May 2008 Nevada Lawyer

 MAY 2008 – BAR COUNSEL REPORT 

SUPREME COURT OF NEVADA

 

In re: Michael Woodbury

Bar No: 6539

Docket No: 50766

Filed March 20, 2008

 

ORDER OF DISBARMENT

 

Disbarment warranted based on attorney’s conviction of a misdemeanor offense of annoying or molesting a minor, reflecting adversely on his trustworthiness and fitness as a lawyer, in addition to failing to inform the State Bar of Nevada of disciplinary sanctions imposed by another jurisdiction and failing to respond to a Supreme Court Order to Show Cause.

 

This is an automatic review of a Southern Nevada Disciplinary Board hearing panel’s recommendation that attorney Michael Woodbury be disbarred from the practice of law. The recommended disbarment is based on Woodbury’s conviction of one misdemeanor count of annoying or molesting a minor, his failure to inform the state bar of disciplinary sanctions imposed by the California State Bar, and his failure to respond to this court’s order to show cause.

 

The State Bar of Nevada first became aware of possible misconduct by Woodbury in June 2006, when it received notification from the State Bar of California that Woodbury had tendered his resignation with charges pending. In response to the Nevada bar’s inquiry, Woodbury explained that he had pleaded nolo contendere on January 3, 2006, to one misdemeanor count of child annoyance and that the crime involved a male between 14 and 15 whom he had known for several years. Woodbury further expressed his hope that the Nevada bar would not disbar him.

 

The state bar obtained court documents from California stating that Woodbury and the boy developed a friendship while attending the same church, that the boy would often sleep in the defendant’s bed with him, that approximately 15 times Woodbury had the boy undress, and that on three occasions Woodbury had inappropriately touched him. Woodbury ultimately served 120 days in the Sacramento County Jail.

 

After the Nevada bar filed an SCR 111 petition, we ordered Woodbury to show cause why he should not be temporarily suspended and referred for formal disciplinary proceedings.1  Woodbury failed to respond to the order to show cause, and we issued an order temporarily suspending Woodbury and referring the matter to the Southern Nevada Disciplinary Board for the initiation of disciplinary proceedings. A formal disciplinary complaint was then filed by the state bar, and Woodbury failed to file an answer.

 

On the day before the scheduled November 8, 2007 hearing, Woodbury faxed a letter to the state bar, apologizing for his failure to attend and asking for leniency. The panel ultimately concluded that Woodbury violated SCR 114 in failing to inform the state bar of discipline imposed on him in another jurisdiction, RPC 8.1 (failure to respond to a disciplinary authority) in failing to respond to this court’s order to show cause, and RPC 8.4(b) (criminal misconduct) with his criminal conduct. Accordingly, the panel recommended disbarment.2

 

Having reviewed the record, we conclude that clear and convincing evidence supports the panel’s findings and recommendations.3 Woodbury’s criminal misconduct resulting in the California nolo contendere misdemeanor plea reflects adversely on his trustworthiness and fitness as a lawyer.4 Further, Woodbury failed in his duty, under SCR 114, to notify the state bar of disciplinary sanctions imposed by another jurisdiction. Finally, Woodbury violated his duty, under RPC 8.1, to respond to this court’s lawful demand for information.

 

Accordingly, Woodbury is disbarred from the practice of law in this state. Woodbury and the state bar shall comply with SCR 115 and SCR 121.1.

 

 

In re: Kimberly L.S. Pugh

Bar No: 6784

Docket No: 50219

Filed March 19, 2008

 

ORDER IMPOSING RECIPROCAL DISCIPLINE

 

Reciprocal public reprimand granted based upon Arizona discipline where attorney represented a wife in a criminal probation matter and then subsequently represented the husband in divorce and custody proceedings.  

 

This is a petition under SCR 114 for reciprocal discipline of attorney Kimberly L.S. Pugh, based upon an informal reprimand imposed on Pugh by the Disciplinary Commission of the Arizona Supreme Court.

 

On November 16, 2007, we ordered a stay of this petition, pending the Arizona Supreme Court’s determination of Pugh’s petition for special action, which challenged the commission’s discipline order. On January 22, 2008, state bar counsel filed a motion to terminate the stay and impose reciprocal discipline pursuant to the previously filed SCR 114 petition. Pugh has not filed any opposition to this motion or to the original SCR 114 petition.5

 

Pugh received an informal reprimand in Arizona based on her violation of Arizona’s equivalent to Nevada Rule of Professional Conduct 1.9 (duties to former clients). Pugh had previously represented a wife in a criminal probation matter and subsequently represented the husband in divorce and custody proceedings. The Arizona disciplinary commission found no aggravating factors and several mitigating factors: absence of a prior disciplinary record, absence of a selfish or dishonest motive, cooperation with the disciplinary board, and inexperience in the practice of law.

 

SCR 114(4) provides that this court shall impose identical reciprocal discipline unless the attorney demonstrates or this court finds that one of the four exceptions applies. None of the exceptions applies to this case, and so we grant the petition for reciprocal discipline. Accordingly, Pugh is hereby publicly reprimanded for her violation of RPC 1.9.6

 

In re:  Joe M. Laub

Bar No: 3664

Docket No: 49211

Filed March 5, 2008

 

ORDER IMPOSING PUBLIC REPRIMAND

 

Supreme Court upholds findings that Laub over-delegated responsibilities to nonlawyer staff and failed to properly supervise his Carson City office, resulting in the unauthorized practice of law by Laub’s paralegal. While additional steps must be taken to ensure adequate supervision in the Carson City office, Laub had already taken significant steps to change office policy, warranting a reduced sanction of a Public Reprimand.

 

This is an automatic review of a Northern Nevada Disciplinary Board hearing panel’s recommendation that attorney Joe M. Laub be suspended for six months and one day (thus requiring reinstatement proceedings under SCR 116) for violations of RPC 5.3 (responsibilities regarding non-lawyer assistants) and RPC 5.5 (unauthorized practice of law). We agree that the violations found by the panel are supported by clear and convincing evidence, but we conclude that the recommended discipline is too harsh and that a public reprimand, together with payment of the disciplinary proceeding’s costs, is sufficient to serve the purposes of attorney discipline.  

 

FACTS

 

Laub was suspended for six months in 2002. Two patterns of conduct formed the primary basis for this discipline, one of which involved Laub’s over-delegation to nonlawyer staff. Evidence in the previous case revealed that Laub routinely permitted employees who were not licensed in Nevada to conduct initial client meetings, including making decisions about whether to represent potential clients and advising clients regarding the merits of their cases. The evidence further demonstrated that Laub’s employees performed almost all work on the clients’ cases with little or no supervision by a Nevada-licensed attorney. In some instances, these employees were paralegals, and in others, they were lawyers admitted elsewhere, but not in Nevada.

 

During and after Laub’s suspension, which was effective from January to July 2002, the firm instituted several policies in an effort to ensure compliance with the rules of professional conduct. First, only lawyers could conduct an initial consultation and make the decision whether to represent a client. Next, the firm developed a “dos and don’ts” flyer, which in pertinent part requests clients to schedule consultations with an attorney approximately every 30 days. Also, staff was instructed that any legal questions must be addressed to a lawyer. Another practice that was commenced involved weekly meetings between the lawyers and staff to review the firm’s cases. Finally, the firm hired additional lawyers for these duties, apparently doubling the firm’s number of Nevada-licensed attorneys. But these policies were not formally reduced to writing, and no employees’ manual was prepared that collected the firm’s policies.

 

Laub’s firm currently maintains four offices, located in South Lake Tahoe, Truckee, Reno, and Carson City. Laub testified that his usual practice is to spend the mornings in the Carson City office and the afternoons in the Reno office. The Carson City office does not have any other lawyer assigned to it on a permanent basis; rather, Laub has contracted with a Carson City lawyer to be available to meet with clients and prospective clients in the afternoons when Laub is in Reno. The permanent full-time staff in the Carson City office consists of a paralegal, who was admitted to the Florida bar in 1968 but is not admitted to the State Bar of Nevada, and his wife, who serves as a receptionist and legal secretary.

 

The grievant in this matter, Leslie Carlen, was injured when her car was rear-ended by another vehicle. She was taken by ambulance to the hospital and was then released. The next day, a Friday, a friend referred her to Laub’s firm. Carlen called and spoke with the receptionist and made an appointment for 2:00 p.m. that afternoon.

 

The receptionist testified that Carlen was fairly upset during the phone call, and that she insisted on seeing someone that day and did not wish to wait through the weekend. But a few minutes before 2:00 p.m. (well after Carlen would have left for the appointment), the contract attorney called and said that he would be unable to keep the appointment. The receptionist attempted to contact Laub in the Reno office to see if he could return to meet with Carlen but was unable to reach him.

 

When Carlen arrive for the appointment, the receptionist, who was aware of the firm’s policy that prospective clients meet only with attorneys, felt sorry for Carlen and did not tell her that the appointment could not be kept and instead brought her to the paralegal, introducing him as the office manager and paralegal.

 

The paralegal also testified that he made an exception and met with Carlen because she seemed stressed and in pain, and he did not want to make her wait until the following week to speak to someone. He stated that he thought it would be permissible for him to meet with the client on this one occasion, obtain information about the case, transmit the information to Laub the following Monday, and then arrange a meeting between Carlen and Laub in the near future if Laub believed that the representation should be undertaken. He stated that he simply took notes about her accident, her insurance coverage, and her medical treatment to date. He also indicated that he showed her the firm’s contingency fee agreement but did not explain any of its terms, and she signed it. According to the paralegal, this fee agreement was not signed, at that point, by anyone at the firm. The paralegal gave Carlen a new client’s folder that included business cards for him and Laub, the “dos” and “don’ts” flyer, and a copy of the contingency fee agreement with only her signature.

 

On the following Monday, the paralegal met with Laub and went over notes concerning his meeting with Carlen, but he did not tell Laub that the contract attorney was not present for the consultation. After discussing Carlen’s case, according to the paralegal, Laub signed the contingency fee agreement and the initial representation letters, including a letter to Carlen, which was mailed to Carlen along with the signed contingency fee agreement.

 

Notably, according to the paralegal, the contract attorney, and Laub, nothing about Laub’s Monday-morning meeting with the paralegal was different from the usual situation when the contract attorney performed an initial consultation: the paralegal customarily attended such consultations and took notes, and the following business day, he would review the notes with Laub. The contract attorney routinely had no direct contact with Laub regarding these initial consultations; only if a case presented an unusual circumstance would the contract attorney directly discuss an initial consultation with Laub.

 

According to Carlen, she was not told that the paralegal was not a Nevada-licensed lawyer, and she assumed during their meeting that he was a lawyer. She indicated that he discussed her case with her, told her about the statute of limitations, went over the contingency fee agreement with her, and mentioned that she had good coverage under her own auto insurance policy that would pay for her medical expenses until she obtained a settlement from the responsible driver. She also testified that Joe Laub’s signature was already on the contingency fee agreement that she signed.

 

Carlen terminated Laub’s services in March 2006, because she was dissatisfied that the firm would not handle her property damage claim; rather, it limited its representation to her bodily injury claim.  She then retained new counsel, who informed her that the paralegal was not a Nevada-licensed attorney and encouraged her to file a disciplinary complaint against Laub. She did so, with her new counsel’s assistance, in late May or early June 2006.

 

Laub did not learn that the contract attorney had not been present until the bar grievance was received in June 2006. Laub admonished both the receptionist and the paralegal for their conduct once he learned of it and emphasized to all staff the importance of having attorneys conduct initial consultations and advise clients of their rights.

 

In response to a panel member’s question about why Laub’s policies, set in place after his 2002 suspension, were not written or compiled into an employee manual, Laub stated that most of his staff have been with the firm for over 10 years, and that he was confident that they were aware of the policies. He acknowledged that his protective measures had not worked in this instance and accepted responsibility for the failure, but he asserted that except for this one incident, the measures implemented since 2002 have adhered to ethical requirements. He argues that if any discipline was warranted, then it should be only a reprimand.

 

The panel unanimously found that Laub had violated RPC 5.3 and RPC 5.5. As to the recommended discipline, four members voted for the six-month-plus-one-day suspension, while the remaining member voted for a six-month suspension, which would not require reinstatement proceedings.

 

In determining the appropriate discipline, the panel considered Laub’s 2002 six-month suspension and recommended the next step: a suspension that would require reinstatement proceedings.  This automatic review followed.

 

DISCUSSION

 

As we recognized in In re Stuhff, “[t]hough persuasive, the [disciplinary panel’s] findings and recommendation are not binding on this court. This court must review the record de novo and exercise its independent judgment to determine whether and what type of discipline is warranted.7 To support the imposition of discipline, the panel’s findings must be supported by clear and convincing evidence.8”

 

The panel concluded that Laub had violated two ethical rules, RPC 5.3 (supervision of nonlawyer employees) and RPC 5.5 (unauthorized practice of law). We consider each in turn. RPC 5.3 sets forth a lawyer’s obligations concerning nonlawyer employees, and requires the lawyer to take reasonable measures to ensure that a nonlawyer employee acts in conformity with professional conduct rules:

 

With respect to a nonlawyer employed or retained by or associated with a lawyer:

 

(a)           A partner, and a lawyer who individually or together with other lawyers possess comparable managerial authority in a law firm shall make reasonable efforts to ensure the firm has in effect measures giving reasonable assurance that the person’s conduct is compatible with the professional obligations of the lawyer;

(b)           A lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer; and

(c)            A lawyer shall be responsible for conduct of such a person that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if:

 

1.     The lawyer orders or, with the knowledge of the specific conduct, ratifies the conduct involved; or

2.     The lawyer is a partner or has comparable managerial authority in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.

 

The Kansas Supreme Court has held that this rule requires a supervising lawyer to ensure that nonlawyer employees do not give legal advice to clients.9 The Colorado Supreme Court has reached a similar conclusion.10 But the mere fact that an employee acted improperly does not necessarily result in lawyer discipline; the lawyer is not per se vicariously responsible for an employee’s misconduct.11

 

Here, the unrebutted testimony of Laub, the receptionist, and the paralegal is that Laub was unaware that the firm’s policies had not been followed in Carlen’s case until he received the bar complaint. It thus appears that any violation was not willful, and also that Laub did not ratify or condone his employees’ conduct.

 

On the other hand, Laub could have done more to ensure that his employees conformed their conduct to the required standard. Written policies or a written employee handbook setting forth the policies and the reasons for them would have resulted in a useful tool for employees faced with the dilemma present in this case, and moreover, having these policies in writing would have reinforced their importance. Also, it appears that the Carson City office’s practice for initial consultations was flawed. Although the contract attorney in almost all instances met with the client when Laub could not, and so a lawyer was available to answer any questions the client might have, the contract attorney then had no further role in the case, unless at some point he was assigned the litigation for that client. By failing to require any communication between the contract attorney, who conducted the initial consultation, and Laub, who after that point assumed primary responsibility for Carson City files, the firm’s general practice allowed the instant case to “fall through the cracks.” Had the contract attorney and Laub conferred regularly about the initial consultations performed, then Laub would have been aware that Carlen had not met with a lawyer, and he could have scheduled an appointment immediately to review her case. It thus appears that clear and convincing evidence supports the panel’s finding that Laub violated RPC 5.3.

 

RPC 5.5 provides, in pertinent part, “A lawyer shall not…[a]ssist another person in the unauthorized practice of law.”  Here, the paralegal was not a licensed Nevada lawyer, and so he was prohibited from giving legal advice. While the paralegal maintained that he did not give Carlen any legal advice, but only took notes on her case to discuss with Laub, the panel apparently found Carlen’s testimony on this point to be more credible: that the paralegal discussed the statute of limitations, her insurance coverage, and had her sign the contingency fee agreement, which at least in her mind resulted in the establishment of an attorney-client relationship. It thus appears that the panel properly found, by clear and convincing evidence, that the paralegal’s conduct overstepped permissible bounds, and that Laub’s failure to properly supervise the Carson City office in this instance contributed to the paralegal’s unauthorized practice of law, thereby violating RPC 5.5.

 

It appears, however, that the recommended sanction is overly harsh. The panel’s statement of why the majority decided to impose a lengthy suspension requiring reinstatement proceedings is quite short, and it simply indicates that the panel believed that it should go a step further than the six-month 2002 suspension. But the 2002 suspension was based on significant misconduct in addition to Laub’s violation of the supervision and unauthorized practice rules. Also, under the firm’s policies at the time of the conduct leading to the 2002 suspension, initial client intake was performed almost exclusively by non-lawyers, and many clients had little or no contact with a lawyer during the entire time their cases were being handled. As a result, the unauthorized practice of law was the firm’s norm.

 

The evidence in this matter indicates that, while additional protective steps must be taken to ensure adequate supervision in the Carson City office, significant steps have been taken by the firm since the 2002 suspension and have resulted in much greater attorney oversight.  We therefore conclude that a lengthy suspension is not necessary in this case. Rather, a public reprimand is sufficient to serve the purposes of attorney discipline.

 

Accordingly, we hereby publicly reprimand attorney Joe M. Laub for violations of RPC 5.3 and RPC 5.4. Also, Laub shall pay the costs of the disciplinary proceeding.

 

 

SOUTHERN NEVADA DISCIPLINARY BOARD

 

In Re: Joseph D. Bunin

Bar No.: 5594

Case No: 07-032-1245

Issued: January 31, 2008

 

Public reprimand and costs ($200) are warranted where attorney was dilatory in responding to the state bar and did not substantively address the issues raised.

 

PUBLIC REPRIMAND

 

TO: JOSEPH D. BUNIN, ESQ.

 

Jason Garner (hereafter “Garner”) retained you in or about October 2004 in a personal injury and/or worker’s compensation matter stemming from an incident earlier that year in Clark County, Nevada.

 

After receiving Garner’s grievance in January 2007, the State Bar of Nevada initially sent three (3) certified letters with return receipt requested (dated January 10, January 30, and February 22, 2007, with signed receipts returned to the Office of Bar Counsel) to you requesting your written response to Garner’s grievance. The February 22, 2007, correspondence warned you that if you did not provide a response, this matter would be presented to a screening panel of the Southern Nevada Disciplinary Board with the assumption that Garner’s allegations were true.

 

Although you provided a partial response to the state bar in a letter dated March 9, 2007, you did not address some issues in connection with Garner’s grievance. Accordingly, on April 17, 2007, the state bar sent you a letter asking you to provide information regarding those issues by May 1, 2007.

 

On or about April 30, 2007, you sent to the Office of Bar Counsel a facsimile requesting an extension of time to provide a response. You received an extension until May 16, 2007.

 

However, you neither corresponded further with the state bar nor provided a response to the state bar’s letter of April 17, 2007.

 

When the instant grievance was presented on June 5, 2007, to a screening panel of the Southern Nevada Disciplinary Board, you still had not provided a substantive response to the state bar’s letter of April 17, 2007.

 

In mitigation, you ultimately cooperated with the state bar and accepted responsibility for not responding in a timely manner to the Office of Bar Counsel.

 

In light of the foregoing, you violated Rule of Professional Conduct 8.1(b) (Bar Admission and Disciplinary Matters) and are hereby PUBLICLY REPRIMANDED.

 

LETTER OF CAUTION12

 

File No. 07-148-0349

 

A Letter of Caution is a dismissal of a grievance. However, a screening panel recommended that this Letter of Caution be published as a learning tool for other Nevada lawyers that are requested to hold monies in their trust account.13

 

Dear Attorney A:

 

A screening panel of the Southern Nevada Disciplinary Board has reviewed the above-referenced grievance file. The panel determined that it would not take formal disciplinary action against you. Accordingly, the panel directed that this grievance be dismissed and the file be closed.

 

          However, the panel instructed the State Bar of Nevada to caution you regarding your ethical obligations. This letter shall constitute delivery of that Letter of Caution. The relevant facts follow.

 

The grievant entered into a Contract for Services with your client, Client B. Client B was to perform any and all work necessary for permits and a site plan for a nightclub in consideration of $25,000.

 

The contract, signed by both individuals, stated that $10,000 would be deposited into your trust account to hold for the benefit of both parties. Upon instruction by both parties and at the completion of work, the monies were to be delivered to Client B.

 

The grievant alleged that Client B breached the contract by failing to perform the services outlined. The grievant requested that you return the $10,000 to him, but you informed him that you had already distributed it to Client B.

 

You responded to the state bar by stating that your recollection was that the grievant authorized you to give Client B $10,000, which you did. You stated that it was not until the grievant appeared in your office demanding the $10,000 that you learned Client B breached the contract.

 

Further, you informed a state bar investigator that you deposited a $10,000 check from Client B that was to be used to pay the grievant back, but it bounced. You stated that on December 20, 2007, you gave the grievant $2,500 of your own money and informed him the remaining $7,500 would be distributed to him when Client B came forward with the money. You further stated that your intention was to distribute the entire sum to the grievant within 30 days, whether Client B pays you the money or not.

 

You telephoned the investigator the day of the screening hearing and informed her that Client B did deposit $7,500 into your trust account. A check for $7,500 was given to the grievant and he was made whole.

 

While you stated that that you did not sign the contract, you were still put on notice of the intention of both parties to hold the money in your trust account and not deliver the funds to Client B until there was instruction by both parties that the work was completed.14

 

Respectfully, perhaps the better practice in this instance would have been to have written instruction from the grievant authorizing the distribution of funds to Client B so there would not have been any confusion about whether the funds should have been distributed.

 

The panel was very concerned with your conduct in this case and contemplated the issuance of a Letter of Reprimand for violation of Rule of Professional Conduct (RPC) 1.15 (safekeeping property).

 

However, the panel took into account your lengthy legal career and unblemished discipline record, your promptness in rectifying the situation and the lack of client harm and concluded that instead, you should be cautioned about your ethical obligations under the above referenced rule.

 

ENDNOTES

 

  1. See SCR 111(9).

  2. The rules governing professional conduct were substantially revised close to the time the state bar instituted the underlying complaints against Woodbury. Although the former rules were cited along with the new rules by the panel and the state bar, for clarity, this order references only to the new rules; other than renumbering, no significant changes were made to the provisions relevant to this matter. See former SCR 200 and former SCR 203.

  3. In re Drakulich, 111 Nev. 1556, 1566, 908 P.2d 709, 715 (1995)

  4. See Attorney Grievance v. Thompson, 786 A.2d 763 (Md. 2001) (holding that criminal conviction for stalking a 13-year-old boy adversely reflected on lawyer’s honesty, trustworthiness and fitness as a lawyer in light of special protection accorded to children by society, and citing cases from several jurisdictions in support of its conclusion).

  5. Based on the fact that the Arizona Supreme Court has reached a final determination on Pugh’s petition, we vacate the stay imposed by our

          November 16 order.

  1. A public reprimand is the closest equivalent discipline in Nevada to Arizona’s informal reprimand.

  2. 108 Nev. 629, 633, 837 P.2d 853, 855 (1992).

  3. In re Drakulich, 111 Nev. 1556, 1566, 908 P.2d 709, 715 (1995).

  4. Matter of Farmer, 950 P.2d 713 (Kan. 1997).

  5. People v. Fry, 875 P.2d 222 (Colo. 1994) (failing to supervise legal assistant resulted in assistant engaging in unauthorized practice of law).

  6. Matter of Galbasini, 786 P.2d 971 (Ariz. 1990).

  7. See SCR 121(Confidentiality) as amended eff. March 1, 2007.  

  8. See SCR 102(8) (Types of discipline: Letter of caution).

  9. See Achrem v. Expressway Plaza Limited Partnership, 112 Nev. 737, 917 P.2d 447 (1996).