In re: Behles ( 2020 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT May 29, 2020
_________________________________
Christopher M. Wolpert
Clerk of Court
In re: JENNIE DEDEN BEHLES, No. 19-2117
(D.C. No. 1:19-MC-00019-WJ-KG-LF)
Attorney - Appellant. (D. N.M.)
_________________________________
ORDER AND JUDGMENT *
_________________________________
Before BACHARACH, BALDOCK, and EID, Circuit Judges.
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This appeal grew out of an attorney’s disbarment. The attorney, Ms.
Jennie Deden Behles, practiced in New Mexico for almost 50 years until
she was disbarred in New Mexico state court. This disbarment led New
Mexico’s federal district court to disbar Ms. Behles, prompting her to
appeal the disbarment in federal court 1 on the ground that procedural
*
Oral argument would not materially help us to decide this appeal. We
have thus decided the appeal based on the appellate briefs and the record
on appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G).
This order and judgment does not constitute binding precedent except
under the doctrines of law of the case, res judicata, and collateral estoppel.
But the order and judgment may be cited for its persuasive value if
otherwise appropriate. Fed. R. App. P. 32.1(a); 10th Cir. R. 32.1(A).
1
In a separate proceeding, our court disbarred Mr. Behles from
practicing in this appellate court. Mr. Behles contends that our order of
disbarment does not preclude her challenge to the district court’s order of
deficiencies had tainted the disbarment in state court. We reject Ms.
Behles’s procedural challenges.
1. Notice
Ms. Behles’s procedural challenges include the adequacy of the
notice provided in the state disciplinary proceedings. This challenge stems
from the federal district court’s requirement for attorneys to remain in
good standing.
Ms. Behles concedes that she did not remain in good standing in New
Mexico state court. See D. N.M. L. Civ. R. 83.2(c). But she points out that
she could obtain relief from this requirement through clear and convincing
evidence that the notice in state court was so deficient that it deprived her
of due process. D. N.M. L. Civ. R. 83.2(d)(2)(A).
The notice issue stems from the relationship between the disciplinary
board’s findings, Ms. Behles’s fee contract with her client, and the client’s
payments to Ms. Behles. Ms. Behles’s client, Dubalouche, LLC, leased a
commercial building to a company that hired a contractor to renovate. The
renovations sparked discord, with Dubalouche alleging damage to the
building and the contractor and subcontractors alleging nonpayment and
asserting liens. Ms. Behles entered the fray as the attorney for Dubalouche.
disbarment. For the sake of argument, we assume that Ms. Behles is
correct.
2
She entered a fee agreement with Dubalouche and obtained a $7,500
retainer. According to Ms. Behles, her hourly fees outstripped the amount
in the retainer. Given the need for additional legal work, Dubalouche
agreed to pay Ms. Behles a flat fee of $25,000 plus a contingency fee for
any recovery on the property-damage claims.
After paying Ms. Behles the flat fee, Dubalouche deposited over
$150,000 in the court’s registry and litigated the validity of the liens. The
litigation settled, and $19,239 remained in the court’s registry for a refund
to Dubalouche. Rather than forward the money to Dubalouche, Ms. Behles
took it. She argues that this money was owed for attorney fees. Dubalouche
disagreed and filed a bar complaint that blossomed into disciplinary
charges.
Ms. Behles points out that the disciplinary charges stemmed from the
circumstances surrounding the $7,500 retainer and Dubalouche’s payment
of the $25,000 as a flat fee. Given the origin of the dispute, Ms. Behles
concedes that the retainer and payment of the $25,000 were relevant; but
she alleges inadequate notice that the retainer and the $25,000 payment
would factor into the disciplinary charges. In support of this allegation,
she cites the disciplinary board’s “specification of charges.”
The Fourteenth Amendment’s Due Process Clause entitled Ms.
Behles to adequate notice. In re Ruffalo, 390 U.S. 544, 550 (1968).
Because notice involves a matter of law, our review is plenary. In re
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Martin, 400 F.3d 836, 841 (10th Cir. 2005). Conducting plenary review, we
conclude that the notice was adequate.
The disciplinary board’s specification of charges stated that
• Dubalouche had agreed to pay a $25,000 flat fee and
• Ms. Behles had falsified records to hide her theft of the
$19,239 in the court registry.
Ms. Behles argues that she knew only that the disciplinary proceedings
would center on her taking of the $19,239 remaining in the court’s
registry. But the dispute over the $19,239 turned on whether Ms. Behles
was owed any attorney fees, which stemmed from Dubalouche’s payment
of the $7,500 retainer and $25,000 flat fee.
From the outset, Dubalouche had alleged full payment based on the
$7,500 retainer and flat fee of $25,000. No one could determine whether
Ms. Behles was entitled to the $19,239 without considering Dubalouche’s
payment of the retainer and flat fee. Indeed, Ms. Behles herself
underscored the interrelationship between her taking of the $19,239 and
Dubalouche’s payment of the $7,500 retainer and $25,000 flat fee:
The Specification charged Behles with taking money, the
$19,239.00, to which she was not entitled. The uncontroverted
and uncontradicted evidence showed that Dubalouche owed
Behles money and that Dubalouche was virtually always
delinquent in keeping the payment of attorney fees current. As a
necessary and an integral part of showing Behles was entitled to
the money, it was necessary to address history of billing and
credits on the Dubalouche account. The accounting showed that
Behles was owed attorney fees when she took the $9,239.00 and
that even with Behles crediting the $19,239.00, Dubalouche still
4
owed her attorney fees. The history of the Dubalouche account
could not have been properly presented without showing the
$7,500.00 and the $25,000.00 went to satisfy amounts owed
Behles for the work that she performed for Dubalouche.
Aplt. App., Vol. I at 36 (Jennie D. Behles Reply to the Disciplinary
Board’s Response Opposing the Motion to Strike Portions of Requested
Findings of Fact & Conclusions of Law at 3 (June 7, 2018)).
The disciplinary board and New Mexico Supreme Court also
concluded that Dubalouche’s payments had satisfied Dubalouche’s
attorney-fee obligations. The disciplinary charges did not concern the
quality of Ms. Behles’s work or her entitlement to the retainer or flat fee.
The disciplinary charges instead centered on Ms. Behles’s taking of the
$19,239 even though she had been fully paid by the retainer and flat fee.
Neither the disciplinary board nor the New Mexico Supreme Court
attributed any wrongdoing to Ms. Behles for acquiring the retainer or flat
fee. The wrongdoing consisted solely of her taking the $19,239 after
obtaining the retainer and flat fee. We thus reject Ms. Behles’s argument
involving inadequate notice as to consideration of the retainer and flat
fee. 2
2 In discussing the procedural background, Ms. Behles also states that
the disciplinary board’s counsel had limited the scope of the investigation
to a seven-month period in 2016. Appellant’s Opening Br. at 3-6. But Ms.
Behles never makes an argument as to notice of the applicable time-frame.
5
2. Jurisdiction to Consider Ms. Behles’s Fee Contract with
Dubalouche
Ms. Behles also argues that the disciplinary board and New Mexico
Supreme Court exceeded their jurisdiction by deciding the parties’
respective rights and obligations under the fee contract. According to Ms.
Behles, contractual issues should be resolved through civil litigation.
The federal district court rejected this argument, as we do.
Contractual disputes are often litigated in state district court through civil
cases. But the availability of civil litigation for fee disputes does not bar
disciplinary proceedings growing out of a contract:
[W]hile attorneys at law are privileged to make contracts with
their clients for remuneration for services, yet the court is vested
with a supervisory control over its officers, and is authorized to
investigate dealings between those officers and their clients, to
see that the conduct of its officers is fair, honest, and
straightforward, and that their clients are neither deceived nor
defrauded in their relations with their attorneys . . . .
Such an argument would have been meritless. Ms. Behles is
apparently referring to a letter that the disciplinary board’s counsel wrote,
requesting complete accounting records:
To date, I have yet to receive complete trust accounting
records from you regarding your client, Dubalouche, LLC.
Specifically, provide your general ledger, individual ledger,
trust account bank statements with imaged checks from January
1, 2016 through July 31, 2016, corresponding reconciliations
(i.e. reconciliations performed from January 1, 2016 through
July 31, 2016) and copies of all invoices received for costs paid.
Aplt. App., Vol. I at 5 (Letter from Anne L. Taylor, Assistant Disciplinary
Counsel to Jennie Behles, Esq. (July 20, 2017)). The disciplinary board
never said or implied that it was confining the disciplinary charges to
events taking place during this seven-month period.
6
In re Levinson, 197 A.D. 46, 49 (N.Y. Sup. Ct., App. Div. 1921), quoted
with approval in In re Burns, 40 P.2d 105, 110 (Idaho 1935).
3. Number of Justices Participating in the Decision
When Ms. Behles’s case was in the New Mexico Supreme Court, the
court had five justices. But only four participated in the decision. One of
the justices (the Honorable Michael Vigil) recused, and the Court
designated a retired justice (the Honorable Charles Daniels) to replace the
recused justice. But Justice Daniels ultimately did not participate. 3
Ms. Behles argues that the absence of a fifth justice created a denial
of due process. The district court properly rejected this argument: The fifth
justice had recused, the replacement had died, and the four remaining
justices were unanimous. In these circumstances, Ms. Behles obtained due
process through the unanimous decision of all non-recused justices on the
court.
Affirmed. 4
Entered for the Court
Robert E. Bacharach
Circuit Judge
3
He died on September 1, 2019, and the court issued a written
decision twenty-two days later.
4
We grant Ms. Behles’s motion and take judicial notice of the New Mexico
Supreme Court’s order and opinion from her disciplinary proceedings.
7