Gerald D. Waggoner, Jr. v. Board of Professional Responsibility of the Supreme Court of Tennessee ( 2023 )

07/11/2023
IN THE SUPREME COURT OF TENNESSEE
AT JACKSON
Assigned on Briefs April 5, 2023
GERALD D. WAGGONER, JR. v. BOARD OF PROFESSIONAL
RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE
Direct Appeal from the Chancery Court for Shelby County
No. CH-21-1145 William B. Acree, Senior Judge
___________________________________
No. W2022-01294-SC-R3-BP
___________________________________
A Board of Professional Responsibility hearing panel found that a Shelby County
attorney’s law license should be suspended for four years based on multiple violations of
the Rules of Professional Conduct (RPCs), including RPC 5.5(a). The attorney appealed
part of the hearing panel’s decision, and the trial court affirmed in part, reversed in part,
and modified the sanction to one year. The Board appeals the trial court’s decision that the
attorney did not violate RPC 5.5(a) by practicing law while his license was suspended. We
find that the attorney violated RPC 5.5(a) by continuing to manage and market his law
practice; by directly or indirectly communicating with office staff, attorneys, and former
clients; and by recruiting and hiring attorneys while his law license was suspended. The
hearing panel’s decision that the attorney violated RPC 5.5(a) is supported by substantial
and material evidence. We hold that the attorney’s law license shall be suspended for two
years, with eighteen months served on active suspension. This sanction is based on the
RPC 5.5(a) violation, as well as the hearing panel’s findings that he violated additional
RPCs, which he did not appeal, the American Bar Association’s Standards for Imposing
Lawyer Sanctions (ABA Standards), five aggravating factors, and no mitigating factors.
The attorney shall also make appropriate restitution, obtain additional continuing education
as ordered by the trial court, and engage a practice monitor during his probated suspension.
Tenn. Sup. Ct. R. 9, § 33.1(d); Judgment of the Trial Court Reversed in Part;
Decision of the Hearing Panel Affirmed in Part, Reversed in Part
SHARON G. LEE, J., delivered the opinion of the Court, in which ROGER A. PAGE, C.J., and
JEFFREY S. BIVINS, HOLLY KIRBY, and SARAH K. CAMPBELL, JJ., joined.
James W. Milam, Brentwood, Tennessee, for the appellant, Board of Professional
Responsibility.
Gerald D. Morgan, Spring Hill, Tennessee, for the appellee, Gerald D. Waggoner, Jr.
OPINION
I.
Gerald D. Waggoner, Jr. was admitted to practice law in Tennessee in 1989. On
August 1, 2017, this Court suspended Mr. Waggoner for three years for removing client
funds from his trust account without his client’s knowledge or consent and converting the
funds for his personal and business use, as well as for making material misrepresentations
to the Board about the location of the funds.1 Mr. Waggoner was required to reimburse his
client $48,528.25 (less any amount already paid) as a condition of reinstatement.
In 2019 and 2020, the Board filed a petition and two supplemental petitions for
discipline against Mr. Waggoner. Only the findings from the initial petition and the second
supplemental petition are considered in this appeal.2 The initial petition, filed May 2019,
alleged that Mr. Waggoner continued to practice law during his suspension by managing
and marketing his law firm, Memphis Legal Group, and thus violated RPCs 5.5(a)
(unauthorized practice of law) and 8.4(a) and (g) (misconduct). In March 2020, the Board
filed a second supplemental petition, alleging that in June 2013, Mr. Waggoner filed
personal injury cases in the Shelby County General Sessions Court on behalf of an adult
and minor children injured in an automobile accident. Mr. Waggoner settled the cases. In
one case, he received the minors’ settlement funds but failed to transmit the net proceeds,
as ordered by the court, to the court clerk to hold until the minors reached the age of
eighteen. In the second case, a minor’s settlement was not approved by the court, and the
court later dismissed the case for failure to prosecute. Mr. Waggoner did not refile the case.
Based on Mr. Waggoner’s handling of these court cases, the Board alleged that Mr.
Waggoner violated RPCs 1.3 (diligence), 1.4 (communication), 1.15 (safekeeping property
and funds), 1.16 (declining or terminating representation), 3.2 (expediting litigation), 3.4(c)
(fairness to opposing party and counsel), 5.3 (responsibilities regarding nonlawyer
assistants), and 8.4(a) through (d) (misconduct).
1
Order of Enforcement, In Re: Gerald Denny Waggoner, Jr., BPR #013988, No. M2017-01434-
SC-BAR-BP (Tenn. Aug. 1, 2017).
2
The first supplemental petition, filed in July 2019, asserted that Mr. Waggoner continued to
manage the law practice of Memphis Legal Group after his suspension. In addition, the petition alleged that
a client paid Memphis Legal Group in July 2018 to represent her in criminal court, but no attorney appeared
in court on her behalf and no legal fees were refunded to her. The hearing panel found Mr. Waggoner had
violated RPCs 3.4(c), 5.5(a), 8.1(b), and 8.4(a), (b), and (c). The trial court reversed the panel’s findings,
and the Board did not appeal the trial court’s decision.
-2-
Hearing Panel
Following a December 2020 evidentiary hearing, a Board hearing panel issued its
findings of fact and conclusions of law. On the initial petition, the hearing panel found that
on August 1, 2017, this Court suspended Mr. Waggoner’s law license for three years. At
the time of his suspension, Mr. Waggoner had two offices in Memphis: the Waggoner Law
Firm on Poplar Avenue and Memphis Legal Group on Summer Avenue. After his
suspension, Mr. Waggoner closed the Waggoner Law Firm office, notified his clients of
his suspension, and advised his clients that attorney Brad Reasonover would finish their
cases or they could hire another attorney. The Memphis Legal Group office, which
primarily handled traffic ticket cases, remained open and continued to accept new clients
after Mr. Waggoner’s August 1, 2017 suspension through August 2018 when he closed the
office. After his suspension, Mr. Waggoner communicated with his former clients through
Christi Walker, who was Memphis Legal Group’s office manager, and through other staff
members. Mr. Waggoner interviewed and hired attorneys to staff Memphis Legal Group
and otherwise directed and marketed the firm after his suspension.
The hearing panel found that Mr. Waggoner’s use of Ms. Walker as an intermediary
to communicate with his former clients about their cases and what they “could do” in their
cases and who from the Waggoner Law Firm would be in court with them was not a
“firewall” against unauthorized practice. The panel also determined Mr. Waggoner’s
conduct “did nothing more than aid a non-lawyer in the practice of law.” The hearing panel
concluded that Mr. Waggoner violated RPCs 5.5(a) (unauthorized practice of law),3 8.1(b)
(bar admission and disciplinary matters),4 and 8.4(a), (c), and (d) (misconduct).5
3
“A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal
profession in that jurisdiction, or assist another in doing so.” Tenn. Sup. Ct. R. 8, RPC 5.5(a).
4
An applicant for admission to the bar, or a lawyer in connection with a bar
admission application or in connection with a disciplinary matter, shall not:
...
(b) fail to disclose a fact necessary to correct a misapprehension known by the
person to have arisen in the matter, or knowingly fail to respond to a lawful demand for
information from an admissions or disciplinary authority, except that this Rule does not
require disclosure of information otherwise protected by RPC 1.6.
Tenn. Sup. Ct. R. 8, RPC 8.1(b).
5
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Rules of Professional Conduct, knowingly
assist or induce another to do so, or do so through the acts of another;
...
(c) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation;
-3-
On the second supplemental petition, the hearing panel found that Mr. Waggoner
filed separate personal injury cases in the Shelby County General Sessions Court in June
2013 for Bennie Stephens and his two minor children for injuries arising from a car
accident. After a March 2014 settlement hearing, the trial court approved the minors’
settlements. The trial court’s orders directed that after payment of attorney fees and medical
expenses, the net proceeds of $2,948.80 for each minor were to be deposited with the court
clerk and held in an interest-bearing account until the minors turned eighteen. On April 1,
2014, Mr. Waggoner received the settlement checks for the minor children, and the checks
were deposited in the bank account of Memphis Legal Group, Inc. On November 12, 2020,
Mr. Waggoner paid to the court clerk the minors’ funds from a bank account he shared
with Ms. Walker. The hearing panel concluded that Mr. Waggoner intentionally withheld
the settlement funds, failed to timely deposit the funds with the court clerk, and did not
hold the funds separate from his own funds. The minor clients were deprived of the funds
and the interest that would have accrued from April 15, 2014, to November 12, 2020. In
another matter arising out of the same car accident, Mr. Waggoner represented Mary
Vaught and her minor child in a case filed in June 2013 in the Shelby County General
Sessions Court. In October 2014, the trial court dismissed the case without prejudice for
lack of prosecution. Mr. Waggoner failed to refile the case. The hearing panel concluded
that Mr. Waggoner, despite being an experienced attorney, intentionally failed to act with
reasonable diligence and promptness while handling the Vaught case. The hearing panel
found that Mr. Waggoner violated RPCs 1.3 (diligence),6 1.4 (communication),7 1.15
(d) engage in conduct that is prejudicial to the administration of justice . . . .
Tenn. Sup. Ct. R. 8, RPC 8.4(a), (c)–(d).
6
“A lawyer shall act with reasonable diligence and promptness in representing a client.” Tenn. Sup.
Ct. R. 8, RPC 1.3.
7
(a) A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to
which the client’s informed consent, as defined in RPC 1.0(e), is required by these Rules;
(2) reasonably consult with the client about the means by which the client’s
objectives are to be accomplished;
(3) keep the client reasonably informed about the status of the matter;
(4) promptly comply with reasonable requests for information[]
…
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the
client to make informed decisions regarding the representation.
Tenn. Sup. Ct. R. 8, RPC 1.4.
-4-
(safekeeping property and funds),8 1.16 (declining or terminating representation),9 and 8.4
(misconduct).10
The hearing panel determined that suspension was the appropriate baseline standard
based on ABA Standards 4.12, 4.42, 6.23, 7.2, and 8.2. The panel found no mitigating
factors and six aggravating factors applied to Mr. Waggoner: a pattern of misconduct,
failure to acknowledge the wrongful nature of his conduct, prior disciplinary history,
multiple offenses, substantial experience in the practice of law, and dishonest or selfish
motive. Based on these findings, the hearing panel concluded that Mr. Waggoner’s law
license should be suspended for four years. The panel also required Mr. Waggoner to pay
8
(a) A lawyer shall hold property and funds of clients or third persons that are in a
lawyer’s possession in connection with a representation separate from the lawyer’s own
property and funds.
...
(d) Upon receiving funds or other property in which a client or third person has an
interest, a lawyer shall promptly notify the client or third person. Except as stated in this
Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly
deliver to the client or third person any funds or other property that the client or third person
is entitled to receive and, upon request by the client or third person, shall promptly render
a full accounting regarding such funds or other property.
Tenn. Sup. Ct. R. 8, RPC 1.15(a), (d).
9
A lawyer who is discharged by a client, or withdraws from representation of a
client, shall, to the extent reasonably practicable, take steps to protect the client’s interests.
Depending on the circumstances, protecting the client’s interests may include: . . . (4)
promptly surrendering papers and property to which the client is entitled and any work
product prepared by the lawyer for the client and for which the lawyer has been
compensated . . . .
Tenn. Sup. Ct. R. 8, RPC 1.16(d)(4).
10
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Rules of Professional Conduct, knowingly
assist or induce another to do so, or do so through the acts of another;
…
(c) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
…
(g) knowingly fail to comply with a final court order entered in a proceeding in
which the lawyer is a party . . . .
Tenn. Sup. Ct. R. 8, RPC 8.4(a), (c)–(d), (g).
-5-
restitution for accrued interest to the minor children in the Stephens case due to his delay
in depositing the funds.
Trial Court Review
Mr. Waggoner petitioned for review under Tennessee Supreme Court Rule 9,
section 33.1(a), challenging the hearing panel’s findings related to the initial petition that
he violated RPCs 5.5(a), 8.1(b), and 8.4(a), (c), and (d). He did not appeal the panel’s
findings related to the second supplemental petition that he violated RPCs 1.3, 1.4, 1.15,
1.16, and 8.4 in his handling of the Stephens and Vaught cases.
The trial court reversed the hearing panel’s findings that Mr. Waggoner violated
RPC 5.5(a) because the trial court could not conclude that Mr. Waggoner applied his
professional judgment to a specific client’s legal problem. The trial court reversed the
panel’s decision as to RPC 8.1(b) because of a lack of proof that Mr. Waggoner failed to
disclose a necessary fact to the Board during its investigation. Further, the trial court
reversed the panel’s decision on RPC 8.4(c) because Mr. Waggoner’s actions were not
deceitful. The trial court affirmed the panel’s decision that Mr. Waggoner violated RPC
8.4(a) and (d) by his involvement in hiring attorneys and actively managing Memphis
Legal Group while suspended from practicing law. The trial court reversed the panel’s
decision that Mr. Waggoner’s actions constituted a pattern of misconduct that served as an
aggravating factor but otherwise affirmed the panel’s findings on the remaining
aggravating factors and the lack of mitigating factors. Based on its findings, the trial court
reduced Mr. Waggoner’s suspension from four years to one year. The trial court affirmed
the panel’s requirement of restitution to the two minor clients and further ordered that Mr.
Waggoner obtain twelve additional hours of continuing legal education related to ethics or
the handling of client property.
The Board appeals to this Court, challenging the trial court’s reversal of the hearing
panel’s finding that Mr. Waggoner violated RPC 5.5(a) by engaging in the unauthorized
practice of law from August 1, 2017, until August 13, 2018, and the reduction of Mr.
Waggoner’s suspension from four years to one year.11 The Board argues, in part, that the
trial court defined “practice of law” too narrowly and disregarded substantial and material
evidence showing that Mr. Waggoner participated in the management and marketing of his
11
See Tenn. Sup. Ct. R. 9, § 33.1(d) (allowing “[e]ither party dissatisfied with the decree of the
circuit or chancery court [to] prosecute an appeal directly to the [Tennessee Supreme] Court”).
-6-
wholly owned law firm, in the supervision of its staff, and in the recruitment and hiring of
attorneys.12
Mr. Waggoner argues that the hearing panel’s findings and conclusions regarding
the RPC 5.5(a) violation and the aggravating and mitigating factors were unsupported by
the evidence and that the hearing panel’s sanction was too severe.
II.
Standard of Review
As the “final and ultimate arbiter of the propriety of the professional conduct of all
lawyers practicing in Tennessee,” Talley v. Bd. of Pro. Resp., 358 S.W.3d 185, 190 (Tenn.
2011) (citing Flowers v. Bd. of Pro. Resp., 314 S.W.3d 882, 891 (Tenn. 2010); Sneed v.
Bd. of Pro. Resp., 301 S.W.3d 603, 612 (Tenn. 2010)), we are tasked with “the ultimate
disciplinary responsibility for violations of the ethical rules that govern the legal
profession,” Sneed, 301 S.W.3d at 612 (citing Doe v. Bd. of Pro. Resp., 104 S.W.3d 465,
469–70 (Tenn. 2003)). Thus, we review judgments in disciplinary proceedings “in light of
our inherent power . . . [and] fundamental right to prescribe and administer rules pertaining
to the licensing and admission of attorneys.” Bd. of Pro. Resp. v. Parrish, 556 S.W.3d 153,
162 (Tenn. 2018) (alteration in original) (internal quotation marks omitted) (quoting Bd. of
Pro. Resp. v. Allison, 284 S.W.3d 316, 321 (Tenn. 2009)).
When reviewing a disciplinary judgment, we apply the same standard of review as
the trial court. Id. (citing Long v. Bd. of Pro. Resp., 435 S.W.3d 174, 178 (Tenn. 2014));
see also Tenn. Sup. Ct. R. 9, § 33.1(d). Under that standard, we may reverse or modify the
hearing panel’s decision only where:
12
The parties reference challenges to RPC 8.4(d) and (g) violations in their briefs. The Board states
in a footnote in its brief that “[t]he reference to RPC 8.4(d) is a typographical error which was clearly meant
to be 8.4(g). RPC 8.4(g) addresses a violation which occurs when a lawyer knowingly violates a final court
order in a proceeding in which he is a party.” Mr. Waggoner responds by saying that “this Court should
reverse the hearing panel’s conclusions that Mr. Waggoner violated 8.4(c) and (d), as the [Board] did not
even allege such violations in the First Petition.” Mr. Waggoner states in a footnote in his brief that “[t]he
[Board] does not refer to 8.4(c) in its brief, and thus has not appealed the trial court’s reversal of that
violation. . . . [T]he [Board] does claim that the trial court’s reference to 8.4(d) should have been a reference
to 8.4(g), but it did not file a motion in the trial court to address that alleged error.” That is the extent of
both parties’ conclusory statements regarding RPC 8.4(d) and (g). Unpreserved issues raised by parties that
are unsupported by authority or citation to the record are waived. Tenn. R. App. P. 13(b); State v. Bristol,
654 S.W.3d 917, 925 (Tenn. 2022). Thus, we decline to consider the parties’ arguments regarding RPC
8.4(d) and (g).
-7-
the rights of the party filing the Petition for Review have been prejudiced
because the hearing panel’s findings, inferences, conclusions or decisions
are: (1) in violation of constitutional or statutory provisions; (2) in excess of
the hearing panel’s jurisdiction; (3) made upon unlawful procedure; (4)
arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion; or (5) unsupported by evidence which is
both substantial and material in the light of the entire record.
Tenn. Sup. Ct. R. 9, § 33.1(b). A hearing panel’s decision is supported by “substantial and
material evidence” where the evidence “furnishes a reasonably sound factual basis for the
decision being reviewed.” Parrish, 556 S.W.3d at 163 (quoting Sneed, 301 S.W.3d at 612).
“A reasonably sound basis is less than a preponderance of the evidence but more than a
scintilla or glimmer.” Harris v. Bd. of Pro. Resp., 645 S.W.3d 125, 137 (Tenn. 2022)
(quoting Beier v. Bd. of Pro. Resp., 610 S.W.3d 425, 438 (Tenn. 2020)).
We review questions of law de novo without a presumption of correctness. Id. at
136 (citing Bd. of Pro. Resp. v. Barry, 545 S.W.3d 408, 420 (Tenn. 2018)). However, we
defer to the hearing panel’s determinations on questions of fact and the weight given to
them. Id.; Long, 435 S.W.3d at 178 (citing Allison, 284 S.W.3d at 323).
RPC 5.5(a)
The Board argues that Mr. Waggoner engaged in the unauthorized practice of law
during his suspension, and thus violated RPC 5.5(a), by managing, directing, and marketing
Memphis Legal Group; by hiring attorneys as independent contractors to operate his law
firm; and by communicating with his former clients and staff using his office manager as
an intermediary. Mr. Waggoner contends that his actions did not constitute the practice of
law.
RPC 5.5(a), standing alone, is relatively simple: “A lawyer shall not practice law in
a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or
assist another in doing so.” Tenn. Sup. Ct. R. 8, RPC 5.5(a). Comment 1 provides that RPC
5.5(a) “applies to unauthorized practice of law by a lawyer, whether through the lawyer’s
direct action or by the lawyer assisting another person.” Tenn. Sup. Ct. R. 8, RPC 5.5 cmt.
1. Enforcement of RPC 5.5(a) requires this Court to consider the often-ambiguous contours
of what constitutes the practice of law. Cf. Tenn. Sup. Ct. R. 8, RPC 5.5 cmt. 2 (“The
definition of the practice of law is established by law and varies from one jurisdiction to
another.”).
-8-
In In re Burson, the practice of law is described as “relat[ing] to the rendition of
services for others that call for the professional judgment of a lawyer.” 909 S.W.2d 768,
775 (Tenn. 1995). The “professional judgment of a lawyer” is defined by the lawyer’s
“educated ability to relate the general body and philosophy of law to a specific legal
problem of a client.” Id. Since Burson, Tennessee courts have considered when activities
require the “professional judgment of a lawyer” in cases involving the preparation and
filing of legal documents and court appearances. See, e.g., Green v. Bd. of Pro. Resp., 567
S.W.3d 700, 714 (Tenn. 2019) (finding a lawyer violated RPC 5.5(a) when he filed a
motion to dismiss and discovery requests and was named as counsel on a scheduling order
filed with the court before obtaining pro hac vice admission); Old Hickory Eng’g & Mach.
Co. v. Henry, 937 S.W.2d 782, 786 (Tenn. 1996) (“The preparation and filing of a
complaint requires ‘the professional judgment of a lawyer,’ and is, therefore, the practice
of law.” (quoting Burson, 909 S.W.2d at 776)); Tenn. Env’t Council, Inc. v. Tenn. Water
Quality Control Bd., 254 S.W.3d 396, 408–09 (Tenn. Ct. App. 2007) (“The petition for a
declaratory order identifies issues that require the Environmental Council’s representative
to exercise professional legal judgment not only in the formal, adversarial proceedings . . . ,
but in the drafting of such a complex petition.”).
This case presents a slightly different issue. Mr. Waggoner did not appear in court
on behalf of clients or prepare legal documents. Instead, he continued to be involved in
managing and marketing Memphis Legal Group, he hired multiple independent contract
attorneys to carry on the legal work of his law firm, and he communicated directly with his
law firm’s staff and indirectly with his former clients. While we have not previously
addressed this issue, the Kansas Supreme Court has reviewed a similar case involving the
unauthorized practice of law—In re Miller, 238 P.3d 227 (Kan. 2010). Christopher Miller
was the sole shareholder and practiced law at a law firm organized as a professional
association. Id. at 228. After Mr. Miller was suspended for two years by the Kansas
Supreme Court, he failed to notify his clients that he had been suspended and maintained
a sign outside of his former office identifying himself as an attorney. Id. at 228–29, 235.
Before his suspension, Mr. Miller arranged for another attorney, Christopher Cowger, to
take over his law practice. Id. at 229. Mr. Cowger was paid by the corporation on an hourly
basis, and his income as an independent contractor was reported to the Internal Revenue
Service. Id. During Mr. Miller’s suspension, a letter was sent to opposing counsel on behalf
of one of Mr. Miller’s former clients. Id. The letter’s signature block read, “Sincerely yours,
Chris Miller For the Firm.” Id. Mr. Cowger was named as the president, treasurer, and sole
shareholder of the corporation, but Mr. Miller retained financial control and signed all of
the corporation’s checks. Id. at 230–31.
-9-
A hearing panel found Mr. Miller violated Kansas Rule of Professional Conduct
5.5 and other rules.14 Id. at 231. On appeal, the Kansas Supreme Court rejected Mr.
13
Miller’s argument that he did not commit the unauthorized practice of law, finding that
neither Mr. Miller nor his corporation had the authority to contract with Mr. Cowger. Id.
at 236. The Miller court reasoned that, because suspended lawyers are forbidden from
practicing after their suspension, it logically follows that a “suspended attorney cannot hire
an independent contractor to do the legal work which the suspended attorney is precluded
from doing.” Id.; see Tenn. Sup. Ct. R. 9, § 12.2(a)(1) (“No attorney suspended under any
Section of this Rule shall resume practice until reinstated by order of the Court.”).
Mr. Waggoner argues that Miller is factually different from his case and provides
no guidance. He notes that after his suspension, Mr. Miller continued to work in his law
office, displayed an exterior sign identifying himself as an attorney, failed to inform his
clients of his suspension, identified himself in letters as an attorney, and maintained control
of the corporation’s checking accounts and made all financial decisions. Miller, 238 P.3d
at 228–31, 235.
We agree Mr. Waggoner’s actions were not as egregious as the attorney’s conduct
in Miller. Mr. Waggoner did not hold himself out as an attorney, did not continue to work
in his office, and notified his clients of his suspension. But these factual distinctions were
not the basis for the Miller court’s ultimate conclusion that a “suspended attorney cannot
hire an independent contractor to do the legal work which the suspended attorney is
precluded from doing.” Id. at 236. Although the Miller court noted Mr. Miller’s failure to
notify clients and the public of his suspension, its holding that Mr. Miller was engaged in
the unauthorized practice of law did not turn on those facts. Id. at 235.
After careful review, we hold that an attorney who has been suspended from the
practice of law violates RPC 5.5(a) by managing and marketing his law firm; by directly
or indirectly communicating with office staff, attorneys, and former clients; and by
recruiting and hiring attorneys to exercise the “professional judgment” that the suspended
attorney is forbidden from doing. Burson, 909 S.W.2d at 775; see also Matter of Thonert,
693 N.E.2d 559, 563 (Ind. 1998) (“[T]he practice of law is not defined only as the giving
of legal advice or acting in a representative capacity—it also had been extended by this
13
Kansas Rule of Professional Conduct 5.5(a) is identical to Tennessee’s RPC 5.5(a), prohibiting
the practice of law “in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction,
or assist[ing] another in doing so.” Kan. Sup. Ct. R. 240, RPC 5.5(a).
14
Mr. Miller was also found to have violated Kansas Rules of Professional Conduct 8.1(b) (failure
to respond to lawful demand for information from disciplinary authority) and 8.4(a) (misconduct) and (g)
(engaging in conduct adversely reflecting on lawyer’s fitness to practice law). Miller, 238 P.3d at 228.
- 10 -
Court to conducting the business management of a law practice.”); Iowa Sup. Ct. Att’y
Disciplinary Bd. v. D’Angelo, 710 N.W.2d 226, 233 (Iowa 2006) (holding that “attempt[s]
to assign client cases . . . to another attorney who will sign pertinent documents and keep
the law office open during the period of suspension” constitute the unauthorized practice
of law); In re Hosford, 252 N.W. 843, 846, 849 (S.D. 1934) (holding that a suspended
attorney who had associated with another attorney for the purpose of allowing the
suspended attorney “to hold his clientele and law business and continue the practice of
law” engaged in the unauthorized practice of law).
It would undermine the purpose of the attorney disciplinary process if a suspended
attorney could make an end-run around his suspension, practice law by proxy, and continue
to generate revenue from the practice of law. See Hornbeck v. Bd. of Pro. Resp., 545
S.W.3d 386, 396–97 (Tenn. 2018) (describing the purposes of the attorney disciplinary
process as “safeguard[ing] the administration of justice, protect[ing] the public from the
misconduct or unfitness of members of the legal profession, and preserv[ing] the
confidence of the public in the integrity and trustworthiness of lawyers in general” (citing
ABA Standards for Imposing Lawyer Sanctions 1.1)). We cannot sanction a reading of
RPC 5.5(a) that hinders the public interest by allowing a suspended attorney “to act in
matters of professional judgment” through another attorney or non-attorney. Burson, 909
S.W.2d at 775; cf. Tenn. Sup. Ct. R. 8, RPC 5.5(h) (“A lawyer or law firm shall not employ
or continue the employment of a disbarred or suspended lawyer as an attorney, legal
consultant, law clerk, paralegal or in any other position of a quasi-legal nature.”).
Although not binding, the definition of “practice of law” in Tennessee Code
Annotated section 23-3-101(3) supports our holding.15 Section 23-3-103 makes it unlawful
for a person to practice law without a license. Tenn. Code Ann. § 23-3-103(a)–(b) (2021).
Section 23-3-101(3) defines “practice of law” as including, in part, “the soliciting of clients
directly or indirectly to provide” legal services. Id. § -101(3) (emphasis added). Thus, it
follows that a suspended attorney, whose license is not “in full force and effect,” should
not be able to solicit clients, either by direct contact or indirectly through the employment
of others. Id. § -103(a).
We now review the record to determine if the hearing panel’s finding that Mr.
Waggoner violated RPC 5.5(a) is supported by substantial and material evidence. The
record shows that during his suspension, Mr. Waggoner took an active role in interviewing
and/or hiring at least eight attorneys to run Memphis Legal Group between his suspension
date of August 1, 2017, and when he closed his office a year later. The attorneys include
15
See Burson, 909 S.W.2d at 776 (providing that section 23-3-103 is “an aid to the inherent power
of this Court” but that we “are not bound by the definitions . . . employed in these penalty statutes”).
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Brad Reasonover, Daniel Lenagar, Stephen Barnes, Kenneth Brashier, Joshua Corman,
Joseph Crone, Chelsea Rainey, and Tim Fowler. Mr. Waggoner offered Mr. Reasonover
the opportunity to “take over the firm.” Mr. Lenagar and Mr. Barnes learned about the
employment opportunity after hearing that “Mr. Waggoner was unable to practice and was
looking for someone to take over his business while he was unable to practice.” Mr.
Waggoner met with Mr. Lenagar and Mr. Barnes and tried to hire them by saying, “It’s
your company. I’ll market you too.” In a later meeting with Mr. Brashier, Mr. Waggoner
and Ms. Walker explained that Mr. Waggoner had been suspended and could no longer
operate his long-standing practice. Mr. Brashier testified that in this meeting, Ms. Walker
said she and Mr. Waggoner thought Mr. Brashier would be able to help Memphis Legal
Group clients. Mr. Fowler eventually left the firm because of his suspicions, confirmed by
Ms. Walker, that Memphis Legal Group was continuing to accept new clients, even though
there was no supervising attorney.
Additionally, Mr. Waggoner had open communications with Memphis Legal
Group’s attorneys and assistants, both directly and indirectly using Ms. Walker as an
intermediary, to maintain influence over Memphis Legal Group’s operations. For example,
Mr. Waggoner directed Memphis Legal Group’s assistants to arrive at court early in an
attempt to indirectly solicit clients for Memphis Legal Group contrary to the instructions
given by Mr. Lenagar and Mr. Barnes. Mr. Waggoner periodically talked with Mr. Lenagar
and Mr. Barnes during their employment at Memphis Legal Group, asking whether they
were understanding the practice and if they had any questions. Both attorneys left Memphis
Legal Group after learning that Mr. Waggoner or Ms. Walker had fired the assistants in the
office. Mr. Brashier stated that Mr. Waggoner called to remind him that a specific
prosecutor had previously offered to dismiss a pending criminal case. Andrea Menchaca,
a former Memphis Legal Group assistant, testified that, when no attorney was available,
she would call Ms. Walker with legal questions that clients had about their cases. Ms.
Walker would return her call with an answer within twenty to thirty minutes. Mr. Fowler
stated when he brought up an issue with Ms. Walker, he later received an unprompted
message from Mr. Waggoner addressing that issue.
Mr. Waggoner also indirectly communicated with former clients after his
suspension. He testified he used Memphis Legal Group attorneys and staff as
intermediaries to avoid being accused of giving legal advice. Mr. Waggoner explained he
was “trying to find a home” for his clients’ files as late as August 2018. He admitted
communicating with former clients about his suspension and its effect on the logistics of
their cases, including whether Mr. Waggoner could refer them to another attorney and if
another attorney would appear in court to represent them. He stated Ms. Walker would talk
to clients before talking to Mr. Waggoner and resolving their issues.
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Mr. Waggoner’s active role at Memphis Legal Group was, at least in part, motivated
by his concern about maintaining his client base and staying current on Memphis Legal
Group’s three-year lease, for which he was responsible. Mr. Waggoner admitted he was
concerned about putting attorneys in place who could take care of his clients and generate
enough income to make his lease payments and to pay other expenses. Mr. Waggoner
conceded that he attempted to incentivize Memphis Legal Group’s newly hired attorneys
to assume a managing role by describing the prospect of Memphis Legal Group’s current
and prospective clients and the money that the attorneys could bring in. Mr. Waggoner
lauded Mr. Lenagar and Mr. Barnes for working “inexpensively.” After his suspension,
Mr. Waggoner started a direct mail marketing firm that provided marketing services for
Memphis Legal Group. During his tenure at Memphis Legal Group, Mr. Brashier realized
that Memphis Legal Group’s marketing letters, prepared by Mr. Waggoner, incorrectly
attributed Mr. Waggoner’s years of experience to him. When asked about the error, Mr.
Waggoner responded by saying that Mr. Brashier was “running an office that ha[d] been
around now for many, many years.”
In sum, substantial and material evidence supports the hearing panel’s findings that
Mr. Waggoner continued to play an active role in the operation, management, and
marketing of Memphis Legal Group to maintain his practice during his suspension and to
generate revenue to fulfill his financial obligations for lease payments and other expenses.
Mr. Waggoner tried to skirt his suspension by hiring contract lawyers through Memphis
Legal Group to do work he was prohibited from doing and using these attorneys and staff
as a firewall against unauthorized practice. Mr. Waggoner also continued to communicate
with attorneys, staff, and former clients during his suspension.
Propriety of the Sanction
We next determine the appropriate sanction for Mr. Waggoner’s misconduct. He
violated RPC 5.5(a) by engaging in the unauthorized practice of law while he was
suspended by order of this Court. Mr. Waggoner did not appeal the hearing panel’s findings
that he also violated RPC 8.4(a)16 and (d) and that, in his representation in the Stephens
and Vaught cases, he violated RPCs 1.3, 1.4, 1.15, 1.16, and 8.4 by, among other things,
failing to act with reasonable diligence and promptness; failing to keep his client
reasonably informed; failing to keep his clients’ funds separate from his funds; failing to
take steps to protect his clients’ interests after withdrawing from representation; violating
the Rules of Professional Conduct; engaging in conduct involving dishonesty; and
engaging in conduct that was prejudicial to the administration of justice.
16
Under RPC 8.4(a), it is professional misconduct to “violate or attempt to violate the Rules of
Professional Conduct.” Tenn. Sup. Ct. R. 8, RPC 8.4(a).
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The Board argues the trial court erred by reducing Mr. Waggoner’s suspension from
four years to one year. Yet, the Board proposed to the hearing panel that Mr. Waggoner be
suspended for a period of between six months and three years. It should be noted that the
hearing panel’s recommended four-year suspension was based on violations of RPC 5.5
and 8.4(a) and (d), as well as a number of violations that the trial court reversed, including
RPCs 3.4(c), 8.1(b), and 8.4(c). Conversely, Mr. Waggoner characterizes the hearing
panel’s sanction as being too severe. He contends the hearing panel and trial court
incorrectly applied aggravating and mitigating factors, and thus he should receive only a
public censure.
The ABA Standards provide guidance for determining the appropriate sanction.
Tenn. Sup. Ct. R. 9, § 15.4(a). Here, Standards 4.12,17 4.42,18 7.2,19 and 8.220 apply to Mr.
Waggoner’s violations. Under these Standards, the presumptive sanction for Mr.
Waggoner’s violations is a suspension. Standard 6.23,21 which has a baseline sanction of
a reprimand, does not apply. This Standard applies where a lawyer “negligently fails to
comply with a court order,” and here the evidence supports the hearing panel’s finding that
Mr. Waggoner’s noncompliance was intentional. Thus, the ABA Standards establish a
baseline sanction of suspension for Mr. Waggoner’s conduct.
We agree with the trial court that no mitigating factors and five aggravating factors
apply: prior disciplinary history, substantial experience in the practice of law, failure to
acknowledge the wrongful nature of his conduct, multiple offenses, and dishonest or selfish
motive.
17
“Suspension is generally appropriate when a lawyer knows or should know that he is dealing
improperly with client property and causes injury or potential injury to a client.” ABA Standards for
Imposing Lawyer Sanctions 4.12.
18
“Suspension is generally appropriate when: (a) a lawyer knowingly fails to perform services for
a client and causes injury or potential injury to a client, or (b) a lawyer engages in a pattern of neglect and
causes injury or potential injury to a client.” ABA Standards for Imposing Lawyer Sanctions 4.42.
19
“Suspension is generally appropriate when a lawyer knowingly engages in conduct that is a
violation of a duty owed as a professional and causes injury or potential injury to a client, the public, or the
legal system.” ABA Standards for Imposing Lawyer Sanctions 7.2.
20
“Suspension is generally appropriate when a lawyer has been reprimanded for the same or similar
misconduct and engages in further similar acts of misconduct that cause injury or potential injury to a client,
the public, the legal system, or the profession.” ABA Standards for Imposing Lawyer Sanctions 8.2.
21
“Reprimand is generally appropriate when a lawyer negligently fails to comply with a court order
or rule, and causes injury or potential injury to a client or other party, or causes interference or potential
interference with a legal proceeding.” ABA Standards for Imposing Lawyer Sanctions 6.23.
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Mr. Waggoner does not contest his prior disciplinary history. In 2017, this Court
suspended him for three years for misappropriating client funds from his escrow account
and making material misrepresentations to the Board. As a part of that suspension, Mr.
Waggoner was required to reimburse his client $48,528.25 less any amount he had
previously reimbursed. In 2005, Mr. Waggoner was issued a private reprimand for
violating RPCs 1.5(c), 7.1(a), 7.3(c)(1) and 7.3(c)(6) by failing to use written contingent
fee agreements, by using misleading advertisements, and by failing to include notification
of advertisement on mail-out communications. He does not challenge the finding that he
has substantial experience in the practice of law.22
Mr. Waggoner argues the other aggravating factors are not supported in the record.
He contends he acknowledged the wrongfulness of his conduct, citing his payment of the
minors’ settlement funds to the court clerk in 2020. However, Mr. Waggoner paid these
client funds out of his personal bank account six years after he received the funds and only
after the Board began investigating the nonpayment. He blamed the nonpayment on
attorneys and staff in his office for failing to properly do their jobs. Mr. Waggoner was
attorney of record in these cases and approved the settlement orders. He was responsible
for the proper handling of the funds. Further, Mr. Waggoner failed to acknowledge it was
wrong to manage his law firm by using his office manager as a “firewall” to protect him
from charges of unauthorized practice of law. Thus, the evidence supports applying the
aggravating factor of failure to acknowledge the wrongfulness of his conduct.
Next, Mr. Waggoner argues he did not commit multiple offenses. However, this
argument ignores the fact that he has been found to have violated RPCs 5.5(a) and 8.4(a)
and (d) in the initial petition and RPCs 1.3, 1.4, 1.15, 1.16, and 8.4 in the second
supplemental petition. Three of the RPC violations, 5.5(a) and 8.4(a) and (d), occurred
while Mr. Waggoner was suspended due to previous misconduct.
Mr. Waggoner also asserts the record supports mitigating factors of absence of a
dishonest or selfish motive, cooperative attitude toward the proceedings, and full and free
disclosure to the Board. He contends he acted out of concern for his clients who were
unrepresented after his suspension. While Mr. Waggoner may have had concerns for his
clients, the evidence also suggests he was motivated to keep his law firm operating and
profitable during his suspension to satisfy his lease and other obligations and to enable him
to return to his practice after his suspension ended. Further, Mr. Waggoner had the use of
the minors’ settlement funds for six years before he paid the funds to the court clerk. Thus,
the record supports the application of the aggravating factor that Mr. Waggoner acted out
of a dishonest or selfish motive.
22
Mr. Waggoner was admitted to practice in Tennessee in 1989.
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Mr. Waggoner argues that his “cooperative attitude toward the proceedings” is a
mitigating factor. However, merely attending and participating in the disciplinary
proceedings does not qualify as a mitigating factor. Mr. Waggoner also contends that he
offered free and full disclosure to the Board and hearing panel. Nothing in the record
supports this argument.
Sanctions imposed in similar cases are helpful in our analysis. In Green v. Board of
Professional Responsibility, this Court suspended an attorney for violating RPCs 5.5(a)
and 8.4(d) by appearing in a Mississippi trial court without being admitted pro hac vice as
required by Mississippi court rules and for violating RPCs 1.3 (diligence), 1.4
(communication), and 8.4(a) (misconduct) by failing to adequately inform two separate
clients about details of their representation, including the status of their cases and the trial
strategies he planned to employ. 567 S.W.3d at 703–09. The attorney had multiple RPC
violations, substantial experience in the practice of law, and a significant disciplinary
history. Id. at 716–17. This Court applied four aggravating factors and four mitigating
factors and affirmed a six-month suspension, with thirty days served on active suspension,
as well as several conditions, including payment of restitution and employment of a
practice monitor. Id. at 711, 717.
In Flowers v. Board of Professional Responsibility, this Court found an attorney had
violated RPCs 5.5(a) and 8.4(a) and (d), along with over twenty other disciplinary rules,
by conducting phone conferences and filing various legal documents, including briefs,
motions, and petitions, with immigration and appellate courts during his suspension. 314
S.W.3d at 887–88. After considering the number and severity of his violations and applying
six aggravating factors, the Court upheld the hearing panel’s one-year suspension. Id. at
902.
In Maddux v. Board of Professional Responsibility, an attorney violated RPCs
1.15(b) (safekeeping property and funds), 4.1 (truthfulness in statements to others), and
8.4(a) and (c) (misconduct) by failing to deposit checks received on behalf of his former
client with the Chancery Court for Hamilton County during pending litigation over the
payments, as well as by failing to notify the trial court or opposing counsel that he had
given the checks to his former client. 409 S.W.3d 613, 616–18 (Tenn. 2013). The Court
upheld the hearing panel’s nine-month suspension, finding three aggravating factors and
two mitigating factors applied to the attorney. Id. at 628.
In Thompson v. Board of Professional Responsibility, this Court held that an
attorney violated several RPCs, including 1.1 (competence), 1.3 (diligence), and 8.4(c) and
(d) (misconduct), by filing a voluntary nonsuit and neglecting to refile the case within the
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applicable statute of limitations. 600 S.W.3d 317, 318–19 (Tenn. 2020). The Court upheld
a one-year suspension, concluding that four aggravating factors and three mitigating factors
applied. Id. at 321–22.
As previously stated, Mr. Waggoner received a three-year suspension in 2017 when
he took a substantial sum of his client’s money from his escrow account without the client’s
knowledge or consent. And in 2005, he received a private reprimand for multiple RPC
violations pertaining to fee agreements and advertisement. Mr. Waggoner apparently has
learned nothing from these earlier sanctions imposed on him for his misconduct. Mr.
Waggoner’s unwillingness to abide by the Rules “foster[s] disrespect for the administration
of justice that ultimately does great harm to the public, the legal system, and the profession
of law.” Sneed, 301 S.W.3d at 618. Admission to the bar is a privilege, and “[i]t is the duty
of every recipient of that privilege”—including suspended attorneys—“to act at all times,
both professionally and personally, in conformity with the standards imposed upon
members of the bar as conditions” for that privilege. Tenn. Sup. Ct. R. 9, § 1. “Where this
duty is not met, we must act to protect the public.” Hornbeck, 545 S.W.3d at 396 (quoting
Bd. of Pro. Resp. v. Cowan, 388 S.W.3d 264, 272 (Tenn. 2012)). The sanction imposed on
Mr. Waggoner should be “commensurate with the larger purpose of attorney discipline,
which includes preserving the public’s confidence in the profession.” Green, 567 S.W.3d
at 717 (quoting In re Cope, 549 S.W.3d 71, 77 (Tenn. 2018)).
Based on our review, we hold that Mr. Waggoner shall be suspended from practicing
law for two years, with eighteen months on active suspension, effective upon the entry of
this Court’s order. See Tenn. Sup. Ct. R. 9, § 28.1. We have considered Mr. Waggoner’s
violations of RPCs 1.3, 1.4, 1.15, 1.16, 8.4, 5.5(a), and 8.4(a) and (d), the ABA Standards,
his failure to acknowledge the wrongful nature of his conduct, his prior disciplinary history,
his multiple offenses, his substantial experience in the practice of law, his dishonest or
selfish motive, and comparable cases. Mr. Waggoner shall make restitution to the minors
in the Stephens case for accrued interest during the time he improperly held their funds.
See Tenn. Sup. Ct. R. 9, § 12.7. He shall also obtain an additional twelve hours of
continuing legal education relating to ethics or the handling of client property. During the
six-month period of his probated suspension, Mr. Waggoner shall engage a practice
monitor. Before reinstatement, Mr. Waggoner must be current on all continuing legal
education requirements, pay all outstanding registration fees and professional privilege
taxes, and pay all court costs and Board costs in this matter.
CONCLUSION
We affirm the hearing panel’s decision that Mr. Waggoner violated RPC 5.5(a) by
engaging in the unauthorized practice of law. For his violations of RPCs 5.5(a), 8.4(a), and
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8.4(d) in the initial petition and RPCs 1.3, 1.4, 1.15, 1.16, and 8.4 in the second
supplemental petition, Mr. Waggoner is suspended from the practice of law for two years,
with eighteen months served on active suspension. His suspension shall be effective upon
the entry of this Court’s order. Mr. Waggoner shall make restitution to the minors in the
Stephens case for accrued interest, obtain additional continuing legal education hours as
ordered, and engage a practice monitor during his probated suspension. The costs of this
appeal are taxed to Gerald D. Waggoner, Jr., for which execution may issue, if necessary.
_________________________________
SHARON G. LEE, JUSTICE
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