KENTUCKY BAR ASSOCIATION V. BERNARD G. WATTS, ESQ.
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2006-SC-000250-KB
(KBA FILE 5959)
KENTUCKY BAR ASSOCIATION
V.
.
TQ A
___..
APPELLANT
IN SUPREME COURT
BERNARD G . WATTS, ESQ.
KBA Member No. 74935
APPELLEE
OPINION AND ORDER
The Movant, Bernard G. Watts, Esq ., was admitted to the practice of law
on May 1, 1977. His bar roster address is 2825 Milburn Avenue, Louisville,
Kentucky 40220 .
Mr. Watts moves this Court to impose the sanction of public
reprimand, pursuant to SCR 3.480(2), for violations of SCR 3.130-3 .3(a)(1) and
(20) and SCR 3 .130-8 .3(a) and (c) in exchange for the termination of disciplinary
proceedings against him for the named violations.
Factual Background
In early 1995, Mr. Watts was contacted, and retained, by Joyce Kirk (Mrs .
Kirk) concerning a potential sexual harassment suit against her former employer,
the Carbon-Graphite Group. Also during the first initial visit with Mr. Watts, Mrs .
Kirk discussed her possible need to file for bankruptcy .
On April 10, 1995, Mrs. Kirk signed a complaint drafted by Mr. Watts
alleging sexual harassment by the Carbon-Graphite group. On June 30, 1995,
Mr. Watts filed a Chapter 7 Bankruptcy Petition, on behalf of Mrs. Kirk and
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William Kirk, in the United States Bankruptcy Court for the Western District of
Kentucky in Louisville. However, Mr. Watts did not list the potential sexual
harassment claim on the petition, even though it is required by law.
Prior to the filing of the bankruptcy petition, Mr. Watts represented Mrs.
Kirk in her application for Social Security disability benefits . On August 16, 1995,
Mrs. Kirk received a letter from the Social Security Administration entitled "Notice
of Award" informing her of the approval of disability benefits in the amount of
$958 .00 a month beginning in December with a lump sum immediately due to her
of $7,360.00. Mrs. Kirk informed Mr. Watts about the letter sometime between
August 16 and September 29, 1995. However, Mr. Watts had not included the
claim as an asset of the estate or as income to Mrs. Kirk, nor did he amend the
bankruptcy petition at any time to include these benefits, although it is required
by law.
On September 28, 1995, a discharge was entered in the bankruptcy case
and fourteen days later, on October 12, 1995, Mr. Watts filed the complaint for
sexual harassment against Mrs. Kirk's former employer in Jefferson Circuit Court .
At the time of the filing, Mr. Watts did not make any effort to reopen the filed
bankruptcy petition to make the appropriate amendments . Thereinafter, the
Carbon-Graphite Group, the defendant in the sexual harassment lawsuit, filed a
motion for summary judgment arguing that the bankruptcy estate, not Mrs . Kirk,
was the proper party to bring the suit.
On August 9, 1996, Mr. Watts filed a motion to reopen Mrs. Kirk's petition
for the purpose of amending it to include the harassment lawsuit as an asset. On
August 26, 1996, Mr. Watts filed a motion to file an intervening complaint in the
sexual harassment case in the United States District Court for the Western
District of Kentucky. In this motion, Mr. Watts held himself out as counsel for the
Bankruptcy Trustee, John Wilson . However, he was never authorized to file such
a motion and the bankruptcy court never appointed him as counsel for the
trustee . A letter dated August 26, 1996 discharged Mr. Watts as Mrs. Kirk's
counsel .
The trustee was allowed to be substituted as Plaintiff in the sexual
harassment lawsuit to assert claims contained in the lawsuit which remained an
asset of the bankruptcy estate . The lawsuit was settled and the proceeds were
paid to Mrs. Kirk and the bankruptcy estate .
Mr. Watts has admitted that his conduct was in violation of the Supreme
Court Rules but denies that he filed the pleading with the intent to defraud or
mislead the bankruptcy tribunal . Mr. Watts admits the assets should have been
listed in the petition or it should have been amended . Also, he acknowledges
that he failed to instruct his client to include the lawsuit or social security award
as assets in the bankruptcy petition . However, he denies that his actions were
undertaken with the intent to deceive the Bankruptcy Court or to defraud the
creditors. Mr. Watts has no prior disciplinary history .
Mr. Watts' motion for public reprimand was reviewed and approved by the
Chair of the Inquiry Commission and the immediate past president of the KBA
before submission to this Court . Consideration was given to the delay of the
underlying litigation and the settlement of the lawsuit to the benefit of the client .
The KBA notes in its response that this Court has granted motions for
public reprimand for these sorts of violations previously in Christie L. Wriaht v.
Kentucky Bar Association , 169 S.W.3d 858 (Ky. 2005) . There have also been
thirty day suspensions for violations of this nature imposed by this Court . See
Kentucky Bar Association v. Jacob, 950 S.W.2d 832 (Ky. 1997) . However, Mr.
Watts has been honest with the court and the KBA about the violations he has
committed, unlike the respondent in Jacob, who knowingly made false
statements to the court, thus, resulting in the harsher punishment.
Section 9.32(1991) sets out the ABA standards for imposing lawyer
sanctions . It provides that after misconduct has been established, mitigating
circumstances may be considered in deciding what sanctions to impose . In this
case, those mitigating factors include the lengthy period of practice with no prior
disciplinary record (twenty-nine years) and the restitution received by Mrs. Kirk
through the settlement of the civil matter.
The KBA respectfully requests that the Mr. Watts' motion for public
reprimand be granted and that an order reflecting the public reprimand be
entered .
Therefore, we adopt the finding by the KBA regarding the appropriate
discipline in this matter and order Mr. Watts be publicly reprimanded pursuant to
SCR 3.480(2), for his violations of SCR 3.130-3 .3(a)(1) and (20) and SCR 3.1308 .3(a) and (c).
Thus, it is ordered that:
1) The disciplinary proceedings by the Inquiry Commission be terminated ;
2) Mr. Watts is publicly reprimanded for his violations of Professional
Ethics; and,
3) Mr. Watts shall pay the costs of $495.95 for which execution may issue
from this Court upon finality of the Opinion and Order.
All concur.
ENTER May
, 2006 .
COUNSEL FOR APPELLANT
Bruce K. Davis
Executive Director
Kentucky Bar Association
514 West Main Street
Frankfort, KY 40601
Linda Gosnell
Chief Bar Counsel
Kentucky Bar Association
514 West Main Street
Frankfort, KY 40601
COUNSELF FOR APPELLEE
Nicholas W. Carlin
2715 Sharon Way
Louisville, KY 40220-1763
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