936 N.W.2d 440
Iowa2019Background
- In a 2015 audit of Edward F. Noyes’s client trust account (CTA) the Client Security Commission found a $12,898.03 shortage caused by: several negative client balances, $4,900.88 in unreimbursed credit-card fees, and $3,834.49 in unidentifiable disbursements.
- Noyes reimbursed the CTA from earned fees within five days after the audit; no client suffered economic loss.
- Noyes (admitted responsibility for CTA balancing) used QuickBooks, relied on an untrained office manager (Pam Breeding) and a paid QuickBooks consultant; Breeding later admitted accounting errors and inadequate reconciliations.
- The Board charged violations of Iowa Rules of Professional Conduct: 32:1.8(e) (financial assistance to client), 32:1.15(a) and (f) (commingling and recordkeeping), and 32:5.3 (supervision). The Grievance Commission found violations and recommended a 60‑day suspension.
- Noyes has four prior public reprimands (1998, 2012, 2014, 2016), including prior matters involving accounting and supervision failures.
- The Iowa Supreme Court affirmed the violations but imposed a 30‑day suspension (reduced from the commission’s recommended 60 days); costs assessed and conditions for automatic reinstatement if paid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether advancing funds to a client violated rule 32:1.8(e) | Board: advances to Gunderson (from CTA and business acct) are prohibited financial assistance | Noyes: matter was settled; no litigation pending when advances made; advances were charitable short‑term support | Violated—administration/disbursement of settlement proceeds was still pending; rule prohibits such advances regardless of charitable intent |
| Whether commingling funds and inadequate records violated rules 32:1.15(a) & 32:1.15(f) | Board: earned fees left in CTA, transfers between CTA and business acct, missing/unclear disbursements and ledgers | Noyes: errors caused by office manager; he relied on staff and outside consultant | Violated—earned fees in CTA, unreconciled negative client balances, and unaccounted disbursements show commingling and recordkeeping failures |
| Whether Noyes failed to supervise nonlawyer staff in violation of rule 32:5.3 | Board: as managing partner Noyes had duty to ensure competent accounting and timely remedial action | Noyes: relied on Breeding and consultant; lacked QuickBooks experience | Violated—Noyes had managerial authority, knew or should have known of problems and failed to take reasonable remedial steps |
| Appropriate sanction | Board/Commission: 60‑day suspension (aggravated by prior discipline and experience) | Noyes: mitigating factors—cooperation, corrective measures, no client harm, no self‑gain | 30‑day suspension imposed (aggravators weighed against mitigation); costs assessed; reinstatement conditioned on payment of costs |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Mathahs, 918 N.W.2d 487 (Iowa 2018) (standard of review and burden in disciplinary appeals)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wengert, 790 N.W.2d 94 (Iowa 2010) (administration/disbursement of settlement funds is part of resolution)
- Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Shinkle, 698 N.W.2d 316 (Iowa 2005) (advancing funds to client typically results in public reprimand)
- Comm. on Prof’l Ethics & Conduct v. Herrera, 560 N.W.2d 592 (Iowa 1997) (attorney remains responsible for trust account management despite employee errors)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lubinus, 869 N.W.2d 546 (Iowa 2015) (30‑day suspension for trust account reimbursement/withdrawal violations with mitigating factors)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kersenbrock, 821 N.W.2d 415 (Iowa 2012) (30‑day suspension for pervasive trust account violations with mitigation)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cross, 861 N.W.2d 211 (Iowa 2015) (chapter 45 recordkeeping requirements govern CTAs)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Morris, 847 N.W.2d 428 (Iowa 2014) (longer suspension where trust account mismanagement was severe and persistent)