Iowa Supreme Court Attorney Disciplinary Board v. James A. Clarity III
2013 Iowa Sup. LEXIS 111
| Iowa | 2013Background
- James A. Clarity III, long-practicing Iowa attorney, developed alcoholism after 2009 and underwent multiple inpatient treatments; his license has been under disability suspension since May 25, 2012.
- Board charged Clarity with ethical violations arising from representation of seven clients in five matters (including a high‑retainer federal Medicare fraud defense for the Eastons and several OWI criminal matters). Clarity stipulated to most facts and nine of ten rule violations; he contested only the excessive‑fee claim.
- Eastons paid a $75,000 retainer; Clarity deposited those funds to his trust account then made frequent withdrawals that exhausted the retainer, provided no contemporaneous accounting, and never refunded the retainer.
- Clarity accepted retainers from Buettner ($15,000) and Clark and Leiss ($2,500 each) but failed to deposit those advance fees into his client trust account and misrepresented on a certified 2011 questionnaire that all retainers had been deposited.
- Due to Clarity’s failures to notify clients and attend scheduled proceedings (and his entering inpatient treatment without notice), three OWI clients were arrested on bench warrants and a civil appeal (Williams) was dismissed for failure to perfect the appeal.
- The Grievance Commission found ten rule violations (including charging an unreasonable fee) and recommended a three‑year suspension; the Iowa Supreme Court reviewed de novo, found all violations, and imposed a one‑year disciplinary suspension (from the opinion date) with conditions for reinstatement.
Issues
| Issue | Plaintiff's Argument (Board) | Defendant's Argument (Clarity) | Held |
|---|---|---|---|
| Failure to deposit advance fees into trust account | Clarity deposited retainers into general account, violating trust rules | Paralegal oversight or error; not intentional | Held: violation of Iowa Ct. R. 45.7(3) and Iowa R. Prof'l Conduct 32:1.15(c) |
| Failure to provide accounting / notice of withdrawals | Clarity withdrew trust funds and failed to give contemporaneous notice or accounting | Claimed lost/ corrupted billing records; reconstructed statement later | Held: violation of Iowa Ct. R. 45.2(2), 45.7(4) and rule 32:1.15(d) |
| Misrepresentation on 2011 questionnaire | Clarity certified all retainers were deposited into trust when they were not | Claimed he later inquired about correcting the form; blamed staff | Held: violated rule 32:8.4(c) (dishonesty/reckless disregard for truth) |
| Neglect / failure to communicate causing arrests and dismissed appeal | Clarity failed to inform clients of hearings, missed appearances, and failed to perfect appeal | Attributed misconduct to alcoholism and recordkeeping issues | Held: violated rules 32:1.3 and 32:1.4 (failure to act with diligence and to keep/respond to clients) |
| Charging an unreasonable fee (Easton $75,000) | Fee unreasonable given lack of credible time records, unusual withdrawal pattern, and poor results | $300/hour was reasonable; extensive records were lost and later reconstructed | Held: Board proved excessive fee by convincing preponderance; violated rule 32:1.5(a) |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Rhinehart, 827 N.W.2d 169 (Iowa 2013) (de novo review and sanction principles)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. McCarthy, 814 N.W.2d 596 (Iowa 2012) (stipulations bind facts but not violations/sanctions; trust‑account guidance)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Dolezal, 796 N.W.2d 910 (Iowa 2011) (depositing retainers into trust account required; consequences for failing to do so)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wengert, 790 N.W.2d 94 (Iowa 2010) (false trust‑account certification violates rule 32:8.4(c))
- Hauser v. Iowa Supreme Ct. Att’y Disciplinary Bd., 782 N.W.2d 147 (Iowa 2010) (alcoholism‑related neglect and trust violations; six‑month suspension)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Weaver, 812 N.W.2d 4 (Iowa 2012) (alcoholism may mitigate but does not excuse misconduct)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Laing, 832 N.W.2d 366 (Iowa 2013) (range of suspensions for excessive fees)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell, 839 N.W.2d 355 (Iowa 2013) (consideration of interim/disability suspensions when imposing disciplinary suspension)