In re Dilk
2014 Ind. LEXIS 130
| Ind. | 2014Background
- Respondent, an Indiana attorney, accepted large-volume referrals (≈2,675 from Foreclosure Solutions alone) from for‑profit foreclosure‑assistance companies between 2005–2009 and received roughly $380,100 from that source (≈$600,000 total across years).
- His typical role: enter appearances, request extensions, file general answers, send form‑letter updates, refer client inquiries back to the referring company, and often allow default judgment or sheriff’s sale without contesting hearings.
- Respondent had limited or no direct client communication, declined to develop individualized defenses, and followed the referring companies’ prescribed, one‑size‑fits‑all approach; he sometimes refused clients who wanted a different course.
- In at least one case where clients provided payment records, Respondent did not pursue discovery or present affidavits opposing summary judgment; he faxed evidence to the referral company but did not use it to defend the case.
- The hearing officer found mitigation only for lack of prior discipline and found aggravation for dishonesty and lack of professional insight (treating the referring companies, not homeowners, as his clients).
- The Court adopted the hearing officer’s facts, found numerous rule violations, and suspended Respondent for not less than six months without automatic reinstatement; reinstatement is discretionary and contingent on meeting rule requirements and showing rehabilitation and remorse.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Respondent breached duties to clients by failing to consult and inform | Disciplinary Commission: Respondent failed RFC 1.4(a)/(b) — no reasonable consultation or explanation enabling informed decisions | Respondent did not contest facts; asserted role was limited to monitoring per referral agreements | Held: Violations of RPC 1.4(a) and 1.4(b) proven |
| Whether third‑party payments and referral‑control violated professional independence | Commission: Accepting fees and direction from nonlawyers (Foreclosure Assistance Entities) interfered with independence and client relationship; facilitated unauthorized practice | Respondent contended (implicitly) that companies were clients or authorized his limited role; did not dispute violations now | Held: Violations of rules prohibiting third‑party fee control, fee‑sharing, and direction of professional judgment (RPC 5.4, 5.5, related provisions) |
| Whether Respondent’s conduct prejudiced administration of justice and participated in unauthorized practice | Commission: Patterned, large‑scale practice enabled nonlawyers to market legal services and delayed meaningful counsel for vulnerable homeowners | Respondent offered little defense and did not challenge factual findings | Held: Violations for conduct prejudicial to administration of justice and assisting unauthorized practice (RPC 8.4(d), 5.5, etc.) |
| Appropriate discipline for extensive, sustained misconduct affecting thousands of clients | Commission sought significant discipline reflecting scope, prior out‑of‑state decisions, and aggravators | Respondent earlier agreed to conditional six‑month suspension with automatic reinstatement (rejected); disagreed with harsher sanction | Held: Suspension for at least six months without automatic reinstatement; reinstatement discretionary and requires clear & convincing proof of remediation, payment of costs, and compliance with reinstatement rules |
Key Cases Cited
- Disciplinary Counsel v. Foreclosure Alternatives, Inc., 127 Ohio St.3d 455, 940 N.E.2d 971 (2010) (enjoined foreclosure‑assistance entity from unauthorized practice; illustrates danger to vulnerable homeowners)
- Cincinnati Bar Ass'n v. Harwood, 125 Ohio St.3d 31, 925 N.E.2d 965 (2010) (discipline for attorneys participating with foreclosure‑assistance schemes)
- Cincinnati Bar Ass'n v. Foreclosure Solutions, LLC, 123 Ohio St.3d 107, 914 N.E.2d 386 (2009) (addressing referral‑company model and ethical failures enabling unauthorized practice)
- Disciplinary Counsel v. Willard, 123 Ohio St.3d 15, 913 N.E.2d 960 (2009) (discipline where nonlawyer entities directed legal services)
- Kentucky Bar Ass'n v. Moeves, 297 S.W.3d 552 (Ky. 2009) (similar discipline in Kentucky for participation in foreclosure‑assistance abuses)
- Cincinnati Bar Ass'n v. Mullaney, 119 Ohio St.3d 412, 894 N.E.2d 1210 (2008) (earlier decision disciplining attorneys for involvement with foreclosure‑assistance entities)