Saturday, January 31, 2015
The United States Court of Appeals for the District of Columbia Circuit affirmed the dismissal of a law firm's suit for fees.
In August 2010, Stephen R. Berry of Berry Law advised Kraft that it might have an antitrust claim worth tens of millions of dollars against News Corporation, News America Marketing FSI LLC, and News America Marketing In-Store LLC (collectively “News Corp.” or “News”). (All referenced facts come from the complaint.) The claim related to possible monopolization and tying in the “sale of in-store promotion services and free-standing-insert coupons placed in newspapers.” Kraft’s chief litigation counsel, Douglas Cherry, asked Berry for further legal analysis of the possible claim.
Berry Law then prepared a 42-page evaluation memorandum for Kraft’s top management analyzing liability and damages issues. Berry alleges that he completed that memo by November 10, 2010. At about the same time, Cherry noted that the matter was “moving pretty fast” and that he wished to brief Kraft’s general counsel about the matter. The complaint says that “upon information and belief, [the evaluation memorandum] was forwarded at the very least to Kraft’s General Counsel in early 2011.” It was presumably Cherry who did the forwarding.
In response to an email from the law firm seeking a fee agreement, Kraft's counsel stated in part
we have never paid for that work as far as I know for any outside counsel.
The firm later claimed fees due in an amount over $191,000 on a theory of implied-in-fact contract,
To state a claim for breach of an implied-in-fact contract, Berry Law must plausibly allege that it rendered Kraft valuable services; that Kraft accepted, used, and enjoyed those services; and that the circumstances “reasonably notified” Kraft that Berry “expected to be paid” by Kraft...
Kraft told Berry that it would not compensate him for work completed prior to management approval. No compensation is due where the “plaintiff did not contemplate a personal fee, or the defendant could not reasonably have supposed that he did.” Bloomgarden, 479 F.2d at 212. Rather, in view of Kraft’s unequivocally expressed position on preliminary work, Berry cannot reasonably have contemplated a fee for work completed before Kraft moved forward, nor could Kraft reasonably have known Berry contemplated any such payment. Instead, Berry completed the memorandum and other legal work in the hope that Kraft would retain him as counsel in the event that Kraft “moved forward.” Because Berry Law’s “services were rendered simply in order to gain a business advantage,” its quasicontract claim fails. Id. at 211.
Friday, January 30, 2015
An attorney who facilitated the unauthorized practice of a disbarred lawyer was suspended for two years by the New York Appellate Division for the Second Judicial Department.
The "legal assistant" was disbarred as a result of a felony criminal conviction.
Notwithstanding the respondent's claim that [Craig] Heller merely performed work as a "legal assistant," the Special Referee found, and we agree, that Heller was continuing to practice law, and that, by permitting Heller to do so, the respondent assisted a non-lawyer in the unauthorized practice of law. The respondent testified at the hearing that he hired Heller because Heller knew everything about the respondent's law practice, given his prior legal experience with real estate matters, and as a bankruptcy lawyer. Indeed, the respondent relied upon Heller's legal knowledge and expertise to allow Heller great autonomy in the performance of his work, and to delegate to him responsibility to act as the principal contact with clients with little or no supervision. Further, the respondent authorized Heller to use the assumed name, "Craig Miller," when communicating with the firm's clients and others, in part, to conceal Heller's status as a disbarred attorney. The credible evidence adduced at the hearing establishes that Heller misled the respondent's clients to believe that he was an attorney named "Craig Miller." The record also reflects that the respondent authorized Heller to improperly solicit clients on behalf of the respondent's firm in violation of 22 NYCRR 691.10(a). In view of the respondent's admissions, and the evidence adduced, we conclude that the Special Referee properly sustained all charges. Accordingly, the Grievance Committee's motion to confirm the Special Referee's report is granted.
The attorney had a record of prior discipline. (Mike Frisch)
The Maryland Court of Appeals has imposed an indefinite suspension of an attorney for misconduct in representing a client in a medical malpractice claim.
The attorney blew the statute of limitations, failed to advise and made misrepresentations to the client and settled her claim of legal malpractice without giving the required written notice of the desirability of consulting with independent counsel.
The court majority noted its precedents on sanctions for dishonest conduct
We now turn to the difficult and serious task of determining the appropriate sanction. Where, as here, MLRPC 8.4(c) is the flagship of a flotilla of violations, our cases of arguably similar ilk are strewn over the sanctions landscape. Petitioner recommends that Respondent be disbarred. Respondent argues that a less severe sanction is more appropriate...
Respondent’s conduct involved several distinct violations of the MLRPC. He failed to communicate with [client] Wisniewski regarding his difficulty in obtaining an expert, the dismissal of her case, and the expired statute of limitations. He failed to withdraw from the case when he realized that she may have had a cause of action against him. He lied to her about the existence of a fictitious settlement.
The court majority weighed aggravating and mitigating factors in declining to order disbarment.
Judge Battaglia, joined by Judge Watts, dissented
Although Shapiro’s violations do not involve multiple clients and cases, his misconduct spans a multiple-year period. He actively misrepresented the status of the case to Wisniewski for five years and failed to inform her of the difficulties he had in finding a doctor to execute a Certificate of Merit. Not only did Respondent lie to Wisniewski about the status of her case, his lies spiraled: he told her that the case had settled when no such settlement had occurred, but ultimately he did not have the money available to fund the “settlement.” Respondent only told Wisniewski the truth about her case—that it had been dismissed, that the statute of limitations had passed, and that no settlement occurred—after she filed a complaint with the Attorney Grievance Commission. Respondent violated additional MLRPC by settling a potential legal malpractice claim with Wisniewski without advising her in writing of the desirability of seeking the advice of independent counsel or obtaining her informed consent, confirmed in writing, to the essential terms of the transaction.
Accordingly, I would order Respondent’s disbarment.
The attorney had been reprimanded in 2012 for tax violations. (Mike Frisch)
A suspension without possibility of reinstatement for 30 days was imposed by the Iowa Supreme Court for an attorney's trust accounting deficiencies.
The problems came to light during an audit but were not cured.
Then, there were bounced checks that led to a follow-up audit.
The auditor examined the documents and found the funds in [the attorney's] trust account were nearly $8000 short. In several instances, [her] records showed clients were credited for funds received, but no corresponding deposits were made to the trust account. Exacerbating the problem, [she] failed to maintain records mandated by court rules and neglected her obligation to perform monthly trust account reconciliations. Further, the auditor determined [she] had commingled personal funds—derived from an operating loan from her father—with client funds in the trust account. [She] explained that she considered the clients’ funds she didn’t deposit in the trust account "as funds being removed from" that operating loan. However, she completely depleted the loaned funds and withdrew client funds before earning them. In April 2013, [she] deposited funds to bring the trust account into balance.
The court considered mitigating factors but determined that a period of suspension was appropriate
[The attorney's] trust account was, in her words, "out of whack" for months. Her trust account deficiencies were not an isolated incident, and therefore, her conduct is more in line with cases in which we have imposed a suspension.
A prior reprimand was treated as an aggravating factor. (Mike Frisch)
From the web page of the Ohio Supreme Court
A Cincinnati attorney used secrets gleaned from a long-time client of his law firm to assist the client’s relative in an estate dispute and also improperly mingled funds of another client with his personal investment account.
The Ohio Supreme Court unanimously ruled that Richard G. Ward be suspended from practicing law for one year. The court agreed with most of the findings of the Supreme Court’s Board of Commissioners on Grievances and Discipline, which considered the matter in December 2013, and recommended the one-year suspension. (The board was renamed the Board of Professional Conduct in January 2015.)
The board found Ward had violated attorney standards by accepting employment in which his professional judgment was affected by his own business interests, dishonestly engaging in his dealing with his client, using a client’s confidences and secrets to that client’s disadvantage, and failing to hold client property separate from his own.
Representation of Koons The infractions stem from Ward’s participation in the legal matters of the deceased John F. “Bud” Koons, principal owner of Central Investment Corporation (CIC), which Koons grew into the nation’s seventh largest bottler for Pepsi-Cola. Richard (Dick) H. Ward, Richard G. Ward’s father, had a close personal relationship with Koons since childhood, and Dick Ward served on the board of directors of CIC and represented Koons in many legal matters.
Dick Ward and other lawyers formed the Drew & Ward law firm. The firm handled several matters for Koons. Dick Ward served as a trustee for at least 11 of 12 trusts Koons established and funded the trusts with CIC stock. When one of the Drew & Ward partners left the firm in 2004, Ward joined his father’s firm. There he assisted in some of Koons’ personal and businesses matters, including litigation that threatened the Pepsi bottling business.
Within a year of Ward joining the firm, CIC sold its business for approximately $400 million to a Pepsi affiliate and formed a limited liability company (LLC) to hold the proceeds of the sale. Koons asked Dick Ward to disentangle himself from the CIC business, and Dick Ward became a consultant to the LLC and had a separate agreement to provide legal services. Shortly after the arrangement Koons died.
As part of the business separation Dick Ward resigned as a co-trustee to a major trust created by Koons’ parents. Allegations central to the misconduct charges brought against the younger Ward were generated by dealings with this trust.
Issues Related to the Trust The trust, created in 1976, was divided into two separate shares, one for Koons’ family and the other for the family of his sister, Betty Lou Cundall. The parents made Koons the trustee for the entire trust, and it was primarily funded with CIC stock. In 1984, Koons sold the CIC stock that funded the Cundall family share, and invested the proceeds in various stocks, bonds, and cash. He did not sell the CIC shares of the trust benefitting his family.
In 1992, the trust was divided into two separate trusts, and the assets designated for the Koons family, CIC stocks, went into a trust for the Koonses. The assets for the Cundall family went into a separate trust for them. Koons remained trustee for the Cundall family trust, until his death, but resigned as the trustee for his family trust. He was replaced by three successor trustees, including Dick Ward.
After Koons died, Dick Ward asked his son to review the Cundall family trust to determine how it was distributed. Ward worked with files in possession of the Drew & Ward law firm, and with the accountant for Koons who also assisted with the CIC operations. Ward questioned the disparities in values of the trust and Koons’ responsibilities as the trustee.
He also expressed concern about his father’s liability exposure for serving as a co-trustee in the event of litigation arising from the disparities. Dick Ward relayed these concerns to the other trustees informing them that his son had participated in the review and Dick Ward resigned as a trustee.
Ward was a personal friend and attorney to Michael Cundall, Betty Lou Cundall’s son, and a trust beneficiary. Ward approached Cundall and his sister about the trust and suggested the possibility of a lawsuit arising out of Koons’ handling of it. He sent Michael Cundall a proposed fee agreement to represent him that varied from a contingent fee of 10 percent to 25 percent depending on the extent of the litigation. Cundall agreed and the fee changed over the course of the representation increasing to a 50 percent contingency.
Potential Conflict? Ward contacted a local bar association ethics hotline to discuss whether his business interests and his father’s prior involvement created an issue, and based on the call Ward concluded that he did not need to disqualify himself. Ward discussed the potential conflict with Drew & Ward shareholders and directors. At their direction, Ward prepared a memo discussing any potential conflicts.
The memo centered on an analysis of his situation in the context of the Ohio Supreme Court’s 1998 Kala v. Aluminum Smelting & Refining Co, Inc. decision. He concluded neither he nor the firm needed to disqualify themselves in a lawsuit against Koons’ estate for its handling of the Cundall estate. The firm authorized Ward to file the lawsuit.
In the Courts Koons’ defense moved to disqualify the Drew & Ward law firm, but the trial court did not act on the motion. Instead it dismissed the case against Koons. Appeals brought the case to the Supreme Court, which ultimately determined all the Cundall’s claims were barred by the statute of limitations.
Representatives of Koons’ estate sued Drew & Ward, as well as Dick and Richard Ward for malpractice. The Wards agreed to indemnify the law firm against any malpractice claims, and they left the firm in 2009, establishing their own firm. The malpractice suit was settled for $5 million.
Supreme Court’s Ruling In its per curiam decision, the Supreme Court cited the Kala ruling expressing that “a fundamental principle in the attorney-client relationship is that the attorney shall maintain the confidentiality of any information learned during the attorney-client relationship.” Further, an attorney who leaves a firm to represent the opposing party is presumed to take any confidences gained with the former relationship and share the confidences with the new firm.
The court wrote that the Kala decision set up a test for matters when an attorney leaves a client and joins another law firm that wants to represent the opposing parties in matters involving the former client. In this case, Ward did not leave Drew & Ward, but instead was seeking to have him and the firm represent Cundall because Koons had terminated its relationship with Drew & Ward and then died.
Because Drew & Ward represented Koons personally and his trust and business interests, Ward was presumed to have shared in the confidences and secrets gained by the firm. The court found Drew & Ward had no institutional screening method that would prevent the confidential information Koons provided to the firm from flowing to Ward. And while Ward argued that he did not represent Koons, the court decided the professional conduct board correctly determined that Ward was in possession of Koons’ confidential information even as he sought to represent Cundall against Koons.
“Here the evidence shows that Ward knowingly used confidential information that Drew & Ward obtained during its representation of Koons’ various interests to solicit and secure Cundall as a client and to formulate his legal strategy in resulting litigation without Koons’ consent,” the court wrote.
The court noted that Ward received more than $237,000 in fees for representing Cundall, and stood to receive millions more had the lawsuit seeking $300 million in damages succeeded. For this the court deemed Ward violated three disciplinary rule: the prohibition of a lawyer from knowingly revealing a confidence or secret of his client; the prohibition of a lawyer from knowingly using the confidence or secret of a client to the clients disadvantage, and; the prohibition of a lawyer from knowingly using a confidence or secret of a client for the lawyer’s own advantage unless the client consents.
In addition, the board charged Ward with violating disciplinary rules that require the consent of the client if a lawyer’s professional judgment might be affected by his own financial or personal interests, and barring a lawyer from engaging in conduct that aversely reflects on the lawyer’s fitness to practice law.
The board investigation found that Ward was motivated to “settle the score” with Koons for removing his father from Koons’ business affairs and that led him to disregard the evident conflict of interest in using the confidences gained by his father and the law firm. The court agreed that he violated the two disciplinary rules.
The court also found Ward acted improperly in a real estate transaction involving Michael Cundall’s wife, Ann, as she was selling a house. Ward attended a real estate closing and testified he was directed to put the $113,000 in net sales proceeds into his client account until Ann found another parcel of real estate to purchase. Ward put $10,000 into an account held by Michael, purportedly at Ann’s request, and transferred the rest to his own securities account as a loan.
Ann disputed the transaction and denied giving Ward any instructions to invest the proceeds of the sale. He paid the money back plus interest to the Cundalls. The board found Ward’s account not to be credible and was contradicted by the Cundalls account of the transaction. The board found and the court agreed that Ward violated the rules requiring a lawyer to hold property of clients separate from the lawyer’s own property.
“Having considered Ward’s misconduct, the aggravating and mitigating factors present in this case, and sanctions we have imposed for comparable misconduct, we believe that the board’s recommended sanction will adequately protect the public from future misconduct,” the court concluded.
The above summary was prepared by Dan Trevas.
The Cincinnati Business Courier had this story on the underlying family dispute. The article notes
Known to his friends as "Bud" Koons, the Cincinnati native was a high-profile business leader who ran Burger's Midland Advertising agency in the 1960s, when the brewery's sponsorship of Cincinnati Reds games made Burger a household name. His son, Jeff, is now a county commissioner in Palm Beach, Fla. His daughter, Deborah, is the widow of Grateful Dead founder Jerry Garcia.
What a long strange trip its been. (Mike Frisch)
The Pennsylvania Supreme Court has disbarred an attorney who took fees, abandoned clients and failed to participate in the ensuing bar process.
The Disciplinary Board
Respondent charged fees to represent clients and subsequently failed to perform services. He failed to act with diligence and promptness and failed to communicate with his clients. He failed to protect his clients' rights when he failed to return unearned fees on multiple occasions. Respondent was convicted of three counts of contempt of court for failing to appear, and failed to report his conviction to Office of Disciplinary Counsel within 20 days. Respondent's contempt convictions occurred while he was on disciplinary probation in a prior, separate matter.
Throughout his representation of his clients, Respondent engaged in repeated misrepresentations, omissions and deceit. His behavior demonstrates a longstanding pattern of neglect, deception and theft, and it appears that after converting unearned fees from numerous clients, Respondent essentially abandoned those clients and ceased all communication. His failure to respond in any way to the charges of misconduct, and his failure to appear at the disciplinary hearing, are acts which demonstrate a continuation of his abandonment of his responsibilities and obligations to his clients and the legal profession.
The Supreme Court does not tolerate attorneys who engage in conversion of entrusted funds and related misconduct, and has subjected such attorneys to lengthy suspension or disbarment.
He has been suspended on an interim basis since 2012. (Mike Frisch)
Thursday, January 29, 2015
The Louisiana Supreme Court has accepted a consent disposition and publicly reprimanded an attorney
Respondent and the Office of Disciplinary Counsel ("ODC") submitted a joint petition for consent discipline in which respondent acknowledges that he published advertisements claiming to be a board certified bankruptcy specialist when, in fact, his certification had lapsed and been revoked.
An attorney convicted of a series of bank robberies has agreed to disbarment by consent in Illinois:
On July 7, 2014, Respondent entered into a guilty-plea agreement wherein he pled guilty to the offenses described above. In the plea agreement, Respondent admitted that in each robbery, he entered the bank wearing sunglasses, a scarf over his face, and gloves, and he brandished a revolver. He demanded money from the tellers and obtained $7,290 from one bank, $5,602 from the second bank, and $43,677 from the third bank. An officer of the Missouri State Highway Patrol stopped Respondent’s vehicle following the third robbery. When the trooper stepped out of his car, Respondent stepped out of his car and fired four shots at the trooper. At least one shot struck the trooper in the center of his chest. Fortunately, the trooper was wearing a protective vest which prevented Respondent’s bullet from penetrating his body. He returned fire and struck Respondent in the leg, causing Respondent to fall and lose possession of his gun. Respondent was then arrested.
He is serving a prison sentence of over 24 years. (Mike Frisch)
As Paul Virgo of California once observed, there are few things in life that hold one's interest as compellingly as the topic of liens.
The District of Columbia Court of Appeals decided a case today that deals with the equally fascinating topic of lis pendens.
In a case of first impression, the court held that the filing of lis pendens notices as part of litigation brought in good faith was immune from later claims of tortious interference with contract.
this case is essentially about a bitter dispute between two companies over the right to purchase certain real properties for investment purposes, stemming, in large part, from the personal rivalry between the companies‘ owners over the attention of one man. Vicky Lynn Karen operated a business venture with her former romantic partner LaMar Carlson (―Carlson‖), entitled VLK, LLC (―VLK‖), to purchase distressed properties in the District of Columbia for resale to developers. At some point, Carlson started dating Joan A. Alderman (―Alderman‖), who also owned a company, Havilah Real Property Services, LLC (―Havilah‖), which was engaged in essentially the same type of business as VLK. Karen believed that Carlson was conspiring with Alderman to buy property that Karen was interested in having VLK purchase, thereby, in Karen‘s view, hurting VLK‘s business interests to the benefit of Havilah and Alderman.
We hold that, in the District of Columbia, the act of engaging in litigation is conditionally privileged against a claim of tortious interference with contract and/or prospective advantage, meaning that it is a complete defense to such a claim if the defendant can establish that the prior litigation asserted a legally protected interest in good faith. If the prior litigation was pursued in good faith and therefore privileged, then the filing of a lis pendens ancillary to that litigation is also privileged. The converse is also true; if the litigation was not pursued in good faith, then the lis pendens is likewise not privileged. In other words, even if the jury is persuaded that an individual lis pendens may have been filed, in whole or in part, based on improper motives independent from the litigation, there can be no liability if the underlying lawsuit itself was asserted in good faith. In this case, whether VLK filed the Maryland lawsuit in good faith was a factual question for the jury to decide, and the jury was entitled to conclude that the Maryland lawsuit was not pursued in good faith and therefore not a privileged act, and thus that VLK was liable for damages proximately caused by the prior litigation, including damages occasioned by the filing of the thirty-one lis pendens related to that litigation.
The court affirmed the grant of summary judgment to VLK on a claim of malicious prosecution. (Mike Frisch)
Wednesday, January 28, 2015
I have blogged recently on the subject of online public access to information about bar disciplinary hearings.
The Ohio Supreme Court has a nice feature - in its online listing of scheduled hearings, the reader can link to the disciplinary charges.
This recent charge caught my eye.
The client was arrested on charges of operating a vehicle while intoxicated. The attorney entered his appearance as counsel in the criminal case.
The Cleveland Metropolitan Bar Association alleges that the attorney met with the client and her boyfriend. At the meeting, he called the client his "beautiful Irish girl" and told her he would resolve the case with a fine and no jail time.
The bar further alleges that he then called the client to ask if she was serious about the boyfriend and called her "my sexy Irish girl."
He also allegedly repeatedly asked her to get into a hot tub with him.
The attorney had the case continued five times. The client became concerned that he was delaying things on purpose.
After an AA counselor accused the client of mixing Vicodin with alcohol, she called the attorney. He allegedly responded to the situation by again asking her to dine with him.
I don't want to go to f***ing dinner. I want you to take care of this. I paid you the f***ing money and I want you to take care of it.
The sexual solicitation ended after this incident.
The client entered a guilty plea ("against her better judgment") and appeared for sentencing. The attorney failed to show up for the sentencing.
When the court asked the client if she expected him to appear, she replied:
No. I've got a problem with him. He's been doing nothing but trying to get in my pants. I paid him $1,000 and he's doing nothing but messing with me, so--
The judge vacated the plea, appointed a public defender and told the client to report her concerns to the bar. Although she was initially reluctant, she eventually filed the bar complaint. (Mike Frisch)
Tuesday, January 27, 2015
The Oklahoma Supreme Court has suspended an attorney as a result of a guilty plea
[the attorney] entered a plea of no contest to one count of Publishing, Distributing or Participating in Obscene Material, and one count of Possession of a Controlled Dangerous Substance,
The Daily Mail had this story about the attorney in February 2013
An Oklahoma lawyer has been charged Tuesday with offering to reduce a female client's legal fees in exchange for having sex with the woman and her two teenage daughters.
According to police, attorney Jeremy Oliver, of Wynnewood, sent his client text messages proposing to give her a $1,000 discount for sexual favors and/or nude pictures of the older girl, and $500 off for the 13-year-old.
When officers went to arrest Oliver Monday, a search of his home on South Johnson Lane turned up marijuana and several hundred naked photos depicting women, suggesting that there may be other victims out there, according to Garvin County Sheriff Larry Rhodes.
The 33-year-old attorney has been under investigation for weeks, NewsOKreported. On Sunday, law enforcement officials were with his client when Oliver allegedly sent her a text message asking for sex with the girls and their lewd pictures.
According to authorities, the attorney also sent his client a photo of his genitals.
Police said that following his arrest, Oliver never denied the text messages or the drugs in his apartment, instead summing his predicament with the words, 'It is what it is.'
Native American Times reported on the plea and sentencing
A former attorney general for two western Oklahoma tribes was put on probation Wednesday after prosecutors dropped a felony charge stemming from accusations of reducing a client’s legal fees in exchange for sex with her underage daughter.
Chickasaw Nation citizen Jeremy Oliver, a resident of Wynnewood, Okla., received two years’ probation after pleading no contest to distributing obscene material and possession of marijuana.
According to the initial arrest report, Oliver offered via text message in February 2013 to reduce a client’s fees in exchange for nude photographs or sexual favors from the client’s 13- and 17-year-old daughters, as well as sexual favors from the client. Oliver also sent an obscene photograph of himself to the client while making the request. A search of his home at the time of the arrest uncovered several pounds of marijuana and several hundred nude photographs.
Despite having text messages that showed Oliver asking his client for a threesome with her daughter, prosecutors dropped a felony charge of soliciting sexual conduct with a minor via technology as part of a plea bargain. Garvin County District Attorney Greg Mashburn told the Daily Oklahoman Wednesday that the evidence “didn’t shake out” the way his office had intended.
Oliver was the attorney general for former Cheyenne and Arapaho claimant governor Leslie Wandrie-Harjo’s administration for more than two years. Prior to his appointment, he was the general counsel for the constitutionally-bound tribes’ legislature.
According to his LinkedIn account, Oliver is also the former attorney general for the Caddo Nation, headquartered in Binger, Okla.
Now that Oliver has a criminal conviction, his license to practice law in Oklahoma could be suspended by the state’s Supreme Court. He has been practicing law in Oklahoma since 2008.
Oliver could not be reached for comment Thursday morning.
The suspension is effective until final discipline is imposed. (Mike Frisch)
An indefinite suspension with the right to apply for reinstatement after six months was imposed by the Maryland Court of Appeals.
The attorney was retained by a couple to pursue a claim arising from a motor vehicle accident and ended uo suing one client on behalf of the other
On September 21, 2012, Respondent filed in the Circuit Court for Harford County a civil action against Mrs. Ware on behalf of Mr. Ware. Then, on September 24, 2012, Respondent filed a separate action in the Circuit Court for Harford County on behalf of both Mr. and Mrs. Ware against BH Motors. On February 23, 2013, the Circuit Court consolidated the two civil cases pursuant to a joint motion filed by the respective defendants. Ultimately, both cases were dismissed.
Respondent admitted that his representation of Mr. Ware against Mrs. Ware created a conflict of interest. Although Respondent maintained that he discussed the conflict of interest with the Wares, the hearing judge found otherwise based on the credible testimony of Mrs. Ware, who testified that Respondent never discussed the question of a conflict with her. Respondent acknowledged that he should have instructed Mr. Ware to retain a different attorney, or referred the case to another attorney, in the lawsuit against Mrs. Ware. In any event, the hearing judge found that Respondent “plainly knew, or should have known of this obvious conflict and ignored it.”
The court found this involved a non-waivable conflict.
The attorney engaged in fee-related misconduct and failed to respond to a second complaint. (Mike Frisch)
The North Carolina Supreme Court has approved a public reprimand of a general court of justice judge for misconduct in handling a divorce involving a member of the Armed Services who was stationed in South Korea.
The judge's violations
a. making inadequate inquiry into the rights afforded to Defendant Jason Foster, a litigant protected under the Servicemember’s Civil Relief Act of 2003, 50 U.S.C. App. §§501-597b (hereafter “the SCRA”), and failing to maintain adequate professional competence in this area of the law;
b. imprudently relying upon the counsel for the opposing party in the matter for a determination of the rights afforded to Defendant Jason Foster under the SCRA, without sufficiently performing her own independent inquiry and research into the law, and allowing opposing counsel to present such advice and opinion on the law to the Court outside of the presence of Defendant or anyone appointed as legal representation for Defendant; and,
c. inappropriately denying Defendant Jason Foster the appointment of legal representation guaranteed under the SCRA, thereby denying him his full right to be heard according to the law.
As to the advice of counsel
Plaintiff’s attorney provided Respondent with an undated, uncited publication, entitled “CROSSING THE MILITARY MINEFIELD: A JUDGE’S GUIDE TO MILITARY DIVORCE IN NORTH CAROLINA” by Mark E. Sullivan, discussing the SCRA and ways to challenge the claims of servicemen under the SCRA, specifically detailing ways that a judge could deny a serviceman a stay, when so requested, by finding that the serviceman did not show “good faith and diligence” when responding to a court action. Here, Defendant was not properly served with any motion or objection from Plaintiff’s counsel, had no notice of her objections to his request for a stay, and was not provided with the documents Plaintiff’s counsel presented to Respondent, which Respondent used in consideration of the Plaintiff’s counsel’s objections.
The judge stipulated to the sanction
With the benefit of hindsight, Respondent now admits and understands her error and that in fact her actions, even if unintentional and not motivated by malice or ill intent, did constitute conduct prejudicial to the administration of justice that brings the judicial office into disrepute. Respondent acknowledged that she has learned a valuable lesson from this incident and will be particularly vigilant to changes to the laws that affect the growing number of servicemen and servicewomen in North Carolina, and will make every effort to ensure that every person legally interested in a proceeding receives their opportunity to be heard according to the law in the [sic] all future dealings.
The North Carolina Court of Appeals held that an attorney improperly withdrew from representation of a client in a termination of parental rights case
In the present case, the record is devoid of any evidence whatsoever that Respondent received any notice from her trial counsel that counsel would seek to withdraw from her representation at the start of the TPR hearing. When the court inquired whether she had any contact with Respondent, [counsel] Ms. Burke replied that she did not know why Respondent was absent, that she had a history of difficulty communicating with Respondent and did not have her telephone number, and that she believed Respondent might have been confused about her court dates. Ms. Burke did state that Respondent had shown up late to court earlier in the week for another matter in which Ms. Burke was representing Respondent, but she offered no elaboration as to what discussion, if any, they had about Respondent’s TPR hearing and the potential consequences that might follow if she failed to appear. The trial court then allowed Ms. Burke to withdraw without any further inquiry.
The court vacated the judgment and remanded for further proceedings. (Mike Frisch)
Monday, January 26, 2015
We recently reported that the New York Second Department had reduced a New Jersey disbarment to a two-year reciprocal suspension.
The Maryland Court of Appeals went the other way today -- a six-month suspension from Virginia drew disbarment as reciprocal discipline.
Disbarment is the appropriate sanction in a reciprocal discipline action involving an attorney who was suspended from the practice of law for six months in Virginia for making repeated misrepresentations to the court, failing to appear at scheduled hearings, and bringing a baseless proceeding, who then failed to notify Bar Counsel of discipline imposed against him in another jurisdiction.
...Buehler misled Virginia courts on multiple occasions, claiming that he had not received notice of scheduled hearings when indeed he had. This sanctionable behavior occurred at least three times. Furthermore, upon receiving a six month suspension from the Virginia State Bar, Buehler committed a misrepresentation by omission, failing to notify the AGC of his Virginia sanction. It is also significant that Buehler repeatedly failed to appear at hearings and frequently delayed the judicial process. “We have said in applying MLRPC 1.3 that this Court has consistently regarded neglect and inattentiveness to a client’s interests to be [an ethical violation] warranting the imposition of some disciplinary sanction.” Att’y Grievance Comm’n v. Garrett, 427 Md. 209, 223, 46 A.3d 1169, 1177 (2012) (alteration in original) (internal quotation marks and citations omitted). Buehler’s conduct was similar to that in Garrett. There, this Court disbarred an attorney for “failing to appear for a scheduled hearing and not communicating with the court, client, or opposing counsel during the two weeks preceding the hearing.” Id. at 221, 46 A.3d at 1176. Buehler, on more than one occasion, failed to attend hearings and conferences and later attempted to undo that ethical lapse by claiming that he had no knowledge of their existence. This pattern of misconduct when viewed in the context of Buehler’s other violations warrants disbarment.
The court concluded that the attorney's "gravest transgressions are his repeated misrepresentations" and also considered his failure to report the Virginia suspension to Maryland authorities.
My take: Even though I think Virginia is light on attorney crime to an extreme degree, I am uncomfortable with converting a six-month consent suspension into a reciprocal disbarment. (Mike Frisch)
The South Carolina Supreme Court disbarred an attorney for misconduct in several matters
Respondent's law practice included conducting residential real estate loan closings. In 2007, Chicago Title Company (Chicago Title) canceled respondent's title agency. From that point, respondent had approved attorney status and issued title commitments and polices through the title agency of his father who is a lawyer. In 2011, when Chicago Title learned of irregularities in some of respondent's closings, it canceled respondent's approved attorney status. From 2011 until his interim suspension in 2013, respondent continued to issue title commitments and policies using the Chicago Title name. Respondent altered Chicago Title's form documents to make it appear as though the company was issuing policies on his closings. At his closings, respondent also collected funds for the purpose of paying title insurance premiums, which he never paid. Respondent's misconduct left lenders and owners without title insurance and some lenders and owners sustained losses as a result of respondent's misappropriation of funds.
The order recites a large number of resulting misappropriations, accepts his consent to disbarment and orders payment of restitution. (Mike Frisch)
The Indiana Supreme Court ordered a suspension of not less than six months without automatic reinstatement of an attorney's whose failure to register a trust account facilitated another lawyer's thefts.
Respondent maintained two attorney/client trust accounts ("Trust Accounts"), neither of which were registered as an Interest on Lawyers Trust Account ("IOLTA"). Respondent did not notify the banks that the Trust Accounts were subject to overdraft reporting to the Commission. On his Attorney Annual Registration Statements from 2008 through 2011, Respondent falsely stated that he was exempt from maintaining an IOLTA. Over several years, Respondent shared signatory authority for the Trust Accounts with another lawyer, who stole money from the Trust Accounts. This resulted in overdrafts, which were not reported to the Commission because the accounts were not registered as IOLTA accounts. By failing to properly register the Trust Accounts as IOLTA accounts, Respondent enabled the other lawyer to steal client funds from those accounts.
He also falsely denied that he charged non-refundable retainers. (Mike Frisch)
Saturday, January 24, 2015
Reciprocal (but not identical) discipline was imposed by the New York Appellate Division for the Second Judicial Department based on an attorney's 2012 disbarment in New Jersey.
The court ordered a two-year suspension
the Special Referee submitted a report in which he found that the respondent had sustained his burden of proving that the imposition of reciprocal disbarment by this Court would be unjust. The Grievance Committee now moves to disaffirm the report of the Special Referee. The respondent cross-moves to confirm the Special Referee's report. In his report, the Special Referee concluded that the respondent understood the basis for his disbarment in New Jersey to be the misappropriation of funds in connection with a single real estate transaction, which occurred in or about 2007. The Special Referee recited the positive testimony about, and characterizations of, the respondent's reputation for honesty and integrity from his witnesses and character references, many of whom were members of the judiciary. Moreover, he credited the respondent with "profound remorse" and "full acceptance of responsibility" for his misconduct. Under the extraordinary circumstances of this case, including, but not limited to, the single complaint of misappropriation in New Jersey; the absence of formal charges against the respondent; the respondent's "profound remorse" and "full acceptance of responsibility" for his misconduct; his impressive character witnesses, including five current members, and one retired member, of the bench, members of the Bar, and a client; his excellent reputation as a member of the criminal law bar; his outstanding service to the community; and his commitment to representing the indigent, we find that the respondent has established by a fair preponderance of the evidence that the imposition of reciprocal disbarment would be unjust. However, we find that the respondent's admitted misappropriation of client funds in the approximate amount of $3,800, for which we find no evidence of restitution, warrants his suspension from the practice of law for a period of two years.
Just one misappropriation.
As to the "absence of formal charges," that was because he consented to disbarment.
Frankly, it is difficult for me to see an injustice in holding someone who consented to disbarment in one jurisdiction to that concession in another state. (Mike Frisch)
From the web page of the Virginia State Bar
Effective January 29, 2015, the Virginia State Bar Disciplinary Board summarily suspended Robert Francis McDonnell’s license to practice law in Virginia based on his conviction for eleven felonies in the United States District Court for the Eastern District of Virginia. Mr. McDonnell was ordered to appear before the board on February 20, 2015, to show cause why his license should not be further suspended or revoked. His license has been administratively suspended for non-payment of Virginia State Bar dues since October 15, 2014.
Friday, January 23, 2015
An interesting decision from a single justice of the Maine Supreme Court dismissed disciplinary charges against an attorney arising from his work as his law firm's senior associate representing GMAC in a large number of foreclosure actions.
The attorney was the "nominal head" of the firm's foreclosure practice group.
It was reported to the attorney by a junior associate that a GMAC employee testified in a deposition that affidavits signed and filed by the witness in a number of matters were false.
A grievance panel found that the accused attorney's failure to promptly respond to and rectify the situation violated Rules 3.3 and 8.4(a).
The panel imposed a public reprimand.
Associate Justice Andrew Mead found that the panel's "should have known" standard did not correctly interpret the charged rule violations
The Panel stopped short of concluding that Peck had actual knowledge (1) that the problems
would not be fixed with an errata sheet and (2) of the thirteen cases noted above. Thus, the Panel’s Decision is founded upon a “should have known” standard rather than actual knowledge.
The distinction is critical. Sections 3.3(a)(1) and (3) and 8.4 are clearly predicated upon conscious malfeasance, not negligence or recklessness. The Panel does not conclude, nor does the record support the notion, that Peck knowingly undertook any course of conduct intended to foist false statements of fact upon the court in the form of the Stephan affidavits.
On the contrary, the record supports, and the Panel acknowledges, that Peck originally believed that Stephan’s deposition testimony, which he found astounding, would be resolved by an errata sheet He directed members of his firm to place the affected cases on hold until the matter resolved. When the errata sheet solution was not forthcoming, Drummond & Drummond earnestly undertook to notify every court (in which the affected cases were pending) of the flaws in the affidavits and either withdrew pending motions or supplemented them with appropriate affidavits.
The court held that the failure to sustain the Rule 3.3 violations doomed the 8.4(a) charge. (Mike Frisch)