Iowa Supreme Court Attorney Disciplinary Board v. Larry Alan Stoller
2016 Iowa Sup. LEXIS 59
| Iowa | 2016Background
- Larry Stoller, Iowa lawyer since 1980 with one prior public reprimand, faced disciplinary charges for conduct in two unrelated matters: the Okoboji Cocktails, Inc. (OCI) dispute and his dealings involving Robert and Marcia Zylstra (related to NuStar Farms).
- OCI matter: OCI abandoned leased premises; Stoller represented landlords (the Martens) and then also assisted Diane Chaplin (registered agent/shareholder) to form a new corporation, execute a consent transferring OCI assets to the Martens, and negotiate a new lease — all before obtaining written conflict waivers. A district court later characterized the transaction as a sham; litigation and settlement followed.
- Zylstra/NuStar matter: Stoller met with Robert Zylstra in 2007 about manure easement drafts, gave cursory advice and recommended other counsel; in 2014 Stoller began representing NuStar while still representing the Zylstras in other matters and sent a May 13 email threatening suit if a deed was not delivered, then filed suit for NuStar.
- Board alleged violations of Iowa Rules of Professional Conduct including conflicts (32:1.7), duties to former clients (32:1.9), communications with represented parties (32:4.2), and dishonesty (32:8.4(c)). The Grievance Commission found several violations and recommended a public reprimand plus a concurrent three-month suspension.
- Iowa Supreme Court reviewed de novo: found conflicts of interest in both matters (violations of rule 32:1.7) and a rule 32:8.4(c) violation for dishonesty in the OCI matter, but rejected several other alleged violations; imposed a sixty-day license suspension (no firearm restriction).
Issues
| Issue | Plaintiff's Argument (Board) | Defendant's Argument (Stoller) | Held |
|---|---|---|---|
| Whether Stoller’s dual representation of Chaplin and the Martens in the OCI transactions created a concurrent conflict under rule 32:1.7(a)(2) | Representing landlord and tenant and orchestrating transfer/lease created a material limitation on loyalty and judgment; written consents were after the fact | Denied a conflict or argued consents cured any conflict; characterized actions as lawful advice or statutory interpretation | Yes. Court found a concurrent conflict of interest (32:1.7) because landlord–tenant interests are antagonistic and informed written consent was not obtained before representation began |
| Whether Stoller engaged in dishonesty, deceit or misrepresentation (rule 32:8.4(c)) in the OCI matter by engineering a sham transfer of OCI assets | Conduct constituted a sham transaction and intentional misleading conduct, not mere negligence, showing scienter required for 32:8.4(c) | Claimed mistake in statutory interpretation and denied intent to mislead; minimized conduct as error | Yes. Court concluded Stoller’s conduct in OCI rose to intentional misleading (32:8.4(c)), not mere negligence |
| Whether Stoller’s representation of NuStar while still representing or recently representing the Zylstras created a concurrent conflict under rule 32:1.7(a)(2) | Stoller began advocating for NuStar before properly terminating or obtaining written consents; he threatened the Zylstras and intended adverse action | Stoller asserted he had severed the Zylstras and did not have a consentable conflict or that any conflict was cured | Yes. Court found a conflict of interest under rule 32:1.7(a)(2); informed written consent was required and not obtained |
| Whether Stoller violated rule 32:8.4(c) for dishonesty in the Zylstra/NuStar matter | Board argued his conduct parsed rules and evidenced dishonesty in switching sides | Stoller argued lack of scienter, reliance on interpretation, and that conduct was negligent or mistaken | No. Court found no evidence of the required scienter; conduct amounted to negligence/incorrect interpretation, not dishonesty |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cross, 861 N.W.2d 211 (Iowa 2015) (standard of review and burden in disciplinary proceedings)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Qualley, 828 N.W.2d 282 (Iowa 2013) (requiring scienter for rule 32:8.4(c) violations)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Haskovec, 869 N.W.2d 554 (Iowa 2015) (dishonesty inquiry focuses on whether conduct misleads rather than informs)
- Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Wagner, 599 N.W.2d 721 (Iowa 1999) (simultaneous representation of buyer and seller as paradigm conflict)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. McGinness, 844 N.W.2d 456 (Iowa 2014) (multiple misrepresentations supporting a six-month suspension)