Iowa Supreme Court Attorney Disciplinary Board v. David M. Nelsen
2011 Iowa Sup. LEXIS 99
| Iowa | 2011Background
- Nelsen represented Greenhouse in 2004 as it faced a $3.6 million default to First Citizens National Bank.
- First Citizens sought itemization of Greenhouse’s accounts receivable and collection of proceeds; Greenhouse had $337,287.31 receivables.
- Greenhouse ceased operations January 9, 2004; bank requested turnover of receivables, documents, and corporate mail.
- Nelsen acknowledged the dispute with the bank and promised to deposit received checks into his trust account, but delivered many checks to Kristi and Michael in Nevada.
- Receivership and multiple district court actions followed; a receiver (Bleakney) was appointed to collect Greenhouse’s assets and enforce collateral.
- Nelsen continued to interact with the bank and the receiver, including arranging and delivering checks to Nevada and receiving some payments personally
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Nelsen aided in the conversion of funds? | Nelsen knowingly assisted conversion of Greenhouse’s receivables | Nelsen claims no personal gain and acted within professional duties | Yes; Nelsen aided conversion |
| Whether revocation of license is the appropriate sanction? | Disbarment warranted for conversion and aiding fraud | Sanction less severe could suffice; no personal gain | Revocation warranted |
| Did Nelsen violate DR 7-102(A)(5)-(7) by misrepresenting deposit intentions and assisting fraud? | Nelsen misrepresented funds would be deposited in trust | No intent to defraud; actions misinterpreted | Violations established; sanctions follow |
Key Cases Cited
- Templeton v. Iowa, 784 N.W.2d 761 (Iowa 2010) (de novo review; convincing preponderance standard)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Axt, 791 N.W.2d 98 (Iowa 2010) (scope of review and sanctions framework)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lustgraaf, 792 N.W.2d 295 (Iowa 2010) (criminal acts evidence can support discipline even without conviction)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774 N.W.2d 301 (Iowa 2009) (disbarment for converting client funds)
- Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Anderson, 687 N.W.2d 587 (Iowa 2004) (sanctions for professional misconduct)
- Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Williams, 675 N.W.2d 530 (Iowa 2004) (sanctions framework for ethical violations)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carr, 588 N.W.2d 127 (Iowa 1999) (disbarment for conversion policy and public protection)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Polsley, 796 N.W.2d 881 (Iowa 2011) (revocation for aiding and abetting fraud; personal gain not necessary)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carroll, 721 N.W.2d 788 (Iowa 2006) (sanctions for misconduct involving funds)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Gailey, 790 N.W.2d 801 (Iowa 2010) (aiding and abetting crime as disciplinary basis)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bell, 650 N.W.2d 648 (Iowa 2002) (sanctions for professional misconduct)