Matter of a Member of the Bar: Lankenau

IN THE SUPREME COURT OF THE STATE OF DELAWARE
IN THE MATTER OF A §
MEMBER OF THE BAR OF § No. 73, 2016
THE SUPREME COURT OF §
THE STATE OF DELAWARE: § Board on Prof. Responsibility
§ Case No. 112315-B
S. HAROLD LANKENAU, §
§
Respondent. §
Submitted: May 18, 2016
Decided: June 9, 2016
Before HOLLAND, VAUGHN, and SEITZ, Justioes.
Upon ReVieW of the Report of the Board on Professional Responsibility.
SUSPENSION ORDERED.
Jeffrey M. Weiner, Esquire, Law Off1ces of Jeffrey M. Weiner, P.A., Wilrnington,
Delaware, Attomey for the Respondent.
Jennifer Kate Aaronson, Esquire (Argued), Patricia Bart1ey Schwartz, Esquire,
Wilmington, Delaware, Attomeys for the Off1ce of Disciplinary Counsel.
PER CURIA]\I:
This is an attorney disciplinary proceeding. The Office of Disciplinary
Counsel ("ODC") filed a Petition alleging multiple ethical violations by S. Harold
Lankenau ("Respondent"). A panel of the Board on Professional Responsibility
("Board") found that Respondent engaged in criminal conduct when he
misappropriated funds from his employer, over a period of five years, and engaged
in dishonest conduct when he lied to his mortgage company and forged his
employer’s signature.
The Board issued a report ("Report") of its findings and recommendation.
The Board recommended that Respondent be suspended for six months and one day.
Suspension greater than six months requires proof of rehabilitation prior to
reinstatement.l Both Respondent and ODC filed objections to the Board’s Report.
Respondent seeks a suspension of only six months. ODC seeks a suspension of
eighteen months. Respondent consented to an interim suspension beginning on
February 22, 20l6.
We have concluded that Respondent should be suspended from practicing law
as a member of the Delaware Bar for a period of eighteen months.
1 Del. Lawyers’ R. Disciplinary Proc. 22(a).
not ask for them. Whether Mr. Lundy asked for the return of the fees is irrelevant
to the question of whether Lundy Law sustained an actual injury. In addition, there
was potential injury to the clients by Respondent’s depositing the funds into his
personal account, and potential injury to Wells Fargo if they decided to forbear
action on Respondent’s mortgage and incurred a loss.
(d) Aggi_ravating And Mitigating Circumstance
After misconduct has been established, aggravating and mitigating
circumstances are considered to decide what sanctions to impose.9 "Aggravation or
aggravating circumstances are any considerations or factors that may justify an
increase in the degree of discipline to be imposed."l°
The Board found the following aggravating factors:
¢ Substantial Experience ln The :"'I?iractice Of Law.
ODC argues that Respondent has substantial
experience. Respondent was admitted to the New
Jersey Bar in 2003, the Pennsylvania Bar in 2006,
and the Delaware Bar in 2007. Respondent was first
admitted to the Bar in 2003. The time period one
must practice in order to have substantial
experience has not been definitely defmed. The
Board finds that Respondent has experience enough
for the circumstances alleged in this case. ABA
Standard 9.22(i).
¢ Pattern Of Misconduct. Respondent repeated his
misconduct by representing multiple clients,
9 In re Baz`ley, 821 A.Zd 851, 866 (Del. 2003);111 re Goldstez`n, 990 A.2d at 408.
1° ABA Standards for Imposing Lawyer Sanctions, 9.21; In re Stez'ner, 817 A.2d at 796.
ll
keeping fees, and charging costs. ABA Standard
9.22(0).
Multiple Offenses. There were multiple acts in that
[Respondent] took fees, used a non-Rule l5A
Account, forged his employer’s signature, and lied
to [his] mortgage company. ABA Standard 9.22(d).
Dishonest Or Selfish Motive. ODC argues
dishonest motive as an aggravating factor. The
Board found that there was a dishonest motive.
Respondent took fees that belonged to his law firm
and charged costs as well, and incorrectly
represented his employment status to his mortgage
company. While Respondent testified that the
clients were represented as favors to others and the
misrepresentations to the bank were made because
he felt he was in dire straits, the acts taken were
dishonest. In addition, Respondent admitted that
his actions were dishonest. ABA Standard 9.22(b)
[sic].“
Mitigating factors "are any considerations or factors that may justify a
reduction in the degree of discipline to be imposed.
following mitigating factors:
(1)
9)12
Absence Of Prior Disciplin@ Record:
Respondent presented the
This is
Respondent’s first time before the Board on Professional
Responsibility. ABA Standard 9.32(a).
(2)
Cooperative Attitude Toward Proceedings:
Although Respondent did not self-report these violations,
he was professional and cooperative throughout these
proceedings. ABA Standard 9.32(e).
11 Intemal citations to the record omitted.
12 ABA Standards for Imposing Lawyer Sanctions, 9.31.
l2
(3) Character And Reputation: Respondent, while not
presenting any evidence of his character and reputation,
takes the position that since ODC did not present adverse
evidence, then it is presumed there is not any adverse
evidence. Because no evidence was presented, the Board
does not find that this is a mitigating factor. ABA
Standard 9.32(g).
(4) Inexperience ln The Practice Of Law: Respondent
asserts that he did not really begin the practice of law until
2004 after his clerkship in New Jersey. The events in
question ranged from 2009 to 2013, less than a 10-year
span. Given the events admitted by Respondent, he had
sufficient experience to know his actions were wrong.
ABA Standard 9.32(@.
(5) Remorse: Respondent is clearly remorseiill about
his actions. ABA Standard 9.32(f).
(6) Personal Or Emotional Problem: lt seems clear,
based upon the reports of Drs. Rappaport and Kaye, that
the problems Respondent found himself con&onting were
exacerbated by his abusive childhood and his reluctance,
if not inability, to confront personal problems. He had an
overwhelming desire to please those he was involved with
on a business basis. ABA Standard 9.32(h).13
The Board found that the mitigating factors do not outweigh the aggravating
factors or the duty a lawyer owes to others in conducting his affairs. The Board
found that the presumptive sanction is suspension.l"
13 Interna1 citations to the record omitted.
14 ABA Standards for Imposing Lawyer Sanctions, 5. l2.
13
B0ard’s Recommended sanction
The Board recommends that Respondent be suspended for six months and one
day, and pay the costs of this disciplinary proceeding. The Board’ s recommendation
of an appropriate sanction assists the Court, but it is not binding." This Court has
the "exclusive authority for disciplining members of the Delaware Bar."“ The Court
"has wide latitude in determining the form of discipline, and [it] will review the
recommended sanction to ensure that it is appropriate, fair and consistent with . . .
prior disciplinary decisions.""
Suspension For Eighteen Months
All lawyers take an oath upon their admission to the Delaware Bar. The oath
is a solemn promise of competent and ethical conduct, which dates back to the
beginnings of the legal profession. lt is a venerable "tradition in both form and
substance." Honesty has been a central requirement in the attomey’s oath since the
era of Justinian.ls
When deciding upon the appropriate sanction, this Court must consider that
"[t]he primary purpose of disciplinary proceedings is to protect the public; to foster
public confidence in the Bar; to preserve the integrity of the profession; and to deter
15 In re McCann, 894 A.2d at lO88; In re Baz`ley, 821 A.2d at 877.
16 111 re Kafz, 981 A.2d ll33, 1149 (Del. 2009).
17 Id.; Irz re Tonwe, 929 A.2d 774, 777 (Del. 2007); In re Stez'rzer, 817 A.2d at 796.
18 In re Davz's, 43 A.3d 856 (Del. 2012).
14
other lawyers from similar misconduct."” The lawyer discipline system was not
designed to be either punitive or penal in nature.z°
We have carefully considered the ethical violations, the nature of the
violations, the aggravating and mitigating factors, and all of the facts and
circumstances of this case. Respondent engaged in criminal conduct when he
misappropriated funds from his employer, over a period of five years, and engaged
in dishonest conduct when he lied to his mortgage company and forged his
employer’s signat1ire. This Court’s precedent supports the imposition of a one-year
suspension where the misconduct is misappropriation of finn funds.zl Accordingly,
Respondent should receive a suspension of at least one year for the sole misconduct
of misappropriating firm funds. Respondent’s dishonest conduct in connection with
his mortgage company, standing alone, also merits the sanction of suspension.zz
Accordingly, ODC submits that Respondent’s dishonest conduct merits a length of
19 In re Fz'glz'ola, 652 A.2d 1071, 1076 (Del. 1995).
2° rn re Rzch, 559 A.2d 1251, 1257 (Del. 1989).
21 See In re Vanderslz'ce, 55 A.3d 322, 327 (Del. 2012) (suspending a lawyer for one year where
lawyer misappropriated firm funds eight times in a ten-month period); see also In re Staropolz`,
2005 WL 2779ll (Del. Jan. 10, 2005) (suspending a lawyer for one year where lawyer
misappropriated firm funds one time).
22 See In re Favata, 119 A.3d 1283 (Del. 2015) (suspending a lawyer for six months and one day
for making false statements to a court during a trial); In re Bria, 86 A.3d 1118 (Del. 2014)
(suspending a lawyer for six months and one day where lawyer made misrepresentations in his
armual registration with the Court regarding the status of his tax obligations); In re Amberly, 996
A.2d 793 (Del. 2010) (rej ecting the Board’s recommendation of a 30-day suspension and imposing
a six month suspension on lawyer who made false statements to the tribunal and disciplinary
counsel).
15
suspension of at least six months, in addition to his suspension for misappropriation
of firm funds. We agree.
According1y, it is hereby ordered that S. Ha;rold Lankenau is suspended from
engaging in the practice of law as a member of the Delaware Bar for a period of
eighteen months, commencing February 22, 2016. lt is further ordered that he pay
the costs of this proceeding. ODC is directed to disseminate this opinion in
accordance with the Ru1es of the Board on Professional Responsibiiity.
16
Counts of the Petitionz
The Petition alleges violation of Rules of Professional Conduct Nos. l.l5(a),
1.15(b), 8.4(b), 8.4(0), and 8.4(d). Allegations of misconduct must be established
by ODC by clear and convincing evidence.3
ln Count I, ODC alleged that Respondent violated Rule l.l5(a) by depositing
the proceeds &om the settlement of a tort claim into his personal bank account when
he represented Alvema and Kenneth Warrington.
In Count II, ODC alleged that Respondent violated Rule l.l$(a) by retaining
fees personally earned in the T0mme, Orleans Homebuilders, and Warrington cases
instead of turning them over to Lundy Law, and failing to keep the funds of a third
party separate from his funds.
In Count III, ODC alleged that Respondent violated Rule l.15(b) by retaining
fees personally earned in the Tomme, Orleans Homebuz'lders, and Warrington cases
rather than tuming those fees over to Lundy LaW.
In Count IV, ODC alleged that Respondent violated Rule 8.4(b) by
committing a criminal act by retaining fees personally rather than turning them over
to Lundy Law, which acts reflected adversely on Respondent’s honesty,
trustvvorthiness, or fitness as a laWyer.
2 This section is taken from the Board’s Report.
3 Del. Lawyers’ R. Disciplinary Proc. l5(c); In re Tos, 576 A.2d 609, 612 (Del. 1990).
In Count V, ODC alleged that Respondent violated Rule 8.4(c) by engaging
in dishonest conduct by retaining the fees personally rather than turning them over
to Lundy Law.
ln Count VI, ODC alleged that Respondent violated Rule 8.4(c) when he lied
to Wells Fargo, Respondent’s mortgage company, in connection with his request for
a mortgage forbearance agreement.
ln Count VII, ODC alleged that Respondent violated Rule 8.4(d) by engaging
in conduct prejudicial to the administration of justice when he personally retained
the fees in the Tomme, Orleans Homebuz'lders, and Warrz'ngton cases rather than
turning them over to Lundy Law.
§I§_-_,Count VIII, ODC alleged that Respondent violated Rule 8.4(d) by engaging
in conduct prejudicial to the administration of justice when he lied to Wells Fargo in
connection with his request for a mortgage forbearance agreement.
B0ard’s F actual F indings
The Board found that ODC had proven by clear and convincing evidence the
following facts:
Respondent was admitted to the Delaware Bar in
2007. He is also a member of the Bars in New Jersey and
Pennsylvania. He was admitted to the New Jersey Bar in
2003 and Pennsylvania in 2006. He was employed by a
Delaware real estate law finn prior to being employed by
Lundy Law in October 2008. His employment with Lundy
Law was continuous until September 20l4. ln connection
with that employment, Respondent signed a fee sharing
agreement setting forth how fees were to be shared with
Lundy Law. While Respondent did not specifically recall
the agreement, he did execute it.
In addition, Respondent was aware of the type of
cases which Lundy Law undertook, and the system and
restrictions for processing cases coming into the finn. For
instance, he knew that the firm restricted its practice to
personal injury cases and did not accept cases which came
to the firm shortly before the expiration of the statute of
limitations. The fee sharing agreement provided for
referral of cases within Lundy Law which it would accept,
or refer to outside firms for cases not accepted by Lundy
Law. When Respondent accepted cases outside of Lundy
Law, he knew he should not have done so.
On July 28, 2009, Respondent filed a property
damages subrogation Complaint in United States District
Court for the District of Delaware on behalf of A1bert
Tomme. The case was not filed through Lundy Law, but
rather individually by Respondent In the fall of 2010, the
case was sett1ed. Respondent received a fee of $l,l 1 1.1 1.
Respondent agreed that the fee earned should have gone
to Lundy Law. In addition, the fee did not pass through a
Rule 1.l5A denominated account. Respondent said he did
not refer the case to Lundy Law because it was not a case
which Lundy Law would normally have taken.
Respondent took the case because he was trying to do a
friend a favor.
In January 20l0, Respondent was retained to
represent a creditor in the Orleans Homebuilders, Inc. case
for the purpose of filing a Motion to lift a stay in
Bankruptcy Court and was paid a fee of $1,000.
Respondent admits that the fee should have gone to Lundy
Law. Lundy Law did not do bankruptcy work.
Respondent undertook the representation for a friend.
ln 2012, Respondent was retained by Alverna and
Kenneth Warrington to represent them in a personal injury
matter. Respondent was called by an attorney he had
worked with shortly after he graduated from law school.
The Complaint was filed shortly before the statute of
limitations was to expire, without following the Lundy
Law procedures for accepting cases. Respondent did not
refer the case to Lundy Law after he filed it because he did
not want to face Mr. Lundy over the issues. Respondent,
however, charged the costs and fees for the Warrington
case to an old existing Lundy Law account. He filed suit
in the Superior Court under the name of Lundy Law. The
case ultimately settled for $19,500. in 2014 Respondent
placed the proceeds of settlement in Respondent’s
personal account and then disbursed them. Respondent’s
account was not a Rule l.l5A account. Respondent kept
fees totaling $4,333.33 which he admits should have gone
to Lundy Law. ln addition, the filing fees were charged to
Lundy Law.
In 20l3, Respondent filed a Complaint on behalf of
Sherry Moore, charging the filing fees to Lundy Law. The
case was eventually dismissed, as Respondent lost contact
with the client.
Respondent reported all of the fees earned on his
personal income tax retums.
Respondent testified that in 2013 he was
overwhelmed with bills. His son was in private school, he
was overwhelmed with work, and he fell behind in his
mortgage.
On August 7, 2013, Respondent wrote to his
mortgage company Wells Fa;rgo, seeking a mortgage
forbearance agreement. In that letter he falsely indicated
that he had been laid off from his job, but had recently
been re-hired. On August 7, 2013, he executed a
Homeowner Financial Assistance Form ("HFA Forrn").
In the body of the HFA Forrn, Respondent falsely asserted
that he had a loss of employment. On Page 5, Respondent
falsely certiHed that the events identified on Page 2 of the
HFA Forrn were correct. The facts on Page 2 of the HFA
Forrn were false since Respondent had not suffered a loss
of employrnent. ln addition, the facts relating to his layoff
set out in Joint Exhibit l6 were also false, as were the
statements as set out in the Hardship Affidavit Forrn.
Respondent acknowledges that he lied to Wells Fargo.
Respondent also forged Mr. Lundy’s signature to a letter
Respondent sent to Wells Fargo and, using Mr. Lundy’s
name, announced "with great pleasure" a job offer to
Respondent. This occurred while when Respondent was
already fully employed at Lundy Law earning a salary of
$100,000-$125,000 per year.
A Complaint was filed with ODC by Mr. Lundy.
He confronted Respondent, who admitted to everything he
did and reimbursed the firm $900 for costs that he
improperly charged to the firm. Lundy Law has not asked
for the fees Respondent collected in the three cases.
Respondent kept fees in the amount of $6,444.44.
Respondent explained that the events relating to clients
came about as requests f`rom f`riends. While he took the
fees and charged costs to Lundy Law, Respondent testified
that he was not trying to start up a new firm or steal clients
from Lundy Law. Respondent testified he did not have
any reason for needing funds. Respondent is currently
working for a law firm in Pennsylvania.
Following the discovery of Respondent’s
misrepresentations, Respondent wrote to Wells Fargo to
admit his false statements. Wells Fargo acknowledged
Respondent’s misrepresentations in a January 5, 2015
letter. Since january 2015, Respondent’s mortgage has
been current, and he has not had any further
communication with Wells Fargo.
Respondent has been treating with a psychologist
and psychiatrist. As noted in their reports, Respondent’s
actions arise out of his childhood and his inability to
confront personal problems. This condition, while it
impacted his practice and contributed to his violation of
his duties as a lawyer, has not resulted in any client loss.
His health care providers indicated that, in their view, from
a mental health perspective Respondent is fully able to
practice law."
Ethical Violations Committed
Respondent admitted all the operative facts, except the allegation of a
violation of 11 Del. C. § 84l(a). Based on its evidentiary findings, the Board found
that ODC had established the violations alleged in Counts I-III, and VI-VIII by clear
and convincing evidence. With respect to Count IV, the Board found by clear and
convincing evidence that Respondent’s conduct, when he kept the funds admittedly
belonging to Lundy Law, constituted criminal conduct which reflected adversely on
Respondent’s trustworthiness and honesty as a lawyer. The Board believed this to
be a close question, but found as a fact that Respondent knew the fees did not belong
to him at the time he kept them. During the proceedings before this Court,
Respondent stipulated that the evidence also established the violations alleged in
Counts IV and V by clear and convincing evidence.
4 Internal citations to the record ornitted.
Board’s Sancti0ns Analysis5
ln determining the appropriate sanction for lawyer misconduct, DelaWare
follows the American Bar Association Standards for Irnposing Lawyer Sanctions
("ABA Standard(s)"):
The ABA framework consists of four key factors [to be
considered by the Court]: (a) the ethical duty violated; (b)
the lawyer’s mental state; (c) the extent of the actual or
potential injury caused by the lawyer’s misconduct; and
(d) aggravating and mitigating factors.é
(a) The Ethical Duties Violated
The Board found that Respondent violated Rules 1.15(a), 1.15(b), 8.4(c), and
8.4(d) as noted above. Respondent stipulated in this Court that the Board’s factual
findings also demonstrated that he violated Ru1e 8.4(b).
(b) The LaM;er’s Mental State
ODC argued that the appropriate mental state was that Respondent acted
knowingly. The ABA Standards define "Knowledge" and "Negligence" as follows:
"Knowledge" is the conscious awareness of the nature or
attendant circumstances of the conduct but without the
conscious objective or purpose to accomplish a particular
result.
"Negligence" is the failure of a lawyer to heed a
substantial risk that circumstances exist or that a result will
5 This section is taken from the Board’s Report.
6 In re Gola’stez`rz, 990 A.2d 404, 408 (Del. 2010); Irz re Doughty, 832 A.2d 724, 736 (Del. 2003);
see also In re McCarzn, 894 A.2d 1087, 1088 (Del. 2005); In re Fountairz, 878 A.2d 1167, 1173
(Del. 2005); In re Steiner, 817 A.2d 793, 793 (Del. 2003).
follow, which failure is a deviation from the standard of
care that a reasonable lawyer would exercise in the
situation.7
The Board found that Respondent acted knowingly with respect to all counts
of the Petition. While Respondent testified that he had reasons for his conduct, he
knew that the acts of representing clients outside of Lundy Law and retaining the
fees associated with those representations were in violation of Respondent’s duties
to his employer. Respondent also admitted that he deposited and retained, in his
personal account, the settlement in the Warrz`ngton case. In addition, Respondent
knew that he was being dishonest with Wells Fargo about his employment status.
Respondent also knew that forging Mr. Lundy’s signature to a purported letter re-
hiring Respondent was wrong.
(c) Actual Or Potential lnjug;
There was no testimony that any of the clients were actually injured by
Respondent’s actions, and none of the parties involved, other than Mr. Lundy,
complained about what Respondent did. Lundy Law was actually injured by
Respondent’s actions. While Lundy Law was reimbursed for the costs charged,
Respondent did not pay Lundy Law the fees he received; a portion of which would
have gone to Lundy Law.g Respondent did not retum the fees, and Mr. Lundy did
7 ABA Standards for imposing Lawyer Sanctions, III. Black Letter Rules (1992).
8 Respondent paid the fees to Lundy Law after the Board hearing.
10