Report Your Convictions, Indiana Lawyers; Scammed; School Board Lawyers Indicted over Free Lunch?;

Those other Rules also Count to the Ind. Supreme Court

There are several (18) sets of rules that lawyers need to know about as a part of your practice, and sometimes we forget them. One that bit a lawyer recently was the rule on reporting our convictions.  No, not our deeply held principles, but the convictions we get for violating the law. The Rule is A&D Rule 23 §11.1 (a)

(2)    An attorney licensed to practice law in the state of Indiana who is found guilty of a crime in any state or of a crime under the laws of the United States shall, within ten (10) days after such finding of guilt, transmit a certified copy of the finding of guilt to the Executive Secretary of the Indiana Supreme Court Disciplinary Commission.

The 18 sets of Rules on the Court’s website can be found here.

Gary Selig, of Indianapolis, was convicted in 2003 of OVWI, but did not report it to the Disciplinary Commission. In 2013 he was again convicted, and started treatment. This time the conviction was reported, apparently by the judge (see below) His matter went to the Commission, and was docketed with the Supreme Court on two charges: Committing a criminal act that reflects adversely on his fitness to practice (RPC Rule 8.4(b) and Failure to Report the 2003 conviction (A&D Rule 23 §11.1(a)(2)).

The penalty: 30 days suspension from the practice of law, stayed for a six months probationary period with terms to help with the alcohol issues in his life, and to remain under JLAP supervision.  Good luck.

While it is probably painful to report a criminal conviction, it will be an aggravation factor if you don’t. Judges:  if a lawyer is convicted in your court, you also have a duty under 11.1(a)(1) to report that conviction within ten days.  Don’t overlook that duty.

***

When the money is coming from Nigeria – Be careful

At least he did not fall for an email from Nigeria, but maybe what he did was worse.  Above the Law has the snarky version of the tale of the Iowa lawyer who not only fell for the $18.8M scam, but convinced several clients to invest in the up front payment of $177,660 to get that big check. He did it for the client who got him into this mess, (a criminal defendant with a pending case) and for the 10% finder’s fee that Robert Allen Wright Jr. (lawyer son of a prominent Iowa lawyer) was expecting out of the deal.

He even tried to get the funds from the Bank of Nigeria and the President of Nigeria (Nigeria is ruled by an Edo – the title used by the current “ruler” of Nigeria.)

Among the charges that were filed was a charge of Fraud on Clients, but it was dropped by the Disciplinary Board, because the evidence showed that Wright did not know there were no funds, and that he still is delusional about the prospect of obtaining the Nigerian cash, any day. Stupid is as stupid does…

He was suspended for a year from the practice. No word on restitution to the clients who were duped, and no requirement was stated for IQ or EQ testing before reinstatement.  Sounds like it might be a good idea.

***

Got to Quit Reading NJ Law Journal
School board lawyers in NJ get indicted on Free Lunch scam for Board Members.

School Board member reports to the board lawyers that his income statement was “misstated” by his wife and he wanted to correct it “so I don’t end up like” another board member who was under investigation for getting free lunches when her kids were not eligible, due to her income.

The lawyers solved the problem for the board member, by conspiring to hide evidence, and telling staff to remove lunch applications from files, and doctor computer records, all to cover up for the various board members’ misdeeds.  Oops.   It was reported that:

A state grand jury in Trenton charged Capece and Nelson [the lawyers] with second-degree conspiracy and official misconduct, third-degree tampering with public records and physical evidence, and fourth-degree hindering prosecution.

If convicted, they would spend a minimum of five years in jail without parole and could pay fines of $150,000.

(emphasis added)

And you thought we school board lawyers lived quiet lives.

****

FYI, Last Friday, I presented a three-hour CLE (one hour ethics) seminar on Representing and Working with a Not for Profit Entity.  A good session sponsored by the Northern Indiana Community Foundation (Fulton, Miami and Starke Counties), the Marshall County Community Foundation and the Pulaski County Community Foundation. If you are interested, contact me at ted@peterson-waggoner.com

Advertisement

Will Lawyers get in trouble blowing smoke?; Be careful what you share with an Inmate; 3-2 vote on an Agreed Discipline – what does that mean?

Good to see a Bar Association help out the member lawyers on difficult ethics issues. The King Co. Bar Assoc. in Washington State has asked for guidance from the State Supreme Court on how to handle a conflict in the drug laws. Marijuana use will soon be legal under WA state law, but the federal law has not changed. So is it unethical for a state licensed attorney to use dope? Is it unethical to advise companies on how to comply with the state law on selling dope?

There are other issues where state law and federal law are at odds in various states. Voting rights issues come up, gun possession issues, campaign finance, and abortion laws.  Are lawyers at risk for following state laws, and not federal laws?  Will drug laws be different?

Wait and see.

***

When will lawyers learn to be careful when visiting inmates?

Lake County lawyer Carl Jones should have followed the rules about sharing information with a jailed client.  He could have sent the inmate’s girlfriend’s letter through the mail, but it would probably be read, and her promise to lie for the inmate at trial would have been found.

More importantly, he could have told the Disciplinary Commission the truth about the matter when first asked.  When he was later testifying he told a different story, and for that he got a suspension for six months, without automatic reinstatement.

Lawyers interactions with inmates are constitutionally protected, up to a point. The inmate is entitled to private conferences so that a legitimate defense can be presented to the court.  But because we have special privileges, we must be extra careful to follow the rules.  Jones is the second lawyer this year to get disciplined for an improper interaction with a prisoner-client.  Earlier this year this blog reported this story.A Google search found: “About 66,000 results (0.31 seconds)”  to that lawyer’s name – most for this event.

Be careful out there, or more especially, when you are visiting someone in there!

***

Value of a Conditional Agreement for Discipline

Plea bargains are a way of life for criminal defense lawyers, and negotiated settlements are the rule for civil litigators, it makes sense to try to work out a disciplinary matter as well.  At least today, that is.

In the Matter of Noah Holcomb, Jr. is a case on point.  Holcomb’s opinion shows that he violated several pretty important rules, 1.15 (3 subsections as different violations) on safekeeping of client funds, commingling client and attorney funds; 8.4 fraudulent conduct (hiding cash from the IRS); 1.5 setting and honoring fee agreements, not charging unreasonable fees, 8.4 conversion, and four different A&D Rules on handling trust accounts.  In addition he neglected client files (Rule 1.3).

By the time the matter got to the Supreme Court he still had not made restitution, but — he had cooperated with the Disc. Comm.

The Court starts its discussion with the following:  “This Court has disbarred attorneys who committed the type of misconduct to which Respondent has admitted.”  The important part is next: “The discipline the Court would impose might have been more severe than proposed by the parties had this matter been submitted without the Commission’s agreement.”

Now the agreement did not result in a slap on the wrist – Holcomb got a three-year suspension, without automatic reinstatement – and the  strong language of warning that reinstatement could be hard to come by:

We note, however, that regardless of the date on which Respondent is eligible to petition for reinstatement, reinstatement is discretionary and requires clear and convincing evidence of the attorney’s remorse, rehabilitation, and fitness to practice law. See Admis. Disc. R. 23(4)(b). Moreover, the parties agree that restitution should be a condition for Respondent’s reinstatement. 

The vote to approve the outcome was an unusual 3-2 with Justices David and Rush dissenting with the comment: “believing the Respondent should be disbarred.”

It sounds unlikely that Holcomb will return to the practice, but he might. After reading the opinion, you might wonder, as I do, if we want him back in the profession.

Did the Commission go too light on Holcomb in order to get an agreement, and if so, why? Apparently three justices accepted the reason (assuming it was explained somewhere), although they did not include the reason in their rationale.  Will they accept that next time?  Is this opinion a shot across the Commission’s bow?

Or is it a shot across the bow of those attorneys who stand their ground?

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?

***
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?

***

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.

“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.

****

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.

***

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

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.

***

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.

***

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.

***

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

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.

***

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.

The Realtors’ Rule?; Aggression pays off in penalty; Automatic Reinstatement

Exonerated in a Discipline Case, and Good Explanation by the Court – a Two-fer

First it is good to see the Court side with a respondent on occasion. Robert Canada got a ruling in his favor, and on that gave a solid explanation of why. And while the court did not say so, exactly, it seems it implemented the Realtors’ Rule.

What is the Realtors’ Rule,  you ask?  When a realtor is trying to sell a property under listing, the seller cannot just walk away when there is a buyer.  The rule is if the real estate agent (I know Realtor® is a registered trademark of the NAR) produces a ready, willing and able buyer who makes a bona fide offer at or above the listing price (or a price the seller later sells for), the realtor has earned the full commission, and the fact that the seller refuses to complete the sale does not mean that the seller does not have to pay the realtor.

Canada offered to “get a plea” in a Class A Felony drug case in exchange for a fee of $10,000. That is what the client asked for, and what the lawyer agreed to do. He worked out a plea, the client was happy, and agreed that it was a good plea, then before entering the plea, the client changed lawyers “to get a better deal.”  New lawyer got the defendant the same deal that Canada had worked out. The client demanded a refund since Canada had not “earned the fee.”

There was a written fee agreement and the court looked it over carefully. The agreement contained the toxic words “fee is non-refundable” which is a big red flag for the Commission and the Court.  Here, although the court said there were qualifiers to the refund that were not appropriate in a flat fee agreement (possibility of preclusion of other representation and accessibility guaranteed), in this case, and because Canada had completed the task he agreed to perform, the fee was fully earned as the plea was obtained, even if the defendant did not accept it the first time. The red flag caused the review, but did not spell trouble – this time.

Canada estimated that he had spent 20 hours on the case, which did not seem to factor into the opinion.  In other words, as a flat fee case, the court did not retroactively do an hourly fee analysis (divide the fee by the hours to see if the resulting rate “shocked the consciences” of the judges. Nor should they.

Copy the following language, and imprint it on your minds, consciences, and the file folder where your form fee agreements rest:

Discussion: This Court has addressed fee agreements in Matter of O’Farrell, 942 N.E.2d 799 (Ind. 2011), Matter of Kendall, 804 N.E.2d 1152 (Ind. 2004), and Matter of Thonert, 682 N.E.2d 522 (Ind. 1997). Under the guidance provided by these opinions, we conclude that the fee Respondent charged in this case was a permissible flat fee (notwithstanding the fee agreement’s one sentence mentioning possible preclusion of other representation and guaranty of priority of access, which would have been more relevant if the fee were a general retainer). Moreover, the agreement properly advised Client that a refund was possible in the event of a failure to perform the agreed legal services. See Kendall, 804 N.E.2d at 1160. The hearing officer found the amount of the flat fee to be reasonable. We therefore find no infirmity with the fee agreement itself.

If you are looking into the use of flat fee agreements with clients (not to be confused with menu pricing agreements) pay close attention. I disagree that the preclusion issue or the guaranty of access are more properly for a general retainer, as taking a drug case often precludes other drug cases due to the conflict of interest rules, and guaranteed prompt access is always a premium item, and should not generally be given away. Nevertheless, it is a helpful opinion.

As one who tells lawyers never to use the words “fee” and “nonrefundable” in the same paragraph, let alone sentence, I partially retract that. But I still urge extreme caution. You may get the Canada treatment.

Mr. Canada, sorry you went through this, but your case improves the profession’s understanding on how to write flat fee agreements, and you were exonerated.  Thank you.

***

 Big Time Aggressive Tactics Backfire Big Time

Gordon B. Dempsey takes no prisoners in litigation, at least in the cases where he is a party. The facts are pretty simple, buy an apartment building, don’t pay the payments, you get sued. In 2002 the foreclosure of his apartment building was ordered, and then his chapter 13 bankruptcy stayed the sale. The convoluted facts get worse, and you can read them here. Eventually, and after the parties “settled the suit” in 2008, Dempsey went on the attack again.

He seemed to have a concern with Jewish people, and with lawyers who might be Jewish. The court findings were:

… that Respondent violated these Indiana Professional Conduct Rules prohibiting the following misconduct:

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

4.4: Using means that have no substantial purpose other than to embarrass, delay, or burden a third person.

8.4(g): Engaging in conduct that was not legitimate advocacy, in a professional capacity, manifesting bias or prejudice based upon race, religion, and disability (mental condition).
The penalty section discusses Dempsey’s history of “unethical litigation practices” “virulent bigotry” as possibly enough of a reason for disbarment, but holds back from that.  He got a three-year suspension without automatic reinstatement.

***

Automatic Reinstatement: What does it mean to get, or not get Automatic Reinstatement?

Disciplinary Commission staff lawyer Bob Shook, former prosecutor in Johnson County, explained the importance of getting automatic reinstatement at the Fulton County Bar Outing CLE a couple of years ago. Admission and Discipline Rule 23, § 4 covers reinstatement.  It says:

A person who has been suspended from the practice of law may petition for reinstatement when the term of suspension prescribed in the order of suspension has elapsed. … If costs have been imposed as part of an order of suspension or an order accepting an affidavit of resignation, those costs must be paid before a petition for reinstatement is filed.

 (b) A petition for reinstatement may be granted if the petitioner establishes by clear and convincing evidence before the disciplinary commission of this Court that:

(1) The petitioner desires in good faith to obtain restoration of his or her privilege to practice law;

(2) The petitioner has not practiced law in this State or attempted to do so since he or she was disciplined;

 (3) The petitioner has complied fully with the terms of the order for discipline;

 (4) The petitioner’s attitude towards the misconduct for which he or she was disciplined is one of genuine remorse;

 (5) The petitioner’s conduct since the discipline was imposed has been exemplary and above reproach;

 (6) The petitioner has a proper understanding of and attitude towards the standards that are imposed upon members of the bar and will conduct himself or herself in conformity with such standards;

 (7) The petitioner can safely be recommended to the legal profession, the courts and the public as a person fit to be consulted by others and to represent them and otherwise act in matters of trust and confidence, and in general to aid in the administration of justice as a member of the bar and an officer of the Courts;

 (8) The disability has been removed, if the discipline was imposed by reason of physical or mental illness or infirmity, or for use of or addiction to intoxicants or drugs;

 (9) The petitioner has taken the Multistate Professional Responsibility Examination (MPRE) within six (6) months before or after the date the petition for reinstatement is filed and passed with a scaled score of eighty (80) or above.

So, you have to show remorse, comply with the order, and take the MPRE and score an 80 or above.  That means you have to go back and seriously study ethics in detail.

According to what I recall Shook saying, the process for reinstatement usually will add about 9 months to the end of a suspension.  That means when you read disciplinary opinions found here, the words about reinstatement may mean the difference between functional disbarment and not.

 

 

Pretend you are a Supreme on DI cases; Duty when depressed; Sign Here Please; Filing Taxes is Timely

As a trial, I will be sharing the facts of a few DI cases, and poll the readers how they think the Court ruled, as punishment for the violations. Later in the blog entry I disclose the Court’s actual decision. Are you tougher than a Supreme?

****
William Dittrich neglected several cases over a four-year period. The neglect included failing to do the work, refusing to respond to clients’ requests for information, not placing unearned fees in trust and failing to refund unearned fees.

He knew he had health and depression issues, but did not seek adequate treatment, and placed his interests ahead of his clients’ interests.

***
Unsigned document to file with the court, client forgot to sign her name. What do you do? There are several wrong answers: file it unsigned, ask the staff to sign for the client, or worst of all – sign the client’s name to the document. Ray Robison chose the worst of the options.

Sisters were co-personal representatives, one signed all but one document in the stack of papers. Robison signed her name to the unsigned document, then sent them to the sister for her signatures. Sister noticed that the signature was not right.

Robison cooperated, withdrew without a fight, and the court acknowledged that his purpose was to avoid inconveniencing a client. But it was a violation of Rule 8.4 on fraud, dishonesty, deceit or misrepresentation.

****
SC lawyer David Flowers failed to file tax returns for 2007-2010. An anonymous complainant reported these facts to the South Carolina Disciplinary Commission, and it got ugly. SC found he violated Rule 8.4 of the RPC, together with two other codes of lawyer conduct.

He admits he wants to give up the practice of law, and suffers from the stress of the practice. He has not yet paid the taxes due.

***

Dittrich, got 90 day suspension with automatic reinstatement. Is working with JLAP according to the Opinion.

Robison got an agreement for a public reprimand accepted by the Court.

Flowers got 90 day “definite suspension” meaning that he must file for reinstatement, and he may not file until after he pays the taxes. There must have been some interest in figuring out who the “anonymous source” was, as it made the opinion.

***
Tell me if you liked the polls in the body of the blog.

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.

***

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.

***

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.

***

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.

It had to happen; Blogger Beware – the hand you bite may bite back; Durham Suspended; Parenting Time Changes; Indiana Talks.

I knew it would happen

I know this lawyer, and the nice things the hearing officer reported to the Supreme Court about her are true, from my experience. But she got reprimanded. I must admit, the facts are hard to decipher from the recitation of events in the opinion, but it appears that the lawyer took on a big case, apparently too big for a single lawyer to take on in the manner she did. She created a class of 64 plaintiffs who may not have had similar interests (since some had settled their claims before becoming part of the class), and they gave her authority to settle without getting further input from the clients, which is power that a lawyer should not have. The Court says that they insisted on it, and she accepted the authority. During mediation, she had a short period of time to accept or reject an offer that seemed appropriate for all 64 clients. She exercised the authority to settle rather than to leave the offer on the table. (Thanks OC and mediator).

It is not clear who reported the matter, but it does not sound (from the opinion) that any of the clients were upset with the settlement, offended by her actions, or thought any inappropriate action had occurred, but that is not the test under Rule 8.4.  Lawyers must let the clients make the decisions to settle, as painful as that can be from time to time (Rule 1.2(a)). Aggregate settlements are tricky creatures, and must be handled with care and with the informed consent of each client (Rule 1.8(g)). When lawyers fail to get informed consent, it usually leads to the failure to explain a matter so the client can make an informed decision (Rule 1.4(b)).

Although the Disciplinary Commission lawyer argued for and sought a suspension from the practice, the public reprimand seems right.

****

Blogger Beware

The National Law Journal reported that a Chicago lawyer and blogger got caught up in a legal matter that prompted her to make allegations that the IL probate process is “a sleazy world of probate” and that there is “malpractice and malfeasance by attorneys and the court.”  Amazingly someone took offense at that.  The lawyer Joanne Denison now faces an ethics complaint.

It seems to stem from the court rejecting an application by Denison to serve as a guardian, after the court found that Denison had notarized the signature of a woman who might have been  suffering from dementia at the time of the signature, and that the document favored the woman’s daughter, a client of Denison, over others in the family.  They thought that was worthy of disqualification from serving as guardian in this matter. Denison went ballistic, created a blog in the name of the potential ward, and started blasting away at the judges and lawyers alike.  She named names and recounted allegations, apparently without due regard to the facts underlying the matters.

The ethics allegation is that the blog contains “comments that are false or made with reckless disregard for the truth.”  Oops.

I will take that into consideration as I write and edit this blog, and invite others to do likewise in their own writings.  As one reply to the NLJ article mentions, Rule 8.3(a) states: “A lawyer who knows that another lawyer has committed a violation of Rule 8.4(b) or Rule 8.4(c) shall inform the appropriate professional authority.”  That is not an invitation to inform via blog.

H/T Patrick Olmstead

****

Durham Suspended

Indy Ponzi scheme convict Tim Durham, the subject of a previous post here, was suspended from the practice of law based on his finding of guilt in the $200M fraud case of Fair Finance. Durham was sentenced to 50 years, so unless he was planning a jail-house lawyer routine, this finishes his legal career. The Order is here.

The Indy Star claimed [login required] it was the Disciplinary Commission that suspended him, but we know  that the Supreme Court keeps that power to itself. Durham still has a challenge to the suspension, but…

BTW, this is Durham’s second suspension, the first was due to failure to pay his annual registration fee last October.  Kirkland & Ellis, one of the biggest of BigLaw firms in Chicago, has decided to provide a pro bono appeal for Durham, according to the Indiana Business Journal. If you cannot pay registration for your license, you probably qualify for indigent services.Good to see the poor getting adequate legal representation to protect their rights. It worked so well for Mike Tyson.

Parenting Time changes

Two lawyers in my office have produced a short video on the changes in the Indiana Parenting Time Guidelines. The changes go into effect on March 1.

You may want to watch, or link to it. Andy Perkins and Rachel Arndt did a nice job, here.

IndianaTalks.com Interview

Indy lawyer Stephen Terrell will be interviewing me this coming Tuesday, Feb. 26 at 9:00 pm on his weekly online “radio” show. Steve has been on-line for 3 weeks now, and has had some very interesting interviews.  You can listen by tuning your browser to http://www.indianatalks.com/.  Steve discusses information of the week, and then conducts his interview for much of the hour.

Don’t know what we will talk about, but Steve and I, while friends for a decade, disagree about most of the important things in life, and this will be my chance to show him the errors of his ways for you all to hear. Plans are to discuss law, politics and religion. Where could we disagree about any of these matters?

I only hope the Hoosiers have put the Gophers away by 9:00.