Iowa Supreme Court Attorney Disciplinary Board v. Bruce A. Willey

IN THE SUPREME COURT OF IOWA
No. 16–1228
Filed January 27, 2017
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
BRUCE A. WILLEY,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
Grievance commission reports respondent committed ethical
misconduct and recommends a thirty-day suspension. LICENSE
SUSPENDED.
Tara M. van Brederode and Amanda K. Robinson, Des Moines, for
complainant.
Leon F. Spies of Mellon & Spies, Iowa City, for respondent.
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ZAGER, Justice.
The Iowa Supreme Court Attorney Disciplinary Board (Board) filed
a complaint charging an attorney with violations of four of our ethical
rules based on his representation of two clients in a business
transaction. The Board and the attorney entered into a joint stipulation
of facts and rule violations, and the Grievance Commission of the
Supreme Court of Iowa (commission) found the attorney violated three
ethical rules. The commission recommended a thirty-day suspension.
Upon our de novo review, we conclude the Board proved by a convincing
preponderance of the evidence violations of Iowa Rules of Professional
Conduct 32:1.7(a)(2) (concurrent conflict of interest) and 32:1.7(b)(4)
(informed consent). We impose a sixty-day suspension for the rule
violations.
I. Background Facts and Proceedings.
Attorney Bruce A. Willey practices law at Willey O’Brien, L.C. in
Linn County, Iowa. Willey was licensed to practice law in Iowa during
the time of the conduct that gave rise to this disciplinary action. Willey
is also a Certified Public Accountant (CPA).
David A. Wild (Wild) has been a client and business partner of
Willey since at least 2006. In December 2006, Willey incorporated
Synergy: Projects, Inc. (Synergy) on Wild’s behalf. At the time of
incorporation, Wild was the president of Synergy and Willey was the
original registered agent. Willey continued to serve in this capacity until
April 2015. While the precise legal and business relationships between
Wild and Willey are unclear from the record, by February 2007, conflicts
of interests were apparent such that Wild and Willey executed a detailed
consent and waiver form for the conflicts. The first paragraph of the
form provides:
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I, David Wild, am President of and otherwise involved with
several corporations, including but not limited to, Evergreen
Timber Corp., Global Resources, Inc., and Synergy: Projects,
Inc. as well as member and manager of other Limited
Liability Companies, related entities and subsidiaries
(collectively “Wild Group”), do hereby acknowledge that I
have been fully informed of the potential conflicts inherent in
the representation of me and my company by Bruce A.
Willey, Bruce A. Willey, P.C., Willey O’Brien, L.C. and its
successors and assigns (collectively “Willey”).
Willey began providing legal services to Henry J. Wieniewitz, III
(Wieniewitz) in 2008. Willey provided legal advice on corporate business
structure and tax structure for companies owned by Wieniewitz. Willey
also prepared income tax returns for Wieniewitz and advised him
regarding companies he was exploring for purchase.
In June 2010, Willey and Wieniewitz met to discuss a business
that Wieniewitz was considering purchasing. During this meeting, Willey
learned that Wieniewitz was interested in possible investment
opportunities. After discussing the original business purchase, Willey
told Wieniewitz that he knew of another investment opportunity that
might be available and he would let him know if there was space for an
additional investor.
In July, Willey contacted Wieniewitz and told him that he could
participate in the investment opportunity if he acted quickly. Willey told
Wieniewitz that other clients of his had been involved with the same or
similar investment opportunities and that it was a safe and common
investment. Specifically, Willey emailed Wieniewitz, “[There] isn’t really
risk related to that . . . .” Willey informed Wieniewitz that the minimum
investment was $100,000. Wieniewitz decided to invest $100,000. Prior
to forwarding the check to Willey, Wieniewitz told Willey, “I can afford to
be out the liquidity 30–60 days, but could never afford to put the money
in a place to potentially lose it.” Wieniewitz denies that Willey ever
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advised him prior to his investment that he was investing money with
another client.
The investment opportunity was structured as a loan between
Wieniewitz and Synergy. Wieniewitz wrote a check for $100,000 payable
to Willey’s law firm. Willey prepared a promissory note on behalf of
Synergy that reflected the agreement between Synergy and Henry and
Amber Wieniewitz. Pursuant to the terms of the promissory note, this
original investment would be repaid within forty-five days. Thereafter,
Wieniewitz would receive $100,000 every forty-five days until the total
amount paid to him equaled $400,000. The promissory note did not
provide any security or collateral to Wieniewitz in exchange for the loan.
Willey deposited the check into his trust account and immediately
disbursed the money to Synergy. Willey did not bill any party for
drafting the promissory note. However, Wild considered Willey to be
acting on behalf of Synergy. In his personal statement to the Board,
Willey stated that he believed he was acting only as an intermediary who
was facilitating a business relationship between two sophisticated
business people.
Willey did not disclose his relationship with Wild or Synergy to
Wieniewitz until much later. Willey never obtained informed consent
from Wieniewitz, nor confirmed in writing any potential conflict of
interest with Wild and Synergy. Willey did not recommend Wieniewitz
consult with independent counsel regarding the concurrent conflict of
interest.
At the outset of the transaction, Willey offered Wieniewitz the
opportunity to meet with Wild to discuss the loan; however, Wieniewitz
declined the offer. All communication regarding the loan and efforts to
collect on the loan was made through Willey. Although Willey facilitated
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the loan and all of the communication between the parties, he had no
independent information about the transaction other than what Wild told
him. At the time Willey prepared the promissory note between Synergy
and Wieniewitz, he had no knowledge of how Synergy would utilize the
funds from Wieniewitz or the identities of the other parties or entities
with whom Synergy was working. Willey had no direct financial interest
in Synergy.
After the initial $100,000 investment, no payments were received
as promised. Wieniewitz contacted Willey on multiple occasions to
request information about the status of the loan repayment. Wieniewitz
began emailing Willey in September 2010 expressing concern about the
transaction. On September 20, Willey emailed Wieniewitz to update him
that Wild had informed him of a “short delay” in disbursements. In an
email on September 27, Wieniewitz wrote that he had expected to have
his principal returned by then, as per the promissory note. He told
Willey that his wife believed the entire transaction was a scam. Willey
responded that he did not believe it was a scam, but Wild had been tied
up with a family emergency and that may explain the delay. Later, Willey
responded that he had spoken with Wild and Wild told him there was no
problem with the transaction, but that the parties were “negotiating a few
items behind the scenes and that [was] the reason for the delays.”
In October 2010, Wieniewitz again emailed Willey to ask about the
status of the disbursements. Willey emailed him an update from Wild:
“They are expecting funds to arrive at Singapore account tonight our
time. The time has been used up getting through the system by trading
bank, settlement bank and disbursement bank. Will be speaking again
this coming night (US).” On November 18, Willey emailed Wieniewitz to
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tell him that Wild expected to have the funds that week, but was “[j]ust
clearing up last of [the] paperwork necessary to allow release.”
In February 2011, Wieniewitz emailed Willey asking about the
payments because he wanted to use the loaned funds to purchase some
apartments. Willey responded that “some things have been going on
behind the scenes and neither [Wild] nor [he] wanted to give out
information before its time.” Willey again included a response from Wild
that said the “funds are sold, just behind schedule.”
Wieniewitz emailed Willey again in March asking about the
payments and was again forwarded a response from Wild:
The representation of platform manager is as follows:
All will be finished in the next 4 days regarding trade
platform issues and should have no more problems.
[T]heir intent is to have liquidity available (overseas) this
coming week. Thank you for your patience.
Wieniewitz did not receive any payment and followed up with an email to
Willey on May 6. Willey responded,
Dave [Wild] reports that everything is moving well now, he is
trying to pinpoint when funds will be available in US and
expects update in 48 hours or so. He says there is good
progress, shouldn’t be much longer, this will get done.
When no payments were received, Wieniewitz sent another email to
Willey on September 18 asking for a realistic timeline on the return of his
money. Wieniewitz also expressed frustration at repeatedly being told
things were “close” but never receiving a disbursement. Willey
responded and again told Wieniewitz the funds would be disbursed “in
the next couple of weeks.”
On January 19, 2012—a year and a half after his original
investment—Wieniewitz sent Willey a letter and an email demanding the
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money he invested be returned to him by January 23. Willey responded
via email,
I don’t know that it works that way, though I understand
your position and feelings. The ability to return the funds
would be different if the principal were sitting in a bank
account. It has been deployed and has not yet come back. I
would be happy to arrange a call with Dave to discuss the
situation and to obtain the most up to date information. I
would be happy to visit with you and Amber as well. There
has been some positive progress of late and it has been
represented that things will clear up soon. We are just as
frustrated as you are. Let me know if you would like to
arrange a call with Dave so we can schedule.
Wieniewitz contacted another attorney about the transaction and his
options for the return of his money.
Wieniewitz’s new counsel contacted Willey about the return of the
money. Willey responded that he could not provide specifics about the
transaction because the materials regarding the transaction were
protected under a nondisclosure agreement. After multiple emails were
exchanged, Willey continued to state that the funds were expected the
next week. When no funds were received, Wieniewitz filed a complaint
with the Board on April 16, 2012.
The Board filed its complaint against Willey on September 30,
2015. In the complaint, the Board alleged violations of rules 32:1.7(a)(2)
(concurrent conflict of interest), 32:1.7(b)(4) (informed consent), 32:1.8(b)
(using client information), and 32:1.9(c) (duties to former clients). A
hearing was set for April 28, 2016. On April 25, the Board and Willey
entered into a joint stipulation of facts and rule violations. Based on the
joint stipulation, the Board and Willey agreed to waive a hearing and
submitted the case to the commission based on the pleadings,
stipulation, and briefs.
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The commission filed its findings of fact, conclusions of law, and
recommendation on July 18. Based on the stipulation, the commission
found Willey violated rules 32:1.7(a)(2), 1.7(b)(4), and 1.8(b). However, it
found there was not a sufficient factual basis to find a violation of rule
32:1.9(c). The commission met again to consider the parties’ briefs
addressing the appropriate sanction for the rule violations. The
commission considered mitigating and aggravating factors and
recommended a thirty-day suspension. Willey filed a timely notice of
appeal.
II. Standard of Review.
Our review of attorney disciplinary proceedings is de novo. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Stoller, 879 N.W.2d 199, 207 (Iowa
2016). “The Board must prove attorney misconduct by a convincing
preponderance of the evidence, a burden greater than a preponderance of
the evidence but less than proof beyond a reasonable doubt.” Id.
(quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cross, 861 N.W.2d
211, 217 (Iowa 2015)). While we give the findings and recommendations
of the commission respectful consideration, we are not bound by them.
Id. If we find the Board proved attorney misconduct by a convincing
preponderance of the evidence, we may choose to impose a sanction that
is lesser or greater than the sanction recommended by the commission.
Id.
III. Analysis.
While Willey stipulated that he committed certain rule violations,
“[a]n attorney’s stipulation as to a violation is not binding on us.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Kingery, 871 N.W.2d 109, 117 (Iowa
2015) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kelsen, 855
N.W.2d 175, 181 (Iowa 2014)). Even if an attorney’s stipulation concedes
9
a rule violation, we will only find that a violation occurred if the facts are
sufficient to support the stipulated violation. Id. Thus, we address each
alleged rule violation in turn to determine whether the Board met its
burden of proof. Id.
A. Rule 32:1.7(a)(2) Violation (Concurrent Conflict of Interest).
Rule 32:1.7(a) provides that an attorney cannot represent a client if the
representation of that client would involve a concurrent conflict of
interest. Iowa R. Prof’l Conduct 32:1.7(a). There are two types of
concurrent conflicts of interest under this rule. Id. Under subsection
(a)(1), a conflict of interest exists if an attorney’s representation of one
client is “directly adverse to another client.” Id. r. 32:1.7(a)(1). Under
subsection (a)(2), a concurrent conflict of interest exists if “there is a
significant risk that the representation of one or more clients will be
materially limited by the lawyer’s responsibilities to another client, a
former client, or a third person or by a personal interest of the lawyer.”
Id. r. 32:1.7(a)(2). The Board charged and the commission found a
violation of rule 32:1.7(a)(2), the “materially limited” prong of the
concurrent conflict of interest rule.
1. Background of rule 32:1.7. We utilize a two-step approach to
determine whether an attorney has violated rule 32:1.7(a)(2). First, we
must decide whether Willey’s representation of one client was affected by
his “responsibilities to another client, a former client, or a third person.”
Id.; see also Stoller, 879 N.W.2d at 207. If so, we next decide whether
Willey’s representation of one client was materially limited by his
representation of another. Iowa R. Prof’l Conduct 32:1.7(a)(2); see also
Stoller, 879 N.W.2d at 208.
The comments to the rule expand on the meaning of material
limitation:
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Even where there is no direct adverseness, a conflict of
interest exists if there is a significant risk that a lawyer’s
ability to consider, recommend, or carry out an appropriate
course of action for the client will be materially limited as a
result of the lawyer’s other responsibilities or interests.
Iowa R. Prof’l Conduct 32:1.7 cmt. 8. The key questions a lawyer must
ask are whether it is likely a difference in interests will occur between the
clients and, if so, whether that difference in interests will interfere with
the lawyer’s ability to offer independent, professional judgment to each
client. Id.
A material limitation is also defined in the Restatement (Third) of
the Law Governing Lawyers. See Restatement (Third) of the Law
Governing Lawyers § 121 cmt. c(ii), at 248 (2000). A “materially adverse
effect” is defined “by reference to obligations necessarily assumed by the
lawyer.” Id. These general obligations include the duty to “proceed in a
manner reasonably calculated to advance a client’s lawful objectives,” the
duty of competence, the duty of diligence, the duty to keep confidences,
the duty to avoid conflicting interests among clients, the duty to deal
honestly, the duty to not act in a manner adverse to a client’s interests,
and the duty to fulfill all obligations to the client. Id. § 16, at 146.
Likewise, our own rules require that a lawyer fulfill certain duties to
clients: competence, diligence, and communication. Iowa Rs. Prof’l
Conduct 32:1.1, 1.3, 1.4. In determining whether an attorney’s
representation was materially limited, we ask whether the attorney was
able to fully perform all of these duties to each of his or her clients. See,
e.g., Stoller, 879 N.W.2d at 209.
The comments to rule 32:1.7 also provide examples of material
conflicts, one of which discusses joint ventures:
For example, a lawyer asked to represent several individuals
seeking to form a joint venture is likely to be materially
limited in the lawyer’s ability to recommend or advocate all
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possible positions that each might take because of the
lawyer’s duty of loyalty to the others.
Iowa R. Prof’l Conduct 32:1.7 cmt. 8. When two clients enter into a joint
venture, their positions are at odds from the outset, which prevents an
attorney from adequately advising each party of all the available
alternatives. See, e.g., Stoller, 879 N.W.2d at 209. Similarly, we have
recognized that the positions of a landlord and tenant or a buyer and
seller are at odds with each other in a transaction. See, e.g., id.
2. Disciplinary case examples. In Iowa Supreme Court Attorney
Disciplinary Board v. Marks, we found an attorney violated our rules
regarding conflicts of interest. 814 N.W.2d 532, 539 (Iowa 2012). The
attorney had previously represented a client in a foreclosure action and
thereafter represented his own wife when she sold a piece of property to
the former client. Id. at 540. Marks failed to obtain informed consent,
confirmed in writing from his former client. Id. at 541. We noted that
the situation was analogous to those situations where an attorney enters
into a business transaction with a current client. Id. Because there was
no harm to the client, we concluded that a public reprimand was
appropriate. Id.
In Iowa Supreme Court Attorney Disciplinary Board v. Qualley, we
found two attorneys violated rules 32:1.7 and 32:1.8. 828 N.W.2d 282,
289 (Iowa 2013). Attorneys Qualley and Bleyhl represented Broadmoor
Place Homeowners Association in collecting delinquent dues from a
homeowner. Id. at 285. They began by sending the proper notice to cure
default to the homeowner as a prerequisite to a foreclosure action and
later filed the foreclosure petition on behalf of Broadmoor. Id. While the
foreclosure action was pending, the homeowner filed for bankruptcy. Id.
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The attorneys continued to represent Broadmoor in the bankruptcy
action. Id.
In the decree of foreclosure it obtained later, Broadmoor
acknowledged a first mortgage existed on the property that was superior
to their lien. Id. When the first mortgage holder initiated a foreclosure
action, Qualley and Bleyhl continued to represent Broadmoor’s interests.
Id. A sheriff’s sale was set, but the first mortgagor dismissed its
foreclosure action one week before the sale. Id. at 286. Also before the
sheriff’s sale, Bleyhl had sent an email to Broadmoor’s property manager
informing her of the company’s right to purchase the property at the
sale, but advising her against exercising that right. Id. The email also
stated that Bleyhl and Qualley had found a potential buyer, but there
was a potential conflict of interest because they would also be
representing the buyer. Id.
Qualley and Bleyhl had a friend, Izaah Knox, with whom they had
discussed entering into a business to “flip” real estate. Id. Qualley and
Bleyhl approached Knox about buying the property at the sheriff’s sale
because they believed they could flip it quickly and make a profit. Id.
Knox agreed, and Qualley and Bleyhl organized a company named Elite
Real Estate, L.L.C. Id. Knox provided the initial capital to Elite, and
neither Qualley nor Bleyhl provided any financial contribution. Id.
After the first mortgagor on the property dismissed its foreclosure
action, Qualley and Bleyhl failed to inform their client, Broadmoor. Id.
While there was a factual dispute regarding whether Broadmoor was
advised of Qualley and Bleyhl’s relationship with Elite, nothing was
confirmed in writing nor was Broadmoor advised to seek independent
legal advice based on this new development. Id. at 287. At the sheriff’s
sale, Qualley provided a written bid of $6500 on behalf of Broadmoor,
13
and then either Qualley or Bleyhl made an oral bid of $6900 on behalf of
Elite. Id. Elite was issued the sheriff’s deed to the property that day. Id.
We found that Qualley and Bleyhl violated rules 32:1.7 and 32:1.8. Id. at
289. We suspended their licenses to practice law for a period of sixty
days. Id. at 294.
In Iowa Supreme Court Board of Professional Ethics & Conduct v.
Wagner, an attorney entered into an agreement with Carl Oehl that he
would assist in finding a buyer for his restaurant and represent Oehl in
the sale in exchange for a commission of ten percent of the gross sale
price of Oehl’s business. 599 N.W.2d 721, 723 (Iowa 1999). Shortly
after this agreement, one of Wagner’s former clients, David Childers,
consulted with Wagner about buying Oehl’s restaurant and starting his
own business. Id. at 724. Wagner orally informed Childers that he
represented Oehl in the sale of the restaurant and that Childers should
seek independent counsel. Id. He did not inform Childers that he would
receive a commission or why he was recommending Childers seek the
advice of independent counsel. Id. We held that Wagner violated a
provision of our old rules that prevented an attorney from entering into a
business transaction with a client without disclosing the lawyer’s own
self-interest. Id. at 727. We suspended his license for three months. Id.
at 729.
In Iowa Supreme Court Attorney Disciplinary Board v. Wright, an
attorney utilized funds from five clients to assist another client in
attempting to obtain what he believed was an inheritance from a cousin
in Nigeria. 840 N.W.2d 295, 297–98 (Iowa 2013). One of Wright’s
clients, Madison, approached Wright to see if he would represent him in
a transaction to obtain a large inheritance from a cousin in Nigeria. Id.
at 297. He informed Wright that he needed to pay $177,660 in taxes and
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then a sum of $18,800,000 would be released to him. Id. Wright
approached five other clients to ask if they would consider loaning
Madison funds for the purpose of paying taxes and fees on the purported
Nigerian inheritance. Id. at 297–98. One client loaned Madison
$12,000, payable to Wright, and Madison signed a document promising
to repay the client $50,000 “upon receipt of [the] inheritance funds.” Id.
at 297. Another loaned Madison $25,000 in exchange for a promise from
Madison to pay her $100,000 upon his receipt of the inheritance from
Nigeria. Id. at 297–98. Three additional clients loaned Madison sums in
the amount of $7000, $20,000, and $160,000. Id. at 298. None of the
loans made to Madison were ever repaid. Id. at 299. We found Wright
violated rules 32:1.1 (competence), 32:1.8(a) (business transaction with
current client), and 32:8.4(c) (professional misconduct involving
dishonesty, fraud, deceit, or misrepresentation). Id. at 299–302.
Because of the severity of the harm to Wright’s clients and his prior
history of discipline, we imposed a twelve month suspension. Id. at 303.
3. Willey’s conduct. In the transaction between Wieniewitz and
Synergy, Willey represented two parties on opposing sides of a
transaction. The interests of Wieniewitz as the party loaning the money,
and Synergy as the party receiving the loan, were at odds from the
beginning. That the two parties had competing interests is demonstrated
throughout the transaction. Throughout the email correspondence,
Willey was repeatedly caught between the interests of Wieniewitz and the
interests of Wild. During the entire transaction, Willey continued to
represent the interests of Wild and Synergy, charging and collecting tens
of thousands of dollars in legal fees. At the same time, Willey was unable
to adequately pursue the interests of Wieniewitz in obtaining the return
of his original investment, let alone any of the future payments promised
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to him in the promissory note prepared by Willey on behalf of
Synergy/Wild. Other than forwarding information from one client to
another, Willey did nothing to advance the legal interests of Wieniewitz.
After Wieniewitz obtained new counsel, Willey expressed that he
could not give certain information to Wieniewitz because of nondisclosure
agreements and because dispersing the information could harm Wild.
Clearly, Synergy was not in a position to return Wieniewitz’s money, and
Willey was not able to adequately pursue Wieniewitz’s interest in
obtaining a full refund of the money he provided under the promissory
note. We agree with the finding of the commission and hold that the
Board proved a violation of rule 32:1.7(a)(2) by a convincing
preponderance of the evidence.
B. Rule 32:1.7(b)(4) Violation (Informed Consent). If there is a
concurrent conflict of interest, our rules provide a mechanism for the
attorney to cure the conflict and continue to represent both clients. Iowa
R. Prof’l Conduct 32:1.7(b); see also Stoller, 879 N.W.2d at 210. If a
concurrent conflict of interest exists, one of the steps an attorney must
take to cure the conflict is to obtain “informed consent, confirmed in
writing” from both clients. Iowa R. Prof’l Conduct 32:1.17(b)(4). When
the conflict exists at the outset of representation, the attorney must
obtain the written consent before undertaking the representation. Id. r.
32:1.7 cmt. 3.
Contrary to the position taken by Willey, he never informed
Wieniewitz of the concurrent conflict of interest, and certainly not the
extent of his relationship with Wild or his involvement with Synergy.
Willey failed to obtain any informed consent, confirmed in writing, from
Wieniewitz before continuing to represent both parties in the loan
transaction. We agree with the finding of the commission and hold that
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the Board proved a violation of rule 32:1.7(b)(4) by a convincing
preponderance of the evidence.
C. Rule 32:1.8(b) Violation (Using Client Information). Rule
32:1.8(b) provides that “[a] lawyer shall not use information relating to
representation of a client to the disadvantage of the client unless the
client gives informed consent.” Id. r. 32:1.8(b). Because it will not affect
the sanction we impose, we decline to decide whether a violation of rule
32:1.8(b) occurred under this set of circumstances. See, e.g., Wright, 840
N.W.2d at 302.
D. Rule 32:1.9(c) Violation (Duties to Former Clients). Rule
32:1.9(c) provides,
A lawyer who has formerly represented a client in a matter or
whose present or former firm has formerly represented a
client in a matter shall not thereafter:
(1) use information relating to the representation to
the disadvantage of the former client except as these rules
would permit or require with respect to a client, or when the
information has become generally known; or
(2) reveal information relating to the representation
except as these rules would permit or require with respect to
a client.
Iowa R. Prof’l Conduct 32:1.9(c).
The commission found there was not a sufficient factual basis to
find a violation of rule 32:1.9(c). Willey continued to represent Synergy
and to bill Wild for legal services during this entire transaction and
through 2015. We agree that there was not a sufficient factual basis to
determine that either client was a former, rather than current, client of
Willey’s at the time of the transaction and hold that the Board did not
prove a violation of rule 32:1.9(c) by a convincing preponderance of the
evidence.
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E. Sanction. Although we consider our prior cases instructive
when we determine a proper sanction, “[t]here is no standard sanction
for [any] particular type of misconduct.” Stoller, 879 N.W.2d at 218
(quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Blessum, 861 N.W.2d
575, 591 (Iowa 2015)). We determine the appropriate sanction for a
violation of our rules based on the particular circumstances of each case.
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Morris, 847 N.W.2d 428, 435
(Iowa 2014).
When crafting a sanction, we consider the nature of the
violations, the attorney’s fitness to continue in the practice of
law, the protection of society from those unfit to practice law,
the need to uphold public confidence in the justice system,
deterrence, maintenance of the reputation of the bar as a
whole, and any aggravating or mitigating circumstances.
Stoller, 879 N.W.2d at 219 (quoting Blessum, 861 N.W.2d at 591).
1. Range of sanctions. We find that Willey violated rules
32:1.7(a)(2) (concurrent conflict of interest) and 32:1.7(b)(4) (informed
consent). Each of the rule violations fall under the general category of a
conflict of interest. In the cases discussed above, we found a range of
sanctions for attorney misconduct arising out of conflicts of interest. In
Marks, we concluded a public reprimand was the appropriate sanction
when there was no harm found to the client. 814 N.W.2d at 541–42. In
Qualley, we suspended the attorneys’ licenses for sixty days for violations
of rules 32:1.7 and 32:1.8. 828 N.W.2d at 289, 294. In Wagner, we
suspended an attorney’s license for three months for entering into a
business transaction with a client and not disclosing his own interest in
the transaction. 599 N.W.2d at 727, 730. In Wright, we suspended an
attorney’s license for twelve months after he convinced five clients to loan
another client money for a loan scam. 840 N.W.2d at 299, 303.
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2. Mitigating and aggravating factors. We must also consider any
existing mitigating or aggravating factors. Stoller, 879 N.W.2d at 220–21.
There are a number of both mitigating and aggravating factors present in
this case.
Willey was cooperative with the Board’s investigation, which we
consider a mitigating factor. Qualley, 828 N.W.2d at 294. In Willey’s
personal statement, he expressed regret for his actions and the harm it
caused to his clients. In the joint stipulation, Willey admitted to the
ethical violations. We consider both remorse and the admission of
wrongdoing to be mitigating factors. Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Weiland, 885 N.W.2d 198, 215 (Iowa 2016) (considering remorse a
mitigating factor); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Conroy, 795
N.W.2d 502, 506 (Iowa 2011) (considering admission of wrongdoing a
mitigating factor). We also note that Willey has not been the subject of
prior disciplinary action, which we consider a mitigating factor. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Bartley, 860 N.W.2d 331, 339 (Iowa
2015). Finally, Willey has engaged in extensive community service,
which we also consider a mitigating factor. Stoller, 879 N.W.2d at 221.
However, we must also consider the aggravating circumstances
surrounding this transaction. We consider harm to a client an
aggravating factor. Weiland, 885 N.W.2d at 215. The $100,000 financial
harm to Wieniewitz was significant. To this day, the Wieniewitzes have
not received any money for their investment. The record also does not
reflect that Wieniewitz is a sophisticated or wealthy business person who
was in a position to lose his and his wife’s money. Prior to investing,
Wieniewitz told Willey that he could only be out the money for no longer
than the forty-five days reflected in the promissory note. Willey assured
him the investment was safe. More significantly, the very structure of
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the investment was questionable from the beginning with an outrageous
promise of a return on the investment. Within weeks, Wieniewitz’s wife
was already questioning whether the transaction was a sham. No one
could reasonably counsel a client that this was a sound investment
opportunity. Willey was also an experienced attorney and CPA who had
been practicing for many years. We consider the experience of an
attorney to be an aggravating factor. Bartley, 860 N.W.2d at 339. In this
same vein, it is clear that Willey was able to recognize a conflict of
interest and knew what his ethical obligations were to his client, as he
had Wild execute a consent and waiver of any conflicts of interest three
years before.
We also note that “persistence . . . in perpetuating [a] falsehood is
a remarkable aggravating factor.” Iowa Supreme Ct. Att’y Disciplinary Bd.
v. Barnhill, 885 N.W.2d 408, 424 (Iowa 2016) (quoting Iowa Supreme Ct.
Att’y Disciplinary Bd. v. McGinness, 844 N.W.2d 456, 466 (Iowa 2014)).
While failing to disclose the conflict of interest to Wieniewitz, Willey
repeatedly represented to Wieniewitz that his payment was forthcoming
“soon,” whether in a few days or the next week. Willey continued to tell
Wieniewitz the payment would be coming “just next week” for nearly two
years. It was only much later that Wieniewitz learned of the conflict of
interest, and then Willey advised him to seek other legal counsel. In our
de novo review of the record, and considering all of the mitigating and
aggravating circumstances in this case, we find that the aggravating
factors weigh in favor of a longer period of suspension. We conclude a
sixty-day suspension is appropriate.
IV. Conclusion.
For the above reasons, we suspend Willey’s license to practice law
with no possibility of reinstatement for sixty days from the filing of this
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opinion. The suspension shall apply to all facets of the practice of law.
Iowa Ct. R. 34.23(3). Willey must comply with the notification
requirements of our rules. Id. r. 34.24. Costs are assessed to Willey. Id.
r. 36.24(1). Unless the Board objects, Willey shall be automatically
reinstated after the sixty-day suspension period on the condition all costs
have been paid. Id. r. 34.23(2).
LICENSE SUSPENDED.