Breathing Space – IND lawyers and 1st Amendment Rights; Lawyers and Child Porn – Problem in CA; Rule 1.8(a) will be Enforced.

CONGRATULATIONS TO SUPREME COURT

Faced with a tough question about the interplay between the rights of a group of defendants to a fair trial, and the feelings of a trial court judge, when her possible bias is pointed out, the Court, in one of two disciplinary cases filed against the lawyers who were trying to protect their clients, under the Rules, found no violation of the Rules of Professional Conduct. This issue was raised here a couple weeks ago.

Thomas M. Dixon, of Osceola, outside of South Bend, together with David A. Wemhof, of South Bend, was accused of violating Rule 8.2(a) for the contents of his Motion for Recusal.   The Rule  says;  “A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge.”  The Hearing Officer found a violation, and Dixon submitted that ruling to the full Court.  The Court in a 4-1 opinion held no violation occurred. 

The concern of lawyers in representing clients who fear a biased judge would have been palpable if the court said that an allegation of bias is proof of “a statement..false… concerning the qualifications or integrity of a judge.”  Rule 11 requires that the lawyer endorse the statements, but most are statements of opinion, most often the opinion of the litigant, who is the one with the right to a fair hearing.

In this case, the judge who was asked to recuse was also the judge who ruled on the request, and who filed the complaint.  And Dixon did good legal work here. The Court distinguishes this case from the Wilkens case of 2003, showing the efforts Dixon put into supporting the statements that were made about the need for the trial judge to recuse herself.

Good for the Court.  There are some limits on the authority of the Disciplinary Commission to protect judges from the rights of litigants through the attacks on their lawyers.

Let’s see if this portends any outcome in the Wemhof or Ogden cases now in the process.

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Child Porn, and other automatic disqualifiers 

Gary Grant, a Cal lawyer, was found by the ICE (Immigration and Customs Enforcement) to have used email to register for a PayPal account, in order to purchase and download child pornography.  With over 100,000 images deemed pornographic, ICE found 19 photos and one video of youths who appeared to be between the ages of 14-16.

Grant pleaded “innocent” but later admitted that a few photos of underage girls were downloaded, and promptly deleted.  Such a deletion does not remove the photo from the computer.  He pleaded guilty to one charge of felony possession, and the prosecutors dismissed two other charges: the sentence was 90 days served three years probation and sex registration for life.  Grant later violated his probation, and spent an additional 183 days in jail.

The Cal State Bar automatically suspended Grant’s license, pending hearing. The Bar Court trial judge recommended disbarment, but the Bar Review Department later recommended a suspension for a period. Bar Counsel appealed the recommendation to the state Supreme Court, which at this time has not ruled.

The question before the court is the “moral turpitude per se standard” California has for lawyers.  If a lawyer is convicted of a crime that qualifies as moral turpitude per se, the disciplinary proceedings are a summary disbarment.

The article on this in the California Lawyer (callawyer.com) describes the hearsay evidence problems, since the Bar Counsel did not have access to the images, but had a computer analyst “describe the images” she had viewed. The appeal is from the Review Department panel’s conclusion that felony possession of child pornography meets the moral turpitude per se standard.  As Grant was charged with having 2 out of 100,000 images that qualified, and there was no “proof that Grant sought out child pornographic images, displayed a sexual interest in children, or otherwise intended to harm a minor” according to Judge Catherine Purcell, and it was a case of first impression, the decision was for suspension.

The history of Cal discipline for child pornography cases is described in the article.  The conclusion, in the 18 cases since 2007, none of them have been summarily disbarred.  There have been 33 summary disbarment actions in the 2011-2013 period, most for forgery, grand theft or other frauds.

The question arises: What is the purpose of the Bar Disciplinary Process?  To punish bad people who hold licenses to practice, or to protect the public?

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AUTOMATIC FEE INCREASES ARE SUBJECT TO RULE 1.8(a)

Ellen Corcella started working on a case in 2009, with a written fee agreement providing for hourly fees of $175 per hour.  When the case concluded in 2011, she billed the clients more than 60 hours at her then rate of $200 per hours.  Client files grievance, she refunds the excess of $1580 and all is well, right?

Not quite.  During the representation, the Court found that Corcella changed the fee agreement twice. The first time to a contingent agreement, then to a blended contingent and hourly fee agreement.  At no time did she give the Rule 1.8(a) warning.*

Let’s go over this again.  If you change a fee agreement, written or not, that does, or may favor you as the lawyer, you must give a Rule 1.8(a) advisory to the client.  Tell the client to take time to obtain an independent professional legal opinion that the transaction is fair and reasonable to the client.  You also must determine that the modification is fair and reasonable, and is understood by the client.  Finally, get the approval of the change in writing.  Follow the rule, with due regard for that part of the Comment as applies.  See below.

*  Rule 1.8. Conflict of Interest: Current Clients: Specific Rules

(a)    A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

(1)    the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

(2)    the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

(3)    the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.

Comment 1 to Rule 1.8(a), in part:

…It does not apply to ordinary initial fee arrangements between client and lawyer, which are governed by Rule 1.5, although its requirements must be met when the lawyer accepts an interest in the client’s business or other nonmonetary property as payment of all or part of a fee. Paragraph (a) applies when a lawyer seeks to renegotiate the terms of the fee arrangement with the client after representation begins in order to reach a new agreement that is more advantageous to the lawyer than the initial fee arrangement…

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How Stupid is that Other Party?; Should I Push that Client?; Extra Punishment for Public Officials; Ogden Update

Legal writing experts tell lawyers to be careful with tone and expressions of disdain or dismissive attitudes towards opponents in motions and briefs.  And lawyers understand (usually) that what might work in traffic court should not be tried in Federal Circuit Courts of Appeals.  And lawyers who represent big clients, like State Farm Auto ought to expect extra scrutiny from courts and judges (mostly due to the respect courts often are suspected of giving to the biglaw lawyer types who represent the big companies.

Imagine what the discussion with General Counsel for State Farm was for the lawyers in Bennett v. State Farm earlier this week.  The Sixth Circuit Court of Appeals (one level below the US Supreme Court in the judicial hierarchy) mocked the insurance company’s lawyers for their brief opposing the efforts of the Bennetts to get what they had coming from Mrs. Bennett being struck while walking her dog.

The opening sentence of the opinion states:

There are good reasons not to call an opponent’s

argument “ridiculous,” which is what State Farm calls Barbara Bennett’s principal argument here. The reasons include civility; the near-certainty that overstatement will only push the reader away (especially when, as here, the hyperbole begins on page one of the brief); and that, even where the record supports an extreme modifier, “the better practice is usually to lay out the facts and let the court reach its own conclusions.”[citations omitted]  But here the biggest reason is more simple: the argument that State Farm derides as ridiculous is instead correct. (emphasis is added).

Oops.  That qualifies as a slapdown.  Now we don’t know which lawyer of the team of Richard M. Garner or Gregory H. Collins, both Ohio lawyers, gets credit for the brief, but the other probably had an opportunity to say “maybe we ought to read our client’s insurance policy before we ask the court to ignore the definition plaintiff is asking for.”

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Clients in dissolution cases can be difficult. they are going through a stressful time in their lives. They often have to deal with their lawyer, the spouse, the spouse’s lawyer, and maybe the kids.  you expect them to lose their cool on occasion.

Lawyers are to be the professionals, even when our client is not dealing well with matters.as well as we want.  Kokomo lawyer Dan May, a long time practitioner, forgot for a moment.

The details are sketchy, but include him shoving the client over the courtroom railing, a battery charge, a diversion agreement, and now a 60 days suspension with automatic reinstatement.

As Sgt. Esterhaus used to say:

http://www.youtube.com/watch?v=Jmg86CRBBtw

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We appreciate our public officials in strange ways.  We pay them less than they could make as practicing lawyers (at least that is the myth – see the SSF Conference Salary Survey report here from 2007).  Then when a public official has a bad moment, we hold her to a higher standard.

Lori Hittle is a part-time deputy prosecutor in Howard County.  She pleaded guilty to OVWI.  Took her punishment in court, got a month suspension from her job without pay, and now gets a public reprimand. That is a bit more than the normal lawyer gets for such an offense, often getting a private reprimand with JLAP provisions.

But we hold public officials to a stricter standard.

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Finally, Paul Ogden update.

I have commented on the Ogden disciplinary case several times, like here, and here. Paul writes about it on his blog with more regularity than most would. Tuesday Ogden said that the Disciplinary Commission is seeking a one year suspension in his post here. He follows up with more commentary in Thursday’s post here.

I will let Paul Ogden speak for himself.  The issues are complex, and important. As a lawyer, you need to think about them.  If you are not a lawyer, you ought to consider where your rights to speak freely are if the lawyers lose their rights.

Lawyer’s Speech and Advertising – Trouble in the Making

Ethnic Slurs Will Not Be Tolerated

“Your client doesn’t understand what laws and court orders mean I guess. Probably because she’s an illegal alien to begin with.”

The lesson of Joe Barker is to not use this method of trying to resolve a parenting time issue. At least I hope that is the lesson, because the only other potentially “burdensome” act is to state that “we’ll be demanding she be put in JAIL for contempt of court.” (emphasis in original).

The Indiana Disciplinary Commission filed charges and the Supreme Court imposed a 30 days suspension from the practice effective Oct. 14, but not allowing Barker to undertake new legal matters between Sept. 6 and Nov. 14.

Costly outburst, for aggressive advocacy.  No prior disciplinary issues, but Barker “has no insight into his misconduct.” Charges filed in 2010, and just now being concluded.  This matter was heard by Judge Kim Brown acting as the hearing officer for the Indiana Supreme Court.  Judge Brown has her own problems now with the Judicial Qualifications Comm. and one of the charges she must answer to related to the length of time she took in completing this matter.

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Faxing Those Canned Newsletters as a Means of Advertising 

Many of us get and a few of us have used the canned newsletters that inform our clients and potential clients that we are current on some legal topic or another.  And 25 years ago the fax machine helped make sharing our knowledge as cheap as the price of a phone call.  Now with the internet, it is even cheaper, unless!

Greg Turza, an IL lawyer got caught up in the practice of faxing newsletters to lots of folk.  He had 200 people or businesses he would fax his newsletters to.  He forgot to read the articles about the Telephone Consumer Protection Act of 1991, 47 USC 227.  But a few of the recipients did not overlook that issue.  The federal law states that senders must have consent to fax advertising materials, and that unwanted faxes must have opt-out provisions on the materials. The penalty is $500 per fax, per recipient. Oops.

$4,215,000 penalty and judgment against Turza for 8,430 faxes was upheld in the 7th Circuit. Will he pay it?  If he does, then the opinion by J. Easterbrook takes on some interesting aspects with what happens to the damage award.  It looks like the lawyers will demand their $1,430,055.90, and lead plaintiff will expect his $7,500 for the 32 faxes (seems like it should have been $16,000).  Who after that will get paid?  Remanded to determine after the $1.437M is paid into the court.

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Lawyer’s Speech and Paul Ogden

Anyone who cares about the boundaries of lawyers’ freedom of speech rights and the consequences of the disciplinary process in Indiana must pay attention to the ongoing saga of Indy lawyer (for now) Paul Ogden and his long battle with the Disciplinary Commission, former Executive Director Don Lundberg, current Executive Director Mike Witte, the Supreme Court, and a Hendrick County judge in a seemly private email.

You can catch up by following this link to Ogden’s blog site, the tagline Disciplinary Commission, where it appears he is telling his side of the story. He also links to the Indiana Business Journal’s editorial on the priorities that the Disciplinary Commission has shown in pursuing Ogden instead of others, including Paul Page, David Wyser and the handling of William Conour.

The current DI matter, criticizing a judge in violation of the rules. has been heard by the hearing officer who will make findings and a recommendation to the Supreme Court.  Ogden predicts that he will lose his law license.

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Seeking Recusal as a Basis for Discipline? 

In a story that has not made local impact, except for Ogden’s blog, a pro-life website Life Site News in 2009 reported that a couple of local lawyers were seeking the recusal of a South Bend judge due to perceived prejudices of the judge’s husband, a noted advocate for abortion rights. The defendants before the judge were pro-life advocates arrested for protesting on the Notre Dame campus when President Obama spoke at graduation.

Ogden reports, and I have verified by the Clerk of the Supreme Court Docket Sheet, that disciplinary charges are on file against Thomas M. Dixon and David A. Wemhoff, the lawyers in the ND88 case.  The docket sheet does not inform the nature of the charge, but Ogden says the recusal issue, as an unwarranted attack on the judge is at the heart of the matter.

This will also bear watching, if you have a tendency to speak the truth to power, or try to protect your clients from a judge who should not hear a particular case for a particular litigant.

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I remembered these matters last week, when I got a call from a lawyer in Indianapolis, to ask about the judicial temperament and other qualities of a certain judge in Northern Indiana.

I apologize to you in advance, but for now, if you call and ask about the character, quality or work ethics of any judge, please understand that my “walks on water” response might be code.  Or it might not.

In my opinion, lawyers must be able to state facts and reasonable (to the reasonable person standard) opinions about judges in pleadings, (especially in recusal motions) and in conversations with clients, lawyers and the courts.  Judge Witte benefitted from those kinds of comments in his time on the bench, and in moving to the Commission. Other judges should have that benefit, or if they are poor judges, that burden.  We do this justice thing for those standing before the bench, not for the one on the bench or the ones at the bar.

It is dangerous if we lawyers cannot protect the rights of our clients, under the rules, by seeking the recusal of judges who are bad fits for the clients’ cases, just like we are duty bound to seek the dismissal of a juror who has some bias or prejudice against our client.

KEEP A WATCH OUT,  as Indy lawyer Patrick Olmstead and I will be speaking on advertising and ethics at the 2014 Solo and Small Firm Conference in June 2014, at French Lick.

Ogden is a fighter, but…; Voils forgot to fight; Disabled and out of the fight

Okay, Paul…it’s your fight

Indy lawyer Paul Ogden writes a blog and challenges authority regularly. Today (Thursday) he threw a punch at the Disciplinary Commission with this blog post.

His trial before the Indiana Supreme Court is next Tuesday, July 30.
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But Alex, Don’t forget to Fight the cases you are hired to fight.

Alex Voils was hired to fight an insurance company for benefits as the company denied the client’s claim in 2005. In 2009, after repeated requests for action, the client fired Voils.  Then he failed to provide the file to new counsel and he ignored the Disciplinary Commission’s request for a response to the grievance.

The parties agreed on discipline of 30 days suspension with automatic reinstatement. The court suggested that punishment might have been more severe if there had not been an agreement. They agreed that Voils violated three rules:

 1.3: Failure to act with reasonable diligence and promptness.
1.16(d): Failure promptly to return to a client case file materials to which the client is entitled after termination of representation.
8.1(b): Failure to respond in a timely manner to the Commission’s demands for information.

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Disability Suspension

We don’t see too many of these, and as the Boomers age, and the Greatest Generation ages even more, we may see these with more regularity. Indy lawyer Mary K. Kleiss was accused by the Disc. Comm. of being disabled “by reason of physical or mental illness or infirmity, or because of the use of or addiction to intoxicants or drugs.”  No more is described.  Kleiss filed an Affidavit of Consent to the Disability Suspension.

The Supreme Court accepted the filings and suspended Kleiss under the A&D Rule 23(25), and ordered that she may petition for reinstatement upon the termination of the disability.  Good Luck.

“Causing grief to clients” = slapdown by judge; Learn from your neighbor lawyers’ mistakes; attend your clients.

Fee Shifting is no Reason to Mishandle a Case

There are a number of statutes that allow for fee shifting, and we hear calls daily for “tort reform” that pushes that idea.  Here it caused all kinds of bad incentives, as pointed out in a 113 page trial court order on the Fee Petitions under USTA and/or ELA environmental laws. [My experience in front of Judge Goshorn in a few cases is that he is normally a judge who uses few words to make his points – this output is unlike his normal work.]

Judge Goshorn of Wells County was asked to approve fees for the plaintiffs’ lawyer in the amount of $676,986.11. He denied the request, mostly due to the conduct of the plaintiff’s counsel in the handling of the case.  Award to counsel $0. actually less, due to several contempt of court orders.

The judge said many things in 113 pages, none complimentary to Mark E. Shere, the lawyer for the plaintiffs in this case. A few direct slapdowns:

• …Shere caused “untold grief and damage to [his] former clients”… [p.2]
• “has been an impediment, not a facilitator, to the just resolution of this cause.” [p.2]
• “this case has been extraordinarily and needlessly protracted…due to Mr. Shere’s fee agreement with his client.”  [p.3]
• “… Shere drove this case off a cliff, leaving in his wake two bankrupt and divorced clients and a third client in financial trouble with its reputation sullied.” [p.5]

The judge was just getting warmed up.  He continued through 169 Findings of Fact and Conclusions of Law, never letting up on Shere.  On page 96 he found that the Fee Agreement Shere had with his clients violated Rule 1.8(i) of the Indiana Rules of Professional Conduct which states:

(i) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer may:

(1)acquire a lien authorized by law to secure the lawyer’s fee or expenses; and

(2)contract with a client for a reasonable contingent fee in a civil case.

Judge Goshorn saw the fee agreement as giving Shere a stake in the case for clients Witt, to his favor and to the favor of co-client Hydrotech. He found that:

• “… the driver of this litigation was recovery of the maximum amount of fees for Mr. Shere, not assisting the Witts.” [p.99]

But this was not a screed against plaintiffs’ lawyers, he gave some fees to lawyers who worked for Shere, ordering the payment to the Clerk, and the clerk to direct the fees to those lawyers. [p.113].

The judge did not feel particularly sorry for the defendants in the case either, denying their petition for fees from Shere or his clients. The Court found:

• “This litigation was a caged grudge match [I like that word-picture offered by the judge] with both sides throwing punches. … The Court is concerned about the chilling effect an award of fees to defendants in a USTA or ELA action might have…” [p.111-2]

Shere gets nothing due to the way he tried the case, putting his interests above those of the client.

This case was also addressed by the Indiana Supreme Court in a March 21, 2012 opinion where Shere and his clients were held in contempt of court.  The Court, in  a 3-2 opinion agreed with the contempt finding, overturning a reversal by the Court of Appeals.

For some reason I suspect we may see another Supreme Court opinion coming out in the future concerning the actions taken by counsel in this case.

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Learn from your Neighbors*

One lesson that is important is for lawyers to learn from the mistakes of their neighbors. It is one of the reasons this blog exists. Elden Stoops, for example, should have learned from neighboring county lawyer Jeffrey Price‘s 2009 public reprimand.  The cases as described sound surprisingly similar.  Both lawyers filed family law matters, seeking emergency relief.  Both offered proposed Orders to the court granting the emergency relief their clients sought. Neither petition cited or certified the steps made to notify the opposing parties of the filing of the emergency filing, as required under Trial Rule 65(B).  Both courts set hearings and immediately granted the emergency relief. [Query, when can parties, and lawyers, count on judges reading pleadings and knowing the law on such things?]

Later the opposing parties were notified of the actions taken.

Unlike Price, who was charged with one offense, Stoops was charged and sanctioned for two offenses. The one above was for violating Rules 3.5(b) – ex parte communication with a judge; 8.4(d) & (f) conduct prejudicial to the administration of justice, and assisting a judicial officer in violation of rules of judicial conduct. Stoops second violation was a conflict of interest, when co-clients turned against each other, and he took the case of one of the former co-clients.

Public reprimand for his actions. He had a clean record, and the court accepted the idea that he was trying to protect children, were mitigating factors accepted by the court.

* A lawyer from my firm was involved in the Stoops case.

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Take Care of the Clients

Ron Weldy has been a frequent poster on the ISBA email discussion lists.  He should have been paying attention to his clients’ matters a bit better.  The Supreme Court recently suspended Weldy for 180 days, 90 to serve and one year probation.  From the six counts, there were issues of fee agreements, client communication, case management, and knowledge of the law were problems for the respondent.  The list of rule problems is lengthy:

Violations: The parties agree that Respondent violated these Indiana Professional Conduct Rules prohibiting the following misconduct:

1.2(a): Failure to abide by a client’s decision concerning the objectives of representation.

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.

1.4(b): Failure to explain a matter to the extent reasonably necessary to permit a client to make informed decisions.

1.5(b): Failure to communicate the basis or rate of the fee for which a client will be responsible before or within a reasonable time after commencing the representation.

1.5(c): Failure to disclose to a client the method by which a contingent legal fee will be determined.

1.7(a)(2): Representing a client when the representation may be materially limited by the attorney’s own self-interest.

1.15(e): Failure to properly secure disputed property until the dispute is resolved.

1.16(a)(3): Continuing representation of a client after the lawyer is discharged.

3.1: Asserting a position for which there is no non-frivolous basis in law or fact.

3.2: Failure to expedite litigation consistent with the interests of a client.

3.3(a)(1): Knowingly making a false statement of fact or law to a tribunal.

8.4(c): Engaging in conduct involving dishonesty, fraud, deceit or misrepresentation.

8.4(d): Engaging in conduct prejudicial to the administration of justice.

This case is a good one to review before taking a weekend off.  Stay diligent, read the law. Be careful with your fee agreements

Corporate Lawyers have Troubles too; E-Discovery Issues; Reimbursements?

Corporate lawyers don’t get too much discipline press

Sometimes they deserve it, so they too, can stay off the radar of LawyersWithTroubles.

Ky. lawyer Ronald Hines was a corporate lawyer with Cody Properties, Inc.  He worked there for years, Cody was the employer.  Then trouble brewed in the corporate boardroom, and Hines took a side with one faction.  In fact he filed a suit against some of the corporate officers, without the Board’s approval, and expressed his opinion that the Board was not properly elected.  But he did not do it within the chain of command, or under the Rules of Professional Conduct.

He turned corporate files over to dissident shareholders, and objected to the LLC’s organizing papers that he had drafted to create the entity, calling them “fraudulent.”  He got fired by the new management, but still continued to hold himself out as “counsel for the corporation.”

The Kentucky Supreme Court found violations or Rule 1.7 – Conflict of Interests, 1.13(a) – Duty of Loyalty with Organizational Clients, 1.4(a) Failure to Communicate with Client (the new officers he was fired by), 1.16 Duties  Upon Termination of Representation, and 1.8 Duty of Confidentiality of Client Information.

The Court suspended Hines for 120 days for this series of violations.  KY does not report the process of reinstatement in this Order.

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“I [heart] hot moms”

One thing about technology is the great evidence that is contained there. Clients do dumb things, and tell the world.  Lawyers who help them “clean up the record” are doing even dumber (and more expensive) things as Virginia lawyer Matt Murray found out.

Fortunately for the client the VA Supreme Court upheld the $8.5M wrongful death verdict coming out of the tragic case, but Murray got tagged for a $542,000 legal fee sanction for advising the client to “clean up the Facebook pages” where, among other things, the deceased woman’s husband and plaintiff had a photo showing himself in a T-shirt that read “I love hot moms.”  Murray thought that might hurt the case, so he had a paralegal instruct the husband to remove that photo, 15 others and some text.  Because the husband had previously communicated with the adjuster through Facebook, the defendants knew of  the materials.

Murray has been reported to DC for abusing the Rules of Professional Conduct, and is now under investigation. He is no longer actively practicing law.

Another article on this case by Sharon Nelson: http://tinyurl.com/l586f5k

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Reimbursements — I  need an expense for that?

BIGLAW lawyers live in a different world.  One thought nothing of seeking $69,000 in reimbursements for cab fare, but forgot to first incur the $69,000 in fares.  Lee Smolen, of the Chicago office of Chicago’s biggest law firm Sidley & Austin, not only got his cab fares paid, but also $50,000 in entertainment expenses “not incurred for legitimate firm purposes.”

Apparently the partners at S&A did not see the humor, fired him and submitted the theft to the IL disciplinary authorities.

But it did not faze his new firm, DLA Piper, with law offices in Chicago and around the world.  It said that Lee had “learned from his experience” and will be a productive member of their team.

H/T John Conlon

Crimes are Trouble

Georgia lawyer Arjun Kapoor was accused of committing acts of domestic violence. That is a bad thing. But the allegations came through a Family Crisis Center, and Kapoor decided to find out more about the allegations. He demanded the documents held by the Center. They rejected his demands, so he made misrepresentations to the local clerk to obtain a Subpoena Duces Tecum for the evidence. The Center knew what it was doing, so it ignored the subpoena and made a report.

The Georgia Supreme Court was not pleased. He was charged by the Disciplinary authorities, and tried to work matters out. Twice rejected for a “slap on the wrist” by the hearing officer, the recommendation was for a public reprimand. The Court found acts of Misrepresentation – violation of GA Rule 8.4(a)(4)(a) [differently numbered than the Indiana RPC] and imposed discipline.

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Resigning with Pending Troubles?

Recently several lawyers have “resigned” their licenses while facing criminal charges.  One reported in IBJ on June 18, David Rees was convicted and sentenced to four years home detention, two years probation and restitution, for stealing more than $270,000 from an estate he was managing. (The story does not say what happened to the balance of the $400,000 found missing, that was under Rees’ control.)

In Jan, 2013 Rees resigned his license on what appears from the Supreme Court docket as the day disciplinary charges were filed against him.

In June 2012 Bill Conour resigned his license, a month after charges were filed against him by the Disc. Comm.

These cases come under the Admission and Discipline Rules.  A conflict appears to exist between Rule 2(L) which prohibits “withdrawing from the practice” while under accusation, and Rule 23(§17), where the provisions allow for such resignations.

Read these Admission & Discipline Rules for context:

Rule 2(l). Affidavit of Permanent Withdrawal. An attorney in good standing, who is current in payment of all applicable registration fees and other financial obligations imposed by these rules, and who is not the subject of an investigation into, or a pending proceeding involving, allegations of misconduct, who desires to relinquish permanently his or her license to practice law in the State of Indiana may do so by tendering an Affidavit of Permanent Withdrawal from the practice of law in this State to the Executive Secretary of the Indiana Supreme Court Disciplinary Commission. The Executive Secretary shall promptly verify the eligibility of the attorney to resign under this section, and if eligible, forward a certification of eligibility, together with the Affidavit of Permanent Withdrawal to the Clerk of the Indiana Supreme Court, and the Clerk shall show on the roll of attorneys that the attorney’s Indiana law license has been relinquished permanently and that the lawyer is no longer considered an attorney licensed to practice law in the State of Indiana.

and

Rule 23. Section 17. Resignations and Consents to Discipline on Admission of Misconduct

 (a) An attorney who is the subject of an investigation into, or a pending proceeding involving, allegations of misconduct may resign as a member of the bar of this Court, or may consent to discipline, but only by delivering an affidavit and five copies to the Supreme Court Administration Office and providing a copy to the Commission. The affidavit shall state that the respondent desires to resign or to consent to discipline and that:

 (1) The respondent’s consent is freely and voluntarily rendered; he or she is not being subjected to coercion or duress; he or she is fully aware of the implications of submitting his or her consent;

 (2) The respondent is aware that there is a presently pending investigation into, or proceeding involving, allegations that there exist grounds for his or her discipline the nature of which shall be specifically set forth;

 (3) The respondent acknowledges that the material facts so alleged are true; and

 (4) The respondent submits his or her resignation or consent because the respondent knows that if charges were predicated upon the matters under investigation, or if the proceeding were prosecuted, he or she could not successfully defend himself or herself.

 (b) Upon receipt of the required affidavit in support of resignation, this Court may enter an order approving the resignation. In the case of consent to discipline, the Commission and the respondent may file a brief regarding an appropriate sanction within thirty (30) days of delivery of the required affidavit. The Court shall then enter an order imposing a disciplinary sanction on consent.

(c) An order entered under (b) above shall be a matter of public record. However, the affidavit required under the provisions of (a) above shall not be publicly disclosed or made available for use in any other proceeding except upon order of this Court.

That provision in (c) causes some concern, since an affidavit confessing the violation of the rules ought to carry some weight in other matters, if admissible.

Also, a distinction (without much difference) may exist between “resignation” and “permanent withdrawal” as Rees and Conour are eligible to petition for reinstatement in 5 years, while those withdrawing must get in through the Bar Exam or under another provision.

It seems a lawyer who offers to withdraw the law license, and is without a pending problem, should have less trouble seeking reinstatement. Practically, Rees and Conour will never practice again.

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Epidemic of Suicides in KY

Half a dozen suicides by lawyers in Kentucky has prompted increased concern.  The Indiana Law Blog excerpted a story from the Louisville Courier Journal on the issue.

All were men, most were trial lawyers, and the average age was 53.

Indiana Judges and Lawyers Assistance Program–JLAP–is available to assist lawyers troubled with their practice.

I have not seen a current table or story on Indiana lawyers, but know of too many who have used a permanent solution for a temporary problem. The 2010 Legal Education Conclave focused a session on Resiliency in the Face of Stress, for law students and the practicing bar and bench.  More still needs to be done.

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Poll Question Result:  The Georgia Supreme Court rejected a public reprimand and suspended Kapoor for six months from the practice of law.

Short Post – Working with Staff to Protect the Lawyer (and Staff jobs)

Not too much time this week, with the Indiana Solo and Small Firm Conference in French Lick. Proud to be a part of the planning for this event, and this year we have record attendance with lawyers.

Also this year for the first time we are bringing law office staff to the Conference, and a Staff Track day of education for the staff members, be they secretaries, legal assistants, paralegals or office managers. Those registered as ISBA Paralegals will be able to receive their 6 hour CLE requirement at the conference.

John Conlon and I are leading one staff session on “Ethics for Staff and the Lawyers Who Employ Them.”  And just in time, the Indiana Supreme Court issues its Order in Godshalk.

Godshalk either allowed his assistant to accept clients and  file appearances in his name, or did not adequately supervise an assistant who did that very act, causing a conflict of interest between two clients.

Good language in the Order about the need to have protections in place that will show a conflict between a criminal client and the witnesses who may testify against the client.

Other Cases on the agenda:

John and I will discuss Guideline 9 and Rule 5.3 of the RPC, and other supervision cases that ended up biting the lawyer:

In the Matter of George Paras (2001);

In the Matter of John Thrasher (1996);

In the Matter of Anonymous (2010)

***

Godshalk got a public reprimand, no harm was suffered by either person involved.

The 2014 Solo and Small Firm Conference is already filing up with great speakers and break out leaders.  Put it on the calendar today for June 5-7, 2014 in French Lick.  Plan to bring your staff and your family.  A great time will be had.

2nd try: Law & Sex, trouble.

Indy BIGLAW guy gets it

Arthur J. Usher IV was a Bose partner when his troubles started, a Kreig DeVault partner when everything blew up, now he is out of BIGLAW, and out of the profession for a while.

In what sounds like the plot line of a cheap romance novel, Usher got focused on a woman at Bose, and went overboard in a really weird way. If you have the time you have to read the story here. Long story short, he got infatuated, rebuffed and went ballistic, trying to destroy “Jane Doe” and her career. He recruited his paralegal to help him further the campaign. He used fictitious emails to spread his bizarre tale, trying to cost Doe her career at Bose, and elsewhere.

His actions started in 2008, the opinion was issued May 17, 2013. I can only imagine the nearly 5 years of trouble that Jane Doe has put up with waiting on a resolution. There was a civil lawsuit, and it appears to have settled on the courthouse steps with “a payment of an undisclosed amount to [Doe]”. The Supreme Court did not allow that to take the place of the disciplinary process.

The Court found violations of Rules 3.3(a)(1) Candor to tribunal, false statements, 8.1(a) False statement Bar application or Disciplinary Process, 8.1(b) failure to disclose facts to correct, 8.4(a, b, c, & d) Misconduct of various stripes. The Court found for him, agreeing with the Hearing Officer, that his problem was with Jane Doe, and not with all women, which would have been a violation of 8.4(g)

The disciplinary ruling: For Respondent’s professional misconduct, the Court suspends Respondent from the practice of law in this state for a period of not less than three years, without automatic reinstatement, beginning June 28, 2013.

****

A Chicago law firm, Prenda Law Inc., found a spot as innovative lawyers or scoundrels. A California federal judge decided that scoundrels fit, better than lawyers. A fight is going on. On one side is a self-professed millionaire copyright lawyer and his team, who have sued over 20,000 for illegally downloading pornography, the other a judge who says it is a scam and shakedown effort.

Now the judge has reported the team to disciplinary groups, and to the federal prosecutors for RICO violations. He says the team identifies alleged copyright infringers by IP addresses, it then alleges that the download of porn occurred, in a demand letter that requests an amount “just below the cost of a bare-bones defense” to the suit, if the alleged infringer does not settle. Public embarrassment to a person’s reputation forces settlement, whether there was a violation or not. Hundreds of lawsuits were filed when payment did not come. These lawsuits are unraveling. At a recent hearing before the trial judge, the plaintiffs’ lawyers from Prenda took the Fifth Amendment, to avoid subjecting themselves to criminal prosecution. Not a good step in any case.

The lawyers who started representing Prenda have bailed out of the case, the appellate court is not telling the district judge to back off, One lawyer is alleged to have committed identity theft in getting a named party for the suits filed. Just a mess, as reported in AM LAW’s daily digest and Forbes.

h/t Patrick Olmstead.

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Two things: 1) PWP FB page: If you haven’t seen the recent FB page for the law firm Peterson Waggoner & Perkins, LLP you have missed the Run in a Dress for MS photo. Having fun, raising funds, and supporting family. https://www.facebook.com/PetersonWaggonerPerkinsLLP

2) Glitch: In starting this blog entry, the little finger on my right hand missed the Shift Key, hitting the Return Key. Somehow that published part of the title to the blog entry for this week. My apologies for filling in your mailbox/reader.

Thanks for reading.

When you, a lawyer, are in trouble, hire a competent lawyer; NY Times on Billing Troubles Abound with Fraud Allegation; More on Fee issues – what is a “document review” billing entry worth?

Can you believe this guy is [might once again be] a lawyer?

It is reportedly a heart stopping moment, you get a certified letter from the Disciplinary Commission inviting you to explain some complaint made against you.  It has to be even more disconcerting when the Commission files, and serves you with its Verified Complaint; now you are past the informal opportunity to solve the problem.

The Best Practice is to hire a competent lawyer to help you at the first letter, but if you don’t, then hire one at the complaint stage – you failed to get yourself off, get help.

Before you go to lunch, find someone, call and set an appointment. Do not go out for the afternoon golf game.  Save your license.

Jeffery Fetters had even been through the process before. In 2012 he started down a path he had previously walked in 2005.  This time he did not read the A&D Rules that govern the disciplinary process.  He misfiled his answer to the complaint. The misfiled answer did not meet the standards for an answer to a complaint. He apparently took the whole process lightly.

Just like he took the duty of effectively representing his client in the eviction process. He won the immediate eviction hearing, but did nothing after that, and eventually refused to talk to the client about the problems.

The court found the following violations:

The Court finds that Respondent violated these Indiana Professional Conduct Rules prohibiting the following misconduct:

1.2(a): Failure to abide by a client’s decisions concerning the objectives of representation.

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(b): Failure to explain a matter to the extent reasonably necessary to permit a client to make informed decisions.

8.1(a): Knowingly making a false statement of material fact to the Disciplinary Commission in connection with a disciplinary matter.

Lots of failures there, and no effective way to answer the allegations because he did not follow the rules, or hire a competent lawyer to assist him.
What do you think the Court did? Answer is below.

DLA Piper in More Trouble

In March, I reported the biggest of the BIGLAW firms that may have gotten caught engaging in serious bill padding. And this was a billing problem of the magnitude of a $200,000 over-estimate, and it was as much as $675,000 in dispute. The NY Times article updating us on the value of the dispute now is here.

One rule of being a smart lawyer is to be real careful before deciding to “sue a client for fees.”  It is on many of the “do not ever do this” lists right before “fool around with the staff, nobody will ever know,” and after “what is a small loan from the trust account going to hurt.”  There are a lot of reasons, not to sue a client, and I will mention a couple illustrated by this case:

1 – you already created a litigation tiger and now you grabbed him by the tail.  Clients going through a lawsuit are often seriously ticked off, and to then be sued by your lawyers, the people you put your trust in, really gets under most clients’ skin.

2 – if you sue your client, be sure that you don’t have a smoking gun in the file, or on the computer. That means you don’t have anything that suggests, let alone shows that you were padding the bill or committing malpractice or ethical violations, or anything else, anywhere in a letter, an email, an interoffice communication, or on a scratch pad. Discovery is getting good.

If you think your client owes you $675K, then the client probably has the resources to spend another $500K searching your database.

Another reason to use a smaller firm?

The Times quotes a “billing ethics professor” (I did not know we have ethics professors who specialize in billing matters – but now know why we do) in this paragraph:

In a survey of about 250 lawyers that Professor Ross conducted in 2007, more than half acknowledged that the prospect of billing extra time influenced their decision to perform pointless assignments, such as doing excessive legal research or extraneous document review. There is also the issue of “featherbedding,” he said, or throwing armies of bodies at every problem.

When your law firm does not have “armies of bodies” hanging around looking for something to do, the “featherbedding” issue is mooted to a great extent.  And when your lawyer or small team of lawyers, that you know by name, are working on your matter, the thought of performing “pointless assignments” is not near as tempting as it might be if you are teaching a large class of first year lawyers the ways of research or the firm’s ethics of billing.

The most recent news in the case?

His [Victor’s] lawyer, Larry Hutcher at Davidoff Hutcher & Citron, amended the countersuit last week to include a fraud claim and a request for $22.5 million in punitive damages, a number representing 1 percent of DLA Piper’s reported revenue last year. (my emphasis)

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The other end of the Canada case.

Last week we discussed the Canada case, where the fees, though flat, were earned, and upon the client’s demand did not need to be returned.  Octavia Snulligan did not understand that rule before Canada was decided.

She too requested a flat fee, but did not appear to do the work required, or at least she could not satisfy the client that she was doing the work that was expected.  After five months she was fired, and the client wanted part of her retainer money back. Snulligan refused, and when she was asked for an invoice, she crafted one. She, like many lawyers do not keep time sheets, but she created one anyway, and showed 37.8 hours of work, in 32 entries.  28 of the entries were for “Document Review” without further explanation. The hearing officer, the commission and the Supreme Court were all unimpressed with the reconstructed time records.

So unimpressed that it was the most serious aggravating factor found. It was “calculated to mislead the Family, the Commission and the Hearing Officer” said the Supreme Court.

Snulligan got a retainer of $6,000 on a flat fee of $12,000. She had the case for five months and said she had worked it. The court said she failed to refund the unearned portion, which the hearing officer calculated as $5,000 in unearned fees of the $6,000 she had received.

The court goes out of its way to say that a “$12,000 total fee, or her collection of $6,000 of that fee before she was terminated would [not] have been unreasonable” if she had been able to complete the representation. But she did not, she was discharged and had not met the Realtor’s Rule of getting to the close before getting fired by the client.

Another good discussion on fee issues by the court, helping the bar to better understand where the line of good behavior ends before you get into bad behavior.

What do you think the Court did? Answer is below.

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Fetters got Six month suspension without automatic reinstatement [follow link to find out about automatic reinstatement], with a requirement for restitution for reinstatement.

Snulligan got a 30 day suspension without automatic reinstatement, but with a proviso that if she refunds the $5,000 in overcharged fees, she may petition for immediate reinstatement.