919 N.W.2d 760
Iowa2018Background
- Lonnie B. Saunders, admitted 1985, served as counsel for the estate of Steven Wallace; court approved a statutory probate fee of $23,297.04.
- Saunders received an initial half-fee payment and later demanded early payment of the remaining half before the final report was filed and court costs were paid.
- On December 30, 2015, Saunders received $7,500 from the estate and deposited it in his business (operating) account rather than a client trust account.
- The estate remained open; final report and payment of costs were not completed until mid-2017.
- The Board charged Saunders with violating Iowa Rules of Professional Conduct (fees and trust account rules); parties stipulated to facts and violations and jointly recommended a 30-day suspension.
- Saunders had received a public reprimand about 18 months earlier for substantially similar premature probate-fee conduct—an aggravating factor here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether taking second-half probate fee before final report and payment of costs violated rule 32:1.5(a) | Saunders took the fee prematurely in violation of Iowa Ct. R. 7.2(4) and thus breached 32:1.5(a) | Saunders implied fee was earned/authorized and offered a discount to settle promptly | Court held Saunders violated rule 32:1.5(a); second-half fee cannot be taken before final report and costs paid |
| Whether depositing the advance fee into business account violated rule 32:1.15(c) (trust-account rule) | Saunders failed to deposit advance fee into client trust account and withdrew funds before earned | Saunders contended funds were due and deposited for convenience; no ongoing trust-account problems otherwise | Court held Saunders violated rule 32:1.15(c); advance fees must go into trust and be withdrawn only as earned |
| Appropriate sanction given violations and prior discipline | Board/plaintiff recommended 30-day suspension given prior similar reprimand | Saunders agreed to stipulated sanction and cooperated in proceedings | Court imposed a 30-day suspension (no reinstatement for 30 days) citing prior reprimand as significant aggravator |
| Whether additional trust-account recordkeeping rules should alter sanction | Plaintiff noted stipulated violations of other trust-account rules tied to the same conduct | Defendant noted maintenance of a trust account generally and lack of separate recordkeeping failures | Court declined to treat additional rule allegations as affecting sanction beyond the primary fee/trust violations |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Pederson, 887 N.W.2d 387 (Iowa 2016) (taking second-half probate fee before final report violates ethics rules)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. West, 901 N.W.2d 519 (Iowa 2017) (suspension where premature fee combined with estate mishandling and client harm)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kersenbrock, 821 N.W.2d 415 (Iowa 2012) (30-day suspension for premature fee plus systemic accounting failures and misrepresentations)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Casey, 761 N.W.2d 53 (Iowa 2009) (premature fee taken before final report violated trust/fee rules)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Arzberger, 887 N.W.2d 353 (Iowa 2016) (30-day suspension where extraordinary fee taken without approval and misrepresentation present)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Nelissen, 871 N.W.2d 694 (Iowa 2015) (prior public reprimand for similar premature probate-fee conduct cited as aggravating)