroom doors. Mr. Zaheer testified that he felt physically threatened, and both Ms. Phillimore and Mr. Larsen testified that they were afraid Mr. Haynes was going to strike Mr. Zaheer, because of Mr. Haynes’ actions and his words. The witnesses also confirmed that Mr. Haynes continued yelling and directing profane language towards the court security officers who arrived after having been summoned by Judge James’ courtroom deputy...

During that three-year period, Mr. Haynes has responded in exactly the opposite way one would expect from an attorney whose conduct is being scrutinized by a peer review committee and the court. He has refused to cooperate with the Committee at every turn. Every deadline set by the court has been met with multiple requests for continuances. His written work product is sloppy, bordering on incomprehensible, and replete with typographical and grammatical errors, making it difficult for the court to even understand his arguments. In short, he has failed to practice competently.

Readers may recall that the Georgia Supreme Court has declined to impose reciprocal discipline based on federal court orders. 

We discuss the majority view of the intersection between federal and state bar reciprocal discipline here. (Mike Frisch)

February 3, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Wednesday, February 1, 2017

Amended Charges, Answer, In Copyright Troll Bar Case

The Illinois Administrator has filed an amended complaint against John Steele in connection with the much-reported "copyright troll" litigation.

Ars Technica reported on related criminal charges last December

The indictment explains how the defendants "used sham entities to obtain copyrights to pornographic movies—some of which they filmed themselves—and then uploaded those movies to file-sharing websites in order to lure people to download the movies."

Prenda Law sued hundreds of people for copyright infringement, accusing them of illegally downloading pornographic movies. In 2013, US District Judge Otis Wright sanctioned the firm in a Los Angeles case, along with Steele and Hansmeier personally, saying they had perpetrated a fraud on the court. Wright also referred the case to criminal investigators.

Wright's damning order set off a domino effect, with Prenda and its affiliated lawyers facing a long series of judicial sanctions and fee orders in courts around the country. Steele and Hansmeier fought many of the sanctions, but earlier this year, panels of appellate judges at both the 7th Circuit and 9th Circuit ruled against them and said they must pay for hundreds of thousands of dollars in attorneys' fees to defense lawyers who fought their claims.

State Bar investigators took action as well, filing complaints that ended this year with both lawyers having their licenses to practice law suspended. Hansmeier, who built a new legal practice suing small businesses over violations of the Americans With Disabilities Act, filed for bankruptcy last year.

NBC news also had a story.

The 76-page  answer filed on Steele's behalf by counsel denies or disclaims involvement with many of the factual averments.

Steele is admitted in Illinois; Hansmeyer in Minnesota. The apparent strategy here is to point the finger of blame away from Steele to others.

I faced a similar problem in a D.C. bar discipline case involving two attorneys - William J, Chadwick and James D. Hutchinson. Both were admitted in D.C. Chadwick also was admitted in California. Together the two had agreed to tell a false story  to the SEC to cover up profits made from inside information.

Prior to my time, Bar Counsel filed charges against both attorneys. 

Chadwick retained a prominent attorney - future Bar President and Deputy Attorney General Jamie Gorelick, who successfully (and over Bar Counsel's objection) moved to stay the proceedings against him while the case against Hutchinson moved forward and California proceeded against him.

I took over the Hutchinson case after a hearing committee report had been filed. I moved to vacate the Chadwick stay as the proceedings in California had stalled (to put it mildly) and it became apparent that the strategy was for each to paint the other as the primary bad actor. The board declined to revisit the earlier ruling.

The Hutchinson case eventually became a highly-significant en banc decision on disciplinary sanctions. California finally acted in Chadwick and D.C. imposed reciprocal discipline.

A close examination of the District of Columbia and California disposition will reveal that the strategy worked like a charm.

Of course, if Steele and Hansmeyer are both convicted, the pointing of fingers will not affect the dispositions. (Mike Frisch)

February 1, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Fee Awarded In Indian Trust Fund Litigation

 An interesting decision yesterday in a notable case by Magistrate Judge G. Michael Harvey of the United States District Court for the District of Columbia

Herein the Court will close what may be the final major dispute in two decades of hard-fought litigation. Plaintiffs, Native Americans whose lands were held in trust by the Department of the Interior, sought to remedy a century of wasteful trust mismanagement. They obtained a stunning victory which brought about trust reform and a significant recovery for the plaintiff class. Helping them in their quest was a team of attorneys whose dedication and tenacity deserve high commendation. One of those attorneys was Mark Brown. After this case settled in 2009, Plaintiffs’ counsel moved for an award of attorney’s fees and costs. Brown was omitted from the motion, as were the hours he spent litigating this matter. He now petitions this Court for his share of the fee award.

The opinion paints a picture of co-counsel working relationships in the Cobell litigation that ran the gamut from strained to toxic.

Brown also had a strained relationship with the Special Master appointed by Judge Royce Lamberth that was not helped by his asking the Special Master whether he suffered from "early onset Alzheimer's."

Then there was the "crying fish" footnote.

In another instance, Brown assisted in drafting a brief in support of a motion for attorney’s fees made to the Special Master. In one of the brief’s footnotes, Brown included a picture of a crying fish. This image was intended to lampoon the government for its complaints that class counsel’s fees were excessive. [Co-counsel] Gingold told Brown to remove the picture before filing the brief, but Brown insisted that it be included. Brown counters that Gingold “specifically asked it to be left in.”  The image was left in. Gingold testified that the Special Master became quite upset upon seeing the image. In his decision on the motion for fees, the Special Master noted the presence of a “fish shedding a tear” in Plaintiffs’ brief. He ultimately deducted 75% of all the time spent preparing the brief. (record citations omitted)

Eventually, the plaintiff's team concluded that life was better without Brown.

The circumstances and cause of his departure were the focus of this fee dispute.

The court

Plaintiffs argue that, if Brown withdrew from the litigation, it was unjustified, and if he did not withdraw, he was terminated for cause. Cobell F&C at 46 ¶ 10, 49 ¶ 17. As discussed above, either finding would eliminate Brown’s recovery entirely under District of Columbia law. Brown responds that he did not withdraw, but rather was terminated without cause, and therefore is entitled to recovery of his fees. Brown Reply at 77 ¶ 7.

The Court ultimately sides with Brown and finds that he is entitled to an award of reasonable fees for his work on this case, although the undersigned does not adopt his reasoning to reach this conclusion. Despite Brown’s belief to the contrary, the Court finds that he withdrew from the Cobell litigation in January 2006. Further, although the terms of Brown’s engagement letter with the Plaintiffs do not make a withdrawing attorney’s compensation contingent on his or her departure being for good cause, the Court in any event finds that Brown was justified in leaving the Cobell team when he did. His withdrawal also did not result in any prejudice to his clients who were ably represented by a veritable army of attorneys at the time of his departure. Nor, under the unique facts of this case, did it represent a clear and serious violation of any ethical duty he owed to Plaintiffs. He is therefore entitled to an award of reasonable fees.

On that score, however, Brown’s petition for more than $5 million in fees is lacking. The billing rate he seeks is in excess of that stipulated in his engagement letters with Plaintiffs. Further, significant cuts are in order to the hours he presents, given that his time records are larded with many hours that were either previously compensated or deemed unreasonable by a judicial officer, or reflect unnecessary work or clerical tasks not reasonably billed at an attorney’s rate. Most importantly, an overall reduction of his time is in order because he did not exercise billing judgment when he reviewed his records prior to submitting them to the Court. After all deductions are applied, the Court concludes that Brown should be awarded $2,878,612.52 for his work representing the plaintiff class prior to his withdrawal.

As to good cause to withdraw

 The Court finds that Brown’s withdrawal met this standard. While the conduct of all parties leading up to Brown’s departure in January 2006 is deserving of some reproach, on balance the evidence shows that Brown’s withdrawal was not unjustified. By that time, the relationship between Brown and his co-counsel was irretrievably broken. Further, following Brown’s May 2005 suspension, the record supports Brown’s contention that he was "frozen out" of work on the case. Brown Ex. 14; Brown Reply at 33 ¶ 59. For the next six months, Brown had little or nothing to do. 4/20 P.M. Tr. 145:5–9; 4/21 Tr. 33:11–34:19. He sought assignments from those few individuals with whom Gingold allowed him to work, but, after a few projects, that work dried up as well. 4/21 Tr. 31:25–32:19. Plaintiffs claim that Brown may have received more work had he repeatedly requested it. 4/22 Tr. 211:20–212:2. It is undisputed, however, that he asked for work, and received little to none. This is not surprising; it is a fair inference from the record that, fol-lowing lead class counsel Gingold’s suspending him from working with anyone but a few attorneys, Brown was effectively persona non grata on the Cobell team. There was clearly much work to be done during that period on behalf of the Plaintiffs, and Brown was willing to do it—indeed, it was never Plaintiffs’ complaint that Brown was not hard working on their behalf. Nevertheless, no assignments were forthcoming.

The court further concluded that Brown's withdrawal sufficiently complied with his ethical obligations under Rule 1.16.  

There is no evidence in the record that Brown’s absence had any material adverse effect on Plaintiffs or their claims.

Indeed, Brown was a divisive figure on the Cobell team. Far from prejudicial, his departure was viewed as advantageous by Plaintiffs’ other counsel, and thus it indirectly benefited the plaintiff class. Gingold testified that suspending Brown “eliminated the risk of harm” to the trial team since he was perceived as source of friction on the Cobell team. Certainly, Brown’s co-counsel were not unhappy to see him go. However long after January 2006 it took them to realize that he was not returning from California, none of them felt inclined to question the change in his status. The litigation proceeded to its successful conclusion undisturbed by his absence. (citations to record omitted)

These facts distinguish the cases cited by Plaintiffs in which the withdrawing attorneys were found to be in violation of their professional obligations. In each of those cases, the attorneys knowingly left their clients in the lurch without other representation...

Indeed, on this point, the zeal with which Plaintiffs’ counsel seeks to expose Brown’s purported ethical lapses would be more persuasive if the end result served something other than their own financial gain. Again, under the unique facts of this case, every dollar not awarded to Brown will pass not to Brown’s clients but to his former colleagues at Kilpatrick Stockton...

 Rule 1.16 was designed as a shield to protect an unwary client when an attorney withdrawals, not as a sword to financially benefit the client’s other counsel.

While the Court does not condone the failure of a withdrawing attorney to put either his client or the Court on proper notice prior to his withdrawal, nevertheless, based on the peculiar facts of this case, the Court finds that any such lapse here is not a sufficient basis to deny Brown the compensation he earned in the six years prior.

Thanks to a reader for sending this to us. (Mike Frisch) 

February 1, 2017 in Billable Hours | Permalink | Comments (0)

Another Call For Transparency In Wisconsin Discipline

An attorney who had neglected three matters and made misrepresentations to the clients to conceal the inaction was suspended for 60 days by the Wisconsin Supreme Court

The central issue for this court is whether a suspension greater than the 60-day minimum suspension is in order. See In re Disciplinary Proceedings Against Grady, 188 Wis. 2d 98, 108-09, 523 N.W.2d 564 (1994) (explaining that generally the minimum length of a license suspension is 60 days). After careful review, we accept the stipulation and impose the jointly requested sanction of a 60-day suspension of Attorney Alfredson's Wisconsin law license, plus restitution payments of $1,500 to N.W. and $309.71 to U.S. Bank. We note that this sanction, on these facts, is modest. We also note that Attorney Alfredson has no prior disciplinary history. If she had been previously disciplined, a longer suspension would be in order. We remind Attorney Alfredson that the court may impose progressively severe sanctions when an attorney engages in repeated misconduct. We impose the sanction to which the parties stipulated with the expectation that Attorney Alfredson will not commit future misconduct subjecting her to additional discipline.

Because Attorney Alfredson entered into a comprehensive stipulation, thereby obviating the need for the appointment of a referee and a full disciplinary proceeding, we do not impose costs in this matter.

 A concurring opinion repeats a call for action in the public interest where lawyer discipline is concerned

SHIRLEY S. ABRAHAMSON, J. (concurring). I write separately to point out that this decision seems to continue a trend of this court's imposing too light discipline following the parties' entry into a stipulation. See, e.g., In re Disciplinary Proceedings Against Krogman, 2015 WI 113, 365 Wis. 2d 628, 872 N.W.2d 657 (Abrahamson, J., dissenting); In re Disciplinary Proceedings Against Crandall, 2015 WI 111, 365 Wis. 2d 682, 872 N.W.2d 649 (Abrahamson, J., dissenting).

I am concerned that the stipulation has become a way to engage in plea (including sentencing) negotiations forbidden by this court...

I advocated for the creation of a committee to review the procedures of the OLR and recommend changes.  A majority of the justices finally created such a committee. I would hope that the Office of Lawyer Regulation Procedure Review Committee studies both plea negotiations and stipulations.

Unfortunately, the Committee was formed without any input from the bench, bar, or public...

Unfortunately the Committee has only one public member. No charge was provided to the Committee, but it has adopted a mission statement.  No time has been proposed within which the committee is to complete its work. Unfortunately, the committee has no web site and does not publicly announce its meetings or distribute its minutes widely.

Fortunately, the committee has an able reporter——Attorney Marsha Mansfield of the University of Wisconsin Law School faculty.

I hope that the Committee's work will be more public and will benefit from public participation to improve the procedures for disciplining lawyers, for both the public and for lawyers.

For the reasons set forth, I write separately.

 When the District of Columbia considered reform of its system, the process suffered from many of the defects identified by Justice Abrahamson. As a result, it was a largely (but not entirely) wasted effort. (Mike Frisch)

February 1, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Tuesday, January 31, 2017

Right To Fee Vindicated

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 court

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.

(Mike Frisch)

January 31, 2017 in Clients | Permalink | Comments (0)

"An Invitation To Attend"

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.

 In any event, I must exercise my discretion properly and, in seeking to do so, I consider the jurisprudence that guides the exercise of this discretion.

The attorney "attended" as invited and the conduct application was dismissed with $500 in costs. (Mike Frisch)

January 31, 2017 in Bar Discipline & Process | Permalink | Comments (0)

54 Year Discipline-Free Career Ends In Disbarment

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.

Bravo.

The case is In re Raymond Quaglia and can be accessed at this link. (Mike Frisch)

January 31, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Suspension For Failure To Pay Child Support

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)

January 31, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Monday, January 30, 2017

My Partner The Justice

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
Ashtabula County

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

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
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)

January 30, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Revocation Sought For Admission Non-Disclosures

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.

Friend-of-the-Court Brief
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

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
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)

January 30, 2017 in Bar Discipline & Process | Permalink | Comments (0)