Disciplinary Board of the Supreme Court v. Ward, 881 N.W.2d 206

Background

Michael Ward, an attorney admitted in 1966 practicing bankruptcy work in Minot, represented Robert and Kelly Stigen in a Chapter 7 bankruptcy in 2013.
The Stigens paid Ward $1,500 (flat fee) on April 24, 2013; Ward filed their bankruptcy petition on May 20, 2013.
Between July and November 2013 the bankruptcy trustee sent eight letters and made calls requesting the Stigens’ 2012 tax returns and a snowmobile appraisal; Ward did not forward the trustee’s communications to the clients or otherwise respond to the trustee for several months.
The trustee sued in an adversary proceeding to deny discharge; the Stigens obtained new counsel who settled the adversary action with the trustee (one settlement condition was that the Stigens file a disciplinary complaint against Ward).
Upon request from successor counsel, Ward produced an incomplete client file and did not refund the $1,500 until about seven months after termination and after the disciplinary complaint was filed.
The Disciplinary Board hearing panel found violations of N.D.R. Prof. Conduct 1.1, 1.3, 1.4, and 1.16(e); the Supreme Court affirmed violations of 1.3, 1.4, and 1.16(e), rejected the 1.1 finding, suspended Ward for two months, and assessed $8,284.78 in costs.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Ward violated Rule 1.3 (diligence) by failing to respond to trustee communications	Ward knowingly failed to promptly provide trustee requested information, causing potential injury	Ward contends the clients were uncooperative, he did not recall receiving appraisal, and trustee/settlement taint Stigens’ testimony	Court: Clear and convincing evidence Ward violated 1.3; his testimony lacked credibility and his failure to respond was knowing
Whether Ward violated Rule 1.4 (communication) by not keeping clients informed	Ward failed to keep Stigens reasonably informed and did not forward trustee letters, preventing informed client decisions	Ward and staff testified they communicated; Stigens disputed	Court: Clear and convincing evidence Ward violated 1.4; panel credibility findings deferred to
Whether Ward violated Rule 1.16(e) (duties on termination) by withholding client file and delaying refund	Ward failed to surrender complete file and delayed refund of unearned fee, harming clients	Ward argues bankruptcy docket is publicly accessible and he offered to provide items on request; fee was not contingent	Court: Clear and convincing evidence Ward violated 1.16(e); must promptly surrender client papers and refund unearned fees
Whether Ward violated Rule 1.1 (competence) based on his conduct with trustee	Panel found lack of competence because Ward failed to cooperate with trustee despite bankruptcy experience	Ward argued conduct was neglect, not incompetence; single instance	Court: Rejected 1.1 violation—conduct better characterized under other rules; declined to "stack" violations

Key Cases Cited

Disciplinary Bd. v. Carpenter, 863 N.W.2d 223 (N.D. 2015) (standards for reviewing disciplinary proceedings and deference to panel credibility findings)
Disciplinary Bd. v. Seaworth, 603 N.W.2d 176 (N.D. 1999) (failure to respond to numerous letters constitutes Rule 1.3 violation)
Disciplinary Bd. v. McKechnie, 656 N.W.2d 661 (N.D. 2003) (caution against using discipline to punish ordinary negligence; competence standard context)
Disciplinary Bd. v. Hoffman, 703 N.W.2d 345 (N.D. 2005) (discussion of competence and negligence in disciplinary context)
Disciplinary Bd. v. Ward, 701 N.W.2d 873 (N.D. 2005) (prior discipline for safekeeping violations — aggravating factor)
Disciplinary Bd. v. Ward, 872 N.W.2d 340 (N.D. 2015) (recent reprimand for Rule 1.3 violation in bankruptcy practice — aggravating factor)
Disciplinary Bd. v. Tollefson, 755 N.W.2d 912 (N.D. 2008) (suspension appropriate when lawyer knowingly fails to perform services and causes injury)
In re Disciplinary Action Against Anseth, 562 N.W.2d 385 (N.D. 1997) (duty to promptly surrender client papers upon termination)