Iowa Supreme Court Attorney Disciplinary Board v. MacHelle Lee Crum
2015 Iowa Sup. LEXIS 33
| Iowa | 2015Background
- The Iowa Attorney Disciplinary Board charged attorney Machelle L. Crum with multiple ethics violations and theft by misappropriation after complaints from six clients; Crum failed to respond to the Board and the Grievance Commission.
- Crum accepted retainers (ranging from $500 to $2,000) from multiple clients for family-law matters and a will, performed little or no work on several matters, and withheld unearned fees and client property (including cash and a wedding band) after demands for return.
- The Grievance Commission deemed factual allegations admitted under Iowa Ct. R. 36.7 due to Crum’s failure to answer; the Board introduced testimony and exhibits at the hearing; the Commission recommended revocation based principally on misappropriation.
- On de novo review, the Iowa Supreme Court found by a convincing preponderance that Crum committed theft by misappropriation and numerous Ethics and Court Rule violations (abandonment, lack of communication, dishonesty, failure to account/return funds).
- Crum did not establish any colorable future claim to the retained funds/property; the court treated the misappropriation as dispositive and revoked her law license, assessing costs against her.
Issues
| Issue | Plaintiff's Argument (Board) | Defendant's Argument (Crum) | Held |
|---|---|---|---|
| Whether factual allegations should be treated as admitted | Crum failed to answer; under Iowa Ct. R. 36.7 allegations should be deemed admitted | (No responsive pleadings or argument) | Court treated allegations as admitted under rule 36.7 and proceeded de novo |
| Whether Crum misappropriated client funds/property (theft by misappropriation) | Crum retained unearned retainers and client property after demand; this satisfies Iowa Code §602.10119 and disciplinary standards | Crum did not present evidence of a colorable future claim to the funds (no defense presented) | Court found misappropriation proven by convincing preponderance; theft established |
| Whether Crum had a colorable future claim to retainers/property | Board: no colorable claim; funds were unearned or property was withheld | Crum bore the burden to demonstrate a colorable claim but did not respond or produce evidence | Court held Crum failed to meet burden; no colorable claim shown |
| Appropriate sanction for misappropriation and related ethical violations | Board left sanction to court; misappropriation normally warrants revocation | (Crum offered no mitigation, no response) | Court revoked Crum’s license, citing consistent precedent of revocation for conversion of client funds; costs assessed to respondent |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Nelson, 838 N.W.2d 528 (Iowa 2013) (standard: convincing preponderance of evidence in disciplinary proceedings)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Barnhill, 847 N.W.2d 466 (Iowa 2014) (commission findings and recommendations are reviewed but not binding)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Johnson, 792 N.W.2d 674 (Iowa 2010) (unchallenged evidence treated as uncontested where respondent fails to respond)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cunningham, 812 N.W.2d 541 (Iowa 2012) (court bases decision on de novo review of record and admissions)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Thomas, 844 N.W.2d 111 (Iowa 2014) (revocation is standard response for attorneys who convert client funds)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carter, 847 N.W.2d 228 (Iowa 2014) (once Board shows misappropriation, attorney must show a colorable future claim to funds)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. McCann, 712 N.W.2d 89 (Iowa 2006) (misappropriation with a colorable future claim may warrant suspension rather than revocation)