Monthly Archives: November 2014

Indiana Supreme Court imposes public reprimand on lawyer who required non-compete provision in associate’s employment agreement

Hello everyone and welcome to this Ethics Alert which will discuss the recent Indiana Supreme Court opinion which imposed a public reprimand on lawyer who required an associate to agree to a non-compete provision in an employment agreement and sent letters to the associate’s clients stating that he would be taking over the representation; however, he did not attempt to enforce the provision. The disciplinary opinion is In the Matter of: J. Frank Hanley II, Case No. 49S00-1410-DI-616 (Ind. SC 11/6/14). The opinion here: http://www.in.gov/judiciary/files/order-discipline-2014-49s00-1410-di-616.pdf

According to the opinion, the lawyer’s law practice was primarily in social security disability law. He hired an associate in 2006 to work in his law office pursuant to an employment agreement which included a non-compete provision prohibiting the associate from practicing Social Security disability law for two years if his employment was terminated.

The lawyer terminated the associate in 2013 and sent letters to the clients whose matters the associate was handling advising the clients that the associate was no longer working at the firm and that he would be taking over their representation. The lawyer also enclosed Appointment of Representative forms for the clients to complete to permit him to replace the associate as the clients’ representative before the Social Security Administration.

Notwithstanding the letters, the associate continued to practice social security disability law after leaving the law firm, and at least two of the associate’s existing clients chose to keep him as their lawyer. The lawyer did not attempt to enforce the non-compete provision and, after the Bar complaints were filed against him, the lawyer provided the associate with the client files.

Bottom line: This lawyer violated Indiana Bar Rule 5.6(a) by requiring the associate to agree to limit his practice after he was no longer with the firm as a condition of his employment agreement. This type of agreement limiting a lawyer’s practice is prohibited in most, if not all states and other jurisdictions.

Florida Bar Rule 4-5.6(a) states:

A lawyer shall not participate in offering or making:

(a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement…

Lawyers should be aware of this Bar rule when hiring associates and should not include a non-compete clause.

Disclaimer: this e-mail 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.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

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Filed under Attorney discipline, Attorney Ethics, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer lack of communication with client, Lawyer Professionalism, Lawyer requiring non-compete restrictive clause in employment agreement, lawyer restricting right to practice, Lawyer sanctions

Pennsylvania lawyer receives 2 year stayed suspension for neglecting cases and paying sanctions with firm funds without telling firm or client

Hello everyone and welcome to this Ethics Alert which will discuss the recent Pennsylvania Supreme Court opinion which imposed an agreed 2 year stayed suspension with probation for a lawyer who neglected client cases over two years, had monetary sanctions imposed on him and paid the sanctions out of firm operating funds without telling his partner or the client, and deceiving client by claiming that his billings were for legal services and not sanctions. The disciplinary opinion is Office of Disciplinary Counsel v. Christopher Roulhac Booth, Jr., No. 106 DB 2013 (Pa. SC 11/13/14) and the opinion and disciplinary board report are online here: http://www.pacourts.us/assets/opinions/DisciplinaryBoard/out/106DB2013-Booth.pdf

According to the opinion and consent agreement, the lawyer neglected cases for over 2 years, had $65,000.00 in monetary sanctions imposed on him and paid the sanctions out of firm accounts without telling his partner or the client. The lawyer had concealed his conduct from his partner and the client, Wachovia Bank. After Wachovia learned of the defaults and sanctions they terminated the firm and hired other counsel.

The lawyer also took additional funds from the law firm’s operating account. According to the consent agreement “(d)uring his tenure with (the law firm), Respondent dispersed, or caused to be dispersed, monies from the firm’s operating account in an amount in excess of $117,000, which disbursements he concealed from the firm and which were in excess of the fees and profits of the partnership to which he would have been entitled under the partnership agreement. Respondent has repaid the firm the amount of $40,000 and has arranged for the repayment of the remainder of the funds by relinquishing fees that were due to Respondent.”

The consent agreement states: “the instant matter does not involve the misappropriation of client funds; rather it involves the ‘misdirection’ of operating funds and subsequent misrepresentation to Respondent’s partner of the true purpose of the use of the operating funds, which was to satisfy sanctions orders resulting from Respondent’s neglect. Furthermore, Respondent attempted to deceive the client, Wachovia, into believing that Respondent’s billings were for services rendered rather than for services and sanctions.”

The consent agreement stated as mitigation that the lawyer had self-reported the misconduct and suffers from depression and in aggravation, that the lawyer had served as a member of a Pennsylvania disciplinary hearing committee.

Bottom line: This lawyer was found to have neglected cases over 2 years, had monetary sanctions imposed upon him and paid the $65,000.00 in sanctions out of his law firm’s operating account without telling his partner or the client and making false statements to the client, and improperly taking an additional $117,000.00 from the firm’s operating account. In other states, including Florida, this lawyer may or would have received a much more severe sanction, including potentially disbarment.

Disclaimer: this e-mail 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.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

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Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, deceit, dishonesty, fraud, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer false statements, Lawyer lack of diligence, Lawyer misrepresentation, Lawyer misrepresentations to law firm re billings, Lawyer Professionalism, Lawyer sanctions

New Jersey Supreme Court suspends lawyer for one year as reciprocal discipline for New York litigation misconduct

Hello everyone and welcome to this Ethics Alert which will discuss the recent New Jersey Supreme Court order/opinion which imposed a one year reciprocal suspension on a lawyer as reciprocal discipline for misconduct in a New York litigation matter. The disciplinary opinion is In the Matter of Gregory N. Filosa, Case No. 14-146 (NJ SC 11/6/14) and is online here: http://www.judiciary.state.nj.us/drb/decisions/Filosa_14_108.pdf

According to the opinion and disciplinary report, the misconduct involved the lawyer’s handling of an employment discrimination matter against the client’s former employer. The lawyer was an associate at his law firm and was supervised by firm partners. The employer requested information about the client’s efforts to mitigate damages through, inter alia, new employment.

The firm retained an economist as an expert to assess damages. The economist prepared an analysis based on the assumption that the client would be unemployed through the end of 2010. Before service of the expert report, the client accepted a job with Kraft that paid her more than she made at the former employer. She advised the associate about her employment, who told his supervisor. The law firm then sent the inaccurate expert report to opposing counsel and demanded a $350,000.00 settlement. The client was later deposed and lied about accepting the job at Kraft. The lawyer was aware that the testimony was false but did not correct it either at the deposition or later.

During the pendency of the case, the former employer learned about the client’s new position at Kraft and moved for sanctions and the dismissal of the case. The supervising attorney and another partner from the law firm were present at the May 2011 oral argument on the motion; however, the lawyer was not present.

After the hearing, the trial judge imposed a $2,500.00 sanction against the client and a $15,000.00 sanction against the law firm due to the “false testimony by (the client) at her deposition” as well as the lawyer (and his supervisor’s) efforts “to conceal (the client’s) new employment and to leverage a false expert report in order to extract a favorable settlement.” The judge did not to dismiss the case against (the employer) at the time. The lawyer resigned from the law firm on May 31, 2011.

The New York disciplinary board found that the lawyer had engaged in misconduct by “misleading (the former employer) about (client)’s employment prospects through the inaccurate expert report; by failing to correct (the client)’s deposition testimony; by failing to produce documents that would have revealed (the client)’s two job offers; and by trying to settle the case quickly ‘before the defendants caught on to the truth’”. He received a one (1) year suspension in New York in 2013. The New Jersey Supreme Court then imposed a one (1) year suspension nunc pro tunc as reciprocal discipline.

Bottom line: This lawyer was found to have concealed a client’s new employment, leveraged a false expert report in order to extract a favorable settlement, allowed the client to lie during a deposition, and failed to correct the client’s false testimony. Some other states might have imposed a longer suspension or disbarred the lawyer.

Let’s be careful out there.

Disclaimer: this e-mail 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.
2454 McMullen Booth Road, Suite 431
Clearwater, Florida 33759
Office (727) 799-1688
Fax (727) 799-1670
jcorsmeier@jac-law.com
http://www.jac-law.com

Leave a comment

Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, deceit, dishonesty, joe corsmeier, Joseph Corsmeier, Lawyer conduct prejudicial to the administration of justice, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer misrepresentation, Lawyer Professionalism, Lawyer sanctions