Legal Profession Blog

Excessive Fee Draws Reprimand

The Ohio Supreme Court has imposed a public reprimand of an attorney who required an "up-front flat fee deemed earned in full by [her mortgage services business] at the time of payment."

The agreements also entitled the client to a full refund under some circumstances. However, the attorney did not give five clients a full refund on request, although she later made restitution.

The court found that "the cost of...services was disproportionate to any benefits the clients received."

The attorney has made "significant changes" in her practice and has had no prior brushes with the disciplinary system. (Mike Frisch)

Inattentive But Not Dishonest

The New York Appellate Division for the Fourth Judicial Department has censured an attorney who "overstated" time spent on assigned counsel matters.

The overstatements took place in 16 cases over an approximately 18 month period.

The referee found the misconduct was "the result of respondent's inattentiveness and failure to make and keep accurate records, rather than fraud or deceit."

The attorney had no prior discipline in 35 years of practice.

The Grievance Committee challenged the "no dishonesty" finding but the court deferred to the credibility findings of the referee. (Mike Frisch)

Psychoanalysis Not Required For Reinstatement

The Arizona Supreme Court disagreed with a hearing panel's unfavorable recommendation and reinstated an attorney who was suspended for six months and a day in 2008 for, among other things, passing off a copy of a will as the original.

The court had a number of rather interesting observations about its reinstatement process, which "does not necessarily require the peeling back of multiple layers of causation and psychoanalysis."

Rather, the petitioner must demonstrate that the "causal weakness" that led to ethical violations must be overcome.

The court also noted that "community service, religious commitment, and meditative reflection are not a panacea" but it seems to have sufficed here. (Mike Frisch)

Limits Of Zealousness

The Kentucky Supreme Court has imposed a suspension of not less than 181 days in a case involving an attorney's decade of advocacy on behalf of a dismissed shoolteacher.

The attorney's advocacy on his own behalf also caught the court's attention, as it was noted that his appeal reflected his

wholesale disapproval of the disciplinary process that brought him to this point. And consistent with the conduct that leads him to this action, [he] has filed with this Court more than the customary number of motions, all purported to instruct the Court and the [Kentucky Bar Association] on the proper procedures.

The court rejected some charges but found that the attorney had engaged in "disruptive" behavior and other misconduct.

The court noted that the duty of zealous advocacy "does not provide permission to inundate the court with the same argument couched under different motions. Justice is not a war of attrition." (Mike Frisch)

Stay Registered

The full Massachusetts Supreme Judicial Court affirmed a single justice's order of a six-month suspension for misconduct described in the court's opinion:

The respondent was admitted to the practice of law in December, 2008, and duly registered with the Board of Bar Overseers (board) in January, 2009. When her employment address changed, she did not file a supplemental statement of changes to the information provided in her initial registration statement, nor did she file a registration statement or pay the associated fee as required in January, 2010. S.J.C. Rule 4:03(1)(a), as amended, 416 Mass. 1319 (1993). Accordingly, on June 14, 2010, the board filed a petition in the county court seeking Gustafson's suspension as an administrative matter. See S.J.C. Rule 4:02(3), as amended, 447 Mass. 1301 (2006); S.J.C. Rule 4:03(2), as appearing in 421 Mass. 1302 (1995). An order suspending her from the practice of law entered on July 26, 2010. Thirty days later, Gustafson became subject to the provisions of S.J.C. Rule 4:01, § 17, as amended, 426 Mass. 1301 (1997), governing suspended attorneys. She did not comply with those requirements.

Notwithstanding her administrative suspension, in November, 2010, Gustafson was hired as in-house counsel at a company having its headquarters in Massachusetts. She submitted a registration statement, an affidavit in support of her request for reinstatement, and a check to the board on or about November 11, 2010. The board returned the check, advising her that she owed additional amounts. It indicated that, when the fees were paid, it would present her request for reinstatement to the court. Gustafson did not respond. Eight months later, in July, 2011, bar counsel received a request for investigation alleging that, despite her ongoing suspension, Gustafson continued to be employed as an attorney.

Gustafson did not respond to the complaint, which was forwarded to her by bar counsel. Nor did she respond to a subpoena that the board caused to be served on her. Contacted by telephone, however, she agreed to appear on October 3, 2011. On that day, she admitted to employment as an attorney and was provided with a complete set of registration materials, none of which she returned. On February 9, 2012, bar counsel filed a petition for discipline. Gustafson failed to file a timely answer to the petition or otherwise cooperate in the investigation, and her default was entered.

Bar Counsel had appealed, seeking a more severe sanction.

The case is Matter of Gustafson, decided April 16, 2013. (Mike Frisch)

Attorney Earned Flat, Non-Refundable Fee

The Indiana Supreme Court has agreed with a hearing officer and entered judgment in favor of a solo practicioner alleged to have charged an unreasonable fee in a criminal case.

The client was charged with felony drug dealing.

The attorney charged a non-refundable flat fee of $10,000.

The hearing officer found the fee was reasonable and earned. The attorney had devoted about 20 hours to the case before he was fired by the client. (Mike Frisch)

Both Sides Now

The Georgia Supreme Court imposed disbarment of an attorney who defaulted on charges of ethical misconduct.

The attorney lives in the Virgin Islands and failed to show up twice for scheduled depositions. The State Bar viewed proceeding by teleconference to be "cost prohibitive."

The underlying allegations involved the attorney handling of a divorce for a retired military officer who had lived overseas for a decade. The attorney retained local counsel and filed in North Carolina, which had no jurisdiction.

The local counsel learned that the attorney had a conflict of interest, having peviously represented the client's wife on related matters. The attorney did not withdraw despite the apparent conflict and tried to refile the case in South Carolina.  (Mike Frisch)

Reprimand With A Refund

The New Jersey Disciplinary Board has reprimanded and ordered a refund of fees paid to an attorney to handle a divorce.

The client paid the attorney a total of $4,000. Several months later, the attorney advised the client that he had suffered a nervous breakdown and could not represent her. He also said that he was "checking into a hospital, that he was expecting to lose his law license" and could not return her retainer because of his own child support obligations.

The client was unable to further contact the attorney and retained new counsel. (Mike Frisch)

From Black Robe To Zebra Stripes?

A judicial ethics quandry has apparently been resolved by a recent opinion of the Florida Judicial Ethics Advisory Committee.

The issue: Can a judge also serve as a college football referee?

Unfortunately, we will have to hold our breath for the answer, as the committee's web page links to an earlier, unrelated opinion on toy donations. (Mike Frisch)

Double Secret Probation

The Vermont Supreme Court has entered an order (dated April 1 but presumably no joke) admonishing an unnamed attorney for neglect and failure to communicate with a client over a three-year period.

The attorney was also placed on probation for nine months.

If your attorney was on disciplinary probation, would you be concerned if it was a secret?

The title reference is well-known to anyone over the age of 50 or so. (Mike Frisch)

Not This Time

The Pennsylvania Supreme Court has denied reinstatement to a petitioner admitted to practice in 1971.

The petitioner was disbarred by consent in 1984 for misappropriation. The court granted his reinstatement petition in December 1991.

But the second time was no charm. He was suspended for five years in 2006 for "lying to an assistant distict attorney while representing a client at a hearing." Here, his attempt to secure reinstatement from that suspension was rejected.

There were several problems.

He has not accepted responsibility for his prior acts of misconduct.

More troubling was his involvement in a family business with the ironic name of License Restoration Services. The Disciplinary Board found his activities involved the practice of law in violation of the suspension order. This was fatal to the petition.

Fool me once, shame on you. Fool me twice, shame on me. (Mike Frisch)

Judge Removed For 1972 Sexual Misconduct

The New York Court of Appeals has accepted the determination of the State Commission on Judicial Conduct and affirmed the removal from office of a former family court judge.

The acts that led to the sanction took place in 1972 when the judge was 25 years old. He "engaged in sexual misconduct involving a five-year-old girl."

The court:

It is troubling that the petition is based solely on conduct that occurred 40 years ago - 13 years before petitioner was elevated to the bench. Nevertheless, the misconduct alleged is grave by any standard. Further, the significant danger of fading memories is tempered somewhat under the circumstances of this particular case, where petitioner admits that conduct of this nature in fact occurred.

The judge had resigned in April 2012. (Mike Frisch)

Firm On The Side

The Maryland Court of Appeals rejected an attorney's plea for a reprimand and disbarred him for intentionally dishonest conduct.

The attorney had set up his own law firm while employed by a title insurance company and engaged in self-dealing:

[He] authorized mulitple payments from his employer to his firm without approval from his superiors, in violation of his obligations as an employee, and assigned assrts from more than one of Old Republic's clients to his own firm for no consideration all to promote his interest in [his firm]. These multiple instances of misconduct, all aimed at the same goal of generating additional fees for his side business, constitute a pattern of misconduct.

Bar Counsel had sought disbarment. (Mike Frisch)

D. C. Bar Budget: License To Steal From Members?

The National Law Journal has just published an opinion piece by Gregory Smith on proposed increases in District of Columbia Bar dues:

If you are a member of the District of Columbia Bar, your dues have gone up again—so the organization can buy a building with your money.

Oh, it hasn't happened yet. The D.C. Bar's current lease doesn't even expire until 2021. But it will. The D.C. Bar is socking away more than  $500,000 a year for a building fund. And your dues were just increased so this fund can grow next year from $1.9 million to $2.4 million.

I am a new member of the D.C. Bar board of directors, and I voted against this increase. I am not one who reflexively rejects all dues increases, regardless of needs. I have occasionally voted for dues increases while leading the Bar Association of the District of Columbia and the Atlanta Bar, when it was necessary. But they should be a last resort. And that is particularly true for a mandatory bar, where most members can't leave the organization, and bar dues are basically a tax.

No such need existed here. The D.C. Bar is, in fact, currently flush with cash. Its latest financial statements, eight months into the year, showed a positive variance from operations in dues-funded programs of $1.4 million. Operating cash at the end of February was $8.7 million—$2.6 million above a year ago. The D.C. Bar board just voted to put this year's projected leftover surplus into a separate contingency reserve, even as it simultaneously voted to raise your dues.

This is not an investment in our profession. It's an investment in real estate. As noted, separate contingency funds exist to cover emergencies. This is a pure building-fund line item, with more than half a million bucks a year being socked away annually, with your money. At a time when members are facing financial insecurity, and the D.C. Bar is running a significant surplus, I did not think this could fairly be justified. Even if the D.C. Bar should consider buying a building in 2021, must it do so in cash?

I could not stop this. I noted how we could still put $70,000 (not $570,000) into this building fund, and raise dues by only $5, not $10.  But I am a new member on the D.C. Bar board, and I was outvoted. The opposing arguments were predictable: "Our budget committee approved this, so we should go along." "$10/year isn't that much." "We started this building fund a few years ago, and are merely continuing it." "We published our proposed budget in the Washington Lawyer magazine, and no one voiced objections." "This is still below the D.C. Court of Appeals' approved dues ceilings, and our dues remain below most other jurisdictions."

I don't agree. The D.C. Bar's dues are low in part because they're spread over 100,000 members, and we are not geographically dispersed. When I joined the D.C. Bar in 2001, I recall my dues being $165/year. Now they'll be $265/year. I doubt many other jurisdictions have raised dues so fast. And this extra $100 per year per member translates into an extra $10 million per year. And more importantly, it's simply wrong to tax our members another half a million, at a time when the D.C. Bar is running a significant surplus (even raising our judges' dues in the midst of sequestration), just to pad a building fund.

I couldn't change this myself, but a new D.C. Bar election is coming. Ballots will be distributed April 30, and candidate forums will be held. Consider asking folks where they stand on dues. (I'm not running, but one candidate, Dan Schumack joined me in voting against this dues increase; all other incumbent candidates running this year for re-election voted to raise dues.) And while you're at it, you may want to ask candidates about the D.C. Bar's other recent decision, to change the election rules without even notifying the membership—with that bylaw change announced only after the vote. That's right—you recently lost your right to run for D.C. Bar president by petition. You weren't even notified that you'd been disenfranchised until after the fact. The argument at the time for why a vote shouldn't at least be delayed until notice was given to the membership?  "The D.C. Bar has never notified its members in advance (even on its website) of bylaw changes that are being considered by the board." Huh?

With the nominating committee now controlling the show, perhaps it's not surprising that both of this year's D.C. Bar presidential candidates voted for this dues increase. Maybe they will reconsider their positions now, but the D.C. Bar's centralization will only continue unless D.C. Bar members speak up—either directly or at least through the votes they cast.  So pass the word along. At the present rate, the D.C. Bar may hit its dues ceilings again in just two to three years.

Mr. Smith is entirely correct in his concerns.

 I attended a bar budget meeting that was open to bar members on April 9 to raise many of the same concerns. Unfortunately, I was one of two members that attended. I also advocated for transparency in the budget details, apparently to no avail.

My previous commentary on the bar leadership selection process (mentioned in Mr. Smith's last two paragraphs) is linked here.

A modest proposal: Gregory Smith for President of the District of Columbia Bar. (Mike Frisch)

Judge Resigns After Criminal Charges

The West Chester Daily Local News reports the resignation of a Pennsylvania district judge recently charged with criminal offenses:

[The judge] was charged with one count of tampering with records or identification, a first-degree misdemeanor, and one count of obstruction of administration of law or other government function, a second-degree misdemeanor. The first offense carries a maximum penalty of five years in prison and a $10,000 fine and the second a maximum of two years in prison and a $5,000 fine, although Arnold is unlikely to face either maximum penalty.

The charges brought by the state Attorney General’s Office accuse Arnold of intentionally obstructing the law by failing to properly perform her duty as an elected magisterial judge, and for concealing records pertaining to wrongdoing. Arnold last year admitted that she delayed docketing a summary harassment citation against her son, Forrest Solomon Jr., and then lying to investigators about what had happened with the citation.

Details from the Unionville Times:

According to the state’s criminal complaint, on Jan. 19, 2010, an altercation occurred at Arnold’s Downingtown home between Arnold’s son, Forrest “Forrie” C. Solomon Jr., who has a 12-year history of convictions ranging from indecent assault to drug offenses, and his half-brother, Jonathan Arnold,  both of whom lived with the judge. As a result of the dispute, Solomon was issued a summary offense citation, which was filed the following day by a state trooper in Arnold’s court, the complaint said.

The charges state that after Arnold received the citation, she returned it to the trooper. Although the citation was immediately returned to the district court, Arnold allegedly did not docket the citation and failed to follow proper procedures to transfer the matter to another district court, the complaint said.

Agents said that Arnold concealed the citation for 2 ½ months in an effort to protect her son from additional sanctions with the Chester County Probation Department, even instructing an employee to “hold on to this” because Solomon had “a probation hearing coming up and she didn’t know if this would affect it,” the complaint said.

After her son was in rehab and after questions from police about the docketing delay, Arnold, without the required knowledge or approval of Chester County President Judge James P. MacElree II, docketed the citation using her computer username and password, and then ordered an employee to transfer the citation to District Justice Mark Bruno’s court, according to the criminal complaint.  Bruno was suspended in February, accused in the Philadelphia Traffic Court ticket-fixing probe.

(Mike Frisch)

An Anonymous Complaint Leads To Suspension

An attorney who had failed to file state and federal income tax returns for a four-year period was suspended for 90 days by the South Carolina Supreme Court.

One notable fact: the matter was brought to the attention of disciplinary authorities by an anonymous compaint. (Mike Frisch)

Multiple Firm Practice Blessed By Ohio Ethics Opinion

From the web page of the Ohio Supreme Court:

The Ohio Supreme Court Board of Commissioners on Grievances  & Discipline no longer advises that a lawyer may not practice with more  than one firm in Ohio at the same time, according to an advisory opinion.

Finding “substantial justification for a new perspective on  practice in multiple firms” and considering “the context of current rules and  modern practice,” the board concluded in Opinion  2013-1 that practice in multiple firms can occur in compliance with the  Rules of Professional Conduct.

The board withdrew three previous advisory opinions on the  issue. The reasoning behind the update includes, among other things, the fact  that other jurisdictions have ruled that the practice is permissible, an  expanded definition of “firm,” and financial considerations for lawyers in  smaller communities who work more than one part-time job.

The opinion’s syllabus gives the following guidance.

“A lawyer who engages in simultaneous practice in multiple  firms must recognize the potential ethical issues connected with such practice.  The lawyer has to be diligent in avoiding conflicts of interest, and the  imputation of conflicts will apply across all associated ‘firms.’ The lawyer is  also required to scrupulously maintain client confidentiality and professional  independence. As part of the lawyer’s duty to refrain from false, misleading,  or nonverifiable communications about the lawyer or the lawyer’s services, the  lawyer must inform his or her clients of all multiple firm associations."

(Mike Frisch)

Better Late Than Never

An Ohio attorney who belatedly introduced mitigating evidence was indefinitely suspended, rather than disbarred, as a result.

The web page of the Ohio Supreme Court notes:

After [the attorney] failed to answer  the complaint filed against him with the state disciplinary board or to otherwise  cooperate  with the board’s proceedings,  the commissioners recommended that he be permanently disbarred.  [He] filed a belated motion with the court  seeking to remand  his case for further  proceedings, asserting that a previously undiagnosed psychological  condition had interfered with his capacity to  defend himself.  The court remanded the  case for the limited purpose of allowing the board to consider any mitigating  effects of the newly offered psychological evidence. 

In  today’s decision the court noted that after evaluating the proffered evidence,  the board amended its recommended sanction from disbarment to an indefinite  suspension.  The court adopted the  board’s recommendation, and specified that any future reinstatement of  [the attorney's] license will be conditioned on his submission of proof that he has  complied with a recovery contract with the Ohio Lawyers Assistance Program  (OLAP), completed psychiatric treatment, follow up care and reporting  requirements imposed by OLAP and his psychiatrist, and submitted a statement  from a qualified mental health professional that he is capable of returning to  the competent, ethical and professional practice of law.

The court's opinion is linked here. (Mike Frisch)

If I Had A Million Dollars...

The New York Appellate Division for the First Judicial Department reversed an order dismissing a case brought against an attorney who received a million dollar gift from his client shortly before the client died:

Defendant served as decedent's attorney on personal and corporate matters for more than 40 years and thus held a fiduciary relationship with decedent. Defendant therefore had the burden of proving by clear evidence that there was no fraud or undue influence in connection with decedent's gift of $1million, made weeks before his death at the age of 82, and deposited in a trust account held jointly by decedent and defendant, clearly for defendant's benefit.

Surrogate's Court erred in dismissing the claim of undue influence as there were conflicting inferences of both undue influence and the lack thereof. For example, the evidence showed that, from September 2009 to January 2010, as decedent's health continued to deteriorate, defendant repeatedly wrote and called decedent to request the creation of a $1 million trust account and suggested that he would suffer a financial crisis if he did not receive it, and decedent complained to plaintiff (his wife) that defendant would not stop asking him for money. While such evidence allowed for an inference of undue influence, the evidence presented by defendant suggested that decedent on occasion expressed a desire to compensate defendant for legal services defendant had performed and might perform for decedent's company after his death, by the creation of this account. Under the circumstances presented, defendant failed to overcome the presumption of undue influence and failed to eliminate any triable issue of fact warranting dismissal of the count.

Surrogate's Court further erred in concluding that decedent had the benefit of consulting with independent counsel regarding the $1 million gift. Decedent's estate planning counsel were introduced to him by defendant to advise decedent regarding his will. Counsel, who were not truly independent, further averred that they did not advise decedent regarding the $1 million gift and instead told him to contact his financial advisor should he wish to proceed. When decedent terminated the representation and obtained other independent counsel, it was solely for purposes of revising his will, and there was no evidence to suggest that he consulted with them regarding the $1 million gift. Thus, there was no meaningful consultation with independent counsel that would support a finding that decedent was not unduly influenced by defendant.

The count of constructive fraud was also improperly dismissed. Defendant, who had a substantial net worth at the time of decedent's death, nevertheless repeatedly represented that his savings were suffer a financial crisis if decedent did not give him the $1 million. While decedent was aware of the salary paid to defendant over the years as counsel to decedent's company, this alone did not amount to clear evidence to eliminate any triable issue of fact as to whether defendant had misrepresented his financial condition, and whether decedent relied upon it. (citations omitted)

(Mike Frisch)

Celerity Counts

An Illinois Hearing Board has recommended a six-month suspension of an attorney who engaged in an improper loan modification business with non-lawyers.

The committee explained its rationale for the sanction:

Having reviewed the...cases and given some consideration to the length of the improper business association with non-lawyers, the number of clients served, whether additional misconduct was present and mitigating circumstances, we conclude that a suspension of six months is appropriate and within the range of discipline imposed in similar cases. Respondent's conduct was serious and continued for more than eighteen months but the mitigating circumstances, and in particular the celerity with which he dissolved his company and assisted his clients, weigh in his favor. We believe a moderate suspension will serve the purposes of the disciplinary process and alert other attorneys to proceed with particular care in areas, such as loan modifications, that generate a sudden influx of clients and are fraught with potential abuse.

(Mike Frisch)