Iowa Supreme Court Attorney Disciplinary Board v. Michael D. Kozlik
943 N.W.2d 589
Iowa2020Background:
- Michael D. Kozlik, an attorney licensed in Iowa (2000) who mainly practices in Nebraska, was appointed administrator of his uncle Duane Slightam’s estate in Pottawattamie County.
- Between 2016–2018 Kozlik withdrew twelve unauthorized checks payable to himself from the estate totaling $39,350; he deposited the funds into his personal/firm accounts and used them for personal and business expenses; he later repaid $9,700 after discovery.
- Kozlik did not obtain court approval before taking the funds; he self-reported the withdrawals, admitted the ethical breach, and was removed as administrator; the district court later reduced his requested fees consistent with statutory caps.
- The Attorney Disciplinary Board charged violations of Iowa R. Prof. Conduct 32:8.4(b) and (c) for conversion/misappropriation; the Grievance Commission found 8.4(b) not proven but 8.4(c) violated and recommended a public reprimand.
- On de novo review the Iowa Supreme Court concluded Kozlik misappropriated estate funds, that his billing did not correlate with withdrawals, he had knowledge of Iowa probate practice, and he lacked a colorable future claim to the funds.
- Because the court found conversion without a colorable future claim, it revoked Kozlik’s Iowa law license (readmission possible after 5 years under conditions).
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kozlik committed a criminal act reflecting adversely on fitness (Iowa R. Prof. Conduct 32:8.4(b)) | Board: withdrawals were misappropriation/theft of fiduciary funds and reflect adversely on honesty/fitness | Kozlik: withdrawals were an honest mistake, lacked scienter, followed Nebraska practice, no intent to steal | Court: Misappropriation of estate funds established violation of 32:8.4(b) (criminal/fitness prong proven) |
| Whether Kozlik engaged in dishonesty, fraud, deceit or misrepresentation (Iowa R. Prof. Conduct 32:8.4(c)) | Board: circumstantial evidence and mismatch of billing vs. withdrawals show knowing conversion (scienter) | Kozlik: no intent to deceive, used checks to disclose transactions, self-reported and repaid funds | Court: Scienter can be inferred; conduct violated 32:8.4(c) |
| Whether Kozlik had a colorable future claim to the withdrawn funds (affecting sanction) | Board: no colorable claim; funds exceeded statutory fee cap and did not correlate to billed work | Kozlik: claimed withdrawals were for earned fees/expenses and a $10,000 tax-offset that was largely repaid; asserted practice in Nebraska differs | Court: No colorable future claim—statutory cap, simple estate, lack of correlation—so revocation is required |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Mathahs, 918 N.W.2d 487 (Iowa 2018) (de novo review and burdens in disciplinary proceedings)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cross, 861 N.W.2d 211 (Iowa 2015) (scienter requirement for 32:8.4(c))
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Den Beste, 933 N.W.2d 251 (Iowa 2019) (conversion of funds violates 32:8.4(b) and (c))
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Muhammad, 935 N.W.2d 24 (Iowa 2019) (misappropriation of client funds supports discipline)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carter, 847 N.W.2d 228 (Iowa 2014) (no colorable future claim; revocation for conversion of estate funds)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kelsen, 855 N.W.2d 175 (Iowa 2014) (conversion without colorable claim undermines credibility of defense)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell, 830 N.W.2d 355 (Iowa 2013) (explains colorable-future-claim defense)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Guthrie, 901 N.W.2d 493 (Iowa 2017) (revocation appropriate in nearly every case of conversion without a colorable claim)