Lawyer Disciplinary Board v. Paul J. Harris, 23-419

Background:

Paul J. Harris, admitted 1987, faced a three-count disciplinary Statement of Charges: Count 1 (trusts, alleged hiding of marital assets, conflicts arising from litigation involving Emil N. and Healy B.-N.); Count 2 ($50,000 fee from client Rocky Tingler); Count 3 (dismissed by HPS for lack of credibility).
HPS found 15 Rule violations under Count 1 and 8 violations under Count 2 and recommended annulment of Harris’s license; ODC supported HPS findings; Harris objected.
Key factual disputes: existence/validity of competing trusts (Trust 1 and Trust 2), whether Healy B.-N. authorized transactions (she did not testify at the disciplinary hearing), and whether payments to Harris were legitimate attorney fees or concealed marital assets.
On Count 2, Tingler paid $50,000 retainer deposited into Harris’s IOLTA; Harris transferred funds to operating account, produced delayed itemization, performed little verifiable work; investigators and other payees received some sums; Harris refunded only a small portion after complaint.
The Supreme Court reversed the HPS findings on Count 1 (insufficient clear-and-convincing evidence, partly because the primary affected party did not testify), affirmed most of Count 2 (7 of 8 violations proven), and imposed a two-year suspension, restitution of $34,995, and post-reinstatement audit conditions.

Issues:

Issue	Plaintiff's Argument (ODC)	Defendant's Argument (Harris)	Held
Timeliness (Rule 2.14 statute of limitations)	Complaints were timely because they were filed within two years of complainants (or referring tribunal/counsel) learning of the alleged violations.	Many allegations accrued earlier and are time-barred; complainant cannot extend time by delayed referral.	Court: Timely. Complainant's/referring party's knowledge controls; both Count 1 and Count 2 timely.
Sufficiency of evidence for Count 1 (trusts, hiding marital assets, conflicts)	HPS findings and underlying litigation show a scheme to divert marital assets and conflicts of interest.	Record is undeveloped on critical points (e.g., Healy B.-N.’s consent); HPS relied on adversarial litigation positions; ODC failed clear-and-convincing proof.	Court: ODC failed to prove Count 1 violations by clear and convincing evidence; reversed HPS on Count 1.
Fee handling and retainer treatment (Count 2: flat fee vs. advance; trust rules)	Fee was effectively an advance payment not earned on receipt; must be held in trust and refunded if unearned; Harris misused/tranferred funds and deceived client.	Fee was a negotiated nonrefundable flat fee earned on receipt and reasonable for federal defense work; no violation.	Court: Fee treated as advance payment; Harris violated Rules 1.15, 1.16, 1.5, and 8.4(c)/(d); 7 of 8 violations proven; not proven under 8.4(b) (no crime shown).
Appropriate sanction (annulment v. suspension; restitution; safeguards)	Given intentional deceit and prior admonishments, annulment warranted.	Annulment disproportionate; this is a fee dispute and overpunitive.	Court: Modified HPS. Two-year suspension, $34,995 restitution to Tingler, CPA audits for 3 years on reinstatement, must reimburse Board costs; annulment denied.

Key Cases Cited

Comm. on Legal Ethics of W. Va. State Bar v. Blair, 174 W. Va. 494, 327 S.E.2d 671 (1984) (Supreme Court is final arbiter of legal ethics sanctions)
Comm. on Legal Ethics of W. Va. State Bar v. McCorkle, 192 W. Va. 286, 452 S.E.2d 377 (1994) (de novo review for law questions; deference to HPS fact findings if supported by substantial evidence)
Law. Disciplinary Bd. v. McGraw, 194 W. Va. 788, 461 S.E.2d 850 (1995) (ODC must prove charges by clear and convincing evidence)
Off. of Law. Disciplinary Counsel v. Jordan, 204 W. Va. 495, 513 S.E.2d 722 (1998) (factors for imposing sanctions under Rule 3.16)
Comm. on Legal Ethics of W. Va. State Bar v. Walker, 178 W. Va. 150, 358 S.E.2d 234 (1987) (discipline must punish, deter, and restore public confidence)
Lawyer Disciplinary Board v. Smoot, 228 W. Va. 1, 716 S.E.2d 491 (2010) (complainant/referring tribunal knowledge controls Rule 2.14 timeliness)
Law. Disciplinary Bd. v. Morgan, 228 W. Va. 114, 717 S.E.2d 898 (2011) (one-year suspension for accepting retainers and depositing into operating account without performing work)
Law. Disciplinary Bd. v. Haught, 233 W. Va. 185, 757 S.E.2d 609 (2014) (one-year suspension where lawyer immediately withdrew client funds from IOLTA; no proof of criminal act required for other ethical violations)
Lawyer Disciplinary Board v. Thorn, 236 W. Va. 681, 783 S.E.2d 321 (2016) (one-year suspension for nonrefundable/flat-fee practices placed into operating accounts with little/no work performed)
Law. Disciplinary Bd. v. Ball, 219 W. Va. 296, 633 S.E.2d 241 (2006) (factors for forfeiture/disgorgement of fees as sanction)