In re Blais
Annotate this Case
In re Blais (97-061); 166 Vt. 621; 696 A.2d 1231
[Filed 1-May-1997]
ENTRY ORDER
SUPREME COURT DOCKET NO. 97-061
MAY TERM, 1997
In re Norman R. Blais, Esq. } Original Jurisdiction
}
}
} Professional Conduct Board
}
}
} DOCKET NO. 95.13
In the above-entitled cause, the Clerk will enter:
Pursuant to the recommendation of the Professional Conduct Board filed
February 18, 1997, and approval thereof, it is hereby ordered that Norman
R. Blais, Esq. be publicly reprimanded for the reasons set forth on pages
3-10 of the board's Final Report attached hereto for publication as part of
the order of this Court. A.O. 9, Rule 8E.
BY THE COURT:
_______________________________________
Jeffrey L. Amestoy, Chief Justice
_______________________________________
Ernest W. Gibson III, Associate Justice
_______________________________________
John A. Dooley, Associate Justice
_______________________________________
James L. Morse, Associate Justice
_______________________________________
Denise R. Johnson, Associate Justice
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STATE OF VERMONT
PROFESSIONAL CONDUCT BOARD
In re: Norman R. Blais, Esq., Respondent
PCB Docket No. 95.13
FINAL REPORT TO THE SUPREME COURT
Decision No. 118
Procedural History
In November of 1992, bar counsel received a complaint from one Ozzie
Preiss of Colorado, alleging that his Vermont lawyer, respondent here, had
failed to provide an accounting as to how his funds had been spent.
Complainant also alleged that respondent had failed to answer his letters
inquiring into this matter.
On November 15, 1993, bar counsel sent a copy of this complaint to
respondent and asked for an answer to these allegations. She received no
response. She renewed the request three months later. Respondent
answered on March 7, 1994, explaining that he was in the process of trying
to clear up the confusion as to what monies, if any, were owed to the
client. He included copies of letters written to the complainant and to
out-of-state lead counsel, attorney Larry Pozner of Denver. He stated that
he would provide bar counsel with additional information after he heard
from Mr. Pozner.
Bar counsel heard nothing further from respondent. She wrote to him
on April 13, July 28, and August 19, 1994, each time asking for a status
report. Respondent did not answer any of these letters. The chair of the
Professional Conduct Board wrote to respondent on September 7, 1994,
requesting a response to the allegations and advising him that failure to
respond could result in imposition of sanctions. Respondent did not
answer. Bar counsel sent a certified letter on January 20, 1995, asking for
a response. Respondent did not answer.
On February 15, 1995, bar counsel sent respondent a certified letter,
informing him of her intent to seek a suspension of his license unless he
began co-operating with her investigation. Respondent began co-operating
on February 27, 1995, and continued to do so until May of 1995, when he
told bar counsel that he was going to retain counsel. Bar counsel heard
nothing further from respondent or his counsel, other than a response to a
telephone inquiry in September of 1995, at which time respondent provided
the name of his lawyer.
In November of 1995, bar counsel instituted disciplinary proceedings
by filing a request for a probable cause review. The petition of
misconduct which gives rise to the instant action was filed on December 13,
1995. It alleged violations of Administrative Order 9, Rule 6D, DR
1-102(A)(5), and DR 9-102(B)(3).
A hearing panel held a hearing into this matter on May 29, 1996. The
parties presented a stipulation of facts, attached hereto and incorporated
herein by reference. The parties presented testimony and argument on the
issue of conclusions of law and sanctions, issues upon which they did not
agree.
The stipulated facts set forth not only the above history of
non-co-operation with the investigation, but also facts demonstrating a
failure to promptly provide an accounting of client funds upon request.
The hearing panel concluded that respondent had violated all of the
disciplinary rules as charged. It recommended that a sanction of public
reprimand be imposed.
A hearing on this matter was held before the full Board pursuant to
Rule 8D on December 6, 1996. Both parties submitted briefs. Bar counsel,
respondent, and respondent's counsel appeared and addressed the Board.
Facts
Respondent agreed to serve as local counsel in the defense of an
interstate federal drug prosecution. Lead counsel was Larry Pozner of
Colorado. The defendant and mutual client was Ozzie Preiss.
Respondent agreed to provide legal services on an hourly basis. In
order to pay respondent's fee, Mr. Pozner transferred to him approximately
$4,500.00 of Mr. Preiss' funds in May of 1992. On October 23, 1992, Mr.
Pozner transferred another $5,000. By March of 1993, counsel were
successful in their efforts to win transference of this prosecution to
Colorado, although respondent continued to handle matters in Vermont into
April of 1993.
Respondent's relationship with this defense was primarily through Mr.
Pozner, who controlled the client account. Mr. Pozner did not demand a
strict accounting of respondent's time. In fact, the October 1992 transfer
of $5,000 was made after Mr. Pozner noted to respondent that respondent had
put a considerable amount of effort into the case and had probably earned
another $5,000.
The incidents which give rise to this disciplinary action began in
March of 1993 when Mr. Preiss, having been convicted in the Colorado
federal court, telephoned respondent demanding information about the
$15,000 in fees which Mr. Pozner had given him. He wanted to know what
respondent had done to earn those fees.
Respondent was initially startled. He knew he had received nearly
$10,000 in fees, but recalled nothing about an additional $5,000. He
wondered if perhaps he had misrecorded client funds or, worse yet, office
staff had embezzled them. He was also concerned that there might be some
problem between Mr. Pozner and Mr. Preiss. Respondent was very concerned
that Mr. Pozner would be accused of wrongdoing by Mr. Preiss and that he
(respondent) would be caught in the middle of this dispute.
Respondent went over his books. His records did not show receipt of
$15,000. As to what he had done to earn the fees, he had not kept a
running account of the hours spent on Mr. Preiss' defense. However, he was
able to go over his schedule and determine how much time he had spent on
the case. He was able to determine that of the nearly $10,000 which Mr.
Pozner had provided, defendant was entitled to a refund of $837.14.
On June 9, 1993, respondent wrote a check for this amount. He did not
mail this check, however, or contact either Mr. Preiss or Mr. Pozner to
discuss the issue.
On July 20, 1993, Mr. Pozner wrote to respondent about Mr. Preiss'
often expressed hope that a refund of fees from respondent could be used to
pay other legal bills owed in Colorado. Mr. Pozner wrote, "Please draw up
an itemization for him or at least get him a check for any monies you have
left in trust." Respondent did not answer.
On November 17, 1993, Mr. Preiss wrote to respondent. The letter
stated, in pertinent part,
I have asked you, through Larry Pozner, Esq., of the law firm
of Pozner, Hutt & Kaplan, P.C. for a detailed account of hours and
expenses that may have occurred when you allegedly represented me
in certain criminal matters.
It is my understanding that the law firm of Pozner, Hutt &
Kaplan, P.C. in Denver, Colorado, transferred $15,000.00 to your
trust account. Is that true?
If so, and at this time I have no reason to doubt that this in
fact did occur, then, as we have asked so many times, where did my
money go?
...
Please give me answers to the following questions and/or
requests.
a. A complete financial statement of where and to who my
money was spent and why?
b. Billing hours: A complete statement.
c. Explain the relationship that existed or does exist
between your law firm and the law firm of Pozner, Hutt
& Kaplan, P.C. in Denver, Colorado.
Record, Exhibit 4 (emphasis in original).
Mr. Preiss asked for an answer by November 30, 1993. Respondent was
still not certain about the $15,000 claim. He did not respond to the
letter.
Mr. Preiss wrote again on December 14, 1993, noting that respondent's
failure to answer had caused him to become truly concerned. He stated that
he would take legal action against respondent and file a disciplinary
complaint unless he heard from respondent by December 28, 1993. Again,
respondent did not answer.
Mr. Preiss began federal court proceedings to try to collect the funds
he felt were owed to him. In support of that effort, Mr. Pozner executed
an affidavit on February 3, 1994, stating that he had sent respondent
$14,412.14, and that he had requested on "numerous occasions...an
itemization of his bill and an accounting of the money sent to him. In
return, I have received neither phone calls nor letters from Mr. Blais."
Respondent received a copy of this affidavit. He then obtained
counsel of his own to deal with this problem. Mr. Pozner eventually
conceded that he had sent respondent approximately $9,400, not the $14,400
previously alleged. With the issue resolved of how much money Mr. Pozner
had given to respondent, it was now clear to respondent that he owed Mr.
Preiss only $837.14, the amount of the check he had issued the previous
June but never sent. On March 23, 1994, respondent's counsel sent Mr.
Pozner that check along with a ledger sheet showing the receipt and
disbursement of Mr. Preiss' funds.
The ledger sheet does not set forth a description or itemization of
the time which respondent spent on Mr. Preiss' defense. The ledger sheet
does, however, comply with the requirements of DR 9-102(C) in the way in
which it was maintained.
Conclusions of Law
Respondent argued that his conduct satisfied the requirements of DR
9-102(B)(3) because he did, in fact, "maintain complete records of all
funds...of a client coming into [his] possession" by maintaining a ledger
in accordance with DR 9-102(C). Bar counsel concedes as much. The
issue in this case concerns the second part of DR 9-102(B)(3). Did
respondent "render appropriate accounts to his client regarding them"?
Respondent initially argued before the hearing panel that since he
eventually did render an accounting of client funds to his client, albeit a
year after the client asked for the information, he has complied with the
letter of the law and that there is no clear and convincing evidence of a
violation. Before this Board, respondent argued, inter alia, that a
sanction no greater than private reprimand is warranted because respondent
had understandable reasons for delaying. Respondent argued that it was
appropriate to delay in rendering his accounting until the false accusation
against him, i.e., that he had received $5,000 more than actually received,
was resolved.
We cannot agree that it is appropriate to ignore multiple requests
from an incarcerated, out of state client who asks his lawyer to explain to
him (1) how much of the client's money the lawyer received and (2) what the
lawyer did with the money. By simply ignoring this request for so many
months, respondent failed to carry out his fiduciary duties to his client
as required by DR 9-102(B)(3). The client also asked for an hourly
itemization of how respondent spent his time on the client's behalf.
Respondent never provided this information to Mr. Preiss. Respondent did
not keep records of his work on an hourly basis, although he was able to
reconstruct his time in June of 1993, when he calculated that a refund was
due of $837.14.
If respondent had agreed to handle this defense on a flat fee basis,
his inability to provide an hourly breakdown of services rendered might be
understandable. However, he agreed to provide services on an hourly basis.
Respondent was obligated to provide a written break down of how those hours
were spent. Without such an itemized statement of the services rendered,
the client is unable to evaluate what services were rendered and whether
the fees charged were reasonable.
Respondent argues that his relationship with out of state counsel was
such that he felt that no hourly accounting was necessary. Indeed, the
evidence shows that Mr. Pozner controlled the purse strings. Until the
question of an accounting came up, Mr. Pozner gave respondent every
indication that his fees were reasonable and appropriate. Respondent
argues that his failure to track his time is understandable in light of Mr.
Pozner's conduct and expectations.
Lead counsel's conduct does not justify respondent's failure to answer
the client's request for an accounting. Once the client asked respondent
for an accounting, it was incumbent upon respondent to make some attempt to
respond. Ignoring him was inappropriate.
Respondent compounded the problem by also ignoring the disciplinary
process. For twelve months he ignored multiple letters from bar counsel
and the chair of this Board, asking for his co-operation with this
investigation. There was no justifiable excuse for such conduct. It
clearly violated DR 1-102(A)(5)(conduct prejudicial to the administration
of justice) and A.O. 9, Rule 6 D. See In re Bailey, 157 VT.424 (1991).
Sanction
We have engaged in considerable discussion as to what the appropriate
sanction in this case should be. There is not a general consensus within
the Board as to whether the failure to render appropriate accounting under
the particular facts of this case, standing alone, mandates a public or a
private sanction. However, we need not reach that issue. Respondent's
conduct in failing to respond to bar counsel's multiple requests for
information over a 12 month period, coupled with his failure to respond to
the client for an equally lengthy time, places this case squarely in the
realm of a public sanction.
We find no justification for respondent's "head in the sand" response
to bar counsel's investigation, particularly in light of the fact that
respondent has himself served as special bar counsel in the past and
understands how the disciplinary system works. It is essentially a system
of self-regulation that requires the co-operation of all members of the bar
if it is going to work fairly and efficiently. There are times when
failure to co-operate - even when the underlying complaint turns out to be
a minor violation - requires public discipline. See, e.g., Matter of
Grochowski, R.I. , 687 A.2d 77 (1996)(lawyer who was exonerated of
two allegations of neglect was suspended for three months for failing to
comply promptly with bar counsel's request for information and for being
dilatory in the closing of an estate); In re Kove, 103 A.D.2d 968, 478 N.Y.S.2d 191,103 (A.D. 3 Dept. 1984)(lawyer who neglected estate would
have been privately disciplined but instead was publicly censured for
failure to co-operate with disciplinary proceedings); see generally,
Annotation, Failure to Cooperate with or Obey Disciplinary Authorities as
Grounds for Disciplining Attorneys - Modern Cases (1985).
Our recommendation is also supported by applicable Standards 4.43 and
6.23 of the ABA Standards for Imposing Lawyer Discipline. Respondent acted
knowingly in neglecting his duties to the disciplinary system; he acted
negligently in not carrying out his duty to account to his client. There
was injury to the lawyer disciplinary system in that time and resources
were wasted trying to obtain respondent's co-operation, co-operation which
should have been extended as a matter of course.
Since Mr. Preiss eventually received his refund, there was no actual
injury, although he had to resort to a law suit in order to obtain
satisfaction. To the extent that Mr. Preiss remains interested in learning
how the hourly fees were earned, there is injury to him in that his request
for that information remains unanswered.
In aggravation, we find that respondent has been disciplined on one
prior occasion and that he has substantial experience in the practice of
law. In mitigation, respondent enjoys an excellent reputation in the legal
community for honesty and integrity. He is well respected by many of his
colleagues. None of these factors, however, is sufficient to move the
recommended sanction above or below those cited by the Standards.
Dated this 14th day of February, 1997.
PROFESSIONAL CONDUCT BOARD
/s/
____________________________
Robert P. Keiner, Esq. Chair
/s/ /s/
___________________________ ____________________________
Joseph F. Cahill, Jr., Esq. Charles Cummings, Esq.
/s/ /s/
___________________________ ____________________________
Paul S. Ferber, Esq. Michael Filipiak
/s/
___________________________ ____________________________
Nancy Foster Rosalyn L. Hunneman
/s/
___________________________ ____________________________
Karen Miller, Esq. Robert F. O'Neill, Esq.
___________________________ ____________________________
Alan S. Rome, Esq. Mark L. Sperry, Esq.
/s/ /s/
___________________________ ____________________________
Ruth Stokes Jane Woodruff, Esq.
/usr3/wsc/blais.finaldec
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