IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Cоmplainant, v. Laurie Jean PEDERSON, Respondent.
No. 16-0199.
Supreme Court of Iowa.
Nov. 10, 2016.
887 N.W.2d 387
Attorneys are officers of the court sworn to uphold the law. To restate the obvious: Obedience to the law symbolizes respect for law. To the extent those licensed to operate the law‘s machinery knowingly and repeatedly violate essential statutes, there inexоrably follows an intensified loss of lay persons’ respect for law. This we can neither condone nor tolerate.
Iversen, 723 N.W.2d at 811 (quoting Comm. on Prof‘l Ethics & Conduct v. Bromwell, 221 N.W.2d 777, 778-79 (Iowa 1974)). Maryland‘s highest court recently observed, “[P]reserving the public‘s confidence in the legal profession is particularly pertinent in cases involving the willful failure to file tax returns.” Att‘y Grievance Comm‘n of Md. v. Katz, 443 Md. 389, 116 A.3d 999, 1010 (2015) (disbarring attorney who underpaid taxes and failed to timely file returns for fifteen years). As that court elabоrated,
An attorney‘s willful failure to file income tax returns may seriously impair public confidence in the entire profession. The need, therefore, to maintain public respect for the bar is a vital consideration in the imposition of disciplinary sanctions. The lawyer, after all, is intimately associated with administration of the law and should rightfully be expected to set an example in observing the law. By willfully failing to file his tax returns, a lawyer appears to the public to be placing himself above that law.
Id. (quoting Att‘y Grievance Comm‘n of Md. v. Walman, 280 Md. 453, 374 A.2d 354, 361 (1977)); see also Fla. Bar v. Erlenbach, 138 So.3d 369, 374 (Fla.2014) (noting lawyers who fail to file tax returns “fail[] to abide by the laws that citizens are required to address each year“).
“[T]he responsibility for properly filing one‘s tax returns is a responsibility that should never be taken lightly by any citizen, especially one who is licensed as an officer of the сourt.” Disciplinary Counsel v. Large, 122 Ohio St.3d 35, 907 N.E.2d 1162, 1165 (2009) (per curiam) (quoting Toledo Bar Ass‘n v. Stichter, 17 Ohio St.3d 248, 478 N.E.2d 1322 (1985) (per curiam)). What we said in Bromwell remains true: There is “no significant moral distinction between willfully cheating a client and willfully cheating the government.” 221 N.W.2d at 780; see also Katz, 116 A.3d at 1013 (holding cheating the government “is equally as reprehensible as cheating a client“).
For these reasons, I would impose a one-year suspension.
ZAGER, J., joins this dissent.
Laurie Jean Pederson, Rockford, pro se.
CADY, Chief Justice.
The Iowa Supreme Court Attorney Disciplinary Board charged attorney Laurie Jean Pederson with violating various rules
I. Background Facts and Proceedings.
Laurie Jean Pederson is an Iowa lawyer. She was admitted to practice law in Iowa in 2001 and has worked as a sole practitioner in Rockford, Iowa, throughout her career. Pederson has been publicly reprimanded in the past.
The disciplinary proceedings against Pederson involve her conduct as an attorney in an estate proceeding and her representation of a client in a child custody case. The facts were presented to the commission pursuant to a stipulation.
In the estate proceeding, Pederson served as the attorney for the estate. The executor was a beneficiary, together with her two siblings. A Mason City attorney represented the two other beneficiaries. Pederson was aware they were represented parties in the proceeding.
During the probate of the estate, Pederson sought and received the second half of her requested attorney fees prior to filing the final report. She also communicated directly with the two beneficiaries represented by counsel. She wrote a letter to them requesting waiver of the hearing on the final report. Pederson had calculated her attorney fees, as well as the executor fees, to be each nearly $29,000. Like Pederson, the executor received the second half of her fee prior to the filing of the final report. The district court removed Pederson as the attorney for the executor after it discovered the attorney fees had bеen miscalculated and the second half of the fees were prematurely received. The district court also removed the executor. The court then ordered Pederson and the executor to return all fees. Pederson, however, did not have sufficient funds at the time to return her attorney fees. She sought and received a loan from the former executor, who then returned аll fees previously paid to the executor and Pederson, totaling nearly $58,000, to the estate. Pederson and the executor did not execute a written loan agreement, and Pederson did not advise the executor to seek independent counsel. Furthermore, Pederson did not obtain informed consent from the executor. The district court eventually ordered Pederson to reimburse the executor, which she has not done.
In the child custody proceeding, Pederson agreed to represent the mother of the child who was the subject of the proceedings. Pederson charged and received a flat fee of $1200 in advance of her services. She deposited the fee into her personal account and never provided her client with an itemization оf services. After receiving the fee, Pederson filed a petition for temporary and permanent custody on behalf of her client and eventually secured a temporary custody order. The case then sat dormant for close to a year, and Pederson had no contact with her client. The client believed the entire case had been completed. Pederson mаintained she only represented the client for the limited purpose of securing an order for temporary custody. Notwithstanding, Pederson did not file and serve a notice of a limited appearance in the case and never informed the court her appearance was limited. The client subsequently obtained new counsel, and Pederson
For her conduct in the estate proceeding, the Board charged Pederson with violating Iowa Rules of Professional Conduct
II. Scope of Review.
We review attorney disciplinary matters de novo.
III. Violations.
With respect to the estate matter, the stipulated record establishes that Pederson communicated with represented parties in the estate in violation of rule
Pederson also violated rule
We next consider the charge that Pederson improperly entered into a business transaction with a client. Rule
Normally, an attorney-client relationship exists between the executor of an estate and the attorney designated by the executor to probate the estate. See Sabin v. Ackerman, 846 N.W.2d 835, 842 (Iowa 2014) (citing Restatement (Third) of the Law Governing Lawyers § 14(1)(b), at 125 (Am. Law Inst. 2000) [hеreinafter Restatement]). We have previously recognized a breach of professional ethics by an attorney for an estate who also represented his parents in the purchase of a home from the estate and failed to “advise the executors to seek independent counsel.” See Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Honken, 688 N.W.2d 812, 818 (Iowa 2004); see also Elam v. Hyatt Legal Servs., 44 Ohio St.3d 175, 541 N.E.2d 616, 618 (1989) (“In probate, the attorney-client relationship exists between the attorney and the personal representative of the estate.” (quoting In re Estate of Larson, 103 Wash.2d 517, 694 P.2d 1051, 1054 (1985) (en banc))). Thus, we conclude Pederson maintained an attorney-client relationship with the executor in this case, and rule 32:1.8 governing business transactions between an attorney and client applies to the relationship. We proceed to consider if the rule continued to apply once the court removed Pederson as the estate attorney.
The district court removed Pederson as the estate attorney prior to the time the loan agreement was negotiated. We have adopted the approach taken by the Restatement in considering when an attorney-client relationship has ended. See Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Netti, 797 N.W.2d 591, 599 (Iowa 2011) (citing Restatement § 31(2)(e), at 220). “[A] lawyer‘s actual authority to reрresent a client ends when ... the lawyer ... is ordered by a tribunal to cease representing a client....” Restatement § 31(2)(d), at 220.
Notwithstanding, Pederson does not argue rule 32:1.8 did not apply to the loan transaction because the attorney-client relationship had ended. Furthermore, the stipulated facts make it difficult to determine the precise point in time when the attorney-client relatiоnship terminated. Yet, the discussion about the loan between Pederson and the executor occurred very close in time after the hearing when they were removed from participating in the estate and ordered to return the fees. Pederson continued to exercise influence over the executor at this time, and neither had complied with the court order. These circumstances support a finding that the attorney-client relationship had not ended when the loan was discussed.
Additionally, in Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Walters, 603 N.W.2d 772, 775 (Iowa 1999), we noted the rule of professional conduct governing business transactions with clients can extend to transactions with former clients.
We conclude under these circumstances that rule 32:1.8 applies to the loan agreement. Pederson violated the rule by failing to comply with the requirements for the agrеement to be fully disclosed in writing, notice and opportunity to seek independent counsel be provided, and informed consent be obtained.
With respect to the custody case, the record established Pederson violated three subsections of rule 32:1.15 by depositing the flat fee into her office account. See
Pederson also violated the rule governing the limited scope of representation. Lawyers may limit their scope of representation if the limitation is reasonable under the circumstances and the client gives informed consent.
Pederson violated rule 32:1.2(c) by failing to obtain the written, informed consent of her client to the limited representation. See
IV. Sanctions.
In considering the sanction to impose in this case, we begin by looking at thе nature of the violations. In the estate proceeding, the misconduct by Pederson involved improperly communicating with a represented party, taking a probate fee before authorized by law, and improperly entering into a business transaction with the executor. The improper communication, however, was limited to a single letter. Additionally, the basis for the fee violation was that the fee was taken before the time permitted by the rule and was not deposited in a trust account. There was no associated claim that Pederson did not have a colorable right to the fee or that the miscalculation of the amount was the result of misrepresentation or fraud. With respect to the improper loan from the executor, Pederson believеd the fee matter would be promptly sorted out and resolved and the executor would be promptly paid. The arrangement violated the rule because
In the custody proceeding, Pederson fоllowed the same course of action pursued in the estate matter. She took a careless and casual approach to matters that require thoughtful consideration. She failed to comply with the trust account rules, ignored the rules governing limited representation, and totally mismanaged the essential communication needed between a lawyer and a client. Yet, as with the estate case, there was no claim that she was without a colorable right to a fee. Additionally, there was no claim that she could not have limited her representation in the custody matter if properly communicated and documented.
Our prior cases generally reveal that the violations by Pederson fall within a range of a public reprimand to a suspension. Seе Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Nelson, 838 N.W.2d 528, 544-45 (Iowa 2013) (indicating violations involving the failure to communicate with a client and neglect of a client matter warrant sanctions ranging from a public reprimand to suspension); Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Stowers, 823 N.W.2d 1, 16 (Iowa 2012) (indicating the unauthorized communication with a represented party normally warrants a public reprimand); Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Piazza, 756 N.W.2d 690, 699 (2008) (indicating trust account violations involving fees subsequently earned normally warrant a public reprimand, with more severe sanctions when accompanied by aggravating circumstances); Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Johnston, 732 N.W.2d 448, 456 (Iowa 2007) (indicating sanctions for engaging in improper business transactions of a minor nature fall within a range of a public reprimand to suspension); Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Jones, 606 N.W.2d 5, 9 (Iowa 2000) (imposing two-month suspension for persuading a former client to loan money to a current client); Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Smith, 569 N.W.2d 499, 503 (Iowa 1997) (indicating the taking of an excessive and premature probate fee warranted a thirty-day suspension). In considering the precise sanction to impose, we also look to the presence of mitigating and aggravating factors. In this case, Pederson had experienced some personal hardships during the relevant time periods. She was also cooperative with the Board throughout the proceedings. On the other hand, Pederson has been publicly rеprimanded in the past for conduct similar to the conduct in this case.
Considering all relevant factors, we conclude the conduct engaged in by Pederson in this matter warrants a suspension from the practice of law for a period of sixty days. Most of the individual violations in the case were not serious, but the collective and repetitive nature of her conduct is alarming. Pederson cannot continue to practice law in the future with the cavalier approach to our rules of professional conduct she has followed in the past. A lawyer who engages in a pattern of repeated offenses, even those of minor significance when considered separately, can project indifference to the legal obligations of the profession.
V. Conclusion.
We suspend Laurie Jean Pederson‘s license to practice law in this state for a
LICENSE SUSPENDED.
All justices concur except WIGGINS, J., who concurs in part and dissents in part.
WIGGINS, Justice (concurring in part and dissenting in part).
I agree with the part of the majority decision finding a violation of our rules. However, I dissent as to the sanction for not using the objective criteria of the ABA‘s Standards for Imposing Lawyer Sanctions (1992). See Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Morse, 887 N.W.2d 131, 148-52 (Iowa 2016) (Wiggins, J., concurring in part and dissenting in part).