Iowa Supreme Court Attorney Disciplinary Board v. David A. Morse
2016 Iowa Sup. LEXIS 99
| Iowa | 2016Background
- Attorney David Morse represented Dennis and Patty Stephenson in mechanic’s-lien litigation and appeal; clients paid a $1,400 check intended as an advance to the court reporter for the trial transcript.
- The $1,400 check was made payable to Morse, deposited into his IOLTA trust account on January 4, 2013, but Morse did not forward payment to the court reporter; the reporter repeatedly requested a deposit.
- The Iowa Supreme Court extended time to pay the reporter and ordered payment within ten days; no payment was made and the court dismissed the Stephenson appeal for failure to file the transcript.
- After dismissal Morse refused to return the $1,400 and applied it to the clients’ outstanding legal fees, asserting a contractual lien; the clients filed an ethics complaint.
- The Grievance Commission found violations of Iowa Rules of Professional Conduct 32:1.3 (diligence), 32:1.15(d) and (e) (safekeeping/separation of client funds), and 32:8.4(d) (prejudicial conduct); it recommended a public reprimand.
- On de novo review, the Court affirmed the violations and imposed a 30-day suspension of Morse’s law license.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Safekeeping special-purpose funds (Rule 32:1.15(d)) | $1,400 was tendered for a special purpose (transcript) and must have been forwarded to the reporter; retaining it violated safekeeping rule | Fee agreement and lien clause authorized offset of funds for unpaid fees | Held: Violation — funds for a special purpose cannot be retained or offset against fees absent client agreement; lien defense rejected. |
| Disputed-interest funds (Rule 32:1.15(e)) | Clients disputed disposition after dismissal; disputed funds must remain in trust pending resolution | Morse claimed contract/lien permitted application to fees | Held: Violation — disputed portion should have remained separate; Morse could not unilaterally resolve dispute. |
| Diligence in prosecuting appeal (Rule 32:1.3) | Withholding payment caused transcript delay and administrative dismissal; attorney consciously disregarded responsibilities | Morse contends he was not required to advance costs and believed checks might have bounced; relied on right to withdraw for nonpayment | Held: Violation — attorney had notice, received funds earmarked for transcript, failed to verify clearance or forward payment, causing dismissal. |
| Conduct prejudicial to administration of justice (Rule 32:8.4(d)) | Failure to timely deliver transcript and failure to correct record caused dismissal of appeal | Morse filed to withdraw and sought extensions; argues dismissal attributable to clients’ payment history | Held: Violation — misconduct led to dismissal and prejudiced court administration. |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Weiland, 862 N.W.2d 627 (Iowa 2015) (standards for proving misconduct; attorney misconduct causing administrative dismissal is prejudicial)
- Comm. on Prof. Ethics & Conduct v. Nadler, 445 N.W.2d 358 (Iowa 1989) (funds entrusted for special purpose are not subject to attorney retaining lien)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Rhinehart, 827 N.W.2d 169 (Iowa 2013) (disputed client funds must remain in trust until dispute resolved)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wright, 758 N.W.2d 227 (Iowa 2008) (distinguishes failure to advance costs where attorney actively monitored client fundraising from misconduct)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Van Ginkel, 809 N.W.2d 96 (Iowa 2012) (defining neglect and duties of diligence)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Dolezal, 796 N.W.2d 910 (Iowa 2011) (suspensions for multiple dismissals and compounded violations)