Sex causes trouble for lawyers and (sr.) judge; Theft and Tax Evasion are problems too.

New York lawyers

In NYC a law firm partner got sued for sexually harassing a junior lawyer in the firm. That happens and is hardly news anymore. What got the NY Times to react was – he not only denied it, but he filed a counterclaim. She says he had his way, against her will, several times and places. Her claim, she quits her job due to his actions, and sues him and the firm.

He comes firing back and gets headlines. He says he turned her down and called a cab to take her home after she suggested that “if he wanted, she would not say no!” He says she was spurned, and “Hell hath no fury…” This will be interesting to watch. Embedded in the Times article is the so-called “lurid complaint” and the counterclaim.

Indiana Sr. Judge and practicing lawyer

Lisa Traylor-Wolff is from near my office, and was the judge of the then two-county  (Fulton-Pulaski) County Court before we asked the legislature to separate the courts in the 1990s.  Several years ago the Pulaski County voters chose another to serve as judge, and she has been practicing since that election – probably 8-10 years ago.  She has served as Senior Judge under the Administrative Rules, #5(B), since her return to private practice.

She was appointed the public defender of S.W. a prisoner at the Miami Correctional Center, and according to the Supreme Court’s Published Order “engaged in an improper romantic relationship” with the client S.W.  That was a violation of Rule 1.7 (a)(2) of the Rules of Professional Conduct, and as she is qualified as a Sr. Judge, the actions also violated Rules 1.2 and 3.1(C) of the Indiana Code of Judicial Conduct.

For this Traylor-Wolff gets a lifetime suspension from serving in any judicial capacity, and a one year suspension from the practice of law, with all but 45 days withheld, and two years of probation. Among the probation terms are working with JLAP; stay away from S.W. (is he the victim?); no violations of RPC; and pay costs.

Marion County Prosecutor goes after admitted and alleged bad lawyers

Terry Curry is going after bad guys, and as prosecutor that is his (and his office’s) job.  Two recent targets are Indy lawyers David Rees and Steven Geller. 

Rees is alleged to have stolen estate funds, after eight years of administration of the estate of his client there was about $400,000 unaccounted for. He also was charged with Obstruction of Justice for filing a false “final accounting” that claimed the missing money was still in the account.

According to the Prosecutor’s press release, Rees has admitted the theft of $270,549 of estate funds, agreed to plead guilty and could face up to eight years for the Class C and D felonies.

Geller was charged with the failure to file multiple Indiana tax returns, earning an Evasion of Tax charge as a Class D Felony. Expect the federal charges to follow.

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Win One, Still Trouble; Charge for That? Neglect of Client in several ways

This is a Win?
The lawyer got sued for malpractice for failure to talk client out of a litigation financing deal. The court ruled that he wins since the lawyer did not refer the client to the lender, did not recommend the use of a litigation financing  program, and did not offer an opinion supporting the deal with the lender when the client made the loan.

Elwin Francis suffered a personal injury. He filed suit, but found himself needing funds up front, So, he borrowed funds from Law Bucks, who submitted a lien for $96,000 on the settlement.

The law firm representing Mr. Francis settled the personal injury matter for $150,000, with consent, and when all the expenses were  paid, Mr. Francis got a check for $111. He did not think that was enough, so he sued his lawyers. [Apparently the client forgot the $$ he got from Law Bucks]. The NY court looked at the documents, at the duty that the lawyer took on in representing Mr. Francis, and at the facts to see if there was conflicting duties that extended to Law Bucks, and found there was no endorsement or contacts between the firm and Law Bucks.

Getting sued by a client is trouble, but winning is good.

Lesson for us?  Stay out of endorsing a lender in a litigation financing program. You may become the guarantor.

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Charge for that?

Rule 1.8(j) has been around for a while. It is a pretty straightforward rule: “A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced.”  Pretty close to a “Thou shalt not ….” with fewer exceptions than the Rule on Hearsay.

Tom Lowe, a lawyer from Minnesota is old enough to have been around when the MN Supreme Court enacted that rule there.  Sexual relations rulings in ethics cases have been around for decades, and the Rule changes started popping up in several states in the late 1990s (IL 1997, Kan 1998). The no-sex Rule came about as a part of the McCrate Amendments to the Model ABA Rules of Professional Conduct in 2002. Indiana adopted the current Rule 1.8(j) on Sept. 30, 2004, as part of the comprehensive update of the RPC (at p. 39 of the Order)*

So Lowe not only violated that rule, but, to add insult to injury he added the time he spent with her (a family law client) while he breached the rule to her bill.  [insert your inappropriate hourly billing (or quarter-hour or one/tenth hour) or other time based billing quip at this spot – I am trying desperately to leave those and other puns out of the post.]

There are important reasons for the rule about sex with a client, and I am not making fun of those, but his billing for his time?  That reminds me of this song…

Lowe got an indefinite suspension of his license, with a minimum period of 15 months before he may apply for renewal. Well done MN.

* I chaired the ISBA subcommittee that reviewed the ABA proposals and led to the addition of 1.8(j) to the Indiana Rules of Professional Conduct. Thanks to my subcommittee.

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Client Neglect Stemming from Mental Health Issues

The front page of the Indiana Judges & Lawyers Assistance Program website states: Research has shown that lawyers may suffer from substance abuse and depression at a rate higher than the general population. Experience has shown that lawyers may be more reluctant than others to seek help for their own problems.

One of the critical consequences of mental health problems is the impact on our clients.  As stated by JLAP Ex. Dir. Terry Harrell: “When I hear that a good lawyer, with no history of neglecting clients, is not returning telephone calls — my radar goes up and I start looking for other signs of depression.” She shares statistics on the increased level of mental health problems that should cause every lawyer to take a slow look in the mirror. Women lawyers appear to have a 10% greater problem than the general female population, while male lawyers  reportedly suffer a problem with depression at a rate more than 200% of the general male population.

When lawyers neglect clients for any reason the clients often get upset. If there is not a good reason for the perceived neglect (such as, “I am in trial all month…”) and the client does not see a way to successfully get the lawyer’s attention, a complaint to the Disciplinary Commission may be their only recourse.

Several cases recently have highlighted the issue of mental health, and I will focus on one. This lawyer (I don’t need to name him) recently stipulated to the following facts: The misconduct includes neglecting clients’ cases, failing to do the work for which he was hired, failing to respond to clients’ requests for information, failing to inform clients of the status of their cases, failing to safeguard unearned fees by placing them in a trust account, and failing to completely refund unearned fees. Respondent knew he was suffering from depression and other health related issues that interfered with his ability to attend to his clients’ needs.”

The lawyer and the Commission agreed that these violations of the Rules occurred: “The parties agree that Respondent violated these Indiana Professional Conduct Rules prohibiting the following misconduct: Rule 1.3: Failure to act with reasonable diligence and promptness. 1.4(a)(3): Failure to keep a client reasonably informed about the status of a matter. 1.4(a)(4): Failure to comply promptly with a client’s reasonable requests for information. 1.15(a): Failure to safeguard property of a client. 1.16(a)(2): Failure to withdraw from representation when the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client. 1.16(d): Failure to refund an unearned fee promptly upon termination of representation. 3.2: Failure to expedite litigation consistent with the interests of a client.”  That is quite a list.

There is the specific requirement under Rule 1.16(a)(2) that states the affirmative duty that a lawyer “shall not represent a client…if: (2) the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client.”

We need to talk about this situation more.  There was this previous post on Age Related Issues in the Law, but it did not tie the violation to 1.16(a)(2). Apparently we need to have more discussion about this.  There are 10,000 Baby Boomers hitting 65 every day. They are not all lawyers, but enough of them are for problems to show up..  65 is not the magic age where age related cognitive disorder hits, but it is one birthday closer to the issue showing up.

Mental illness extends far beyond age related disorder, and beyond depression, bi-polar disorder and other issues.  But it hits lawyers in greater numbers than the general population.  When it hits, all the suffering lawyer’s clients are affected. Be aware.

Good Use of Probation; So bad, so bad; Reciprocal Discipline imposed

Using Probation in Disciplinary Proceedings

Drugs and alcohol are problems for lawyers.  The evidence is clear that many problems come from addictions. The Indiana Supreme Court and Disciplinary Commission recognizes that reality with greater frequency.  Take Marla Muse’s case as an example. The facts are sketchy in the opinion, but they start with a plea of Guilty to Possession of Marijuana as a Class D Felony.

RPC Rule 8.4(b) states that “It is professional misconduct for a lawyer to: (b) commit a criminal act that reflects adversely on the lawyer’s … fitness…”  Ms. Muse agreed that she violated that standard.  The court’s sanction is as follows:

For Respondent’s professional misconduct, the Court suspends Respondent from the practice of law for a period of 180 days, beginning February 15, 2013, with 30 days actively served and the remainder stayed subject to completion of at least two years of probation. The Court incorporates by reference the terms and conditions of probation set forth in the parties’ Conditional Agreement, which include:(1) Respondent shall maintain complete abstinence from mind-altering drugs during her probation.(2) Respondent shall have no violations of the criminal law of this state or the Rules of Professional Conduct during her probation.(3) If Respondent violates her probation or the JLAP monitoring agreement, the Commission will petition to revoke her probation and request the balance of the stayed suspension be actively served without automatic reinstatement, and Respondent may be reinstated only through the procedures of Admission and Discipline Rule 23(4) and (18).

It seems that a period of probation, working with JLAP in a well monitored probation program will do more to protect the clients of Ms. Muse than any longer suspension and return to the profession without requiring some assistance.  *

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How bad can one lawyer get?
Amy McTeer had it bad for the guy. Amy was a criminal defense lawyer, who forgot that you want to be sure at the end of the case it is the client who goes to jail. She worked hard, and got him out of jail, the illegal way – she helped him escape. To compound matters she posted photos on Facebook of her out with the escapee. She was arrested in 2011 for these matters, and the Oklahoma Supremes finally accepted her resignation of her license.

The whole sordid story, drugs and troubles can be found here.

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Reciprocal Discipline

Did you realize that if you get busted in one state for ethical violations, it can carry over to other states where you are licensed?

Mark J. Hughes, a now former member of the Indiana Bar was disbarred in Arizona. The State Bar of Arizona reported:

In the matter of Mark J. A. Hughes, the Presiding Disciplinary Judge accepted a consent agreement between Hughes and the State Bar and ordered him disbarred.

In three cases, the State Bar charged that Hughes revealed information relating to the representation of a client without informed consent, engaged in conflicts of interest and failed to take steps to protect his client’s interests upon termination of representation. The State Bar also alleged that Hughes failed to maintain confidences and preserve the secrets of his client, engaged in unprofessional conduct, and made disparaging, offensive, and provocative comments and accusations about his client and client’s family members in their presence. Finally, the State Bar charged that Hughes engaged in the unauthorized practice of law while suspended. Hughes agreed not to contest any of the charges.

As a result of the consent agreement, the Presiding Disciplinary Judge issued an order on May 1, 2012, declaring Mark J. A. Hughes’ disbarment. Hughes must pay $1,202 for all costs and expenses associated with the State Bar of Arizona’s investigation.

The Indiana Supreme Court sent Hughes a Rule to Show Cause why similar treatment should not occur here in Indiana. The standard under the A&D Rule 23(28)(c) is that similar treatment should occur here. No reply as to why it should not.

* The author is a JLAP volunteer.

Lying to the Bar Exam Board – Bad idea; Legal Fees pay for Legal Work, not Housekeeping; Age Related Issues in the Law

Liar, Liar, License on Fire

Leah Harmuth, a Calif. lawyer former lawyer, lost her license when the Board of Examiners found that she had lied about her alleged disability and need for extra time to take the Bar Exam. She said that she suffered a disability and needed extra time, and a quiet place to take the exam. She took it, passed and later moved to NY, where she tried it again. The NY examiners checked her story, found she lied to them and they reported the information to CA.

Oops. Honesty in your bar application is critical. After nearly three years as a lawyer, including time at one of San Francisco’s premiere law firms, known as MoFo, she now is not a lawyer.

I have served on the Indiana Supreme Court Character and Fitness Board, and have spoken at three of Indiana’s four (soon five) law schools about the Bar Admission process. One more horror story to share with the students. These pop up occasionally. Kind of like Coach O’Leary. You have to be scrupulously honest in a job application. A lie on the application can cost you your license to practice law at any time. No statute of limitations on that offense.

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What can you do for lawyer’s fees? Get Suspended

Katherine Guste was a nice woman, she helped an old man with his legal needs, by preparing a Power of Attorney for the client. Then the client, who suffered a debilitating disease needed some additional legal help. He had an accident, and was charged with hit and run. She handled the criminal matter. Then Guste started helping him with personal matters, driving him places, helping him move from one nursing home to another. Nice things, but he had agreed to pay her normal hourly rate as a lawyer for performing those non-legal services. Eventually she claimed she had provided 220 hours of service, after he decided he had been hoodwinked, and complained to the Louisiana Disciplinary Commission. But she was paid for over 250 hours.

That did not matter. The LA Supreme Court decided that lawyers’ hourly fees are unreasonable for general labor work and she could not mix the two types of work for the same fee. Rule 1.8 prohibits mixing work like this. She had other discipline matters too, and ultimately she got her license suspended for two years. Ouch.

Be careful charging lawyers fees for standing at the copy machine.

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“What do we do with a General, when he stops being a General…”*

[*words and lyrics by Irving Berlin] In the movie musical White Christmas, Bing Crosby’s character sings about what to do with General Waverly after the war and he is no longer in charge. Lawyers see this dilemma as well with our older members of the Bar.

The Ohio Supreme Court this week issued an “age-associated cognitive disorder” opinion for a 71-year-old lawyer who was charged with an ethical violation during the handling of a couple of estate matters, and was confused in his explanation to the disciplinary commission. Raymond O’Neal complained about his memory problems during his testimony, so the commission had him submit to a psychiatric exam by a medical professional. The doctor found age-associated cognitive disorder, and recommended some age-appropriate strategies for minimizing the effects of the disorder.

The Ohio Supreme Court suspended O’Neal for two years, withheld 18 months, but started off with a six month suspension. During the six months before return, he must undergo a thorough geriatric psychological assessment and prove that he will be fit to return to the competent, ethical and professional practice of law. Not sure how he will do that based on the problems he exhibited to the court and outlined in the 9 page opinion.

Congratulations to the Bar and Bench in Ohio. This is a difficult area of enforcement, but the duty to protect the clients is important. I invite older lawyers to discuss this issue with family and partners.

Fraud gets 50 years; Mayhem gets jail; Shameless Plug.

Fraud gets lawyer prison time.

Indiana lawyer, now businessman Tim Durham gets 50 years for defrauding about 5,000 depositors in Fair Finance, with their total losses exceeding $200M.  Durham, admitted to practice law in Indiana in 1987, and suspended in June 2012, had what various magazines and stories showed as “the good life.”  It was based on the frauds he committed after he left the practice of law, apparently.

Starting his  legal practice at Ice Miller, he moved on to even bigger and better things. He once was married into one of the most prominent families in Indianapolis, and apparently wanted more. He acquired Fair Finance, and apparently took investment lessons from Bernie Madoff. The lure of cars, yachts and houses led him astray, and the 50-year-old, who must now serve at least 43 years in prison under current federal guidelines, may not get out in this lifetime.

If you get too excited at the chance to “hit the lottery” with someone else’s money, recall the lesson of Tim Durham.

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Don’t Trash the Office Before you are Evicted

Dallas lawyer Thomas Corea was jailed after making a real bad situation even worse.  First he was disbarred for stealing client funds, then he was evicted from his office.  But he was the smart one who showed the landlord.  After getting his eviction notice he trashed the office, doing more than $100,000 in damages.  That got the interest of the police, and he was jailed, and his bond increased to $500,000 for the first four felony charges.

Corea at one time had been host of an “ask your lawyer” TV show, but that turned out bad when he sued the station for $1.4M for not forwarding all calls.

It was the graffiti that got him in the eviction. He (or the vandal) wrote several messages on the wall, including one message that was a derogatory remark about an Arizona judge who had found him in contempt. He included her phone number and an invitation to call her…

Update – Another Dallas PI lawyer has now asked the court to appoint him custodian of the files left by Corea, since he cannot provide legal services to his clients disbarred and jailed.  It sounds similar to Indiana’s Attorney Surrogate Rule that allows this kind of help. No word from the ABA Journal if the help is welcomed by Corea.

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Shameless Plugs on Ethics (and other) Courses I am Presenting

Ted Waggoner, editor/author of this blog presented an hour of Ethics for the General Practice Solo and Small Firm Section of the ISBA on Nov. 29. The course was “Hiring and Training New Law Firm Personnel: How to Avoid Losing $85,000 or your License.”

On February 28, I will also be presenting an hour of Business Law Ethics at an ICLEF program. It has the tentative title of “Developing and Representing the Business Entity.”

On Jan. 23,  I will be presenting a seminar in kicking off the 2013 Ivy Tech Ag Seminar Series, titled “Family Farm Ownership: What is the Right
Solution for You and Your Family?”

For further information about either of these programs, please contact me.

Be nice to your SO; Get along with the Voters; Be a Careful Witness

Don’t Hit Your SO

BigLaw partner loses his job, and family, after being charged with assault. During a dispute with his Significant Other, King and Spaulding lawyer Steven Guynn, forgot the basic concepts of alternative dispute resolution, and allegedly resorted to hitting.

Reading the news today (and any day since you were three years old) a lawyer, especially a 59-year-old corporate lawyer, should know that hitting girls is not an effective means of winning a dispute.

He is no longer listed on the BigLaw firm’s website, and they will not answer questions about him.

These things never lead to good outcomes, Guynn’s wife has now filed for dissolution of the marriage.  The wife was not the hittee, that was his mistress (to use an old-fashioned term, which 59-year-old lawyers can do).  Several bad decisions rolled into one situation.

Too bad the generals are not reading this blog.

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The Voters have Spoken

Judge Cynthia Brim shoved a Chicago courts deputy last March, and was charged with Battery. She was also barred from the courthouse without a court approved escort, by the presiding panel of judges. Suspended from the job, and charged with a crime, she still sought judicial retention while also pleading temporary insanity for her act of Battery.

With a retention vote of 67.5%, she gets to keep her job, or at least her paycheck.

She returned to Court the day after the election, but it was to answer to the misdemeanor Battery charges. At that hearing she submitted her insanity defense to the charge. The court appointed psychiatrist agrees she was suffering from bi-polar disorder at the time of the crime, but while properly medicated can stand trial, and could return to work.

The Chicago Bar Association had recommended that Judge Brim lose her position, but the Cook County Democratic Party endorsed her retention. The voters retained Judge Brim. No report that the judicial panel has said if she can return to her courtroom yet.

As a supporter of merit selection with retention ballots, I must admit that the system is not perfect. I hope the IL JLAP program is on the case.

There are serious issues involved in bi-polar disorder, and the medical profession is working hard in its efforts to help those suffering. Lawyers and judges who are medically affected by a variety of illnesses must seek treatment early, and not allow the illness to interfere with the rights of clients or litigants. The ABA Journal report does not tell us if Judge Brim is doing that, yet.

H/T Professor George Smith.

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Trying to Make a Point as an Expert

Dean Borland is a lawyer and computer expert.  He testifies as an expert in trials. He explains his analysis with computer skills and tries to make his points to the jury in an understandable fashion.  This time he succeeded too well. [paywall protected]

In a criminal trial about child pornography, he showed the jury how easy it is to replace the face of an adult porn model with the face of a child, twice. He showed them that a possessor of such a photo would not be able to know that the image was modified.  Doing this, he committed the very crime he was testifying about, in open court, on the record, of “possessing an image modified to appear as if a minor is engaging in sexually explicit conduct.”

He was charged with that crime, and entered a pretrial agreement with the Cleveland US Attorney, and apologized to all through the Cleveland Bar Journal.

Lesson learned, right?  Well, no. The children’s images he used were professional models, and by putting their image on the body of a nude model (makes it sound less sleazy to say ‘nude’), he exploited the children in a way that also violates the federal law. A victim of a sex crime who suffers any kind of personal injury is entitled to a judgment of not less than $150,000, irrespective of the actual damages. There were two child victims who sued.  The federal trial court first threw out the case, saying no real harm was done, but the Sixth Circuit Appellate Court disagreed.  Borland ends up paying the $300,000 for the damages he did.

As the Sixth Circuit Court said “Congress meant business in awarding the damages the way that it did.”  Borland learned that lesson the hard way, and so have you, at much lower cost.  Be safe out there.

H/T Olmstead

New Rules for Lawyers and Judges: Living with the Rules; What is JLAP?

New Rules to Review

Six new sets of rules are going into effect for Indiana lawyers and judges on Jan. 1, 2013 based on a series of Ind. Supreme Court rulings issued in Sept.  The list of new 2013 orders (plus three effective July 1, 2012), if you have not seen them is here: http://www.in.gov/judiciary/2784.htm

It always pays to read the rules.

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Paying for Disclosure Violation

One hard fast rule in Bankruptcy Court is for the lawyer to disclose any interest, direct or indirect, in representations in the case.  In a recent bankruptcy case in Georgia, the lawyer was required to disclose any interest in any creditor of the bankrupt client before representing the client.  In this case the lawyer forgot to disclose that he and his wife were shareholders in a creditor bank, while her father had been bank president, board member and chair of the bank’s board, and to top it off, the lawyer’s former partner was general counsel to the bank.  Oops.

The opinion, as reported by the Business Reporting Committee, does a nice job of listing the five factors to used in determining if a disclosure misstatement is to be actionable, and here it clearly was an intentional misstatement of reality.  The court cut the law firm’s fees by $20,000 which should get these folks attention. And yours.

H/T Gregory Jordan for the link.

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What is JLAP?

One of the critical pieces of the legal system in Indiana was created in 1997, by adoption of Rule 31 of the Admission and Discipline Rules of the Supreme Court.

JLAP’s purpose “is assisting impaired members in recovery:” of all kinds.  It is designed to “provide assistance to judges, lawyers and law students who suffer from physical or mental disabilities that result from disease, chemical dependency, mental health problems or age that impair their ability to practice;…”

Terry Harrell is the extremely competent and compassionate Executive Director.  If you have questions about your situation, or the situation of a friend or colleague, you should review Rule 31 here and call JLAP for information and assistance.  The program has volunteers around the state, so you may get someone from nearby to provide assistance.

Of course the important thing is, if you or someone you know needs help, you should call. Today, or tomorrow. The impact of the call can be life saving, or might protect the rights and property of a client. Good faith calls get some qualified immunity under Section 9.  Call.  It is better than being required to report misconduct if you don’t call.