Iowa Supreme Court Attorney Disciplinary Board v. Sheree L. Smith , 885 N.W.2d 185 ( 2016 )

IN THE SUPREME COURT OF IOWA
No. 16–0111
Filed September 9, 2016
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
SHEREE L. SMITH,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
The grievance commission reports an attorney violated several
rules of professional conduct and recommends a suspension. LICENSE
SUSPENDED.
Tara van Brederode and Wendell J. Harms, Des Moines, for
complainant.
Sheree L. Smith, Cedar Rapids, pro se.
2
HECHT, Justice.
The Iowa Supreme Court Attorney Disciplinary Board (Board)
charged attorney Sheree L. Smith with violating multiple rules of
professional conduct. Smith entered a stipulation conceding that her
conduct violated several rules. See Iowa Ct. R. 36.16 (permitting
stipulations in attorney disciplinary matters); see also Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Haskovec, 869 N.W.2d 554, 562–63 (Iowa 2015)
(establishing parameters for stipulations in disciplinary matters but
cautioning that stipulations do not bind the court as to whether an
ethical violation has occurred). After a hearing, the Iowa Supreme Court
Grievance Commission (commission) recommended suspension of
Smith’s license for sixty days. We agree with the commission’s
recommendation and suspend Smith’s license with no possibility of
reinstatement for sixty days.
I. Background Facts and Proceedings.
Smith became an Iowa lawyer in 1998. She initially worked as a
clinician with a behavioral health organization and, with the
organization’s approval, utilized her law license to represent defendants
in some court-appointed criminal matters. The organization filed for
bankruptcy in 2002, and Smith then became a sole practitioner.
This disciplinary proceeding arises out of Smith’s representation of
a client in a family law matter and an audit of Smith’s trust account.
Smith stipulated to some facts, which we consider established for the
purposes of this proceeding. See Haskovec, 869 N.W.2d at 557
(“Stipulations of facts are . . . binding on the parties.”). We supplement
the stipulated facts with our own de novo factual findings.
A. Jill Hopkins Matter. In February 2012, the district court
entered a decree dissolving Jill Hopkins’s marriage. Smith did not
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represent Hopkins in the dissolution, but in June, Hopkins hired Smith
to represent her in seeking a postdecree injunction and paid Smith a
retainer of $1185. Smith deposited the retainer in her client trust
account and sent Hopkins a letter establishing billing rates for her work
and her assistant’s work.
In July, Smith filed an application for temporary injunction. The
court granted a temporary injunction and set a hearing. At that hearing,
Smith requested a continuance of the matter for an indefinite period.
Thereafter, Smith withdrew the retainer from her client trust account but
did not send Hopkins a bill or itemization of her services.
Hopkins hired new counsel in October. Her new counsel sent
Smith a letter asking her to withdraw from the case and requesting that
she forward the remainder of Hopkins’s retainer. Smith did not respond
to the letter or forward any funds to Hopkins’s new attorney.
Hopkins filed a complaint with the Board. When Smith responded
to the Board’s inquiry, she claimed she did not respond to Hopkins’s new
counsel or forward any portion of Hopkins’s retainer because she had
exhausted the retainer and in fact had billed additional time for which
Hopkins had not paid. Smith asserted she “completed all work” Hopkins
hired her to perform but Hopkins was frustrated because “the result was
not what she expected.” Smith did not respond to subsequent Board
inquiries asking her to provide copies of records accounting for funds
drawn against Hopkins’s retainer.
B. Trust Account Audits. In 2007, a Client Security Commission
auditor performed an audit of Smith’s client trust account. The auditor
noted a few minor deficiencies in Smith’s trust account practices but
acknowledged Smith had recently adjusted her document retention
policies and was maintaining appropriate ledgers.
4
The same auditor performed another audit in 2012. He did not
note any specific deficiencies in Smith’s recordkeeping at that time. He
also did not note, however, whether Smith had preserved her client trust
account records for the length of time required by our rules.
Nonetheless, the auditor concluded Smith’s trust account reconciled with
each bank statement he examined and with the check register.
Following the complaint lodged by Hopkins, the same auditor
performed another audit in 2014. The auditor wrote to Smith and
requested documents evidencing her trust account activity since January
2011, including bank statements, canceled checks, deposit slips,
transaction registers, reconciliations, and monthly balance sheets that
included individual subaccount balances. Smith responded that the
computer on which she kept these records had irretrievably
malfunctioned in February 2014, and so had her electronic backup
storage. Smith further reported she had not kept a checkbook record
since 2008 and did not have copies of canceled checks or deposit tickets
because her bank did not return them. Smith eventually produced some
documents, but the auditor considered them incomplete and insufficient
to demonstrate Smith’s compliance with the court rules governing client
trust accounts. Smith asserted she had always kept minimal records
and assumed her recordkeeping was permissible because neither of her
prior audits resulted in referral to the Board or recommended changes in
her trust account practices.
After Smith produced more documents in piecemeal fashion—but
still not all the documents the auditor had requested—the auditor
reviewed them and prepared a memorandum concluding Smith’s trust
account practices violated our rules in several particulars.
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C. Disciplinary Proceedings. After Hopkins’s complaint to the
Board and the Client Security Commission audit, the Board opened an
investigation. Eventually it filed a formal complaint with the
commission, alleging Smith violated numerous provisions of the Iowa
Rules of Professional Conduct and Client Trust Account Rules, including
32:1.15(a) and 45.2(3)(a) (not maintaining trust account records for six
years following termination of the representation); 32:1.15(b) and 45.1
(commingling personal funds and trust account funds); 32:1.15(c) and
45.7(3) (not depositing advance fees in a trust account and withdrawing
them only when fees are earned or expenses incurred); 32:1.5(d) and
45.2(2) (not promptly delivering funds or other property to which the
client is entitled); 32:1.15(f) (violating the court rules governing trust
accounts); 32:1.16(d) (not returning papers, property, and any unearned
advance payments that the client is entitled to receive); and 32:8.1(b)
(knowingly failing to respond to a lawful demand for information from the
Board).
“[A] violation of an attorney’s obligations under chapter 45 [of the
Iowa Court Rules] also constitutes a violation of rule 32:1.15(f).” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Eslick, 859 N.W.2d 198, 201 (Iowa
2015). The Board also alleged some additional trust account rule
violations under chapter 45, as incorporated by rule 32:1.15(f). Those
alleged violations included violations of rules 45.2(3)(b)(2) (not keeping
sufficiently detailed records of deposits); 45.2(3)(b)(3) (withdrawing funds
from a trust account payable to cash); 45.2(3)(c) (failing to ensure the
lawyer’s own access to and ability to produce relevant records), and
45.7(4) (failing to provide a client written notice “of the time, amount, and
purpose of any withdrawal” from the client’s trust account).
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Smith and the Board entered a stipulation in which the parties
agreed on undisputed facts, agreed Smith’s conduct violated the specified
rules, and jointly recommended a sanction—a suspension lasting thirty
days—to the commission. Although the stipulation binds the parties as
to the stipulated facts, it does not bind the court in determining whether
rules were violated or in imposing the appropriate sanction. Iowa Ct. R.
36.16(2)–(3); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lubinus, 869
N.W.2d 546, 549 (Iowa 2015). Nonetheless, the parties’ stipulation is
“helpful in narrowing the issues and highlighting the facts supporting a
violation or sanction.” Haskovec, 869 N.W.2d at 562.
The commission held a hearing to consider the stipulation,
evaluate whether the record demonstrated a factual basis for it, and ask
additional questions. See Iowa Ct. R. 36.16(1) (“The grievance
commission may . . . accept the stipulation but conduct a limited hearing
to elicit such additional evidence as the grievance commission may deem
necessary . . . .”). 1 At the hearing, Smith described her accounting
1Days before the hearing, Smith filed a motion to continue, asserting she “did
not receive notice of the request for hearing by the commission” until five days before
the scheduled hearing time and therefore did not receive due process or adequate time
to prepare. Smith’s motion stated her subjective expectation “that the stipulated
agreement . . . would cancel all hearings.” Smith also filed a statement with this court
regarding the commission’s recommendation. See Iowa Ct. R. 36.21(1) (“[T]he
parties . . . may file written statements with the supreme court in support of or in
opposition to the discipline the grievance commission recommends.”). In that
statement, she renews her assertion that she “was not afforded appropriate notice and
time to prepare for the evidentiary hearing.”
We reject Smith’s claim that she did not receive adequate notice of the
commission hearing. Her expectation that the stipulation would cancel all hearings was
unreasonable given the language of the rule, which expressly allows the commission to
accept the stipulation but still conduct a hearing. See Iowa Ct. R. 36.16(1).
Furthermore, after reviewing the record, we conclude Smith had plenty of time to
prepare. The commission entered a scheduling order on April 13, 2015—before the
parties ever began negotiating a stipulation—that scheduled the hearing for October.
Thus, Smith had roughly six months to prepare. She also signed a joint motion to
continue that the parties filed on October 9, and the commission filed an order granting
that motion on October 12. The October 12 order continues the hearing “until . . .
7
procedure or system as an unsophisticated one that made sense to her
even if it did not make sense to anyone else. She testified the 2014
computer malfunction prevented her from refuting some of the Board’s
allegations, especially regarding her failure to keep adequate records, but
insisted “from day one of practicing law,” she had always properly
deposited fees and reconciled her trust account. She further asserted
some documents falling into the required six-year retention period were
destroyed in a 2008 flood. However, she also acknowledged she utilized
her trust account as an operating account for over a decade. See Comm.
on Prof’l Ethics & Conduct v. Kraschel, 260 Iowa 187, 192–93, 148
N.W.2d 621, 625 (1967) (concluding an attorney commingled funds when
he “maintained one account . . . for all funds for the operation of his
office and funds belonging to his clients”).
Smith filed a “statement of mitigating circumstances” with the
commission and contended the circumstances she identified in the
statement should either excuse any violations the commission found or
reduce the sanction the commission would otherwise recommend. These
included the 2014 computer malfunction, the 2008 flood and ensuing
postal difficulties, and a complicated caseload. Additionally, Smith
raised what is effectively an estoppel argument. She asserted that
because the 2007 and 2012 audits did not result in disciplinary action or
criticism of her accounting practices, she reasonably believed her
recordkeeping complied with the rules and it should not subject her to
discipline now. As Smith put it in a different filing before the
commission, “I have maintained the same records for all audits and I
___________________________
October 26.” The order about which Smith complains, which the commission filed on
October 20, merely confirms that “the hearing previously scheduled . . . will proceed.”
The record simply does not support Smith’s assertion that the Board or commission
blindsided her by first announcing a hearing with less than a week to prepare.
8
have never had a corrective action. Those same records and processes
cannot now be found to be non-compliant.”
The commission concluded the record contained a factual basis
supporting the stipulation Smith and the Board entered, with one
exception: The commission did not find a convincing preponderance of
evidence indicating Smith violated rule 32:1.15(c) or rule 45.7(3) by
withdrawing fees before earning them. It considered as aggravating
circumstances Smith’s prior admonishment for failing to respond to a
Board inquiry, her intransigence during the disciplinary process, and its
perception—based on Smith’s testimony—that she “attempts to place
blame on everyone but herself” for the events generating this proceeding.
See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lett, 674 N.W.2d 139, 146
(Iowa 2004) (finding it “troubling that [an attorney] . . . continually
shifted the blame for her misdeeds” to other people and events, including
“the terrorist attacks of September 11, 2001”); Comm. on Prof’l Ethics &
Conduct v. Steele, 414 N.W.2d 108, 111 (Iowa 1987) (en banc) (“In each
instance where production of . . . evidence could support Steele’s version
of the events, some factor ostensibly outside her control purportedly
prevented her from doing so.”). In mitigation, the commission noted
Smith’s violations “do not appear to be the result of any malicious
conduct.” However, because the violations spanned years of practice, the
commission ultimately recommended that Smith be suspended from
practicing law for sixty days.
II. Scope of Review.
We review attorney disciplinary matters de novo. Iowa Ct. R.
36.21(1). “The Board must prove each rule violation by a convincing
preponderance of the evidence—a standard higher than in most civil
cases but lower than the criminal burden of proof beyond a reasonable
9
doubt.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kingery, 871 N.W.2d
109, 117 (Iowa 2015). “We respectfully consider the commission’s
recommendations, but they are not binding upon us.” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Morris, 847 N.W.2d 428, 433 (Iowa 2014).
III. Rule Violations.
“A party’s stipulation as to a violation of the Iowa Rules of
Professional Conduct does not bind us.” Haskovec, 869 N.W.2d at 557.
If the parties enter a stipulation that “concedes a rule violation, we will
only find a violation if the facts are sufficient to support the stipulated
violation.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wright, 857 N.W.2d
510, 514 (Iowa 2014). Accordingly, we address each stipulated violation
in turn to determine “whether the Board carried its burden of proof.”
Kingery, 871 N.W.2d at 117 (quoting Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Hedgecoth, 862 N.W.2d 354, 360 (Iowa 2015)).
A. Document Retention, Preservation, Adequacy, and Access.
Several of the Board’s allegations fall into this category. “Complete
records of [trust] account funds and other property shall be kept by the
lawyer and shall be preserved for a period of six years after termination
of the representation.” Iowa R. Prof’l Conduct 32:1.15(a); see also Iowa
Ct. R. 45.2(3)(a) (listing specific kinds of records lawyers must
“retain . . . for a period of six years after termination of the
representation”). These must include “records of deposit . . . sufficiently
detailed to identify each item.” Iowa Ct. R. 45.2(3)(b)(2). The lawyer
must ensure their own access to the records and maintain them in a
format such that “printed copies can be produced.” Id. r. 45.2(3)(c).
Smith did not preserve and could not produce upon request
adequately detailed trust account records regarding her representation of
Hopkins less than six years ago. We conclude that constitutes a
10
violation. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Nelissen, 871
N.W.2d 694, 699 (Iowa 2015) (concluding an attorney committed a
violation “by failing to retain for six years billing and trust account
records relating to [a particular] representation”). Although we have no
doubt the severe 2008 flood greatly affected Smith’s practice, her
representation of Hopkins did not begin until 2012. Thus, the flood
could not have affected Smith’s recordkeeping regarding Hopkins.
Smith failed to produce for the auditor sufficient records with
adequate detail that would permit an effective trust account audit. “The
bank records [s]he made available . . . evidenced numerous deposits and
disbursements that could not be attributed to specific clients . . . .”
Morris, 847 N.W.2d at 430. The auditor testified that during some
audits, minor deficiencies in lawyers’ recordkeeping still permit auditors
to “figure it out from the other elements of the records.” However,
Smith’s records were so minimal or even nonexistent that the auditor
could not do so in this case. Consequently, when disbursing funds from
the trust account, Smith’s records frequently did not identify the client
whose funds were disbursed. While we are sympathetic to the plight
Smith faced in dealing with both natural and electronic disasters, we
conclude the catastrophic events do not undermine the convincing
preponderance of evidence establishing Smith violated these document
preservation and retention rules. Even after the flood, Smith failed to
minimally follow trust account requirements. Her numerous and
persistent violations of rules contained in chapter 45 constitute
violations of rule 32:1.15(f). See Eslick, 859 N.W.2d at 201–02.
B. Commingling Personal Funds. “A lawyer may deposit the
lawyer’s own funds in a client trust account for the sole purpose of
paying bank service charges on that account, but only in an amount
11
necessary for that purpose.” Iowa R. Prof’l Conduct 32:1.15(b); see also
Iowa Ct. R. 45.1(1) (similar). We have concluded an attorney who
deposited an operating loan from her father into her trust account
violated rule 32:1.15(b). Eslick, 859 N.W.2d at 201. Similarly, we
concluded an attorney violated the precursor to rule 32:1.15(b) when he
“deposited the proceeds from a personal loan into the trust account, and
then periodically used the account to pay a variety of business and
personal obligations.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Hall,
728 N.W.2d 383, 385, 387 (Iowa 2007); see also Comm. on Prof’l Ethics &
Conduct v. O’Callaghan, 436 N.W.2d 51, 52 (Iowa 1989) (noting it was
“not disputed” a lawyer violated rules prohibiting commingling when he
“began using his office trust account for personal deposits and
expenditures”).
Smith testified “[e]verything was related to [her] practice that went
in” her trust account. However, Smith’s testimony, the bank records,
and the parties’ stipulation in this case reveal Smith deposited her
personal income tax refunds and proceeds from a personal insurance
claim into the trust account. The evidence reveals that Smith had one
personal and business bank account for several years—and it was the
trust account.
Some funds are inappropriate for deposit in a trust account, even if
they are related to a lawyer’s practice. For example, Smith deposited
earned fees from court-appointed work—which she had earned by the
time the state paid them and which were therefore personal funds—into
the trust account. See Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v.
Sunleaf, 588 N.W.2d 126, 126–27 (Iowa 1999) (concluding an attorney
violated the precursor to rule 32:1.15(b) when he “used his trust account
for the deposit of earned fees”). Smith acknowledged at the commission
12
hearing that depositing earned fees from court-appointed work into her
trust account was “a mistake,” conceded she did so “from the beginning”
of her solo practice, and offered no explanation apart from “I just always
did.” We conclude Smith violated the rules prohibiting commingling. 2
C. Withdrawing Fees Before Earned. Once a lawyer deposits
client funds in the trust account, the lawyer may not withdraw such
funds for the payment of an attorney fee until he or she earns it. Iowa R.
Prof’l Conduct 32:1.15(c); Iowa Ct. R. 45.7(3). The commission
concluded the Board had not shown by a convincing preponderance of
the evidence that Smith withdrew fees from her trust account before she
earned them for services rendered to Hopkins. We agree.
Smith claimed she earned the entirety of Hopkins’s retainer.
Because the parties entered a stipulation, the Board presented no
additional evidence refuting Smith’s assertion. At the commission
hearing, the Board noted it was “living within the confines of the
stipulation.” Thus, it did not call Hopkins as a witness to testify about
the various tasks Smith completed for her or examine Smith about the
work she performed for Hopkins. While Smith’s poor recordkeeping
certainly “made it difficult . . . to trace funds to confirm” she did not
withdraw fees before earning them, Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Santiago, 869 N.W.2d 172, 182 (Iowa 2015), we conclude the
Board did not prove by a convincing preponderance of evidence that she
did.
2Although commingling funds and paying personal expenses from the trust
account may result in misappropriation of clients’ funds, the Board did not assert
Smith committed theft or misappropriation. Accordingly, we do not address whether
her conduct constituted theft or misappropriation. See Iowa Ct. R. 36.8(1) (“If the
[Board] intends to assert that a respondent misappropriated or converted client or
third-party funds . . . , the [Board] must specifically allege in its complaint the
misappropriation or conversion for personal use without a colorable future claim.”).
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D. Prompt Delivery of Client Property. Rule 32:1.15(d) requires
lawyers to deliver promptly “any funds or other property that [a] client or
third person is entitled to receive.” Iowa R. Prof’l Conduct 32:1.15(d).
Rule 32:1.16(d) addresses conduct after representation ends; it requires
lawyers to surrender “papers and property to which the client is entitled”
and refund “any advance payment of fee or expense that has not been
earned or incurred.” Id. r. 32:1.16(d).
We have concluded an attorney violated these rules when he did
not return client files and records after the client (or the client’s
subsequent attorney) specifically requested their return. Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Baldwin, 857 N.W.2d 195, 203–04, 209–10
(Iowa 2014); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Mendez, 855
N.W.2d 156, 162, 170 (Iowa 2014). Similarly, we have concluded an
attorney committed an ethical violation by not returning any portion of a
retainer after the attorney–client relationship ended even though he had
done no work on the case. Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Ireland, 748 N.W.2d 498, 502 (Iowa 2008).
There are some factual differences here, partially due to the
stipulation. Hopkins’s successor counsel asked Smith to withdraw and
forward any unearned portion of the retainer—but did not request that
Smith forward any files she possessed. And unlike Ireland, Smith
performed at least some work for Hopkins by meeting with her, drafting
and filing an application for an injunction, and attending the hearing.
See id. at 502. Smith claimed she earned the entire retainer, and the
Board presented no evidence refuting that. In other words, Hopkins may
not have been “entitled to receive” anything from Smith because the fees
charged by her may have been earned. We conclude the Board did not
prove by a convincing preponderance that Smith violated these two rules
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demanding prompt return of property and funds to which the client is
entitled.
E. Other Trust Account Rules.
1. Withdrawing cash. Trust account “[w]ithdrawals shall be made
only by check payable to a named payee and not to cash.” Iowa Ct. R.
45.2(3)(b)(3). At the commission hearing, Smith admitted she made cash
withdrawals on more than one occasion. This conduct violated the rule.
See Wright, 857 N.W.2d at 517.
2. Notification to client when withdrawing trust account funds. “A
lawyer accepting advance fee or expense payments must notify the client
in writing of the time, amount, and purpose of any withdrawal of the fee
or expense . . . .” Iowa Ct. R. 45.7(4). The available records in this case
reflect that Smith rarely if ever provided her clients with the required
written notice and accounting. In particular, although she sent Hopkins
a letter prospectively disclosing the hourly rate for legal services, she
never sent Hopkins an actual bill detailing the services rendered and the
time spent rendering them and notifying Hopkins of the withdrawal from
the trust account. We find Smith violated rule 45.7(4). See Nelissen, 871
N.W.2d at 699 (“Nelissen never communicated to [her client] that
withdrawals were being made from the initial . . . retainer.”).
F. Failing to Respond to a Board Inquiry. A lawyer shall not
“knowingly fail to respond to a lawful demand for information from
[a] . . . disciplinary authority.” Iowa R. Prof’l Conduct 32:8.1(b). The rule
reflects our expectation that “[a]ttorneys must be responsive to the
Board’s inquiries.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Silich, 872
N.W.2d 181, 191 (Iowa 2015). Smith ignored at least three letters from
the Board seeking records showing Smith’s handling and use of
Hopkins’s retainer. We find she violated the rule. See Nelissen, 871
15
N.W.2d at 700 (concluding an attorney violated this rule when “the Board
sent a series of letters . . . , as to which it received no response”); Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Humphrey, 812 N.W.2d 659, 665
(Iowa 2012) (concluding an attorney violated this rule when he
disregarded a letter from the Board seeking information and “also failed
to reply to a second Board letter sent three months later seeking the
same . . . information”).
IV. Sanction.
When we review disciplinary matters, we “may impose a lesser or
greater sanction than the discipline the grievance commission
recommends.” Iowa Ct. R. 36.21(1). “When determining a sanction, we
consider the type of violation, a deterrent purpose for other lawyers, the
need to protect the public, and the need to maintain our profession’s
reputation. We also consider any aggravating and mitigating
circumstances.” Eslick, 859 N.W.2d at 202 (citation omitted).
“The range of discipline imposed for substantial failures to keep
and maintain records of trust account transactions ranges from a public
reprimand to a suspension of several months’ duration.” Morris, 847
N.W.2d at 436 (citation omitted). “When an attorney’s minor trust
account violations are the result of sloppiness or lack of oversight, we
have levied a public reprimand rather than a suspension.” Lubinus, 869
N.W.2d at 550. “On the other hand, when an attorney has committed
multiple or more systematic trust account violations, we have imposed
suspensions . . . .” Id. at 551.
We issued thirty-day suspensions in several recent cases in which
attorneys violated rules pertaining to lawyer trust accounts. In Lubinus,
we suspended an attorney for thirty days because he “had a series of
incidents involving misuse of his trust account” but “did not demonstrate
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a total, long-term disregard for the trust account rules.” Id. at 553–54.
In Eslick, we suspended an attorney for thirty days when “[h]er trust
account deficiencies were not an isolated incident.” 859 N.W.2d at 203.
In Iowa Supreme Court Attorney Disciplinary Board v. Kersenbrock, we
suspended an attorney for thirty days in part because she “had no
electronic record keeping system, and she prepared only minimal manual
records over a period of several years.” 821 N.W.2d 415, 420, 422 (Iowa
2012). In Iowa Supreme Court Attorney Disciplinary Board v. Boles, we
suspended an attorney for thirty days after “his flagrant, multiyear
disregard for the billing and accounting requirements of our profession.”
808 N.W.2d 431, 441–43 (Iowa 2012). Finally, in Santiago, we imposed a
suspension of thirty days for numerous violations of our rules governing
trust account record keeping and management that persisted even after
an earlier audit revealed deficiencies. 869 N.W.2d at 183–85.
We have also issued a sixty-day suspension for violations
consisting primarily of trust account deficiencies. Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Parrish, 801 N.W.2d 580, 585–88, 590 (Iowa 2011).
We selected sixty days in part due to aggravating circumstances—
particularly the fact that the attorney had “six private admonitions
dating back” ten years for related conduct and had failed to return funds
to which a client was entitled for almost five years. Id. at 589.
But sixty days is not the upper limit. In 2014, we suspended an
attorney for three months after he failed to maintain proper records and
commingled funds. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Ricklefs,
844 N.W.2d 689, 702 (Iowa 2014). We focused in particular on the
attorney’s “refusal to correct his trust account practices for years [even]
after he was informed of his deficient recordkeeping.” Id. Furthermore,
we considered as an aggravating factor the attorney’s effort “to delay and
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deflect the investigation of his trust account practices virtually up until
the . . . disciplinary hearing.” Id.
We conclude “the recurring pattern of conduct in this case
warrants a . . . suspension.” Parrish, 801 N.W.2d at 590. Smith’s
“record-keeping . . . deficits were severe and they persisted over a long
period of time.” Morris, 847 N.W.2d at 436. Indeed, her wholesale
violations of rules pertaining to the proper use and maintenance of trust
accounts persisted for years, like the attorneys’ violations in Kersenbrock
and Boles. See Kersenbrock, 821 N.W.2d at 420; Boles, 808 N.W.2d at
441. However, before determining the length of suspension, we first
address aggravating and mitigating circumstances. Morris, 847 N.W.2d at
435–36.
The Board has privately admonished Smith on three prior
occasions. In 2011, she received an admonishment after neglecting two
postconviction-relief cases. In 2012, she received an admonishment after
failing to cooperate with a Board investigation, in violation of rule
32:8.1(b). Finally, in 2013, she received an admonishment after ignoring
a client’s inquiries about his case for seven months. “While ‘[p]rivate
reprimands are not discipline,’ they provide notice of deficiencies
[regarding] particular ethical requirements . . . .” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Said, 869 N.W.2d 185, 194 (Iowa 2015) (first alteration
in original) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Van Ginkel, 809 N.W.2d 96, 110 (Iowa 2012)). This is especially so when
the conduct for which the attorney was admonished or reprimanded
resembles the conduct currently at issue. See Van Ginkel, 809 N.W.2d at
110 (“[T]wo prior admonitions for conduct similar to that in this case [i]s
an aggravating factor on the question of appropriate sanction.”).
Although the Board did not allege Smith neglected the matters at issue in
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this case, we consider all three prior admonishments to be aggravating
factors. Her inaction both when faced with a request from Hopkins’s new
counsel and when faced with a request from the Board closely matches
the type of unresponsive conduct she should have known by then to
avoid.
Another aggravating circumstance is the fact that Smith’s
“persistent failure to keep appropriate records” effectively
“prevent[ed] . . . review of [her] accounting practices.” Kersenbrock, 821
N.W.2d at 422. Furthermore, Smith has been practicing for over fifteen
years; her experience is another aggravating factor. See Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Wagner, 599 N.W.2d 721, 730 (Iowa
1999) (“Sixteen years in the practice . . . tell us that Wagner should have
known better.”); cf. In re De Caro, 220 Iowa 176, 185, 262 N.W. 132, 137
(1935) (noting “[w]hat we might say or do with an attorney of larger
experience, mature years, is not necessarily what would be just” for a
less experienced attorney).
We reject Smith’s assertion that because prior audits occurred
without a disciplinary referral, her trust account practices were
presumptively permissible. Lawyers always bear responsibility for
knowing and following the applicable rules. “[I]gnorance of [one’s] ethical
obligation is no defense.” Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Howe, 706 N.W.2d 360, 370 (Iowa 2005). At the commission hearing,
one member of the panel asked a specific question about this principle,
and Smith’s answer is revealing:
Q. As lawyers, we don’t do anything without
consulting the rules. If you’re going to court, you know, the
rules of court or the rules of civil procedure, or with any
criminal proceeding, you had to know those rules to practice.
How is it you weren’t aware of the rules regarding your
records? A. Well, I’m going to acknowledge that I’m not—I
19
was not aware of—you know, I should have been, but was
not.
We acknowledge one mitigating factor: Smith’s work on behalf of
clients with modest means. See Iowa Supreme Ct. Att’y Disciplinary Bd.
v. Taylor, 814 N.W.2d 259, 268 (Iowa 2012) (considering as a mitigating
factor the fact that an attorney “allows persons with modest means to
obtain representation” and “provides her clients with access to the courts
for an affordable fee”).
The commission recommended a sixty-day suspension. We agree
with that recommendation. Smith is more experienced than the attorney
in Eslick, and while “Eslick’s trust account was . . . ‘out of whack’ for
months,” Smith’s was noncompliant for years. 859 N.W.2d at 199, 203.
The aggravating factor of additional experience and a comparably
lengthier noncompliance period here lead us toward a longer suspension
than the one we imposed in Eslick. See id. at 203–04 (imposing a thirty-
day suspension). Smith demonstrated “a total, long-term disregard for
the trust account rules.” Lubinus, 869 N.W.2d at 553. We also conclude
a suspension of sixty days—rather than a suspension of thirty days like
the one imposed in Santiago, 869 N.W.2d at 185—is appropriate in this
case because Smith has a disciplinary history including three prior
admonitions.
Although we reject Smith’s argument that her prior uneventful
audits estop the Board from disciplining her now, we contrast these facts
with Ricklefs, where the attorney refused “to correct his trust account
practices for years after he was informed of his deficient recordkeeping.”
844 N.W.2d at 702 (emphasis added); see also Morris, 847 N.W.2d at 436
(“Morris’s record-keeping and management deficits were severe and they
persisted over a long period of time even after the Client Security
20
Commission intervened with an audit and provided information that
should have facilitated compliance . . . .”). In Morris and Ricklefs, the
attorneys’ failures to correct their trust account practices after knowing
they were deficient justified longer suspensions. See Morris, 847 N.W.2d
at 436; Ricklefs, 844 N.W.2d at 702. Smith had no similar express
“informational roadmap,” Morris, 847 N.W.2d at 435, from the Client
Security Commission. While that does not prevent a suspension because
Smith remained responsible for knowing and following the applicable
rules, it also does not constitute an aggravating factor justifying more
severe discipline. Accordingly, we suspend Smith’s license for sixty days.
V. Conclusion.
We suspend Smith’s license to practice law in this state with no
possibility of reinstatement for sixty days from the date this opinion is
filed. The suspension applies to “all facets of ordinary law practice.”
Iowa Ct. R. 34.23(3). Unless the Board files an objection, Smith will be
automatically reinstated after the suspension period on the condition
that she has paid all costs. Id. r. 34.23(2). We tax the costs of this
action to Smith. Id. r. 36.24(1).
LICENSE SUSPENDED.