IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD vs. JAMES WILLIAM McCARTHY
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IN THE SUPREME COURT OF IOWA
No. 105 / 06-0695
Filed September 29, 2006
IOWA SUPREME COURT ATTORNEY
DISCIPLINARY BOARD,
Appellee,
vs.
JAMES WILLIAM McCARTHY,
Appellant.
________________________________________________________________________
On review of the report of the Grievance Commission.
Grievance Commission reports respondent has committed ethical
misconduct and recommends suspension of respondent’s license to
practice law. LICENSE SUSPENDED.
Dan T. McGrevey, Fort Dodge, for appellant.
Charles L. Harrington and Wendell J. Harms, Des Moines, for
appellee.
2
STREIT, Justice.
James W. McCarthy has been admonished or reprimanded seven
times for previous ethical violations.
None of these previous ethical
violations led to a suspension of his license to practice law. This trend
ends today.
The Iowa Supreme Court Attorney Disciplinary Board
(“Board”) accused McCarthy of improperly representing two clients with
conflicting interests, neglecting client matters, and failing to respond to
inquiries from the Board.
The Grievance Commission of the Supreme
Court of Iowa (“Commission”) found McCarthy violated the Iowa Code of
Professional Responsibility for Lawyers and recommended a one-year
suspension. Due in part to mitigating factors, we suspend McCarthy’s
license for six months.
I. Background
McCarthy was born on April 13, 1950. Since his early childhood,
he has suffered from recurrent bouts of depression.
He was admitted to practice law in 1981. He began his legal career
working for a law firm in Des Moines that specialized in collections. He
then secured employment with the Child Support Recovery Unit in
Des Moines and later transferred to Fort Dodge. In 1987, he went into
private practice with another attorney.
practitioner.
In 1991, he became a solo
McCarthy’s principal areas of practice are family law,
juvenile law, bankruptcy, and criminal law. At least half of his case load
relates to court appointed cases. 1
In the years since entering private practice, McCarthy has been
punished numerous times for his ethical violations.
1McCarthy told the Commission he had approximately 330 open cases at the
time he received this complaint.
3
In March 1991, the Board admonished McCarthy for failing to tell
his client a motion for sanctions had been filed, that the court held a
hearing on the matter, and that the court imposed sanctions.
In November 1992, he was reprimanded for failing to make timely
filings in a probate matter and for failing to respond to the Board’s three
notices about its investigation.
In December 1993, the Board admonished McCarthy when he
represented an individual even though he had previously represented the
individual’s former spouse.
The representation of this individual was
adverse to the interests of the former spouse and was in a matter that
was substantially related to the matter in which McCarthy had
represented the former spouse.
McCarthy did not receive informed
consent for this representation.
In February 1996, he was reprimanded for representing a client
when such representation was adverse to the interests of a former client.
McCarthy had previously represented a mother in her dissolution of
marriage proceedings.
These proceedings involved matters of child
custody, child support, and visitation. Later, McCarthy represented the
father to secure a modification of the dissolution decree.
This
modification sought primary care and custody of the children. McCarthy
also represented the interests of those children in a child in need of
assistance proceeding.
These representations were contrary to the
interests of the mother—McCarthy’s previous client. By representing the
father in matters contrary to the interests of his former client, McCarthy
thereby violated his continuing duty of confidentiality to the mother.
In June 2000, the Board admonished McCarthy for failing to
appear for a trial and for failing to appear for a hearing.
4
In October 2001, the Board admonished McCarthy for neglecting a
client’s matter when he failed to tell the client that he was not going to
pursue the client’s claim against a bank.
Finally, in November of 2003, he was reprimanded for failing to
respond to three notices from the Board about a complaint.
On September 12, 2005, the Board filed the present complaint
against McCarthy. The complaint consisted of five counts, each count
representing a separate individual alleged to be harmed by McCarthy’s
alleged ethical violations. One of the counts was eventually dismissed by
the Board.
After the present complaint was filed, McCarthy went to an
intensive treatment center in Texas for help with his depression.
He
participated in this program for ten weeks.
On March 26, 2006, McCarthy appeared for the hearing on this
complaint.
counts.
He admitted the Board’s allegations in all but one of the
McCarthy testified about his long history of major recurrent
severe clinical depression, which he blames for his ethical problems.
McCarthy’s physician testified extensively about McCarthy’s current
medical condition. In relation to McCarthy’s future, the physician stated:
Well, I think it’s gotten to the point where he reached
the bottom of the barrel and had no way to go but up. And
sometimes it takes a major disaster for people to realize
they’ve got to change and they have to make changes now.
And at least based on my last few sessions, I feel really good
about how he’s doing when he leaves the office.
McCarthy reports he has his depression under control for the first
time in his life.
He is on medication and sees a mental health
professional regularly.
He has made substantial changes in the
operation of his private practice, including reducing his caseload and
implementing better organizational tools. Additionally, McCarthy has a
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network of judges and attorneys committed to supporting and assisting
him.
The
Commission
concluded
McCarthy
violated
numerous
provisions of the Iowa Code of Professional Responsibility for Lawyers
and recommended a one-year suspension.
II. Standard of Review
We review attorney disciplinary proceedings de novo, Iowa
Supreme Ct. Attorney Disciplinary Bd. v. D’Angelo, 710 N.W.2d 226, 229
(Iowa 2006), and review such proceedings pursuant to Iowa Court Rule
35.10. The Board has the burden to prove disciplinary violations by a
convincing preponderance of the evidence. D’Angelo, 710 N.W.2d at 230.
This burden is “less than proof beyond a reasonable doubt, but more
than the preponderance standard required in the usual civil case.” Id.
(quoting Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Lett, 674
N.W.2d 139, 142 (Iowa 2004)).
III. Factual Findings
We find convincing evidence to prove the following:
A. Traster Matter
McCarthy represented Christopher Traster in a dissolution of
marriage action. His wife, Scotti Traster, was represented by the father
and son combination of Charles and Justin Deppe.
Scotti filed her
petition for dissolution on January 28, 2002. During the pendency of
the dissolution action, both Christopher and Scotti agreed that McCarthy
would represent them in a joint petition for bankruptcy.
The parties
agreed to file the petition jointly even though they were in the midst of
dissolution proceedings because it would be more economical for both of
them—there would be only one filing fee for the joint bankruptcy
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petition. 2 The bankruptcy petition was filed on October 21, 2002, and
the debts listed in the bankruptcy petition were discharged on February
12, 2003.
On April 17, 2003, the Trasters’ dissolution of marriage decree was
entered. The parties had agreed upon all terms in the decree except for
the payment of attorney fees. In regards to the payment of attorney fees,
the court ordered:
That [Scotti] shall receive from [Christopher] the sum
of $2000.00 for her attorney fees and expenses incurred
herein, and that her Attorney Charles Deppe is hereby
granted a judgment for said amount, to be due and payable
from this date, with interest at the legal rate, until paid in
full.
In response to this judgment, McCarthy sent Christopher a letter
containing the following statements:
In going over your bankruptcy petition, Charles Deppe
was not added as a creditor on the petition, due to the fact
that he hadn’t submitted a bill yet. I want to reopen the
bankruptcy and include him as a creditor, so we can get rid
of this legal bill. . . . I will . . . reopen the matter on your
behalf only, and include Mr. Deppe as an unsecured
creditor. (Emphasis added.)
On August 11, 2003, McCarthy filed a motion to reopen the
bankruptcy so Christopher could discharge the court ordered attorney
fee judgment. As described in the above-mentioned letter, the motion did
not list Scotti as a party to the petition and did not list Scotti as a party
to the debt.
Scotti eventually learned the bankruptcy case had been reopened.
She contacted McCarthy and asked if she could also reopen the
bankruptcy to include two recently discovered credit card debts that
predated the original bankruptcy petition. McCarthy told her to fax the
2Neither the Board nor the Commission discussed whether this represented a
conflict of interest in and of itself. Therefore we do not reach this issue.
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information on the debts to his office. He told her to stop paying on the
debts because they would be discharged upon reopening the bankruptcy.
Scotti sent him a copy of the bills and stopped making payments on the
credit cards.
At some point, Justin Deppe contacted Scotti and informed her she
would still be liable for the legal bill if Christopher’s liability for the
$2000 was discharged through bankruptcy. Scotti then sent a letter to
McCarthy telling him she did not approve of Christopher trying to
discharge the $2000 debt to her dissolution attorney.
Charles Deppe challenged Christopher’s attempt to discharge the
$2000 debt and was ultimately successful, in part because McCarthy did
not attend the hearing on the matter.
McCarthy never amended the bankruptcy petition to include
Scotti’s two additional credit cards because there was some dispute as to
whether Scotti was to pay the required filing fee before McCarthy filed the
information about the two credit cards.
Scotti filed an ethics complaint when her checking account was
garnished for failure to pay one of the two credit cards. The Board sent
McCarthy three notices regarding this complaint and he failed to respond
to any of the notices.
B. Schmitz Matter
McCarthy admits the following facts alleged by the Board. In May
of 2003, McCarthy was appointed to represent L.A.C. in a child in need of
assistance case.
The Iowa Department of Human Services assigned
Cheryl Schmitz to this case. Schmitz filed a complaint against McCarthy
with the Board.
McCarthy did not respond to either of the Board’s
notices about the complaint.
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C. Aguilera Matter
McCarthy admits the following facts alleged by the Board.
On
March 28, 2000, the Iowa District Court appointed McCarthy to
represent Jose Aguilera with regard to an appeal of his postconviction
relief case. On May 12, 2000, the clerk of the supreme court issued a
notice of default and assessment of penalty to McCarthy because he
failed to file and serve a combined certificate.
On July 28, 2000, the
clerk of the supreme court dismissed the Aguilera appeal for want of
prosecution pursuant to Iowa Rule of Appellate Procedure 6.19(1).
McCarthy also ignored two letters sent by Aguilera inquiring into his
appeal. McCarthy failed to respond to two subsequent notices of
complaint sent by the Board in regards to this matter.
D. Kobel Matter
McCarthy admits the following facts alleged by the Board. On July
1, 2004, the Iowa District Court appointed McCarthy to represent Dawn
Kobel with regard to an appeal of her conviction. On July 24, 2004, the
clerk of the supreme court issued a notice of default and assessment of
penalty to McCarthy because he failed to file and serve a combined
certificate. On February 22, 2005, the clerk of the supreme court issued
a notice of default and assessment of penalty to McCarthy because he
failed to file Kobel’s proof brief and failed to designate the appendix
contents. On March 24, 2005, the clerk of the supreme court dismissed
the Kobel appeal for want of prosecution. See Iowa R. App. P. 6.19(1).
IV. Ethical Violations
Convincing evidence proves the following ethical violations:
A. Representation of Two Clients with Differing Interests
The Board charged, and the Commission found, McCarthy’s
decision to reopen the Traster bankruptcy on Christopher’s behalf so
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that he could discharge Christopher’s liability for Scotti’s legal bills
violated DR 5-105 (focusing on the threat posed to a lawyer’s “exercise of
independent professional judgment on behalf of a client” when two
clients’ differing interests come into play).
DR 5-105(C) provides:
A lawyer shall not continue multiple employment if the
exercise of independent professional judgment on behalf of a
client will be or is likely to be adversely affected by the
representation of another client, except to the extent
permitted under DR 5-105(D). (Emphasis added.)
DR 5-105(D) provides:
[a] lawyer may represent multiple clients if it is
obvious that the lawyer can adequately represent the interest
of each and if each consents to the representation after full
disclosure of the possible effect of such representation on the
exercise of the lawyer’s independent professional judgment
on behalf of each.
However unwise it was for McCarthy to serve as Christopher
Traster’s attorney for the dissolution proceedings while simultaneously
serving as both Scotti and Christopher’s attorney for the purposes of a
joint bankruptcy petition, that decision became acutely unethical when
he decided to amend the bankruptcy petition only on Christopher’s
behalf. McCarthy’s attempt to discharge Christopher’s liability for a legal
bill that Christopher was required to pay for his wife was clearly adverse
to Scotti’s interests.
If Christopher’s liability for the legal bill was
discharged, then Scotti was still arguably liable for the bill because her
liability had not been discharged and she was the one who had signed
the original contract for legal services.
Both of the Trasters were McCarthy’s clients for the original
bankruptcy petition and the decision to amend the petition constituted
the same matter as the original petition. An attorney cannot represent
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two parties in a bankruptcy petition and then, six months after the
bankruptcy discharge, use the knowledge and information discerned
from both clients in the original action to amend the bankruptcy petition
to the detriment of one of the original parties. We find such actions were
violations of DR 5-105(C) and (D).
B. Neglect
The record supports the Commission’s finding that McCarthy
committed professional neglect on numerous occasions.
See DR 6-
101(A)(3) (providing a lawyer shall not neglect a client’s legal matter); see
also Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Moorman, 683
N.W.2d
549,
551
(Iowa
2004)
(defining
professional
neglect
as
“indifference and a consistent failure to perform those obligations that a
lawyer has assumed, or a conscious disregard for the responsibilities a
lawyer owes to a client”).
In the Aguilera and Kobel matters, appeals were dismissed as a
result of McCarthy’s neglect.
See Moorman, 683 N.W.2d at 552-53
(holding attorney’s failure to comply with rules of appellate procedure, as
well as subsequent notices to cure the defaults issued by the clerk of
court, reveals a blatant pattern of neglect and constitutes a “conscious
disregard” for the responsibilities an attorney owes a client and the
court).
Such dilatory handling of client matters is a disservice to the
client and the judicial system. Iowa Supreme Ct. Attorney Disciplinary
Bd. v. Kadenge, 706 N.W.2d 403, 408-09 (Iowa 2005).
McCarthy’s conduct in these matters violated DR 1-102(A)(1)
(providing a lawyer shall not violate a disciplinary rule); DR 1-102(A)(5)
(providing a lawyer shall not engage in conduct that is prejudicial to the
administration of justice); DR 1-102(A)(6) (providing a lawyer shall not
engage in any other conduct that adversely reflects on the fitness to
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practice law); DR 6-101(A)(3) (providing a lawyer shall not neglect a
client’s legal matter); DR 7-101(A)(1) (providing a lawyer shall not
intentionally fail to seek the lawful objectives of a client); DR 7-101(A)(2)
(providing a lawyer shall not intentionally fail to carry out a contract of
employment); DR 7-101(A)(3) (providing a lawyer shall not intentionally
prejudice or damage a client during the course of the professional
relationship); and DR 7-102(8) (providing a lawyer shall not knowingly
engage in conduct contrary to a disciplinary rule in the representation of
a client).
C. Failure to Cooperate with the Board
McCarthy was dilatory in responding to the Board’s notices of
complaint in the Traster, Schmitz, Aguilera, and Kobel matters. While
McCarthy filed an answer to the Board’s complaint, his initial lack of
cooperation wasted the Board’s valuable time and limited resources. See
Kadenge, 706 N.W.2d at 409. His lack of cooperation also prejudiced the
Board’s ability to gather all pertinent facts regarding the complaints. Id.
Delay in responding to the Board is a violation of DR 1-102(A)(5), (6)
(conduct prejudicial to administration of justice and conduct reflecting
adversely on fitness to practice law).
See Comm. on Prof’l Ethics &
Conduct v. Bromwell, 389 N.W.2d 854, 857 (Iowa 1986) (holding failure to
respond to grievance committee violates the proscription against conduct
prejudicial to administration of justice).
V. Sanction
When determining the proper sanction, we consider the nature of
the alleged violations, the fitness of the attorney to continue to practice
law, the need to protect the public from persons unfit to practice law, the
need to uphold the public’s confidence in the integrity of our system of
justice, the need to deter other attorneys from committing similar
12
misconduct, maintenance of the reputation of the bar as a whole, and
any aggravating or mitigating circumstances. Iowa Supreme Ct. Bd. of
Prof'l Ethics & Conduct v. Kallsen, 670 N.W.2d 161, 164 (Iowa 2003). The
form and extent of a disciplinary sanction “must be tailored to the
specific facts and circumstances of each individual case.”
Comm. on
Prof’l Ethics & Conduct v. Rogers, 313 N.W.2d 535, 537 (Iowa 1981).
We understand depression is a serious illness and applaud
McCarthy’s continuing efforts to seek treatment.
While his ongoing
battle with depression may explain why he neglected clients and failed to
cooperate with the Board, it does not excuse his unethical conduct. See,
e.g., Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Thompson, 595
N.W.2d 132, 136 (Iowa 1999) (attorney suspended for two months when
ethical violations occurred during a period of depression and active
alcoholism). In addition, we are not convinced depression played a factor
in his poor decision to recommend that one of his clients amend a joint
bankruptcy petition to the detriment of his other client.
These current violations illustrate that McCarthy has not learned
from his previous reprimands and admonishments. In both 1993 and
1996 he was sanctioned for representing clients with interests adverse to
those of former clients.
Also, in 1992, 2000, 2001, and 2003 he was
reprimanded for violations relating to neglect and/or failing to respond to
inquiries from the Board. We therefore agree with the Commission that a
suspension is warranted.
Nonetheless, there are sufficient mitigating
factors to justify a six-month suspension. For the first time in his life,
McCarthy’s depression appears to be under control and he has made
great strides in treatment.
bench and bar.
Moreover, he has strong support from the
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VI. Conclusion
McCarthy is suspended indefinitely from the practice of law with
no possibility of reinstatement for at least six months. This suspension
shall apply to all facets of the practice of law as provided in Iowa Court
Rule 35.12(3) and requires notification of clients as outlined in Iowa
Court Rule 35.21.
Upon any application for reinstatement, McCarthy
must establish that he has not practiced law during the suspension
period and he has in all ways complied with the requirements of Iowa
Court Rule 35.13. In his application for reinstatement, McCarthy must
provide this court with an evaluation by a licensed health care
professional verifying his fitness to practice law. Before obtaining this
evaluation, McCarthy shall submit the name of the proposed evaluator
and the nature of the evaluation to the Board for its prior approval.
Costs are taxed to McCarthy pursuant to Iowa Court Rule 35.25(1).
LICENSE SUSPENDED.
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