Friday, June 14, 2024

Close But No Cigar

The Kentucky Supreme Court publicly reprimanded an attorney

Lisa Mead is the sole member of L&J Development, LLC (L&J) and was a member of the now defunct Paducah Cigar Company, LLC (PCC) with fellow members Megan and Kip Kessler. In March 2019, Mead hired Byers to “wind down,” or dissolve, the failing PCC, beginning with evicting PCC from a building owned by L&J. In return for the services he would render, Byers accepted a $3,000 retainer payment from Mead, however, Byers failed to execute an agreement outlining the scope of his representation or the hourly rate he would charge Mead. Mead’s husband, Joaquin Hilton, was actually the individual who had first consulted Byers and delivered the $3,000 retainer check to Byers on Mead’s behalf.

For the next eight months, Byers engaged in work on behalf of Mead and Hilton in an effort to dissolve PCC. Byers sent a demand letter to PCC instructing it to vacate L&J’s premises, initiated eviction proceedings, and engaged in settlement negotiations with counsel for the Kesslers, the other members of PCC. Byers’s representation related to the dissolution of PCC ended on June 1. Byers provided a billing statement that he had earned $2,607.50 of the $3,000 retainer between March 16 and June 1, leaving a balance of $392.50 owed to Mead. However, Byers did not return that unearned portion of his retainer to Mead.

In August 2019, Mead’s husband, Hilton, contacted Byers to explore the operation of a new business, a cigar bar, in the building owned by L&J. At the time, Paducah city ordinances prohibited tobacco use and alcohol sales by the drink at the same location. Byers gave Mead and Hilton a proposal of several services he could offer in assisting them in the new venture, as well as accompanying price points. At one point, Byers offered to perform services and receive payment in the form of equity in the proposed new company.

Eventually, Mead hired Byers to assist in changing the local ordinances to allow for the proposed cigar bar. Byers accepted payment in the form of a check for $5,000, without a written advance fee agreement, and deposited the sum in his operating account rather than his escrow account. Ultimately, the representation was successful; the Paducah City Council passed the necessary ordinances to allow for the operation of Mead and Hilton’s cigar bar. Byers later drafted and filed the proper documents with the Kentucky Secretary of State to incorporate the Old Fashioned Cigar Bar, LLC (OFCB). By agreement, Byers retained a 40% interest in OFCB, however, he failed to advise Mead or Hilton to consider consulting independent counsel before entering into a business relationship with him. Nor did Byers obtain documentation of Mead or Hilton’s informed consent to the terms of the transaction.

The business relationship between the parties soon deteriorated and, in August 2020, Byers sent Mead a letter informing her that he wished to terminate their partnership in OFCB. In October 2020, OFCB sought an injunction against Byers, and Byers then filed suit against Mead, Hilton, and L&J two months later. Both cases were dismissed by agreement in September 2021. Mead later filed a bar complaint against Byers, and in March 2023, the KBA Inquiry Commission charged Byers with violations [of a number of Rule violations]

He admitted most of the violations

Michael Gary Byers is found guilty of violating SCR 3.130(1.5)(f), SCR 3.130(1.8)(a), SCR 3.130(1.15)(e), and SCR 3.130(1.16)(d) and is hereby publicly reprimanded for his unprofessional conduct.

(Mike Frisch)

Bar Discipline & Process | Permalink


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