Iowa Supreme Court Attorney Disciplinary Board v. John E. Cepican
861 N.W.2d 841
| Iowa | 2015Background
- John E. Cepican, admitted 1974, practiced chiefly in intellectual property; by the hearing he was not actively practicing and was 66 years old.
- The Attorney Disciplinary Board filed a three-count complaint alleging neglect, failure to follow trust account procedures for retainers, and failure to respond to the Board; each count involved a different client with documented harm (including USPTO abandonment notices and a $5,000 civil default judgment).
- Cepican failed to respond to the complaint and discovery; the Grievance Commission deemed allegations admitted and barred him from presenting evidence at the hearing as a discovery sanction.
- The Commission concluded Cepican converted client retainer funds (no colorable future claim shown) and recommended revocation of his Iowa law license.
- On de novo review the Iowa Supreme Court found Cepican violated professional rules (neglect, communication, trust-account deficiencies) but held the complaint did not give adequate advance notice that conversion/theft was charged, denying a fair opportunity to present a colorable-future-claim defense.
- The Court suspended Cepican’s license for not less than six months (costs assessed) rather than revoking it, emphasizing due-process notice when revocation is sought.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Neglect and failure to communicate | Cepican neglected matters, causing abandonment and client harm | Cepican offered limited explanations and did not contest allegations (failed to respond) | Court found violations for neglect and communication failures supported discipline |
| Trust account/retainer procedures | Cepican took retainers, failed to deposit into trust, failed to account or refund | Cepican was barred from introducing evidence by sanctions and did not present a colorable-future-claim defense | Court found trust-account violations and relied on them for suspension |
| Conversion/theft of retainer funds | Board alleged conversion warranting revocation based on admitted facts and civil judgment | Cepican argued (by implication) he lacked notice and was prevented from proving a colorable future claim | Court held complaint lacked adequate notice of theft allegation; revocation not appropriate without fair chance to present defense |
| Appropriate sanction | Board urged revocation given alleged conversion and serious client harm | Cepican requested suspension and court considered fairness and notice defects | Court suspended license at least six months instead of revocation, citing due-process notice requirements |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lemanski, 841 N.W.2d 131 (Iowa 2013) (disciplinary matters reviewed de novo)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell, 830 N.W.2d 355 (Iowa 2013) (conversion of client funds generally warrants revocation; trust-account violations typically less severe)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carter, 847 N.W.2d 228 (Iowa 2014) (colorable future claim can distinguish premature fee-taking from theft)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kelsen, 855 N.W.2d 175 (Iowa 2014) (sufficient notice of theft may be shown by complaint language or record where attorney had opportunity to litigate colorable-claim defense)
- In re Ruffalo, 390 U.S. 544 (1968) (disciplinary proceedings are quasi-criminal and require fair notice of charges)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Nelson, 838 N.W.2d 528 (Iowa 2013) (Board must disclose charges before proceedings; notice is basic due process)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Rhinehart, 827 N.W.2d 169 (Iowa 2013) (requirements for issue preclusion from prior proceedings in disciplinary context)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Hauser, 782 N.W.2d 147 (Iowa 2010) (six-month suspension for severe neglect, communication failures, and trust-account violations)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Walker, 712 N.W.2d 683 (Iowa 2006) (six-month suspension for neglect, misrepresentation, and failure to communicate resulting in client harm)
- Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Murphy, 669 N.W.2d 254 (Iowa 2003) (difference in burdens limits preclusive effect of civil judgments in disciplinary proceedings)
- Winnebago Indus., Inc. v. Haverly, 727 N.W.2d 567 (Iowa 2006) (default judgments do not establish issues actually litigated for issue preclusion)