Legal Profession Blog

No Ace In The Hole

The Tennessee  Court of Appels affirmed the denial of a recusal motion in a contentious domestic relations matter

The incident giving rise to the recusal motion was an alleged conversation between Petitioner and Ms. Morgan, Mr. Baker’s counsel, that occurred on May 30, 2021; however, Petitioner took no action until her motion for recusal was filed on June 8, 2022. In her affidavit filed in support of the motion for recusal, Petitioner alleged that Ms. Morgan told
her that she had influence over the judge, that she had “pull” with the judge. In the affidavit Ms. Morgan filed in response to the allegations, she denied making any such statements to Petitioner or anyone else. Further, at the hearing on the motion for recusal, Judge Benningfield categorized Petitioner’s allegations as “outlandish.” He also stated, “Ms. Morgan has appealed any number of my cases over the years, so if we were in cahoots, that wouldn’t have been necessary.”

The salient fact before this court is that Petitioner failed to file her motion for recusal for more than one year after she learned of the facts forming the basis for the motion. Whether she did so to await a favorable decision from the trial court or to preserve the event as an “ace in the hole” is insignificant. See Gotwald, 768 S.W.2d at 694. What is significant is that the failure to assert those facts in a timely manner “results in a waiver of a party’s right to question a judge’s impartiality.” Kinard, 986 S.W.2d at 228. Based on the foregoing, we hold that Petitioner has waived the issue of bias.

(Mike Frisch)

When Positive Is a Bad Thing

The Indiana Supreme Court found that an attorney had violated disciplinary probation

On June 16, 2022, the Commission filed a “Verified Notice of Probation Violation,” pursuant to Admission and Discipline Rule 23(16)(c), asserting Respondent tested positive for methamphetamine in March 2022, a result verified by a confirmatory positive test in May 2022. Respondent has filed a response acknowledging his probation violation and requesting to continue his probationary period with additional requirements.

No second chance

Upon consideration of the materials before us, we conclude that revocation of probation is warranted and that the full balance of Respondent’s stayed suspension should be actively served without automatic reinstatement. Accordingly, Respondent’s probation is hereby revoked. Respondent shall be suspended from the practice of law for a period of not less than 275 days, without automatic reinstatement, beginning September 15, 2022.

(Mike Frisch)

Also Worthy Of Mention

The Kansas Supreme Court affirmed multiple findings of rule violations and ordered an attorney's one year suspension

The respondent failed to provide J.D. and C.D. with competent representation. The respondent recognized his lack of competence in J.D. and C.D.'s case, to some extent, stating that he felt 'overwhelmed' and believed that the arbitration and litigation with the home builder was 'monster litigation for a solo practitioner' like himself. The respondent testified, 'there's no way a sole practitioner could represent or go through that on his own. No way.' The respondent failed to timely and properly file appeals on behalf of J.D. and C.D. In addition, the respondent accepted assistance from J.D. and C.D. in the case that would ordinarily be expected to be provided by a lawyer or the lawyer's staff. Both the United States District Court for the District of Kansas and the Court of Appeals noted significant deficiencies in the respondent's filings. Six notices of appeal were filed on behalf of J.D. and C.D. between October 26, 2015 and September 1, 2016, in the Court of Appeals. Two of these notices were prematurely filed. Three of the notices were never docketed with the Court of Appeals. The respondent failed to appropriately respond to the Court of Appeals' show cause order regarding consolidation, filed a brief on behalf of J.D. and C.D. that contained 'convoluted arguments' and that was 'nearly impossible to square . . . with the record on appeal,' and ignored the Court of Appeals' order to address jurisdiction in the appellate brief and only briefly addressed jurisdiction in the reply brief.

The court overruled the hearing panel on the refund amount based on a rejected settlement offer

We reject the panel's reasoning and agree with the Disciplinary Administrator's recommendation regarding the amount respondent is required to refund J.D. and C.D. The refusal of a settlement offer, especially early in the litigation when the offer is substantially lower than the plaintiffs and counsel have valued their damages, should not be considered a triggering event that entitles consideration of an attorney fee owed to counsel. This is especially true in this instance when nearly all the litigation expenses were incurred following the failed settlement negotiations. The hearing panel found that J.D. and C.D. paid $46,910 to the respondent and contributed significant hours working on their own case. The case was complex. It involved three mediation sessions, an arbitration session, state court litigation, and federal litigation. The case also involved an appeal to the Court of Appeals and petition for review to the Kansas Supreme Court. Overall, the case lasted more than 10 years. The respondent represented J.D. and C.D. throughout the entire case at every level. Regarding this representation, the hearing panel found—and the respondent did not contest—that multiple serious rule violations occurred at nearly every phase of the litigation and caused most of the expenses incurred by J.D. and C.D. While the hearing panel recognized that the respondent expended a substantial amount of time to handle the case, this does not equate to money that the respondent is entitled to via the initial fee agreement. We conclude the amount owed to J.D. and C.D. is $46,910.

Blame shifting

Also worthy of mention is the troubling decision of both the respondent and counsel in this disciplinary action to cast blame on the complainants. Characterizations of the complainants as difficult and impossible permeated the hearings in this matter. Counsel also opined that the respondent should have "kicked them [complainants] to the side" during oral presentation to this court. Both respondent and counsel paradoxically took the position that the complainants should have filed a malpractice action or some sort of fee claim in a separate action to recoup their losses as a result of respondent's inept legal representation.

(Mike Frisch)

Removal Recommended

The Michigan Judicial Tenure Commission has recommended the removal of a judge for misconduct involving her abused grandsons and the investigation of the abuse

The totality of the evidence shows that Respondent was aware that her grandsons were being abused by her son, she covered it up, and she lied about knowing about it. Within two days after the boys were finally rescued in late June 2018, Respondent told the CPS investigator, Ms. Apple, that Respondent had not realized that “it” (meaning the abuse) was “this bad.” (Tr. pp 1305-1306.) Respondent’s statement to Ms. Apple revealed that Respondent knew her son was abusing her grandsons. Respondent now denies this. (Tr. p 2034.) She claims that, subjectively, she was referring only to civilized punishments her son imposed – banishing the boys to their rooms or prohibiting them from using their iPads. (Tr. pp. 20752076.) However, Respondent admits she did not say anything like that to Ms. Apple, (id. p. 2034/16-20), nor does she explain why she would regard such non-physical discipline as so “bad” in comparison to everything else she knew about. Again, her after-the-fact explanation is a thinly veiled attempt to escape a finding of misconduct in this proceeding.

Proposed sanction

The preponderance of evidence establishes that Respondent committed misconduct as alleged under Counts I and II of the Formal Complaint, as amended. That misconduct included multiple knowingly false statements under oath while she was a judge. The misconduct occurred before Respondent became a judge and continued after she became a judge. Brown observed that “[t]he most fundamental premise of the rule of law is that equivalent misconduct should be treated equivalently.” 461 Mich at 1292.

The precedent of the Michigan Supreme Court discussed above establishes that judges who lie under oath seeking to manipulate legal proceedings in their self-interested favor, which is exactly what Respondent did, must be removed.

(Mike frisch)

Their Unorthodox Litigation

A marriage that was not all that it appeared to be is the subject of a Delaware Court of Chancery opinion

Fashion designer Julia Haart and telecom billionaire Silvio Scaglia have a carefully curated public image supporting both their business partnership and their marriage. They met through work at a luxury fashion brand, and married in a lavish ceremony. Scaglia brought his new wife into the leadership of one of his businesses, a major model management company. Haart and Scaglia present as though they own and run that business as equals. In their free time, the couple maintains a glamorous lifestyle. They host friends and family in their sprawling Tribeca penthouse. They drive matching Bentleys. And television cameras follow their every move for Haart’s Netflix reality series, My Unorthodox Life. But their public image differs from their formal business arrangement. That tension is the central issue in this case.

Behind the cameras and bright lights is a pair of Delaware entities. The first is the holding company for the modeling business, Elite World Group, LLC (“EWG”). The second is the couple’s umbrella company, Freedom Holding, Inc. (“Freedom”), which holds EWG and the couple’s other personal and business investments. Haart and Scaglia are co-owners of Freedom; Haart was an EWG director and its CEO; and this opinion assumes Haart was a Freedom director. To the public, Haart and Scaglia presented a united front, telling potential investors, other third parties, and tax authorities that they owned Freedom equally. But behind
the scenes, Freedom’s internal documents told a different story.

Scaglia formed Freedom and initially held all one hundred shares of its common stock. In December 2018, anticipating his marriage to Haart, Scaglia caused Freedom to issue him 123,665 preferred shares of Freedom stock. After the couple married in June 2019, Scaglia transferred Haart fifty of Freedom’s common shares, but did not mention or transfer any preferred shares. In March 2020, Haart learned about the preferred shares, and demanded that the two be equal partners. In response, Scaglia executed a stock power, transferring 61,832, or 49.9995957%, of the preferred shares to Haart. Scaglia thus maintained a one-share voting advantage over Haart. Haart discovered this discrepancy as the couple’s marriage deteriorated, but continued to insist she was an equal owner.

In the final moments of their marriage, Scaglia used his control over Freedom to oust Haart from her positions at Freedom and EWG; a majority of EWG’s board, including Scaglia, also removed her from her positions at EWG. Haart argues that because she is an equal owner of all classes of Freedom stock, Scaglia could not unilaterally remove her from her Freedom directorship, Freedom is deadlocked, and neither Freedom nor EWG’s board could remove her from her EWG roles. She brings declaratory judgment claims to resolve who controls Freedom and EWG under 8 Del. C. § 225 and 6 Del. C. § 18-110, a claim to dissolve Freedom under 8 Del. C. § 226, and a breach of fiduciary duty claim. Scaglia brought reciprocal counterclaims for declaratory judgments.

This post-trial opinion on the declaratory judgment and dissolution claims finds that Haart does not own half of Freedom’s preferred shares, and so is not entitled to relief under any of her theories. Despite the appearance of an equal partnership, the evidence reveals that Haart never owned an equal stake of Freedom’s preferred stock. For the reasons that follow, judgment is entered for Scaglia on all those counts.

(Mike Frisch)

Disclosures Lead To Proposed Censure

An Illinois Hearing Board has recommended a public censure for an attorney's disclosure of confidential medical records

Respondent admits he provided two documents to his expert witness after the court had entered an order deeming them privileged and precluding their use in a medical negligence matter. The Hearing Board found Respondent acted knowingly and intentionally when he disobeyed the court’s order, and further found that his conduct prejudiced the administration of justice.

B. Admitted Facts and Evidence Considered

Respondent has been licensed to practice law in Illinois since 1979. (Tr. 77). His practice focuses on personal injury matters, primarily in the area of medical negligence. (Tr. 78-79). Respondent testified that he plans to retire in the next two years. (Tr. 114).

The charges in this matter pertain to Respondent’s representation of the estate of Eugene Wheat, who died in 2016 following a catheterization procedure performed by Patrick Murphy, M.D., at Advocate BroMenn Medical Center (Advocate). While investigating the matter at the request of Wheat’s family, Respondent learned that Advocate suspended Dr. Murphy’s staff privileges after Wheat’s death and Dr. Murphy filed a lawsuit challenging the suspension, Patrick Murphy v. Advocate BroMenn Medical Center, 2016 CH 122 (Circuit Court of McLean County). Respondent then sat in on a hearing in the 2016 CH 122 matter and learned it involved Dr. Murphy’s treatment of Wheat. On or around July 19, 2017, Respondent reviewed the court file for 2016 CH 122 and obtained copies of certain documents from the circuit clerk, including a peer review report generated by an Advocate Intraprofessional Conference Committee (ICC report), and a letter dated June 1, 2016 to Murphy from Advocate’s president of medical staff (June 1
letter). (Tr. 127; Resp. Ex. 3). In Respondent’s view, the ICC report “pretty well laid out what [Wheat’s] case against Murphy was”. (Tr. 128). The June 1 letter contained most of the same information as the ICC report. (Tr. 129).

In the Wheat litigation

the court entered an order denying the Motion for Judicial Notice and determining, in relevant part, that the ICC report was privileged and confidential under the Medical Studies Act, 735 ILCS 5/8-2101 et seq., because it contained recommendations arising from the peer review process. The court further determined that the June 1 letter was privileged in part because it contained the results of the peer review process and recommendations and conclusions arising from the peer review process.

Intent

Respondent understood the court’s order and understood he was not permitted to disclose the ICC report or unredacted June 1 letter. There was no testimony from Respondent that he forgot about or misunderstood the court’s ruling. On the contrary, Respondent’s own testimony established that he purposely provided the privileged information to Dr. Sanborn to focus Dr. Sanborn’s attention on a particular time period. Respondent also testified that the content of Dr. Sanborn’s written opinions, which Respondent helped draft, mirrored the language in the ICC report to a certain extent because Respondent wanted to make a record for purposes of appeal. The logical inference from this testimony is that Respondent disclosed the privileged documents with the intention that information contained therein would make its way into Dr. Sanborn’s opinions. Thus, the evidence clearly and convincingly established that Respondent’s conduct was not accidental or inadvertent.

The hearing board found substantial mitigation. (Mike Frisch)

The Five Required Disclosures

The District of Columbia Court of Appeals has affirmed a finding of reckless misappropriation and ordered disbarment.

The matter involves the obligations of disclosure for advanced fees

We agree with the Hearing Committee’s determination that Mr. Ponds’s misappropriation was at a minimum reckless. In re Mance is not clear in all respects. See In re Haar, 270 A.3d 286, 295 (D.C. 2022) (In re Mance is unclear about whether attorneys were required to apply its requirements retroactively to funds received from clients before In re Mance was decided). On the issues raised in this case, though, In re Mance is quite clear: (1) flat fees paid in advance are client property and must be treated accordingly unless the client gives informed consent to a different arrangement; (2) informed consent requires an attorney to discuss the “material risks of and reasonably available alternatives to the proposed course of conduct”; and (3) to obtain informed consent in this context, an attorney must “expressly communicate to the client verbally and in writing” five specific pieces of information. In re Mance, 980 A.2d at 1206-07 (internal quotation marks omitted); see also supra pp. 3-4 (listing five required disclosures).

Mr. Ponds’s fee agreement and his conduct in this case are fundamentally incompatible with the requirements of In re Mance. Rather than making clear that the unearned portion of a flat fee must be returned, the fee agreement indicated precisely the opposite. Rather than complying with the requirement to return unearned advance fees, Mr. Ponds refused, despite an arbitral award requiring him to comply. As the Hearing Committee explained, the fee agreement also omits other topics specifically required by In re Mance, and neither the fee agreement nor Mr. Ponds’s discussion with Mr. Young provided the information that would have been necessary for Mr. Young to have given informed consent.

We view it as quite implausible that an attorney who was trying in good faith to comply with the requirements of In re Mance would have drafted the fee agreement in this case or would have acted as Mr. Ponds has acted in this case. We need not rest, however, on a conclusion of subjective bad faith. Even assuming that Mr. Ponds may have subjectively believed that the fee agreement and his conduct were permissible, we think it quite clear that Mr. Ponds at a minimum demonstrated “conscious indifference” to the requirements of In re Mance. See, e.g., In re Gray, 224 A.3d at 1232 (“Reckless misconduct requires a conscious choice of a course of action, either with knowledge of the danger to others involved in it or with knowledge of facts that would disclose this danger to any reasonable person.” (internal quotation marks omitted); see also, e.g., In re Cloud, 939 A.2d 653, 661 (D.C. 2007) (holding that attorney’s failure to pay client “back within a reasonable time after discovering [attorney’s] error” supports finding of reckless misappropriation); In re Anderson, 778 A.2d 330, 339 (D.C. 2001) (reckless misappropriation may be shown by proof of “a pattern or course of conduct demonstrating an unacceptable disregard for the welfare of entrusted funds”).

(Mike Frisch)

Chief Judge Sanctioned

A stipulated sanction approved by the Colorado Presiding Disciplinary Judge involved misconduct by a judicial officer

The Presiding Disciplinary Judge approved the parties’ stipulation to discipline and suspended Mark Duncan Thompson (attorney registration number 22091) for six months, all stayed pending Thompson’s successful completion of a one-year period of probation. Thompson’s sanction, which takes into account significant mitigating factors, took effect on July 26, 2022. The order approving the stipulation sanctions Thompson in his capacity as a Colorado-licensed lawyer; the Colorado Commission on Judicial Discipline, which maintains concurrent jurisdiction, is charged with disciplining Thompson in his capacity as a judicial officer. Thompson’s discipline arises from his guilty plea to an amended count of disorderly conduct.

The plea was based on a heated verbal confrontation with his twenty-two year-old stepson in front of and inside Thompson’s home. At one point during the confrontation, Thompson recklessly displayed a firearm, alarming his stepson. His stepson left the house and called 911. At the time of the offense, Thompson was the sitting Chief Judge for Colorado’s Fifth Judicial District. The district attorney’s office and the judges for the district recused themselves and arranged for the appointment of a special prosecutor and judge.

Following his guilty plea, Thompson was sentenced to one year of unsupervised probation with standard probationary terms as well as the following special terms and conditions: he was required to remain in the anger management treatment he had been undergoing since the incident and provide a release to his current therapist and any successor or other treatment provider authorizing full disclosure of information to the special prosecutor and the court; he was required to satisfactorily complete requirements of disciplinary authorities resulting from his conviction; and he was required to timely provide to the special prosecutor and the judge proof that he had completed the probationary terms and conditions.

(Mike Frisch)

Level Two

The Colorado Presiding Disciplinary Judge approved a stipulated three-year suspension

On January 21, 2022, Delanghe pleaded guilty in federal court to two counts of possession with the intent to distribute a controlled substance. The factual predicate involved two incidents in 2019 when a confidential source working with the Drug Enforcement Administration (“DEA”) arranged to purchase cocaine from Delanghe.

In March 2019, DEA agents provided the confidential source $3,000.00 and drove the confidential source to a location near Delanghe’s home. The agents watched the confidential source enter Delanghe’s home during surveillance. The confidential source used the funds to purchase from Delanghe two ounces of cocaine. DEA agents verified through laboratory testing and analysis that the net weight of the purchased cocaine was 55.4 grams.

The next month, the confidential source purchased two ounces of cocaine from Delanghe with $2,700.00 provided by DEA agents while DEA agents conducted surveillance. Laboratory analysis confirmed that the confidential source had purchased cocaine, with a net weight of 55.5 grams.

In Colorado, distribution or possession with intent to distribute 55.4 grams of cocaine is a level two drug felony.

(Mike Frisch)

Gunshot Wound Home Remedies Draw Reciprocal Censure

A reciprocal censure has been imposed by the New York Appellate Division for the Second Judicial Department based on facts stipulated to in a New Jersey censure

On February 2, 2018, the respondent was attempting to secure her legally owned 9 millimeter semiautomatic handgun for transport when it inadvertently discharged. The discharged round, which traveled through a wall in the respondent’s home, struck a minor child in the right thigh and buttock. After examining the minor’s wound, the respondent cleaned it, and wrapped it with a sweatshirt that had been on the floor, but failed to summon medical or emergency assistance.

Thereafter, the respondent telephoned her former husband, Wouter Smits, who is a part-time emergency medical technician and surgical technician, to ask him to examine the minor’s wound. Wouter, however, did not answer the telephone and the respondent left a voice message which failed to reveal that the minor had been shot. When Wouter returned the respondent’s call approximately 35 minutes later, the respondent informed him of the gun’s discharge and the injury to the minor. Wouter replied that he would examine the wound after he went to Home Depot to purchase painting supplies for the respondent’s new home.

Approximately 1 hour and 25 minutes after the minor had been injured, Wouter arrived and examined the minor, at which time Wouter determined that the wound likely required stitches. Despite this, the respondent still did not seek medical care for the minor.

Subsequently, more than two hours after the firearm had been discharged, the Wayne police arrived at the residence to perform a welfare check after being informed of the incident by a friend of the minor who had observed a social media post wherein the minor revealed that the respondent had shot him. The respondent admitted to the police that she had accidently shot the minor, and claimed that she had been preparing to take the minor to the hospital. The police, after
examining the minor’s wound, observed that it was still bleeding and called an ambulance. The ambulance ultimately arrived almost 2½ hours after the initial injury.

Both Respondent and Wouter were charged and entered a pretrial intervention program. (Mike Frisch)

Giuliani Hearing Dates

District of Columbia Disciplinary Counsel has filed a statement in the Giuliani prosecution notifying the Hearing Committee that the parties propose a hearing from October 24 to November 4, 2022.

The parties will file their exhibit and witness lists on or before October 7 and expert reports (if any) on that same date. 

It has not been determined if the hearing will be in-person or over Zoom.

Respondent is represented the Hon. John Leventhal and Barry Kamins of Aidala, Bertuna & Kamins. 

The pleadings can be accessed at this link by clicking on Cases of Public Interest. (Mike Frisch)

Caveat Emptor

Dismissal of a legal malpractice action was affirmed by the New York Appellate Division for the First Judicial Department

This legal malpractice action stems from defendant's representation of plaintiff in a prior action in which plaintiff sought to recover damages he allegedly sustained after purchasing at auction a particular medal that he asserted was worth far less than his winning bid. Plaintiff alleges that defendant failed to timely sue the proper parties — namely, Stack's LLC and its auctioneers — leading to the dismissal of the prior action and precluding any recovery by plaintiff for alleged misrepresentations by Stack's and the auctioneers regarding the materials comprising the medal.

Supreme Court properly dismissed plaintiff's legal malpractice cause of action in the original complaint because he failed to allege that "but for" defendant's negligent conduct, he would have prevailed in the underlying action (Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 272 [1st Dept 2004]; see Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). Plaintiff's citation to a ruling in the underlying action denying dismissal of his fraud claim, among others, did not, without more, show that he would have prevailed in the underlying action had defendant timely commenced it by naming the proper parties in the original complaint (see Sonnenschine v Giacomo, 295 AD2d 287, 287 [1st Dept 2002]).

Further, Supreme Court providently exercised its discretion in denying plaintiff's motion for leave to amend the complaint because the claims asserted in the proposed amended complaint are devoid of merit (see Lewis v Pierce Bainbridge Beck Price & Hecht, LLP, 205 AD3d 618 [1st Dept 2022]). With respect to the underlying transaction giving rise to plaintiff's legal malpractice action, the proposed amended complaint alleges, among other things, that plaintiff purchased a Russian military order (the medal) at an auction conducted by Stack's and its auctioneers; that Stack's and the auctioneers represented in the auction catalog and at auction that the medal was comprised of "brilliants," which plaintiff claims is a term commonly understood in the numismatic trade to mean diamonds; that the medal was sealed in plastic, restricting plaintiff's ability to inspect the medal prior to auction; that plaintiff justifiably relied on the catalog representation that the medal was comprised of brilliants in bidding on the medal, including the winning bid of $600,000; that plaintiff discovered after the auction that the medal was not comprised of brilliants, but instead was comprised of inferior materials (i.e., glass or lead crystals), drastically affecting the value of the medal; and that plaintiff suffered both direct and consequential damages because he paid significantly more for the medal than its worth.

Plaintiff could not have prevailed in the underlying action — and, therefore, cannot prevail in this legal malpractice action (see Warshaw Burnstein Cohen Schlesinger & Kuh, LLP v Longmire, 106 AD3d 536, 536 [1st Dept 2013]) — because plaintiff's fraud and breach of contract claims against Stack's and the auctioneers would have been flatly defeated by the various disclaimers and conditions in the terms of sale contained in the auction catalog.

By placing a bid in the auction, plaintiff, a numismatic dealer who buys, sells, and collects Russian coins and medals, acknowledged receipt of the auction catalog and agreed to adhere to the terms of sale (see Terms of Sale ¶¶ 5, 40). Bidders were "encouraged to carefully examine all lots prior to sale," because the lots would not be shown at the sale (Terms of Sale ¶ 15, see Terms of Sale ¶ 26). Stack's assumed no liability for the facts stated concerning the items in the auction, except as specified in the terms of sale (Terms of Sale ¶¶ 15, 18[k]; see Terms of Sale ¶ 31 ["Stack's hereby disclaims all liability for damages, incidental, consequential or otherwise, arising out of or in connection with the sale of any property by Stack's to purchaser"]). While offering a limited warranty "that any numismatic item sold is authentic (i.e., not counterfeit, that its date or mintmark has not been altered, and that the coin has not been repaired as those terms are used in the trade)," Stack's made clear that "all other warranties of authenticity of authorship, whether express or implied, [were] disclaimed" (Terms of Sale ¶ 16). Elsewhere in the terms of sale, Stack's warned bidders (in bold text) that, "[e]xcept as otherwise expressly stated in the Terms of Sale, Stack's and its agents and employees make no warranties or guaranties or representations, and expressly disclaim all warranties and guaranties and representations, including, without limitation, a warranty of merchantability, in connection with any numismatic properties sold by Stack's" (Terms of Sale ¶ 18[h]; see Terms of Sale ¶ 18[i] ["All oral and written statements made by Stack's are statements of opinion only and are not warranties or representations of any kind, unless stated as a specific written warranty, and no employee or agent of Stack's has authority to vary or alter these Terms of Sale . . ."]).

(Mike Frisch)

Dishonored Check Led To Interim Suspension

The New York Appellate Division for the First Judicial Department has ordered an interim suspension of an attorney

In 2015, respondent was retained to arrange and handle the sale of a property located in Queens County. In January 2016, a potential purchaser remitted a down payment, which respondent deposited into her escrow account. The transaction never closed. However, bank records show that between July 2017 and November 2019, respondent repeatedly invaded the purchaser's down payment.

In January 2020, the Lawyers' Fund for Client Protection notified the AGC that a $5,000 check issued from respondent's IOLA account on November 27, 2019, was dishonored due to insufficient funds. The AGC requested that respondent submit a written answer explaining the reason for the dishonored check and directed her to produce specified bookkeeping records for the six-month period preceding the date of the check at issue, which she is obligated to maintain under Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.15(d)(1). By an affirmation and supplemental response, respondent asserted, inter alia, that the dishonored check was attributable to complications with the real estate transaction at issue and a bookkeeping related error on her part, but that the intended third party had ultimately received the funds they were owed.

The AGC subpoenaed respondent's escrow account records directly from her bank and she appeared before the AGC on September 28, 2021, for an examination under oath.

During the examination under oath, respondent did not provide credible corroborating evidence to support her claim that some of the withdrawals were for expenses related to her client. During the period at issue, respondent made check disbursements to herself and made cash withdrawals from her escrow account, which is prohibited under rule 1.15(e).

Contentions

Respondent states that an interim suspension would adversely affect her clients. She admits that some monies were for her own use, but some were payable to others on unrelated matters. In reply, the AGC states that respondent's testimony is evidence that she is unfamiliar with the rules of professional conduct.

(Mike Frisch)

Long COVID

From the Florida bar discipline summaries for August 2022

Bradley Nephase Laurent, 8615 Commodity Circle, Suite 6, Orlando, emergency suspended effective 30 days following a July 14 court order but to cease accepting new clients as of July 14. (Admitted to practice: 2005) Laurent misappropriated client funds from his law office trust account, some of which he repaid from the proceeds of a Paycheck Protection Program loan he obtained on behalf of his law firm for COVID-19 relief. (Case No: SC22-851)

(Mike Frisch)

The Judge From Cookeville

The Tennessee Board of Judicial Conduct has suspended a judge for 30 days.

One set of allegations involved his public comments in opioid litigation where he took on the role of public advocate rather than impartial judge.

A second set involved his communications with a woman in an adoption matter which ranged from "flirtatious to sexual before, during and after" the proceeding.

He requested intimate photos and had sex with her in a hotel in Cookeville. He also requested she use an app that would automatically delete their communications.

He nonetheless did not recuse himself and entered an order granted the husband's adoption and had failed to respond to the notice of charges.

The order notes that he had been previously reprimanded for his social media communications with multiple women.

Ten News reported on the prior matter

Young presides in the 13th Judicial District, which includes Putnam and Cumberland counties. He often handles family matters.

An investigation by the board in August found Young sent inappropriate messages to various women from 2015 to this year. Besides sending flirtatious and even sexual messages, he sometimes asked for photographs, the investigation found.

Most of his communications on the social media platforms occurred while he used a photo showing him in his black judicial robes.

Among the women who got his messages were one whose firm has business in his court and an unnamed litigant who had a child custody case before him, the investigation found.

His activities at times put lawyers in awkward positions of having to seek counsel on whether they needed to disclose to their clients what they knew about Young, the board found.

In at least one case alluded to in the reprimand, board Chairman Dee David Gay noted that a party knew about the judge's activities and used it to their "strategic advantage."

Judges are supposed to act professionally and personally in a way that is above reproach. They're supposed to conduct themselves in a way that instills confidence by the public.

The board said Young's behavior failed to follow that standard of conduct.

Young cooperated with the investigation and admitted what he'd done, the Oct. 5 letter from Gay states. That worked in his favor.

Mercifully, his term of office expires on August 31, 2022. (Mike Frisch)

Anti-Semitic Letter, Conflict Draws Indefinite Suspension

The Maryland Court of Appeals has indefinitely suspended an attorney for a conflict of interest and because she had

sent an antisemitic and highly offensive 20-page letter to a client and then later knowingly and intentionally misrepresented to Bar Counsel that she had sent the letter by mistake.

The client matter involved an employment dispute

The conflict

Ms. Maiden created a conflict of interest by making herself a co-claimant along with Mr. Riese for the purpose of asserting a cause of action under 42 U.S.C. § 1981...

Ms. Maiden also created a conflict of interest by claiming a 50% share of any punitive damages Mr. Riese might obtain. Although a “reasonable contingent fee,” “subject to Rule []1.5,” is permitted as an exception to the general rule prohibiting an attorney from acquiring a proprietary interest in a cause of action, Md. Rule 1.8(i)(2), Ms. Maiden’s demand for a 50% share of any punitive damages award was premised at least in part on her status as a co-claimant with Mr. Riese—and her stated belief that she was a more appropriate recipient of those damages than he was—not on her legal work. Ms. Maiden thus violated Rules 1.7 and 1.8(i) by creating a conflict of interest without obtaining Mr. Riese’s written informed consent.

The letter

With respect to the antisemitic and highly offensive nature of Ms. Maiden’s statements, the excerpts recited above speak for themselves. The 20-page letter is laced with statements that are offensive, demeaning, personally insulting, profane, and premised on harmful religious, racial, and ethnic stereotypes.

Sanction

The Commission recommends that Ms. Maiden be indefinitely suspended from the practice of law. Ms. Maiden neither responded to that recommendation nor offered a contrary recommendation.

Prior cases involving epithets

we concluded that none of our precedents is directly analogous. Although the conduct in Markey carried on for a significantly longer period, the statements at issue there were directed only to like-minded co-workers and were never intended to be shared outside of that group. Ms. Maiden’s conduct was brief in time but extensive in volume and severity, and her offensive statements were sent to and intended to be read by their subject, who was also her client. It is also notable that neither Basinger nor Markey involved other violations, such as the significant conflict-of-interest, competence, and dishonesty violations at issue here, which further call into question Ms. Maiden’s fitness to represent clients at this time.

(Mike Frisch)

The Eagle Lands And Remands

The Missouri Supreme Court reversed and remanded a dispute between the children/heirs of conservative activist Phyllis Schlafly as described in the court's summary

Bruce Schlafly (Son) and Anne Cori (Daughter) are children of political activist Phyllis Schlafly and beneficiaries of her trust. Prior to and after Schlafly’s death, conflict arose between Son and Daughter as to control over and the direction of the political entities Schlafly created (Eagle Entities). Daughter filed several lawsuits against and related to Eagle Entities. She also contested Schlafly’s trust, which Schlafly had amended prior to her death to reduce Daughter’s interest by the defense costs stemming from the lawsuits. Daughter named Son as a defendant in the trust contest action. Daughter later dismissed the trust contest once a settlement was reached. In 2020, Son sued Daughter for abuse of process. He alleged Daughter’s legal actions, including the trust contest, were motivated partially by animosity toward Son and other relatives. Son further alleged Daughter sought to force him to resign from Eagle Entities, grant her control and use of certain Eagle Entities property, halt his involvement with the political operations, cede his inheritance, require him to expend large sums on litigation, extract items of value from him, hinder his medical practice, create media coverage regarding her claims, curry public favor, legitimize her standing regarding one of the Eagle Entities, improve her bid to take over Eagle Entities and its assets, obtain advantages and force favorable outcomes in other litigation, harass Son, and reduce trust assets. Daughter moved to dismiss the action, and the circuit court sustained her motion. Son appeals.

Court en banc holds: Son sufficiently alleged an improper use of process for purposes of his abuse of process claim. Improper use of process means some willful, definite act not authorized by the process or aimed at an objective not legitimate in the proper employment of such process. The relevant question is whether process has been used to accomplish some unlawful end or to compel the opposite party to do some collateral thing which he or she could not be compelled to do legally. In his petition, Son alleged Daughter instituted the trust contest to achieve unlawful ends, to compel Son to act in a manner in which he could not be legally compelled, and to obtain results outside of the scope of process. Son further alleged Daughter used the trust contest not to adjudicate the validity of the trust amendments but for improper ulterior motives, such as gaining an advantage in other litigation, extorting items of value, improving her standing for claims regarding control of Eagle Entities, silencing Son, pressuring him regarding his positions with the two related funds, harassing him, and hindering his medical license. Son also asserted Daughter utilized improper litigation tactics, such as engaging in extensive discovery and seeking the appointment of a special fiduciary or master, all to increase costs. Taking these allegations as true, as the Court is required to do under the standard of review, Son sufficiently pleaded improper use of process.

(Mike Frisch)

Yes I Have A Banana

An attorney's text messages to a client's daughter led to an agreed reprimand and probation for 18 months  from the Arizona Presiding Disciplinary Judge.

The recipient was Respondent's primary point of contact in the representation

On November 12, 2020, Respondent asked AD via text, “Got any good pics?”, hmm, You should send me something. Unless ur a wuss, lol. Sorry … are you a vegan or a meat eater?” Respondent then sent emojis of a baguette and a bone to AD. AD did not respond to those messages.

On November 24, 2020, Respondent sent AD a photo of a banana and wrote, “Hoes that?”, “Did you like my banana?”. AD responded “lol that’s funny.” Respondent then responded, “U like the real deal?; Are u willing to trade pics with
me?”

On November 26, 2020, Respondent wrote: “What’s the best time to send you the pics?” AD did not respond to that message.

On November 27, 2020, Respondent wrote, “When does [AD] want the Hammer?” AD responded “What.” Respondent responded “when do you want me to send the hammer pic, lol.” AD responded: “I hope you had a wonderful Thanksgiving! Is there any updates on the case?”. Respondent responded: “Yes, and I’ll take care of it as soon as I return[.] You too. I will be aggressive. And focused. I’m sorry, I misunderstood.”

 In responding to the State Bar’s screening investigation and communicating with the Attorney Discipline Probable Cause Committee Respondent acknowledged that his text messages were inappropriate and accepted responsibility for his unprofessional conduct.

The complainant was A.D.'s father, who objected to the agreed sanction

In his objection to the Agreement, the complainant states that his daughter “was the victim and feels horrible and disgraced like she did something wrong.” His sentiment is understandable, and Mr. Schumacher’s conduct was entirely inappropriate.

The client was The Hammer Maintenance Group LLC (Mike Frisch)

Dammed If You Do

The Tennessee Court of Appeals affirmed a judgment against a former law firm client for unpaid fees

In 2005, Appellant Richardson M. Roberts constructed a large dam on his property in Humphreys County, Tennessee. The dam impounded the waters of Snake Creek, which flowed into Tumbling Creek and the Duck River. Mr. Roberts built the dam without obtaining permits for its construction. Following construction, Mr. Roberts faced substantial legal challenges concerning the environmental impact of the dam and his alleged violations of environmental laws.

The law firm was retained to defend him 

Of note, Luna Law represented Mr. Roberts, inter alia, in both a federal criminal investigation and a federal civil enforcement action, discussed at length infra. After October 2010, Mr. Roberts ceased paying Luna Law’s invoices despite the firm’s continued representation of him. By June 2011, Mr. Roberts owed Luna Law $136,283.28.

The court rejected statute of limitations and laches defense.

Reasonable fees

In its very thorough final order, the trial court delineated numerous findings of fact to support its conclusion that Luna Law’s attorney’s fees were reasonable. As an initial matter, the trial court found, and it is undisputed, that Mr. Luna and Mr. Pearigen were highly respected attorneys with extensive knowledge of environmental and regulatory laws. Although it is also undisputed that Mr. Roberts’ defense was complex and very technical, a review of its intricacies is integral to determining whether the trial court erred when it concluded that Luna Law’s attorneys’ fees were reasonable.

They were

The record shows that, when Mr. Roberts complained of these fees and requested a discount, Mr. Luna attempted to cooperate with him, reducing the number of hours he personally billed, cutting his bills in half, offering to meet with Mr. Roberts to discuss individual billing entries, and even offering to settle for $100,000.00. Mr. Roberts accepted none of these compromises. The record shows that despite the fact that Mr. Roberts demanded (and received) high-quality representation from Luna Law, he simply did not want to pay for these services. For the many reasons discussed above, we conclude that Mr. Roberts is responsible for paying the outstanding $136,283.28 in attorney’s fees, and we affirm the trial court’s conclusion that Luna Law is entitled to same.

(Mike Frisch)

In Cell Phone Camera

The New York Appellate Division for the Second Judicial Department has suspended an attorney for six months as reciprocal discipline

The respondent had an appearance on behalf of the plaintiff creditors in courtroom 164 for a trial in a bankruptcy case, which was before Judge Sean Lane. While waiting for the proceedings to begin, before Judge Lane took the bench, the respondent used his cell phone to photograph an individual in the courtroom who he believed was conspiring with the defendant to hide bankruptcy assets. In addition, he “inadvertently” took video footage in the courtroom until he realized that his cell phone camera was set to the video, rather than the still-photo, setting.

The respondent was questioned by a court security officer, and admitted taking photos and video. Pursuant to the standing order, on December 3, 2014, United States District Judge Nelson S. Roman, a member of the court’s Security Committee, revoked the respondent’s Attorney Service Pass, and the matter was referred to the court’s Committee on Grievances.

In the ensuing proceeding

the Southern District’s Committee on Grievances issued an opinion and order dated January 20, 2016. The opinion and order recited the underlying facts as set forth above, and found that the respondent committed a “blatant” violation of the standing order, which, in turn, constituted a “clear” violation of the above-cited Rules of Professional Conduct. The Committee on Grievances further found that the respondent’s submissions raised no issues requiring a hearing. Based on the record and his admissions, the Committee on Grievances found that the respondent violated the above-cited rules. Although the respondent was afforded the opportunity to weigh in on the appropriate disciplinary sanction, he did not do so.

The federal court ordered a six-month and until further order suspension

“The Court takes seriously the taking of photographs or video footage inside its courthouses because of the potential adverse impact on witnesses, litigants, and jurors. This point seems entirely lost on Respondent, who is far more dismissive than he is apologetic. The Court also notes that Respondent was previously sanctioned by this Court on at least two separate occasions for conduct entirely unrelated to the matter at issue here..."

He did not notify the Second Department but

After his suspension in the Southern District, the respondent, pro se, commenced three federal court actions in that District against, among others, his wife and a number of New York State judges, including the Chief Judge of the State of New York and the then-Presiding Justice of this Court, seeking relief pursuant to 42 USC § 1983, pertaining to his New York State matrimonial and Family Court matters. All of those actions were dismissed. The respondent contends, among other things, that the “crux” of the Southern District’s suspension order was his federal court litigation, and that the instant reciprocal disciplinary proceeding is “retaliation” against him for disclosing “corrupt” practices in the New York State court system.

(Mike Frisch)