In the Matter of Misty Oaks Paxton ( 2021 )

In the Supreme Court of Georgia
Decided April 19, 2021
S21Y0696. IN THE MATTER OF MISTY OAKS PAXTON.
PER CURIAM.
This disciplinary matter is before the Court on the petition for
voluntary discipline filed by Misty Oaks Paxton (State Bar No.
127089) before the issuance of a formal complaint, pursuant to Bar
Rule 4-227 (b). In her petition, Paxton, who has been a member of
the Bar since 2009, admits violating Rules 1.2 (a), 1.2 (c), 1.3, and
1.5 of the Georgia Rules of Professional Conduct found in Bar Rule
4-102 (d), and requests a State Disciplinary Review Board
reprimand. The State Bar responded, recommending that the Court
accept the petition and requested sanction. We agree to accept the
petition and impose a Review Board reprimand.
In her petition, Paxton admits the following. Paxton, a solo
practitioner, had a relationship with a nationwide law firm
marketing loan modification services called the Kealy Law Center
(“KLC”), whereby KLC would refer to Paxton people in Georgia who
contacted KLC for services. In December 2017, KLC referred a 64-
year-old disabled veteran who suffered from PTSD and major
depression to Paxton. The client was in danger of losing his home
to foreclosure. KLC provided a retainer agreement on Paxton’s
letterhead to the client. The agreement required payment of an
initial retainer and monthly payments, and also required the client
to timely respond to requests and inquiries. The client executed the
agreement, returned it to KLC, and began making payments to
KLC.
On May 2, 2018, a KLC employee faxed a letter of authority for
third-party authorization to the client’s mortgagee, so that Paxton
could speak to the mortgagee about loan modification. On May 10,
a KLC employee contacted the mortgagee and learned that it would
not consider loan modification for the client because he had already
modified his mortgage three times, but that he would qualify for a
repayment plan. Paxton did not inform the client that he did not
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qualify for modification, but instead proceeded to process his file for
a repayment plan with the mortgagee.
During the same time period, the client failed to respond to
requests and inquiries from KLC and failed to make all agreed-to
monthly payments, resulting in KLC notifying the client in June
2018 that his case would be closed with the firm if payment was not
received within 10 days. On June 29, KLC notified the client that
his case with the firm was being closed for non-payment. Neither
Paxton nor KLC ever sent a mortgage modification package to the
client’s mortgagee between January and June of 2018.
On July 24, 2018, the mortgagee notified the client that his
home was subject to a foreclosure sale scheduled for September 4,
2018. On July 31, the client notified KLC about the pending
foreclosure sale and date, and signed another attorney-client
agreement with KLC, agreeing to pay his outstanding balance and
a “requalification fee,” totaling $900, to have his case re-opened. On
August 1, Paxton wrote to the client, introducing herself as “the local
attorney in the State of Georgia, working . . . on your file for a loan
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modification/foreclosure defense.” The client paid $500 to KLC on
August 3, but did not provide necessary documentation, and he
spent several days that month in the hospital with a head injury.
On August 31, the client called KLC and expressed concern because
his home was still being advertised for the foreclosure sale on
September 4; KLC sent the client an email informing him that
nothing would be done for him because he had not paid the full
amount owed; and the client paid the additional $400 to KLC. That
same day, KLC emailed Paxton about the matter, and Paxton
emailed the client, informing him that she could not travel to
Brunswick to file for bankruptcy to head off the foreclosure because
she was out of town, but that she had completed and attached an
Emergency Chapter 13 Bankruptcy petition, which she informed
him he needed to file by the morning of September 4. The client was
unable to print the petition, and therefore filled out his own pro se
petition and filed it on September 5. The client’s home was sold at
the scheduled foreclosure sale on September 4.
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In October 2018, the client contacted Atlanta Legal Aid, and a
Legal Aid attorney sent written requests to Paxton for information
regarding the client’s case on October 18 and November 1, 2018 and
again on February 13, 2019. Paxton finally responded on February
18, 2019, stating that she was “in the middle of loan modification
efforts” when the mortgagee foreclosed on the client’s home. The
Legal Aid lawyer asked Paxton for additional information and
documents, but Paxton never responded. Nevertheless, Legal Aid
was able to work out a deal with the mortgagee permitting the client
to rent-to-own his home.
The client filed a grievance against Paxton in April 2019. On
October 30, 2020, Paxton refunded the client’s money as requested
by the Assistant General Counsel to the Bar.
Paxton asserts that her failures were based on a business
model that left too much of the handling of client matters in the
hands of non-lawyers several states away whom she did not
supervise or employ, which caused the client’s case to fall through
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the cracks to his detriment. She asserts that she has terminated her
relationship with KLC.
Paxton admits that she violated Rule 1.2 (a), insofar as she
failed to abide by her client’s decisions concerning the scope and
objectives of representation; she violated Rule 1.2 (c), insofar as the
limitations on her representation of the client were unreasonable;
she violated Rule 1.3, insofar as she was not sufficiently diligent on
behalf of the client; and she violated Rule 1.5 (e), insofar as she did
not advise the client about the division of fees between her and KLC,
that division was not proportionate, and the total fee was
unreasonable. Paxton acknowledges that the maximum
punishment for a single violation of Rules 1.2 (a), 1.2 (c), and 1.3 is
disbarment, and that the maximum punishment for violating Rule
1.5 (e) is a public reprimand. Paxton asserts that generally, a
reprimand is appropriate under the American Bar Association
Standards for Lawyer Discipline for misconduct, such as hers, which
violated such rules out of negligence, rather than knowingly or
habitually. See, e.g., ABA Standards 4.42 and 4.63. Paxton
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concedes, in aggravation of punishment, that she has substantial
experience in the practice of law. See ABA Standard 9.22 (i). In
mitigation, Paxton asserts that she has no prior disciplinary record,
had no dishonest or selfish motive, has had a cooperative attitude
toward the disciplinary proceedings by submitting this petition for
voluntary discipline prior to commencement of formal Bar
proceedings, has otherwise exhibited good moral character, has a
positive reputation, and is remorseful. See ABA Standard 9.32 (a),
(b), (e), (g), and (l). Based on the foregoing, Paxton requests a
Review Board reprimand.
The State Bar filed a response consenting to Paxton’s petition
for voluntary discipline by Review Board reprimand. The Bar’s only
substantive addition was to submit the aggravating factor of
“vulnerability of victim,” see ABA Standard 9.22 (h), which also
applies in this matter.
Having reviewed the record, the Court agrees that the
imposition of a Review Board reprimand is an appropriate sanction
in this matter. See, e.g., In the Matter of Fisher, Case No. S21Y0582,
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2021 WL 769461, at *1-3 (decided Mar. 1, 2021) (accepting petition
for voluntary discipline and imposing a Review Board reprimand for
an attorney who repeatedly failed to appear at hearings on a client’s
foreclosure case, resulting in foreclosure of the client’s property in
violation of Rules 1.3, 1.4 (a) (3), and 9.3, where attorney had
substantial experience, but multiple mitigating factors existed); In
the Matter of Gantt, 305 Ga. 722, 722-723 (827 SE2d 683) (2019)
(accepting petition for voluntary discipline and imposing a Review
Board reprimand for an attorney who failed to timely perform work
on a client’s case and failed to adequately communicate with the
client in violation of Rules 1.2, 1.3, 1.4, and 1.5, where the attorney
had substantial experience and a prior disciplinary history, but
many similar mitigating factors existed); In the Matter of Brown,
296 Ga. 439, 439-441 (768 SE2d 456) (2015) (accepting petition for
voluntary discipline and imposing a Review Board reprimand for an
attorney who failed to timely contact an incarcerated client, failed
to serve the client with a motion to withdraw, and failed to ensure a
successor counsel was in place before withdrawing in violation of
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Rules 1.2 (a), 1.3, 1.4, and 1.16 (d), where there were many similar
mitigating factors and no aggravating factors). Accordingly, we
accept the petition for voluntary discipline and direct that Misty
Oaks Paxton receive a Review Board reprimand in accordance with
Bar Rules 4-102 (b) (4) and 4-220 (b).
Petition for voluntary discipline accepted. Review Board
reprimand. All the Justices concur.
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