James P.S. Snyder v. Kentucky Bar Association

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2014-SC-000093-KB
JAMES P. S. SNYDER MOVANT
KBA MEMBER NO. 66180
V. IN SUPREME COURT
KENTUCKY BAR ASSOCIATION RESPONDENT
OPINION AND ORDER
Movant; James P. S. Snyder, Kentucky Bar Association ("KBA") member
number 66180, whose bar roster address is 1544 Winchester Avenue, Suite
820, P.O. Box 1067, Ashland, Kentucky 41105, was admitted to the practice of
law in the Commonwealth of Kentucky on October 1, 1974. Movant's law
practice focused mainly on social security and bankruptcy matters.
In June of 2007, Movant was contacted by a colleague to represent Alma
Energy, LLC ("Alma"), a coal mining corporation. Alma was experiencing
significant financial trouble. Consequently, Movant filed a Chapter 11
Bankruptcy petition on its behalf in the United States Bankruptcy Court for
the Eastern District of Kentucky. Shortly thereafter, Movant requested that the
bankruptcy court approve his retainer fee in the amount of $7,961.00.
Two years later, in August of 2009, an Assistant United States Trustee
deposed Movant. When questioned about the retainer he had collected for the
Alma bankruptcy, Movant stated that he had deposited the funds in either his
personal or operating checking accounts. Movant also explained that he had
used some of the retainer to pay the filing fee for Alma's bankruptcy petition.
Movant further revealed that the law firm of Prewitt and DeBourbon had
provided him with two separate $5,000.00 checks to pay for Alma's legal fees
and expenses. Movant did not believe payments from the third party law firm
were required to be held in trust, nor did he think the payments were subject
to court approval since the checks were not taken from Alma's bankruptcy
estate.
Movant continued to implicate himself during the deposition. For
instance, Movant testified that he had received $20,000.00 from Johnson
County Gas Company for fees incurred from its own Chapter 11 bankruptcy.
Movant acknowledged that he had not received approval from the court to
obtain this money. Once again, Movant stated that court notice and approval
was not necessary since the owner of Johnson County Gas Company paid him
directly for his representation, not out of the bankruptcy estate.
Lastly, and arguably most damaging, was Movant's admission that he
had not maintained a trust account for the previous five years. In fact, Movant
admitted that all client funds were deposited into either his personal or
operating checking accounts.
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Due to Movant's above-mentioned actions, he entered into an agreed
order in the United States Bankruptcy Court for the Eastern District of
Kentucky. The order mandated that he return any unearned fees and disgorge
fees totaling $19,400.00. In addition, the order required him to withdraw from
all presently filed bankruptcy cases in which meetings of the creditors had not
yet been held or confirmed plans obtained. Lastly, the order enjoined him from
filing new bankruptcy petitions for not less than nine months, after which time
he could seek reinstatement from the court. Movant's motion states that he is
currently engaged in a limited practice of la'w.
On July 8, 2013, the Inquiry Commission issued a formal Charge, KBA
File No. 18236, containing the following counts of disciplinary violations:
Count I, Supreme Court Rule ("SCR") 3.130-1.15(a) (failure to hold client's
property in a separate account); Count II, SCR 3.130-1.15(e) (failure to deposit
advanced fees in a trust account); and Count III, SCR 3.130-3.4(c) (knowingly
disobeying an obligation under rules of a tribunal). Movant admits to violating
these three Rules of Professional Conduct.
In an effort to resolve the pending disciplinary charges, Movant and the
KBA have negotiated a sanction pursuant to SCR 3.480(2). The negotiated
sanction imposes a public reprimand and requires Movant to be monitored by
the Kentucky Lawyers Assistance Program ("KYLAP").
Whether this Court will accept the negotiated sanction is within our
sound discretion. Anderson v. Kentucky Bar Ass'n, 262 S.W.3d 636, 638 (Ky.
2008). In its response, the KBA contends that the recommended discipline is
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appropriate and supported by Kentucky case law. The KBA directs us to
several cases to support the proposed sanction. For example, in Kentucky Bar
Ass'n v. Schilling, 361 S.W.3d 304 (Ky. 2012), the attorney subject to discipline
was appointed as the examiner for a massive bankruptcy case. Similar to the
case before us, the attorney failed to disclose fee arrangements. The attorney
also made false or misleading statements to the court. He was found guilty of
violating four Rules of Professional Conduct, including SCR 3.130-3.3(a); SCR
3.130-3.4(c); SCR 3.130-4.1; and SCR 3.130-8.3(c). Ultimately, this Court
approved a public reprimand as the attorney's punishment. The KBA also
points to several cases in which we publicly reprimanded attorneys, who failed
to deposit retainers into their escrow accounts. See, e.g., Kentucky Bar Ass'n v.
Bubenzer, 145 S.W.3d 842 (Ky. 2004); Keen v. Kentucky Bar Ass'n, 386 S.W.3d
737 (Ky. 2012).
Furthermore, Movant has admitted to suffering from Obsessive
Compulsive Disorder ("OCD”), 1 which he claims was aggravated by the
daunting workload and stress he endured during the pendency of the Alma
case. Movant alleges that he was overwhelmed with legal work and had no
support staff. As a result, Movant claims that he was on the verge of a nervous
breakdown.
1 "OCD is a type of anxiety disorder that traps people in endless cycles of
repetitive thoughts and behaviors. People with OCD are plagued by recurring and
distressing thoughts, fears, or images (obsessions) they cannot control." OCD-
Overview, WebMD , http: / /www.webmd.com/ anxiety-panic/ tc / obsessive-compulsive-
disorder-ocd-topic-overview (last visited March 27, 2014).
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Movant states that he has been evaluated by KYLAP and now
participates in the program, although the extent of his participation is
unknown. Nonetheless, we will consider it a mitigating factor that Movant has
admitted he suffers from OCD and has sought rehabilitative services.
Additionally, this Court places great weight on the fact that Movant, in his forty
years of practice, has no disciplinary history in the Commonwealth of
Kentucky.
Based on previous cases imposing similar discipline for analogous
misconduct, in addition to Movant's mental disorder and lack of previous
disciplinary actions, this Court finds that the consensual discipline proposed
by Movant and agreed to by the KBA is appropriate. Therefore, Movant's
motion for a public reprimand is hereby granted.
ACCORDINGLY, IT IS ORDERED THAT:
(1) Movant, James P. S. Snyder, KBA Member No. 66180, is found guilty
of violating SCR 3.130-1.15(a); SCR 3.130-1.15(e); and SCR 3.130-
3.4(c).
(2) Movant is hereby publicly reprimanded for his unprofessional
conduct.
(3) Movant is ordered to complete and participate in an evaluation
performed by a professional of KYLAP and to fully comply with any
resulting recommendations from such evaluation.
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(4) Pursuant to SCR 3.450, Movant is directed to pay all costs associated
with this disciplinary proceeding in the amount of $245.75, for which
execution may issue from this Court upon finality of this Order.
All sitting. All concur.
ENTERED: April 17, 2014.
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