Iowa Supreme Court Attorney Disciplinary Board v. Brian Michael Green
2016 Iowa Sup. LEXIS 111
| Iowa | 2016Background
- Brian M. Green, an Iowa lawyer, agreed with developers Troy Strawhecker and James Myers to form a management company (Summit Quest Holdings) to manage a prosthetics business (GMS) and share profits equally. Green also provided some legal services to them.
- Green never formed the agreed entity (Holdings). Instead he created Summit Quest Capital, LLC (Capital), solely owned by him and his wife, and contracted with GMS using Capital without informing Strawhecker and Myers.
- GMS paid monthly sums ($27,500) to Green/Capital; Green represented the funds and management duties were on behalf of Holdings and misled Strawhecker and Myers, refused to provide documents or accountings, and did not distribute agreed shares.
- Strawhecker personally guaranteed a lease for Green and suffered loss when Green defaulted; GMS later terminated the management agreement and reported misconduct by Green. Strawhecker and Myers sued and obtained a default civil judgment; they then filed a disciplinary complaint.
- Green failed to answer the disciplinary complaint, did not comply with discovery, and did not appear at the disciplinary hearing; the Board’s factual allegations were deemed admitted under Iowa Ct. R. 36.7.
- The Grievance Commission found violations of Iowa R. Prof’l Conduct 32:8.4(c) and 32:1.8(a) and recommended revocation; the Iowa Supreme Court, reviewing de novo, concluded Green committed dishonesty and misappropriation and revoked his law license.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Green engaged in dishonesty, fraud, or misrepresentation in violation of Iowa R. Prof’l Conduct 32:8.4(c) | Board: Green knowingly misled Strawhecker and Myers about the entity, received funds to which they had rights, and misappropriated them | Green: generally denied allegations; offered voluntary surrender of license in a letter but did not contest facts in proceedings | Held: Violation proved by convincing preponderance; Green misrepresented formation and control of entity and misappropriated funds |
| Whether Green misappropriated funds (theft by appropriation) requiring discipline | Board: Payments from GMS were received by Green/Capital and used for his benefit, not distributed as agreed | Green: no substantive defense presented at disciplinary hearing; did not produce evidence of colorable future claim to funds | Held: Misappropriation established; no colorable claim shown; supports discipline |
| Whether the civil default judgment precludes relitigation in disciplinary proceedings (issue preclusion) | Board argued preclusion based on civil judgment | Green did not meaningfully oppose; judgment was by default | Held: Issue preclusion not applied because default judgment did not involve actual litigation and burdens differ between civil and disciplinary proceedings |
| Appropriate sanction for conversion/misappropriation | Board: Revocation appropriate given theft of client-related funds | Green: asked to voluntarily give up license but did not participate in adjudication | Held: Revocation is required and consistent with precedent for attorneys who convert client funds |
Key Cases Cited
- Strand v. Iowa Supreme Ct. Att’y Disciplinary Bd., 841 N.W.2d 600 (Iowa 2014) (revocation generally required when attorney converts client funds)
- Thomas v. Iowa Supreme Ct. Att’y Disciplinary Bd., 844 N.W.2d 111 (Iowa 2014) (theft by appropriation constitutes Rule 8.4(c) violation)
- Cepican v. Iowa Supreme Ct. Att’y Disciplinary Bd., 861 N.W.2d 841 (Iowa 2015) (civil judgments generally lack preclusive effect in disciplinary cases when burdens differ)
- Khowassah v. Iowa Supreme Ct. Att’y Disciplinary Bd., 837 N.W.2d 649 (Iowa 2013) (lack of criminal prosecution does not preclude disciplinary finding of theft)
- Clarity v. Iowa Supreme Ct. Att’y Disciplinary Bd., 838 N.W.2d 648 (Iowa 2013) (reckless disregard for truth satisfies scienter requirement for Rule 8.4(c))
- Stowe v. Iowa Supreme Ct. Att’y Disciplinary Bd., 830 N.W.2d 737 (Iowa 2013) (revocation appropriate to emphasize seriousness of attorney theft)
- Anderson v. Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct, 687 N.W.2d 587 (Iowa 2004) (revocation upheld even when embezzled funds were later returned)