In re Karpin

IN_RE_KARPIN.92-570; 162 Vt. 163; 647 A.2d 700

[Opinion Filed May 21, 1993]

[Motion for Reargument Denied June 3, 1994]

 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P.
 40 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 92-570


 In re Gary Karpin                            Supreme Court

                                              Original Jurisdiction

                                              March Term, 1993


 Shelley A. Hill, Bar Counsel, Montpelier, for plaintiff-appellee

 David J. Williams of Sleigh & Williams, St. Johnsbury, for defendant-
   appellant


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


      PER CURIAM.   Respondent-attorney appeals the recommendation of the
 Professional Conduct Board that he be disbarred from the practice of law.
 Respondent claims that (1) his due process rights were violated by allowing
 Bar Counsel to prosecute the case and participate in the Board's
 deliberations, in violation of the doctrine of "internal separation of
 powers," (2) the evidence is insufficient to support many of the Board's key
 findings, and (3) the recommended sanction is inappropriate.  We adopt the
 recommended sanction.
                                     I.
      Respondent's first argument is that his due process rights were
 violated when the Board failed to disqualify Bar Counsel from prosecuting
 this case.  Respondent claims that the dual role of Bar Counsel, as
 prosecutor and counsellor to the Board, violated the internal-separation-of-
 powers rule.  The combination of investigatory and adjudicatory functions
 does not, by itself, violate due process.  In re O'Dea, 4 Vt. L.W. 19, 22
 (Feb. 11, 1993).  Because the Board is not the final decision-making
 authority and has the power only to recommend the sanction, respondent has
 not demonstrated any deprivation of due process rights in the disciplinary
 process.  See id. (no violation of due process where Judicial Conduct Board
 prosecutor actively participated in the deliberative process).
                                             II.
      Respondent's second claim is that the evidence does not support the
 findings.  First, respondent argues that, because Bar Counsel carries the
 burden of proving respondent's misconduct by clear and convincing evidence,
 A.O.9 Rule 13(C), on appeal all reasonable doubts and inferences must be
 resolved in his favor, citing Emslie v. State Bar of California, 520 P.2d 991 (Cal. 1974).  Emslie, however, is distinguishable.  Under the
 California disciplinary system, findings of fact made by the disciplinary
 board are not binding on the reviewing court.  Id. at 995.  Under present
 Vermont law, however, this Court must accept the Board's findings of fact
 unless they are "clearly erroneous."  A.O. 9 Rule 8(E).  As long as the
 Board applies the correct standard of proof, the Board's findings will be
 upheld if they are "'clearly and reasonably supported by the evidence'"
 because the Board is the trier of fact.  In re Rosenfeld, __ Vt. __, __, 601 A.2d 972, 975 (1991) (quoting In re Wright, 131 Vt. 473, 490, 310 A.2d 1,
 10, (1973)); cf. In re G.S., 153 Vt. 651, 652, 572 A.2d 1350, 1351 (1990
 mem.) (findings of fact stand unless clearly erroneous because court
 correctly applied clear and convincing standard of proof in proceeding for
 termination of parental rights).  Because the Board correctly applied the
 clear and convincing standard of proof, we will accept the Board's findings
 unless they are clearly erroneous.
      The allegations of misconduct arise out of the respondent's repres-
 entation of different clients in four unrelated matters.  Each is addressed
 separately.
                                     A.
      In the first case, respondent was contacted by Fred and Janet Gage to
 represent them in connection with soot damage they had sustained in their
 home due to what they believed was a faulty installation of a furnace and
 hot water heater.  The company that installed the furnace and hot water
 heater initially agreed to correct the problem, but then denied liability.
 Respondent was employed to pursue the claim against the installer.  He also
 knew that his clients were making a claim against their own insurer,
 Cooperative Fire Insurance Association, which ultimately paid approximately
 $12,000 in damages.  When Mr. Gage telephoned respondent to discuss this
 settlement, respondent advised Mr. Gage not to tell him what he was
 receiving from the insurer "because it would hurt his dealing with the
 installer."  The Gages executed a proof of loss which subrogated to their
 insurer their rights to collect damages from the installer.
      Respondent settled the Gages' claim against the installer for $8,000
 and informed the Gages that this settlement would have no effect on their
 claim against their own insurer because the claim against the installer
 "covered a different loss."  When the insurer later learned of the
 settlement with the Gages, it demanded the return of the monies paid under
 the policy.  When the Gages confronted respondent about the problem, he told
 them that he had not known they had filed a claim against the insurer.  He
 later told counsel for the insurer that there was no dual compensation
 "because the claims had covered different losses."
      The hearing panel, in findings adopted by the Board, found that
 respondent's denial to his clients that he had any knowledge of the claim
 against the insurer was conduct involving dishonesty and misrepresentation
 in violation of DR 1-102(A)(4).  The panel further found as aggravating
 factors that respondent submitted false statements to Bar Counsel in
 connection with the investigation of the matter and that he attempted to
 shift blame for the problem by suggesting that the Gages were attempting to
 defraud the insurer and the installer without his knowledge or involvement.
      On appeal, respondent argues that the Gage complaint must be dismissed
 because the only evidence to support the Board's findings is the testimony
 of Janet Gage and that her testimony was not worthy of belief.  It is the
 role of the trier of fact to "'determine the weight of the evidence and the
 persuasive effect of the testimony.'"  In re Rosenfeld, __ Vt. at __, 601 A.2d  at 975 (quoting In re Wright, 131 Vt. 473, 490, 310 A.2d 1, 10 (1973)).
 We find no error in the Board finding Janet Gage credible.
      In addition, respondent alleges that two findings are clearly
 erroneous:  the finding stating that the Gages contacted the insurer with
 respondent's knowledge and consent and the finding stating that the Gages
 did not understand the subrogation form.  There was credible testimony
 directly supporting each of these two findings, and thus, we uphold the
 factual determination made by the finder of fact.  See id.
      Respondent also claims that the panel failed to find several facts:
 that the Gages did not inform respondent of their contacts with and
 attempts to collect from the insurer; that Mrs. Gage met with McNally from
 the insurance company and told him that she was not getting any money from
 the installer on the same day that she signed the general release of the
 installer; and finally, that there was no evidence that respondent ever lied
 to or misled the Gages.  Because there was credible evidence directly
 refuting respondent's alleged facts, the Board did not err by failing to so
 find.  Cf. Cano v. Cano, 129 Vt. 598, 605, 285 A.2d 721, 726 (1971)(failure
 to make certain findings will not be reviewed where requested findings are
 of insufficient merit to affect the result).
                                     B.
      In the second case, respondent was retained by Donald Coderre after a
 car dealer refused to fix Coderre's recently purchased, allegedly defective
 used automobile.  Although two independent mechanics suspected that the car
 had either a faulty head gasket or engine block, the dealer refused to fix
 the car, thereby allegedly dishonoring the forty-five-day warranty.  When
 Coderre contacted respondent, respondent indicated that Coderre had a good
 case and that Coderre should return the car to the dealer as defective goods
 under the Uniform Commercial Code and stop making payments on his bank loan,
 which was secured by the car.  The bank subsequently repossessed the car.
      Respondent performed minimal trial preparation by deposing the dealer
 and attending opposing counsel's depositions of Coderre and Coderre's
 witnesses.  During pretrial negotiations, Coderre told respondent that he
 wanted the dealer to pay off the car loan and forgive the repair bills.  For
 six months there was no action in the case.
      In March of 1990, opposing counsel made respondent an offer, which
 Coderre rejected.  On April 24, 1990, respondent wrote a letter informing
 Coderre that the case was scheduled as backup for May 1, 1990; however,
 Coderre never received this letter.  The case was moved from backup to the
 schedule for May 1, but respondent did not immediately inform Coderre of
 this change.  Respondent did not notify the witnesses of the trial date
 because, as he told his secretary, the case was going to settle.
 Thereafter, he telephoned Coderre at 10:00 p.m. at his home on April 28 to
 tell Coderre that the case was going to trial on May 1.  When Coderre
 expressed his concern over the short notice and the possible unavailability
 of his witnesses, respondent falsely stated that the subpoenas were ready to
 be served the next day.  Respondent discussed settlement with Coderre, who
 insisted that a $1500 settlement would be acceptable only if the dealer
 would pay off the car loan and forgive the repair bills.
      Respondent agreed with the attorney for the car dealer to settle the
 case for $1500 in direct opposition to his client's wishes.  When Coderre
 learned of this, he told respondent he had not authorized such a settlement
 and respondent must undo the settlement.  Despite Coderre's wishes,
 respondent negotiated the check, signed the stipulation agreement and filed
 it with the court.
      Coderre hired another attorney in order to try to rescind the settle-
 ment.  Respondent learned that Coderre had informed his new attorney that
 respondent had settled without Coderre's authority.  Respondent then
 commenced a retaliatory small claims suit for the collection of unpaid
 services he had rendered on Coderre's case.  The Board found that some of
 the fees sought were for services that had not been rendered.  Coderre
 answered respondent's claim with allegations that respondent was incompetent
 and that respondent had settled the case without Coderre's authority.
 Although assisted by his new attorney, Coderre represented himself at small
 claims court.  Coderre and respondent reached an oral agreement in which
 Coderre said he would drop his attempt to recover fees already paid to
 respondent if respondent would drop his attempt to collect more legal fees.
 They did not discuss malpractice or ethical complaints.  Respondent drew up
 the stipulation, which included a waiver by Coderre of any malpractice or
 ethical complaints against respondent.  Because Coderre was unsophisticated
 and did not read well, he signed the stipulation assuming it contained the
 terms to which the two had orally agreed.  The Board found that respondent
 had violated DR 6-101(A)(2) by inadequately preparing for Coderre's trial
 and DR 1-102(A)(5) by attempting to squelch any ethical investigation into
 his conduct.
      Respondent argues that several findings of fact are clearly erroneous
 because the panel chose to believe Coderre and ignore contradictory
 business-record evidence.  As respondent states, the central question is
 whether Donald Coderre was a credible and trustworthy witness.  The panel
 specifically found Donald Coderre to be a credible witness.  We will uphold
 this factual determination.  See Lockwood v. Bougher, 145 Vt. 329, 331, 488 A.2d 754, 755 (1985)(determining credibility of witnesses is exclusively
 matter for trier of fact).  The findings that respondent challenges state
 the following:  that respondent advised him not to continue to make payments
 on his bank loan; that Coderre was surprised that the car had been
 repossessed; the alleged implication that respondent was responsible for the
 loss of the evidence (the car) necessary for the law suit; that Coderre
 received no notice of the trial until two days before the trial; and
 finally, that respondent tricked Coderre into waiving his civil claims
 against respondent.  Because there is credible evidence to support all of
 these findings, we defer to the Board's fact-finding and reject all of
 respondent's arguments concerning the Coderre complaint.
      In addition to the factual disputes raised by respondent in the Coderre
 case, the Board noted three other factual situations in which respondent was
 found to have lied, and these situations are relevant to the determination
 of the appropriate sanction.  Respondent lied to the Board in stating that
 he had been ready to go to trial in the Coderre case, that the witnesses
 were ready to testify at the trial, and that he was authorized to settle the
 case.
                                     C.
      In the third case, respondent was charged with accepting private
 employment in a matter in which he had had substantial responsibility while
 he was an Orleans County Deputy State's Attorney.  Respondent had served as
 Deputy State's Attorney to Philip White, who had developed a unified,
 interagency procedure to coordinate the investigation and prosecution of
 child sex abuse cases.  The panel found that this procedure demonstrated
 that the office took child sex abuse cases very seriously.
      In July of 1988, as he was preparing to leave on vacation, Philip White
 advised respondent that a sex abuse case involving a thirteen-month-old
 baby, K.B., was coming into the office and that respondent was to handle the
 case.  Respondent filed a CHINS petition and represented the State at a
 temporary detention hearing.  Respondent was prepared to represent the State
 at a contested merits hearing but instead actively participated in the
 negotiated resolution of the case, which resulted in a stipulation signed by
 respondent.  The panel found that respondent's participation in the case was
 substantial.
      Later in the summer, after respondent had left the State's Attorney's
 office, the parents of K.B. asked respondent to represent them in the same
 matter.  They told respondent that they wanted to hire someone already
 familiar with the case.  Respondent testified that he was aware of the
 ethical issues raised by the representation of K.B. and that he had
 researched these issues and reached a reasoned conclusion that his
 representation was within the bounds of ethical conduct.  The panel,
 however, found this testimony was not credible.  The panel concluded that
 respondent clearly violated DR 9-101(B) (a lawyer shall not accept private
 employment in a matter in which he had substantial responsibility while he
 was a public employee).
      Respondent argues that three of the panel's findings are clearly
 erroneous.  First, respondent contests findings that he characterizes as
 implying that any attorney involvement in sex abuse cases would be per se
 "substantial."  Respondent mischaracterizes these findings.  They do not
 state or imply any per se rule.  Rather, these findings describe the office
 procedure for sex abuse cases and stress the seriousness with which the
 office addressed such cases.
      Second, respondent challenges the finding that respondent's conduct
 was a "clear violation of DR 9-101(B) (a lawyer shall not accept private
 employment in a matter in which he had had substantial responsibility while
 he was a public employee)."  Although the panel did not cite any case law
 interpretations of the term "substantial," the factual findings clearly
 support the finding that respondent had substantial responsibility in the
 K.B. case.
      Finally, respondent contests the finding that the panel did not find
 credible respondent's testimony that he researched the ethical implications
 of private representation of K.B. and had reached a reasoned conclusion that
 his representation would not violate any ethical rules.  Respondent
 testified, however, that he could remember only "looking into the issue" but
 not whether he consulted case law.  Moreover, the panel was free to believe
 or not believe respondent's testimony. See In re Rosenfeld, __ Vt. at __,
 601 A.2d  at 975 (panel must determine weight and persuasiveness of
 testimony).
                                     D.
      In the final case, respondent was retained in June of 1991 by Nancy
 Ouellette to represent her in a modification-of-custody-and-support action.
 Ouellette told respondent that she would be in Virginia for most of the
 summer but could return for a hearing.  Respondent advised Ouellette that
 she would not need to be present at the hearing.  Ouellette was given a
 blank affidavit of income and assets to fill out and return to respondent's
 office.  She completed most of the form but had questions as to whether to
 include certain income from rental property.  She returned the unfinished
 and unsigned affidavit with a note asking for advice as to how it should be
 completed.  Respondent did not respond to Ouellette's inquiry.
      Respondent informed Ouellette of the hearing date but did not tell her
 she was required to attend.  On the day of the hearing, respondent noticed
 that the affidavit was not signed.  He instructed his office worker, Elaine
 Hall, to sign Ouellette's signature and notarize the signature.  Hall
 quickly looked at some samples of Ouellette's signature and signed the
 affidavit.
      When respondent arrived at family court, he told the magistrate that
 Ouellette could not attend the hearing because she was in mandatory
 training courses, and he presented the forged affidavit to opposing counsel.
 Because opposing counsel had questions about the contents of the affidavit
 and because Ouellette was not present, the hearing had to be continued until
 September.  Opposing counsel sought costs for the continuance.  In his
 memorandum in opposition to awarding costs, respondent again asserted that
 Ouellette had been unable to attend the hearing due to mandatory training
 without which she would lose her job.
      When Ouellette received a copy of this memo, she was surprised by the
 false assertions regarding job training and immediately informed respondent
 that she was only on vacation in Virginia.  Before the September hearing,
 Ouellette completed another affidavit of income and assets, including her
 income from rental properties.  During this hearing, the parties discovered
 that the first affidavit had been forged.  Respondent informed the
 magistrate that he did not know who had signed it.  Respondent also told the
 magistrate that he had been mistaken about Ouellette taking educational
 courses.
      The magistrate filed a complaint with the Board on October 4, 1991, and
 sent a copy of this complaint to respondent.  In early October, Elaine Hall
 resigned from her employment with respondent.  Although no severance pay was
 discussed upon her resignation, she received four or five checks, each for
 $100, between October of 1991 and March of 1992.  Respondent was informed by
 the Board of the complaints filed against him on October 28, 1991.  On
 November 14, 1991, respondent sent Hall an affidavit, which he had drafted
 and which falsely stated that Elaine Hall had inadvertently signed
 Ouellette's affidavit.  Accompanying this affidavit was a "severance pay"
 check for $100.  Hall signed the affidavit.  As part of the Board's
 investigation, Hall was interviewed and confirmed the information in the
 November affidavit.  Shortly after this interview, Hall received another
 "severance pay" check for $100.  Hall also submitted another affidavit in
 January confirming the November affidavit.  On June 3, 1992, however, Hall
 was subpoenaed to a deposition and was given "use and fruits" immunity in
 return for her testimony.  At the deposition on June 4, 1992, and at the
 hearing on June 23, she recanted her earlier statements and stated instead
 that respondent had noticed, moments before leaving for the hearing, that
 the Ouellette affidavit was unsigned and he had instructed Hall to sign the
 form and notarize it.
      The hearing panel specifically found that respondent violated DR 6-
 101(A)(2) by failing to respond to his client's questions about completing
 the affidavit and failing to notice that it was unsigned.  More importantly,
 the panel found that respondent's submission of the false affidavit
 violated DR 1-102(A)(5)(conduct prejudicial to the administration of
 justice), DR 7-102(A)(4)(knowingly using false evidence), and DR 7-102(A)(6)
 (the creation and use of false evidence).  The panel also found that
 throughout the disciplinary process, respondent had submitted false
 statements and false evidence and had attempted to shift the blame to
 others, either his clients or his staff.  This pattern of dishonesty, fraud
 and misrepresentation violated DR 1-102(A)(4).
      Respondent's arguments challenge the panel's decision to find Hall's
 testimony credible and respondent's testimony not credible.  As stated
 above, credibility is left to the fact-finder unless the findings are
 clearly erroneous.  See In re Rosenfeld, __ Vt. at __, 601 A.2d  at 975
 (panel must determine weight and persuasiveness of testimony).  Respondent
 claims that several findings are clearly erroneous.  These findings state:
 that the signature on the July affidavit is not that of Ouellette and that
 Ouellette had not signed it before Elaine Hall as suggested by respondent;
 that respondent noticed that the signature was missing, that he asked Hall
 to forge the signature, and that Hall quickly looked through the files for
 samples of Ouellette's signature; that Hall received a check marked
 "severance pay" along with the affidavit that respondent had drafted for her
 on November 11; and that respondent misled or lied to the magistrate.  There
 was ample credible evidence to support each of these findings, and we defer
 to the Board's factual findings.  See id. (findings must be upheld if
 "clearly and reasonably supported" by evidence).
                                    III.
      Bar Counsel contends that the Board erred in dismissing a charge that
 respondent violated DR 1-102(A)(7), prohibiting a lawyer from engaging in
 "conduct that adversely reflects on the lawyer's fitness to practice law."
 Bar Counsel, however, neglected to file an appeal from the Board's dismissal
 and cannot raise the issue now.  In re Berk, __ Vt. __, __, 602 A.2d 946,
 950 (1991).
                                     IV.
      Finally, respondent contends that the sanction is not appropriate for
 the alleged misconduct.  In the Gage case, respondent violated DR 1-
 102(A)(4) (engaging in conduct involving dishonesty and misrepresentation).
 In the White case, respondent violated DR 9-101(B) (accepting private
 employment in a matter in which he had substantial responsibility as a
 public employee).  In the Coderre case, respondent violated DR 6-101(A)(2)
 (handling a legal matter with inadequate preparation) and DR 1-102(A)(5)
 (attempting to foreclose an ethical investigation of his conduct, which
 constituted conduct prejudicial to the administration of justice).  In the
 Ouellette case, respondent violated DR 1-102(A)(4) (engaging in conduct
 involving dishonesty and misrepresentation), DR 7-102(A)(4) (using false
 evidence), DR 7-102(A)(6) (creating false evidence), DR 6-101(A)(2)
 (handling a legal matter with inadequate preparation), and DR 1-102(A)(5)
 (submitting false evidence and lying to magistrate, which constituted
 conduct prejudicial to the administration of justice).
      Although the Board's recommended sanction of disbarment is not binding
 upon this Court, it is accorded deference.  In re Berk, __ Vt.  at __, 602 A.2d  at 948.  Moreover, the Board relied upon the American Bar Association
 Standards for Imposing Lawyer Sanctions (1991)(ABA Standards), which we have
 found useful in the past.  E.g., In re Berk,__ Vt. at __, 602 A.2d  at 950.
 Under these standards, the factors to be considered in imposing sanctions
 are the duty violated, the lawyer's mental state, the actual or potential
 injury caused by the lawyer's misconduct and the existence of aggravating or
 mitigating factors.  ABA Standards, supra, at 30.
      Although the Board focused on four of the ABA provisions, we are
 convinced that standards 4.61 and 6.11 together require disbarment in this
 case.  Under standard 4.61, disbarment is appropriate "when a lawyer
 knowingly deceives a client with the intent to benefit the lawyer . . . ,
 and causes serious injury or potentially serious injury to a client."  The
 Board found that respondent had lied to the Gages, and the result was that
 the Gages were sued by their insurer and incurred additional attorney's
 fees.  The Board also found that respondent lied to his client Ouellette
 about the necessity of being present at the hearing.  Moreover, the Board
 found that respondent had engaged in a pattern of deceit in an attempt to
 cover up his own misconduct.
      Under standard 6.11, disbarment is appropriate "when a lawyer, with the
 intent to deceive the court, makes a false statement, submits false document
 . . . , and causes serious or potentially serious injury to a party."  The
 Board found that respondent had lied to the magistrate about the reason for
 Ouellette's absence from the July hearing and that he had submitted a
 forged affidavit to the court.  In addition, respondent lied to the Board
 throughout the disciplinary proceedings and induced Hall to make false
 statements.  This could have subjected Hall to prosecution, an enormous
 potential injury.
      Disbarment is an appropriate sanction under the ABA Standards, and the
 fact that almost every aggravating factor is present confirms disbarment as
 the appropriate sanction.  See ABA Standards, supra, at 9.22 (listing
 aggravating factors).  Respondent had dishonest and selfish motives.  He
 engaged in a pattern of misconduct.  He committed multiple offenses.  He
 engaged in bad faith obstruction of the disciplinary proceeding by lying to
 the panel and attempting to have Coderre waive his right to bring a
 complaint.  He submitted false evidence and used other deceptive practices
 during the disciplinary process.  He refused to acknowledge the wrongful
 nature of his conduct.  He took advantage of a vulnerable victim, especially
 Coderre.  The only mitigating factors that were present were his
 inexperience in the practice of law and the absence of a prior disciplinary
 record.  See id. at 9.32.  Due to the brevity of his practice, however, the
 lack of past disciplinary actions is not significant. The Board properly
 determined the appropriate sanction for respondent's conduct, and we adopt
 its recommendation.
      Judgment that Gary Karpin is removed from the office of attorney and
 counsellor at law and his name is stricken from the rolls.