Monday, October 27, 2014

Readmission Impossible

An attorney convicted in a tax shelter scheme was permanently disbarred by the Louisiana Supreme Court.

The underlying facts of the Third Superseding Indictment are complex, but essentially, the Government alleged that respondent’s criminal conduct occurred as part of an effort to market, sell, and implement a tax shelter known as "Hedge Option Monetization of Economic Remainder," or HOMER, which respondent designed for high net worth clients of Bank One. Respondent, who is also a CPA, allegedly prepared fraudulent invoices to obtain referral fees from Bank One on the transactions relating to this tax shelter, although he was not entitled to receive the fees, and then concealed the receipt of the ill-gotten referral fees by failing to report them on his individual tax returns. Furthermore, the Government alleged that respondent embezzled at least $3 million dollars from a client’s trust account and willfully evaded taxes on approximately $6.5 million in income in 2001 and 2002.

On June 2, 2010, following a three-week trial, the jury found respondent guilty of all three counts of the Third Superseding Indictment. In response to a special interrogatory, the jury found that the Government had proven respondent’s guilt with respect to both alleged objects of the Count One conspiracy.

The conviction was affirmed and is presently under collateral attack.

As to sanction

The record reveals that respondent orchestrated a complex scheme in which he stole money from a client’s trust, then stole fees from Bank One that would not otherwise have gone to him, and finally avoided paying federal income taxes on the monies so obtained. See United States v. Ohle, 441 Fed. Appx. 798, 800, 2011 WL 4978442 (2nd Cir. 2011). Without a doubt, such conduct reveals a fundamental lack of honesty and integrity in respondent’s character which makes him unfit to hold a license to practice law in this state.

We do not impose permanent disbarment lightly. In re: Morphis, 01-2803 (La. 12/4/02), 831 So. 2d 934. However, in light of the undisputed facts of this case, we can conceive of no circumstances under which we would ever allow respondent to be readmitted to the practice of law in Louisiana. He must be permanently disbarred.

(Mike Frisch)

October 27, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Unpardonable Offense

 The Maryland Court of Appeals has disbarred an attorney for misappropriation and other misconduct.

The court offered a reminder of the sanctity of entrusted funds

The gravamen of Respondent’s misconduct is the misappropriation of funds he collected on his clients’ behalf. As discussed above, we have concluded that, because Respondent had insufficient funds to pay C. Jones and Mr. Potochney the money owed to them, and he failed to promptly pay Ms. Dress’s medical bill, Respondent misappropriated both client and third-party funds. Respondent, as the only name on both his operating and trust account, was solely responsible for the funds and had knowledge of all account activity.

We are consistent in holding that the “misappropriation of funds by an attorney is an act infected with deceit and dishonesty and ordinarily will result in disbarment in the absence of compelling extenuating circumstances justifying a lesser sanction.” (citation omitted)...

 here Respondent’s misconduct in misappropriating funds is exacerbated by multiple other violations, including his failure to provide competent representation to his clients, his failure to prosecute diligently his clients’ claims, and his failure to communicate adequately with his clients on their respective matters. These combined violations create an even stronger case for disbarment.

(Mike Frisch)


October 27, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Friday, October 24, 2014

No Beauty Or Culture In These Arguments

An attorney who is not regularly engaged in the practice of law but rather serves as chief financial officer of the Charleston Academy of Beauty Culture ("CABC") was suspended for three months by the West Virginia Supreme Court of Appeals.

The misconduct involved arguments made on behalf of CABC in  an appeal brief that attacked an administrative law judge. 

The underlying case involved the allegations of two former students that CABC had engaged in race discrimination. The claims were filed with the state Human Rights Commission.

The ALJ was African-American.

The attorney asserted, among other things

[ALJ] Phyllis H. Carter failed to execute her duties as ALJ for the HRC in a fair an (sic) impartial manner by, and in direct conflict with the Code of Judicial Conduct, exhibiting clear bias and having personal knowledge of the matters appearing before her; refusing to disclose the same; and ruling against that which she personally knew to be false...

In an outlandish display of tyrannical inclination, ALJ Carter found that Respondents discriminated because they were unable to force other companies and trade groups to provide instruction and product knowledge at the Respondents’ school. . . . ALJ Carter basing her Decision upon the absence of such an outlandish forced coercion, as she obviously did, indicates not only that ALJ Carter is deluded into thinking that this is a Communist country where companies are forced to perform services for others, but is under the deluded impression that Respondents have the power and authority to compel others to do its bidding. For the foregoing reasons, Respondents recommend that ALJ Carter seek professional psychiatric help, or be required to attend a forced reeducation camp . . . oops . . . wrong country...

The court rejected a number of contentions, concluding that Rule 8.2 applies to statements about administrative law judges and that the statements were not protected by the First Amendment.

The court

 An attorney is obligated to present the most effective argument for his client within the Rules of Professional Conduct and to pursue his client’s interests in a lawful manner. Attorneys are encouraged to present zealous advocacy and pursue all available avenues of relief on the client’s behalf. Dissatisfaction with adverse rulings, however, does not justify unwarranted attacks upon the credibility and personal values of the adjudicatory officer. Such irresponsible behavior is injurious to the client’s interests and to the attorney’s obligation to the legal system.

The [Hearing Panel Subcommittee] also properly ruled upon the second factor under the Rule 3.16 [sanction] analysis. Mr. Hall acted intentionally and knowingly; his violations were made in writing after deliberation. Moreover, he presented his statements in two separate appeals and has remained steadfast in his assertion that his statements regarding ALJ Carter were justified.

The attorney also must take a CLE ethics course. (Mike Frisch)

October 24, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Roeder Conviction Affirmed, Hard 50 Sentence Vacated

The Kansas Supreme Court has affirmed the conviction of the killer of Dr. George Tiller.

The court found no basis for the defense of necessity or imperfect self-defense of others.

Among the other arguments rejected was prosecutorial misconduct in argument

...the prosecutor's statements, although arguably misconduct, were very mild and were made in response to defense counsel's argument. Further, the abundant evidence of premeditation made any error in failing to provide a second-degree murder instruction harmless beyond a reasonable doubt. Consequently, especially in light of the overwhelming evidence, we conclude that cumulative error did not affect the trial's outcome and did not deny Roeder a fair trial.

The court vacated the Hard 50 aspect of the sentence imposed

Since Roeder's sentencing, we have held that a hard 50 sentence based upon a judge's own preponderance-of-the-evidence determination that an aggravating factor existed is unconstitutional and must be vacated.

(Mike Frisch)

October 24, 2014 | Permalink | Comments (0) | TrackBack (0)

Crimes Draw Suspension

Two incidents of criminal conduct have led to an attorney's 181 day suspension by the Kentucky Supreme Court.

The first involved a guilty plea to criminal endangerment

The charges relate to an altercation between Benton and his then girlfriend that occurred around 2:00 a.m. on May 14, 2011, near the corner of Short and Market Streets in Lexington. After Benton reportedly quickly and aggressively accelerated his car toward the victim, he exited his vehicle brandishing a semiautomatic handgun. According to witnesses, Benton then struck the victim in the head with either the pistol or a closed fist, knocking her unconscious.

He then tested positive for marijuana use while on probation. The probation was continued rather than revoked but he got two weekends in jail.

The second incident

Benton entered a guilty plea in Fayette Circuit Court to terroristic threatening, third-degree, which is a Class A misdemeanor. The charge arose from threatening text messages and voicemails Benton sent to an 18-year-old male high school student who had been bullying Benton's daughter. Benton was sentenced to sixty days imprisonment with credit for time served, and he has served his time.

The attorney must be assessed by the bar's treatment program and comply with any conditions imposed as a result. (Mike Frisch)

October 24, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

What It Takes To Get Disbarred In New Jersey

An attorney who had continued to represent clients while suspended (and did a poor job of it) has been disbarred by the New Jersey Supreme Court.

The Disciplinary Review Board

Respondent’s most serious ethics offense was practicing law while suspended. He represented at least six clients, starting on the day after his temporary suspension and for a period of eight months

He had previously defaulted on bar charges and defaulted in this one

The two present matters constitute his fourth and fifth brushes with the disciplinary system. They are also his fourth and fifth defaults. In our view, nothing short of disbarment is justified for respondent’s persistent refusal to abide by the rules of the profession and obvious disregard for the ethics system...

For his pattern of disrespect for disciplinary authorities, for the Court, and for the profession at  large respondent must be disbarred. We so recommend to the Court.

The court agreed. (Mike Frisch)

October 24, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

"So Either File A Complaint Or Get The Hell Off My Back"

An attorney who had failed to remove earned fees from his escrow account and was initially uncooperative with the bar investigation has been reprimanded by the Maryland Court of Appeals.

From the hearing judge's findings

To some extent, Respondent appeared to be the victim of the old adage, “no good deeds go unpunished.” He repeatedly provided free legal advice to Mr. Hulamm, who in turn appeared to believe that Respondent should provide him free services. Respondent was not faultless, however... Respondent Weiers’[s] failure to keep time sheets and to bill accordingly led to Mr. Hulamm’s insistence that he was due a refund although Respondent had earned his fee. Further, Respondent’s failure to timely pay himself for services rendered to Crescendo Realty, LLC, resulted Respondent Weiers’[s] failure to keep time sheets and to bill accordingly led to Mr. Hulamm’s insistence that he was due a refund although Respondent had earned his fee. Further, Respondent’s failure to timely pay himself for services rendered to Crescendo Realty, LLC, resulted in the commingling of earned and unearned funds in Respondent’s trust account for approximately one year.

The court was not impressed with the attorney's attitude as reflected by this communication to Bar Counsel

I do not know what misconduct you are investigating and I don’t think you do either. Your latest demand appears to be a desperate attempt to justify the time you have wasted so far. . . I don’t know if you are on a witch hunt, a personal vendetta, a fishing expedition, or if you just don’t have enough to do, but I’ve had my fill of you. So either file a complaint or get the hell off my back.

This attitude was also reflected in Respondent’s statements during oral arguments, asserting for instance that this entire situation was “Kafkaesque.” These statements reflect a disparagement of and lack of regard for the Attorney Grievance Commission. In our review of the record, we agree with the hearing judge that Mr. Weiers’s failure to cooperate readily with Bar Counsel constitutes a MLRPC 8.1(b) violation.

But in the end

Respondent’s conduct in this case caused no harm to his clients. Respondent has no history of prior disciplinary offenses, and there is no evidence that his conduct was motivated by a dishonest or selfish motive. Although Respondent failed to timely comply with Bar Counsel’s requests for information, Respondent ultimately responded to Bar Counsel and participated in the disciplinary process. Mindful of Respondent’s troubling attitude toward Bar Counsel and the investigative process, and having cautioned Respondent against such conduct in the future, we conclude that a reprimand is the appropriate sanction in this case.

(Mike Frisch)

October 24, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Amount Due

A law firm was entitled to its legal fees, notwithstanding errors made by its original counsel, according to a decision of the New York Appellate Division for the First Judicial Department:

The motion court properly concluded that the varying figures given by R & M during this litigation, as to the total outstanding fees due, did not undermine R & M's prima facie case for an account stated, inasmuch as the discrepancies were plainly attributable to the incompetence of its original attorney in drafting the motion papers on its previous motions for summary judgment, which, inter alia, did not include R & M's complete billing invoices from the past, and records of off-sets that the parties had agreed to. The monthly invoices and records - the timely receipt of which Sakow never disputed - were never challenged by Sakow as to accuracy or reasonableness until the instant litigation was commenced years later. Such circumstances, including that Sakow continued to make payments towards the total fees accrued and billed, without reservation, belie the belated challenges to the reasonableness of the invoiced fees...

The record reflects that R & M represented Sakow on many legal matters since 1989, and that R & M would send regular, detailed monthly invoices to account for the fees claimed. The record also demonstrates that Sakow never denied receipt of invoices supporting the "balance forward" figure referenced in the March 7, 2002 invoice, that no objection was raised as to such invoices, and that Sakow continued to make regular payments towards the invoices.

(Mike Frisch)

October 24, 2014 in Billable Hours, Clients | Permalink | Comments (0) | TrackBack (0)

Thursday, October 23, 2014

Suspension For Computer Child Porn

An attorney convicted of second degree endangerment of children has been suspended for an indeterminate period by the New Jersey Supreme Court.

He may seek reinstatement in five years from the date of his January 2011 interim suspension on a showing of fitness to practice.

From the court's summary

 The facts of this case are undisputed. In July 2008, printouts of pornographic images, some of which depicted young female victims, were found in a receptionist’s desk drawer at the district office of New Jersey’s Twentieth Legislative District. At the time, respondent was an assemblyman representing the Twentieth District. The discovery led to an investigation by the New Jersey State Police, which revealed that this was not the first time pornography was encountered at the office; staff had previously discovered sexually explicit images in the office during morning work hours or following a weekend. As a result, the Office of Legislative Services required passwords on the computers.

When confronted, respondent admitted to the State Police that he had visited pornographic sites and printed the sexually explicit pictures. He acknowledged that the sites he viewed and the printed images contained both adult and child pornography. He explained that he had accessed the receptionist’s state-issued computer with a password that he instructed another member of his staff to obtain. Interviews also revealed that staff members observed respondent viewing pornography on the receptionist’s computer on prior occasions. In total, the police recovered thirty-four images of child pornography that respondent accessed on computers at the district office and at respondent’s law office. The images retrieved from respondent’s law office depicted nineteen girls under sixteen years old.

Respondent resigned from his position in the Legislature on July 20, 2008.

The court called the sanction a "step short" of disbarment. (Mike Frisch)

October 23, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Faster Than A Speeding Bullet

From the web page of the Ohio Supreme Court comes this story of a prosecutor's third brush with the attorney discipline system.

He had previously been suspended for a year in two separate matters.

One matter involved allegations that he had insinuated to other counsel that he was in a sexual relationship with a judge; the other confidentiality violations relating to an Ohio State football investigation.

The Ohio Supreme Court has placed  Christopher T. Cicero of Columbus on an indefinite suspension from the practice  of law for altering the charge in his own speeding case.

After receiving a speeding ticket  in Columbus, Cicero obtained a blank but signed document from a Franklin County  judge that Cicero then had his assistant fill out, changing his speeding charge  to a headlight violation.

Cicero had previously amassed  about 50 speeding tickets and had his driver’s license suspended twice. The  lesser offense of an equipment violation carried no points against his license  and eliminated the possibility of another driver’s license suspension.

The alteration came to light when  Judge Scott VanDerKarr’s bailiff noticed that the judgment entry document that  was filed did not include a required notation for a finding of guilt. When the  court contacted Cicero, he refused to provide the name of the prosecutor who  agreed to allow the change to a lesser charge, and the judge issued an arrest warrant for Cicero for contempt of court.

Cicero subsequently identified a prosecutor, who was working his second to last day in  the office on the day of Cicero’s arraignment in March 2012. The prosecutor denied having  any conversation with Cicero about amending the speeding ticket.

Cicero would not explain to the  judge how the deal to amend his charge came about, and he was sent to jail for  five days. Afterward, Cicero withdrew his plea to the headlight violation and  pled no contest to the original speeding charge. The judge  cited him for contempt and sentenced him to time served.

Cicero has been before the  Supreme Court in two prior disciplinary cases – one in which he claimed he was  having sex with a judge presiding over one of his cases and another in which he  shared confidential information from a potential client with the head football  coach at the Ohio State University.

The panel that reviewed this case  for the Board of Commissioners on Grievances and Discipline noted Cicero’s  pattern of misconduct and refusal to accept responsibility for his actions,  among other aggravating factors, and recommended that he be indefinitely  suspended.

The full board, however,  recommended to the court that Cicero be prohibited permanently from practicing  law for his misconduct. While Cicero did not challenge the misconduct and rule  violations that the board found, he objected to the proposed sanction of  disbarment.

After reviewing a number of prior  disciplinary cases, the court determined that Cicero’s history of misconduct  involved three different matters and did not reflect a “longstanding pattern of  deceit.” In a 5-2 decision, written by Justice Judith L. French, the court  concluded that an indefinite suspension was appropriate for Cicero’s  misconduct, but noted that his repeated violations were “troubling.”

“By no means do we condone  Cicero’s dishonest, unprofessional, and censurable conduct, which was  prejudicial to the administration of justice and which adversely reflects on  Cicero’s fitness to practice law,” Justice French wrote. “Nevertheless, in  light of this court’s precedent and considering all of the circumstances,  including the aggravating factors and lack of significant mitigating factors,  we do not find that Cicero’s conduct, egregious though it may be, rises to the  level for which we reserve the sanction of permanent disbarment.”

Cicero can apply to return to the  practice of law in two years.

Joining the majority were  Justices Paul E. Pfeifer, Terrence O’Donnell, Sharon L. Kennedy, and William M.  O’Neill.

In a written dissent, unusual in  disciplinary cases, Chief Justice Maureen O’Connor would have disbarred Cicero.  Her opinion was joined by Justice Judith Ann Lanzinger.

In Chief Justice O’Connor’s view,  the majority “does not adequately recognize the insidiousness of Cicero’s  behavior.” Calling his conduct a “charade” and his long list of excuses  “outlandish,” Chief Justice O’Connor also emphasized Cicero’s refusal to take  responsibility for his actions and admit his wrongdoings.  “Cicero’s quiver of untruths is notable for  its depth, if nothing else,” she added.

She pointed out that the  prosecutor Cicero claimed had agreed to let him plea to a lesser charge did not  work on traffic or criminal matters and was not assigned to any arraignment  courtroom.

“Cicero’s spectacular talent for  deflecting blame and minimizing misbehavior reflects his inability to conduct  himself in an ethical manner,” the chief justice wrote. “That inability  portends great risk to his clients and endangers the public and the legal profession.”

She disagreed with the majority  perspective that Cicero be given a lesser sanction because his misconduct over  the years has involved distinct matters.

“It does not matter that Cicero’s  three disciplinary cases did not spring from a common source,” she wrote. “Cicero’s  pattern of dishonesty, blaming others, disrespect for the legal process and for  the courts, self-serving behavior, and feigned remorse is unrelenting. In fact,  it is his willingness to defraud and impugn the court system in a great variety  of unrelated circumstances that is  the most troubling of all.”

Cicero’s actions have  reinforced the worst stereotypes about the legal profession, and his misconduct  warrants disbarment, she concluded.

2013-1980. Disciplinary  Counsel v. Cicero, Slip  Opinion No. 2014-Ohio-4639.

Video camera icon View oral argument video of this case.

(Mike Frisch)

October 23, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Disbarred After Missing Oral Argument Before Court

The Maryland Court of Appeals has disbarred an attorney for misconduct in the course of representing a client in a child custody disputes and during the resulting bar investigation.

We conclude that the appropriate sanction for Barnett’s misconduct is disbarment. Barnett forged [client] Wooden’s signature on an Affidavit of Indigency without consulting her or obtaining her consent, and then submitted the false document to the circuit court. Barnett failed to notify Wooden of the Exceptions hearing dates, or otherwise communicate with her for at least ten months during the course of his representation. After Wooden filed with the Commission a complaint concerning Barnett’s lack of communication, Barnett intentionally misled Bar Counsel concerning his discussions with Wooden regarding the Exceptions hearing dates and overall attorney-client communications. Barnett’s misconduct culminated in his unauthorized withdrawal of the Exceptions (i.e., the Exceptions were not pursued even though Wooden retained Barnett for the sole purpose of filing and pursuing Exceptions), and negatively impacted the public’s perception of the legal profession. There are no mitigating factors and Barnett’s misconduct is aggravated by multiple violations of the MLRPC and refusal to acknowledge the wrongful nature of the misconduct.

The court had entered a sua sponte order of disbarment on October 3, the date of the scheduled oral argument. THe attorney had failed to appear. (Mike Frisch)

October 23, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

The Return Of The Fortune Cookie

How long must a disbarred attorney wait for reinstatement?

Sixteen years was the period of banishment for an attorney reinstated yesterday by the New York Appellate Division for the Second Judicial Department.

The attorney had been disbarred in 1998 as a result of a criminal fraud scheme described by the New York Times

Since 1990, Mitchell Rachlin has collected more than $626,000 in payments from an insurance policy, claiming that neck and back injuries from a car accident prevented him from working at his law practice.

Undercover investigators, however, say that Mr. Rachlin has been hard at work at his Hempstead law firm on Long Island -- with no sign of impairment. Videotapes from a hidden camera show him moving nimbly about the office, even cradling the phone with his supposedly injured neck.

Not only was he working at his office, investigators say, Mr. Rachlin was also helping clients concoct their own fraudulent insurance claims.

Today, Mr. Rachlin was among 20 people indicted in Nassau County on felony charges stemming from a two-year sting, called Operation Backbone, to uncover fraud in insurance cases involving automobile no-fault, disability and workers' compensation. The others were 3 lawyers, 12 chiropractors, an orthopedist, a medical supplier, a legal assistant and a chiropractor's receptionist.

From the disbarment order

The respondent admitted that on or about October 23, 1995, he knowingly submitted false lost wages documents to Cigna Insurance Company (hereinafter Cigna) in support of a no-fault lost wage claim and thereby obtained in excess of $3,000 from Cigna.   The respondent further admitted that between approximately March 1995 and August 1995, he engaged in a scheme constituting a systematic ongoing course of conduct whereby he intended to defraud Cigna Insurance Company and Zurich Insurance Company by referring “false, fraudulent statement[s]” to those companies regarding the disability claims of more than one person.   Those persons received in excess of $1,000.

The reinstatement order does not set forth the evidence adduced to demonstrate present fitness to practice but notes the favorable recommendation of the Committee on Character and Fitness.

The court had denied two previous petitions. (Mike Frisch)

October 23, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Coverups Worse Than Crimes

The New York Appellate Division for the Second Judicial Department has disbarred an attorney who, after having neglected the matters of several clients, lied and created false documents to conceal the neglect.

As noted in an earlier post, the case underscores the value of granting disciplinary counsel the power to depose as

The respondent does not contest the charges, notwithstanding earlier denials. He stated at the hearing: "My testimony [at my deposition] speaks for itself." At his deposition, the respondent not only admitted that he was "mistruthful," but he also admitted that he had fabricated orders, fabricated judges' signatures, and fabricated court stamps and index numbers on various orders, all in an effort to conceal his neglect.

On sanction

In mitigation, the respondent testified at his deposition that a close friend of his died of an aneurysm at his home, and that the respondent allegedly tried to save his friend's life, but was unsuccessful. According to the respondent, the trauma of that incident caused him to go into a deep depression. Unfortunately, he turned to alcohol, claiming at the same time that he was a recently recovered alcoholic. Although the Grievance Committee requested that the respondent produce medical reports substantiating his health problems, the respondent failed to provide any documentation in support thereof. The respondent recounted the same chain of events at the hearing, but offered no evidence whatsoever to support his claims. The Special Referee requested that the respondent provide some documentation, e.g., a medical report from his treating physician, which the respondent indicated could still be obtained. No such documentation was provided subsequent to the hearing.

The respondent's submissions in support of his purported mitigation consist of self-serving statements for which no evidence, documentary or otherwise, has been produced. Other than the respondent's bare claims, and despite separate requests by the Grievance Committee and the Special Referee for supporting documentation, no  evidence was presented to support his contentions that: (1) a close friend had died in his arms, (2) he suffered from depression and post-traumatic distress disorder, (3) he sought treatment, and (4) he abused alcohol, entered Alcoholics Anonymous, and is now sober. Given the utter lack of evidence to support any of the respondent's claims, we find these claims to be not credible.

(Mike Frisch)

October 23, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 22, 2014

Divorce Tennessee Style: Alcohol, eBlaster, Altered Documents And Shooting the Bird

A Tennessee attorney has been censured for using improper means to obtain evidence in her own divorce.

The story is told in this opinion from a Magistrate Judge in the United States District Court for the Eastern District of Tennessee

This not a garden variety case of one spouse putting spyware on the other spouse's computer to electronically eavesdrop. Plaintiff alleges defendant engaged in an elaborate, deceptive scheme which involved wiretapping his computer to intercept emails, altering those emails to make it appear he was having an affair, and altering legal documents in order to provide that if plaintiff did have an affair, defendant would receive more money in a divorce. Because of the elaborate nature of the allegations and because the plaintiff seeks punitive damages, the Court has been required to focus a wide lens on the parties' conduct and consider behavior beyond simply wiretapping. The result is the regrettable and unavoidable airing of dirty laundry...

Were the Court required to rely primarily on the testimony of either party, it would be very difficult to reach a conclusion about the plaintiff's conduct. Defendant's testimony, in particular, is so contradictory to the forensic and documentary evidence and so inconsistent with her previous statements as to render her testimony at trial completely incredible. However, there is clear and convincing evidence from sources other than the two parties' own testimony that defendant engaged in egregious conduct: evidence from William Dean's forensic computer examination of the KLC computers and defendant's laptop computer; from the documentary evidence, much of which was produced by defendant pursuant to a subpoena; from the two recorded phone conversations (again produced by the defendant); and from other witnesses.  The Court has detailed this evidence in the fact portion of this opinion. All this evidence considered as a whole leads to only one logical conclusion: defendant engaged in a concerted scheme to gain advantage over the plaintiff in a divorce by 1) tricking plaintiff into signing an altered prenuptial agreement with a provision that rendered the prenuptial agreement null and void in the event that plaintiff committed adultery, 2) by secretly substituting a page in the September 27, 2007 Agreed Order with different pages that contained a provision making plaintiff's premarital assets part of the marital assets and forfeiting three fourths of those assets to defendant if plaintiff committed adultery, 3) by secretly installing eBlaster on the computers regularly used by plaintiff, 4) by secretly intercepting at least three emails sent by R.G. to plaintiff and altering them to look like R.G. and plaintiff were having an affair, and 5) by intending to use the altered emails, the altered prenuptial agreement and the altered September 27, 2007 agreed order to obtain a significant amount of plaintiff's property to which she was not entitled in a divorce from plaintiff. The Court concludes the only reason this plan was not successful was that defendant was unable to keep eBlaster a secret. Once eBlaster was discovered, plaintiff launched into an investigation which uncovered defendant's conduct. This conduct on the part of the defendant was extreme and outrageous and merits punitive damages.

The Court may also consider the conduct of plaintiff in determining punitive damages. Plaintiff frequently abused alcohol during the marriage which caused him to be verbally and physically abusive. Further, during the course of their divorce proceedings and after their divorce proceedings, plaintiff engaged in behavior which can only be described as harassment of the defendant. He sent defendant incendiary text messages and popped up in places around town where defendant could be found. His conduct included "shooting the bird" at defendant and making prejorative comments about her in public settings. Plaintiff's conduct bordered on stalking. "[T]wo wrongs do not make a right. Two wrongs simply make two wrongs." Finally, the amount of punitive damages should bear a reasonable relation to actual damages awarded. Considering the totality of the circumstances discussed herein, the Court awards plaintiff $10,000 in punitive damages. (citations omitted)

The Court concludes plaintiff has proven at trial by a preponderance of the evidence that defendant violated the federal and Tennessee wiretap acts by intercepting plaintiff's emails. The Court therefore shall award the plaintiff $10,000 in statutory damages. Further, the Court concludes that plaintiff has proven by clear and convincing evidence that defendant engaged in outrageous and egregious conduct and the Court awards plaintiff $10,000 in punitive damages. Finally, the Court determines that plaintiff is entitled to reasonable attorney's fees and costs to maintain this action. An appropriate judgment shall be entered.

The attorney submitted a conditional guilty plea to the ethics charges.

WBIR had this report on the attorney's trial testimony against her next husband, who serves in the state House of Representatives.

  WNCT reported that the trial led to a reckless enganderment conviction. (Mike Frisch) 

October 22, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Ethics Journal Current Developments Issue Is Out

My favorite issue of the Georgetown Journal of Legal Ethics -our yearly compilation of student notes on current developments in ethics law -  has just hit the street.

This issue holds up well with the past editions and gives the reader excellent exposure to the hottest legal ethics issues that face 21st century members of the legal profession.

As co-faculty advisor (along with my colleague Professor Mitt Regan) to the journal, I am biased in its favor.

With that disclaimer, I highly recommend that all practitioners with an interest in ethics take a look.

Kudos to the journal staff for their hard work and dedication to this notable contribution to the profession. (Mike Frisch)

October 22, 2014 in Ethics, Hot Topics, Judicial Ethics and the Courts, Law & Society, Law Firms, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

No Show Lawyer Gets Disbarred

A recent disciplinary decision from the Maryland Court of Appeals

This attorney discipline matter concerns an attorney who accepted $2,500 from a client as a retainer for a divorce case, had no further communication with her client, performed no work on the matter, and apparently abandoned her Maryland law practice. The attorney, who did not maintain a separate trust account, deposited the client’s payment into a general account and never returned the unearned fee to the client. The attorney did not cooperate with Bar Counsel’s disciplinary investigation, failed to respond to the disciplinary charges later filed against her, and did not participate in the proceedings before the hearing judge or our Court. As a result, we have no information that would mitigate the sanction for her misconduct. We hold that she violated multiple provisions of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) as well as related rules and statutes and, based on those violations, disbar her.

I only hope that this attorney is not admitted in D.C. as I would hate to read a decision that imposed censure as reciprocal discipline for this misconduct. (Mike Frisch)

October 22, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Conflict Of Interest: Sex With Incarcerated Client's Wife

A sexual relationship with the client's wife has resulted in the suspension of an Ohio attorney.

The relationship took place during and after the criminal trial in which the client was accused of murdering his own parents.

As reported by Kathleen Maloney

The Supreme Court today suspended  Columbus attorney James D. Owen for having a sexual relationship with the wife  of a client. The court noted in its decision that the professional conduct  rules do not address this issue nor had there been any case law about this type  of situation.

In a 6-1 vote, the court imposed  a two-year suspension, with the second year stayed on conditions, for Owen’s  misconduct.

In 1997, Owen began representing  Robert Caulley, who had been accused of murdering his parents three years  earlier. Owen was originally hired to research a false confession defense in  the capital case. Given his work on part of the case, a trial judge removed  Caulley’s court-appointed lawyers and put Owen in their place.

The accused’s wife relocated from  Texas to Ohio in summer 1997 and helped Owen with case-related tasks. Several  days before Caulley’s trial began that September, Owen and Caulley’s wife  started a sexual relationship, which continued until August or September of  1998. The jury found Caulley guilty of two lesser offenses, not punishable by  death, and he was sent to prison.

Caulley found out about the  affair years later, and the Ohio Public Defender contacted Owen in 2011 to tell  him it was asking the court for a new trial because of his relationship with  Caulley’s wife. Owen admitted his actions and cooperated in the efforts to gain  a new trial, which was granted. He also reported his misconduct to the  Disciplinary Counsel about a month later and entered into a five-year contract  with the Ohio Lawyers Assistance Program (OLAP) in early 2012. He sought  treatment for anxiety, depression, and severe attention deficit disorder.

In a per curiam opinion, the court found that a sexual  relationship with the spouse of a current client creates a conflict of interest  that compromises the trust and confidence between the client and attorney.

The court has disapproved of  lawyers engaging in sexual conduct with clients, and it today upheld the same  principle for sexual relationships with a client’s spouse because “the  vulnerability of the client and the betrayal of trust are the same.”

Owen’s suspension with one year  stayed is contingent on him complying with his OLAP contract and committing no  further misconduct.

In the court’s majority were  Justices Paul E. Pfeifer, Terrence O’Donnell, Judith Ann Lanzinger, Sharon L.  Kennedy, Judith L. French, and William M. O’Neill.

Chief Justice Maureen  O’Connor dissented. She would have imposed an indefinite suspension.

2013-1981. Disciplinary  Counsel v. Owen, Slip  Opinion No. 2014-Ohio-4597.

The court

We understand the effects that mental illness, alcoholism, psychological impairments, and dysfunctional upbringings can have on a practicing attorney, not to mention the stresses attorneys endure in their day-today lives, both professional and personal. As debilitating as these can be to practitioners, however, there are consequences when they lead to misconduct, and attorneys will be held accountable. Owen has accepted full responsibility for his misconduct. He acknowledges that he had ample time and opportunity to disclose the affair to Caulley and later to Caulley’s appellate attorneys, yet he failed to do so. He is deeply remorseful for his betrayal of his family, his client, and his profession.

The Daily Mail has details about the case. reports that the client was granted a new trial as a result. (Mike Frisch)

October 22, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

A "Crazy Mistake" Or A Broken System Of Regulation?

The pathetic state of lawyer regulation in New Jersey is on display in a reprimand for negligent misappropropriation just issued by the Disciplinary Review Board and accepted by the Supreme Court.

The disciplinary matter came to light during a random audit.

The attorney conceded that he was deficient in his recordkeeping and that he had commingled his trust and business accounts.

The attorney was charged with two counts of knowing misappropriation, for which the sanction is disbarment.

The special master found the violations; both findings were overturned by the DRB. 

The count that appears to clearly involve knowing misappropriation involved the handling of a $35,000 settlement check in a slip-and-fall case.

The attorney prepared the deposit ticket and deposited the funds in his business account. The account had a balance of slightly over $1,100.

He then used escrow funds (i.e. other people's money) to pay the client her share. He  used the funds deposited in the business account to pay business and personal expenses. He wrote eighteen checks for such purposes and invaded entrusted funds to the tune of over $9,000.

A workers' compensation lien owed to a state agency for over $11,000 went unpaid for a year and was satisfied by a loan from the attorney's father.

The DRB described the special master's findings

In the Howard matter (count one), the special master concluded that respondent’s deposit into the business account was "knowing and purposeful." The special master noted that the deposit slip bore the business account number placed by respondent, after the account name, that respondent checked off boxes to both "business" and "checking," and that he wrote "(bus)" on the deposit slip. The special master remarked that, without this deposit, the business account would have contained insufficient funds to cover the eighteen checks written by respondent between August 9 and 27, 2010.

In concluding that respondent knowingly misappropriated trust funds, the special master found, consistent with [chief auditor] Waldman’s testimony, that respondent paid Howard with trust account funds belonging to other clients. Compounding respondent learned that he was out of that offense, once trust, he took no immediate action, waiting until he received a notice of the OAE’s random audit, before borrowing funds from his father. Thereafter, he waited five months, before satisfying the workers' compensation lien.

Notwithstanding these rather damning facts and the special master's conclusion, the DRB finds a way to absolve this behavior

Respondent went on to say that, from roughly March 2011, when he discovered his "crazy mistake," until late August 2011, he thought that he could replenish the account by using legal fees, as they came in. However, he said, the OAE’s audit notice had "forced his hand," in late August 2011. He then immediately borrowed funds from his father and replaced the amount of the check issued to Howard ($11,494.80) in the trust account. Even with that loan, however, respondent failed to satisfy the workers’ compensation lien for another six months, accomplishing that task in late February 2012. He did not do so sooner, he claimed, because he did not have sufficient funds at the time.

This case presented us with a difficult scenario. On the one hand, respondent seemed forthright, but careless and forgetful. He claimed to have had little reason to use the settlement funds as he did. One may also wonder why, if respondent was so desperate for funds that he was willing to risk his law license, he would not have asked his father for a loan, much sooner than he did. Could it be because he was unaware of his mistake? It should be noted, too, that respondent presented character witnesses and has a stainless disciplinary record of thirty years.

On the other hand, respondent acted in a way that both Waldman and the special master found to be consistent with the actions of other attorneys who have knowingly misappropriated trust funds. In particular, respondent’s actions regarding the handwritten notations on the deposit slip present serious problems...

...the record does not identify the owner of the funds that were allegedly invaded or the extent of the invasion. It does not show how much respondent should have been holding in trust at the time, to whom those funds in the trust account belonged, how much remained after the alleged invasion, and the amount of the alleged invasion.

We, therefore, dismiss the charge that respondent knowingly misappropriated client funds, when he issued the check for Howard’s portion of the settlement proceeds. We also dismiss the charge  funds was intentional in nature. The record does not allow a finding, by clear and convincing evidence, that respondent’s use of the $11,000 lien was anything more than inadvertent, a "crazy mistake, as respondent put it.

Ah, yes. The old "why would he do it?" defense.

Possible answer: it was an easy solution to a financial problem that did not involve charity from his father.

If the record was not sufficient to get to the bottom of this then the public interest demands a remand for further findings. These facts do not lead to absolution.

No disciplinary regime that wishes to instruct its bar and assure the public about the sanctity of entrusted funds would tolerate this result or reprimand on these facts. (Mike Frisch)

October 22, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 21, 2014

Legal Malpractice And Intervening Cause

The New Mexico Court of Appeals has reversed a favorable ruling to the defendant in a legal malpractice case

Roland Lucero and his company, R & L Straightline Tile, (collectively, Plaintiff) appeal from a judgment entered in favor of Defendant Richard Sutten following a bench trial on the issue of legal malpractice. The district court found that Defendant negligently failed to apprise Plaintiff of the dangers of providing an unsecured $300,000 loan to a Las Vegas development company. However, the district court applied the doctrine of independent intervening cause, a defense that had not been previously raised in Defendant’s proposed findings prior to trial, and concluded that the real estate market collapse of the mid-to-late 2000s severed the connection between Defendant’s professional negligence and Plaintiff’s damages claimed therefrom. On appeal, Plaintiff argues that the district court erred in applying the doctrine of independent intervening cause to these facts. We agree. We reverse and remand for consideration of damages in light of this Opinion.

The court

The district court should not have dismissed this case but, instead, it should have determined whether Defendant’s negligence was the proximate cause of Plaintiff’s loss and, if applicable, employed a standard comparative fault analysis.

(Mike Frisch)

October 21, 2014 in Clients | Permalink | Comments (0) | TrackBack (0)

Eli's Coming

A former Eli Lilly attorney was suspended for 90 days by the Indiana Supreme Court for taking confidential materials with him when he left.

 Respondent has been an attorney since 1993 and was admitted as a patent attorney by the United States Patent and Trademark Office in 2000. Respondent was employed by Eli Lilly and Company ("Lilly") from 1999 through 2009. Respondent had a duty to protect Lilly's intellectual property and preserve Lilly's confidences. In 2009, as Respondent prepared to leave his employment with Lilly, he copied documents and forms onto a disk. A Lilly administrative assistant made a copy of the disc and gave both discs to Respondent. The information on the discs ("CD Data") was property of Lilly and was considered by Lilly to be confidential. Respondent took the CD Data from Lilly's premises and retained it, knowing that he was not authorized to possess or control the CD Data after he left Lilly.

 As to sanction

 The parties cite the following fact in aggravation: Respondent was aware that the duty of a patent lawyer is to protect the intellectual property of the client. The parties cite the following facts in mitigation: (1) Respondent has no disciplinary history; (2) Respondent was cooperative with both Lilly and the Commission in their investigations; (3) Respondent had no intent to harm the client; (4) he returned the CD Data to Lilly upon request and did not intend to share it with third parties; (5) Respondent believes that the information regarding Lilly's products on the discs was either already in the public domain or would become public in the near future; (6) Respondent has expressed that the breach of his employment agreement was not intentional, yet he takes full responsibility for and regrets his actions; and (7) Respondent's misconduct resulted in the revocation of a substantial severance payment from Lilly.

(Mike Frisch)

October 21, 2014 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)