Traci Lee Tidball Peppers v. Kentucky Bar Association ( 2022 )

TO BE PUBLISHED
Supreme Court of Kentucky
2022-SC-0106-KB
TRACI LEE TIDBALL PEPPERS MOVANT
IN SUPREME COURT
V.
KENTUCKY BAR ASSOCIATION RESPONDENT
OPINION AND ORDER
Pursuant to Supreme Court Rule (SCR) 3.480(2), Traci Lee Tidball
Peppers moves for consensual discipline based on a negotiated sanction
agreement with the Kentucky Bar Association (KBA). Peppers requests this
Court enter an Order resolving the pending disciplinary proceeding against her
by imposing, retroactive to August 20, 2020, a five-year suspension from the
practice of law for her admitted violations of SCR 3.130(1.15)(a) related to
safekeeping of client property and SCR 3.130(8.4)(c) relating to professional
misconduct. The KBA filed a response stating it had no objection to the motion
for consensual discipline. Because Peppers and the KBA have agreed on the
sanction, and our caselaw supports the proposed resolution in this matter, we
hold this sanction to be the appropriate discipline for Peppers’ conduct and
grant her motion.
Peppers was admitted to the practice of law in Kentucky on May 2, 2005,
and has no history of prior discipline. Her KBA number is 90685 and her bar
roster address is 108 Garet Way, Glasgow, Kentucky, although Peppers
currently resides in Tallahassee, Florida. The present disciplinary proceeding
arose from Peppers’ admitted violations of the Rules of Professional Conduct in
KBA File 20-DIS-0085, concerning Peppers’ misappropriation or improper
dealings with funds she held as conservator for the estate of a minor. On
August 20, 2020, this Court temporarily suspended Peppers pending the
outcome of the disciplinary process.
In 2010, Nicole Suzanne Garrett, unexpectedly passed away. Nicole’s
son, Garrett Hunter Graves, was the beneficiary of her life insurance policy
which appears to have paid approximately $191,000. The child also was
entitled to a monthly Social Security benefit of $720 due to his mother’s death.
Adam Graves, Garrett’s father, was appointed guardian and took control of
Garrett’s assets. Between October 2011 and March 2013, Adam transferred or
appropriated nearly the entirety of Garrett’s estate to pay for his own personal
and business expenses, leaving the estate with less than $14,000. Adam
obtained no court authorization to expend any funds. It appears Garrett
neither directly nor indirectly benefitted from his father’s spending. When
Adam’s misdeeds became impossible to conceal further, he resigned as
Garrett’s guardian. Peppers was then appointed as conservator for Garrett’s
estate.
Almost immediately after her appointment, Peppers recognized Adam’s
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improper use of Garrett’s funds and began aggressively attempting to recover
the same. Ultimately, Peppers and Adam reached a negotiated settlement
agreement, although the exact details of the agreement were noticeably absent
from the Agreed Order tendered to the court. Between April 2013 and August
2015 Adam repaid approximately $14,000 to the estate. No further payments
were made, and Peppers apparently took no action to collect additional sums.
She filed periodic settlements in 2014 and 2015; no further filings were
tendered. On February 15, 2018, Peppers was appointed as Family Court
Judge for the 43rd Judicial Circuit. She did not resign as conservator as she
should have based on her new role as judge. Peppers was defeated in the
November 2018 general election, thereby removing the impediment to her
serving as Garrett’s conservator.
After five years of receiving no periodic settlements, the court scheduled
a show cause hearing for Peppers on February 27, 2020; she did not appear.
On March 10, 2020, Peppers appeared, with counsel, and informed the court
she was unable to file a periodic settlement, leading the trial court to
immediately remove her as conservator and appoint Brian K. Pack as her
successor. Pack undertook an audit of bank records for all of Garrett’s
previous accounts. The audit revealed between April 2016 and January 2020,
Peppers transferred approximately $28,500 of Garrett’s funds into her own
personal or business accounts. During this time, she deposited $4,000 into
Garrett’s account, resulting in a total of approximately $24,500 of Garrett’s
funds unaccounted for. On April 15, 2020, Peppers voluntarily tendered
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$27,000 in certified funds to Pack to make Garrett whole. This amount was
approximately $2,500 more than Pack calculated as Garrett’s loss due to
Peppers’ actions. Peppers self-reported her conduct to the KBA, resulting in
the filing of the current disciplinary action.
The Inquiry Commission charged Peppers with violating SCR
3.130(1.15)(a) which provides in relevant part “[a] lawyer shall hold property of
clients or third persons that is in a lawyer’s possession in connection with a
representation separate from the lawyer’s own property. Funds shall be kept in
a separate account[.]” Peppers was also charged with violating SCR
3.130(8.4)(c) which provides it is professional misconduct for a lawyer to
“engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”
Peppers admits she violated this rule by her conduct, and she and the KBA
have agreed to a negotiated sanction to resolve this matter.
Under SCR 3.480(2), this Court “may consider negotiated sanctions of
disciplinary investigations, complaints or charges . . . .” Peppers now moves
this Court to accept this consensual discipline for her violations of SCR
3.130(1.15)(a) and SCR 3.130(8.4)(c). She asks us to impose the sanction of a
five-year suspension from the practice of law, retroactive to August 20, 2020,
the date of her temporary suspension. The KBA, having acknowledged its
review of her motion and analogous case law, stated no objection to the
proposed discipline and requested we order the proposed discipline.
Peppers has no prior disciplinary record, made a timely good faith effort
to make restitution, and has been cooperative throughout these proceedings.
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She also presented some evidence of ongoing mental health issues which were
undiagnosed and not being managed at the time of her misconduct. However,
her actions evince a dishonest or selfish motive and establish a pattern of
misconduct relative to financial dealing with client funds.
As stated by Bar Counsel, the proposed sanction is supported by the
discipline imposed for similar violations in Kentucky Bar Assoc. v. Calvert, 607
S.W.3d 700 (Ky. 2020), and Thakur v. Kentucky Bar Assoc., 444 S.W.3d 435(Ky. 2014). The Chair of the Inquiry Commission and a Past President of
the KBA reviewed and approved the sanctions. After reviewing the allegations,
Peppers’ previous disciplinary record, and the cases cited by the KBA, this
Court concludes the discipline proposed by Peppers, and agreed to by the KBA,
is appropriate.
Therefore, because the KBA and Peppers have agreed to the five-year
suspension, the Court hereby orders:
1. Traci Lee Tidball Peppers’ motion for consensual discipline is granted
pursuant to SCR 3.480(2).
2. Peppers is adjudged guilty of the above-described and admitted
violations of SCR 3.130 (1.15)(a) and SCR 3.130(8.4)(c).
3. Peppers is suspended from the practice of law for five years with such
suspension to be imposed retroactively to August 20, 2020, for the
violations.
4. If she has not already done so, pursuant to SCR 3.390, Peppers must
promptly take all reasonable steps to protect the interests of her
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clients, including, within ten days after the issuance of this order,
notifying by letter all clients of her inability to represent them and of
the necessity and urgency of promptly retaining new counsel and
notifying all courts or other tribunals in which Peppers has matters
pending. Peppers must simultaneously provide a copy of all such
letters to the Office of Bar Counsel.
5. If she has not already done so, pursuant to SCR 3.390, Peppers must
immediately cancel any pending advertisements; must terminate any
advertising activity for the duration of the term of suspension; and
must not allow her name to be used by a law firm in any manner until
she is reinstated.
6. Pursuant to SCR 3.390, Peppers must not, during the term of
suspension and until reinstatement, accept new clients or collect
unearned fees.
7. Pursuant to SCR 3.450, Peppers is directed to pay all costs associated
with this disciplinary proceeding against her, for which execution may
issue from this Court upon finality of this Opinion and Order.
All sitting. Minton, C.J.; Conley, Hughes, Keller, Lambert and Nickell,
JJ., concur. VanMeter, J., dissents with a separate opinion.
VanMeter, J., dissenting. Theft of client funds, here over $24,000, when
one serves in a fiduciary capacity justifies the permanent sanction of
disbarment. Ky. Bar Ass’n v. Edwards, 377 S.W.3d 557 (Ky. 2012)
(permanently disbarring attorney serving in a fiduciary capacity for taking
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$78,000 of his ward’s funds); Ky. Bar Ass’n v. Christian, 320 S.W.3d 687 (Ky.
2010) (permanently disbarring attorney who took $13,000 from estate and
failed to comply with statutory obligations as executor of estate). I expressed
this consistent view in Ky. Bar Ass’n v. Calvert, 607 S.W.3d 700, 710 (Ky.
2020) (VanMeter, J., concurring in part, dissenting in part).
ENTERED: April 28, 2022.
______________________________________
CHIEF JUSTICE
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