Iowa Supreme Court Attorney Disciplinary Board v. Lawrence L. Lynch
901 N.W.2d 501
| Iowa | 2017Background
- Lawrence L. Lynch, an Iowa attorney since 1971, repeatedly borrowed money from longtime clients (Darrel & Carolyn Bell; Tom & Terri Bell) between 2008–2012 to cover failing real-estate ventures; total principal advanced was $177,000 and principal remains unpaid.
- Loans were memorialized by promissory notes (some secured by mortgage), extensions, and consolidations, but Lynch did not advise clients in writing to obtain independent counsel nor obtain their written informed consent as required by the rules.
- Lynch continued to represent the Bells on legal matters after entering the debtor–creditor relationships and did not disclose the full extent of his financial distress to them.
- The Attorney Disciplinary Board charged Lynch with violating Iowa Rules of Professional Conduct 32:1.8(a) (business transactions with clients) and 32:1.7(a)/(b) (concurrent conflicts of interest and required written informed consent).
- The parties stipulated to facts and rule violations; the Grievance Commission recommended a nine-month suspension after a sanction hearing; the Supreme Court reviewed de novo and imposed a six-month suspension (no reinstatement possibility during that period).
- Reinstatement is conditioned on repayment, an agreed repayment plan current at reinstatement, or bankruptcy to restructure/discharge the loans; Lynch must also notify clients and is assessed costs.
Issues
| Issue | Plaintiff's Argument (Board) | Defendant's Argument (Lynch) | Held |
|---|---|---|---|
| Whether Lynch violated Rule 32:1.8(a) by entering into business transactions (loans) with clients without required disclosure, advice, and written consent | Lynch entered into loans and extensions with clients without fair disclosures, written advice to obtain independent counsel, or written informed consent | Lynch contends he orally advised clients he could not act as their attorney for the loans and did not appreciate the need for written advisals/consent | Violated 32:1.8(a); loans were business transactions and Lynch failed to provide required written disclosure, advice, and written informed consent |
| Whether Lynch violated Rule 32:1.7 by representing the Bells after becoming indebted to them | Lynch’s substantial unpaid debt to clients created a personal interest that materially limited his independent professional judgment; no written waivers were obtained | Lynch argued he believed he had orally excused himself from representing them on the loan matters | Violated 32:1.7(a)/(b); personal financial interest created a concurrent conflict and Lynch did not obtain written informed consent |
| Appropriate sanction for repeated, harmful violations involving client loans | The Board sought suspension appropriate to multiple loans, client harm, and repeated misconduct (commission recommended nine months) | Lynch urged a thirty-day suspension, citing long career, community service, pro bono work, and lack of prior discipline | Court imposed six-month suspension (no reinstatement for six months), balancing aggravators (pattern, significant client loss, experience) and mitigators (no prior discipline, community service, self-reporting) |
| Conditions for reinstatement | Reinstatement should ensure clients are made whole or debt restructured | Lynch sought leniency but accepted conditions tied to repayment ability | Reinstatement conditioned on repayment, agreed repayment plan (current), or bankruptcy to discharge/restructure loans; costs assessed |
Key Cases Cited
- Wintroub v. Iowa Supreme Ct. Att’y Disciplinary Bd., 745 N.W.2d 469 (Iowa 2008) (attorney–client loans require strict scrutiny; failure to advise independent counsel can warrant suspension)
- Willey v. Iowa Supreme Ct. Att’y Disciplinary Bd., 889 N.W.2d 647 (Iowa 2017) (concurrent conflict and lack of written informed consent from client-investor; suspension imposed)
- Pederson v. Iowa Supreme Ct. Att’y Disciplinary Bd., 887 N.W.2d 387 (Iowa 2016) (attorney obtained client loan among other violations; sixty-day suspension affirmed)
- Dolezal v. Iowa Supreme Ct. Att’y Disciplinary Bd., 841 N.W.2d 114 (Iowa 2013) (loan transactions characterized as business transactions under Rule 1.8)
- Wright v. Iowa Supreme Ct. Att’y Disciplinary Bd., 840 N.W.2d 295 (Iowa 2013) (harm to clients from improper business dealings is an aggravating factor and can justify lengthy suspension)
- Hall v. Committee on Professional Ethics & Conduct, 463 N.W.2d 30 (Iowa 1990) (series of transactions with a client over multiple years led to license revocation)