Iowa Supreme Court Attorney Disciplinary Board Vs. Ross G. Hauser ( 2010 )

IN THE SUPREME COURT OF IOWA
No. 09–1445
Filed May 14, 2010
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
ROSS G. HAUSER,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
Grievance commission recommends attorney‟s license be
suspended for nine months. LICENSE SUSPENDED.
Charles L. Harrington and David J. Grace, Des Moines, for
complainant.
Ross G. Hauser, Cedar Rapids, pro se.
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WIGGINS, Justice.
This matter comes before us on the report of a division of the
Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R.
35.10. The Iowa Supreme Court Attorney Disciplinary Board brought a
complaint against the respondent, Ross G. Hauser, alleging multiple
violations of our ethical rules based on his neglect of a client matter.
After a hearing, the grievance commission recommends we suspend
Hauser‟s license to practice law in Iowa indefinitely with no possibility of
reinstatement for nine months. Upon our de novo review, we concur the
respondent violated our ethical rules and suspend his license to practice
law indefinitely with no possibility of reinstatement for six months.
I. Scope of Review.
This court reviews lawyer disciplinary proceedings de novo. Iowa
Supreme Ct. Att‟y Disciplinary Bd. v. Dull, 713 N.W.2d 199, 201 (Iowa
2006). The board‟s burden to prove disciplinary violations is by a
convincing preponderance of the evidence. Iowa Supreme Ct. Att‟y
Disciplinary Bd. v. Marks, 759 N.W.2d 328, 330 (Iowa 2009). A
convincing preponderance of the evidence is “ „less than proof beyond a
reasonable doubt, but more than the preponderance standard required
in the usual civil case.‟ ” Iowa Supreme Ct. Att‟y Disciplinary Bd. v.
D‟Angelo, 710 N.W.2d 226, 230 (Iowa 2006) (quoting Iowa Supreme Ct.
Bd. of Prof‟l Ethics & Conduct v. Lett, 674 N.W.2d 139, 142 (Iowa 2004)).
Weight is afforded the commission‟s findings, but we are not bound by
them. Marks, 759 N.W.2d at 330.
II. Background Facts and Prior Proceedings.
Hauser has been practicing law in the state of Iowa for the past
twenty-three years. During this period of time, the respondent has
received a series of private admonitions, public reprimands, and
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suspensions. Beginning in 1988, we have privately admonished him
twice for neglect of legal matters and failure to respond to the board‟s
inquiries. We have publicly reprimanded him three times for neglect of
client matters, failure to respond to the board‟s inquiries, and failure to
return a retainer. Finally, we have suspended his license five times
between October 2005 and June 2009 for failing to comply with the rules
of the Commission on Continuing Legal Education, failing to comply with
the rules of the Client Security Commission, and failing to respond to the
board‟s inquires.
This current disciplinary action involves Hauser‟s handling of a
dissolution action. In 2005 the respondent was retained by Ricky
Clemens to represent Clemens in his dissolution-of-marriage case. At
the start of the representation, Clemens gave the respondent a $1000
retainer.
Initially, Hauser appeared to be providing appropriate
representation to his client. He filed an answer to Clemens‟ now ex-wife‟s
dissolution petition and participated in obtaining an agreement on
temporary matters and a pretrial statement. On February 26, 2006, he
attended a mediation session with his client and the opposing party.
Thereafter, however, Hauser did not file any further pleadings or motions
on Clemens‟ behalf. On July 5, 2006, the respondent and his client
failed to appear at the scheduled trial on the dissolution petition, and the
court entered a default decree. Hauser had not notified Clemens of the
trial date, and Clemens was not aware the trial had occurred until he
received a copy of the dissolution decree in the mail.
After receiving the decree, Clemens placed numerous telephone
calls to Hauser, which Hauser failed to return. Clemens then employed
another attorney who motioned the district court to get the default
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judgment set aside. On August 31, 2006, the district court entered an
order denying the motion. Clemens did not appeal. He subsequently
filed a complaint against Hauser with the board.
On April 8, 2008, the board sent Hauser a letter, seeking
information on Clemens‟ complaint. Hauser never responded. On
May 14, 2009, the board filed a one-count complaint against Hauser,
alleging the respondent violated numerous ethical rules in his
representation of Clemens. Specifically, the board alleged Hauser
committed ethical violations by ceasing to work on his client‟s case
without taking the proper steps to withdraw; failing to adequately
communicate with his client; failing to notify his client of the trial date;
failing to attend the trial, resulting in a default judgment against his
client; failing to furnish his client with a timely and complete accounting
regarding earned fees; and failing to respond to a request for information
from the board. These acts, the board alleged, established violations of
Iowa Rules of Professional Conduct 32:1.1, requiring a lawyer to provide
competent representation to a client; 32:1.3, requiring a lawyer to act
with reasonable diligence and promptness in representation; 32:1.4,
requiring a lawyer to keep his client reasonably informed and to promptly
comply with reasonable requests for information; 32:1.15, requiring a
lawyer to render a full accounting of client property in his possession;
32:1.16(d), requiring a lawyer, upon withdrawal from representation, to
take appropriate steps to protect his client‟s interests and to return any
unearned fees; 32:8.1(b), requiring a lawyer to respond to lawful
demands for information from the board; and 32:8.4(a) and (d), holding it
is misconduct for a lawyer to violate an ethical rule and to engage in
conduct prejudicial to the administration of justice. The board also
asserted Hauser violated Iowa Court Rule 45.7, which requires a lawyer
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to notify his client of the withdrawal of advance fees from the client‟s
trust account.
Hauser failed to respond to the board‟s complaint, and therefore,
the commission deemed the allegations admitted. Hauser subsequently,
however, responded to a motion to compel discovery. Based upon the
information contained in Hauser‟s responses, the board moved to amend
its complaint to include an additional allegation of trust account
violations due to the respondent‟s failure to keep trust account records
with respect to the advance fee he received from Clemens. See Iowa R.
Prof‟l Conduct 32:1.15(c) (“A lawyer shall deposit into a client trust
account legal fees and expenses that have been paid in advance, to be
withdrawn by the lawyer only as fees are earned or expenses incurred.”);
Iowa Ct. R. 45.2(2) (“A lawyer shall maintain complete records of all
funds . . . of a client coming into the lawyer‟s possession and regularly
account to the client for them.”). In an order granting the board‟s
request to amend, the commission noted its prior order holding the
initial allegations admitted, but the subsequent allegation was not
deemed admitted, and Hauser would be permitted to present evidence on
this allegation.
A hearing was held on September 1, 2009, before a division of the
commission. Because the majority of the allegations were deemed
admitted, the board presented the testimony of Ricky Clemens for the
limited purpose of considering the appropriate sanction. The focus,
therefore, was on what harm, if any, Clemens sustained from Hauser‟s
representation.
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Clemens testified the divorce decree ordered him to pay $560.55
per month in child support.1 This, he contended, was based upon the
child support guidelines worksheet submitted by his ex-wife, which listed
Clemens‟ annual income at $42,785. Clemens, however, claimed his
annual income was $25,600 in 2006 and $29,100 in 2005. No child
support worksheet had been submitted to the district court by Clemens
or by Hauser on Clemens‟ behalf, and Clemens did not present any
evidence in the form of income tax returns. Clemens also asserted his
ex-wife‟s child support worksheet erroneously understated the monthly
premium he paid for health insurance. Based upon these alleged errors,
Clemens believed his child support was set too high.
As previously noted, Clemens‟ attempt to get the default decree set
aside was unsuccessful. In December 2006 Clemens developed serious
medical problems and was unable to work for approximately four
months. At that time, he hired a third attorney who was successful in
getting his child support obligation modified as of July 2007. Clemens
believed Hauser‟s failure to properly represent him resulted in his
receiving an excessive child support obligation, which in turn required
him to hire different counsel, necessitating additional attorney fees. In
addition, Clemens testified he never received an accounting of the $1000
he paid to Hauser or any refund of any unearned fees from Hauser.
Hauser testified on his own behalf. He acknowledged his neglect of
the Clemens dissolution matter. In his defense to the allegation of trust
account violations, Hauser submitted three check stubs as evidence of
his depositing Clemens‟ $1000 advance fee payment into his client trust
1This amount was forty dollars more per month than the temporary support set
by the court. There is no indication in the record that Clemens or Hauser objected to
the temporary support award.
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account and of his subsequent withdrawals of $400, $300, and $100 in
payments to himself for legal services rendered. The last withdrawal was
dated October 21, 2005. The records do not show, however, how Hauser
earned the fees withdrawn. Upon questioning, he admitted he could not
locate any trust account ledger that may have been kept in this case, but
stated it was his practice to keep such a ledger.
Hauser also testified to his lengthy history of alcohol abuse. He
acknowledged his alcohol use could have played a factor in prior
disciplinary actions brought against him as well as this one. In the time
leading up to Clemens‟ trial, early 2006, Hauser asserted he was not in
control of his drinking. During this time, he underwent a short period of
self-committal followed by extensive participation in the Alcoholics
Anonymous (AA) program. Although he was able to maintain sobriety for
over eighteen months, Hauser admitted he resumed drinking in January
2008. Hauser testified he has been sober since May 29, 2009, and is
committed to sobriety. He has been attending AA meetings on a regular
basis. He acknowledged clients would suffer if he resumed drinking and
agreed the public needs to be protected from this. His failure to respond
to the board‟s inquiries, he contended, was due to the fact that he
wanted to address his alcohol abuse first before dealing with the ethics
complaint. Hauser called no other witnesses, but he did try to admit
three letters of support, which the commission rejected due to his failure
to timely present his character evidence by sworn affidavit as required by
Iowa Court Rule 36.14.
The commission concluded the respondent committed the ethical
violations alleged by the board. It also concluded the respondent was
currently unfit to practice law as evidenced by his ineffective
representation of himself before the commission. In addition to failing to
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produce complete records regarding his trust account, the commission
noted Hauser failed to follow the rules to allow the admission of letters of
support into evidence. Finally, in considering an appropriate sanction,
the commission found mitigating as well as aggravating circumstances.
It found the respondent‟s presently sober and candid acknowledgement
of the harm caused to his client to be a mitigating factor, while his
numerous prior disciplinary actions and the financial harm caused to his
client were aggravating factors. Based upon these findings, the
commission recommended Hauser‟s license to practice law be suspended
indefinitely with no possibility of reinstatement for nine months. It also
recommended three conditions be placed upon any application for
reinstatement: (1) reimbursement of Clemens‟ $1000 advance fee,
(2) Hauser must be evaluated by a licensed health care professional who
verifies his fitness to practice law, and (3) Hauser must furnish evidence
that he will associate with an experienced attorney who can monitor his
practice of law to ensure Hauser is not allowing alcoholism to affect his
practice.
III. Misconduct and Ethical Violations.
We agree with the commission the board established by a
convincing preponderance of the evidence Hauser neglected his client‟s
dissolution case, failed to keep his client informed, failed to properly
safeguard and appropriately withdraw his client‟s funds, failed to
appropriately withdraw from representation, failed to properly maintain
trust account records, failed to provide an accurate accounting to his
client and to return unearned fees to his client, and failed to respond to
the board‟s inquires. We also agree, with one exception, these actions
establish violations of the previously enumerated ethical rules. See Iowa
Rs. of Prof‟l Conduct 32:1.3; 32:1.4; 32:1.15(c); 32:1.16(d); 32:8.1(b);
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32:8.4(a), (d); Iowa Ct. Rs. 45.2(2), .7. We disagree, however, that there
was clear and convincing evidence Hauser‟s conduct evidenced
incompetence. See Iowa R. Prof‟l Conduct 32:1.1 (requiring a lawyer to
provide competent representation to a client).
To establish incompetence, the board is required to show the
attorney (1) “did not possess the necessary legal knowledge and skill to
complete the tasks” or (2) “had not made a competent analysis of the
factual and legal elements of the problem[].” Iowa Supreme Ct. Att‟y
Disciplinary Bd. v. Hoglan, 781 N.W.2d 279, 285 (Iowa 2010). In this
case, Clemens does not assert Hauser‟s representation, up until the time
of the mediation, had been neglectful or in any other way inadequate.
Thereafter, the evidence supports the conclusion that, due to his
struggles with alcohol, Hauser abandoned his client and his client‟s case.
While this is certainly evidence of serious neglect and numerous rules
violations, it is not evidence of incompetence as defined under our rules.
Therefore, we conclude the board failed to prove by a convincing
preponderance of the evidence attorney incompetence.
IV. Sanction.
“There is no standard sanction for a particular type of misconduct,
and though prior cases can be instructive, we ultimately determine an
appropriate sanction based on the particular circumstances of each
case.” Iowa Supreme Ct. Att‟y Disciplinary Bd. v. Carpenter, 781 N.W.2d
263, 270 (Iowa 2010). In determining the appropriate sanction, we look
to several factors, including “the nature of the violations, the need for
deterrence, protection of the public, maintenance of the reputation of the
Bar as a whole, and the violator‟s fitness to continue to practice law.”
Iowa Supreme Ct. Bd. of Prof‟l Ethics & Conduct v. Ramey, 639 N.W.2d
243, 245 (Iowa 2002). We also consider mitigating and aggravating
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circumstances. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774
N.W.2d 301, 308 (Iowa 2009).
The primary underlying ethical violation in this case is severe
neglect, which eventually resulted in a total abandonment of the client.
Sanctions for neglect have “typically ranged from a public reprimand to a
six-month suspension.” Hoglan, 781 N.W.2d at 286. “ „Often, the
distinction between the punishment imposed depends upon the existence
of multiple instances of neglect, past disciplinary problems, and other
companion violations.‟ ” Marks, 759 N.W.2d at 332 (quoting Iowa
Supreme Ct. Att‟y Disciplinary Bd. v. Lesyshen, 712 N.W.2d 101, 106
(Iowa 2006)).
In this case, Hauser‟s neglect and abandonment of his client is
compounded by the fact that Hauser made no attempt to notify Clemens
of his decision to abandon representation so that Clemens could engage
new counsel and avoid having a default decree entered against him. See
Iowa Supreme Ct. Att‟y Disciplinary Bd. v. Ireland, 748 N.W.2d 498, 502
(Iowa 2008) (noting abandonment prior to performing the contracted
legal services resulted in failure to meet the lawful objectives of the
client). These actions were clearly harmful to his client. His failure to
timely return his client‟s paperwork or refund any unearned portion of
the advance fee was also harmful to his client. Id.Hauser‟s trust account violations are also a serious matter. See
Iowa Supreme Ct. Att‟y Disciplinary Bd. v. Wagner, 768 N.W.2d 279, 287–
88 (Iowa 2009). In the past, the sanction for failure to properly deposit,
to properly account for, and to appropriately return unearned advance
fees has ranged from a public reprimand, see Iowa Supreme Ct. Bd. of
Prof‟l Ethics & Conduct v. Herrera, 560 N.W.2d 592, 594–95 (Iowa 1997),
to a suspension, see Iowa Supreme Ct. Att‟y Disciplinary Bd. v. Earley,
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729 N.W.2d 437, 444 (Iowa 2007) (Earley I), to a revocation, see D‟Angelo,
710 N.W.2d at 236–37. In cases warranting a more severe sanction,
additional infractions or other aggravating circumstances were present.
See Earley I, 729 N.W.2d at 443–44 (neglect resulting in harm to clients,
failure to return client‟s property, trust account violations, and prior
reprimand warranted four-month suspension); D’Angelo, 710 N.W.2d at236–37 (multiple and serious violations, including deliberate conversion
of client funds demands revocation of lawyer‟s license); Iowa Supreme Ct.
Bd. of Prof‟l Ethics & Conduct v. Frerichs, 671 N.W.2d 470, 477–78 (Iowa
2003) (illegal fee contract, trust account violations, neglect of client
matter, failure to cooperate with board, and prior admonition warranted
four-month suspension). In this case, Hauser‟s abandonment of his
client, his prior extensive history of ethical infractions, and his failure to
timely and appropriately respond to the board‟s inquiries, combined with
his trust account violations, warrants the imposition of a more serious
sanction. See Wagner, 768 N.W.2d at 287.
In fashioning an appropriate sanction, we also consider any
mitigating circumstances. We have repeatedly held that, “[w]hile . . .
illnesses do not excuse [attorney] misconduct, they can be mitigating
factors and can influence our approach to discipline.” Carpenter, 781
N.W.2d at 271; accord Hoglan, 781 N.W.2d at 287; Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Curtis, 749 N.W.2d 694, 703 (Iowa 2008).
Hauser candidly admits that he is an alcoholic and further acknowledges
that his clients will suffer if he resumes drinking. At the time of the
hearing, the respondent testified to his current sobriety and his
involvement with AA, but offered no significant testimony about any prior
treatment or any evidence that he is currently seeking professional
assistance with his alcoholism. The only evidence of professional
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treatment is contained in Hauser‟s response to interrogatories, in which
Hauser stated he was diagnosed in August 2009 as being alcohol
dependent. To the extent Hauser acknowledges his alcoholism and has
taken steps to address it through attendance at AA meetings, we
consider these acts in fashioning an appropriate sanction. However, we
are mindful that our primary goal is not to punish the attorney, but “ „to
protect the public . . . from lawyers rendered unfit from any cause.‟ ”
Dull, 713 N.W.2d at 207 (quoting Comm. on Prof‟l Ethics & Conduct v.
Paulos, 410 N.W.2d 260, 261 (Iowa 1987)).
V. Disposition.
We have carefully considered Hauser‟s current violations, his prior
history of ethical infractions, and his current fitness to practice law and
conclude the respondent‟s license to practice law should be suspended
indefinitely with no possibility of reinstatement for six months. Prior to
any application for reinstatement, the respondent must provide this
court with an evaluation by a licensed health care professional verifying
his fitness to practice law. In addition, as a condition of reinstatement,
Hauser must confirm that he has accounted to Clemens for the advance
fees paid to him and that he has refunded any unearned fees. See Iowa
Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Kennedy, 684 N.W.2d 256,
261 (Iowa 2004). If he is unable to provide adequate trust account
documentation, we hold the full retainer must be returned.
We decline, however, to impose a commission recommendation
that the respondent, prior to application for reinstatement, furnish this
court with evidence that “he will associate with an experienced lawyer
who can monitor his practice of law to ensure [the respondent] is not
allowing his alcoholism to affect his practice and is attending to his
cases.” As we have stated in prior cases, “ „neither the court nor the bar
13
has effective machinery in place for such supervision.‟ ” Hoglan, 781
N.W.2d at 287 (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kirlin,
741 N.W.2d 813, 819 (Iowa 2007)). Requiring the respondent to provide
medical documentation of his fitness to practice law more appropriately
addresses this issue.
This suspension applies to all facets of the practice of law. See
Iowa Ct. R. 35.12. Upon any application for reinstatement, Hauser must
establish that he has not practiced law during the suspension period and
that he has in all ways complied with the requirements of Iowa Court
Rule 35.13 and has provided the required notification of clients as
outlined in Iowa Court Rule 35.22. Prior to any application for
reinstatement, Hauser must provide the board with an evaluation by a
licensed health care professional verifying his fitness to practice law. In
addition, he must also submit documentation that he has refunded any
unearned fees. Costs are taxed to Hauser pursuant to Iowa Court Rule
35.26.
LICENSE SUSPENDED.
All justices concur except Ternus, C.J., and Baker, J., who take no
part.