Hiding Things Brings Trouble: Assets, Evidence and a Court Order.

Hiding Assets

The case started for Washington State lawyer, Thomas McGrath when his wife, a chiropractor, started a fight with her ex-employee.  Forbes reports on his bad actions: first to represent his wife in a case where she lost a judgment of $500,000; and then to do improper asset protection in violation of the RPC.

Shifting assets when the case is going badly is a time honored tactic, but shifting a spouse’s asset through the office trust account in violation of Rule 1.15 is still a forbidden mixture of personal assets with clients’ assets.

Filing bankruptcy is not generally improper, but falsifying the Bankruptcy Petition is a federal felony and an ethical violation.

As Jay Atkisson, the Forbes columnist explains: “This case has nothing to do with legitimate asset protection planning, and everything to do with plain old fraud on creditors.”

What do you think the Washington State Supreme Court did to the husband lawyer, just trying to help his wife?

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Hiding Evidence on Facebook:

Matthew Murray was slow to advise his client about the eternal nature of electronic evidence. Murray’s client lost his wife and filed a wrongful death case.  Among the damages claimed was loss of love, affection and companionship.  After being asked to produce “screenshots” from his client’s Facebook account, Murray told his paralegal to make sure the account had been “cleaned up. ” The plaintiff-client’s photos disappeared from his Facebook wall, but the defense counsel already had 16 of them, including the one that showed him wearing a T-shirt that said “I ♥ hot moms” while holding a beer, soon after the wife’s death.  Since the suit was for the losses he suffered due to the wrongful death of the plaintiff’s wife as caused by the defendant, the photo was thought to be material to damages.

First, the trial court ordered the payment of defendant’s attorney fees against Murray and his client in the amount of $722,000 and slashed the jury’s $8.5M verdict. The VA Supreme Court reinstated the verdict, but allowed the attorney fees order to stand.

It also found Murray violated the RPC and entered a sanction: What would you have ordered?

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Hiding the Court Order?

A busy time for the Washington State Disciplinary Board.
And Tom Kamb was a busy lawyer. He had a criminal law practice, mostly DUI defense work. On the day of the problem, he had 20 case hearings set in the morning.  He got a plea on one case, which was submitted, and approved by the court.  He forgot to get the breath test suppressed, which appears to be a normal event, since suppression of the breath test protects the client’s driver’s license.

Kamb later had a hearing with the Dept. of Licensing’s ALJ about his client’s driver’s license, Kamb reported that he had gotten the breath test suppressed in the criminal charge.  Now he had to find a way to prove that.  Bad idea.  He asked for the closed file from the clerk, and penciled a note about the test being suppressed on the signed order. The now suspicious clerk refused to provide him with a certified copy of the newly forged order, and sent him to the prosecutor.  The prosecutor agreed to a retroactive suppression, not knowing that Kamb had lied to the DOL’s ALJ, and forged the court’s order.  When Kamb returned with the note from the prosecutor, the clerk sent him to the presiding judge who was not pleased.

The judge files disciplinary charges, and after the investigation by bar counsel, there was a finding of Kamb’s guilt on three counts:

Count 1 charge[d] Kamb with misrepresenting the existence of an order suppressing his client’s breath test to the hearing officer in violation of RPC

3.3(a)(1). Count 2 charge[d] Kamb with changing Judge Svaren’s order in violation of RPC 8.4(b ), 8.4( c), and 8.4( d). Count 3 charge[d] Kamb with violating RPC 1.3 which  requires a lawyer to act diligently and promptly, by failing to discuss suppression of the breath test with [prosecutor] Johnson before the DOL hearing.

Kamb challenged the Hearing Officer’s findings. The court found his version of facts lacked credibility.  The transcript of the ALJ’s hearing proved the timeline and his misstatement of facts about the existence of a court order that helped his client.

What did the WA Supreme Court do in this case?

Poll Results:

1. Washington Supreme Court disbarred the lawyer after 40+ years of practice – citing the filing of false filings and claims, and lack of remorse.

2. Murray got a five-year suspension from the practice of law.

3. The opinion cites as authority: “The American Bar Association’s Standards for Imposing Lawyer Sanctions (1991 & Supp. 1992)” as the guide for lawyer discipline in Washington State.   Kamb got disbarred.

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Telling the Client’s Story; Drinking, Twice?; Calculated Fraud?

Must be Tempting

To know a juicy story, with sex, politics, and prominent people, and be forbidden to tell, is tough.  It is such a temptation that the authorities wrote a rule especially for lawyers, to threaten us not to reveal confidential information.  But Karl Rove is also a tempting target.  And there is money in writing books, so they say.

It is tough to deal with one temptation, but two, or three all at the same time?  Joseph Stork Smith, of Carmel, IN, did not handle the pressure well, apparently.  He decided to write the book, name the names, and tell the sordid stories that he got from his legal client. Some have speculated on who the client is, but the Indiana Supreme Court in its Order did not name her.  I respect that. And having read the opinion, it is pretty juicy writing for a per curiam decision.

Smith got a disbarment. End of the line for him.  Started practice in 1976, so early he is in his early 60s most likely.  Succumbed to temptations.

Maybe if he had not subtitled the book “Machiavelli’s Sexy Twin Sister”….

Once ought to be enough.

Allen County, IN Public Defender Mitchell Hicks, has seen the twice drunken arrestee too many times in the practice, he has to know better, but….“I screwed up,” he said.

A fight with a former client outside a bar… an unregistered gun… trouble. Arrested for a second alcohol offense, he took it like an adult (unlike so many defendants). Sentencing was as follows:

[Judge Fran] Gull ordered Hicks to serve 60 days at the Allen County Jail on the drunken driving charge but suspended 50 days of that sentence. She ordered him to serve 365 days on the charge of carrying a handgun without a license but suspended 275 days.

She then said he could serve his time in the county community corrections program and that his [driver’s] license will be suspended for 180 days.

100 days of home detention. No Disciplinary Action by the Indiana Supreme Court, yet.

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Biglaw lawyers ought to know!

Some firm names just ring out as BIGLAW, and among the biggest is Baker & McKinzie.  Biglaw firms have lots of people around, and they suggest that lots of people provide good protection for their clients. When you get billed for 10 lawyers work on your business matter, you should have especially good protection from the harms that some solo or other errant lawyer might commit.

Not in the case of Martin Weisberg!  He was sentenced to two years for committing “a calculate fraud and lies” to steal $1.3M from his securities clients.

The scheme was to put $30M of client’s money into a “trust account,” but he did not tell the clients that it was earning interest.  Lawyers use interest free or IOLTA trust accounts for handling small amounts of money for clients, if the interest that would be earned is not worth the time to set up the account.  The Rules co permit the earned interest be used for public purposes, instead of simply going to the bank. But when the amounts involved make it worth the time to open an interest earning trust account, the lawyer must do that.  Weinberg put $1.3M earned interest in his pocket.  That violates lots of laws, and lawyer rules.  He got caught. The Sentencing Order included:

 [T]wo years in prison,… three years of supervised release, 1,000 hours of community service, a $297,500 restitution order and a $250,000 forfeiture.

I always wonder why if the finding is $1.3M in losses, the restitution and forfeiture together do not equal at least $1.3M – plus interest.

PA Judge steals Drugs?; Former VA Bar President gets Disbarred; the Indiana Oath of Attorneys

Another PA Judge goes bad?

Pennsylvania has had a run of bad luck with its judges. In 2011, two judges were sentenced for taking kickbacks for sending kids to a private juvenile prison instead of to juvenile probation. Now a judge is charged with stealing cocaine from the evidence locker on drug cases that had been closed.

Judge Paul Pozonsky resigned abruptly last year, after questions were raised about his residency. Now charges are pending for the alleged theft of drugs from his evidence locker. Pozonsky had changed the local rules for evidence in drug cases, requiring that the actual drugs be brought to court in criminal cases, and placed in evidence. After a while State Police did an inventory of the evidence closet, and found drugs missing and evidence tampered with.

His lawyer calls it “a serious matter, and he [Pozonsky] is treating it as such.” Really serious.
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Former Virginia Bar President Bills Big – Disbarred

With a billing rate of $850 per hour, former Virginia Bar President Glenn Lewis still thought he needed to pad his bill. But there is the padding of a coffee break while on the client’s clock, and then there is Lewis’s padding.

According to the Washington Post, Lewis was “once one of the Washington area’s highest-paid and most-respected divorce lawyers and a former president of the Virginia Bar Association…” See the previous post on the Icarus Rule.

Suing clients over a bill is often a mistake (one PLP defense lawyer reports that 90% of client claims for malpractice against lawyers are, in fact, cross claims filed when the lawyer first sued for unpaid fees), but when the client you sue is also a lawyer, and the suit is for $500,000 more in fees on a divorce case where the client has already paid $382,000, and the case settled during pre-trial work, that should be a concern that was considered before filing the first lawsuit. Among the charges in the suit was a claim $253,000 in interest on the past due legal fees [doing the math, $253,000 interest on $632,000 in fees, more than 1/2 of which had been paid might be a usurious interest rate].

When a smart client gets sued for fees, and the client can afford a billing expert, the lawyer’s time records will get reviewed, very carefully. Lewis’s records could not stand up to a serious challenge, although he did stand by the accounting offered to the court. When the records started showing more than 30 hours a day billed by Lewis, the situation got sticky for him. He blamed “block billing” but that is no excuse, the Virginia Disciplinary Commission decided. The decision is appealable to the VA Supreme Court.

Lewis settled the civil case with the lawyer-client. He had asked for $500K from the client, but Lewis paid out $102K to the client. Then the trouble got worse for Lewis. Two more former clients sued, they claimed that they had paid, but Lewis did not do the work, and refused to refund retainers. Once things started falling in, they fell hard, these two got default judgments and then more claims came in.

Bar Discipline Commissions understand that working with clients can be tough, but taking clients’ money and doing no work, that is just not acceptable. It is hard to understand why the lawyers violate their Oath of Attorneys.

 

Oath of Attorneys

FYI – this is Indiana Admission and Discipline Rule 22.

Upon being admitted to practice law in the state of Indiana, each applicant shall take and subscribe to the following oath or affirmation:

“I do solemnly swear or affirm that: I will support the Constitution of the United States and the Constitution of the State of Indiana; I will maintain the respect due to courts of justice and judicial officers; I will not counsel or maintain any action, proceeding, or defense which shall appear to me to be unjust, but this obligation shall not prevent me from defending a person charged with crime in any case; I will employ for the purpose of maintaining the causes confided to me, such means only as are consistent with truth, and never seek to mislead the court or jury by any artifice or false statement of fact or law; I will maintain the confidence and preserve inviolate the secrets of my client at every peril to myself; I will abstain from offensive personality and advance no fact prejudicial to the honor or reputation of a party or witness, unless required by the justice of the cause with which I am charged; I will not encourage either the commencement or the continuance of any action or proceeding from any motive of passion or interest; I will never reject, from any consideration personal to myself, the cause of the defenseless, the oppressed or those who cannot afford adequate legal assistance; so help me God.”

The Indiana Bar Fellows dinner will join in reciting the Oath of Attorneys this Friday at the annual Fellows Dinner, this time in Chicago.  If you are interested in becoming a Fellow of the Indiana Bar Foundation, call the IBF office.

Lawyers = Icarus?; Hubris?; Conoured

An Icarus moment?

Paul Bergerin, a once prominent NJ lawyer, former state and federal prosecutor and recently a criminal defense lawyer was convicted by a jury on 23 counts, including Conspiracy to Murder – a witness, and Racketeering, in the operation of his law firm. He has been sitting in jail since 2009 on the charges, had one trial declared a mistrial, and faces life in prison now.

When the lede starts “once prominent attorney” you know the Icarus paradox is involved.

H/T Tim Kalamaros

Being the Investigator gets you Suspended

David Schalk made a serious mistake, he forgot his role as a lawyer.  Lawyers are not investigators, and should not make themselves witnesses, or more importantly criminal defendants. One sage said “Whatever you do, make sure the client goes to jail, and you go to lunch.”

Schalk had a client charged with possession of Meth. He apparently did not think that the confidential informant was legitimate, and was selling drugs himself.  So Schalk set up a drug buy by two of his criminal defendant’s friends, plus a juvenile. Schalk provided the funds and a recorder, and told the agents that “it is all legit.”

After the “agents” successfully bought some drugs they smoked some, kept some of Schalk’s money, and gave him a folded newspaper that they said contained the drugs.   Schalk tried to get law enforcement to make arrests, and so they arrested the lawyer Schalk. for Conspiracy to Possess Marijuana, and Attempt to Possess.  That was not his plan.

The court found five facts in aggravation, nothing in mitigation.  The opinion discusses his lack of insight into the misconduct and his attacks on the officers for being vindictive as evidence that Schalk needing disciplined.  So it did the deed.  Schalk got nine months without automatic reinstatement. I will explain the importance of “automatic reinstatement” in a later post.

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Conour

Recent word is that Bill and Jennifer Conour’s names still grace the atrium at the McKinney Law School.  According to the Indiana Lawyer story of Sept. 12, 2012 the law enforcement authorities were actively investigating the matter in December 2011.  That story’s lede is “William Conour, until recently, was one of Indiana’s most respected and powerful personal injury attorneys,…” (see reference above).

I think it is time for Indiana University to figure out how to get those names off the atrium wall.  Whatever it takes.  IU’s new general counsel will surely do a better job to include contract terms that fit with Herman B Wells’ admonition about naming things until five years after the person’s death, or at least have a forfeiture clause if necessary.  Coaches contracts should have morals/NCAA clauses as well.  Good luck Jackie.

Billing troubles abound

Inflating the fees

BigLaw firm gets caught in mocking a client about the fees the firm is charging, and get sued. DLA Piper, the world’s largest law firm was representing a client, Mr. Victor, in a potential bankruptcy of one of his companies.  The fees started and never quit.  Victor asked about the size of the bills, and  the number of new lawyers working on the case, the lead lawyers working the case started mocking him. “I hear we are 200k over our estimate – that’s Team DLA Piper” and “churn that bill, baby” emails made their way around the office.

Once DLA Piper filed suit for $675,000 in past due fees, Victor counter-sued for the “sweeping practice of overbilling.”  He got the emails described in his discovery request, along with 250,000 pages of other stuff created in the case. Victor amended his complaint, added fraud and punitive damages request of $22.5M.

Don’t mock your clients, or overbill. And be careful even joking about billing in an email or other discoverable method.
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Losing Half the Billing on a Big Case

The plaintiffs lawyers had a good deal, they thought.  12 law firms came together to file a class action suit against LivingSocial, a daily deal online marketing group.  The issue was expired deals, a customer buys a deal, pays for it and the deal expires before it is used. The question is who gets the money?

46 lawyers worked on the case, and the lawyers and their paralegals racked up over 4,000 hours.  The fee request was $3M.  That is only $750 per hour across the board.  LivingSocial did not object, but Federal Judge Ellen Huvelle in DC did the math, asked a bunch of questions and wrote a 39 page opinion that decided that the lawyers should not get that much money, and criticized lots of what they did and did not do.

Judgge Huvelle said they would have to make due with only $1.35M and leave the other $2.65M in the pot for the class members.

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How much is a name worth?

For Stan Chesley, he thought his name as a “the godfather of the modern class-action lawsuit” ought to get  him something extra.  His fee was only $20M on a $200M case. The phen-fen cases in KY are now notorious, and Chesley’s matter is not the worst.  He got disbarred in KY (his home is Ohio, and what they do is yet to be determined) for an unreasonable fee in the case.

The Court said “his professed ignorance and lack of responsibility for any aspect of the litigation except showing up…” argued against a large fee. Also, the clients signed up for a 1/3 contingency, but the lawyers had charged 49%.  Chesley was to get about $14M if he deserved any fee, but he still charged $20M.

Two lawyers in the case have gone to prison for swindling their clients out of $94M of the settlement funds. Their sentences – 20-25 years.

H/T John Conlon

Neglect gets 3 years; Lawyer arrested for fraud?; Report your Sex Offender Client? NY says no!

There must have been neglect, statement of proof in the opinion would be nice.

Louis Denney eventually had four DI cases filed, one for each year of 2008, 2009, 2010, and finally one in 2011 that did him in. Unfortunately the Order reads more like a CCS entry, so it is hard to tell what all Denney did. We are told that the Hearing Officer, Judge Jeff Todd issued a 56 page report, Denney appealed and was heard by the Supreme Court, and the court adopted that Report, but we just get a snippet of info on Counts 2,5,7 and 9. The court found violations of Rules 1.2(a), 1.3, 1.4(a) & (b), 1.5(a), 1.15(d), 1.16(a)(3) & (d), 3.1, 3.2, 3.4(c), 4.4(a), 5.4(a), 8.1(b) and 8.4(b).  Denney was a busy guy, and apparently  neglected many of his cases. He did fight the allegations and the Hearing Officer report, but the final order does not offer many details.

There is no link to the 56 page report, so what we know is that Denney: charged unreasonable fees, neglected client cases, failed to do the work for which he was hired, failed to communicate, refused to return unearned fees, disobeyed court orders for accountings, and made scandalous and irrelevant accusations against a judge when the judge refused a continuance, in an attempt to remove the judge from the case.

As a result he is suspended from the practice for three years without automatic reinstatement, and we know  that Justice Rucker would have approved a one year suspension, and Justice David would have disbarred Denney.

What we don’t know that would be educational for lawyers who review disciplinary matters is: How many total counts were found against the respondent; were any counts found for the respondent; what time frame was Denney committing violations, and did he continue to violate the duty to clients after the 2008 complaint (which resulted from his failure to respond to grievance), and was the 2008 issue (or the ’09 or ’10 issues) wrapped into the 2011 matters? Were any clients made whole during this matter or will the ISBA’s Client’s Financial Assistance Fund be involved, if the clients are aware of this benefit?

I imagine writing disciplinary opinions is difficult, but we could learn more if more information and judicial reasoning was put on display in the opinions that are issued. Especially after a well fought hearing.

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Lawyer Arrested for Benefits Fraud…

Shawn Donahue pleaded not guilty to fraud in Harrison County recently.  The Louisville Courier Journal’s story called it welfare fraud, but it appears to be unemployment compensation benefits at issue.

The allegations are that Donahue received UE benefits while still working for a couple local entities that were paying him for legal work. It is alleged that he failed to disclose the earnings. Donahue’s lawyer, Bart Betteau predicted that his client would be cleared of the charges.

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NY Opinion, Lawyer not required to Report Inaccurate reports by Sex Offender

Legal services lawyer is contacted by potential client PC, who is a registered sex offender.  Lawyer is asked to review an administrative filing, made under penalty of perjury, to a state agency. She does, and in confirming the information submitted determines that the allegation of being a felon is inadequate, because pc did not disclose the sex offender status of Level Three Rapist, and pc did not register as required by law, under his properly spelled name.  PC  did not appear for appointment, so Agency decided not to represent him further, but did not report the evidence it found to the agency.

Should lawyer have reported the findings to the state agency? NY Ethics Committee says No! (see Opinion 963) Rules of Professional Conduct # 1.6 deals with confidentiality of client communications, and if PC had not become a client, Rule 1.18 carries duties to prospective clients. The rub is that Rule 3.3 “Conduct before a Tribunal” puts duties to disclose confidential information on lawyers, if the situation meets the standards. Here it is a close call, but since the lawyer did not appear before the tribunal, but only reviewed information submitted to it, and the submission was not by the lawyer, the committee finds that “It would not make sense to require a lawyer to take reasonable remedial measures regarding proceedings before a tribunal in which the lawyer has never appeared on behalf of the client.”

But does the lawyer have to report the failure to register properly with the police?  Rule 1.6(b)(2) in NY and in Indiana, is a permissive rule.  “A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary: (2) to prevent the client from committing a crime… and in furtherance of which the client has used or is using the lawyer’s services” (Ind. Rule).  NY’s Rule 1.6 does not have the “and in furtherance” language.  Indiana’s does which makes it even less likely that a disclosure would be appropriate even with the permissive disclosure language.

In NY the committee previously opined that past crimes cannot be revealed under this provision, only future crimes. Either way there is no mandatory disclosure, but a permissive disclosure in NY looks to be less risky than in Indiana, where there was no use of the lawyer’s services in furtherance of the misreporting.

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Jeffersonville INNS of Court meeting

Thursday March 21, Ted Waggoner will attend the Jeffersonville IN Inns of Court meeting at the invitation of Judge Terry Cody to speak on the Indiana Attorney Surrogate Rule, and its application to lawyers and law firms.  Ted chairs the Attorney Surrogate Rule Special Committee of the ISBA. 

Contact me for more information about this important rule.

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.

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.