In the Matter of Carl S. Von Mehren ( 2021 )


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  • In the Supreme Court of Georgia
    Decided: August 24, 2021
    S21Y1097. IN THE MATTER OF CARL S. VON MEHREN.
    PER CURIAM.
    This disciplinary matter is before us on the Report and
    Recommendation of      Special    Master   Catherine   Koura,   who
    recommends that this Court (1) accept the petition for voluntary
    discipline filed by Respondent Carl S. Von Mehren (State Bar No.
    728840) pursuant to Bar Rule 4-227 (c) after the State Bar filed a
    formal complaint against him; and (2) impose a six-month
    suspension for Von Mehren’s admitted violations of Rules 1.3, 1.15
    (I) (a), and 1.16 (d) of the Georgia Rules of Professional Conduct
    found in Bar Rule 4-102 (d). Having reviewed the record, we agree
    to accept the petition and to impose a six-month suspension.
    According to the Special Master, Von Mehren, who has been a
    member of the Bar since 1987 and who asserts that he is not
    accepting new matters as he is in the process of winding down his
    practice to retire, seeks to resolve two separate grievances, State
    Disciplinary Board Docket (“SDBD”) No. 7195 and SDBD No. 7196.
    With regard to SDBD No. 7195, the record shows that Von
    Mehren conducted a real estate closing in which his clients were the
    purchasers of certain property. Pursuant to the agreement, Von
    Mehren was to retain $70,000 in his escrow account after closing for
    later distribution. In the spring of 2017, both the seller and Von
    Mehren’s clients demanded the funds, but Von Mehren declined to
    distribute the money to either party because he was aware that a
    dispute had arisen between the parties as to their entitlement to
    those funds and that they were negotiating to resolve the dispute.
    In the fall of 2017, the seller sued Von Mehren and the purchasers
    for fraud, and Von Mehren deposited the funds into the trial court’s
    registry pursuant to a motion for interpleader.1
    1 That suit was later resolved when the trial court granted the
    defendants’ motions for summary judgment on the seller’s fraud claim.
    2
    Although the Special Master found that Von Mehren acted
    reasonably in declining to disburse the funds to either party, the
    record showed that during the time he was supposed to be retaining
    those funds, the balance of Von Mehren’s trust account often
    dropped below $70,000 and that, while he denied ever using any
    trust funds for his personal benefit, he acknowledged that he did not
    keep accurate records that would have prevented the trust account
    balance from falling below the $70,000 required amount.          The
    Special Master further noted that Von Mehren admitted that the
    $70,000 should have remained in his escrow account until he moved
    for interpleader; that between May 2017 and August 2017, Von
    Mehren’s escrow account balance repeatedly fell below $70,000, and
    sometimes for extended periods of time; and that, at one point, the
    balance was as low as $21,227.26. The Special Master also noted
    Von Mehren’s assertions that, throughout this time, his firm was
    closing various real estate transactions involving large sums of
    money; that no client was ever harmed; and that LandTech (the
    management system used by his firm) was, and still is, a very
    3
    common system used by real estate practitioners but that the system
    identifies the funds by transaction, rather than attributing them to
    a particular person. Based on the above, the Special Master found
    that Von Mehren violated Rule 1.15 (I) (a) by failing to keep accurate
    records that would have prevented the trust account balance from
    falling below the required level of $70,000 and would have allowed
    him to determine how much money he was holding for each client or
    third party.
    With regard to SDBD No. 7196, the record shows that, in
    February 2015, a man approached Von Mehren about pursuing a
    claim of adverse possession on his behalf against a business that
    owned an adjacent property. Von Mehren agreed to initiate that
    proceeding, but failed to do so because he misplaced the affidavit the
    man provided him in support of the claim and never took steps to
    obtain a replacement. In the meantime, the business mailed the
    man a letter complaining about an outbuilding, which it contended
    was encroaching on its property. Von Mehren communicated with
    the business on behalf of the man, even though Von Mehren had not
    4
    been retained or paid to do so, but the business nonetheless filed suit
    against the man for trespass. Von Mehren and the man then
    executed    an   engagement      letter   covering    Von    Mehren’s
    representation of the man in that lawsuit.
    In his petition for voluntary discipline, Von Mehren asserted
    that he initially believed the man had a viable legal argument based
    on the man’s staunch belief that his outbuilding was located entirely
    on his own property. However, after learning that the results of a
    survey showed the man’s outbuilding to be located mostly or entirely
    on the property owned by the business, Von Mehren felt that the
    survey destroyed the man’s claim of adverse possession as well as
    his defense to the trespass suit. Von Mehren contended that even
    though he communicated these concerns, the man remained
    convinced that he could prevail, requiring Von Mehren to orally
    advise the man that he would not continue the representation.
    However, Von Mehren did not specifically tell the man that he would
    not communicate with opposing counsel or file an answer on his
    behalf as agreed upon in the engagement letter. Von Mehren now
    5
    admits that the better practice would have been to inform the man
    in writing that the professional representation had been terminated,
    but Von Mehren asserts that he was never paid any fees and that
    the man did not communicate a desire for Von Mehren to continue
    representing him. Von Mehren did not communicate with the man
    after that meeting and did not ensure that he had retained new
    counsel. Thereafter, the man went into default. Although the man
    hired another attorney who was able to get the default opened, he
    ultimately had to settle the lawsuit after spending a substantial sum
    of money because his defense was not viable. Based on these facts,
    the Special Master concluded that Von Mehren violated Rules 1.3
    and 1.16.
    Having found violations of Rules 1.3, 1.15 (I) (a), and 1.16, the
    Special Master turned her attention to the appropriate level of
    discipline, noting that the maximum penalty for a single violation of
    Rules 1.3 and 1.15 (I) (a) is disbarment, and the maximum penalty
    for a violation of Rule 1.16 is a public reprimand. The Special Master
    correctly recited that Georgia looks to the ABA’s Standards for
    6
    Imposing    Lawyer     Sanctions    for   guidance    in   determining
    punishment in disciplinary cases, see In the Matter of Morse, 
    266 Ga. 652
    , 653 (470 SE2d 232) (1996), and that ABA Standard 3.0
    provides for consideration of the following factors in imposing
    discipline: (1) the duty violated; (2) the lawyer’s mental state; (3) the
    actual or potential injury caused by the lawyer’s misconduct; and (4)
    the existence of aggravating or mitigating factors.
    The Special Master then concluded that in SDBD No. 7195,
    Von Mehren negligently dealt with his trust account by allowing the
    balance to drop below the $70,000 threshold he was required to
    retain and that, although the seller, who was not his client, made a
    claim to the $70,000, the trial court ultimately found that the seller’s
    claim lacked merit. The Special Master reasoned that, if Von
    Mehren had filed an interpleader action immediately upon
    determining that there was a dispute over the funds, the seller
    would not necessarily have had to file her lawsuit, but she still would
    have had to engage in the legal process associated with the
    interpleader action. The Special Master considered the State Bar’s
    7
    concession that it could not prove by clear and convincing evidence
    that Von Mehren withdrew funds from the trust account for his
    personal benefit as well as its argument that it could not do so, in
    part, because Von Mehren did not maintain the required records
    that would have allowed for such a determination and because he
    did not otherwise provide an accounting of the $70,000.
    With regard to SDBD No. 7196, the Special Master found that
    Von Mehren acted negligently in his handling of the man’s affidavit
    and in discontinuing the representation as he did, but she noted that
    those violations resulted in little or no injury because the man was
    able to open the default and because it is extremely unlikely that the
    man could have prevailed either in the property dispute or the
    adverse possession claim.
    The Special Master noted that Von Mehren filed his petition
    for voluntary discipline after negotiations with the Bar; that he
    requested the imposition of a public reprimand as discipline, but
    agreed to accept a suspension of up to six months; and that the Bar
    did not object to acceptance of the petition, but argued that a six-
    8
    month suspension was the appropriate level of discipline. After due
    consideration of those positions and the facts of these two cases, the
    Special Master found that a six-month suspension would be
    appropriate and consistent with prior similar cases; would best
    serve the purpose of sanctioning Von Mehren for failing to maintain
    proper records for a trust account, failing to maintain property in
    trust, and failing to ensure that a client’s interests were protected;
    and would remind practitioners that lawyer discipline also functions
    to protect clients, courts, and the public. See In the Matter of
    Duncan, 
    301 Ga. 898
    , 899 (804 SE2d 342) (2017) (six-month
    suspension with conditions for reinstatement for violations of Rules
    1.4, 1.15, and 1.16 (c) in two client matters; no prior disciplinary
    history and mitigating factors); In the Matter of Graziano, 
    299 Ga. 7
    , 7 (785 SE2d 537) (2016) (six-month suspension with conditions for
    violations of Rules 1.3, 1.4, and 1.16 in a single matter, which
    resulted in dismissal of client’s suit and judgment against her on
    counterclaim); In the Matter of Buckley, 
    291 Ga. 661
    , 662 (732 SE2d
    87) (2012) (four-month suspension for violations of Rules 1.3, 1.4,
    9
    and 1.16 in one client matter; prior disciplinary history, but
    mitigating factors). And, although she considered the aggravating
    factors of multiple offenses and substantial experience in the
    practice of law, see ABA Standard 9.22 (d) and (i), and the mitigating
    factors of no prior disciplinary history and no dishonest motive, see
    ABA Standard 9.32 (a) and (b), the Special Master found that those
    factors did not warrant modification of the recommended level of
    discipline. Therefore, she recommends that this Court accept Von
    Mehren’s petition for voluntary discipline and impose a suspension
    of six months for his admitted violations.
    Having reviewed the entire record in this case, we conclude
    that a six-month suspension is an appropriate sanction in this case.
    Accordingly, we hereby accept Von Mehren’s petition for voluntary
    discipline and order that he be suspended from the practice of law
    for six months. Because there are no conditions on Von Mehren’s
    reinstatement other than the passage of time, there is no need for
    him to take any action either through the State Bar or this Court to
    effectuate his return to the practice of law. Instead, the suspension
    10
    based on this opinion will take effect as of the date this opinion is
    issued and will expire by its own terms six months later. Von
    Mehren is reminded of his duties under Bar Rule 4-219 (c).
    Petition for voluntary discipline        accepted.   Six-month
    suspension. All the Justices concur.
    11
    

Document Info

Docket Number: S21Y1097

Filed Date: 8/24/2021

Precedential Status: Precedential

Modified Date: 11/20/2021