Thursday, October 21, 2021

Mediation Rejected In Reinstatement

The Florida Supreme Court has rejected the favorable recommendation of a referee to reinstate a suspended attorney

After mediation, the referee held a final hearing and submitted a report recommending that Murtha’s petition be granted and that he be reinstated to the practice of law. The referee found that there was no evidence that Murtha engaged in the practice of law during his suspension and that he had proven his rehabilitation and fitness to resume the practice of law by clear and convincing evidence, which outweighed any evidence of potentially disqualifying conduct. The referee indicated that the underlying misconduct for which Murtha was suspended was due to his “sloppy” procedures in running his law practice of debt collection and business litigation and in handling his personal finances. This sloppiness stemmed from stress, anxiety, and depression related to Murtha’s wife having suffered a serious medical condition, his mother-in-law having suffered a serious medical issue that resulted in her death, and a friend having recently died. The referee also noted that the witnesses who testified at the final hearing, including the original complaining witness, had positive interactions with Murtha. He was described as a “pleasant, personable, and knowledgeable attorney” who positively contributed to his community and is remorseful for his misconduct. Further, the referee highlighted that Murtha did not misappropriate client funds for personal gain but instead was merely “sloppy” with record keeping.

Use of mediation

First, the Bar argues that the referee erred in ordering formal civil mediation prior to the final hearing in this reinstatement proceeding. The Bar asks this Court to make clear that formal civil mediation is inappropriate in Bar proceedings. We conclude that the referee’s order of civil mediation in this case was inappropriate and merely delayed the proceedings. We decline at this time to address whether formal civil mediation is appropriate in any Bar proceeding.

...Here, according to the record, the referee believed that the Bar could stipulate to the issue of Murtha’s reinstatement. However, because there was evidence of disqualification on which the denial of reinstatement could be based, the Bar did not in fact have that authority. Thus, the referee erred in referring the Bar and Murtha to civil mediation, since the referee was required to hold a final hearing and to make a determination on Murtha’s fitness to return to the practice of law. Because the case could not be “settled” in a mediation proceeding and any narrowing of issues required might have occurred before the referee, civil mediation was inappropriate in this case. As to the joint pretrial stipulation, the Bar routinely makes such agreements without being ordered to formal mediation.

Disqualifying conduct

At the final hearing, the Bar presented evidence of disqualifying conduct that occurred while Murtha was suspended. In violation of rule 3-7.10(f)(1)(D), misconduct in employment, while suspended, Murtha failed to provide quarterly reports as required by rule 3-6.1(e) based on his drafting of legal complaints and conducting legal research for cases for his brother’s law firm. Although Murtha initially filed the reports, he stopped doing so because he did not believe that the work he was providing for his brother necessitated the continued filing of reports.

Further, under rule 3-7.10(f)(1)(G), financial irresponsibly, Murtha filed late and incorrect tax returns during the period of suspension. Murtha did not hire a CPA to prepare his taxes; instead, he used TurboTax and appears to have neglected to report income from his law firm on his personal taxes and filed incorrect forms for his law firm. Murtha claimed he was advised that he did not need to file based on his level of income, and that his tax returns “looked okay,” but no one testified at the final hearing that they advised Murtha on his taxes. Murtha’s tax forms were not, in fact, “okay.” Especially in light of the condition of his suspension requiring regular consultation with a CPA, prudence would have dictated that he obtain the advice of a professional.

Additionally, while suspended, Murtha left his operating account overdrawn for 524 days, which resulted in bank fees of approximately $18,000. Compounding the imprudence reflected in having managed his affairs this way is the fact that he was overdrawn by approximately $1,500, less than a tenth of the amount in fees he ultimately incurred.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2021/10/the-florida-supreme-court-has-rejected-the-favorable-recommendation-of-a-referee-to-reinstate-a-suspended-attorney-after-med.html

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