IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant, v. Eric K. PARRISH, Respondent.
No. 11-0326
Supreme Court of Iowa.
Aug. 5, 2011.
The tortfeasor who understands the distribution of the assets in his estate could be disrupted by a judgment for punitive damages—should he die as a consequence of his willful or wanton misconduct against another or from other causes prior to the entry of a civil judgment—will likely be deterred by the prospect. The purpose of deterrence is clearly advanced when a living, potential tortfeasor knows his estate plan, usually benefitting a spouse, children, family, or friends, will be disrupted by a punitive damage judgment if he engages in willful and wanton tortious conduct, whether he survives the imposition of judgment or not. The rule announced in Sheik and reaffirmed in this case by the majority militates against the purpose of specific deterrence for certain tortfeasors, such as one who is terminally ill or elderly or one who is contemplating a willful or wanton act calculated to cause his own death and harm another, by assuring them a crude advantage over the tortfeasor who survives his willful and wanton tort and civil judgment.
Deterrence in the general sense would also be maximized by a rule allowing judgments for punitive damages against tortfeasors’ estates. Others perceiving judgments for punitive damages against tortfeasors’ estates will be deterred from willful or wanton misconduct, knowing that their estate plans and loved ones will be similarly affected by their willful and wanton misconduct. The extraordinary importance of general deterrence alone justifies, in my view, the reversal of Sheik and the adoption of a new rule. Accordingly, I respectfully dissent.
Charles L. Harrington and Elizabeth E. Quinlan, Des Moines, for complainant.
David L. Brown, Des Moines, for respondent.
ZAGER, Justice.
This attorney disciplinary proceeding comes before us on the report of a division of the Grievance Commission of the Supreme Court of Iowa. See
The commission found Parrish violated several of the Iowa Rules of Professional Conduct and Iowa Court Rules. The commission recommended Parrish receive a
I. Scope of Review.
We review attorney disciplinary proceedings de novo. Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Keele, 795 N.W.2d 507, 509 (Iowa 2011). The board must prove an attorney‘s ethical misconduct by a convincing preponderance of the evidence. Id. A convincing preponderance of the evidence is more than the preponderance standard required in a typical civil case, but less than proof beyond a reasonable doubt. Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Schmidt, 796 N.W.2d 33, 36 (Iowa 2011). Although the commission‘s findings and recommendations are not binding on us, we give them respectful consideration. Id. “Upon proof of misconduct, we may impose a greater or lesser sanction than the sanction recommended by the commission.” Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Templeton, 784 N.W.2d 761, 764 (Iowa 2010).
II. Findings of Fact.
The parties entered into a stipulation and agreement which stipulates numerous facts. A stipulation of facts is binding on the parties. Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Gailey, 790 N.W.2d 801, 803 (Iowa 2010). A hearing was conducted in this matter resulting in findings of fact, conclusions of law, and recommendation from the commission. Based upon our de novo review of the stipulation and agreement, and the hearing record, we find the following facts.
A. Montgomery Ward Representation (Count I). In June 2005, Montgomery Ward was arrested in Marion County, Iowa, on suspicion of selling methamphetamine. At the time, he was also a suspect in a theft case. On October 7, he was formally charged with possession of methamphetamine with the intent to deliver, a class “C” felony, and theft in the second degree, a class “D” felony.
Ward entered into an attorney fee agreement with Parrish on October 20, indicating Ward would be billed for Parrish‘s services at a rate of $175 per hour. Ward‘s mother paid the Parrish Law Firm a $10,000 retainer, which Parrish deposited into the firm‘s trust account on October 21. Parrish filed an appearance for Ward in Marion County.
Between October 25 and December 7, Parrish withdrew fees and expenses from Ward‘s trust account on six separate occasions. Parrish‘s withdrawals totaled $10,000, Ward‘s entire retainer. Parrish did not provide Ward with a contemporaneous written notice of the withdrawals from the trust account or a complete accounting.
Parrish negotiated a plea agreement with the Marion County Attorney‘s Office. On June 30, 2006, Ward pled guilty to possession of methamphetamine, a serious misdemeanor, and theft in the second degree. At sentencing on August 11, Ward received a deferred judgment and two years of probation.
Immediately after sentencing, Ward requested a final bill. After numerous contacts to the Parrish Law Firm, Parrish finally provided Ward a final bill on March 9, 2007. This bill reflected a statement for fees and expenses incurred totaling $1532.54 with a credit balance of $8467.46. The statement informed Ward that as soon as he received the statement and agreed to its terms, the firm would send a refund of his retainer within 30 days. While Ward agreed to the statement, no refund was ever received by Ward, even after telephone and fax demands were made on Parrish by an attorney who was then representing Ward.
On July 23, Parrish sent Ward a revised billing statement for fees and expenses totaling $3693.54, with a credit balance of $6306.46. Parrish explained that the changes in the statement reflected that he had used the wrong hourly rate in his previous billing. On September 25, Parrish sent a second revised billing statement for fees and expenses totaling $3008 with a credit balance of $6992. On October 9, Parrish sent a letter to Ward‘s attorney indicating he would be providing a refund based upon his previous billing statements. Parrish never issued a refund.
Parrish sent yet another billing statement, which was created on November 15, claiming Parrish had earned $3020 and Ward had a credit of $6980. After no resolution to the fee dispute, Ward filed a complaint against Parrish with the Polk County Fee Arbitration Committee on December 17. Both Ward and Parrish participated in the hearing before the committee. On January 5, 2009, the committee determined Parrish had earned $1532.54 in fees and expenses and directed him to
After Parrish‘s adverse arbitration decision, and after Ward filed a complaint against Parrish with the board, Parrish undertook a review of Ward‘s file for the purpose of providing more complete billing information to the board. Upon completing his review, Parrish provided a billing statement, dated May 12, 2009, which indicated he had earned $10,325.01 for his work in representing Ward. At his disciplinary hearing, Parrish explained that he believed he earned the entire $10,000 retainer during his representation of Ward. Parrish contended that his billing statements did not fully reflect the actual amount of work he conducted in the case. However, Parrish acknowledged his system for tracking the hours he worked was not adequate and further admitted that he could not provide the commission with an accounting. Parrish also acknowledged that he did not provide a contemporaneous accounting of the amounts he withdrew from the trust account. Lastly, Parrish acknowledged that no refund has yet been issued to Ward.
B. James Bixler Representation (Count II). In August 2009, James Bixler retained Parrish to represent him in a South Dakota matter involving a criminal charge for possession of cocaine and the civil forfeiture of Bixler‘s Harley Davidson motorcycle. On August 11, Bixler signed a fee agreement retaining Parrish at an hourly rate of $175. Bixler paid a $5000 retainer, which was deposited into the firm‘s trust account on August 12. On September 28, Bixler paid Parrish an additional $3000.
After being retained, Parrish conducted research into South Dakota law and had some communication with officials in South Dakota. Parrish was not able to negotiate a plea agreement. Bixler‘s motorcycle was also forfeited, although this forfeiture was later set aside.
On October 5, Bixler terminated Parrish‘s representation in both the criminal and civil matters. Bixler requested a full refund of his $3000 payment and also requested a refund of the unused portion of his $5000 retainer. On October 8, Parrish provided a full refund of the $3000 payment. He did not provide a refund or an accounting regarding the $5000 retainer.
The records reflect that Parrish withdrew fees from Bixler‘s trust account on four separate occasions between August 10 and October 21. Based upon a billing statement Parrish provided on March 10, 2010, the records reflect that Parrish withdrew more in fees than what he had earned. Parrish also did not provide Bixler with a contemporaneous written notice when he withdrew these funds. Lastly, Parrish‘s March 10 billing statement shows Bixler was charged, at times, an hourly rate of $200 per hour as opposed to the $175 per hour rate specified in the fee agreement. Parrish acknowledges that a refund is owed to Bixler, but he has refunded no money to him.
III. Ethical Violations.
A. Client Funds/Trust Account and Accounting. The board alleged Parrish violated rules 32:1.5(a), 32:1.15(c), (d), and (f), as well as rule 32:1.16(d). Rule 32:1.15(f) incorporates Iowa Court Rules 45.7(3) and 45.7(4). We will address these alleged rule violations together because they all apply to the handling of client funds.
(c) A lawyer shall deposit into a client trust account legal fees and expenses
that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred. (d) Upon receiving funds or other property in which a client or a 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 a 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.
. . . .
(f) All client trust accounts shall be governed by
chapter 45 of the Iowa Court Rules .
From this court‘s de novo review of the record, we find the convincing preponderance of the evidence establishes that Parrish has violated several ethical rules. Pursuant to Iowa Supreme Court Board of Professional Ethics and Conduct v. Apland, 577 N.W.2d 50, 55 (Iowa 1998), the $10,000 fee paid by Ward and the $5000 fee paid by Bixler to Parrish were both “advance fee payments.” These funds remain the property of Ward and Bixler until Parrish earned them. Id.
We also find Parrish violated
We find Parrish violated
Parrish also violated rules
B. Rule 32:8.4(c). This rule states, “It is professional misconduct for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit, or misrepresentation[.]”
We have previously found that Parrish violated rules
C. Rule 32:8.4(d). “It is professional misconduct for a lawyer to engage in conduct that is prejudicial to the administration of justice[.]”
Examples of conduct prejudicial to the administration of justice include paying an adverse expert witness for information regarding an opponent‘s case preparation, demanding a release in a civil action as a condition of dismissing criminal charges, and knowingly making false or reckless charges against a judicial officer. Templeton, 784 N.W.2d at 768.
Under the facts and circumstances involved in this case, this court cannot conclude that Parrish‘s failure to adhere to the requirements involving his client trust account and fees hampered the efficient and proper operation of the courts or of an ancillary system upon which the courts rely. Accordingly, we find Parrish‘s conduct did not violate this rule.
IV. Discipline.
“There is no standard sanction for a particular type of misconduct, and though prior cases can be instructive, we ultimately determine an appropriate sanction based on the particular circumstances of each case.” Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Earley (Earley I), 729 N.W.2d 437, 443 (Iowa 2007). In determining an appropriate sanction, we consider:
[T]he nature of the violations, the attorney‘s fitness to continue in the practice of law, the protection of society from those unfit to practice law, the need to uphold public confidence in the justice system, deterrence, maintenance of the reputation of the bar as a whole, and any aggravating or mitigating circumstances.
Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Ireland, 748 N.W.2d 498, 502 (Iowa 2008). The court has recognized, “Where there are multiple violations of our disciplinary rules, enhanced sanctions may be imposed.” Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Alexander, 574 N.W.2d 322, 327 (Iowa 1998). When determining appropriate discipline, this court also considers aggravating and mitigating circumstances present in the disciplinary action. Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Earley (Earley II), 774 N.W.2d 301, 308 (Iowa 2009). Significant aggravating factors for punishment include “the existence of multiple instances of neglect, past disciplinary problems, and other companion violations.” Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Marks, 759 N.W.2d 328, 332 (Iowa 2009) (quoting Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Lesyshen, 712 N.W.2d 101, 106 (Iowa 2006)).
When dealing with client trust account violations, our sanctions have ranged from a public reprimand when the violation was relatively minor and isolated, Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Piazza, 756 N.W.2d 690, 700 (Iowa 2008), to license suspension when the violation involved poor office management and neglect, Earley I, 729 N.W.2d at 443-44, to license revocation when the violation amounted to a misappropriation of client funds, Earley II, 774 N.W.2d at 309. Based upon the record in this case, we are not faced with a single incident, nor are we dealing with a case of misappropriation. Therefore, the suspension cases are most helpful in determining the ultimate sanction to impose in this case. Cases involving suspension for client trust account violations range from two months in less serious cases, Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Plumb, 589 N.W.2d 746, 749 (Iowa 1999), to eighteen months in very severe cases when the violations combine with multiple instances of neglect and other ethical violations,
The commission has recommended that Parrish receive a public reprimand. The board has recommended that Parrish‘s license to practice law be suspended for a period of no less than four months. In considering aggravating and mitigating circumstances, the prior disciplinary history of an attorney is a factor we must consider in imposing discipline. Iowa Supreme Ct. Bd. of Prof‘l Ethics & Conduct v. Lemanski, 606 N.W.2d 11, 14 (Iowa 2000). Since that decision, this court has repeatedly considered prior admonitions as aggravating circumstances that relate directly to an appropriate sanction. See, e.g., Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Cohrt, 784 N.W.2d 777, 783 (Iowa 2010) (“A prior admonition is properly considered in determining discipline, especially when it involves the same type of conduct as the conduct subject to discipline.“); Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Barry, 762 N.W.2d 129, 132, 140 (Iowa 2009) (noting prior disciplinary history included private admonition for a conflict of interest); Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Gottschalk, 729 N.W.2d 812, 821 (Iowa 2007) (prior discipline included two private admonitions); Iowa Supreme Ct. Att‘y Disciplinary Bd. v. Morrison, 727 N.W.2d 115, 117, 120 (Iowa 2007) (included in the parties’ stipulation was a prior admonition for similar conduct).
Without setting forth specific details, Parrish has been the subject of six private admonitions dating back to December 2001. The genesis of each of the admonitions involved Parrish‘s failure to provide an itemization of services provided, and in at least two of the previous admonitions, the conduct involved the withdrawal of funds from a client trust account in excess of the fees that were actually earned. While an error in judgment or mere negligence by an attorney is not an appropriate basis for discipline, Parrish‘s conduct over the last ten years has now developed into a pattern of violating the Iowa Rules of Professional Conduct and the rules of this court relating to the administration of trust accounts. An additional aggravating circumstance involves his failure, now over many years, to return funds to his former clients. In the case of Ward, his refusal or inability to return these funds is now approaching five years. While less egregious due to the amount in question, it is instructive that Parrish likewise has still not refunded the unearned fees to Bixler.
We also consider any mitigating circumstances. Parrish has been involved in providing pro bono legal services to individuals, and he is also active and involved in the community. Additionally, Parrish has indicated that he is attempting to take remedial actions to improve the billing and accounting problems that have plagued him in his practice. This has included the firm updating both its billing system and case management software so that this conduct will not be repeated. However, as noted by counsel, none of these remedial actions excuse Parrish‘s failure to actually account for the time billed to his clients, to withdraw the proper funds based on the billings, or to provide a contemporaneous notice of withdrawals to his client. Finally, the court notes that Parrish has taken full responsibility for his failures, and Parrish cooperated fully in responding to the complaints.
Having considered all the aggravating and mitigating circumstances, and in our de novo review, a public reprimand under this set of facts would not be adequate. Such a sanction might have been appropriate had this case involved only a single incident of misconduct. See, e.g.,
V. Disposition.
We have carefully considered the respondent‘s current violations, his prior history of ethical infractions, and his current fitness to practice law. Accordingly, we suspend Parrish‘s license to practice law in the State of Iowa for sixty days. This suspension applies to all facets of the practice of law. See
LICENSE SUSPENDED.
ZAGER
JUSTICE