On review, respondent concedes some violations but challenges others. He also argues that his misconduct warrants a reprimand or, at most, a brief suspension. The Bar, for its part, argues that the trial panel should have found that respondent committed additional violations and that a two-year suspension is appropriate. We review the trial panel's findings de novo . ORS 9.536(2) ; Bar Rule of Procedure (BR) 10.6. The Bar has the burden of proving misconduct by clear and convincing evidence. BR 5.2. As explained below, we agree with most of the trial panel's findings but conclude that respondent should be suspended from the practice of law for 18 months. We address the charged violations regarding each client separately.
I. PRADO-HERNANDEZ
Prado-Hernandez pleaded guilty to first-degree sexual abuse. After his conviction became final, Prado-Hernandez's wife asked respondent to represent her husband in seeking post-conviction relief.
Respondent agreed to represent Prado-Hernandez for a flat fee of $5,000 plus expenses. Respondent collected the $5,000 from the wife on July 13, 2010, and deposited those funds into his operating account rather than his
Over the next year, respondent investigated potential grounds for seeking post-conviction relief but concluded that no valid basis for relief existed. On September 14, 2011, respondent mailed a letter to Prado-Hernandez explaining his conclusion. The letter begins by noting, "I've completed my investigation of your case. * * * My opinion at this time, based on everything I have seen and heard, is that I don't believe there are any grounds for post-conviction reliеf." After a detailed description of the facts of the case, the letter reiterated that respondent did not "think there are any legitimate grounds for post-conviction relief." The letter concluded: "I know this is not what you want to hear but I just don't see any basis for relief. That is not to say that I will stop my investigation. I will continue to look for options to getting your case back to court."
In January 2013, approximately 16 months after respondent mailed the September 2011 letter, Prado-Hernandez's wife began contacting respondent to ask about the status of the case. In May 2013, respondent told Prado-Hernandez's wife that he would meet with her husband at the Snake River Correctional Institution, where Prado-Hernandez was incarcerated. Respondent planned a meeting for later that month but had to cancel because he had scheduling conflicts. Another meeting was planned for October 2013, but it was cancelled at the request of Prado-Hernandez's family when it looked like Prado-Hernandez might be transferred to a closer prison.
On December 2, 2013, Prado-Hernandez sent a letter to respondent complaining about respondent's inaction and requesting "copies of the most recent court filings * * *, a list of everything you have filed for me, a summary of the
Respondent never sent the promised response. In the meantime, Prado-Hernandez requested copies of filings directly from the Court of Appeals and the trial court and learned that respondent had not filed anything.
In February 2014, Prado-Hernandez filed a complaint with the Bar. After receiving notice of the bar complaint, respondent met with Prado-Hernandez in March 2014. Following that meeting, respondent sent Prado-Hernandez a letter stating that he "would like the opportunity to continue exploring options and to continue to work with you in attempting to overturn your plea and sentence. This will entail thinking and working outside the box." Respondent agreed to perform several tasks noted in the letter, including:
"Review and provide billing statements accounting for charged fees and expenses and costs charged to date;
"Provide a partial refund based on statements and costs and expenses;
"Provide you a copy of the file;
"Conduct investigation of case and interview witnesses at no additional charge; [and]
"Report on status of investigation within 60 days from March 25, 2014."
Respondent scheduled a meeting with Prado-Hernandez for May 2014 to follow up on his letter. Prado-Hernandez, however, refused to see respondent and told the Bar that he wanted a refund of the money that his wife had paid respondent. Respondent never refunded the money to Prado-Hernandez, nor did he provide him with the information, such as copies of billing statements, that he had promised.
Respondent concedes that he violated RPC 1.15-1(a) and RPC 1.15-1(c) when he deposited the $5,000 into his operating account "[w]ithout a clear written agreement * * * that the fees paid in advance constitute a non-refundable retainer earned on receipt," In re Biggs ,
RPC 1.4(a) provides that "[a] lawyer shall keep a client reasonably informed about the status of a matter and
We assume, for the purposes of resolving this issue, that RPC 1.4(a) required respondent to discuss the status of the case only with his client. Accordingly, we assume that his failure to respond directly to Prado-Hernandez's wife does not provide a basis for finding a rule violation. However, we infer from the fact that respondent agreed to meet with Prado-Hernandez in May 2013 that respondent understood, at least by May 2013, that Prado-Hernandez's wife was acting on her husband's behalf in asking respondent about the status of his case.
We also conclude that Prado-Hernandez's requests for information, communicated both through his wife and directly by him, were reasonable ones. Although respondent wrote Prado-Hernandez in September 2011 that he did not see a valid basis for post-conviction relief, he also stated in his letter, "I will not stop my investigation. I will continue to look for options to getting your case back to court." Even if we assume, as respondent argues, that Prado-Hernandez received that letter, Prado-Hernandez reasonably understood from the letter that respondent was continuing to work on his behalf, and Prado-Hernandez reasonably asked through his wife what, if anything, respondent was doing to advance his claims.
Despite receiving those reasonable requests for information on or before May 2013, respondent did not tell Prado-Hernandez the status of the case for at least nine months. Specifically, respondent did not provide a substantive response to Prado-Hernandez's inquiries until March 2014, approximately one month after Prado-Hernandez filed a bar complaint against respondent and more than
B. RPC 1.15-1(d)
RPC 1.15-1(d) provides:
"Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property."
RPC 1.15-1(d). The trial panel found that respondent did not retain any unearned funds in violation of that rule. However, it found that he violated that rule by not providing Prado-Hernandez with a full accounting after Prado-Hernandez requested one. The Bar challenges the first finding; respondent, the second.
We begin with the issue that the Bar raises-whether respondent violated RPC 1.15-1(d) by retaining any unearned funds after Prado-Hernandez terminated his representation. Respondent argues that, in return for a flat fee of $5,000, he agreed to investigate and pursue, if warranted, post-conviction relief. In respondent's view, once he investigated the possibility of filing a post-conviction petition and concluded that no petition was warranted, he had done all that the agreement required to earn the entire fee. For that reason, respondent argues, the trial panel correctly determined that he held no unearned fees that he was obligated to return.
The Bar responds that the limited amount of work that respondent did on Prado-Hernandez's
As noted above, the agreement between respondent and Prado-Hernandez was oral. Although respondent had prepared a written fee agreement and testified that he discussed the terms of that agreement with Prado-Hernandez, Prado-Hernandez never saw the written agreement. The testimony at the hearing, however, made clear that respondent and Prado-Hernandez orally entered into a flat-fee agreement. The testimony is less clear as to what respondent promised to do to earn the flat fee. There is evidence to support respondent's position that he would earn the flat fee if he investigated whether there was a legitimate basis for filing a post-conviction petition and, if there were none, took no further action.
If respondent had the burden of proving that he did all he promised to do to earn the $5,000 flat fee, we might question whether he met his burden of persuasion. However, the Bar had the burden of proving by clear and convincing evidence that the fees respondent retained were unearned-namely, that respondent did not do all that he promised to do to earn the fees. Cf. In re Balocca ,
We turn next to respondent's argument that he had no obligation under RPC 1.15-1(d) to provide a full accounting. On that issue, respondent does not dispute that Prаdo-Hernandez requested an accounting and that he did not provide one. Respondent argues instead that the obligation to provide a full accounting applies only to "funds * * * in which a client or third party has an interest," and he asserts, without further explanation,
II. MONROY
The Bar charged respondent with multiple rule violations for his representation of another client, Monroy. On appeal, respondent argues that claim preclusion prevents the Bar from pursuing some or all of the charges arising out of his representation of Monroy. If that defense is not successful, respondent concedes that he violated some of the charged rules but argues that the trial panel erred in finding other rule violations.
In setting out the facts, we first describe respondent's representation of Monroy and his transfer of Monroy's files to another lawyer, Kliewer, which occurred when respоndent was suspended from the practice of law. We then turn to respondent's claim preclusion defense and set out the facts that relate to that defense-both the charges that came to light when respondent transferred his files to Kliewer and the stipulated order of discipline resolving those charges. After explaining why we agree with the trial panel that claim preclusion does not apply, we turn to the specific rule violations that the trial panel found.
A. Facts
Monroy was convicted of sexually abusing her 16-year-old foster child. The foster child brought a civil action against both Monroy and the agency that had placed him with her. In September 2011, while Monroy was appealing her criminal conviction and the civil matter was just beginning, Monroy hired respondent to investigate and file a post-conviction petition on her behalf once the direct appeal in the criminal case became final. At their first
When Monroy received the written fee agreement, she called respondent because she had expected that respondent would handle the post-conviction matter for a flat fee of $5,000. During the telephone call, Monroy and respondent discussed the hourly billing arrangement in the fee agreement, which Monroy ultimately signed. Monroy then paid the $2,000 retainer, and respondent deposited the retainer in his operating account.
Respondent started work on the post-conviction matter by obtaining and reviewing documents from the underlying criminal trial. He did not, however, begin drafting the post-conviction petition because Monroy's direct criminal appeal was still pending. Respondent did not send Monroy periodic billing statements for the work he did on the post-conviction matter and, as a result, did not notify her of the balance remaining on her $2,000 retainer.
For the next five months, most оf the work that respondent performed for Monroy related to the civil matter. As to that matter, respondent attended hearings, navigated the discovery process, and attempted to negotiate a
In March 2012, respondent asked Monroy's sister to pay the $1,000 that remained from the February bill. On March 14, 2012, he told her, "I need the $1,000 balance due on [Monroy's] account paid today." At the same time, respondent told her that "[Monroy's direct] appeal [in the criminal matter] was affirmed without an opinion. I need to file the post conviction relief this week." That statement was not completely accurate. Although the Court of Appeals had affirmed Monroy's conviction, respondent could not file (and thus did not need to file) a petition for post-conviction relief until the appellate judgment issued, which occurred approximately two months later in May.
On March 20, 2012, respondent again asked Monroy's sister to pay the remaining $1,000 that Monroy owed on the civil matter. Something about respondent's request struck the sister as odd, and she searched the Internet for information on respondent. There, she discovered that respondent was going to be suspended from the practice of law. She told Monroy about the pending suspension, and Monroy asked respondent about it. When asked, respondent told Monroy that he was going to begin a 150-day suspension a few days later, on March 27, 2012. Respondent had known about the suspension since January 27, 2012, when he stipulated to a disciplinary order with the Bar resolving ethical violations that had occurred during 2006 and 2007.
Respondent told Monroy that he had arranged for another lawyer, Kliewer, to handle her civil and post-conviction cases during his suspension. He also told her that he would continue to be involved in those cases because he would work as Kliewer's paralegal or legal assistant during his suspension. Respondent led Monroy to believe that, although Kliewer would be representing her in court, respondent would continue to perform substantive legal
Respondent's representations to Monroy were, again, not completely accurate. Although Kliewer had agreed to handle some of respondent's cases during his suspension, Kliewer had not specifically discussed handling Monroy's matters, nor was Kliewer aware that she would be required to represent a client in a post-conviction and a civil matter, two areas of law that Kliewer did not ordinarily practice. Further, Kliewer had not agreed (and did not agree) to hire respondent to work as her legal assistant or paralegal during his suspension. When Kliewer took over Monroy's matters in March, Kliewer had a difficult time getting complete files from respondent and was not given access to any unearned advance fees that Monroy had paid respondent.
In May 2012, Kliewer found discovery requests in Monroy's civil matter that respondent had not addressed before his suspension and learned that a declaration, which was key to resolving the civil matter, required revision. At some point, Kliewer revised Monroy's declaration, which Monroy signed. After receiving the declaration, the plaintiff in the civil matter dismissed his claims against Monroy.
In September 2012, after respondent was reinstated, Monroy terminated respondent's representation on the remaining post-conviction matter. She asked for a refund and for all of her files tо be transferred to another lawyer, Roller. In October 2012, Roller asked respondent for Monroy's files and for any money that respondent owed Monroy. Respondent released Monroy's files on October 31,
B. Claim Preclusion
With that background in mind, we turn to the facts related to respondent's claim preclusion defense. In June 2013, the Bar filed an amended formal complaint (the June 2013 complaint) against respondent alleging multiple rule violations. The June 2013 complaint grouped 18 claims for relief into seven "matters." One of those seven matters was denominated as the "Kliewer Matter."
In September 2013, Monroy filed a bar complaint against respondent. In August 2014, while Monroy's complaint was being investigated and before the Bar filed any charges against respondent based on Monroy's complaint, the Bar and respondent discussed a possible settlement for the conduct charged in the June 2013 complaint. Those charges were set to be heard before a trial panel in August 2014, and the parties wanted to settle them before the hearing date.
Respondent raised the idea of wrapping the claims against him based on his representation of Monroy into the settlement of the charges alleged in the June 2013 complaint.
Ultimately, the Bar and respondent settled the charges alleged in the June 2013 complaint, including those in the Kliewer Matter, by entering into a stipulated order of discipline. Regarding the allegations in the Kliewer Matter, respondent stipulated that "between December 6, 2010 and March 27, 2012,
In August 2015, the Bar filed this complaint, part of which arises out of respondent's representation of Monroy.
Respondent's argument fails to distinguish two separate questions.
"In determining the res judicata effect of an order of dismissal based upon a settlement agreement, we should also attempt to effectuate the parties' intent. * * * Consequently, the scope of the preclusive effect of the 1977 Dismissal should not be determined by the claims specified in the original complaint, but instead by the terms of the SettlementAgreement, as interpreted according to traditional principles of contract law."
Norfolk Southern Corp. v. Chevron, U.S.A. ,
Because claim preclusion is an affirmative defense, respondent had the burden of proving by a preponderance of the evidence that the stipulated order of discipline was intended to resolve the Bar's claims arising out of
However, if the stipulation is read in light of the allegations that gave rise to it, its intended scope becomes clearer. The allegations in the Kliewer Matter in the June 2013 complaint identified five clients whose claims gave rise to the charges included in the Kliewer matter. Monroy was not one of those clients. Moreover, when respondent's lawyer raised the prospect of wrapping any claims arising out of respondent's representation of Monroy into the stipulated order of discipline, the Bar told respondent that it could not do so bеcause the SPRB first had to decide which, if any, charges should be brought against respondent based on his representation of Monroy. Given this record, we find that respondent failed to meet his burden of proving, by a preponderance of evidence, his affirmative defense of claim preclusion.
As noted above, the Bar alleged that respondent violated seven ethical rules. Those rule violations divide into four general categories. Three arise out of respondent's fee agreements and related actions. Two arise out of his failure to communicate with Monroy. One arises out of the fees respondent charged Monroy, and one violation arises out of the obligations that respondent owed Monroy when his representation of her ended.
1. Fee agreements
The trial panel found that the fee agreements in both the post-conviction matter and the civil matter violated RPC 1.5(c)(3) because those agreements denominated the fees as "earned on receipt" or "nonrefundable" without providing the required disclosures. The panel then found that respondent "did not put funds that he received on behalf of [Monroy] into a lawyer trust account in violation of RPC 1.15-1(a)." Finally, the trial panel found that respondent "placed funds in his own account before they were earned" in violation of RPC 1.15-1(c).
Respondent does not challenge the trial pаnel's findings that he violated those rules. Rather, he focuses his argument on the weight that should be given those violations in imposing a sanction. The Bar argues that the fee agreements in both matters violate RPC 1.5(c)(3) for the reasons that the trial panel identified. The Bar also argues that respondent violated RPC 1.15-1(a) and RPC 1.15-1(c) when he deposited the advance payment of $2,000 for the post-conviction matter in his operating account. However, the Bar does not argue that respondent placed any fees in the civil matter into his operating account before he earned them. We agree with the Bar in all respects.
2. Communication with Monroy
a. RPC 1.4(a)
The trial panel found that respondent violated RPC 1.4(a) because he failed to keep Monroy "reasonably informed about the status of her [post-conviction] matter." It
Not only does respondent's argument miss the mark, but the Bar's argument on review is equally unhelpful. In its brief on review, the Bar recites a series of events in both the post-conviction and the civil matters and then asserts, without further explanation, that respondent violated RPC 1.4(a) and RPC 1.4(b). The Bar's argument does not specify, much less explain, which omission or group of omissions it believes violated RPC 1.4(a), RPC 1.4(b), or perhaps both rules.
The Bar took a more helpful approach before the trial panel. There, the Bar argued that the salient failure on respondent's part was his failure to tell respondent when the criminal appeal was likely to end and when, as a result, respondent would file a post-conviction petition on her behalf. We agree with that argument. Monroy had told respondent that she wanted to file a post-conviction petition as soon as possible because of the effect of the criminal conviction on her family. Not only did respondent fail to inform Monroy when a post-conviction petition could legally be filed, but he gave her, through her sister, incorrect information on that issue. For that reason, respondent failed to keep Monroy
b. RPC 1.4(b)
RPC 1.4(b) provides that "[a] lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." The trial panel found that respondent violated that rule "particularly regarding his failure to explain his unilateral transfer of [Monroy's] case to another lawyer." On that point, respondent argues that he did not unilaterally transfer Monroy's case to Kliewer. Rather, he notes that he discussed the matter with Monroy before the transfer occurred and that she agreed to it. He accordingly disagrees that his explanation was insufficient to permit her to make an informed decision about the transfer.
The difficulty with respondent's argument is that the information that he told Monroy was either inaccurate or incomplete. For example, he told her that he would work with Kliewer during the period of his suspension as a law clerk or a paralegal and that, as a result, he would work on her post-conviction and civil matters even while suspended. Kliewer, however, had not and did not agree to that arrangement. Beyond that, respondent did not explain to Monroy whether the fees that she had paid him for those matters would be available to Kliewer or whether Mоnroy would owe Kliewer additional funds for the work that Kliewer did on Monroy's behalf. Put differently, Monroy agreed to the transfer without a reasonable understanding of how the work on her cases would be handled and what her financial obligations to Kliewer would be. The trial panel correctly found that respondent violated RPC 1.4(b).
3. Excessive fee
The trial panel found that respondent violated RPC 1.5(a) because he "charged an excessive fee for the work
The Bar argues that the $4,000 that Monroy paid in the civil matter was excessive because respondent's efforts did not result in the dismissal of the civil matter. The Bar notes that the civil matter was not dismissed until Kliewer took over Monroy's civil case while respondent was suspended. While true, the Bar's argument fails to account for the work that respondent did, which is discussed above, before he transferred the civil matter to Kliewer. Moreover, although Kliewer revised a declaration that respondent had drafted, which resulted in the dismissal of the civil claims against Monroy, respondent performed the lion's share of the work on the civil matter that led to the dismissal. The Bar has not persuaded us by clear and convincing evidence that respondent charged an excessive fee for the civil matter.
The Bar also argues that respondent charged an excessive fee for the post-conviction matter. As we understand the Bar's argument, it rests on the proposition that Monroy paid respondent an advance fee of $2,000 but got nothing in return.
4. Termination of representation
RPC 1.16(d) provides:
"Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. The lawyer may retain papers, personal property and money of the client to the extent permitted by other law."
The trial panel found that, when respondent's representation of Monroy ended, respondent "did not take steps reasonably practicable to protect [Monroy's] interests." The trial panel did not state what steps respondent should have taken. Respondent, for his part, asserts that the trial panel erred in finding that he violated this rule but does not explain why the panel erred.
The Bar notes that, when respondent was suspended and later when Monroy retained another lawyer, Roller, respondent unreasonably delayed transferring his files both to the substitute counsel (Kliewer) and to Monroy's new counsel (Roller). We agree that respondent violated the rule in failing to turn over his files in a timely manner. Additionally, the Bar argues that respondent failed to return the unearned fees that Monroy had paid him. As explained above, the Bar failed to prove by clear and convincing evidence that respondent retained any unearned fees. Accordingly, we disagree with that part of the Bar's argument.
In March 2013, Lyons retained respondent to represent him in two criminal matters, one
Lyons' grandmother paid respondent $7,500. Because the written agreement contained the disclosures required by RPC 1.5(c)(3), respondent properly deposited those funds into his operating account.
By mid-May 2013, it appeared that the Multnomah County case might go to trial. Respondent told Lyons that he would represent him at trial for a $3,000 flat fee. Respondent also told Lyons that, although he was collecting the trial fee before it was certain that there would be a trial, the money would go into respondent's trust account and respondent would return the $3,000 fee if the case did not "go to trial." Lyons' grandmother was reluctant to pay the fee in advance of the trial but ultimately provided respondent with the $3,000 payment after discussing it with him. Respondent deposited the $3,000 into his operating account.
The criminal trial in Multnomah County was scheduled to begin on Monday. On the Friday before trial began, respondent and the state appeared at call and told the trial court that they were ready to proceed to trial, and the case
Later, the Columbia County case also settled. Lyons's grandmother attended the sentencing hearing in Columbia County. After the hearing, respondent came out and spoke to her. He told her that "he was going to go back tо the office and get a check cut to refund [her] the money because all it was just that sentencing hearing and there was no trial because they went ahead with the plea bargain stuff." When no check arrived, Lyons's grandmother called respondent's office repeatedly to ask about the refund. She talked to his assistant, called his cell phone, and left messages for him. She never heard back from respondent.
Lyons filed an ethics complaint with the Bar. At the hearing on that complaint, respondent acknowledged that his written agreement did not explain when a case would "go to trial." He testified, however, that it was his practice to go over the terms of the contract, explain what a flat fee is, what the trial fee would be for each day, and when "that trial fee kicks in." However, he could not recall specifically having that discussion with Lyons, and Lyons did not remember respondent telling him that the trial fee would "kick in" when the case was called for trial.
Given those facts, the trial panel found that respondent had violated three rules. Specifically, it found that respondent had: (1) collected an earned-upon-receipt fee without entering a written fee agreement containing appropriate disclosures under RPC 1.5(c)(3) ; (2) deposited advance-paid fees into his operating account without an appropriate "earned upon receipt" agreement, RPC 1.15-1(c) ; and (3) failed to рrotect Lyons' interests upon termination of representation by returning the unearned trial fee, RPC 1.16(d). Respondent challenges each of those findings.
Respondent entered into two fee agreements with Lyons. One was written; the other, oral. In answering the Bar's charges, respondent admitted that his written fee agreement violated RPC 1.5(c)(3), and the trial panel found that he violated that rule based on his admission. On review, respondent argues that he should not be held to the admission in his answer because the written fee agreement clearly complied with RPC 1.5(c)(3). Respondent accordingly focuses his argument on review on whether the oral agreement to pay the $3,000 trial fee was an extension of the written agreement that incorporated its terms and thus complied with RPC 1.5(c)(3).
On review, the Bar does not dispute that the written fee agreement for pretrial work complied with RPC 1.5(c)(3). The Bar, however, focuses on the oral agreement for the trial fee. It takes the position that, because respondent "deemed [the $3,000 trial fee] nonrefundable and earned on receipt," respondent's collection of that fee violated RPC 1.5(c)(3). The Bar notes that there was no written agreement concerning the $3,000 trial fee, much less a written agreement that contained the disclosures required by RPC 1.5(c)(3).
In resolving the parties' arguments, we note as an initial matter that respondent does not dispute that RPC 1.5(c)(3) applies to his oral agreement to receive the $3,000 flat fee if one or more of the criminal cases went to trial. His argument turns instead on whether the oral agreement complied with RPC 1.5(c)(3). On that issue, RPC 1.5(c)(3) requires that the fee agreement be written, not oral. Here, the agreement for the $3,000 trial fee was oral and separate from the written agreement for respondent's work in negotiating a pretrial settlement or dismissal. It necessarily follows that respondent's oral agreement did not comply with the rule.
B. RPC 1.15-1(c)
The trial panel also found that respondent violated RPC 1.15-1(c), which requires that fees paid in advance be deposited in a lawyer's trust account unless the fee is denominated as earned on receipt and the parties' fee agreement complies with RPC 1.5(c)(3). Given our conclusion that the respondent's oral fee agreement did not comply with RPC 1.5(c)(3), it necessarily follows that respondent violated RPC 1.15-1(c) when he deposited the $3,000 trial fee in his operating account.
C. RPC 1.16(d)
The remaining question is whether respondent violated RPC 1.16(d) when he refused to return the $3,000 trial fee after both criminal cases settled. Respondent argued before the trial panel that, under the terms of his written agreement with Lyons, he was entitled to retain the trial fee if the Multnomah County case "went to trial" and that the case had gone to trial when he
We agree with that conclusion. We find that respondent did not tell Lyons that the $3,000 trial fee would be triggered when either criminal case was called for trial. Objectively, it seems unlikely that respondent would have addressed that issue with Lyons when they discussed the written fee agreement. That agreement covered pretrial negotiation, and there was no apparent reason for respondent to explain when he would earn a trial fee in discussing an agreement that, by its terms, did not apply to trial work. Moreover, respondent did not testify that he ordinarily would have discussed the triggering point for the trial fee when he entered into the oral agreement with Lyons. Rather, his testimony regarding his usual practices with clients focused on the written agreement, which did not implicate the starting date for a trial fee.
More importantly, Lyons's grandmother, whom the trial panel found to be "highly credible, based on demeanor," testified that respondent told her after the sentencing hearing in Columbia County that he was going to go back and cut a check to refund the trial fee because "there was no trial." When respondent never sent a check, Lyons's grandmother called him repeatedly, but he never responded to her calls asking about the refund. Not only did respondent admit that no trial had occurred and that Lyons was due a refund, but his failure to respond to the grandmother's repeated inquiries about the promised refund undercuts the position he later took that no refund was due under the terms of one or the other of his agreements with Lyons.
One other point requires discussion. As the trial panel noted, respondent's interpretation of the phrase "go to trial" was a permissible one. However, it was not the ordinary meaning of that phrasе. If, as we conclude, respondent did not share that understanding with Lyons, then the phrase "go to trial" in the written agreement and its apparent counterpart in the oral agreement should be given their usual meaning. Respondent would earn the trial fee when the trial actually began, as opposed to when the case was called for trial on Friday to begin on the following Monday.
IV. SANCTION
The trial panel suspended respondent from the practice of law for one year. Respondent argues that, to the extent that he violated the rules of professional conduct, his violations were the result of negligence and mostly matters of form, not substance. In his view, a reprimand or a minor suspension should suffice to protect the public. The Bar views respondent's violations differently. In the Bar's view, respondent's repeated failure to conform his conduct to the ethical rules evinces a disregard for his clients' interests that warrants a substantial sanction. It reasons that the trial panel should have suspended him from the praсtice of law for two years, not one.
In determining the appropriate sanction for violating the rules of professional conduct, we look initially to the American Bar Association's Standards for Imposing Lawyer Sanctions (ABA Standards). See In re Gatti ,
In this case, respondent violated duties that he owed his clients. He violated the duty to preserve and properly handle client property when he deposited Prado-Hernandez's, Monroy's, and Lyons's funds in his operating
Respondent acted knowingly in depositing the advance fees that Prado-Hernandez's wife paid him into his operating account. Although respondent argues that his action was merely negligent because he meant to have Prado-Hernandez sign a written fee agreement, the fact remains that respondent deposited the money in his operating account before he ever met with Prado-Hernandez. He knew at that point that Prado-Hernandez had not signed a written agreement that would permit him to take that action. However, Prado-Hernandez suffered only a potential injury from that violation. Respondent knowingly failed to respond promptly to Prado-Hernandez's reasonable requests for information, and Prado-Hernandez suffered actual injury in the form of the unnecessary anxiety and frustration. See In re Cohen ,
Respondent knowingly violated his duty of diligence to Monroy when he failed to respond promptly to her requests for information about the status of her post-conviction case and when he failed to provide her with information reasonably necessary to make an informed decision regarding the transfer of her cases to Kliewer. He knowingly violated his duty of loyalty to Monroy when he unreasonably delayed transferring her files to her new counsel when his representation of her ended. Monroy experienced аctual injury in the form of unnecessary anxiety and frustration as a result of those violations.
Respondent negligently violated his duty of loyalty to Lyons when he deposited the $3,000 advance fee in his operating account. He should have known that the
Considering the duty violated, respondent's mental state, and the injuries and potential injuries that resulted, we find that suspension is the presumptive sanction solely for respondent's failure to refund the $3,000 trial fee to Lyons. ABA Standard 4.12 ("Suspension is generally appropriate when a lawyer knows or should know that he is dealing improperly with client property and causes injury or potential injury to a client."). Moreover, even if all of respondent's breaches of the duty of diligence that he owed to Prado-Hernandez and Monroy were negligent, suspension would be the appropriate sanction for that pattern of neglect. ABA Standard 4.42(b) ("Suspension is generally appropriate when * * * a lawyer engages in a pattern of neglect and causes injury or potential injury to a client.").
We also consider aggravating and mitigating circumstances. Regarding aggravating factors, respondent has substantial experience in the practice of law, ABA Standards 9.22(i); he committed numerous violations, ABA Standards 9.22(d); and his clients were vulnerable victims, which makes his failure to keep them reasonably informed all the more egregious, ABA Standards 9.22(h).
The more significant aggravating factors are respondent's pattern of misconduct, ABA Standards 9.22(c), and his prior
In his case, respondent has been admonished or sanctioned in three prior lawyer disciplinary proceedings.
We do not consider the rule violations for which the 2014 sanction was imposed (including the Kliewer Matter) as "prior disciplinary offenses" because the acts that gave rise to this disciplinary proceeding occurred before the imposition of the 2014 sanction. See Jones ,
Against those substantial aggravating circumstances, we find only one mitigating circumstance. During the relevant time period for the Prado-Hernandez and Monroy matters, respondent was experiencing personal or emotional problems-namely, serious financial and tax problems and the stress resulting from those problems. ABA Standards
Finally, we consider our cases. No previous case presents the same constellation of violations and aggravating and mitigating circumstances. Respondent's proposed suspension of not more than 30 days is inadequate under the case law in light of the breadth and scope of his violations. Several of his violations, standing alone, could justify a suspension exceeding that amount. For example, in Inre Peterson ,
Nevertheless, the two-year suspension proposed by the Bar also lacks support in our case law. In previous cases involving neglect by lawyers with disciplinary histories and substantial experience in the law, we have imposed one-year suspensions. See Knappenberger ,
Respondent is suspended from the practice of law for a period of 18 months, commencing 60 days from the date of this decision.
Notes
We find the facts set out in this opinion by clear and convincing evidence.
RPC 1.15-1(a) required respondent to hold Prado-Hernandez's property in a lawyer trust account separate from respondent's property and RPC 1.15-1(c) required respondent to put unearned fees in a lawyer trust account. Because respondent had not yet earned the funds that Prado-Hernandez's wife paid him and because he had not entered into a written agreement that would have justified treating those fees as earned on receipt, he violated both rules when he put the funds that Prado-Hernandez's wife paid him into his operating account. See In re Fadeley ,
Although the Bar challenges that ruling on review, it does not сhallenge the trial panel's other adverse rulings regarding Prado-Hernandez.
Of course, if there were a legitimate basis for seeking post-conviction relief, then respondent would have been obligated under his view of the agreement to file and litigate the post-conviction action for the $5,000 flat fee.
The question whether the parties entered into a flat-fee agreement and what a lawyer must do to earn the flat fee is separate from the question whether fees are denominated as "earned on receipt" and, if they are, whether the agreement contains sufficient disclosures to permit the lawyer to deposit them into his or her operating account. The latter question essentially is an affirmative defense, and the lawyer bears the burden of production and persuasion to show that the defense applies. Balocca ,
Respondent does not argue that the Bar should have charged him with violating RPC 1.16(d) rather than RPC 1.15-1(d) for failing to return unearned funds on the termination of his representation, and we express no opinion on that issue.
We note that the terms of RPC 1.15-1(d), read as a whole, appear to apply most naturally to a lawyer's obligation to notify a client or third party when a settlement оr other funds have been received, to promptly deliver the funds that the client or third party is entitled to receive, and to provide the client an accounting when requested. See In re Webb ,
The other six matters arose out of alleged violations that were unconnected to the files that respondent transferred to Kliewer.
Specifically, the Bar charged respondent with failing to keep Monroy reasonably informed about the status of a matter and failing to promptly comply with reasonable requests for information, RPC 1.4(a) ; failing to explain a matter to the extent reasonably necessary to permit Monroy to make informed decisions regarding the representation, RPC 1.4(b) ; collecting a clearly excessive fee, RPC 1.5(a) ; collecting an earned-upon-receipt fee without entering a written fee agreement containing appropriate disclosures, RPC 1.5(c)(3) ; failing to keep Monroy's property separate from the lawyer's own property, RPC 1.15-1(a) ; depositing advance-paid fees into the lawyer's operating account without first entering an appropriate "earned-upon-receipt" agreement, RPC 1.15-1(c) ; and failing to protect Monroy's interests upon termination of representatiоn, RPC 1.16(d).
Respondent assumes that claim preclusion applies to lawyer disciplinary proceedings, as does the Bar. Given that shared assumption, we also assume without deciding that claim preclusion applies in this context.
Claim preclusion applies only if the settlement has been reduced to a final order, decree, or judgment. See 18A Federal Practice & Procedure at § 4443. In this case, respondent's stipulation was embodied in a final order.
Given our resolution of respondent's claim preclusion defense, we neither decide nor express any opinion on the question whether the Bar's claims against respondent arose out of the same factual transaction.
The Bar does not expressly challenge the trial panel's finding that the Bar did not prove that respondent failed to keep Monroy reasonably informed about the status of the civil matter, although it intimates that there might be a problem. Without a coherent, cognizable argument from the Bar on that issue, we decline to overturn the trial panel's finding.
At some points, the Bar refers to Monroy's understanding that she paid respondent $5,000 on the post-conviction matter. That understanding, however, is inconsistent with the written fee agreement, and the fact that Monroy paid respondent a total of approximately $6,000 total for both matters, $4,000 of which was for the civil matter.
The Bar also charged respondent with engaging in professional misconduct, RPC 8.4(a)(3). The trial panel found that respondent had not violated that rule, and the Bar does not challenge that finding on review.
RPC 1.5(c)(3) provides that a "lawyer shall not enter into an arrangement for, charge, or collect * * * a fee denominated as 'earned on receipt,' 'nonrefundable' or in similar terms unless it is pursuant to a written agreement" that is signed by the client and that explains that the fee will not be deposited in the lawyer's trust account and is, in fact, refundable in whole or in part if the lawyer is discharged without having provided all or some of the services he or she agreed to provide.
In 2002, the Bar admonished respondent for depositing flat-fee retainers into his operating account without first entering into a written fee agreement and failing to timely refund fees to a client. In 2012, respondent received a 150-day suspension for making improper deposits into and improper withdrawals from his trust account, leading to numerous overdrafts. And in 2014, respondent received a six-month suspension for misrepresenting to his employees that he was withholding and paying their income and payroll taxes, using improper fee agreements, failing to respond to clients, failing to keep clients informed, failing to refund fees, and failing to provide an accounting. The 2014 sanction included conduct charged in the Kliewer matter. Although the 2014 sanction preceded the imposition of the sanction in this case, respondent had not been "sanctioned for [those offenses] before engaging in the offense in the case at bar." Jones ,