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THE NORTH CAROLINA STATE BAR v. ROBERT M. TALFORD, ATTORNEY
No. COA00-952
(Filed 18 December 2001)
1. Attorneys_discipline by State Bar_appeal_standards
The State Bar's discipline of attorneys is governed by N.C.G.S. §
84-28, with the standard of proof in disciplinary and disbarment
proceedings being clear, cogent, and convincing evidence. A finding of
misconduct allows the Disciplinary Hearing Commission of the State Bar
to impose sanctions which include admonition, private reprimand, public
censure, suspension of law license, or disbarment. Appellate review of
State Bar orders is under N.C.G.S. § 84-28(h), which allows appeal on
matters of law and legal inference. The appellate court does not sit
as fact-finder and may only review for abuse of discretion where no
issue of legal interpretation is raised, and the review is under the
whole record test. In this case, the appellate court must determine
whether the DHC's findings were supported by substantial evidence in
the whole record, whether its findings support its conclusions of law,
and whether the DHC abused its discretion in ordering defendant
disbarred.
2. Attorneys_mismanagement of trust account_sufficiency of evidence
There was sufficient evidence for the Disciplinary Hearing
Commission of the State Bar to conclude that defendant violated N.C.
Revised Rules of Professional Conduct 1.15, which deals with trust
accounts, where defendant testified that he did not reconcile his trust
account, had not maintained accounting records, had commingled his own
and his clients' money, had not always deposited settlement checks or
paid creditors promptly, that there was money in his trust account of
unknown origin, and that he had not escheated any of this money to this
State.
3. Attorneys_trust account_management grossly negligent
An assignment of error to a State Bar Disciplinary Hearing
Commission conclusion that defendant was grossly negligent in managing
his trust account was overruled because the conclusion provided no
independent basis for imposition of sanctions and there was substantial
evidence that defendant violated the Rules of Professional Conduct.
4. Attorneys_disbarment_mismanagement of trust account
The Disciplinary Hearing Commission of the State Bar abused its
discretion by disbarring an attorney who mismanaged his trust account
where there were no findings or conclusions that established that any
individual client was harmed, defendant's violations of the Rules of
Professional Conduct did not evince an intent to defraud the court and
did not affect proceedings in court, and the DHC's order made no
findings that the defendant's actions threatened harm to the legal
profession or to the administration of justice. No reported cases
similar to this were found in which an attorney was disbarred and
lesser sanctions have been imposed for far more serious conduct.
Appeal by defendant from order entered 14 March 2000 by the North
Carolina State Bar Disciplinary Hearing Commission in Wake County. Heard
in the Court of Appeals 6 June 2001.
Clayton W. Davidson, III and Carolin Bakewell for plaintiff-
appellee.
Irving Joyner for defendant-appellant.
BIGGS, Judge.
Robert M. Talford (defendant) appeals from an order entered by the
Disciplinary Hearing Commission of the North Carolina State Bar (DHC)
disbarring him from the practice of law. We affirm in part, and reverse
and remand in part.
Defendant practiced law for over twenty years in the Charlotte area,
having received a license to practice in 1976. His practice focused
primarily on the representation of plaintiffs who filed claims for
disability settlements such as workers' compensation, social security
disability, and medical claims arising from accidents. Defendant
operated his practice from a small house in Charlotte, and had no
permanent employees. He had maintained a trust account since 1978. In
1998, the North Carolina State Bar (State Bar) audited defendant's trust
account, and discovered discrepancies and irregularities in his
bookkeeping practices.
On 19 October 1999 the State Bar filed a complaint against
defendant, alleging the following misconduct:
1. That defendant failed to reconcile his trust
account at least quarterly; 2. That
defendant failed to maintain adequate records to
determine whose funds were deposited into the
account; 3. That defendant
commingled his own funds with client funds;
4. That defendant was paying
office expenses and personal expenses from the trust
account in order to avoid having the funds seized bythe Internal Revenue Service; 5.
That defendant appropriated to his own use funds
received in a fiduciary capacity, thus committing a
criminal act reflecting adversely on his honesty,
trustworthiness, and fitness as a lawyer;
6. That defendant entered
into an unfair business transaction with a client;
7. That defendant engaged in willful
attempts to evade or defeat payment of federal
taxes, behavior involving dishonesty, fraud, deceit,
or misrepresentation; 8.
That defendant overpaid himself attorney's fees;
9. That
defendant disbursed payment of client settlements
before the settlement checks were received;
10. That defendant
failed to pay certain of his clients' medical fees
in a timely manner; 11. That defendant appropriated
client funds to his own use; and
12. That defendant was grossly negligent in
the management of his trust account, and benefitted
from his own gross negligence.
At a hearing before the DHC on 25 February 2000, Edward White
(White), an investigator with the State Bar, testified concerning his
investigation of defendant's record keeping and accounting habits. White
testified about defendant's business records in relation to some ten to
fifteen clients. This evidence established that defendant had not
maintained a financial ledger or other written record of his income and
expenses, and had not reconciled his trust account on a quarterly basis,
as required by North Carolina Revised Rules of Professional Conduct 1.15-
1 and 1.15-2. White began his audit with defendant's records for 1994,
at which time defendant's trust account balance was approximately
$37,000. Defendant's records did not document the source of all of this
money, nor whether any of this amount was owed to someone else. White
termed this money unidentified funds.
Defendant testified that none of his clients had ever claimed any of
the unidentified funds in his trust account, that all his clients had
been paid what was due to them, and that he had never misappropriated any
client's funds. He contended that it was necessary to have some of hisown money in the trust account to avoid bank charges, and prevent any
checks from being returned for insufficient funds. Defendant
acknowledged failing to regularly reconcile his trust account, but
testified that he kept a sufficient visual reconciliation to make this
unnecessary. Defendant also conceded that he did not maintain a ledger
or other written records for his trust account. He offered explanations
for some of the bookkeeping discrepancies, but was unable to account for
many of them.
The State Bar did not present evidence that any client or creditor
had complained to the State Bar about defendant, nor that any client had
failed to receive monies owed to him.
The DHC issued an order on 14 March 2000. Of the allegations in the
complaint summarized above, the DHC dismissed numbers four, five, six,
and seven, finding that they were not proven by clear, cogent, and
convincing evidence. The allegations dismissed were those that alleged
misappropriation of client funds; commission of criminal acts; conduct
involving dishonesty, fraud, deceit, or misrepresentation; involvement in
an unfair business transaction; and attempted evasion of federal income
tax liability.
The DHC made extensive findings of fact regarding defendant's
representation of twelve of his prior clients. The DHC's findings of
fact were similar for each of these clients, and may be generally
summarized as follows:
1. In 1994, defendant had approximately $37,000 in
his trust account, for which he could identify
neither the source nor the appropriate disposition
of the money. These unidentified funds were never
escheated to the State.
2. Defendant had on several occasions
written checks attributable to expenses for a case
prior to depositing a settlement check in the case,
or for cases in which he never received a settlement
check. 3. Defendant had
on several occasions written checks attributable tohis fees in a case, in excess of the amount that
could be documented as owing to him for the
settlement. 4. Defendant had several times
been very dilatory in paying medical providers, on
occasion delaying over a year after receipt of a
settlement check in the case. 5.
Defendant had on several occasions failed to deposit
a settlement check into his trust account.
6. Defendant had written
checks from the trust account attributable to a case
in which he had been hired to perform legal research
and writing, and for which no settlement check would
be received.
The DHC also found that defendant generally had been grossly negligent in
the management of his trust account and had benefitted from his own gross
negligence. The DHC concluded that defendant's acts and omissions were
in violation of the Rules of Professional Conduct in that he:
(1) failed to maintain proper trust account records
in violation of N.C. Revised Rules of Professional
Conduct 1.15-1 and 1.15-2 (and superceded Rules 10.1
and 10.2); and (2) failed to preserve
funds in a fiduciary capacity, failed to deposit
trust funds into trust account when received, failed
to properly disburse funds, failed to reconcile his
trust account at least quarterly, and commingled
client and personal funds, in violation of N.C.
Revised Rules of Professional Conduct 1.15-1 and
1.15-2 (and superceded Rules 10.1 and 10.2).
The DHC further concluded that the defendant's acts and omissions set
forth herein were grossly negligent and committed in reckless disregard
of his obligations under the [Rules of Professional Conduct.]
In the dispositional part of its order, the DHC found several
factors that aggravated defendant's violation of the Rules of
Professional Conduct, including: (1) a pattern of misconduct, (2) the
commission of multiple offenses, (3) a refusal to acknowledge the
wrongfulness of his actions, (4) substantial experience in the practice
of law, and (5) defendant's apparent indifference to determining the
ownership of the unidentified funds and making any restitution that was
owed. The DHC found as a mitigating factor that the defendant had no
previous disciplinary record. The DHC concluded that the aggravatingfactors outweighed the mitigating factor, and ordered the defendant
disbarred. From this order, defendant appeals.
I.
[1]We first review the law generally applicable to an appeal from
a DHC order. The State Bar's discipline of attorneys is governed by
N.C.G.S. § 84-28, which authorizes the State Bar to impose sanctions on
attorneys who have engaged in acts constituting misconduct. The
statute defines misconduct to include (1) conviction of offenses showing
professional unfitness, (2) violation of the N.C. Rules of Professional
Conduct, and (3) misrepresentation or evasion in response to a State Bar
inquiry or complaint.
The standard of proof in disciplinary and disbarment proceedings is
clear, cogent, and convincing evidence. 27 NCAC 1.0114(u).
See In re
Palmer, 296 N.C. 638, 252 S.E.2d 784 (1979) (adopting standard);
N.C.
State Bar v. Beaman, 100 N.C. App. 677, 398 S.E.2d 68 (1990). Clear,
cogent, and convincing is an evidentiary standard that is stricter than
preponderance of the evidence, although not as high as the criminal
burden of proof, beyond a reasonable doubt.
In re Montgomery, 311 N.C.
101, 316 S.E.2d 246 (1984). Clear, cogent, and convincing evidence is
evidence which should fully convince."
Williams v. Building and Loan
Assn, 207 N.C. 362, 177 S.E. 176 (1934).
In the present case, discipline was based upon the State Bar's
finding that defendant had violated certain Rules of Professional
Conduct. A finding of misconduct allows the DHC to impose sanctions,
which include admonition, private reprimand, public censure, suspension
of law license, or disbarment.
Appellate review of State Bar orders is authorized under N.C.G.S. §
84-28(h) which provides that: There shall be an appeal of right from any final
order imposing admonition, reprimand, censure,
suspension, stayed suspension, or disbarment upon an
attorney. . . . Review by the appellate division
shall be upon matters of law or legal inference.
The procedures governing any appeal shall be as
provided by statute or court rule for appeals in
civil cases. . . .
Appeal is thus allowed on matters of law and legal inference,
which is the generally established basis of appeals from a trier of fact.
See e.g., N.C.G.S. § 7A-26, (North Carolina Supreme Court and Court of
Appeals have jurisdiction to review matters of law or legal inference);
N.C.G.S. § 1-277, (granting appeal from district and superior court upon
orders and judgments involving a matter of law or legal inference);
N.C. Const. Art. IV, § 12 (the jurisdiction of appellate courts is
generally limited to issues of law or legal inference, while the
superior court has original general jurisdiction except as otherwise
provided by statute).
This Court does not sit as a fact-finder, and does not take new
evidence or make new findings of fact.
Lamm v. Lorbacher, 235 N.C. 728,
71 S.E.2d 49 (1952) (facts are those found by jury);
N.C. State Bar v.
Speckman, 87 N.C. App. 116, 360 S.E.2d 129 (1987) (factual findings of
DHC conclusive on appeal if supported by substantial evidence). Where no
issue of legal interpretation is raised, we may review only for abuse of
discretion.
Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540
S.E.2d 775 (2000);
Kinsey v. Spann, 139 N.C. App. 370, 533 S.E.2d 487
(2000). A ruling committed to the fact finder's discretion is to be
accorded great deference, and "[a]n abuse of discretion occurs only when
a court makes a patently arbitrary decision, manifestly unsupported by
reason."
Buford v. General Motors Corp., 339 N.C. 396, 406, 451 S.E.2d
293, 298 (1994).
This Court's review of the record in appeals from a DHC order is
conducted under the whole record test.
N.C. State Bar v. Dumont, 304
N.C. 627, 286 S.E.2d 89 (1982) (adopting standard);
N.C. State Bar v.
Maggiolo, 124 N.C. App. 22, 475 S.E.2d 727 (1996). In
N.C. State Bar v.
Speckman, 87 N.C. App. 116, 119-120, 360 S.E.2d 129, 132 (1987), this
Court summarized the whole record standard as applied to appeals from a
DHC order:
In attorney discipline and disbarment proceedings,
findings of fact must be supported by clear, cogent,
and convincing evidence drawn from the whole record.
The "whole record test" is the standard for judicial
review of attorney discipline cases and requires the
reviewing court to consider the evidence which in
and of itself justifies or supports the
administrative findings and . . . also [to] take
into account the contradictory evidence or evidence
from which conflicting inferences can be drawn. . .
. Under the whole record test there must be
substantial evidence to support the findings,
conclusions and result. . . . The evidence is
substantial if, when considered as a whole, it is
such that a reasonable person might accept as
adequate to support a conclusion. (citations
omitted).
Substantial evidence is 'more than a scintilla' and is 'such
relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.'
Williams v. Dept. of Env. and Natural Res., 144
N.C. App. 479, 483, 548 S.E.2d 793, 796 (2001) (citations omitted).
Although the whole record test requires this Court to consider all the
evidence in the record, it does not allow the Court to substitute its
judgment for that of the DHC, even if the evidence is conflicting, and
the Court might have reached a different conclusion.
North Carolina
State Bar v. Nelson, 107 N.C. App. 543, 421 S.E.2d 163 (1992).
In sum, this Court must determine whether the DHC's findings were
supported by substantial evidence in view of the whole record; whether
its findings support its conclusions of law; and whether the DHC abusedits discretion in ordering defendant disbarred.
II.
[2]Defendant argues first the State Bar presented insufficient
evidence to support its findings of fact and conclusion that he had
violated the Rules of Professional Conduct. We disagree.
The DHC found that defendant had violated N.C. Revised Rules of
Professional Conduct 1.15. This Rule requires, in pertinent part, that
an attorney: (1) Keep clients' money segregated in a trust fund; (2)
Deposit all settlement checks and other entrusted funds into the trust
account promptly upon receipt; (3) Not commingle funds of the attorney in
the trust account with client funds; (4) Maintain current, accurate,
bookkeeping records, including quarterly reconciliation of the trust
account, a ledger, and retention of receipts, canceled checks, and other
documentation for the trust account; and (6) Escheat abandoned funds to
the State.
The defendant testified during the hearing that he did not reconcile
his trust account; that he had not maintained accounting records; that he
had commingled his and his clients' money; that he had not always
deposited settlement checks or paid creditors promptly; that there was
money in his trust account whose origin he could not establish; and that
he had not escheated any of this money to the State. We find that
defendant's own testimony, in conjunction with that of White, amply
established by clear, cogent, and convincing evidence that defendant was
in violation of Rule 1.15 of the Rules of Professional Conduct. This
assignment of error is without merit.
III.
[3]Defendant argues also that the State Bar failed to demonstrate
by clear, cogent, and convincing evidence that he was grossly negligent
in managing his trust account. The DHC specifically found that defendanthad been grossly negligent in the management of his trust account,
and
that he had benefitted from his own gross negligence. Defendant
correctly points out that the term gross negligence is not defined in
the Rules of Professional Conduct or in the relevant statutes; that the
DHC did not define the standard it was employing in its determination
that defendant had been grossly negligent; and that the record fails to
establish what definition or standard was applied to the term gross
negligence. While this is true, we do not find it dispositive on the
issue of whether a violation of the Rules of Professional Conduct
occurred. DHC's conclusion that defendant was grossly negligent
provides no independent basis for imposition of sanctions. In that we
have concluded that there is substantial evidence that defendant violated
the Rules of Professional Conduct, we overrule this assignment of error.
However, we also note that the order fails to set forth what benefit,
if any, defendant derived. This is particularly relevant in light of the
dismissal of allegations of misappropriation of funds.
IV.
[4]Defendant also asserts error in the DHC's imposition of
disbarment, the most severe sanction available to the DHC. For the
reasons that follow, we must agree.
N.C.G.S. § 84-28 authorizes the imposition of sanctions against an
attorney who has engaged in misconduct, including violations of the Rules
of Professional Conduct. Upon a finding of misconduct, the DHC has a
choice of five possible sanctions. In order of increasing severity, the
statutory definitions of these are as follows:
1.
Admonition: An admonition is a written form of
discipline imposed in cases in which an attorney has
committed a minor violation of the Rules of
Professional Conduct. 2.
Reprimand: A
reprimand is a written form of discipline more
serious than an admonition issued in cases in which
an attorney has violated one or more provisions ofthe Rules of Professional Conduct, but the
protection of the public does not require a censure.
A reprimand is generally reserved for cases in which
the attorney's conduct has caused harm or potential
harm to a client, the administration of justice, the
profession, or members of the public.
3.
Public Censure: A censure is a written
form of discipline more serious than a reprimand
issued in cases in which an attorney has violated
one or more provisions of the Rules of Professional
Conduct and has caused significant harm or potential
significant harm to a client, the administration of
justice, the profession, or members of the public,
but the protection of the public does not require a
suspension of the attorney's license. 4.
Suspension for a period up to but not exceeding five
years, any portion of which may be stayed upon
reasonable conditions to which the offending
attorney consents. 5.
Disbarment.
N.C.G.S. § 84-28(c). The choice of which sanction is most appropriate
rests in the discretion of the DHC and, accordingly, this Court will
review the DHC's order of disbarment under an abuse of discretion
standard.
See North Carolina State Bar v. Nelson, 107 N.C. App. 543, 421
S.E.2d 163 (1992) (defendant alleges DHC abused its discretion in choice
of sanction; Court holds that sanction may not be modified if within
statutory range, and finds no abuse of discretion);
N.C. State Bar v.
Graves, 50 N.C. App. 450, 274 S.E.2d 396 (1981) (defendant argues
sanction imposed was unreasonably harsh; this Court evaluates sanction in
context of defendant's actions and the range of sanctions available to
DHC, and concludes it was properly imposed).
Our analysis of whether the DHC's decision to disbar defendant was
'supported by reason' is undertaken against the backdrop of the stated
policy underlying the State Bar's imposition of sanctions against an
attorney. The Rules of Professional Conduct state that sanctions against
an attorney are not intended as punishment for wrongdoing, but are
imposed for the protection of the public, the courts, and the legal
profession. 27 NCAC 1.0101.
See also N.C. State Bar v. Talman, 62 N.C.App. 355, 303 S.E.2d 175 (1983). Therefore, a
sanction imposed by the
DHC should be reasonably related to the protection of the public, the
courts, and the legal profession, in view of the nature and gravity of
a defendant's misconduct, and of the other evidence in the record.
This policy is further reflected in the statutory guidelines
articulated in N.C.G.S. § 84-28(c) for the DHC's determination of the
most appropriate sanction. These include (1) whether the attorney's acts
or omissions have caused harm or potential harm to a client, the
administration of justice, the profession, or members of the public, (2)
whether the attorney's acts or omissions have caused
significant harm or
significant potential harm to a client, the administration of justice,
the profession, or members of the public, and (3) the extent to which the
attorney's acts and omissions demonstrate a need to protect the public.
The DHC's order does not reference these factors; its findings and
conclusions do not address the degree of potential harm that defendant's
acts and omissions might cause, why disbarment would be necessary to
protect the public, or how the defendant's failure to maintain accurate
records might threaten the public, the legal profession, or the
administration of justice. Thus, the order does not disclose whether the
DHC's decision to disbar defendant was connected to any of these
considerations.
The DHC's order made no findings that the defendant's actions
threatened harm to the legal profession or to the administration of
justice. Our own examination of the record discloses no evidence that
defendant's acts and omissions operated as a threat to our legal system,
or undermined the administration of justice. Defendant's violations of
the Rules of Professional Conduct did not evince an intent to defraud the
court, and did not affect proceedings in court; instead, his errors wereconfined to his bookkeeping and to his attorney/client relationship
s.
Compare with, e.g., Disciplinary Hearing Comm'n, N.C. State Bar v.
Frazier, 141 N.C. App. 514, 540 S.E.2d 758 (2000) (attorney pressured
witness to recant truthful testimony);
In re Paul, 84 N.C. App. 491, 353
S.E.2d 254 (1987) (attorney solicited another to disrupt trial);
N.C.
State Bar v. Talman, 62 N.C. App. 355, 303 S.E.2d 175 (1983) (attorney
offered false testimony, and counseled clients in illegal conduct).
The DHC's order also contains no findings or conclusions that
establish that any individual client was harmed. It may be argued that
the defendant's failure to keep accurate records poses an inherent risk
of harm to clients; however, the record does not reveal any actual harm
to any client.
The other factor articulated in N.C.G.S. § 84-28(c) is the degree to
which defendant's acts and omissions demonstrate a need to protect the
public from the attorney. In this regard, we find it most significant
that those charges originally brought by the State Bar that alleged
dishonesty, fraud, tax evasion, misrepresentation, unfair business
transaction, misappropriation of funds, and deceit, were dismissed at the
end of the hearing. We conclude that the dismissal of all charges
implicating intentional malfeasance and moral turpitude reduces the
apparent extent to which the public needs protection from defendant.
Finally, although N.C.G.S. § 84-28 does not require a
proportionality review, fundamental fairness requires that the DHC not
act with unbridled license, and that its decisions not be arbitrary. To
this end, we examine the factual context of other cases in which
sanctions were imposed against an attorney. Such review suggests that
disbarment historically has been reserved for situations in which an
attorney is shown by clear, cogent, and convincing evidence to haveengaged in conduct that is dishonest, immoral, or criminal. We find that
the present case appears to be an anomaly. This defendant was disbarred
for violation of the accounting requirements of the Rules of Professional
Conduct, although none of his clients had lodged a complaint against him,
or were shown to have suffered any harm.
The most frequent predicate for disbarment appears to be proof of
embezzlement.
See, e.g., In re Escoffery, 216 N.C. 19, 3 S.E.2d 425
(1939);
In re Brittain, 214 N.C. 95, 197 S.E. 705 (1938);
Boomer v.
Caraway, 116 N.C. App. 723, 449 S.E.2d 215 (1994);
GE Capital Mortgage
Services v. Avent, 114 N.C. App. 430, 442 S.E.2d 98 (1994);
N.C. State
Bar v. Whitted, 82 N.C. App. 531, 347 S.E.2d 60 (1986). Commission of
other serious criminal offenses also has been the basis for disbarment.
See, e.g., In re Delk, 336 N.C. 543, 444 S.E.2d 198 (1994) (extortion and
conspiracy to commit extortion);
N.C. State Bar v. Harris, 137 N.C. App.
207, 527 S.E.2d 728 (2000) (attorney steals settlement check from client
who had previously discharged him);
Vann v. N.C. State Bar, 79 N.C. App.
166, 339 S.E.2d 95 (1986) (attorney receives prison terms after pleading
guilty to eleven felony forgery charges);
State v. Singletary, 75 N.C.
App. 504, 331 S.E.2d 166 (1985) (conspiracy and fraudulent burning of
uninhabited house);
State Bar v. Temple, 2 N.C. App. 91, 162 S.E.2d 649
(1968) (attempting to traffic in counterfeit money, preparation of false
affidavits, altering note and deed of trust).
The North Carolina State Bar also has disbarred attorneys who
demonstrated an intention to perpetrate a fraud upon the court, subvert
the trial process, or disrupt the court's functioning.
See Attorney
General v. Gorson, 209 N.C. 320, 183 S.E. 392 (1936) (failure to disclose
to North Carolina State Bar that attorney had previously been disbarredin Pennsylvania for reasons of moral turpitude);
Disc
iplinary Hearing
Comm'n, N.C. State Bar v. Frazier, 141 N.C. App. 514, 540 S.E.2d 758
(2000) (misappropriation of client funds, advising client not to attend
hearing, and pressuring witness to recant prior truthful testimony);
N.C.
State Bar v. Maggiolo, 124 N.C. App. 22, 475 S.E.2d 727 (1996) (counseled
client to commit fraud, advised unrepresented party, and engaged in
conduct involving dishonesty, fraud, and deceit);
In re Paul, 84 N.C.
App. 491, 353 S.E.2d 254 (1987) (soliciting another to disrupt trial with
loud outburst);
N.C. State Bar v. Talman, 62 N.C. App. 355, 303 S.E.2d
175 (1983) (false testimony about having paid estate taxes; counseling
clients in fraudulently obtaining stock certificates).
In sum, disbarment generally serves to protect the public, the
courts, and the legal profession from an attorney's misconduct.
Talman
id. However, our review has revealed no reported cases wherein an
attorney was disbarred for conduct akin to this defendant's: violation of
regulations for trust account management, unaccompanied by proof of
injury to specific persons, or of dishonesty, fraud, or criminal
behavior.
Suspension from practice for a period of time, and public censure,
are less serious sanctions than disbarment. Like disbarment, suspension
frequently has been imposed in response to proof that an attorney has
engaged in dishonest or criminal behavior.
See, e.g., N.C. State Bar v.
Dumont, 304 N.C. 627, 286 S.E.2d 89 (1982) (six month suspension for
procuring false testimony by a witness);
N.C. State Bar v. Mulligan, 101
N.C. App. 524, 400 S.E.2d 123 (1991) (three year suspension for
embezzling funds from client);
N.C. State Bar v. Speckman, 87 N.C. App.
116, 360 S.E.2d 129 (1987) (three year suspension for conversion ofclient's funds, failure to honor subpoena);
N.C. State Bar v. Wilson<
/i>, 74
N.C. App. 777, 330 S.E.2d 280 (1985) (one year suspension for knowing use
of perjured evidence, misleading tribunal, preparation of false
affidavit); N.C. State Bar v. Braswell, 67 N.C. App. 456, 313 S.E.2d 272
(1984) (ninety day suspension for attorney who failed to perfect appeal;
made knowing misrepresentations to client and to State Bar); State Bar v.
Combs, 44 N.C. App. 447, 261 S.E.2d 207 (1980) (three year suspension for
fraudulent real estate transaction).
Suspension also has been imposed upon attorneys whose acts and
omissions have caused a client to suffer harm. See, e.g., In re Hunoval,
294 N.C. 740, 247 S.E.2d 230 (1977) (twelve month suspension for refusal
to file application for writ of certiorari for client on death row, on
grounds that he did not expect to be paid for its preparation); N.C.
State Bar v. Barrett, 132 N.C. App. 110, 511 S.E.2d 15 (1999) (two year
suspension, stayed, where attorney commingled personal funds with rent
monies received on behalf of client); N.C. State Bar v. Sheffield, 73
N.C. App. 349, 326 S.E.2d 320 (1985) (three year suspension for failure
to keep trust account records, failure to withdraw from case that he was
neglecting, failure to disburse settlement funds).
Public censure, the third most severe sanction, also has been
employed to protect others from an attorney who has been dishonest,
unprofessional, or who has injured a client. See, e.g., In re Palmer,
296 N.C. 638, 252 S.E.2d 784 (1979) (public censure for failure to
withdraw from case in which attorney knows that client intends to offer
perjured testimony); N.C. State Bar v. Shuping, 86 N.C. App. 496, 358
S.E.2d 534 (1987) (censure for failure to file required documents in
connection with settlement of estate, and failure to respond to repeatedofficial notices about estate deadlines); State Bar v. Graves, 50 N.C.
App. 450, 274 S.E.2d 396 (1981) (public censure for suborning perjury).
Our examination of the reported cases involving discipline of an
attorney for misconduct leads us to conclude that the sanction imposed in
this case is an aberration. We find it significant that the charges
implicating dishonesty were dismissed. We also note that none of
defendant's clients had lodged a complaint, or were shown to have
suffered any harm. Neither do the DHC's findings regarding aggravating
and mitigating factors establish a readily apparent reason for disbarring
defendant. In addition, we cannot discern the extent to which the DHC
relied upon its finding of gross negligence in imposing the ultimate
sanction against this defendant. However, assuming arguendo that
defendant's conduct did rise to the level of gross negligence as found by
DHC, our review shows that the lesser sanctions of suspension and public
censure have been imposed for far more serious conduct than has been
established in this case. Finally, the State Bar failed to establish
that defendant has received any benefit from his actions.
The statutory framework for discipline of attorneys allows the DHC
wide latitude in fashioning an appropriate and constructive sanction
against an attorney who has engaged in misconduct. As fact-finder, the
DHC has discretion to consider demeanor, credibility, and other
intangible factors in its decision to sanction an attorney, and in its
choice of sanction. Thus, the DHC is not required to match particular
offenses to specific sanctions. However, this discretion cannot be
exercised arbitrarily. We conclude that the imposition of the sanction
of disbarment, based on the record before us, is such a departure from
DHC's application of disbarment in prior cases, that we are unable to
conclude that it is based upon a reasoned decision as to the sanctionimposed. The record does not demonstrate a rational basis for
disbarment; nor is such rational basis evident in the DHC order.
Accordingly, we conclude that the imposition of disbarment was, on the
facts of this case, an abuse of discretion. Of particular note is the
detailed discussion in the transcript, by counsel for both the State Bar
and the defendant, regarding sanctions other than disbarment that might
be appropriate. The State Bar, because of its enormous power to control
one's ability to practice law, which is a property right, has a
responsibility to be fair and evenhanded in the exercise of this power
and, equally important, to exhibit the appearance of evenhandedness in
its judgments.
The decision herein does not diminish the DHC's discretion. Nor
does it do any damage to cases that have held that as long as the
sanction is within the statutory parameters, this Court is without
authority to enter a different sanction. We are not replacing disbarment
with another sanction of our choosing, but are exercising our customary
and established power to review discretionary rulings on appeal for abuse
of discretion.
For the reasons discussed above, we hold that DHC's findings and
conclusion that defendant violated Rule 1.15 of the Rules of Professional
Conduct is supported by substantial evidence in the record; and we remand
for the DHC to review the sanction imposed in light of the discussion
herein, and for entry of a new order consistent with this opinion.
Affirmed in part, reversed and remanded in part.
Judges WYNN and CAMPBELL concur.
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