Iowa Supreme Court Attorney Disciplinary Board v. Rodney Howard Powell, 901 N.W.2d 513

Background

Rodney Powell, an Iowa attorney licensed since 1973 with multiple prior disciplines, obtained a $20,000 loan from the estate administrator while representing the estate; the administrator was also the beneficiary of $40,000 life-insurance proceeds Powell received and deposited in his firm trust account.
Powell requested the loan orally and withdrew funds from his trust account before executing a written loan agreement; the later-written agreement included 10% interest and monthly payments tied to unspecified firm receipts.
The administrator said Powell did not advise him to seek independent counsel; Powell claimed he asked but the administrator denied it.
Powell made sporadic, minimal payments; the administrator sued for breach and the parties settled for $25,000 payable in monthly installments of $1,500.
The Attorney Disciplinary Board charged Powell with violating Iowa Rules of Professional Conduct 32:1.8(a), 1.8(b), and 1.9(c); the Grievance Commission found violations of 1.8(a), 1.8(b), and 1.9(c) and recommended six months’ suspension.
The Supreme Court found Powell violated Rule 32:1.8(a) (business transaction with a client) and, considering his extensive prior discipline as an aggravating factor, imposed a two-year suspension with no possibility of reinstatement during that period; costs assessed against Powell.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Powell violated Rule 32:1.8(a) by entering a business transaction with a client without required protections	Board: loan from estate administrator (a client/fiduciary) was a business transaction lacking required written disclosure, written informed consent, and written advice/opportunity to seek independent counsel	Powell: he represented the estate (not the fiduciary as a separate client) and sought oral agreement and allegedly asked the administrator if he wanted independent counsel	Held: Powell violated Rule 32:1.8(a); fiduciary counted as a client; transaction lacked fair terms, disclosure, and required written documentation and consent
Whether companion conflict and misuse-of-information rules require separate findings	Board alleged violations of 1.8(b) and 1.9(c)	Powell contested scope and client identity	Held: Court found 1.8(a) violation dispositive and unnecessary to adjudicate companion counts
Appropriate sanction for violating conflict-of-interest rule given Powell’s history	Board recommended six-month suspension; commission recommended six months	Powell implicitly urged lesser sanction	Held: Two-year suspension (no reinstatement during that period) because of significant aggravating factor of repeated prior misconduct; revocation not imposed though dissent argued for it
Allocation of costs and conditions for reinstatement	Board sought costs and conditions including satisfaction of settlement	Powell did not dispute costs	Held: Costs assessed to Powell, including administrator’s mileage; Powell must show compliance with suspension rules, no practice during suspension, satisfaction of settlement, and meet Iowa Ct. R. 34.25 requirements on any reinstatement application

Key Cases Cited

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell, 830 N.W.2d 355 (Iowa 2013) (prior disciplinary history for Powell)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wintroub, 745 N.W.2d 469 (Iowa 2008) (business-transaction rule applied to attorney-client loans)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Pederson, 887 N.W.2d 387 (Iowa 2016) (attorney representing an estate may owe duties to the executor/fiduciary)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Marks, 814 N.W.2d 532 (Iowa 2012) (stringent enforcement of business-transaction safeguards)
Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Fay, 619 N.W.2d 321 (Iowa 2000) (importance of strict compliance with conflict rules to protect client trust)
Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Beckman, 674 N.W.2d 129 (Iowa 2004) (repetitive ethical violations can justify revocation)
Comm. on Prof'l Ethics & Conduct v. Yates, 420 N.W.2d 455 (Iowa 1988) (attorney failed to advise client to seek counsel and converted funds)
Comm. on Prof'l Ethics & Conduct v. Hall, 463 N.W.2d 30 (Iowa 1990) (revocation reserved for most serious misconduct such as conversion)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wright, 840 N.W.2d 295 (Iowa 2013) (one-year suspension for conflict violations)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Willey, 889 N.W.2d 647 (Iowa 2017) (recent sixty-day suspensions for conflicts violations)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Khowassah, 890 N.W.2d 647 (Iowa 2017) (consistency in discipline analysis)
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lynch, 901 N.W.2d 501 (Iowa 2017) (reinstatement conditions and satisfaction of civil obligations)