Iowa Supreme Ct. Att'y Disciplinary Bd. v. Jesse Michael Marzen ( 2020 )

IN THE SUPREME COURT OF IOWA
No. 20–0472
Submitted July 14, 2020—Filed September 11, 2020
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
JESSE MICHAEL MARZEN,
Respondent.
On review of the report of the Iowa Supreme Court Grievance
Commission.
In an attorney disciplinary action, the grievance commission
recommends a public reprimand for attorney’s violation of ethical rules.
LICENSE SUSPENDED.
Oxley, J., delivered the opinion of the court, in which all justices
joined.
Tara van Brederode and Crystal W. Rink, Des Moines, for
complainant.
James Steadman Blackburn of the Finley Law Firm, Des Moines, for
respondent.
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OXLEY, Justice.
The Iowa Supreme Court Attorney Disciplinary Board (the Board)
brought a complaint against attorney Jesse Marzen arising out of his
representation of a couple involving two different matters. The first matter
involved his work in preparing income tax returns for the couple’s
business, and the second matter involved his transfer of an estate matter
to another attorney without the client’s prior consent. The Iowa Supreme
Court Grievance Commission (the commission) found the Board proved
Marzen violated most, but not all, of the cited rules.
The commission recommends we publicly reprimand Marzen, a
discipline Marzen supports. The Board urges us to suspend his license
for some period of time. On our de novo review, we conclude Marzen
violated our ethical rules. We agree with the Board that his conduct
justifies more than a public reprimand. Therefore, we suspend Marzen’s
license for thirty days.
I. Background Facts and Proceedings.
Attorney Jesse Marzen was admitted to practice law in Iowa in 2005.
He was previously disciplined in 2010 after he had a sexual relationship
with a client and disclosed confidential information about the client during
his campaign for county attorney, which resulted in a six-month
suspension of his license. Marzen resumed practice in March of 2012.
Currently, Marzen is not practicing law or taking on clients, but his license
is still active.
The complaint in this case arose from Marzen’s representation of
Lloyd and Linda Pierson. The Piersons started a business buying and
reselling classic cars after Lloyd received a large inheritance from his
stepfather. Lloyd knew Marzen’s father for many years, so he asked
Marzen for help with the business. In 2014, Marzen set up three limited
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liability companies for the Piersons. The Piersons later asked Marzen to
do other work for them, including tax work for their business and work on
Lloyd’s biological father’s estate.
A. Estate Work. Lloyd Pierson hired Marzen to handle the estate
of his biological father, Cecil Pierson, in 2015. The estate involved a small
amount of property and a Medicaid lien. Marzen did not timely file the
estate inventory report and received a delinquency notice from the court
dated June 1, 2015. Faced with this delinquency notice, Marzen contacted
Roger Sutton, another Charles City attorney, about handling Cecil
Pierson’s estate. Marzen testified he communicated primarily with Amy
Medlin, Sutton’s paralegal. He then sent a letter, dated June 8, 2015, to
the Piersons explaining that someone named “Amy” would be assisting on
the case. The letter said,
Marzen Law Office has expanded. D[ue] to this
exp[ansion], we have hired Amy to assist Marzen Law Office
with some of our files. Cecil’s estate has been one of those
files she will be assisting with.
In the near future, Amy will be in touch with you
regarding the estate. Please answer any and all questions she
may have concerning Cecil’s Estate.
Marzen testified he originally intended to hire Medlin to work for his office
on a contract basis. When this arrangement did not work out, Marzen
testified he transferred the case to Sutton, who entered an appearance and
finished the estate work.
The same day Marzen sent a letter to the Piersons, he sent a flash
drive containing his file on Cecil Pierson’s estate to Sutton’s office, directed
to Amy Medlin. The flash drive contained “what Mr. Marzen had in his file
up to that point.”
Marzen testified he told either Sutton or Medlin that Lloyd consented
to transferring the estate case to Sutton’s office. Sutton testified that
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Marzen told him he had Lloyd’s written consent to transfer the file. Yet,
no such consent appears in the record, Sutton never saw any evidence of
it, and Lloyd disputes ever having given consent to the transfer. Indeed,
Sutton was leery about whether Lloyd had consented to the transfer based
on Sutton’s previous work on Lloyd’s stepfather’s estate. Lloyd had hired
Sutton to handle the large estate and was unhappy when Sutton sought,
and was granted, the statutory attorney fee award. After receiving Cecil
Pierson’s estate file from Marzen on June 8, 2015, Sutton contacted the
Piersons, who were surprised the file had been transferred. Lloyd testified
he was not happy about the transfer but “didn’t think there was anything
[he] could do about it.” Lloyd ultimately consented to Sutton handling the
estate work, which was completed without further issue.
B. Tax Work. In September 2016, the Piersons approached Marzen
about completing their personal and business tax returns for 2014 and
2015, which had not been filed and were delinquent. The Piersons had
hired a certified public accountant and were frustrated he had not begun
work on the project. Marzen agreed to complete the Piersons’ delinquent
2014 and 2015 tax returns and to prepare their 2016 returns. The fee
agreement authorized Marzen to charge $200 per hour but did not
authorize interest on overdue amounts.
Marzen quickly realized the project would take a lot more time than
anticipated. The Piersons failed to keep detailed records for their business
and used the same bank accounts and credit cards for both personal and
business activities. Over time, they brought boxes of documents that
Marzen and his assistant, his wife Kari Marzen, combed through in an
attempt to recreate the Piersons’ nonexistent books. Marzen requested
additional records to fill gaps identified from the records, but the Piersons
failed to provide all the documents to support the needed information,
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including the cost of some of the vehicles purchased for resale and
numerous expenses.
In January 2017, Marzen recommended a banker for the Piersons
to contact about a loan for their business. The Piersons repeatedly
requested financial statements and tax returns from Marzen to provide to
the bank, and Marzen told the Piersons the financial statements were
incomplete based on the missing documentation. Ultimately, Marzen
prepared tax returns for 2014, 2015, and 2016, which the Piersons signed
in Marzen’s office on April 14, 2017. Marzen knew the Piersons needed
the business tax returns for the bank. Marzen had the Piersons sign the
tax returns despite knowing they significantly understated the cost of
goods sold for the classic automobiles, among other items, given the lack
of information from the Piersons. The Piersons provided the tax returns
completed by Marzen to the bank on April 21, 2017.
Without consulting the Piersons, Marzen hired Amanda Conley, an
accountant, in late April 2017 to help finalize amended Form 1065
partnership returns for 2014 through 2016 based on additional records
the Piersons brought to Marzen in mid to late April, after Marzen had
mailed the incomplete returns to the Internal Revenue Service (IRS). The
Piersons did not learn of Conley’s work until after she had completed it.
Marzen paid Conley $300 for the approximate fifteen hours of work she
performed, testifying he paid that bill himself and did not pass it on to the
Piersons. Marzen testified his work on the project stalled in May 2017
from a lack of further documentation from the Piersons.
Marzen’s monthly bills to the Piersons totaled $32,830 for
approximately 164 hours’ worth of work on the business records and tax
return project between September 2016 and May 2017. The Piersons paid
lump sums toward their bill, including $7210 in September 2016 and
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$10,000 in July 2017. Marzen charged interest at 18% on monthly
invoices that were not paid within fourteen days of the respective due
dates. The commission determined the outstanding balance on the
Piersons’ account, exclusive of interest, was $15,620. By October 2017,
the Piersons questioned the size of the bill, and they filed this complaint
in December 2017. Marzen wrote off the balance.
The parties disputed whether Marzen filed the Piersons’ tax returns
in April 2017. Kari Marzen testified she put the personal and business tax
returns in the mail on April 17, 2017, in three different envelopes, two
addressed to the IRS and one to the Iowa Department of Revenue (IDOR).
Marzen admitted into evidence a mailing affidavit Kari Marzen regularly
completed in the course of her work, identifying the three envelopes as
part of the outgoing mail on that date. Ms. Marzen also testified she
specifically recalled mailing the tax returns because it was a milestone in
a large project. Nonetheless, none of the three envelopes reached their
destinations, and the Piersons’ business and personal tax returns for
2014, 2015, and 2016 were not actually filed at that time.
Marzen admits the returns he attempted to file were incomplete,
referring to them as “junk” during the hearing, and required amendments.
He testified he nonetheless mailed them on the April 17, 2017 filing
deadline to minimize late filing penalties. Marzen was unable to reproduce
copies of the signed returns, explaining he thought he could access the
returns from his computer software and failed to keep a copy of the signed
returns he gave to the Piersons.
In spring 2018, the Piersons hired attorney Todd Prichard to assist
with the probate of Linda’s father’s estate and to assist with a foreclosure
proceeding against their home. At some point, it was learned that the
Piersons’ tax returns for 2014, 2015, and 2016 had not been filed. In July
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2018, Prichard requested a transcript from the IRS of the Piersons’
personal tax returns for 2014 through 2016 and learned the IRS had not
received the returns. Prichard requested Marzen send the Piersons’ file to
him and, like Marzen, spent significant time recreating the Piersons’
business records from the boxes of unorganized information. Prichard
filed the Piersons’ 2014 and 2015 personal and business returns and, at
the time of the hearing, was working on completing and filing the Piersons’
subsequent tax returns.
II. Standard of Review.
“We review attorney disciplinary matters de novo.” Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Earley, 933 N.W.2d 206, 213 (Iowa 2019). “The
Board must prove attorney misconduct by a convincing preponderance of
the evidence, a burden greater than a preponderance of the evidence but
less than proof beyond a reasonable doubt.” Earley, 933 N.W.2d at 213.
“We give the commission’s findings, conclusions, and
recommendations respectful consideration, ‘especially with respect to
witness credibility,’ but we are not bound by them.” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Noel, 933 N.W.2d 190, 192 (Iowa 2019) (quoting
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kieffer-Garrison, 847 N.W.2d
489, 492 (Iowa 2014)). “We may impose a sanction that is greater or lesser
than that recommended by the commission.” Id.
III. Violations.
The Board alleged Marzen violated a number of our rules of
professional conduct. The commission concluded Marzen committed
some, but not all, of the violations identified by the Board.
A. Count One. Count one involved Marzen’s work on the Piersons’
business records and tax returns. The Board alleged four rule violations
associated with this work. We discuss each in turn.
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1. Rule 32:1.4(a)(2). Iowa Rule of Professional Conduct 32:1.4(a)(2)
requires that “[a] lawyer shall . . . reasonably consult with the client about
the means by which the client’s objectives are to be accomplished.” The
commission determined Marzen violated this rule by engaging an outside
accountant, Conley, without obtaining advance consent from the Piersons.
The comment to rule 32:1.4(a)(2) provides that “[i]n some
situations—depending on both the importance of the action under
consideration and the feasibility of consulting with the client—this duty
will require consultation prior to taking action.” Iowa R. Prof’l Conduct
32:1.4 cmt. [3]. Even in exigent circumstances, “the lawyer must
nonetheless act reasonably to inform the client of actions the lawyer has
taken on the client’s behalf.” Id.
While there may be some circumstances in which hiring an outside
accountant to assist with tax work the client hired the attorney to perform
would violate this rule, the Board failed to prove this was one of them.
Marzen performed the bulk of the work of compiling the business records
and prepared the initial tax returns given to the Piersons on April 14, 2017.
While those returns were admittedly incomplete, and therefore inaccurate,
the incompleteness was due to lack of information from the Piersons.
When the Piersons brought additional documents in the following weeks,
Kari Marzen informed them the materials were being sent out of the office.
Conley worked approximately fifteen hours over a period of two to three
weeks in April and May 2017 and provided drafts of updated Form 1065
returns based on the additional documentation from the Piersons.
Notably, the Board did not prove that Marzen passed Conley’s $300 fee on
to the Piersons or that Conley performed any legal work. This is not the
type of conduct we have previously found to violate this rule. See, e.g.,
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Turner, 918 N.W.2d 130, 145
9
(Iowa 2018) (attorney’s failure to inform clients he would not represent
them at bankruptcy hearings violated rule 32:1.4(a)(2)).
Although Marzen provided sensitive information about the Piersons’
business to a third party outside of his office, the Board alleged that
Conley’s involvement violated only rule 32:1.4(a)(2)’s requirement to
consult with clients about the means of accomplishing their objectives.
Where Conley performed limited work and Marzen did not pass her fee on
to the Piersons, the rule did not require Marzen to consult with the
Piersons before hiring Conley.
2. Rule 32:1.5(a). Iowa Rule of Professional Conduct 32:1.5(a)
declares that “[a] lawyer shall not make an agreement for, charge, or collect
an unreasonable fee or an unreasonable amount for expenses, or violate
any restrictions imposed by law.” The commission found Marzen’s $200
per hour rate and the amount of time spent on the project were reasonable.
Although the Piersons ultimately took their tax work elsewhere, the record
supports the commission’s finding that Marzen performed significant work
in an attempt to make sense of the disorganized business records required
to prepare the Piersons’ tax returns. Considering the deference we give to
the commission, see Noel, 933 N.W.2d at 192, we agree the $200 per hour
rate and the number of hours billed were not unreasonable.
The commission nonetheless determined Marzen violated the rule
by charging 18% interest when the fee agreement did not authorize interest
charges. Marzen conceded he violated this rule by charging unauthorized
interest. “[W]e are not bound by an attorney’s stipulation to a disciplinary
violation . . . .” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Suarez-Quilty,
912 N.W.2d 150, 157 (Iowa 2018). Instead, we evaluate the facts
independently to determine whether Marzen violated the rule. See id.
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On our review, we agree Marzen violated rule 32:1.5(a). Generally,
“[a]n attorney cannot assess finance charges when the attorney collects a
fee, unless the client agrees in writing in advance to the finance charges
imposed.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell, 726 N.W.2d
397, 404 (Iowa 2007). Even without an agreement, an attorney may apply
finance charges on the unpaid balance of an accounts receivable if he
complies with the notice requirements contained in Iowa Code section
535.11. See Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. McKittrick,
683 N.W.2d 554, 560 (Iowa 2004). While the parties do not address
whether Marzen’s invoices complied with the finance charge provisions of
chapter 535, on our de novo review, we conclude they did not. See Iowa
Code § 535.11(2)(b) (2017) (requiring, for transactions not subject to Truth
In Lending, written notice at time debt arises and disclosure of finance
charge rate and date before which payment must be received to avoid
finance charge); see also 15 U.S.C. § 1603(1) (2012 & Supp. V 2017)
(exempting transactions extending credit primarily for business purposes
from Truth In Lending). Some invoices in the record contain no notice of
finance charges, for example, Invoices 2393 and 2333, and the only
invoices in the record referencing interest were submitted to the Piersons
after the original debt was due, for example, Invoices 2675 and 3338.
Further, even if the notice on those invoices had been included on the
original invoice sent when the debt was initially incurred, the notices failed
to identify the date by which the finance charge could be avoided. The
Board established that Marzen charged unauthorized finance charges in
violation of rule 32:1.5(a).
3. Rule 32:8.1(a). Iowa Rule of Professional Conduct 32:8.1(a)
declares that “a lawyer in connection with . . . a disciplinary matter, shall
not . . . knowingly make a false statement of material fact.” The
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commission concluded the Board failed to prove Marzen knowingly made
a false statement of material fact when he claimed he filed the Piersons’
tax returns despite the fact the IDOR and IRS never received them.
This determination depends on an evaluation of credibility. We
generally give deference to the commission when questions of credibility
are involved, unless we are convinced by contrary evidence in the record
the commission was incorrect. See Iowa Supreme Ct. Att’y Disciplinary Bd.
v. Mendez, 855 N.W.2d 156, 169 (Iowa 2014). The Board argues Marzen
made a misrepresentation in the course of this disciplinary proceeding by
insisting he filed the tax returns.
The Board’s position turns on semantics. It is clear that when
Marzen claimed he filed the tax returns he meant that he placed them in
the mail to the relevant taxing authorities. Marzen maintained throughout
this proceeding that the returns were mailed despite neither taxing
authority receiving them. Kari Marzen testified she specifically recalled
mailing the tax returns because it was a milestone in a big project, and
her testimony is supported by the contemporaneous mailing affidavit.
Marzen’s inability to produce a copy of the signed returns may be poor
practice, but it does not in itself undermine the evidence showing the
returns were mailed.
We are mindful of the standard for imposing attorney discipline. We
agree with the commission that the Board failed to prove by a convincing
preponderance of the evidence that Marzen knowingly made a false
statement of material fact to the Board in violation of rule 8.1(a).
4. Rule 32:8.4(c). Iowa Rule of Professional Conduct 32:8.4(c)
declares that “[i]t is professional misconduct for a lawyer to . . . engage in
conduct involving dishonesty, fraud, deceit, or misrepresentation.” The
commission determined Marzen violated this rule when he mailed tax
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returns he knew to be incomplete and inaccurate to the IRS and the IDOR
for filing and provided those same returns to the Piersons to present to the
bank in support of their loan application.
“To violate this rule, a lawyer must act with some level of scienter,
which means the misrepresentation must be more than a negligent
misrepresentation.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. McGinness,
844 N.W.2d 456, 462 (Iowa 2014). We have found that an attorney violates
this rule by making the misrepresentation to opposing counsel or to the
court, see id., but such a misrepresentation need not be so limited. “[T]he
key question we must answer is whether the effect of the lawyer’s conduct
is to mislead rather than to inform.” Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Barry, 908 N.W.2d 217, 226 (Iowa 2018) (quoting Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Weiland, 885 N.W.2d 198, 211–12 (Iowa 2016)).
“An attorney’s ‘casual, reckless disregard for the truth’ also establishes
sufficient scienter to support a violation of the rule.” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Muhammad, 935 N.W.2d 24, 38 (Iowa 2019)
(quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Clarity, 838 N.W.2d
648, 656 (Iowa 2013)).
We agree with the commission that submitting tax returns known
to be materially incomplete and inaccurate to the taxing authorities and
giving the Piersons those returns to take to the bank in support of a loan
application has the effect of misleading rather than informing and thus
violates this rule. Marzen defends his actions as protecting the Piersons’
best interests to avoid late filing penalties. Marzen repeatedly requested
additional information from his clients, telling them in mid-April, “I can
get something in for you, but these are junk. These are not right. You
need to get me the information that I need.” He testified he mailed the
returns on the 2016 filing deadline without waiting for more complete
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information “to put a Band-Aid on the bleeding, basically. The 2016
returns at least could be sent in on time, and they wouldn’t have a failure
to file penalty on that.”
Marzen ignores that the returns required a signature affirming the
information contained in the returns was “true, correct, and complete.”
Further, Marzen never provided amended returns to correct the known
inaccuracies. We appreciate the position Marzen faced when his clients
failed to provide the information required to complete the tax returns. But
that does not excuse Marzen’s actions of intentionally mailing materially
inaccurate returns to the IRS and IDOR without following up with
amended returns.
We are more troubled by the fact that Marzen mailed the inaccurate
returns to the IRS for the specific purpose of providing them to the bank
as filed tax returns to support the Piersons’ loan application. Marzen
testified that he mailed the incomplete returns to the IRS in part because
“the tax returns they had to have had to be filed tax returns. . . . [T]he
banker was requesting . . . filed tax returns for 2014, 2015, and 2016. I
got something in for them so that they could go get their loan.” This was
not a matter of missing a few invoices to support a completely accurate
return. Marzen testified he lacked information about the cost of the
majority of the automobiles sold by the Piersons’ business, leaving the
returns to materially overstate the Piersons’ income. Yet Marzen
intentionally mailed the returns to the IRS at least in part so that his
clients could present them to the bank as “filed returns” that purported to
show an accurate reflection of their income. It is one thing to file tax
returns with as much information as available to avoid late filing penalties;
it is another altogether to do so in order to provide clients with “filed
returns” to give the bank in support of a loan application. Rule 32:8.4(c)
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imposes an ethical obligation on an attorney to say no to his clients when
complying with the request involves a known and material
misrepresentation. Marzen violated rule 32:8.4(c).
B. Count Two. Count two involves Marzen’s work on Cecil
Pierson’s estate. The Board alleged Marzen violated six rules associated
with this count.
1. Rule 32:1.4(a)(1)–(3). Iowa Rule of Professional Conduct
32:1.4(a)(1) requires a lawyer to “promptly inform the client of any decision
or circumstance with respect to which the client’s informed consent, as
defined in rule 32:1.0(e), is required by these rules.” Rule 32:1.0(e) defines
informed consent as “the agreement by a person to a proposed course of
conduct after the lawyer has communicated adequate information and
explanation about the material risks of and reasonably available
alternatives to the proposed course of conduct.” Iowa R. Prof’l Conduct
32:1.0(e). As explained above, rule 32:1.4(a)(2) requires a lawyer to
reasonably consult with the client about the means of achieving the client’s
objectives. Iowa Rule of Professional Conduct 32:1.4(a)(3) requires a
lawyer to “keep the client reasonably informed about the status of the
matter.” The commission found Marzen violated each of these subsections
of rule 32:1.4 by transferring the Cecil Pierson estate file to attorney Sutton
without the Piersons’ consent.
The commission credited Lloyd Pierson’s testimony that Marzen did
not consult him before transferring Cecil’s estate to Sutton’s office. Giving
deference to the commission’s credibility determinations, see Mendez, 855
N.W.2d at 169, we see ample support for this conclusion. Sutton and
Lloyd both testified the Piersons were surprised when Sutton contacted
them to see if Marzen had sought Lloyd’s consent to transfer the file, given
their prior involvement. The June 8 letter Marzen sent to the Piersons
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misleadingly stated Marzen had expanded his office and hired “Amy” to
work for Marzen Law Firm. Marzen did not inform the Piersons that “Amy”
worked for another law firm; nor did he seek their consent to transfer the
file to another firm. Factually, we agree with the commission that Marzen
transferred the file to Sutton without Lloyd’s knowledge or consent.
We also agree with the commission this conduct violated rule
32:1.4(a)(1)–(3). The comments advise that ordinarily an attorney should
obtain client consent before “retain[ing] or contract[ing] with other lawyers
outside the lawyer’s own firm” to provide or assist in providing legal
services on a client’s matter. Iowa R. Prof’l Conduct 32:1.1 cmt. [6]. Even
more so, transferring a file to another attorney in a separate law firm
requires informed consent, and doing so without informed consent violates
rule 32:1.4(a)(1).
The attorney–client relationship is built on trust and confidence that
is necessarily attorney-specific. An attorney who is unable to complete a
matter cannot simply transfer the client’s file to another attorney in a
different firm without the client’s knowledge and consent, and certainly
not another attorney whom the client might be averse to using. Although
an attorney may assist in facilitating a transfer, and we commend Marzen
for recognizing the need for assistance to ensure the estate matter was
timely administered, it is the client’s decision whether to retain a different
attorney in another law firm. The client must always make such
foundational decisions about the attorney who represents him.
Likewise, transferring a file to another law firm necessarily changes
the means by which the client’s objectives are to be accomplished,
requiring communication, the absence of which violates rule 32:1.4(a)(2).
Finally, that the attorney hired to handle a case has transferred the file to
another law firm is certainly relevant to the status of the matter and must
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be communicated to the client under rule 32:1.4(a)(3). Marzen violated
rule 32:1.4(a)(1)–(3) when he transferred the Cecil Pierson estate matter to
attorney Sutton without Lloyd’s consent.
2. Rule 32:1.6(a). Iowa Rule of Professional Conduct 32:1.6(a)
declares that,
A lawyer shall not reveal information relating to the
representation of a client unless the client gives informed
consent, the disclosure is impliedly authorized in order to
carry out the representation, or the disclosure is permitted by
paragraph (b) or required by paragraph (c).
The commission concluded the Board failed to prove that Marzen violated
this rule. The commission explained that Marzen transferred the filed
pleadings to Amy Medlin at Sutton’s office, noting Marzen had previously
contacted Medlin to assist with the probate matter. The commission then
noted that Marzen “did not disclose the filed pleadings, which are public
record, to Roger Sutton or any other person.” Yet, the commission also
found that “Marzen transferred the estate file to Roger Sutton’s office
without the written consent of Lloyd Pierson.” It is unclear whether the
commission found this alleged violation was not proved because the
disclosed file contained only filed pleadings or whether the commission
believed Marzen was authorized to disclose the records to Medlin because
he had hired her to assist with the matter. Either way, we disagree with
the commission and conclude the Board proved that Marzen violated rule
32:1.6(a).
In Iowa Supreme Court Attorney Disciplinary Board v. Mendez, we
held that an attorney’s failure to obtain his client’s consent to retain
outside counsel to assist with court filings violated rule 32:1.6(a). 855
N.W.2d at 172. Our holding did not depend on whether the information
disclosed to the retained counsel was confidential in nature or that the
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outside counsel was also bound to maintain the client’s confidences; it was
enough that the attorney provided client information to outside counsel.
Id. Rule 32:1.6 and its comments distinguish between discussions with
other attorneys within a firm and attorneys outside the firm. See, e.g.,
Iowa R. Prof’l Conduct 32:1.6(b)(7), cmts. [5], [13]. To the extent the
commission based its finding on the fact that Marzen transferred the files
to a paralegal he sought to hire, that fact is immaterial. Medlin was
employed by a different law firm, and Marzen never actually hired her. An
attorney may not disclose client information to outside counsel, or a
paralegal who works for outside counsel—and certainly may not transfer
a client file to another law firm—without obtaining client consent to reveal
information about the representation as required by rule 32:1.6(a).
That the client file contained only filed pleadings does not protect
Marzen from violating rule 32:1.6. The comments explain that “[t]he
confidentiality rule . . . applies not only to matters communicated in
confidence by the client but also to all information relating to the
representation, whatever its source.” Id. r. 32:1.6 cmt. [3] (emphasis
added). Indeed, we sanctioned Marzen in his first disciplinary case for
violating rule 32:1.6(a) when he discussed a client’s litigation with her
probation officer during a media interview even though the disclosed
information was contained in public court documents. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Marzen, 779 N.W.2d 757, 765–66 (Iowa 2010)
(Marzen I) (noting our conclusion was consistent with other jurisdictions).
In Marzen I, we held for the first time “that the rule of confidentiality is
breached when an attorney discloses information learned through the
attorney–client relationship even if that information is otherwise publicly
available.” Id. at 766. We recognize there is a distinct difference between
discussing a client’s personal life with reporters and providing the
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pleadings in an estate matter to another law firm in an effort to keep the
case moving. But that is a difference in degree, not in kind. Marzen
violated rule 32:1.6(a) when he transferred his file to Sutton’s office
without Lloyd’s consent.
3. Rule 32:4.1(a). Iowa Rule of Professional Conduct 32:4.1(a)
requires that “[i]n the course of representing a client, a lawyer shall not
knowingly . . . make a false statement of material fact or law to a third
person.” The commission found Marzen violated this rule when he told
Sutton he had Lloyd’s consent to transfer the Cecil Pierson estate file when
he did not.
The term “third party” in rule 32:4.1 is broad. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Barnhill, 885 N.W.2d 408, 421 (Iowa 2016). The
rule makes no exception to its prohibition against making knowingly false
statements just because the third party may know or believe the statement
to be false. Id. at 422.
Whether Lloyd consented to Marzen transferring the estate matter
to Sutton was material to whether Sutton would accept the representation,
particularly given Sutton’s prior experience with the Piersons. Having a
client’s consent is not a fact that is easily overlooked. Testimony from
Sutton and Lloyd supports the commission’s finding that Marzen told
Sutton that Lloyd had already consented to the transfer when in fact he
had not; Lloyd was unaware of the transfer until informed by Sutton.
Whether or not Lloyd objected to the transfer, or even consented after-the-
fact, Marzen’s statement to Sutton was false when he made it. Marzen
knowingly made a false statement of material fact in violation of rule
32:1.4(a).
4. Rule 32:8.4(c). As discussed above, “[i]t is professional
misconduct for a lawyer to . . . engage in conduct involving dishonesty,
19
fraud, deceit, or misrepresentation.” Iowa R. Prof’l Conduct 32:8.4(c). The
commission determined Marzen violated this rule by misrepresenting how
he would handle the Cecil Pierson estate matter.
According to Marzen, he informed Lloyd he had hired “Amy” to work
on the Cecil Pierson estate, so there was no misrepresentation. Marzen
testified he intended to hire Amy Medlin as an independent contracting
paralegal, but when the logistics did not work out, he transferred the file
to Sutton to take over, collecting no fee for the work. Even if we found
Marzen’s explanation credible, he still failed to explain to the Piersons that
Medlin was a paralegal employed by another law firm. Instead, he
misrepresented to them that his office had hired “Amy” because it had
expanded, implying that Amy Medlin was an employee of his law firm.
Further, we find Marzen’s explanation not credible, as he transferred the
file to Sutton’s office on a flash drive the same day he told the Piersons he
had hired “Amy” and they should talk to her if she called about the estate
case. We agree with the commission that Marzen misrepresented how the
Cecil Pierson estate would be handled in violation of rule 32:8.4(c).
IV. Sanctions.
We have no uniform sanctions for particular misconduct. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Bergmann, 938 N.W.2d 16, 23 (Iowa
2020).
In determining the appropriate sanction, we engage in
a fact-based analysis and consider a number of factors, such
as “the nature of the underlying violation, need to deter, public
protection, protection of the reputation of the legal profession,
and the [lawyer]’s fitness to practice law.”
Barry, 908 N.W.2d at 227 (alteration in original) (quoting Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Thompson, 732 N.W.2d 865, 867 (Iowa 2007)).
“We also take into account mitigating and aggravating circumstances.” Id.
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When determining what sanction a particular case deserves, we attempt
to harmonize past cases with the present case. Id.
A. Review of Analogous Cases. Marzen engaged in a range of
misconduct with a corresponding range of sanctions. “Sanctions for
charging and collecting unreasonable fees generally range from sixty days
to two years.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Mathahs, 918
N.W.2d 487, 495 (Iowa 2018). Yet, this case is unique, as Marzen’s
violation relates only to his unauthorized charge of interest on a past due
account. Marzen’s usual practice was to charge interest; that it was not
included in the fee agreement with the Piersons appeared to have been an
oversight. Moreover, the Piersons never paid any interest and, in fact,
never paid nearly half of Marzen’s bill for the tax work project.
“Sanctions for attorney misconduct involving misrepresentation
generally range from a public reprimand to a three-year suspension.”
Barry, 908 N.W.2d at 227. Many of our cases involving misrepresentation
involve forging documents or lying to opposing counsel, clients, or the
court. See id. at 227–31 (summarizing sanctions in Iowa cases involving
misrepresentation by attorneys); McGinness, 844 N.W.2d at 465–66
(same). Examples of sanctions involving forgery include a one-year
suspension when an attorney falsified pleadings and court orders provided
to his clients over a fourteen-month period to cover up his failure to file a
dissolution petition, see Barry, 908 N.W.2d at 223–27, and a public
reprimand for an attorney with an otherwise exemplary record and good
moral character who forged a judge’s signature on an order the judge
approved but inadvertently failed to sign, see Iowa Supreme Court Attorney
Disciplinary Board v. Newman, 748 N.W.2d 786, 787–89 (Iowa 2008).
Iowa Supreme Court Attorney Disciplinary Board v. Haskovec, 869
N.W.2d 554 (Iowa 2015), involved misrepresentation without a forgery.
21
Haskovec prepared a new will for his aunt during a dispute between her
children. Id. at 557–58. Shortly before the aunt’s death, Haskovec realized
the will was invalid because one of the witnesses had not signed it. Id. at
558. Haskovec had the witness sign it at that time, despite knowing she
was required to sign in the presence of the testator and the other witness.
Id. Haskovec’s aunt passed away shortly thereafter, and Haskovec gave it
to the new executor to probate. Id. When speaking with the other attorney
hired to probate the estate, Haskovec admitted to the flaw in the will. Id.
at 558–59. The aunt’s previous will was ultimately probated, and the
board brought an ethics complaint against Haskovec. Id. at 559. We
concluded Haskovec’s conduct violated rule 32:8.4(c) and publicly
reprimanded him. Id.
Here, Marzen misrepresented to Sutton that he had Lloyd’s consent
to transfer Cecil Pierson’s estate matter to Sutton. Separately, he made
misrepresentations by attempting to file the inaccurate tax returns and,
more significantly, providing them to the Piersons to give their bank as
accurate reflections of their income. We conclude these
misrepresentations were more limited than in Barry, both in time and in
subject matter. Yet, in Newman and Haskovec, the attorneys each made
one serious error in judgment and quickly admitted the misrepresentation
when confronted. Marzen’s misconduct was not so isolated, nor is his
record as exemplary.
B. Aggravating and Mitigating Factors. Before we determine the
appropriate sanction, we must consider both mitigating and aggravating
factors. The Board identifies several aggravating factors, including prior
discipline, multiple rule violations, substantial experience practicing law,
client harm, failure to take responsibility, and providing untruthful
22
testimony at the hearing. The commission considered only Marzen’s prior
discipline as an aggravator in recommending a public reprimand.
We agree with the commission that Marzen’s prior six-month
suspension is the primary aggravating factor in this case. “We use prior
discipline as an aggravating factor because an attorney did not learn from
his or her prior misconduct.” Noel, 933 N.W.2d at 205. If the prior
disciplinary action was based on the same or similar conduct, “[t]his factor
is even stronger.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Goedken, 939
N.W.2d 97, 108 (Iowa 2020). Although there are meaningful differences
between revealing information to the media and revealing information to
another attorney, we consider the two instances to be similar enough to
be a relatively strong aggravating factor.
Additionally, “[m]ultiple rule violations are an aggravating factor.”
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Parrish, 925 N.W.2d 163, 181
(Iowa 2019). In Parrish, we concluded the attorney’s violation of five ethical
rules was an aggravating factor. Id. at 167, 181. We consider Marzen’s
violation of multiple rules an aggravating factor.
We decline to find the other aggravating factors advanced by the
Board. While substantial experience in the practice of law can be
considered an aggravator, see Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Jacobsma, 920 N.W.2d 813, 819 (Iowa 2018) (considering twenty years of
experience as an aggravating factor), inexperience can likewise be a
mitigating factor, see Turner, 918 N.W.2d at 155 (“Even before we adopted
the rules of professional conduct, we considered inexperience to be a
mitigating factor.”). Marzen had been practicing just over ten years at the
time of the events at issue. While certainly not inexperienced, neither
would we consider Marzen so seasoned to warrant enhancing his
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discipline. We consider Marzen’s ten years’ experience neither aggravating
nor mitigating.
Similarly, while harm to a client can be an aggravating factor, see
Turner, 918 N.W.2d at 154, “[l]ack of harm to clients ‘is a significant
mitigating factor.’ ” Goedken, 939 N.W.2d at 109 (quoting Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Van Ginkel, 809 N.W.2d 96, 110 (Iowa 2012)).
Here, Sutton promptly completed the Cecil Pierson estate, and the
Piersons never voiced their displeasure to Marzen. With respect to the tax
work, the Piersons were not harmed by the unauthorized finance charges
as they paid none of the interest. While the Piersons paid Prichard to
essentially redo the tax work completed by Marzen, they paid only half of
Marzen’s legal fees, which the commission found to be not unreasonable.
The only harm identified by the Piersons was the stress of dealing with the
IRS based on the unfiled returns, but that harm is not attributable to any
of the founded ethical violations. The minimal harm to the Piersons is
neither aggravating nor mitigating.
We reject the Board’s arguments that Marzen’s failure to take
responsibility for his actions and his untruthful testimony at the hearing
should be considered additional aggravating factors. First, we found that
Marzen did not provide untruthful testimony at the hearing, so that factual
basis does not exist. With respect to whether Marzen accepted
responsibility, we recognize that an attorney is entitled to defend his
actions in a disciplinary proceeding without fear that doing so will be
considered an aggravating factor if he is found to have violated our ethics
rules. While we are troubled by Marzen’s misrepresentation to Sutton that
Lloyd had provided written consent to transfer the estate file and by
Marzen’s willingness to mail known inaccurate tax returns to the IRS,
Marzen provided plausible, albeit misguided, explanations for his actions.
24
This is not the type of “failure to acknowledge any misconduct [that]
reflects upon his inability to conform his conduct to our rules of
professional responsibility for lawyers.” Iowa Supreme Ct. Bd. of Prof’l
Ethics & Conduct v. Remer, 646 N.W.2d 91, 96 (Iowa 2002). We trust that
Marzen will conform his conduct in light of this disciplinary action.
Finally, the commission found the Piersons brought this complaint
because they did not want to pay Marzen, which it considered a mitigating
factor. Even if the Piersons did bring this complaint to avoid paying their
legal fees, a client’s motivation for bringing a complaint is not a mitigating
factor. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Santiago, 869 N.W.2d
172, 182 (Iowa 2015). Rather, “a complainant’s motives are irrelevant in
lawyer disciplinary cases.” Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct
v. Sunleaf, 588 N.W.2d 126, 127 (Iowa 1999). We decline to consider the
Piersons’ motive for filing the complaint as a mitigating factor.
C. Appropriate Sanction. Based on Marzen’s violations and the
aggravating factors in this case, we agree with the Board that Marzen’s
license should be suspended, contrary to the commission’s
recommendation of a public reprimand. We are most troubled by Marzen’s
willingness to provide knowingly inaccurate tax returns for his clients to
give to their bank in support of a loan application. This, coupled with
Marzen’s prior disciplinary record, warrants a thirty-day suspension.
V. Disposition.
In light of the above considerations, we suspend Marzen’s license to
practice law for thirty days from the date of filing this opinion. The
suspension applies to all facets of the practice of law. Iowa Ct. R. 34.23(3).
If he has any current clients, Marzen shall comply with the notification
requirements of Iowa Court Rule 34.24. We tax the costs of this action to
Marzen in accordance with Iowa Court Rule 36.24(1).
LICENSE SUSPENDED.