Iowa Supreme Court Attorney Disciplinary Board v. John Michael Carter
847 N.W.2d 228
Iowa2014Background
- John Michael Carter, admitted in Iowa and Nebraska (2007), practiced as a sole practitioner in Council Bluffs and Omaha.
- He received estate funds ($7,334.61) for the Anna Charles estate, deposited them to his trust account, then withdrew $6,300 in March–April 2009.
- He also deposited $52,766.46 for clients the Eastridges and later moved $17,600 to his business account; and borrowed $60,000 from client Shirley Suber without a written loan, independent counsel, or informed consent.
- Carter gave inconsistent explanations for the trust withdrawals (fees earned, intended distribution, periodic personal payments) and claimed lost billing records prevented proof of entitlement.
- The Grievance Commission found conversion of client funds and multiple Rule violations and recommended revocation; the Iowa Supreme Court reviewed de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Carter converted client funds from the Anna Charles trust | Board: Carter withdrew trust funds for personal use without entitlement | Carter: Withdrawals were fees he earned (lost records); alternatively, intended distributions | Court: Board proved conversion; Carter had no colorable future claim; conversion established |
| Burden of proof for colorable-future-claim defense in disciplinary proceedings | Board: Must prove misconduct by convincing preponderance; defense should not shift proof burden to Board | Carter: Colorable-claim defense should avoid revocation absent Board disproof | Court: Discipline proceedings follow criminal-style framework for affirmative defenses — attorney must come forward with evidence of colorable claim, but Board retains burden to prove conversion by convincing preponderance of evidence-equivalent standard |
| Scope of the colorable-future-claim defense (when it prevents revocation) | Carter: Performed services entitling him to fees; thus defense applies | Board: Defense limited to retainer or legitimately premised fee claims, not post-hoc or unrelated conversions | Court: Defense applies mainly to premature attorney-fee withdrawals (especially retainers); does not cover nonretainer estate funds taken without court approval or where evidence shows no intent to take as fees |
| Appropriate sanction for conversion of client funds | Board: Revocation warranted for conversion without colorable claim; other violations support sanction | Carter: Asked for lesser sanction given asserted fee claim and lost records | Held: License revoked; conversion without colorable claim mandates revocation; other violations unnecessary to decide sanction |
Key Cases Cited
- Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Anderson, 687 N.W.2d 587 (recognizing colorable future claim concept in conversion context)
- Iowa Supreme Ct. Att'y Disciplinary Bd. v. Powell, 830 N.W.2d 355 (distinguishing trust violations from stealing; suspend for premature fee withdrawals)
- Iowa Supreme Ct. Att'y Disciplinary Bd. v. Reilly, 708 N.W.2d 82 (conversion supports revocation absent colorable claim)
- Iowa Supreme Ct. Att'y Disciplinary Bd. v. Conroy, 795 N.W.2d 502 (describing burden of proof in disciplinary proceedings)
- Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Allen, 586 N.W.2d 383 (attorney discipline for taking conservatorship fees without approval)
- Comm. on Prof'l Ethics & Conduct v. Rowe, 225 N.W.2d 103 (revocation can follow conversion regardless of amount)