in the Matter of William C. Nesbitt ( 2014 )

FINAL COPY
294 Ga. 480S14Y0126. IN THE MATTER OF WILLIAM C. NESBITT.
PER CURIAM.
This disciplinary matter is before the Court on the report and
recommendation of the special master, Shelby A. Outlaw, recommending that
William C. Nesbitt (State Bar No. 538301) be disbarred based upon his conduct
in setting up a law practice with a client who was not a lawyer and his financial
misconduct. Following the filing of a formal complaint, a timely answer, and
a consolidated pre-trial order, the special master held a lengthy evidentiary
hearing. The special master issued a detailed and comprehensive report and
recommendation, and neither party sought review before the Review Panel.
The special master found that Nesbitt agreed with a married couple who
were friends and clients, but who were not lawyers, to form the Nesbitt Law
Firm, LLC. The clients contributed funds for the establishment and running of
the law firm, one client was the firm’s chief financial officer, and both clients
were involved in the day-to-day business operations of the firm. No documents
memorialized the parties’ agreement regarding the partnership, and although the
clients expected to share in the profits of the firm, they did not receive any
profits or any repayment of the approximately $12,000 to $15,000 they
expended on behalf of the firm. The firm ultimately went out of business.
In addition to the law firm enterprise, Nesbitt obtained a loan of
approximately $15,000 from the clients to use to pay back taxes on a Florida
property that Nesbitt represented he owned. Nesbitt signed a promissory note
and agreed to grant the clients an interest in the Florida property as collateral for
the loan. However, the property was in fact owned wholly by Nesbitt’s
domestic partner, Sherry Cornwell; the property had been transferred to
Cornwell from Nesbitt’s mother. Because of this fact, Cornwell and Nesbitt
understood that Nesbitt had an equitable interest in the property. Eight months
after receiving the loan proceeds and executing the promissory note, Nesbitt
executed a mortgage after receiving an ultimatum from his client. Shortly
thereafter, the client discovered that Nesbitt did not own an interest in the
property and confronted Nesbitt via e-mail in August 2010. Nesbitt was
offended that his former friend would accuse him of fraud, testifying that his
client “could have been much more gracious than he was.” Nesbitt did not
respond to his client’s concerns or provide him with any explanation; nor did he
respond to seven demand letters sent by certified mail. In 2012 Nesbitt did have
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Cornwell quitclaim the Florida property to him, but he did not inform the clients
of the quitclaim deed.
Based on testimony and evidence Nesbitt presented in an effort to show
that he did not act improperly in connection with the loan for the Florida
property, the special master concluded that Nesbitt also acted deceitfully in other
transactions related to the Florida property. Specifically, the special master
found that the transfer of the Florida property from Nesbitt’s mother, who was
senile at the time, to Cornwell, was a sham transaction designed to avoid taxes
or probate; that Nesbitt and Cornwell misrepresented to Wachovia/Wells Fargo
Bank that they were married in order to obtain a loan on the Florida property;
that Nesbitt and Cornwell failed to disclose the existence of tax liens on the
property at the Wachovia/Wells Fargo closing; that Nesbitt and Cornwell failed
to pay off the tax liens with the loan proceeds; and that the final disbursements
from the loan were not taken to make improvements on the property until after
Nesbitt filed for bankruptcy, and thus Nesbitt had a line of credit in 2009 at the
time he was borrowing money from his clients to set up the law practice and pay
off the tax liens.
Based upon the conduct related to the clients, the special master found that
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Nesbitt, who was admitted to the Bar in 1982, violated Rules 1.8 (a), 5.4 (b), 5.4
(d), and 8.4 (a) (4) of the Georgia Rules of Professional Conduct found in Bar
Rule 4-102 (d). The maximum sanction for a violation of Rules 5.4 (b), 5.4 (d)
and 8.4 (a) (4) is disbarment, and the maximum sanction for a violation of Rule
1.8 (a) is a public reprimand.
The special master found the following factors in aggravation: (1) Nesbitt
had a dishonest or selfish motive; (2) Nesbitt engaged in a pattern of deceitful
or fraudulent misconduct; (3) Nesbitt committed multiple offenses; (4) Nesbitt
made false statements at the evidentiary hearing; (5) Nesbitt refused to
acknowledge the wrongful nature of his conduct; (6) the victims were vulnerable
as a result of the trust they reposed in Nesbitt; (7) Nesbitt has substantial
experience in the practice of law; and (8) Nesbitt has shown an indifference to
making restitution. The special master found one mitigating factor: that Nesbitt
had no prior disciplinary sanctions.
Having considered the record, the Court agrees with the special master
that disbarment is the appropriate sanction in this matter. Therefore, it is hereby
ordered that the name of William C. Nesbitt be removed from the rolls of
persons authorized to practice law in the State of Georgia. Nesbitt is reminded
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of his duties pursuant to Bar Rule 4-219 (c).
Disbarred. All the Justices concur.
Decided January 27, 2014.
Disbarment.
Paula J. Frederick, General Counsel State Bar, Rebecca A. Hall,
Assistant General Counsel State Bar, for State Bar of Georgia.
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