Iowa Supreme Court Attorney Disciplinary Board v. Cami N. Eslick ( 2015 )

IN THE SUPREME COURT OF IOWA
No. 14–1577
Filed January 30, 2015
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
CAMI N. ESLICK,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
The grievance commission reports an attorney violated several
court rules and rules of professional conduct and recommends
suspension. LICENSE SUSPENDED.
Charles L. Harrington, David J. Grace (until withdrawal), and
Elizabeth E. Quinlan, Des Moines, for complainant.
Cami N. Eslick, Indianola, pro se.
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HECHT, Justice.
The Iowa Supreme Court Attorney Disciplinary Board (the Board)
charged attorney Cami Noelle Eslick with violating rules of professional
conduct after a trust account audit revealed numerous deficiencies.
Eslick admitted all allegations in the Board’s complaint. After a hearing,
the Grievance Commission found Eslick violated several rules and
recommended suspension of her license for thirty days.
I. Background Facts and Proceedings.
Eslick was admitted to the Iowa bar in 2005. She has operated her
solo practice in Warren County since 2008. In 2011, an auditor from the
Client Security Commission instructed Eslick to rectify several
deficiencies in her trust accounting practices. Following up on those
instructions, the Client Security Commission audited Eslick again in
January 2013 after she received several trust account overdraft notices.
The auditor requested numerous documents from Eslick, including trust
account bank statements, receipt and disbursement journals, ledger
records, reconciliations, and a check register. However, Eslick failed to
provide them promptly.
A month passed, and the auditor’s request for access to Eslick’s
records had not been honored. Eslick and the auditor attempted to meet
for a follow-up appointment several times, but weather and illness
interfered and the appointment was never rescheduled. The Client
Security Commission issued a notice of delinquency on March 22, 2013,
and on April 8, Eslick produced some of the requested documents.
When she provided them, Eslick stated, “I will admit my account is a
mess. I kept thinking I could get it straightened out, but I didn’t realize
h[ow] bad of a mess it was.”
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The auditor examined the documents and found the funds in
Eslick’s trust account were nearly $8000 short. In several instances,
Eslick’s records showed clients were credited for funds received, but no
corresponding deposits were made to the trust account. Exacerbating
the problem, Eslick failed to maintain records mandated by court rules
and neglected her obligation to perform monthly trust account
reconciliations. Further, the auditor determined Eslick had commingled
personal funds—derived from an operating loan from her father—with
client funds in the trust account. Eslick explained that she considered
the clients’ funds she didn’t deposit in the trust account “as funds being
removed from” that operating loan. However, she completely depleted
the loaned funds and withdrew client funds before earning them. In
April 2013, Eslick deposited funds to bring the trust account into
balance.
On May 6, 2014, the Board filed a complaint with the grievance
commission alleging Eslick violated Iowa Rule of Professional Conduct
32:1.15 and Iowa Court Rules 45.1, 45.2, and 45.7. The complaint
alleged the audit revealed several instances of misconduct on Eslick’s
part: failing to deposit all unearned fees and prepaid expenses into her
trust account, commingling personal funds with those of her clients,
failing to maintain a receipt and disbursement journal and check ledger
for the trust account, failing to perform trust account reconciliations,
withdrawing fees from the account without notifying clients, failing to
maintain copies of accountings to clients, and operating with a deficiency
of nearly $8000 in her trust account. On June 27, 2014, Eslick filed an
answer admitting each of the violations alleged in the complaint.
On August 27, 2014, the matter came on for hearing before the
grievance commission. Eslick expressed remorse, stating, “There are no
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excuses for not keeping my books. I knew better.” She explained she
had neglected her trust accounting obligations because she took on more
clients than she could handle and became overwhelmed. She noted
despite her record-keeping and accounting missteps, no clients were
financially harmed; and since the 2013 audit, she has reformed her trust
accounting procedures such that her accounts balance “to the penny”
every month. Further, she now takes medication for attention deficit
disorder and has learned coping skills through therapy. These
measures, she explained, now equip her to manage her very full
workload without becoming overwhelmed. Eslick emphasized her
violations of the applicable rules were committed without intent to
defraud or steal from her clients.
Following the hearing, the commission found Eslick violated Iowa
Rule of Professional Conduct 32:1.15 and Iowa Court Rules 45.1, 45.2,
and 45.7. Specifically, the commission found Eslick violated rule
32:1.15(b) by commingling personal funds with those of her clients; that
she violated rule 45.2(3)(a)(9) by failing to perform trust account
reconciliations; that she violated rules 32:1.15(c), 45.1, and 45.7(3) by
failing to deposit advance fee payments into the trust account; and that
she violated rule 45.7(4) by failing to notify clients when their funds were
withdrawn from her trust account. Taking into account Eslick’s prior
reprimand for rules violations unrelated to trust account management,
the commission recommended a thirty-day suspension.
II. Scope of Review.
We review attorney disciplinary matters de novo. Iowa Ct. R.
35.11(1); see also Iowa Supreme Ct. Att’y Disciplinary Bd. v. Morris, 847
N.W.2d 428, 433 (Iowa 2014). “The Board must prove the attorney’s . . .
misconduct by a convincing preponderance of the evidence.” Iowa
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Supreme Ct. Att’y Disciplinary Bd. v. Barnhill, 847 N.W.2d 466, 470 (Iowa
2014). This standard “places a burden on the Board that is higher than
the burden in civil cases but lower than the burden in criminal matters.”
Id. The Board’s burden is also lower than “clear and convincing,” the
highest civil standard of proof. Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Kennedy, 837 N.W.2d 659, 667 (Iowa 2013); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. McCuskey, 814 N.W.2d 250, 254 (Iowa 2012). “We
respectfully consider the commission’s recommendations, but they are
not binding upon us.” Morris, 847 N.W.2d at 433.
III. Analysis.
A. Rule Violations. The Board alleged that Eslick violated Iowa
Rule of Professional Conduct 32:1.15 and Iowa Court Rules 45.1, 45.2,
and 45.7. Eslick admitted each paragraph of the Board’s complaint.
“Factual matters admitted by an attorney in an answer are deemed
established, regardless of the evidence in the record.” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Nelson, 838 N.W.2d 528, 532 (Iowa 2013); accord
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Alexander, 727 N.W.2d 120,
122 (Iowa 2007).
1. Rule 32:1.15. Three portions of rule 32:1.15 are relevant to our
adjudication of this case. First, “[a] lawyer may deposit the lawyer’s own
funds in a client trust account for the sole purpose of paying bank
service charges on that account, but only in an amount necessary for
that purpose.” Iowa R. Prof’l Conduct 32:1.15(b). Second, “[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.” Id. r. 32:1.15(c). Finally, rule 32:1.15
incorporates chapter 45 of the Iowa Court Rules governing trust account
procedures. Id. r. 32:1.15(f). Therefore, a violation of an attorney’s
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obligations under chapter 45 also constitutes a violation of rule
32:1.15(f).
We find Eslick violated rule 32:1.15(b) because the funds loaned by
her father and deposited in the trust account were personal funds and
were not used for the sole purpose of paying bank service charges. We
further find Eslick violated rule 32:1.15(c) by failing to deposit in her
trust account advance fees received from her clients.
2. Rule 45.1. Rule 45.1 provides that “[f]unds a lawyer receives
from clients . . . for matters arising out of the practice of law in Iowa shall
be deposited” in a client trust account. Iowa Ct. R. 45.1 (emphasis
added). We find that Eslick’s failure to deposit all client funds in a trust
account, as required by rule 32:1.15(c), also constituted a violation of
rule 45.1.
3. Rule 45.2. Rule 45.2(3)(a) requires lawyers to maintain current
financial records. Iowa Ct. R. 45.2(3)(a). In particular, lawyers must
keep receipt and disbursement journals, keep ledger records, and
perform monthly account reconciliations. Id. r. 45.2(3)(a)(1)–(2), (9).
Eslick admitted she did not maintain the journals or ledger records and
did not perform monthly reconciliations. We find Eslick violated rule
45.2(3).
4. Rule 45.7. Two provisions of rule 45.7 are applicable here.
First, “[a] lawyer must deposit advance fee and expense payments from a
client into the trust account and may withdraw such payments only as
the fee is earned or the expense is incurred.” Iowa Ct. R. 45.7(3)
(emphasis added). Second, “[a] lawyer accepting advance fee or expense
payments must notify the client in writing of the time, amount, and
purpose of any withdrawal of the fee or expense, together with a complete
accounting.” Id. r. 45.7(4).
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We find Eslick violated both of these provisions because she failed
to deposit client funds in the trust account and failed to notify clients
when she made withdrawals from the account containing funds loaned
by her father. Accordingly, we find the Board has proven Eslick violated
rule 45.7(4). Together, the violations of chapter 45 also resulted in a
violation of rule 32:1.15(f).
B. Sanction. When we review attorney disciplinary matters, we
“may impose a lesser or greater sanction than the discipline
recommended by the grievance commission.” Iowa Ct. R. 35.11(1); see
also Morris, 847 N.W.2d at 435. “We give respectful consideration to the
commission’s recommendation. However, the issue of appropriate
sanction is exclusively within this court’s authority.” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Baldwin, ___ N.W.2d ___, ___ (Iowa 2014). There
is no standard sanction for any individual rule violation; we evaluate
each case individually but still consider prior cases instructive. Morris,
847 N.W.2d at 435. When determining a sanction, we consider the type
of violation, a deterrent purpose for other lawyers, the need to protect the
public, and the need to maintain our profession’s reputation. Id. We
also consider any aggravating and mitigating circumstances. Id. at 435–
36.
We have considered previous discipline—including reprimands—to
be aggravating factors when determining appropriate disciplinary
sanctions. See, e.g., Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wright,
840 N.W.2d 295, 303 (Iowa 2013); Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Taylor, 814 N.W.2d 259, 269 (Iowa 2012); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Lickiss, 786 N.W.2d 860, 869 (Iowa 2010). Eslick was
publicly reprimanded in 2012 for neglecting client matters. Although the
conduct for which she was reprimanded in 2012 did not involve trust
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account violations, we nonetheless consider Eslick’s previous reprimand
an aggravating factor here.
“Personal illnesses, such as . . . attention deficit disorder, do not
excuse a lawyer’s misconduct but can be mitigating factors.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Curtis, 749 N.W.2d 694, 703 (Iowa
2008); see also Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bowles, 794
N.W.2d 1, 7 (Iowa 2011); Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Fields, 790 N.W.2d 791, 799–800 (Iowa 2010). Eslick testified before the
commission that she is receiving treatment for attention deficit disorder
and that the treatment will assist her in managing her trust account
going forward. We acknowledge her recognition of the need for
treatment, and her pursuit of treatment, as a mitigating factor.
Lastly, Eslick made no attempt to deceive the auditor, the Board,
or the commission, and cooperated fully during the proceedings.
Further, she appeared genuinely remorseful in all communications with
the auditor, Board, and commission. Even though “we . . . expect
cooperation with, and candid responses to, commission auditors,”
remorse and cooperation generally mitigate our sanction. Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Herrera, 560 N.W.2d 592, 595 (Iowa
1997); see also, e.g., Iowa Supreme Ct. Att’y Disciplinary Bd. v. Qualley,
828 N.W.2d 282, 294 (Iowa 2013); Taylor, 814 N.W.2d at 268; cf. Morris,
847 N.W.2d at 437 (considering the lawyer’s false representation that he
regularly reconciled his trust account to be an aggravating factor). So,
too, does the fact that no clients were harmed. See, e.g., Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Marks, 831 N.W.2d 194, 202 (Iowa 2013);
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kersenbrock, 821 N.W.2d 415,
422 (Iowa 2012); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Van Ginkel,
809 N.W.2d 96, 110 (Iowa 2012).
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Ultimately, “[w]hen dealing with client trust account violations, our
sanctions have ranged from a public reprimand when the violation was
relatively minor and isolated to license suspension when the violation
involved poor office management and neglect . . . .” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Parrish, 801 N.W.2d 580, 588 (Iowa 2011)
(citations omitted). In one particular case, we concluded an attorney who
violated trust account rules deserved only a public reprimand because
his “honesty, his forthright responses, and his move to correct his
operation all weigh[ed] in his favor.” Herrera, 560 N.W.2d at 595. In
Herrera, the attorney entrusted his accounting to a staff member who
was ill equipped to handle it and who may have mismanaged the affairs
because she resented Herrera. Id. Due to those unique circumstances,
we decided a suspension was too harsh. See id. In other cases involving
trust account violations, we have imposed only a public reprimand when
the violations were isolated incidents. See, e.g., Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Denton, 814 N.W.2d 548, 551 (Iowa 2012); Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Sobel, 779 N.W.2d 782, 789–90
(Iowa 2010) (finding no violation of several other rules and reprimanding
the lawyer for the one remaining trust account violation); Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Apland, 577 N.W.2d 50, 60 (Iowa
1998) (reprimanding the lawyer even though his “lackadaisical
bookkeeping practices served only to compound his problems”).
However, Eslick’s trust account was, in her words, “out of whack”
for months. Her trust account deficiencies were not an isolated incident,
and therefore, her conduct is more in line with cases in which we have
imposed a suspension. See, e.g., Morris, 847 N.W.2d at 436–37
(suspending the lawyer for six months because his “record-keeping and
management deficits were severe and . . . persisted over a long period of
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time”); Kersenbrock, 821 N.W.2d at 422 (suspending the lawyer for thirty
days because of the “cumulative impact of all violations”); Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Boles, 808 N.W.2d 431, 442–43 (Iowa 2012)
(suspending the lawyer for thirty days because his “trust account
problems were not isolated,” created “[a] pattern of misconduct,” and
caused “extensive problems with four clients”).
We conclude a suspension of thirty days is appropriate here.
Although Eslick did not intend to defraud her clients, her failure to make
trust account deposits or account for withdrawals, and her wholesale
neglect of the obligation to maintain records, created a pattern of rule
violations, much like the attorney in Boles whose “trust account
problems were not isolated.” Boles, 808 N.W.2d at 442. Further, her
previous public reprimand makes a suspension appropriate in this case.
In Boles, we also considered “the need to motivate attorneys to maintain
proper trust account and billing practices” as a reason to impose a
suspension. Id. at 443. We do so again here.
IV. Conclusion.
We suspend Eslick’s license to practice law with no possibility of
reinstatement for thirty days from the date this opinion is filed. The
suspension applies to “all facets of the ordinary law practice.” Iowa Ct.
R. 35.13(3). Unless the Board files an objection, Eslick will be
automatically reinstated after the thirty-day-suspension period on
condition that all costs have been paid. See id. r. 35.13(2). Eslick must
also notify all clients of the suspension as required by Iowa Court Rule
35.23. Costs are assessed against Eslick pursuant to Iowa Court Rule
35.27(1).
LICENSE SUSPENDED.