Iowa Supreme Court Attorney Disciplinary Board v. David S. Kelsen
2014 Iowa Sup. LEXIS 89
| Iowa | 2014Background
- Kelsen, a 75-year-old Iowa attorney, represented Matthew Cox in a wrongful-termination matter.
- Engagement February 13, 2012 required a $1000 retainer; initial deposits and hourly rates were specified.
- Kelsen withdrew the entire $1000 from the client trust account in March 2012 without keeping time records.
- Cox later paid $7500 on June 28/29, 2012 for deposition and related costs, but Kelsen did not deposit it into the trust account and used portions for office expenses.
- Kelsen failed to notify Cox of withdrawals, provide accountings, deposit advance payments, or promptly return unearned funds after Cox terminated representation; the Board filed charges Sept. 9, 2013, alleging multiple trust-account rule violations; Kelsen pled the facts, and the Grievance Commission recommended a public reprimand, while the Board sought stricter discipline; the Iowa Supreme Court revokes Kelsen’s license after determining there was misappropriation without colorable future claim.
- The Court reviews de novo and assigns weight to the Commission’s credibility determinations but is not bound by its sanction recommendation; it considers deterrence, public protection, bar reputation, and fitness to practice in determining sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kelsen violated trust-account rules by misusing Cox’s $7500 | Board: misappropriation constituting conversion. | Kelsen: there was a colorable future claim or loan arrangement. | Yes; no colorable future claim; revocation warranted. |
| Whether there were additional violations of trust-account rules besides the $7500 issue | Board: all relevant rules violated; improper handling and records. | Kelsen: some explanations for handling; credibility issues. | Yes; multiple rule violations proven. |
| Whether Kelsen had a colorable future claim to the $7500 | Board contends no legitimate future claim; funds used for office expenses. | Kelsen asserts an oral loan or anticipated contingent fee; some future claim possible. | No colorable future claim; supports revocation. |
| Appropriate sanction for the violations | Board prefers reprimand but recognizes severity of misappropriation. | Kelsen argues mitigating factors and colorable claim defense; seeks lesser sanction. | License revoked; explicit finding of misappropriation without colorable future claim. |
| Is a reduction in sanction or due process issues present | Board maintains proper notice and charging of misconduct. | Kelsen argues due process concerns from complaint specificity. | De novo review confirms charges properly framed; no due process defect. |
Key Cases Cited
- Carter v. Iowa Supreme Ct. Att’y Disciplinary Bd., 847 N.W.2d 228 (Iowa 2014) (misappropriation with no colorable future claim warrants revocation)
- Thomas v. Iowa Supreme Ct. Att’y Disciplinary Bd., 844 N.W.2d 111 (Iowa 2014) (withdrawal of more than earned or after settlement can justify discipline)
- Wunschel v. Committee on Professional Ethics & Conduct, 461 N.W.2d 840 (Iowa 1990) (due process and notice considerations in complaints)
- Rickabaugh v. Iowa Supreme Ct. Att’y Disciplinary Bd., 728 N.W.2d 375 (Iowa 2007) (charges must be known before proceedings; specificity of charges)
- Laing v. Iowa Supreme Ct. Att’y Disciplinary Bd., 832 N.W.2d 366 (Iowa 2013) (sanction guidance balancing deterrence, protection, and fitness)