Iowa Supreme Court Attorney Disciplinary Board Vs. William Shaw Carpenter

IN THE SUPREME COURT OF IOWA
No. 09–1343
Filed April 16, 2010
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
WILLIAM SHAW CARPENTER,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
Grievance commission recommends attorney’s license be
suspended for thirty months. ATTORNEY ORDERED TO CEASE AND
DESIST PRACTICING LAW IN IOWA.
Charles L. Harrington and David J. Grace, Des Moines, for
complainant.
James Quilty of Crawford & Quilty Law Firm, Des Moines, and
William Shaw Carpenter, pro se, for respondent.
2
TERNUS, Chief Justice.
The complainant, Iowa Supreme Court Attorney Disciplinary
Board, filed charges against the respondent, William Shaw Carpenter,
alleging numerous violations of the Iowa Rules of Professional Conduct.
Carpenter is licensed to practice in Minnesota, but not in Iowa.
Carpenter practices in Iowa under our rules that permit lawyers not
licensed in Iowa to practice in federal law matters venued in this state.
Iowa R. Prof’l Conduct 32:5.5(d)(2). The disciplinary complaint against
Carpenter is based on his representation of clients in seventeen separate
federal immigration matters, his two misdemeanor convictions, and his
trust account violations.
After a hearing panel denied Carpenter’s motion to dismiss, the
parties entered into a stipulation with regard to Carpenter’s ethical
violations and a recommended sanction of a suspension for thirty
months, as well as a requirement that any application for reinstatement
include an evaluation by a licensed health care professional verifying
Carpenter’s fitness to practice law. Upon the parties’ request, a hearing
panel of the Grievance Commission of the Supreme Court of Iowa
convened without the parties’ participation. Subsequent to the panel’s
discussion of the issues, the panel adopted the parties’ stipulation and
recommended sanction. The panel also recommended the return of all
client funds taken without a proper accounting.
We agree that Carpenter engaged in the charged misconduct.
Therefore, we order Carpenter to cease and desist from all practice of law
in Iowa indefinitely with no opportunity to request that this order be
lifted for a period of not less than two years. We also order Carpenter to
submit, with any request to lift this order, an evaluation by a licensed
health care professional that he is fit to practice law.
3
I. Standard of Review.
Our review of attorney disciplinary proceedings is de novo. Iowa
Ct. R. 35.10(1); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Gottschalk, 729
N.W.2d 812, 815 (Iowa 2007). The commission’s findings and
recommendations are given respectful consideration, but we are not
bound by them. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Isaacson, 750
N.W.2d 104, 106 (Iowa 2008). The board has the burden of proving
attorney misconduct by a convincing preponderance of the evidence.
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Conrad, 723 N.W.2d 791, 792
(Iowa 2006).
“This burden is less than proof beyond a reasonable doubt,
but more than the preponderance standard required in the
usual civil case. Once misconduct is proven, we ‘may impose
a lesser or greater sanction than the discipline recommended
by the grievance commission.’ ”
Id. (quoting Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Lett, 674
N.W.2d 139, 142 (Iowa 2004) (citation omitted)).
II. Jurisdiction.
Although licensed to practice law in Minnesota, Carpenter is not
licensed to practice law in Iowa. From 2005 to 2007, Carpenter
maintained offices in Iowa and provided legal services to persons in Iowa
on federal immigration matters under Iowa Rule of Professional Conduct
32:5.5(d)(2), which provides:
A lawyer admitted in another United States jurisdiction, and
not disbarred or suspended from practice in any jurisdiction,
may provide legal services in this jurisdiction that . . . are
services that the lawyer is authorized to provide by federal
law or other law of this jurisdiction. 1
1Federal law provides that a member in good standing of the bar of the highest
court of any state, who is not under suspension or otherwise restricted in his or her
practice of law, may practice before the Federal Immigration Court. See 8 C.F.R.
§§ 1001.1(f), 1292.1(a)(1) (2009).
4
Since October 18, 2007, Carpenter has been prohibited from all
practice of law in Iowa due to his disability related to depression. 2 With
regard to his disability suspension, we determined we had jurisdiction to
prohibit Carpenter’s practice under Iowa Rules of Professional Conduct
32:5.5(d)(2) and 32:8.5(a). Comment 19 to rule 32:5.5(d)(2) provides:
A lawyer who practices law in this jurisdiction pursuant to
paragraph (c) or (d) or otherwise is subject to the disciplinary
authority of this jurisdiction. See rule 32:8.5(a).
Rule 32:8.5(a) provides:
(a) Disciplinary Authority. A lawyer admitted to
practice in Iowa is subject to the disciplinary authority of
Iowa, regardless of where the lawyer’s conduct occurs. A
lawyer not admitted in Iowa is also subject to the
disciplinary authority of Iowa if the lawyer provides or offers
to provide any legal services in Iowa. A lawyer may be
subject to the disciplinary authority of both Iowa and
another jurisdiction for the same conduct.
Comment 1 to rule 32:8.5(a) provides in pertinent part:
It is longstanding law that the conduct of a lawyer admitted
to practice in Iowa is subject to the disciplinary authority of
Iowa. Extension of the disciplinary authority of Iowa to other
lawyers who provide or offer to provide legal services in Iowa
is for the protection of the citizens of Iowa.
These same provisions give us authority to prohibit Carpenter’s practice
in Iowa on the basis of professional misconduct. Our jurisdiction to
discipline attorneys practicing in Iowa under rule 32:5.5(d)(2) rests on
our responsibility to protect the citizens of our state from unethical
conduct of attorneys who provide services in Iowa.
2Since February 2008, Carpenter also has been suspended from practicing
before the Board of Immigration Appeals, the Immigration Courts, and the Department
of Homeland Security. In September 2008, the Minnesota Supreme Court transferred
Carpenter’s Minnesota law license to disability inactive status.
5
III. Factual Background and Prior Proceedings.
As previously noted, the respondent is admitted to practice law in
the State of Minnesota. His Minnesota license has been on “disability
inactive status” since September 2008. He is not admitted to practice
law in Iowa; however, from 2005 through 2007, he maintained law offices
in Iowa for the purpose of providing legal services on immigration
matters to persons in Iowa.
On January 7, 2009, the board filed its initial complaint against
Carpenter that contained seventeen separate counts: fifteen related to
his handling of fifteen different federal immigration matters; one related
to his convictions for operating while intoxicated (OWI), second offense,
and driving with a suspended license; and one related to trust account
violations. The complaint was subsequently amended to include two
additional counts relating to immigration matters.
After respondent’s motion to dismiss was rejected, the parties filed
a stipulation regarding the ethical violations and recommended sanction.
Specifically, the respondent stipulated that, on March 29, 2007, he was
convicted of an aggravated misdemeanor of OWI, second offense, in
violation of Iowa Code section 321J.2 (2007), and on May 23, 2007, he
was convicted of a serious misdemeanor of driving while his license was
suspended in violation of Iowa Code section 321J.21. The parties
stipulated that Carpenter’s traffic convictions violated Iowa Rules of
Professional Conduct 32:8.4(a) (violating a rule of professional conduct),
32:8.4(b) (committing a criminal act that reflects adversely on the
lawyer’s fitness as a lawyer), and 32:8.4(d) (engaging in conduct that is
prejudicial to the administration of justice).
In addition to his convictions for traffic offenses, Carpenter’s
alleged ethical violations involved his representation of seventeen
6
separate clients—Hector Hernandez, Maria Martinez, Amber Jara-Cruz,
Carmen Ahidee Urrutia-Espino, Joel Villasenor, Antonia and Martin
Moreno, Claudia Michelle Aguilar, Juan Gonzalez, Juan Hurtado,
Ibis Melendrez Ruano, Jose Corado, Rosa Quintana, Oscar Liberato and
Sara Mejicanos, Sammie Hall, Michelle Wilson, Tu Ngo, and
Carolina Ibanez Galicia. His misconduct included trust account
violations. The parties stipulated that, with regard to these matters,
Carpenter violated Iowa Court Rule 45.7 (requiring lawyer to deposit
advance fees from a client into a trust account and allowing withdrawal
of such payments only as the fee is earned) and Iowa Rules of
Professional Conduct 32:1.3 (requiring lawyer to act with reasonable
diligence and promptness in representing a client); 32:1.4 (requiring
lawyer to promptly communicate with a client); 32:1.15(a), (c), (d), (f)
(requiring lawyer to deposit unearned fees into a client trust account, to
account to client regarding earned fees, to promptly deliver to client any
funds the client is entitled to receive, to promptly render a full
accounting, and to abide by the rules governing trust accounts contained
in Iowa Court Rules ch. 45); 32:1.16(d) (requiring lawyer to take steps to
protect client’s interests upon termination of representation, including
returning or forwarding files and refunding fees); 32:8.1(b) (requiring
lawyer to respond to the board’s demand for information); and 32:8.4(d)
(engaging in conduct that is prejudicial to the administration of justice).
As detailed in the parties’ stipulation, with regard to all seventeen
separate immigration matters, Carpenter failed to deposit unearned fees
in a client trust account and withdrew funds without a proper
accounting to the client as to the services provided. With regard to the
Hernandez, Martinez, Jara-Cruz, Hurtado, Ruano, Corado, Quintana,
Liberato/Mejicanos, Hall, Wilson, Ngo, and Galicia matters, the parties
7
stipulated that Carpenter “failed to take all reasonable steps practicable
to protect the client’s interests upon termination of representation.”
With regard to the Martinez, Jara-Cruz, Hurtado, Quintana,
Liberato/Mejicanos, Hall, Wilson, Ngo, and Galicia matters, the parties
stipulated that Carpenter “was not prompt or diligent with his
communications with his clients.” Finally, with regard to the Galicia
matter, the parties stipulated that Carpenter failed to respond to two
notices he received from the board regarding the client’s complaint.
The parties’ stipulation also noted mitigating circumstances,
including Carpenter’s temporary disability due to depression, for which
he has sought treatment, and his cooperation with the board. The
parties’ stipulation recommended that Carpenter be suspended for thirty
months and that any application for reinstatement be accompanied by
an evaluation from a licensed health care professional of Carpenter’s
fitness to practice law.
Pursuant to the parties’ motion, the complaint was submitted to a
hearing panel based upon the stipulation and without the submission of
any additional evidence. On September 14, 2009, the panel submitted
its findings of fact, conclusions of law, and recommendations, adopting
the parties’ stipulation of facts and recommended sanction. The panel
also recommended that all client funds taken without a proper
accounting be refunded to each client.
IV. Ethical Violations.
A. Neglect and Failure to Communicate. Under our rules
prohibiting neglect, an attorney must advance and protect his clients’
interests. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774 N.W.2d
301, 307 (Iowa 2009) [Earley II]. “ ‘[A]n attorney [must] attend to matters
entrusted to his care and . . . do so in a reasonably timely manner.’ ”
8
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Ramey, 746 N.W.2d 50, 54
(Iowa 2008) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Dunahoo,
730 N.W.2d 202, 205 (Iowa 2007)). Neglect warranting discipline
“involves ‘indifference and a consistent failure to perform those
obligations that a lawyer has assumed, or a conscious disregard for the
responsibilities a lawyer owes to a client.’ ” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Kirlin, 741 N.W.2d 813, 817 (Iowa 2007) (quoting Iowa
Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Moorman, 683 N.W.2d 549,
551 (Iowa 2004)). Carpenter neglected his clients’ legal matters and
failed to keep his clients informed about their cases. In doing so, he
violated Iowa Rules of Professional Conduct 32:1.3, 32:1.4, 32:1.16(d),
and 32:8.4(d). Earley II, 774 N.W.2d at 307.
B. Trust Account Violations. Carpenter violated several ethical
rules when he received advance fee retainers and failed to properly
deposit the fees in a client trust account and failed to properly account
for the fees. See Iowa Rs. Prof’l Conduct 32:1.4; 32:1.15; 32:1.16(d);
Iowa Ct. R. 45.7; Earley II, 774 N.W.2d at 307–08; see also Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Plumb, 766 N.W.2d 626, 631–32 (Iowa 2009)
[Plumb II] (finding similar ethical violations under the Iowa Code of
Professional Responsibility for Lawyers for failure to deposit and account
for advance fees); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 729
N.W.2d 437, 443 (Iowa 2007) [Earley I] (same).
C. Failure to Respond to Board’s Inquiries. Carpenter violated
rule 32:8.1(b) in the Galicia matter when he failed to respond to the
board’s inquiries. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Dull, 713
N.W.2d 199, 205 (Iowa 2006) (holding failure to respond to board inquiry
is an ethical violation).
9
D. Conviction of Traffic Offenses. Carpenter violated Iowa Rule
of Professional Conduct 32:8.4(a), (b), and (d) when he was convicted of
an aggravated misdemeanor OWI, second offense, and a serious
misdemeanor of driving with a suspended license. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Johnson, 774 N.W.2d 496, 499 (Iowa 2009)
(holding conviction of OWI offense violates rule 32:8.4(a), (b), (d)); see
also Iowa Supreme Ct. Att’y Disciplinary Bd. v. Weaver, 750 N.W.2d 71,
79 (Iowa 2008) (holding attorney’s OWI conviction evinced conduct
adversely reflecting on fitness to practice law in violation of Iowa Code of
Professional Responsibility for Lawyers DR 1–102(A)(6)); Dull, 713 N.W.2d
at 204 (same); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Ruth,
636 N.W.2d 86, 88 (Iowa 2001) (same).
V. Sanctions.
A. Equitable Powers. In cases in which this court disciplines an
attorney, our rules permit the suspension or revocation of the attorney’s
license, as well as additional or alternative sanctions such as
reprimands, restitution, payment of costs, practice limitations,
appointment of a trustee or receiver “and other measures consistent with
the purposes of attorney discipline.” See Iowa Ct. R. 35.9; see also Iowa
Ct. R. 35.10(2). We do not have a rule that specifies sanctions peculiar
to an attorney practicing in Iowa without an Iowa law license.
With regard to violations that typically warrant sanctions not
directly affecting an attorney’s licensure, such as reprimands and
restitution, it is possible to impose the same sanctions on non-Iowa
licensed lawyers as would be imposed on attorneys with an Iowa license.
See, e.g., Ky. Bar Ass’n v. Shane, 553 S.W.2d 467, 467–68 (Ky. 1977)
(holding attorney licensed in another jurisdiction was subject to the
discipline deemed appropriate by Kentucky court, including public
10
reprimand for communicating with party known to be represented by a
lawyer). In contrast, when a non-Iowa licensed attorney commits
misconduct that typically warrants a sanction directly affecting
licensure, such as suspension or revocation, such sanctions are not
feasible because there is no Iowa law license to suspend or revoke.
Nevertheless, like our sister courts, we conclude our authority to
discipline non-Iowa licensed attorneys includes the ability to fashion
practice limitations through our injunctive and equitable powers that are
equivalent to license suspension, disbarment, or other sanctions related
to an attorney’s license. See, e.g., In re Towne, 929 A.2d 774, 781–82
(Del. 2007) (ordering nonlicensed attorney to cease and desist from all
practice of law in Delaware and excluding attorney from admission to the
bar as injunctive relief similar to disbarment); Att’y Grievance Comm’n v.
Kimmel, 955 A.2d 269, 295 (Md. 2008) (ordering attorneys who were not
licensed to practice law in Maryland be indefinitely “suspended,” which,
for purposes of attorneys not licensed in Maryland, included exclusion
from any privilege allowed nonadmitted attorneys associated with the
practice of law within the state, with the right to apply for reinstatement
after ninety days); In re Discipline of Droz, 160 P.3d 881, 885 (Nev. 2007)
(recognizing its limitations on discipline of nonlicensed attorney, court
concluded enjoining attorney from practicing law in Nevada or appearing
in Nevada court was appropriate sanction). This authority is clearly
necessary for the protection of Iowa citizens.
B. Appropriate Sanction. In applying our equitable powers, we
first examine our prior cases involving similar violations committed by
Iowa-licensed lawyers. An examination of these cases will provide a
basis for translating the appropriate sanction into equivalent injunctive
relief.
11
There is no standard sanction for a particular type of misconduct,
and though prior cases can be instructive, we ultimately determine an
appropriate sanction based on the particular circumstances of each case.
Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Plumb, 589 N.W.2d
746, 748–49 (Iowa 1999) [Plumb I]. When fashioning a sanction, we
examine several factors, including “the nature of the violations, the need
for deterrence, protection of the public, maintenance of the reputation of
the Bar as a whole, and the violator’s fitness to continue to practice law.”
Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Ramey, 639 N.W.2d
243, 245 (Iowa 2002); accord Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Marks, 759 N.W.2d 328, 332 (Iowa 2009). We also examine both
mitigating and aggravating circumstances. Earley II, 774 N.W.2d at 308.
Significant aggravating factors for punishment include “ ‘the existence of
multiple instances of neglect, past disciplinary problems, and other
companion violations.’ ” Marks, 759 N.W.2d at 332 (quoting Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Lesyshen, 712 N.W.2d 101, 106
(Iowa 2006)).
When neglect is the principal violation, discipline usually ranges
from a public reprimand to a six-month suspension. Dull, 713 N.W.2d at
206. When multiple instances of neglect are involved and combine with
other violations or cause significant harm to the clients, we have imposed
a longer period of suspension. Id. For example, in Iowa Supreme Court
Attorney Disciplinary Board v. Maxwell, the attorney neglected three
client matters, two of which involved allowing the statute of limitations to
run. 705 N.W.2d 477, 478–79 (Iowa 2005). Based upon the number of
instances of neglect, the resulting harm, and the attorney’s present
unfitness to engage in the practice of law due to mental health issues, we
imposed a one-year suspension. Maxwell, 705 N.W.2d at 480. Likewise,
12
in Moorman, we held the attorney’s multiple acts of pervasive neglect
resulting in great harm to his clients, coupled with his offer to engage in
fraudulent conduct, supported a two-year suspension. 683 N.W.2d at
552–53.
With regard to convictions of criminal offenses, an attorney’s
license to practice law may be revoked or suspended depending on the
severity of the offense and any aggravating or mitigating factors. See
Johnson, 774 N.W.2d at 499–500 (discussing cases and stating that, with
conviction of an OWI felony, license may be revoked or suspended);
Weaver, 750 N.W.2d at 79, 92 (holding that second-offense OWI and
other violations warranted suspension of three months); Thompson, 595
N.W.2d at 135–36 (discussing criminal assault cases with sanctions
ranging from three to fourteen months and imposing a suspension of two
months). In a disciplinary case involving a misdemeanor public
intoxication conviction, extensive neglect and the mishandling of client
trust accounts, we imposed an eighteen-month suspension. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Kadenge, 706 N.W.2d 403, 405, 409
(Iowa 2005).
When dealing with client trust account violations, our sanctions
have ranged from a public reprimand when the violation was relatively
minor and isolated, Iowa Supreme Ct. Att’y Disciplinary Bd. v. Piazza, 756
N.W.2d 690, 700 (Iowa 2008), to license suspension when the violation
involved poor office management and neglect, Earley I, 729 N.W.2d at
443, to license revocation when the violation amounted to
misappropriation of client funds, Earley II, 774 N.W.2d at 309. Given the
parties’ stipulation, we are not dealing with a single incident nor are we
dealing with a case of misappropriation. Therefore, the suspension cases
are most helpful in determining the ultimate sanction to impose in this
13
case. Cases involving suspension for client trust account violations
range from two months in less serious cases, Plumb I, 589 N.W.2d at
749, to eighteen months in very severe cases when the violations
combine with multiple instances of neglect and other ethical violations,
Plumb II, 766 N.W.2d at 635.
We note that the parties have stipulated that Carpenter’s illness of
depression and his treatment for that illness constitute mitigating
circumstances. While such illnesses do not excuse misconduct, they can
be mitigating factors and can influence our approach to discipline. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Curtis, 749 N.W.2d 694, 703 (Iowa
2008) (holding depression a mitigating circumstance in disciplinary
action resulting in one-year suspension for neglect, client trust account
violations, and dishonesty to client); Iowa Supreme Ct. Att’y Disciplinary
Bd. v. McCann, 712 N.W.2d 89, 96 (Iowa 2006) (holding severe
depression and anxiety constituted mitigating circumstances in
disciplinary action resulting in two-year suspension for multiple acts of
misconduct, including neglect, misrepresentation, and client trust
account violations). We consider Carpenter’s illness and treatment to be
mitigating circumstances and have taken them into account in imposing
a sanction.
The hearing panel adopted the parties’ recommendation of a thirty-
month suspension. We believe Carpenter’s misconduct in seventeen
client matters, including neglect, failure to communicate, and failure to
safeguard his clients’ interests upon termination of representation, in
addition to his trust account violations and conviction of two traffic
offenses, would justify a two-year suspension. See Moorman, 683
N.W.2d at 552–53 (imposing two-year suspension for neglect and other
serious misconduct in six client matters). Translating this suspension to
14
injunctive relief, we order the respondent to cease and desist from the
practice of law in Iowa under Iowa Rule of Professional Conduct
32:5.5(d)(2) or any other law indefinitely with no possibility that the order
will be lifted for a period of not less than two years. Although the
commission recommended that funds taken in violation of client trust
account rules be refunded to Carpenter’s clients, the parties’ stipulation
does not detail the amount of such funds, and no witness testimony or
other evidence was taken on the matter. Due to this lack of specificity in
the stipulation and absence of evidence, we are unable to determine the
degree of harm caused by the respondent to his clients or the extent to
which they may be entitled to a refund of the advance fees paid by them.
We do, however, agree with the commission that, given Carpenter’s
depression, some showing of competency to practice law must be shown
to have the cease-and-desist order lifted. Therefore, any request by
Carpenter to return to practice in this state or any request to become
licensed in this state must be accompanied by an evaluation from a
licensed health care professional verifying his fitness to practice law. See
McCann, 712 N.W.2d at 96–97 (requiring evaluation of attorney who
suffered from depression and anxiety).
VI. Disposition.
We order Carpenter to cease and desist from all legal practice in
Iowa indefinitely with no possibility that the order will be lifted for a
period of not less than two years. Carpenter shall provide all
notifications specified in Iowa Court Rule 35.22. In addition, costs are
taxed to Carpenter pursuant to Iowa Court Rule 35.26(1).
For purposes of having the cease-and-desist order lifted, as well as
for all other purposes, Carpenter shall be treated as though he has been
suspended. See Iowa Ct. R. 35.13. Upon any application to lift this
15
order, Carpenter shall have the burden to show he has not practiced law
in Iowa during the period the order is in effect and that he meets the
requirements of Iowa Court Rule 35.12. Carpenter shall also be required
to submit with any such application an evaluation from a licensed health
care professional stating he is fit to practice law.
RESPONDENT ORDERED TO CEASE AND DESIST PRACTICING
LAW IN IOWA.