Hello everyone and welcome to this Ethics Alert blog which will discuss the recent Iowa Supreme Court opinion which revokes the license of a lawyer who had been practicing for over 50 years and had no prior discipline and other mitigation for trust fund conversion. The disciplinary opinion is: Iowa Supreme Court Attorney Disciplinary Board v. David S. Kelsen, Case No. 14–0507 (September 5, 2014). The opinion is here: http://www.iowacourts.gov/About_the_Courts/Supreme_Court/Supreme_Court_Opinions/Recent_Opinions/20140905/14-0507.pdf
According to the lengthy opinion, the lawyer was admitted to practice in 1962 and was 75 years old, and he had no prior discipline. The Iowa Supreme Court Attorney Disciplinary Board (Board) charged that the lawyer had violated trust account rules, including conversion of $7,500.00 in client funds, while representing a client. The grievance commission found that the lawyer had violated all rules as alleged by the Board and recommended a public reprimand.
The lawyer had received funds “in connection with a client’s discharge from employment.” The opinion reviewed the underlying facts and testimony by the lawyer that the funds were either an advance on expenses which the client authorized him to use or a “retainer” on a contingent fee. According to the opinion, “(the lawyer) later claimed that ‘a part of the funds’ were to be used for case expenses and that the contingent-fee contract simply failed to reflect that part were going to be used to cover office expenses. (The) lawyer also asserted that he had taken ‘a bar form contract form and tried to revise it on the spot on a Sunday night to get something in place’ to ‘basically confirm what [he and Cox] had agreed to.’” The opinion later states: “We note some problems with (the lawyer’s) version of events.”
The lawyer presented mitigation regarding “a number of family difficulties he was facing in 2012. His wife had lost her job and was dealing with serious health problems. (T)he lawyer’s secretary had left, and (the lawyer) did not replace her because of his financial constraints. A stepson had used forged checks to take funds from (the lawyer’s) law firm.” The opinion later stated: “While stating that it understood (the lawyer’s) personal situation, the commission noted that personal difficulties do not excuse trust account violations. Still, as a mitigating factor, the commission took into account (the lawyer’s) lack of prior ethical violations. It also presumed that (the lawyer) had been through several successful trust account audits in the past. The commission ultimately recommended a public reprimand as a sanction.”
The opinion states: “For the foregoing reasons, we find by a convincing preponderance of evidence that (the lawyer’s) trust account violations included the conversion of $7500 worth of client funds without a colorable future claim to those funds. (The lawyer’s) claim of an oral loan agreement is not credible, and we also reject his contention that, even without a loan agreement, he would have a colorable future claim to the funds based on an expected contingent case settlement. “This conduct alone is enough to support revocation, and it is unnecessary for us to further consider the impact of his other unethical conduct. (citation omitted).”
Bottom line: This 75 year old Iowa lawyer was apparently having severe financial difficulties and he improperly converted client funds to his own use. Although he had no prior discipline and mitigation, his license was revoked. The opinion does not make any specific findings that the lawyer made false statements during the disciplinary investigation; however, his testimony was rejected and there is a clear implication that the court did not believe that the lawyer told the truth in explaining the circumstances surrounding the nature and use of the funds, which may have influenced the decision to revoke the lawyer’s license.
Let’s be careful out there!
Disclaimer: this Ethics Alert is not an advertisement and does not contain any legal advice and the comments herein should not be relied upon by anyone who reads it.
Joseph A. Corsmeier, Esquire
Law Office of Joseph A. Corsmeier, P.A.
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