Wednesday, May 31, 2017

Nine Months

A discipline decision from the Minnesota Supreme Court has an interesting evaluation of a host of potentially mitigating factors

 Given the mitigating factors present, the appropriate discipline for respondent’s conviction of felony theft by swindle is an indefinite suspension with no right to petition for reinstatement for 9 months.

The issues related to withheld employee contributions

On July 31, 2014, Bonner was charged in Hennepin County District Court with felony theft by swindle, Minn. Stat. § 609.52, subd. 2(a)(4) (2016), for his failure to deposit $6,068.08 in withheld employee contributions into the IRA accounts of two firm attorneys from August 23, 2011, to January 31, 2012. The evidence at trial proved that Bonner kept withheld employee contributions in the firm’s business account, which was used to pay the firm’s business expenses and some of Bonner’s personal expenses.

Two attorneys also testified at trial. The first testified that he was aware that his employee contributions were not being deposited and that Bonner failed to make a catch-up payment in 2011, despite promising to do so. The other attorney provided inconsistent testimony regarding her knowledge about whether the employee contributions were being deposited into her IRA account. Bonner was convicted of felony theft by swindle on January 2, 2015. As part of his sentence, Bonner was required to make full restitution and pay a fine of $6,000. Bonner was also placed on probation for 3 years, which was originally set to end in March 2018. The district court discharged him from probation early, effective January 27, 2017.

The court affirmed the finding that he did not have dishonest intent

in the end, the Director has the burden of proving dishonesty by clear and convincing evidence. We conclude that the referee’s finding here was based on a credibility determination that Bonner did not act dishonestly with respect to the conduct alleged in Count II.

But

 Here, Bonner’s misappropriation was not a "single isolated incident" or a "brief lapse in judgment." Rather, Bonner failed to deposit withheld employee contributions to an IRA account in an amount totaling $6,068 over the course of 5 months. The cumulative weight of this repeated misconduct was therefore significant.

 And the court rejected mitigating factors found by the referee

this case also involves several contested mitigating factors, the first of which is the referee’s finding of "full restitution." The Director contends that Bonner’s restitution was compelled and that therefore the referee clearly erred by crediting Bonner with "full restitution" as a mitigating factor. We agree with the Director...

Because cooperation with the Director and compliance with the law are not mitigating factors, the referee clearly erred by finding otherwise...

When considering the harm to the public and the legal profession, we have already noted that Bonner’s misconduct did not harm any clients and have discussed how his misconduct harmed the legal profession. We agree with the Director that considering a lack of harm to clients, adverse parties, or tribunals should not be counted as a mitigating factor because these considerations overlap with our consideration of the harm that Bonner’s misconduct caused to the public and the legal profession. Thus, we conclude that the referee clearly erred by considering lack of harm to clients, adverse parties, and tribunals as mitigating factors.

 As to the crime

The referee’s finding that Bonner lacked a selfish or dishonest motive is inconsistent with the theft by swindle conviction underlying Count I: a person cannot simultaneously have a specific intent to defraud another and at the same time lack a selfish or dishonest motive. Accordingly, because the theft by swindle conviction is conclusive evidence with respect to the conduct underlying the conviction, the referee clearly erred by finding that Bonner did not act with a selfish or dishonest motive...

The referee found as a mitigating factor that Bonner’s misconduct was related to his law firm’s extreme financial difficulties. The Director argues that law firm financial distress is not an appropriate mitigating factor. We agree that the referee clearly erred by concluding that the law firm’s financial difficulties were a mitigating factor.

Noting that disbarment is the normative sanction for felony theft

 After carefully reviewing our prior cases, and recognizing that Bonner’s circumstances do not neatly line up with the cases cited by the parties, we conclude that neither the referee nor the parties propose the appropriate discipline. See Rooney, 709 N.W.2d at 269 ("But none of these cases is precisely on point. As we have often noted, attorney discipline cases are decided on a case-by-case basis, making the specific factual circumstances of each case particularly important."). We determine the appropriate discipline on a case-by-case basis, guided by the principle that the purpose of attorney discipline is to protect the public and the judicial system and to deter future misconduct, not to punish the attorney. Brost, 850 N.W.2d at 703.

In light of the nature of the misconduct established by his felony conviction of theft by swindle, the mitigating factors present, and the overarching goal of protecting the public, we hold that the appropriate sanction for Bonner’s misconduct is an indefinite suspension with no right to petition for reinstatement for 9 months.

 (Mike Frisch)

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

When You Need Cash Now

A single justice's order of a 60-day suspension for failure to protect the interests of an entity that had advanced cash to the client was affirmed by the Massachusetts Supreme Judicial Court.

In late February, 2013, the respondent received a "cash advance agreement" and other documents from Global Financial Credit, LLC (Global) indicating that, in consideration of a "cash advance of $1,025.00" the client assigned a security interest in the proceeds of the MBTA settlement to Global. The respondent signed and returned documents acknowledging that he would pay Global that amount, together with other fees described in the agreement, from the client's portion of the MBTA settlement. On March 4, 2013, the respondent received a formal "notice of assignment" from Global...

The MBTA paid the $6,600 settlement in late June, 2013, and the respondent deposited the settlement funds into his client trust account. A settlement statement was prepared reflecting the $1,998.00 payoff amount for Global's two cash advances to the client and accompanying fees; the respondent's legal fees and costs of $2,569.30; and the balance, $2,032.70, due to the client. There was no payoff amount indicated for ELF. The respondent disbursed the amounts indicated on July 2 and 3, 2013.

The respondent did not notify ELF of receipt of the MBTA settlement funds. As of July 2, 2013, under the terms of the client's agreement with ELF, approximately $1,265 would have been due. When ELF inquired about the MBTA settlement and learned that the respondent already had disbursed the settlement proceeds to the client, it demanded payment from the respondent. The respondent refused. It was ELF's request that bar counsel investigate that gave rise to these proceedings.

 After a hearing, at which the respondent and a witness from ELF testified, a majority of the hearing panel found that the respondent made intentionally false statements to Global and ELF concerning the absence of prior cash advances, in violation of Mass. R. Prof. C. 4.1 (a), 426 Mass. 1401 (1998), and Mass. R. Prof. C. 8.4 (c), 426 Mass. 1429 (1998). The hearing panel unanimously found that the respondent failed to comply with the client's ELF letter of instructions by failing to contact ELF to determine what the client owed to ELF, in violation of Mass. R. Prof. C. 1.2 (a), 426 Mass. 1310 (1998), and Mass. R. Prof. C. 1.3, 426 Mass. 1313 (1998). It also found that the respondent failed to notify ELF that the settlement proceeds had been received, and failed to promptly deliver funds to ELF, in violation of Mass. R. Prof. C. 1.15 (c), as appearing in 440 Mass. 1338 (1998). A majority of the panel recommended a three-month term suspension. Both the respondent and bar counsel appealed.

 Sanction

We agree with the single justice's observation that the respondent's misconduct was more serious than failure promptly to notify a third party and deliver funds to satisfy a lien, and that more than a public reprimand is required...

Finally, we note that the respondent filed a motion to dismiss in the county court. He contends that the motion should have been allowed, because bar counsel did not address in the county court the points he raised regarding the board's findings. Although bar counsel did not respond expressly to the respondent's motion, she did not concede that there was error.

 The single justice independently reviewed the record and concluded that the board's findings were supported by substantial evidence. See Matter of Barrett, 447 Mass. at 459-460; Matter of Segal, 430 Mass. 359, 364 (1999). Although a party risks much by failing to respond to an argument raised by an opponent, that failure does not equate necessarily with victory for the opponent.

(Mike Frisch)

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

To The Rescue: Not

The full Massachusetts Supreme Judicial Court affirmed sanctions imposed by a single justice

Bar counsel filed a petition for discipline, which was twice amended, with the Board of Bar Overseers (board) against the respondent arising out of his participation in seven residential mortgage foreclosure "rescue transactions" during 2005 and 2006. At the time, the respondent worked with his son, attorney Evan A. Greene, at a law firm specializing in real estate transactions

Sanction

The primary factor in attorney discipline is "the effect upon, and perception of, the public and the bar." Matter of Kerlinsky, 428 Mass. 656, 664, cert. denied, 526 U.S. 1160 (1999), quoting Matter of Finnerty, 418 Mass. 821, 829 (1994). In this case, the respondent used his considerable experience in the practice of law to implement a series of transactions designed to take advantage of vulnerable homeowners in precarious financial positions, concealed the nature of the transactions from his lender clients out of a self-interested motive, and engaged in multiple conflicts of interest. Giving "substantial deference to the board's recommendation," Matter of Foley, 439 Mass. 324, 333 (2003), we conclude that a two-year suspension from the practice of law is warranted. The order of the single justice is therefore affirmed.

(Mike Frisch) 

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

Coll Waiting: None Of Your Business

Dan Trevas reports that an application for bar admission has been denied by the Ohio Supreme Court

A law school graduate who failed to disclose the details of several traffic violations and claimed he was not obligated to provide the information in order to take the Ohio bar exam, had his application to take the test denied by the Ohio Supreme Court today.

In a 5-2 per curiam opinion, the Supreme Court found that while the traffic infractions themselves would have had modest impact on the consideration of Shamir L. Coll’s application to take the February 2016 bar exam, his interpretation of the application process reflected “a degree of arrogance and disdainfulness for the Court that brings into serious question” his judgment and ability to represent clients. The Court agreed that if the University of Toledo College of Law graduate meets certain requirements he will be permitted to apply to take the July 2018 bar exam.

Coll Refuses to Complete Required Forms
Coll was a 24-year-old, third-year law student when he submitted his bar exam application in August 2015. Two members of the Toledo Bar Association interviewed him in November 2015 and recommended to the Board of Commissioners on Character and Fitness that he be approved to sit for the exam. In February 2016, just before the exam was to be administered, the board sought to further examine Coll’s character and fitness to practice law.

The board conducted a hearing that focused on Coll’s failure to meet the requirement that he detail each moving traffic violation he had received in the past 10 years. The board found he failed to provide complete information and made “provocative statements,” which included accusing police officers of racism as the reason for being ticketed. The board’s panel recommended his application be disapproved and that he be permitted to reapply for the July 2019 exam. The board adopted the finding and recommended it to the Court.

The board characterized the vehicular incidents Coll disclosed as “relatively benign” but raised concerns about his unwillingness to provide details of his violations, and a subsequent statement that he had provided all the information the board required, including descriptions of the incidents, the final disposition, and the charges he faced. Instead, Coll reported only that he had violations in “Many Cities, Many Counties, OH.” When asked by a bar admissions specialist to provide the full information — with a caution that failure to comply could impact his ability to sit for the bar exam — Coll provided only his name, Social Security number, driver’s license number, and an abstract from the Ohio Bureau of Motor Vehicles reflecting no moving violations in the past three years.

After a second request, Coll provided some of the information about four incidents, but not all. And while the board was investigating his application, Coll failed to comply with the rule requiring him to report any changes or additions, which included two fourth-degree misdemeanors for undersize fishing and fishing in a closed zone. He later reported his convictions for those charges, which resulted in a fully suspended 10-day jail sentence, and two years of probation.

Coll Argued He Adequately Informed Board
Coll argued that his registration was complete when he provided his name, Social Security number, and driver’s license number, and that it was the duty of the Court to investigate his past conduct. He asserted that in exchange for his nonrefundable application fee, the board was supposed to conduct an investigation. He also maintained that his driving record had no consequence on his overall character.

The board responded that the rules governing bar applications state that applicants have a duty to cooperate and provide accurate and complete answers.

The Court’s opinion stated that Coll read the instructions and clearly knew he was required to provide details. The Court noted that contrary to Coll’s belief, it is within the discretion of the Court to determine what information is required, and it includes a National Conference of Bar Examiners (NCBE) character examination. The process requires honesty and candor from the applicants, the opinion stated, and disclosure of past incidents helps narrow the focus of the investigation or otherwise, the Court would have to inquire into every jurisdiction in the nation, and beyond, to adequately investigate applicants.

“Coll’s failures to disclose the requested information also raise significant questions about his cognitive capacity to learn, to recall what has been learned, to reason and to analyze, and to exercise good judgment and act in accordance with the law and the rules governing the practice of law—not only in his own professional affairs but also in the affairs that clients will one day entrust to him,” the opinion stated.

Coll asserted that the board’s position that he not be able to take the test until July 2019 was overly harsh compared with sanctions imposed on other applicants who committed more serious infractions, such as failure to disclosure alcohol-related accidents and offenses.

The Court responded that in the cases Coll cited, the applicants were allowed to reapply within three years, and concluded that requiring Coll to wait two years to reapply would provide a “period of maturation” that would help him develop the qualities needed to be admitted to practice law.

The Court required that Coll must submit a new application, and undergo a complete character and fitness investigation, that includes an investigation and report by the NCBE demonstrating he has the moral qualifications to practice law.

Justices Sharon L. Kennedy, Judith L. French, William M. O’Neill, Patrick F. Fischer, and R. Patrick DeWine joined the majority opinion.

Dissenting Justices Would Permanently Block Coll
Justice Terrence O’Donnell concurred in part and dissented in part, writing that he disagrees with the majority’s finding that if Coll had properly disclosed his traffic violations they would not have raised significant concerns about his character and fitness, and led to the conclusion that his offenses were not as severe as others who were permitted to reapply.

“The problem with this analysis is that Coll has not yet provided complete information about all of his offenses, and therefore it is not possible to compare his conduct to any other case or to decide that his pattern of conduct does not disqualify him from admission to the practice of law,” Justice O’Donnell wrote.

He stated that he is not convinced that Coll will benefit from the brief “period of maturation” that the Court provides him, and that he should not be permitted to take the Oho bar exam.

“Coll has demonstrated an attitude that shows he lacks the ability to take that oath and does not have the professional judgment demanded of all lawyers. His lack of candor and his disrespect for the Court in frustrating our obligation to thoroughly investigate those seeking admission to the bar in Ohio suggest that he will not ever have the character and fitness to take the oath to become a lawyer in Ohio,” he wrote.

Chief Justice Maureen O’Connor joined Justice O’Donnell’s opinion.

2016-1243. In re Application of Coll, Slip Opinion No. 2017-Ohio-4023.

Video camera icon View oral argument video of this case.

(Mike Frisch)

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

Aggravating Factors Lead To Rejection Of Petition For Voluntary Discipline

The Georgia Supreme Court rejected a petition for voluntary discipline that had acknowledged numerous ethics violations but sought a suspension of no more than 91 days.

In mitigation, the special master notes that Johnson did not have a selfish or dishonest motive; that, during the time in which these disciplinary matters arose, Johnson experienced personal and emotional problems and that the resultant anxiety and depression had a detrimental effect on his practice; that Johnson has explained his plans to provide restitution to three of the six former clients at issue; that he is active in, and has a good reputation among, the legal community; and that he has expressed remorse for his actions leading to these disciplinary matters and for his failure to participate proactively in the disciplinary process. The special master recommends that Johnson receive a 90-day suspension, with conditions on reinstatement. Neither Johnson nor the Bar filed exceptions to the special master’s report...

Having reviewed the record, we conclude that Johnson’s petition for voluntary discipline is due to be rejected in light of the aggravating factors present with regard to these matters. Of particular relevance to our decision to reject this petition are the facts that Johnson has been involved in multiple instances of improper conduct involving the abandonment of legal matters entrusted to him by clients, that he has retained fees paid to him in association with these matters, that he has failed to make full and proper restitution to clients affected by his abandonment, and that he has been the subject of numerous prior instances of discipline,including a prior letter of admonition and three prior suspensions. Taken together, these factors militate against our acceptance of this petition, and we therefore reject Johnson’s petition for voluntary discipline.

(Mike Frisch)

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

Tuesday, May 30, 2017

"Steep Overbilling Ought To Come At A Steep Price"

The United States Court of Appeals for the District of Columbia Circuit remanded a dispute over fee-shifting in a case where a law firm that collected on student loans got sued

In order to pursue a Master’s degree in Computer Graphics, Demetra Baylor (“Appellant”) took out six student loans. Several years after her graduation, Mitchell Rubenstein & Associates, P.C. (“Appellee”) came calling to collect. At the heart of this case are a number of inconsistencies in letters that Appellee sent Appellant over the course of several months regarding her loans and the amounts that she owed on them, as well as Appellee’s failure to direct all of its communications to Appellant’s attorney after she retained counsel. In response, Appellant filed suit on December 17, 2013, alleging that Appellee had violated the Fair Debt Collection Practices Act (“FDCPA”), the District of Columbia Consumer Protections Procedures Act (“CPPA”), and the District of Columbia Debt Collection Law (“DCDCL”), statutes which target abusive debt collection and improper trade practices. See 15 U.S.C. § 1692(e); D.C. CODE §§ 28-3904, -3814.

Over the course of the next few years, the parties engaged in what the District Court termed a “particularly striking expenditure of effort and resources,” generating “excessive, repetitive, and unnecessarily sharp pleadings.” Order, Dkt. No. 41, at 2. Nonetheless, all of Appellant’s statutory claims were eventually resolved. Appellant accepted Appellee’s offer of judgment regarding her FDCPA claim and the District Court, with the aid of a Magistrate Judge, determined the attorney’s fees to which she was entitled for this success. Appellee, meanwhile, prevailed in its Motion to Dismiss all of Appellant’s CPPA claims and some of her DCDCL claims, the remainder of which were rejected when the District Court subsequently granted Appellee’s Motion for Summary Judgment.

A number of orders from this “clutter[ed]…docket” are challenged on appeal. Id. First, the parties dispute the District Court’s decision to adopt a Magistrate Judge’s recommendation that Appellant receive approximately twenty percent of the attorney’s fees that she requested. Second, Appellant asserts that the District Court erred in finding that Appellee’s conduct does not fall within the aegis of the CPPA. Third, Appellant also contends that the District Court abused its discretion in failing to credit her objections to a different Magistrate Judge’s denial of her Motion to Compel the disclosure of communications between Appellee and an agent of Appellant’s creditor on the grounds that these documents were protected by attorney-client privilege. Appellant additionally disputes the District Court’s refusal to award her attorney’s fees for her efforts in litigating this issue. Finally, Appellant argues that the District Court improperly granted Appellee’s Motion for Summary Judgment on her DCDCL claims. On this last point, Appellant contends that the District Court failed to appropriately account for evidence demonstrating that Appellee had “willfully violated” the DCDCL and was therefore subject to liability under the statute.

We do not reach the question of whether the District Court abused its discretion in awarding Appellant only a percentage of the attorney’s fees she sought in connection with her FDCPA claim. In addressing this issue, the District Court relied on the standard set forth in Local Civil Rule 72.2 in finding that the Magistrate Judge’s proposed disposition was not “clearly erroneous or contrary to law.” This was error. Federal Rules of Civil Procedure 54(d)(2)(D) and 72(b)(3) foreclose the District Court from using a “clearly erroneous or contrary to law” standard when evaluating a Magistrate Judge’s proposed disposition of a fee request. The correct standard of review is de novo. We therefore reverse and remand to allow the trial judge to reconsider this matter in the first instance applying de novo review to assess the Magistrate Judge’s recommendation. We affirm all of the remaining Orders challenged on appeal.

Circuit Judge Henderson concurred with harsh words over the fee request

It is a time-honored bargaining tactic: make an unreasonable opening offer in an effort to “anchor” the ensuing give-and - take to an artificially high (or low) range of prices. Russell Korobkin, Aspirations and Settlement, 88 CORNELL L. REV. 1, 32 (2002). Even if the offer has no basis in reality and is rejected out of hand, it may for psychological reasons yield an artificially high (or low) final price. Id. at 32 & nn.151-53 (citing evidence that people “often begin [a negotiation] with a reference value . . . and then adjust from that point to arrive at their final determination,” even if starting point does “not bear a rational relationship to the item subject to valuation”). That may be fine for selling a car or conducting a business negotiation. But a request for attorney’s fees is not a negotiation.

Federal fee-shifting statutes typically authorize the recovery of a reasonable attorney’s fee. If a party seeks more than that—making an excessive demand in hopes that the award, although short of the demand, will be artificially high— a district court can impose a sanction to deter future violations and to protect the integrity of its proceedings. In particular, the court has discretion to deny an award altogether or “impose a lesser sanction, such as awarding a fee below what a ‘reasonable’ fee would have been.” Envtl. Defense Fund, Inc. v. Reilly, 1 F.3d 1254, 1258 (D.C. Cir. 1993).

I say all this because Radi Dennis, counsel for plaintiff Demetra Baylor, made what I consider a grossly excessive fee request. In Baylor’s name, Dennis sought a total of $221,155 for her work on Baylor’s $1,001 settlement and on the fee request itself.  The $221,155 demand was more than five times the $41,990 that a magistrate judge determined to be reasonable. Reviewing for clear error, the district court overruled objections from both sides and awarded Baylor $41,990. The Court today holds, and I agree, that a remand is in order because the district court erred by not reviewing the magistrate’s recommendation de novo. The Court is careful not to dictate the outcome on remand, and rightly so because of the district court’s discretion in fee matters, I write separately only because, on reviewing the fee order, I am uncertain whether the district court recognizes just how broad its discretion is. On the extreme facts of this case—and because Dennis is a repeat offender, see Jones v. Dufek, 830 F.3d 523, 529 & n.6 (D.C. Cir. 2016) (affirming denial of excessive fee request Dennis made on behalf of another client)—I believe the court’s discretion includes awarding a fee substantially below an otherwise reasonable one. (citations to record omitted)...

Indeed, I do not think it would be an abuse of discretion to award Dennis the same amount she won for Baylor: $1,001. Steep overbilling ought to come at a steep price.

Senior Judge Edwards authored the opinion. (Mike Frisch)

May 30, 2017 in Billable Hours | Permalink | Comments (1)

Fee Arbitration With Teeth

The result of an attorney's failure to comply with a fee arbitration award was involuntary enrollment on inactive status, according to a recent order of the California State Bar Court Review Department

The amended inactive enrollment motion and its supporting documents establish the following facts. On February 12, 2015, the Orange County Bar Association’s Mandatory Arbitration Program (Orange County Program) properly served, on Attomey Rossetti by mail, the statement of decision and award of arbitrators in its case number JN-014-5912, styled Daniel Melcher v. Patrick A. Rossetti. That statement and award, which is signed by three Orange County Program arbitrators, requires that Rossetti refund to Melcher $15,000 in unearned advanced fees that Melcher paid Rossetti. The award does not provide for post-award interest even though such interest should have been awarded.

Even though the award was initially nonbinding, it became binding and final on about Monday, March 16, 2015, because neither Rossetti nor Melcher sought a trial after arbitration within 30 days after service of the award. (§§ 6203, subd. (b), 6204, subd. (a); Code Civ. Proc., §§ 12, 12a [when last day to act is a Saturday, time to acts is extended to the next day that is not a holiday].) Even though the award is binding and final, Rossetti has not paid any portion of the award despite Melcher’s reminders and requests for payments. Therefore, on June 4, 2015, Melcher submitted, to the State Bar Program, a client’s request for enforcement of an arbitration award.

...in the present proceeding, Attorney Rossetti has not produced any evidence that demonstrates that he is not personally responsible for making or ensuring payment of the $15,000 refund of advanced legal fees or that he is lacks the ability to pay the $15,000 refund award. (§ 6203, subd. (d)(2).) In short, the court finds that the statutory requirements for involuntary inactive enrollment under section 6203, subdivision (d) are satisfied. Accordingly, the court will grant the Presiding Arbitrator’s amended inactive enrollment motion and order Attorney Rossetti’s involuntary inactive enrollment.

An earlier request for this relief was denied for lack of notice.

Ordinarily, the Presiding Arbitrator’s September 28, 2016, service of the motion on Attorney Rossetti at his membership-records address by certified mail, return receipt requested would have been deemed complete when mailed regardless of whether Rossetti received it.  [citations omitted] However, in the present case, the court could not deem the September 28, 2016, service complete when mailed because the State Bar’s Mandatory Fee Arbitration Program (State Bar Program) knew, no later than April 27, 2016, that Rossetti was no longer at his then membership-records address. (U.S. Const., 14th Amend.; Jones v. Flowers (2006) 547 U.S. 220, 230-231.) Accordingly, on November 15, 2016, the court filed an order dismissing the September 29, 2016, inactive enrollment motion without prejudice. In that same order, the court granted the Presiding Arbitrator 20 days’ leave to file and serve an amended inactive enrollment motion that was accompanied by a declaration of reasonable/due diligence showing that the Presiding Arbitrator or his agents had taken additional steps that a reasonable person would take under the circumstances in an attempt to provide Rossetti with actual notice of the amended inactive enrollment motion so as to comport with due process under the Fourteenth Amendment to the United States Constitution.

(Mike Frisch)

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

The Longest And Costliest Bar Discipline Case In Nova Scotia History

A case brought against a Nova Scotia attorney has dragged out over a number of years as recently reported by CBC News

The panel hearing complaints against Halifax defence lawyer Lyle Howe has moved to bring his disciplinary hearing to a close.

The Nova Scotia Barristers' Society accuses Howe of professional incompetence and professional misconduct. Howe has countered by saying he is a victim of discrimination because of race. If found guilty, the lawyer could be disbarred.

The panel has sat for 60 days, spread out over 15 months. It has heard from about 40 witnesses and generated more than 10,000 pages of transcripts.

Closing arguments started last week and resumed Monday. Originally, the two sides had estimated they would take about a day each to sum up their cases. But when pressed Monday to provide the panel with a timeline, Howe's lawyer, Jeanne Sumbu, said she would need 14-18 more days to argue that his charter rights had been violated.

The panel balked at that suggestion.

"We're not here to take a university course, we're here to argue a case," panel chair Ron MacDonald told Sumbu.

He also said the arguments she had presented to that point could have been made in much less time.

Panel member Don Murray weighed in, saying complex cases are argued before the Supreme Court of Canada in a day or less.

After adjourning to consider Sumbu's request, the panel came back with a decision for a much shorter timeline.

Sumbu will have one more day to make the charter arguments, Howe will have two days to respond to the society's specific charges against him and the society will have one day to respond. It's all supposed to wrap up on April 19.

The CBC's Blair Rhodes liveblogged from the hearing.

CBC News analysed the impact of race on the bar case. 

Howe is African-Nova Scotian. He argues lots of other lawyers commit the same infractions he is accused of, but none of them face discipline. The only difference between them and him, he says, is that he is black.

Howe has attempted to build this argument throughout the hearing by asking the same set of questions to each lawyer who testified. Most have admitted that, yes, there had been a time or two when they might have been double booked or late for a court appearance.

But they would also say those double bookings were in courtrooms in the same courthouse.

Howe's alleged transgressions, however, are more egregious. In an episode cited repeatedly during the hearing, he was scheduled to appear in family court in north-end Halifax, as well as provincial courts in Bridgewater, Dartmouth and Halifax all on the same day. Howe says other lawyers in his firm were scheduled to make those appearances. 

The society bolstered its arguments with court dockets and Howe's own court appointment calendar, which had been seized in preparation for the hearing.

Howe admitted in his own testimony and in cross-examination of other witnesses that he hadn't always been diligent about keeping courts and other lawyers informed of his whereabouts, or making scheduled appearances. But he also stressed that his practice methods had improved immensely under the strict conditions and supervision imposed by the society

Earlier this month the same source reported new charges

The Nova Scotia Barristers' Society has laid three new charges against suspended lawyer Lyle Howe.

That means Howe, who was recently the subject of the society's longest and costliest disciplinary hearing ever, will face a new one.

The society, which regulates lawyers in the province, alleges Howe breached its codes of integrity, competence and quality of service.

It also alleges Howe "failed to provide various clients with a quality of service that is competent, timely conscientious, diligent and efficient."

Darrel Pink, the society's executive director, said some of the charges are based on complaints from clients while others are from other sources.   

Pink said it was impossible, logistically, to include the most recent charges in the hearing that just wrapped up.

"While the hearing was ongoing, a number of other matters came to the society's attention that resulted in an investigation," he said.

"Sometimes you can add charges to a hearing if their investigations are complete and the case is still open. In this case, our case was closed by the time our investigations were complete."

One of the charges deals with Howe's alleged misconduct during his hearing.

The society said Howe "failed to act with integrity, and failed to be honest and accurate in his representations to the court, clients, the Crown, and the hearing panel.

 Howe, who is still under suspension by the society, called the most recent charges minor "practice management" details. 

"I think at this point some of the charges reflect that the society is desperate in terms of what they're willing to charge me with," he said.

"One of the charges is essentially that I didn't go to court for a client that I didn't represent for a date that I didn't set."

Howe is still awaiting a decision from the panel on his previous hearing, which lasted 15 months and generated more than 10,000 pages of transcripts.

The society accused Howe of professional incompetence and professional misconduct. He countered by saying he was a victim of discrimination because of race. 

A decision isn't expected until sometime mid-summer, said Pink. If found guilty, Howe could be disbarred.

The series of orders entered in the case can be found here. 

Canadian Lawyer also covered the case.

Canadian Lawyer asked numerous Nova Scotia lawyers to comment on Howe’s claims of racial unfairness in the system — including senior criminal defence counsel who practise in Halifax, members of the judiciary, Dalhousie University law professors, and members of the NSBS governing council. None would agree to an interview. Among those who declined were John Bodurtha, co-chairman of the Barristers’ Society Racial Equity Committee, and Michelle Williams, a professor at Dalhousie University’s Schulich School of Law and director of its Indigenous Blacks & Mi’kmaq Initiative.

In February, Nova Scotia Justice Minister Diana Whalen addressed the issue with reporters, saying the provincial government recognizes the problem and wants more diversity in the province’s courts. “In every appointment we make, we look for diversity on the list of candidates that we have for any positions on the bench,” she said.

Howe says politicians, and leaders in the legal profession, have been saying the same thing in Nova Scotia for the past quarter-century, ever since the release of the Marshall commission report. “You know how many lawyers make money every day off black people in trouble with the law? Where are these white lawyers, making money off black clients — why aren’t they coming out and addressing this problem? What the hell has been done lately? Nothing, nothing has been done. Same for the Barristers Society; they’ve done nothing.”

Stephen Kimber also delved into the bar case for the Halifax Examiner (part one here). (Mike Frisch)

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

Legal Malpractice Claims Draw Appellate Rebuke

The New York Appellate Division for the First Judicial Department affirmed the dismissal of a legal malpractice claim and went further

After a careful review of the appellate record and the parties' briefs, we draw the only conclusion such record permits — the bases for the legal malpractice claim have been without merit in law or fact since their inception. More concerning, however, is that despite it having been apparent from the record that successor counsel was the one who withdrew the conversion and breach of contract claims in the federal action and not defendants, and despite being alerted to this fact by the record of this case and Supreme Court on multiple occasions, counsel persists in repeating a materially false claim to this Court.

There can be no good faith basis for the repetition of this materially false claim on appeal, and we find that counsel's behavior would satisfy any of the criteria necessary to deem conduct frivolous. In fact, the only fair conclusion is that the prosecution of this appeal and knowing pursuit of a materially false and meritless claim was meant to delay or prolong the litigation or to harass respondents.

"Among the factors we are directed to consider is whether the conduct was continued when it became apparent, or should have been apparent, that the conduct was frivolous, or when such was brought to the attention of the parties or to counsel (22 NYCRR 130-1.1 [c]), circumstances that are replete in this record as noted above" (Levy v Carol Mgt. Corp., 260 AD2d 27, 34 [1st Dept 1999]).

We also consider that sanctions serve to deter future frivolous conduct "not only by the particular parties, but also by the Bar at large" (id. at 34). The goals include preventing the waste of judicial resources, and deterring vexatious litigation and dilatory or malicious litigation tactics.

Here, counsel was ethically obligated to withdraw any baseless and false claims, if not upon his own review of the record, certainly by the time Supreme Court advised him of this fact. Instead, counsel continued to repeat a knowingly false claim in what could only be described as a purposeful attempt to mislead this Court, and pursued claims which were completely without merit in law or fact.

The appropriate remedy for maintaining a frivolous appeal is the award of sanctions in the amount of the reasonable expenses and costs including attorneys' fees incurred in defending the appeal (see Matter of Levine, 82 AD3d 524, 527 [1st Dept 2011]). Thus, we remand the matter to Supreme Court for a determination of the amount of expenses and costs including attorneys' fees incurred by defendants in defending this appeal, and for entry of an appropriate judgment as against plaintiff's attorney.

The case

Plaintiff, a Danish citizen, owned or was the authorized agent for many works of fine art that he brought to New York to sell. He contracted with Jurdem Associates, Inc., a public relations firm, to facilitate the sales, and, on its recommendation, contracted with Jan Amory to display the art in her Manhattan apartment. In March 2003, plaintiff realized numerous works of art were missing from the apartment.

Plaintiff retained defendants to commence the underlying federal action. On March 20, 2006 — more than three years after plaintiff discovered the missing art — defendants filed a complaint (the federal complaint) on his behalf in the Southern District of New York against Jurdem Associates, its sole shareholder, Arnold Jurdem (collectively the Jurdem defendants), and Amory, in connection with approximately 47 works of art that were improperly taken or lost. The federal complaint alleged fraud, conversion, and breach of the "Amory Contract" against all the defendants, and an additional claim of breach of the "Jurdem Contract" against the Jurdem defendants.

On November 1, 2006, after their relationship with plaintiff had deteriorated, the firm moved to withdraw as his counsel in the federal action, and on November 14, 2006, the Southern District granted the motion...

On March 6, 2010, plaintiff, through his attorney, Andrew Lavoott Bluestone, who represents him on this appeal, commenced this action against defendants, alleging legal malpractice and breach of fiduciary duty. Significantly, the complaint alleges, inter alia, that defendants "negligently failed to render competent legal service when, they unilaterally, without notice and without consent, voluntarily withdrew all claims of conversion and breach of contract against [the Jurdem defendants]." It also alleges that they failed to file the federal complaint in a timely manner. The malpractice complaint alleges that, but for the withdrawal of the conversion and breach of contract claims, plaintiff would have prevailed in the federal action...

Notably, Mr. Bluestone did not address that it was well established by the record and Supreme Court's prior order that it had been successor counsel who had withdrawn the conversion and breach of contract claims in the federal action. Nor did he make any efforts to correct the record or withdraw claims he most certainly knew were frivolous. Moreover, in plaintiff's affidavit, plaintiff asserted that defendants were improperly asking for sanctions, and intimated that defendants might be subject to sanctions for "wrongfully asking over and over for sanctions."

Supreme Court granted the motion for summary judgment and dismissed the remaining claims against defendants. The court noted that it had previously dismissed that portion of the legal malpractice claims alleging that defendants had withdrawn the federal conversion and breach of contract claims.

Regarding any alleged malpractice arising from the failure to timely commence the federal complaint or plead other claims, the court held that there was merit to the conversion and breach of contract claims against Amory and Jurdem Associates, and fraud against all the federal action defendants, and it cited the Southern District's refusal to dismiss certain related claims against Jurdem Associates. The court reasoned that defendants' failure to allege claims of negligence and breach of fiduciary duty, later asserted by successor counsel, was not legal malpractice. More important, the court found that even if the firm had acted negligently, plaintiff failed to raise a material issue of fact regarding proximate cause, since it was successor counsel's withdrawal of the conversion and breach of contract claims, and his failure to seek a default judgment against the major tortfeasor, Amory, that led to the ultimate result in the federal case.

Thus, the motion court dismissed the legal malpractice claims against the firm. It also dismissed the breach of fiduciary duty claim as duplicative of the legal malpractice claim, and noted that plaintiff had not opposed its dismissal. The court acknowledged that it already had dismissed the complaint against defendant Vaughn-Flam on March 7, 2011.

The merits

Turning to the merits of plaintiff's legal malpractice claim, as detailed above, the record clearly establishes that the allegation regarding the withdrawal of certain claims is inaccurate and false. The record is clear that successor counsel, not the defendant firm, withdrew the conversion and breach of contract claims against the Jurdem defendants. As for the allegation relating to additional potential claims, by plaintiff's own admission in the complaint, plaintiff would have prevailed on the claims defendants initially pleaded in a timely manner, consisting of conversion, two counts of breach of contract, and fraud against all defendants in the underlying federal action.

Further, while the firm did not commence the suit sooner, which might have avoided the dismissal as time-barred of two claims added by successor counsel, it appears defendants were not formally retained to sue on plaintiff's behalf until 2006. Indeed, record evidence demonstrates that defendants repeatedly advised plaintiff that they needed to be retained and paid before commencing a suit on plaintiff's behalf. Thus, plaintiff's claim that defendants somehow agreed to commence the action in 2003 or 2004, and failed to do so, is belied by the record evidence.

(Mike Frisch)

May 30, 2017 | Permalink | Comments (0)

Attorney Who Failed To Defend Civil Claim Must Pay The Judgment

The Ohio Supreme Court has imposed a stayed six-month suspension of an attorney who had mishandled the defense of a civil claim.

[Plaintiff] Needham, however, twice amended the complaint—first to add her grandfather, Charles Needham, as a plaintiff, and the second time to name Donald Jones, d.b.a. We Sell, as a defendant. The second amended complaint was served on Peck by e-mail and on Jones by certified mail, but Peck did not answer it. Consequently, the Needhams moved for default judgment against Donald Jones, d.b.a. We Sell. Peck failed to respond. Although Peck appeared at the hearing on the default motion, the court granted the motion, finding that he had not presented any evidence of excusable neglect or moved for leave to file an answer out of time. The court issued a judgment in favor of the Needhams for $6,206.89 in compensatory damages, trebled to $18,620.67 under the Consumer Sales Practices Act, punitive damages of $6,206.89 on their fraud claim, attorney fees of $1,100, and interest at the rate of 4 percent per annum. Peck did not appeal the trial court’s decision, and the parties stipulate that the court issued a certificate of judgment for $25,927.56.

After a garnishment, the attorney tried and failed to vacate the judgment. 

Also

In addition to mishandling the representation, Peck failed to provide Jones with information regarding his professional-liability-insurance carrier. At the hearing, he testified that he thought he had malpractice insurance but that he had missed the deadline to renew his policy and therefore lacked coverage.

A condition of the stay requires the attorney to pay the full judgment with interest. (Mike Frisch)

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

Let's Go To The Audiotape

The Georgia Supreme Court affirmed an order denying a law firm audiio copies of court proceedings

The record shows that in the course of representing criminal defendants in two cases, an attorney at the Firm participated in three hearings before Judge Emerson in June and October 2015. Each of these proceedings was open to the public and audio-recorded by court reporter Melissa Cantrell, who subsequently transcribed the hearings. On October 8, 2015, the Firm sent an email to Cantrell requesting copies of the audio recordings of the three hearings. On October 9, Cantrell responded, stating that she had consulted with Judge Emerson, who advised that the Firm should file a motion in order to make a formal request for the recordings. Later that day, the Firm responded by email to Cantrell (and copied to Judge Emerson) that “no such motion is needed, and any instruction that these tapes be withheld until a motion is filed (and presumably ruled upon) is contrary to the Court’s rules and the long-established black letter law in Georgia regarding the public’s access to court records[,]”which the Firm argued included the requested recordings. On October 11, 2015,Judge Emerson issued an order sua sponte in each of the two underlying criminal cases; the order allowed the Firm to listen to the recordings but expressly did not allow the Firm to make copies of the recordings or require Cantrell to do so.

Mandamus was not available to obtain the copies

Although Judge Emerson entered the orders in two criminal cases in which the Firm was not a party, his orders denying the Firm the ability to copy the audio recordings was an adverse ruling against the Firm that the Firm could have appealed. The Firm makes no claim that Judge Emerson’s order was unclear or ambiguous, nor does the Firm seek any guidance regarding the application of that order. The Firm may disagree with the merits of that ruling, but it may not use a declaratory judgment action to collaterally attack the decision specifically adjudicating the Firm’s claim. 

The case was covered by the Atlanta Journal-Constitution in February 2017

The Georgia Supreme Court on Monday heard arguments as to whether members of the public may obtain copies of audio recordings of trials and hearings made by a court stenographer.

The case involves a lawsuit against Douglas County Chief Judge David Emerson and his court reporter Melinda Cantrell, who like most stenographers records court proceedings to aid in her transcriptions. The suit stems from cases tried before the judge by criminal defense attorney Ashleigh Merchant in 2015.

Merchant said her law firm wants recordings from two trials before Emerson in 2015. One was a racketeering case in which she said the judge became angry and hostile toward her and the other was a murder case in which Emerson addressed her in a condescending manner.

“You can’t tell his demeanor and tone in a cold transcript,” she said. “That just doesn’t come across.”

Merchant and her husband and law partner, John Merchant, asked Cantrell for a copy of her recordings. Cantrell deferred to Judge Emerson. After Emerson gave the Merchants the opportunity to listen to the audio recordings but refused to let them make copies, the Merchants filed suit.

During Monday’s arguments, Justices David Nahmias and Nels Peterson indicated there appears to be no question that the audio recordings are official court records. But a 1992 state Supreme Court ruling on the issue merely says such recordings are open to “public inspection,” and inspecting a recording doesn’t necessarily mean you can duplicate it, the justices said.

“The right to inspect would be valueless without the right to make copies,” John Merchant responded. He added that no motion had been made to place the recordings under seal and, during the hearings in question, anyone had the right to walk into the courtroom and listen to what was going on.

State attorney Russell Willard, who argued on Emerson’s behalf, said the case is not about the denial of court records because the Merchants can get official transcripts of the proceedings in question. Willard also contended the Merchants didn’t file a proper motion before Emerson to obtain a copy of the recordings.

The court’s ruling, which is of interest to the media, is expected in the coming months.

The state high court will soon hear arguments in a similar case involving the popular “Undisclosed” podcast, which is seeking access to a court reporter’s recordings of a 2001 trial in Floyd County. (The first season of The Atlanta Journal-Constitution’s “Breakdown” podcast relied heavily on court reporters’ recordings of a trial in Haralson County and a subsequent court hearing in Telfair County.)

The Georgia First Amendment Foundation filed a legal brief before the state Supreme Court in support of the Merchants’ position.

The court recordings case took on an unusual twist Monday because Emerson himself recently sat as a substitute justice in a high-profile case involving the state’s tax credit scholarship program. Emerson replaced a justice who recused himself from the scholarship arguments.

This meant Emerson was sitting as a colleague to the court’s justices on Jan. 23, just weeks before the justices heard arguments on a lawsuit in which Emerson was a defendant.

State Supreme Court spokeswoman Jane Hansen said the court keeps a list of judges who volunteer to sit in place of justices who withdraw from cases. Emerson was picked to hear the tax credit case because his name was next in line on a list kept by the Clerk’s Office. The court screens visiting judges for potential conflicts, but only those involving cases they’re hearing at the time, she said.

As for the court’s justices, Hansen said, “Regardless of whether they know a judge, they call it as they see it, based on the law.”

The fact that Emerson recently sat on the same court that’s now hearing a case in which he’s a defendant is “probably not legally assailable,” University of Georgia law professor Ron Carlson said.

“But does it look to John Q. Public to be a questionable situation?” Carlson asked. “It’s probably a good idea in the future to separate a guest judge’s appearance on the court from the time a case is coming up where he’s an actual defendant.”

(Mike Frisch) 

May 30, 2017 | Permalink | Comments (0)

Sunday, May 28, 2017

LinkedOut

From the web page of the Colorado Presiding Disciplinary Judge

The Presiding Disciplinary Judge granted a motion for entry of default and imposed reciprocal discipline, suspending Brendan James Magee (attorney registration number 37875) from the practice of law for one year and one day, effective May 16, 2017. To be reinstated, Magee will bear the burden of proving by clear and convincing evidence that he has been rehabilitated, has complied with disciplinary orders and rules, and is fit to practice law.

This reciprocal discipline case arose out of discipline imposed upon Magee in Pennsylvania. Magee was admitted to practice law in Colorado in 2006, but he was never licensed in Pennsylvania. Nevertheless, he represented to the public on his LinkedIn profile that he was licensed to practice law in Pennsylvania. Further, in 2014 and 2015, Magee represented his stepson and his wife in a high school expulsion matter, including at an expulsion hearing. He stated that he was the child’s “Attorney” but disclosed neither that he was the child’s stepfather nor that he lacked a Pennsylvania law license. Later, Magee failed to respond to a request for information from Pennsylvania disciplinary authorities.

For this misconduct, the Supreme Court of Pennsylvania suspended Magee from the practice of law for one year and one day. Magee’s misconduct constitutes grounds for reciprocal discipline under C.R.C.P. 251.5 and 251.21.

(Mike Frisch)

May 28, 2017 | Permalink | Comments (0)

Saturday, May 27, 2017

Government Lawyer Reprimanded For Rule 4.2 Violation

A reprimand from the Michigan Attorney Grievance Commission

The respondent and the Grievance Administrator filed a stipulation for a consent order of discipline, in accordance with MCR 9.115(F)(5), which was approved by the Attorney Grievance Commission and accepted by the hearing panel. The stipulation contains respondent's admission that he committed acts of professional misconduct in his position as Staff Attorney for the [Michigan] Department of Civil Rights, where he was to provide counsel to Department investigators.

Based upon respondent's admissions and the stipulation of the parties, the panel found that respondent directly contacted a discrimination complainant who was represented, in violation of MRPC 4.2. Respondent was also found to have violated MCR 9.104(1 )-(3) and MRPC 8.4(a) and (c). In accordance with the stipulation of the parties, the panel ordered that respondent be reprimanded. Costs were assessed in the amount of $757.71.

The charging document is linked here. (Mike Frisch)

May 27, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Friday, May 26, 2017

From McLouth To Tonganoxie

A letter to two principals led to a published censure from the Kansas Supreme Court.

The parties in a post-divorce proceeding wanted their children to attend different schools.

The father had an order to send the children to school in McLouth; the mother wanted them in Tonganoxie.

On August 24, 2015, the respondent sent a letter to [McLouth principal] Mr. Johnson. In the letter, the respondent stated:

'This letter will serve to advise you that I represent [A.C.] concerning the enrollment of her children [] in the Tonganoxie School District. As you should know, the children, along with their mother, recently took up residence [in] Tonganoxie, Kansas 66086, which is located within the boundaries of USD 464. As a consequence of this new residence, my client has filed an application with the District court [sic] that has jurisdiction over this matter seeking to have a determination made about the district where the children will attend school moving forwards [sic]. Because my client's motion is pending, it is scheduled for a hearing on September 9, 2015, there is no order to resolve where they will be attending school. As I am sure you are aware, Kansas law provides that a student attend the school district of residency, which is why, pending a decision being made by the Court, that the children are enrolled in USD 464.'

Additionally, the respondent sent a nearly identical letter to the principal at the Tonganoxie Elementary School. The respondent acknowledged that the letters are not accurate and that a valid court order was in effect. The respondent explained that he did not carefully read the letters prior to sending them out. The respondent stated that he intended to inform the principals that a motion was pending and explain why his client was bringing the children to the Tonganoxie Elementary School.

On August 24, 2015, the father dropped the children off at the McLouth Elementary school. Prior to the start of school that day, the mother picked the children up from McLouth Elementary School and, presumably, took them to the Tonganoxie Elementary School. On August 27, 2015, the father again dropped the children off at the McLouth Elementary School. Again, the mother picked up the children from the McLouth Elementary School prior to the beginning of the school day and, presumably, took them to the Tonganoxie Elementary School.

The genesis of the bar case is described in the hearing panel report

On September 25, 2015, Judge Gary L. Nafziger filed a complaint with the disciplinary administrator's office regarding the respondent's conduct.

On November 4, 2015, the court resumed the hearing. The mother appeared with new counsel. The mother was called to testify and she testified that the respondent gave her legal advice that led her to disregard the court's order. The court concluded that the mother's violation of the court's order was induced by the respondent's legal advice.

The respondent disputes the statements made by his client which led to the court's conclusion. The respondent testified that prior to the time his client enrolled the children in school, he did not have a discussion with his client about the children's school enrollment in the Tonganoxie Elementary School. The respondent asserted that he advised his client that the court order required the children to attend school in McClouth. The respondent admitted, however, that the language of his letter confused his client.

Based on the respondent's response to the initial complaint as well as the respondent's testimony, it is clear that the respondent's client was a difficult client.

The court

In making its disciplinary determination, the court observes that the panel found respondent provided "inaccurate" information in his letters to the two principals, resulting in violations of KRPC 1.4(b) and 8.4(d). Merely providing inaccurate information can be consistent with its finding of his mental state that he "negligently" violated his duty. But the panel also found respondent violated KRPC 8.4(c) by engaging in conduct "that involved dishonesty when he falsely stated to the two principals that no court order regarding school attendance was in effect when, in fact, an order was in effect." (Emphasis added.)

Dishonest statements usually are inaccurate. But inaccuracy is not necessarily indicative of dishonesty, hence the questionable result of "negligent dishonesty." "Dishonest" has been defined as "disposed to lie, cheat, defraud or deceive." (Emphasis added.) The American Heritage Dictionary of the English Language 378 (1981). By contrast, misrepresentation—a form of misconduct that is also covered by KRPC 8.4(c)—can be merely negligent. See Mahler v. Keenan Real Estate, Inc., 255 Kan. 593, 604-06, 876 P.2d 609 (1994). As the American Bar Association Standards recommend a reprimand for conduct that involves dishonesty (Standard 5.13) as well as for conduct that is negligent (Standard 6.23), this court holds that respondent should be disciplined by published censure.

The video of the oral argument is linked here. (Mike Frisch)

May 26, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Troubling Allegations Will Be Heard

The United States Court of Appeals for the Fourth Circuit has held that an ineffective assistance claim arising from a 1988 guilty plea will be heard on the merits

In March 1988, Corey Lorenzo Woodfolk pleaded guilty in the Circuit Court for Baltimore City to attempted murder and a related firearm offense. Several months after his plea, Woodfolk sought relief from his criminal judgment on the ground that his trial counsel, who represented both Woodfolk and his codefendant, had brokered a deal with the prosecution, whereby Woodfolk would plead guilty to allow his codefendant to go free. Woodfolk alleged that his guilty plea resulted from his trial counsel’s disabling conflict of interest and therefore was constitutionally infirm.

Woodfolk’s troubling claim has evaded merits review throughout a tortuous history of proceedings in the nearly 30 years since his original plea, culminating in the 28 U.S.C. § 2254 proceedings giving rise to this appeal. In the proceedings below, the district court concluded that Woodfolk’s petition was both filed outside the one-year statute of limitations applicable to § 2254 petitions and procedurally defaulted by operation of an independent and adequate state procedural bar. We disagree.

The story

On June 14, 1987, Woodfolk and another young man, Cornelius Langley, were involved in an altercation in a parking lot in Baltimore, Maryland. During the altercation, an off-duty police officer observed Woodfolk draw a handgun. According to this officer, Woodfolk pulled the trigger, but the gun did not fire. Woodfolk and Langley were arrested, and Woodfolk was charged with attempted murder. Both Woodfolk and Langley retained attorney Michael Vogelstein to represent them.

Woodfolk later would testify that Vogelstein initially expressed optimism about Woodfolk’s chances of success at trial. But on March 4, 1988, while Woodfolk waited in a holding cell in the courthouse on the first day of his scheduled trial, Vogelstein advised Woodfolk that he had arranged an agreement with the State. According to that agreement, Woodfolk would plead guilty; Langley would provide a statement to the court inculpating Woodfolk, and Langley’s case would be placed on the stet docket,  allowing him to go free. Woodfolk, then 18 years old, was resistant to accepting the agreement, but he eventually acceded to Vogelstein’s advice.

That day, Woodfolk pleaded guilty to attempted murder and use of a handgun in the commission of a crime of violence. After accepting his guilty plea, the circuit court sentenced Woodfolk to ten years’ imprisonment, with five years suspended, on the attempted murder count and a concurrent term of five years’ imprisonment, suspended, on the handgun count, to be followed by five years’ probation. Woodfolk did not appeal his conviction based on his guilty plea.

On June 3, 1988, represented by new counsel, Woodfolk filed a motion for reduction or modification of sentence pursuant to Maryland Rule 4-345. In the motion, Woodfolk argued that his criminal judgment was tainted by Vogelstein’s disabling conflict of interest. At an October 1988 hearing, upon the court’s advice, Woodfolk withdrew the Rule 4-345 motion and orally moved for a new trial. The court granted Woodfolk’s motion for a new trial based on his conflict-of-interest allegations. Pursuant to an agreement between the parties, Woodfolk pleaded guilty that same day to attempted murder and wearing and carrying a handgun. The court sentenced Woodfolk to 15 years’ imprisonment, with all but 18 months suspended, on the attempted murder count and a concurrent 18 months’ imprisonment on the handgun count, to be followed by five years’ probation. Based on the time Woodfolk had already served in prison on these charges, the new judgment ended his active term of incarceration.

He violated probation with a federal conviction.

Resolution

The parties seemingly agree that [attorney] Vogelstein represented both Woodfolk and Langley on related charges, and that Langley received a stet while Woodfolk was sentenced to a term of incarceration. The parties dispute, however, both the extent to which this apparent conflict impacted counsel’s representation of Woodfolk and the reasonableness of the remaining alternative strategies Woodfolk proffers. While we express no opinion as to the ultimate merits of Woodfolk’s claim, we reserve the appropriate resolution of these factual questions for the district court on remand.

For nearly 30 years, Woodfolk has contended that his guilty plea was procured by an attorney who served two masters, thereby betraying his duty of loyalty to Woodfolk in exchange for a favorable outcome for Woodfolk’s codefendant. No court, state or federal, has ever addressed the substance of these troubling allegations. Having found no time bar or adequate state procedural bar to preclude a review of the claim on its merits, we believe the time has come for a fair adjudication of Woodfolk’s claim.

Woodfolk is serving a 50 year sentence on unrelated federal charges. (Mike Frisch)

May 26, 2017 | Permalink | Comments (0)

Ignorance Excuses Tax Lapses

The Illinois Review Board recommends that charges of dishonesty be dismissed

The Administrator charged Respondent with engaging in dishonesty based upon his treatment of a portion of his employees' wages as non-taxable expenses, which resulted in his tax returns and wage statements underreporting employee compensation.

Following a hearing, the Hearing Board found that Respondent had committed some of the charged misconduct, and recommended that he be suspended from the practice of law for 60 days, with the suspension stayed in its entirety by a one-year period of probation.

The story on failure to pay taxes on wages

Respondent testified that he did not intend to evade his obligation to pay taxes on his employees' wages, and that he had little understanding of the specific types of withholding required from employees' wages. He testified that he knew that, as an employer, he had to pay some amount to the state and federal governments for a portion of the withholding from an employee's paycheck, and understood that he had some responsibility for payments that were not coming out of his employees' pay, but did not have a plan for how he was going to pay his taxes on the non-payroll amounts that were paid to Ms. Smith, Ms. Buhle, and Ms. Styx. He testified that he assumed that, at the end of the year, Ms. Heap and Mr. Zabel "would gather it up and figure it out," but that he did not "actually think about it."

The Administrator sought a two-year suspension but got bupkis

Other than the statements in Respondent's answer, the Hearing Board identified no other evidence to show that Respondent knew that the tax and wage documents contained false information, or that he understood the accounting and tax implications of his decisions. To the contrary, the evidence established that Respondent did not know how his decision to accede to Ms. Smith's request affected his pay records, and did not know that the records prepared by Ms. Heap over-stated expense reimbursement and understated his employees' wages. The evidence showed that Respondent had no involvement in his firm's record-keeping or in the handling of his firm's finances, which is how he has conducted his practice since 1985. The evidence showed that he did not know the logistics of how Ms. Heap paid employees, did not have access to her records, and never saw an employer return or wage statement filed on behalf of his office. While that may have been an irresponsible and foolhardy way to run his practice, it does not, in and of itself, establish the scienter necessary to support a dishonesty finding.

Consequently, the Hearing Board's findings to the contrary, which were based upon the statements in Respondent's answers that it incorrectly deemed to be judicial admissions, are against the manifest weight of the evidence, because they are not supported by the evidence of record in this matter.

In reaching this conclusion, however, we in no way condone Respondent's actions, particularly his poor communication with his bookkeeper, carelessness regarding how he paid his employees, and failure to personally review and ensure the accuracy of his tax documents. His choices exhibit exceedingly poor judgment. But as our Court has noted, a lack of good judgment does not necessarily constitute ethical misconduct. See In re Winthrop, 219 Ill. 2d 526, 546, 552, 554, 848 N.E.2d 961 (2006).

(Mike Frisch)

May 26, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Affairs Of The Heart And The Duty To Disclose

The Louisiana Attorney Disciplinary Board reviewed a hearing committee report and recommends  a stayed six-month suspension with one year of unsupervised probation and 20 hours of CLE for an attorney's failure to disclose an "intimate, romantic relationship" with an FBI agent/witness while serving as an Assistant United States Attorney for the Western District of Louisiana. 

The hearing committee had proposed an actual six-month suspension.

The board noted that the parties had agreed that the actual suspension should be imposed but exercised its independent authority to determine an appropriate proposed sanction.

Of particular interest here is the concurring opinion of Board Member Linda Bizzarro, who notes her view as a career prosecutor and retired AUSA that "discovery issues are better handled by the criminal court system and not by the disciplinary system."

Member Bizzarro notes that the trial judge found the relationship was irrelevant in the criminal case and that the Office of Professional Responsibility of the Department of Justice found no Rule 3.8 violation.

She also notes that the attorney stipulated to violations to bring the matter to a prompter conclusion.

She concludes

The exact parameters potential impeachment information under Giglio are not easily determined...as [prosecutors] proceed in unchartered waters, they must add to their consideration affairs of the heart.

Our prior coverage is linked here.

An "intimate,  romantic" relationship between an Assistant United States Attorney and her lead FBI agent in two cases has led to a proposed six-month suspension and probation by a Louisiana Hearing Committee.

The hearing committee found that the AUSA had failed to disclose the conflict in the investigations and prosecutions of Monroe Councilmen "Red" Stevens and Arthur Gilmore and a separate prosecution of Ouachita Parish Sheriff Royce Toney.

In the Toney case, the AUSA responded to the defendant's supposed "spreading rumors" about the affair (true rumors, it turns out) by making the defendant submit to a "perp walk."

The hearing committee also found that she lied to the United States Attorney when confronted.

The relationship was found to create a Rule 1.7 conflict of interest.

The Times Picayune had a 2008 story about Member Bizzarro. (Mike Frisch)

May 26, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Utah, California, Missouri, Kansas

The Kansas Supreme Court has disbarred an attorney in a matter where the hearing panel found

The respondent has played fast and loose with the truth in the disciplinary proceedings in Utah, in his voluntary resignation in California, and during the disciplinary proceedings here in Kansas. Despite the 1998 order suspending his license to practice law in California, during the Utah sanctions hearing, the respondent testified that he had not previously been disciplined. In the voluntary resignation of his license to practice law in California, despite the pending complaint in Utah, the respondent asserted that he had no disciplinary complaints pending in any jurisdiction. Finally, in correspondence with the disciplinary administrator's office, the respondent falsely claimed that J.B. was fully reimbursed before the bar complaint was filed. Regarding his misconduct in California, the respondent stated that the 'issue was resolved with the California bar,' when in fact, in 1998, his license to practice law in California had been suspended. Further, the respondent failed to report his 2000 reciprocal suspension in Missouri and his 2015 disbarment in Utah.

The Utah disbarment involved intentional misappropriation.

Though the rules allow for flexibility in most cases, there are presumptive sanctions for the most egregious types of misconduct. Disbarment is the presumptive sanction when a lawyer either "knowingly engages in professional misconduct . . . with the intent to benefit the lawyer . . . and causes serious or potentially serious injury to a party" or "engages in serious criminal conduct, a necessary element of which includes . . . misappropriation, or theft." Id. 14-605(a)(1), (2). And though disbarment is the harshest sanction available in the realm of attorney misconduct—"the proverbial professional death-sentence," In re Discipline of Corey, 2012 UT 21, ¶ 40, 274 P.3d 972—we have long said that intentional misappropriation of client funds is one of, if not the most "severe" kind of misconduct in the legal profession. In re Discipline of Grimes, 2012 UT 87, ¶ 15, 297 P.3d 564. Misappropriation of client funds undermines the relationship between attorney and client and damages the legal profession as a whole. Indeed, this court and others have not minced words when addressing it, describing it as "always indefensible," In re Discipline of Babilis, 951 P.2d 207, 217 (Utah 1997); something "we cannot tolerate," In re Discipline of Johnson, 2001 UT 110, ¶ 14, 48 P.3d 881; a form of "ethical dereliction," In re Blumenstyk, 152 N.J. 158, 704 A.2d 1, 4 (1997); "the gravest form of professional misconduct," Att'y Grievance Comm'n v. Pattison, 292 Md. 599, 441 A.2d 328, 333 (1982); and an act that "reflects poorly on the entire legal profession and erodes the public's confidence in lawyers." In re Disciplinary Action Against Rooney, 709 N.W.2d 263, 270 (Minn. 2006). As we explained in Babilis, a seminal Utah case in this area, intentional misappropriation of client funds "strikes at the very foundation of the trust and honesty that are indispensable to the functioning of the attorney-client relationship and, indeed, to the functioning of the legal profession itself." 951 P.2d at 217.

The court

The only remaining issue before us is the appropriate discipline for respondent's violations. At the panel hearing, the office of the Disciplinary Administrator recommended that the respondent be disbarred. The hearing panel also unanimously recommended that the respondent be disbarred. The respondent requested probation, that he be given an opportunity to retain or reinstate his license, and that he be allowed to prove to the community that he is a responsible person.

The day prior to the hearing before this court, the respondent notified the office of the Clerk of the Appellate Courts that he would not appear in person or by counsel. The clerk informed him that pursuant to Supreme Court Rule 212(e)(5) he was required to appear and that any response from him must be submitted in writing; the clerk gave respondent the clerk's office fax number.

At the hearing before this court, the respondent did not appear. The Disciplinary Administrator recommended that the respondent be disbarred. We agree with the recommendation of both the Disciplinary Administrator and the panel, and we hold that respondent is disbarred from the practice of law in the state of Kansas.

(Mike Frisch)

May 26, 2017 in Bar Discipline & Process | Permalink | Comments (0)

Runnymede And Fat Bullies

A legal dispute involving the sale of a horse farm called Runnymede has been affirmed in part and remanded in part by the New Hampshire Supreme Court.

The farm was purchased with the understanding that it remain a horse farm in perpetuity.

The Devenports bought Runnymede Farm in 1998. The property housed a barn, an apartment, and stables, and included a grazing easement over adjoining lots. When the Devenports purchased the property, they promised to operate it as a horse farm in perpetuity, and to allow the former owner — not a party to this case — to maintain an office on site.

On July 15, 2010, the Devenports ran into Simmons — a real estate investor — at a local restaurant. Because they had been contemplating selling Runnymede, the Devenports asked Simmons if he knew someone who might be interested in purchasing the property. Simmons later told them that he was interested, and inquired into its purchase price. Bret Devenport responded that they were asking $800,000, and that they would only sell Runnymede if the buyer agreed to continue operating the property as a horse farm and to allow the former owner to maintain an office on site.

Simmons thereafter spoke with Gould — a retired Massachusetts attorney — about purchasing the property jointly with the intent to develop and/or resell it. Gould agreed, and the two created Fat Bullies “for the purpose of acquiring real estate for development or resale.” Simmons and Gould then contacted an attorney, who drafted an “option agreement” to be executed by the Devenports and Fat Bullies. The draft option agreement stated a purchase price of $700,000.

The Devenports sold Runnymede to another purchaser (the Perkinses) after learning that Fat Bullies did not intend to keep the horse farm going. 

This litigation consists of four separately filed actions, which the trial court consolidated. Fat Bullies first filed suit against the Devenports, alleging, among other things, breach of the option agreement. It thereafter filed two actions against the Perkinses alleging tortious interference with contractual relations — one seeking monetary relief, and the other seeking equitable relief. Finally, the defendants brought an action against Fat Bullies, Simmons, and Gould in which the Devenports asserted a fraudulent inducement claim, and the Devenports and Perkinses collectively asserted a claim under the Consumer Protection Act (CPA), see RSA ch. 358-A (2009 & Supp. 2016), among other things.

The court rejected some of the claims against Fat Bullies

We agree with the trial court and the Devenports that a course of conduct can violate the CPA. See, e.g., Milford Lumber Co. v. RCB Realty, 147 N.H. 15, 20 (2001). However, a series of acts only becomes a course of conduct violative of the CPA when the acts collectively constitute an “unfair or deceptive act or practice.” RSA 358-A:2; see Milford Lumber Co., 147 N.H. at 20 (concluding misrepresentations to procure materials and use of same misrepresentations to avoid payment collectively constituted “course of deceptive acts and practices”); E. Microwave, Inc. v. Am. Private Line Servs., Inc., No. 912850, 1993 WL 818931, at *2 (Mass. Super. Ct. Oct. 6, 1993) (concluding defendants engaged in a “course of conduct” violating Massachusetts Consumer Protection Act when they “deliberately siphoned” funds owed to plaintiff out of “sham corporation” in “an intentional scheme to defraud” plaintiff). Based upon our review of the record, we hold that the trial court erred in finding that Fat Bullies and Simmons engaged in a course of conduct that was “unfair or deceptive” as contemplated by the CPA. RSA 358- A:2.

Viewing Fat Bullies and Simmons’s misrepresentation in conjunction with the remainder of their course of conduct does not alter our determination. Even taken together, the acts of showing up unannounced with an attorney and an option agreement, not recommending that the Devenports obtain legal counsel, attempting to negotiate price, not explaining the meaning of the language contained in the draft agreement, threatening and attempting to enforce an option agreement, and pursuing a contentious litigation strategy would not “raise an eyebrow of someone inured to the rough and tumble of the world of commerce.” George, 162 N.H. at 129; see Barrows v. Boles, 141 N.H. 382, 390 (1996) (“‘[S]elfish bargaining and business dealings will not be enough to justify a claim for damages’ under the Consumer Protection Act.” (quoting Eastern Motor Inns, Inc. v. Ricci, 565 A.2d 1265, 1274 (R.I. 1989))); cf. Monotype Imaging Inc. v. Deluxe Corp., 883 F. Supp. 2d 317, 323 (D. Mass. 2012) (concluding that bringing of lawsuit regarding “a reasonable disagreement over the meaning of contract terms” was not consumer protection violation); Trenwick America Reinsurance Corp. v. IRC, Inc., 764 F. Supp. 2d 274, 308 (D. Mass. 2011) (considering litigation tactics part of course of conduct in violation of consumer protection law when offending party utilized “moving target [litigation] strategy” and engaged in “discovery abuses”). We cannot conclude that the subject conduct offends established public policy, is immoral, unethical, oppressive, or unscrupulous, or causes substantial injury. See Moran, 151 N.H. at 453.

The above conclusion also resulted in a finding that Fat Bullies had a basis to bring the tortious interference claim.

The web page for Historic Runnymede Farm.

Historic Runnymede Farm has long been a jewel of the East Coast equine community. The home of 45 stake-winning thoroughbred race horses—including Kentucky Derby winner “Dancer’s Image”—Runnymede has infused the seacoast with an air of sporting excitement and pastoral beauty since 1923.

The farm’s colorful owner, Peter Fuller—son of Massachusetts Governor Alvan T. Fuller—became a horse-racing legend during his lifetime, famous for his remarkable winning racing record. A champion boxer, Peter Fuller once sparred with Mohammad Ali and several other well known fighters. The story of his horse winning the 1968 Derby is an intriguing tale…one of great personal struggle, back room politics, and national controversy.

 In the years following Peter Fuller’s passing, an effort to preserve the farm’s important history took shape, and two local families have now partnered to refurbish and restore the property. With their commitment to the project, a renaissance has begun at Historic Runnymede Farm. A full-scale restoration is underway at the old barn with great care being taken to retain the original wood, fixtures, and ambience. Peter Fuller’s trophy room remains unchanged, looking exactly as it did the day that Peter Fuller won the Derby.

Today, Historic Runnymede Farm is proud to continue the farm’s long tradition of equestrian excellence, honoring the farm’s legacy as well as helping to energize the seacoast community’s long held passion for horses.

Wikipedia has the 1968 Derby story

Dancer's Image won the 1968 Kentucky Derby but was disqualified to last after traces of phenylbutazone were discovered in the mandatory post-race urinalysis. Second-place finisher Forward Pass was declared the winner. The controversy filled the sporting news of every media outlet in North America and was the cover story for Sports Illustrated magazine, which referred to it as the sports story of the year...

Owner Peter Fuller and the horse's handlers believed someone else may have been motivated to give the colt another dose of the drug and filed an appeal of the disqualification.

The Kentucky State Racing Commission examined the matter and ordered distribution of the purse with first money to Forward Pass. Fuller took legal action, and in December 1970 a Kentucky Court awarded first-place money to Dancer's Image.  That decision was overturned on appeal in April 1972 by Kentucky's highest court in Kentucky State Racing Comm'n v. Fuller, 481 S.W.2d 298 (Ky. 1972).

Controversy and speculation still surround the incident, and the New York Times calls the ruling the "most controversial Kentucky Derby ever". Forty years after the disqualification, owner Peter Fuller still believed he was a victim of a set-up, due to his being a wealthy civil rights sympathizer from Boston who offended the Kentucky racing aristocracy by donating Dancer's Image's $62,000 prize for a previous victory to Coretta Scott King two days after her husband's murder. Fuller said he had anticipated that someone might interfere with his colt and asked Churchill Downs officials to provide extra security before the race, but they denied the request. As of 2008, the Churchill Downs media guide for the Derby still included the official chart showing Dancer's Image as the winner.

By 1986, phenylbutazone was so commonly used that in that year's Kentucky Derby, thirteen of the sixteen entrants were running on the medication.

(Mike Frisch)

May 26, 2017 | Permalink | Comments (0)

Not Utterly Refuted

The New York Appellate Division for the Second Judicial Department held that a legal malpractice action should not have been dismissed in a case where the defendant attorney's alleged legal malpractice involved prosecution of a legal malpractice claim

In this action to recover damages for legal malpractice, the complaint alleges that the defendants, Anthony P. Gallo, P.C., and Anthony P. Gallo (hereinafter together Gallo), who represented the plaintiff in a prior legal malpractice action against the plaintiff’s former attorneys, Demartin & Rizzo, P.C., and Joseph N. Rizzo, Jr. (hereinafter together Rizzo), negligently failed to respond to certain discovery demands by Rizzo, which resulted in the Supreme Court (Gazzillo, J.) precluding the introduction of evidence in the plaintiff’s legal malpractice action against Rizzo (4777 Food Serv. Corp. v DeMartin & Rizzo, P.C., 2013 NY Slip Op 33007 [U] [Sup Ct, Nassau County]; hereinafter the Rizzo order). The complaint further alleges that, as a result of this evidence being precluded, the court which issued the Rizzo order found that the plaintiff had failed to meet its burden of proof as to the element of damages sustained as a result of Rizzo’s malpractice.

The trial court found damages were speculative but 

Here, the Rizzo order does not utterly refute the allegations in the complaint, nor does it establish a defense as a matter of law. The order concludes, in part, that there was no proof of actual damages presented by the plaintiff, due to the plaintiff’s failure to respond to at least two of Rizzo’s discovery demands, which resulted in the preclusion of the damages evidence. The Rizzo order then states, referring to the precluded evidence, “[m]oreover, even if, arguendo the [c]ourt were to overlook that deficiency, its probative value is highly suspect” (4777 Food Serv. Corp. v DeMartin & Rizzo, P.C., 2013 NY Slip Op 33007 [U], *9). Contrary to the Supreme Court’s conclusion, this alternate holding, which constitutes dicta, was not a finding on the merits and did not utterly refute the allegations in the complaint against Gallo (see O’Connor v G & R Packing Co., 53 NY2d 278; Malloy v Trombley, 50 NY2d 46, 50; Pollicino v Roemer & Featherstonhaugh, 277 AD2d 666, 667-668). Accordingly, the Supreme Court should have denied Gallo’s motion pursuant to CPLR 3211(a) to dismiss the complaint.

(Mike Frisch)

May 26, 2017 in Clients | Permalink | Comments (0)