Iowa Supreme Court Attorney Disciplinary Board Vs. James Franklin Hall, Jr. ( 2007 )

IN THE SUPREME COURT OF IOWA
No. 133 / 06-1320
Filed March 5, 2007
IOWA SUPREME COURT ATTORNEY
DISCIPLINARY BOARD,
Complainant,
vs.
JAMES FRANKLIN HALL, JR.,
Respondent.
________________________________________________________________________
On review of the report of the Grievance Commission.
Grievance Commission reports that Respondent has committed
ethical misconduct and recommends a suspension from the practice of
law. LICENSE SUSPENDED.
Charles L. Harrington and Laura M. Roan, Des Moines, for
Complainant.
Donna Ruth Beary, Des Moines, for Respondent.
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CADY, Justice.
The Iowa Supreme Court Attorney Disciplinary Board (Board)
charged James F. Hall, Jr. with numerous violations of the Iowa Code of
Professional Responsibility for Lawyers. The Grievance Commission of
the Supreme Court of Iowa (Commission) found Hall violated the Code of
Professional Responsibility. It recommended Hall be suspended from the
practice of law for a minimum period of fifteen months. On our review,
we find Hall violated the Code of Professional Responsibility, and we
suspend his license to practice law indefinitely, with no possibility of
reinstatement for twelve months.
I. Background Facts and Proceedings.
James F. Hall, Jr. is an Iowa lawyer. He was admitted to the
practice of law in Iowa in 2002. Hall was raised in Des Moines, and
enjoyed a variety of success in his life prior to practicing law. Hall was
an exceptional multi-sport high school athlete and a one-time Olympic
hopeful in track. He served in the United States Navy, and is a veteran
of the Gulf War. He was the first member of his family to attend and
graduate from college.
Hall began his legal career as a sole practitioner in Des Moines.
Within a short period of time, he moved from Des Moines and began
practicing law in Waterloo as a sole practitioner. The demands on his
time were great, and he began, unknowingly at first, to exhibit signs of
what would later be identified as depression and bipolar disorder. He
also had little understanding of the intricacies of an office practice, or the
need to fully train and supervise staff. He had no real mentor within the
profession, and primarily associated with people that provided little
professional guidance. There was evidence that some people he
associated with used illegal drugs in his home. The confluence of these
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circumstances, as well as others, foretold the disaster that would lie
ahead. This cataclysm eventually unfolded in an eight-count complaint
filed by the Board in 2006, and a hearing before the Commission that set
forth the evidence largely supporting the complaint. Hall currently lives
in Des Moines and practices with another lawyer in an office sharing
arrangement.
Hall’s office practice in Waterloo was marked by disorganization
and, at times, chaos. On one occasion in 2005, Hall signed the names of
two clients to their bankruptcy petitions after he had traveled to the
federal courthouse in Cedar Rapids to file the petitions and discovered
the signatures were missing. He did not obtain permission from the
clients to sign their names, and did not understand he was not permitted
to sign the petitions for his clients. See 11 U.S.C. § 110(e)(1) (2006) (“A
bankruptcy petition preparer shall not execute any document on behalf
of a debtor.”). Hall then told conflicting accounts of the matter to the
bankruptcy judge and later to the Commission.
Hall also neglected client cases on numerous occasions. Between
2003 and 2005, Hall neglected four separate cases after filing notices of
appeal with this court. He repeatedly missed filing deadlines and
received default notices from the clerk of court. On one occasion, his
neglect resulted in the dismissal of the appeal. Hall also neglected a case
involving a claim for wrongful discharge he undertook on behalf of a
client named Marsha Lewis. After agreeing to handle the case, Hall made
little or no effort to advance the client’s claim. He also misrepresented
the status of the case to the client and later failed to promptly turn over
the client file after the client obtained new counsel. Similarly, Hall
neglected a case on behalf of a client named Kristen Campbell after
agreeing to represent the client on an insurance claim involving the
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death of her husband. He failed to return numerous phone calls from
the client and did little or no legal work in the case. He also failed to
turn over the client file after the client obtained new counsel. The papers
in the file had not been returned to the client as of the date of the
hearing before the Commission. Hall was unable to locate the file or the
papers belonging to the client.
Hall maintained a trust account in his practice, but repeatedly
mismanaged the account and failed to comply with trust account
requirements. He did not maintain a proper ledger of deposits and
withdrawals, and repeatedly used the account to deposit and withdraw
personal funds. He also permitted a paralegal in his office to deposit and
withdraw funds. In 2004, for example, Hall 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. Hall also
deposited other personal funds into the trust account from time to time.
At times, Hall used the trust account more for his personal dealings than
for client matters. Nevertheless, there was no evidence he failed to
maintain an adequate amount of personal funds in the account when he
withdrew funds for personal matters.
Hall handled other financial matters in unorthodox ways. On two
occasions, Hall was paid fees or advances from clients that were never
deposited in the trust account. The Commission, however, found Hall
had earned the fees by the time they were paid by the client. On another
occasion in August 2004, Hall received a settlement check from an
insurance company on behalf of a client in the amount of $3500.
Instead of depositing the check in his trust account, Hall went to the
bank with his client to negotiate the check. The fee arrangement
apparently entitled the client to $2000. Hall deposited the check into his
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office account at the bank and paid his client $2000 in cash. A few days
later, Hall transferred $3000 from his trust account into his office
account. When Hall’s trust account was later audited by the Client
Security Commission, Hall falsely told the auditor the $3000 that had
been transferred from the trust account represented the settlement
proceeds.
Finally, Hall repeatedly failed to respond to Board inquiries in
response to the various complaints filed against him.
II. Board Complaint.
The Board charged Hall with multiple violations of the rules of
professional responsibility. Count I involved the bankruptcy petitions
and alleged Hall violated six separate provisions of the Code of
Professional Responsibility, including DR 1-102(A)(4) (misrepresentation);
DR 1-102(A)(5) (conduct prejudicial to the administration of justice); DR
1-102(A)(6) (conduct adversely reflects unfitness to practice); and DR 7-
102(A)(5) (false statement of law or fact). Count II involved the neglect in
the four appellate cases and alleged Hall violated four code provisions,
including DR 6-101(A)(3) (neglect of a client’s legal matter). Count III
involved other cases of neglect, and alleged Hall violated ten separate
code provisions, including DR 6-101(A)(3), DR 1-102(A)(5), and DR 2-
110(A)(2) (return client papers). Counts V and VI involved the trust
account violations, and alleged Hall violated code provisions including
DR 9-102(A) (client funds required to be placed in trust account and a
lawyer shall not deposit funds of the lawyer into the trust account); DR
9-103(A) (maintain ledger or record of client funds); DR 9-102(B)(3)
(maintain complete records and render an accounting to client); and DR
1-102(A)(4). Count V also alleged misappropriation of client funds in
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violation of DR 1-102(A)(4). Count VIII involved the failure to cooperate
with the Board in violation of DR 1-102(A)(5) and (6).
Count IV alleged Hall submitted an excessive fee claim in a case.
Count VII alleged Hall used a controlled substance.
The Commission found the Board established the violations under
Counts I, II, III, V, VI, and VIII. It found the Board failed to establish
Counts IV and VII. It also found Hall did not misappropriate client funds
as alleged in Count V. It recommended Hall be suspended from the
practice of law for fifteen months. As a condition of reinstatement, the
Commission recommended Hall undergo a mental health evaluation and
disclose the name of a licensed attorney who would be willing to serve as
a mentor to him to provide guidance following any reinstatement. It also
recommended Hall attempt to locate and return the papers and records
belonging to Kristen Campbell.
III. Scope of Review.
We review attorney disciplinary matters de novo. Iowa Supreme Ct.
Bd. of Prof’l Ethics & Conduct v. Bernard, 653 N.W.2d 373, 375 (Iowa
2002). We give the findings of the Commission weight, but are not
bound by them. Id.
IV. Violations.
We agree with the findings and conclusions made by the
Commission in its detailed report. In particular, the evidence showed
Hall violated the provisions of the Code of Professional Responsibility as
found by the Commission. He engaged in misrepresentation and
conduct that adversely reflected on his fitness to practice law by signing
his name to the bankruptcy petitions and later telling inconsistent
accounts of his misconduct. This conduct violated the Code of
Professional Responsibility, including DR 1-102(A)(6) and DR 1-102(A)(4).
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He neglected client matters in violation of DR 6-101(A)(3) by his failure to
comply with the rules of appellate practice in four separate cases. He
also neglected client matters in two other cases, misrepresented the
status of the cases to his clients, and failed to promptly return client
papers. See Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Freeman,
603 N.W.2d 600, 602 (Iowa 1999) (obligation to turn over client papers to
successor counsel). He also failed to respond to numerous notices from
the Board in violation of the Code of Professional Responsibility. See
Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Kelsen, 670 N.W.2d
161, 167 (Iowa 2003) (failing to respond in a timely manner).
It is clear Hall also maintained his trust account in violation of the
requirements of DR 9-102. He used the trust account to deposit
personal funds and to pay personal and business expenses. The
commingling of his personal funds with his trust account violated DR 9-
102(A) of the Code of Professional Responsibility. He also failed to
maintain a proper ledger and other records to demonstrate compliance
with the trust account requirements in violation of DR 9-103. To
compound matters he knowingly misrepresented the nature of at least
one trust account transaction to the Client Security Commission auditor
in violation of DR 1-102(A)(4). See Iowa Supreme Ct. Bd. of Prof’l Ethics &
Conduct v. Matson, 558 N.W.2d 193, 194 (Iowa 1997).
V. Discipline.
In determining the appropriate level of discipline, we focus on “the
nature of the alleged violations, the need for deterrence, the protection of
the public, maintenance of the reputation of the [Bar] as a whole, and the
respondent’s fitness to continue” to practice law. Iowa Supreme Ct. Bd.
of Prof’l Ethics & Conduct v. Waters, 646 N.W.2d 111, 113–14 (Iowa
2002). We consider both aggravating and mitigating circumstances. Id.
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In the end, we impose discipline based on the particular facts of each
case. Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. McKittrick, 683
N.W.2d 554, 563 (Iowa 2004).
Our prior cases reveal the discipline we impose for neglect
normally ranges from a public reprimand to a six-month suspension.
Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Hohenadel, 634
N.W.2d 652, 655–56 (Iowa 2001). In this case, the neglect was visited on
numerous clients, and was frequently compounded by
misrepresentations to clients. The neglect also visited harm on clients.
Hall further compounded his neglect by failing to turn over client files
after termination of the attorney-client relationship.
Hall engaged in other acts of misrepresentation. He improperly
signed his client’s names on bankruptcy petitions in violation of federal
law, and told conflicting stories of the account to minimize his
culpability. Likewise, he misrepresented the circumstances of a
suspicious transaction involving his trust account to an auditor from the
Client Security Commission. Dishonesty, deceit, and misrepresentation
by a lawyer are abhorrent concepts to the legal profession, and can give
rise to the full spectrum of sanctions, including revocation. See Iowa
Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Ackerman, 611 N.W.2d 473,
474 (Iowa 2000); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Stein,
603 N.W.2d 574, 576 (Iowa 1999). An honest lawyer is essential to the
legal profession. See Comm. on Prof’l Ethics & Conduct v. Bauerle, 460
N.W.2d 452, 453 (Iowa 1990). Generally, neglect combined with
incidents of misrepresentation give rise to a lengthy suspension from the
practice of law. Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Ruth,
656 N.W.2d 93, 100 (Iowa 2002).
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The failure to comply with the trust account requirements is also a
serious matter. We have said that the commingling of trust funds with
personal or office funds is strictly prohibited. Iowa Supreme Ct. Bd. of
Prof’l Ethics & Conduct v. Herrera, 560 N.W.2d 592, 594 (Iowa 1997).
Moreover, the overall manner in which Hall operated the trust account
was outrageously deficient. It reflected his overall approach to the
practice of law, and revealed his general unfitness to be a lawyer at this
time.
We have recognized the rigors of the practice of law and the
difficulties that can be encountered by attorneys. See McKittrick, 683
N.W.2d at 563. These difficulties are multiplied exponentially for young
lawyers who venture into the practice as sole practitioners. This factor,
perhaps more than any other, may help explain the disaster Hall
encountered in his practice of law. This also explains the
recommendation by the Commission that Hall be required to identify and
become associated with a lawyer to serve as a mentor and counselor
before resuming his legal practice. Additionally, Hall struggled with
burgeoning mental health issues. These matters contributed to his
misconduct, and can ultimately serve to mitigate sanctions. See Iowa
Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Sullins, 648 N.W.2d 127,
135 (Iowa 2002).
The scope and type of misconduct engaged in by Hall—profuse
client neglect, repeated misrepresentations, trust account failures, failure
to return client property, failure to respond to the Board, and general law
office mismanagement—has been documented by us in a host of prior
disciplinary cases, including our recent case of Iowa Supreme Court
Attorney Disciplinary Board v. Joy, ___ N.W.2d ___ (Iowa 2007) (filed
February 23, 2007) (listing similar cases). These cases reveal we
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generally discipline lawyers who engage in this misconduct by
suspending them from the practice of law for a period between one and
three years. Id. Of course, the point where the discipline ultimately falls
within the range depends on the particular facts and circumstances as
revealed in each case. In the end, this case can be distinguished from
the others. Ultimately it seems to reveal less about an unethical lawyer
than one who was confused, alone, and unprepared for the voyage he
undertook, and quickly found himself well over his head in the
dangerous and sometimes treacherous currents of the practice of law.
Under all the circumstances, we conclude Hall should be suspended
from the practice of law indefinitely, with no possibility of reinstatement
for twelve months.
The conditions of reinstatement recommended by the Commission
are reasonable, and will be considered upon any application for
reinstatement by Hall. Moreover, we support the concept of mentoring
for all new lawyers, especially those who have recently graduated from
law school and choose to begin their careers as a sole practitioner. The
lack of education and guidance on the intricacies of the practice of law is
often, as in this case, a recipe for disaster for new lawyers.
Consequently, all new lawyers who decide to engage in the practice of law
as a sole practitioner would benefit immeasurably from a mentor, just as
they would benefit from obtaining continuing legal education on office
practices before opening a law office as a sole practitioner. The
profession, and the public, would benefit by including such education in
continuing legal education programs for new lawyers.
VI. Conclusion.
We suspend Hall’s license to practice law in Iowa indefinitely, with
no possibility of reinstatement for a period of twelve months from the
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date of filing of this opinion. The suspension imposed applies to all
facets of the practice of law as provided by Iowa Court Rule 35.12(3), and
requires notification to clients as provided in Iowa Court Rule 35.21. The
costs of this proceeding are taxed against Hall pursuant to Iowa Court
Rule 35.25(1).
LICENSE SUSPENDED.