IN THE SUPREME COURT
STATE OF NORTH DAKOTA
| IN THE MATTER OF THE APPLICATION FOR | DISCIPLINARY COUNSEL'S | ||
| DISCIPLINARY ACTION AGAINST SAMUEL | BRIEF | ||
| S. JOHNSON, A MEMBER OF THE BAR OF | |||
| THE STATE OF NORTH DAKOTA | Supreme Court Nos. 20070107, 20070108 | ||
| Paul W. Jacobson (ID 03631) | ||||||
| Disciplinary Counsel | ||||||
| Disciplinary Board of the Supreme Court | ||||||
| P. O. Box 2297 | ||||||
| Bismarck, ND 58502 | ||||||
TABLE OF CONTENTS
| TABLE OF AUTHORITIES ... | ii |
| STATEMENT OF CASE ... | 1 |
| STATEMENT OF FACTS . | 3 |
| SAMUEL S. JOHNSON'S OBJECTIONS TO REPORT OF HEARING | |
| PANEL File No. 4148-SE-0411 .. 8 | |
| SAMUEL S. JOHNSON'S OBJECTIONS TO REPORT OF HEARING | |
| PANEL File No. 4273-SE-0508 .. | 10 |
| DISCIPLINARY COUNSEL'S OBJECTIONS TO REPORT OF HEARING PANEL. | 13 |
| ARGUMENT | 14 |
| CONCLUSION .. | 39 |
TABLE OF AUTHORITIES
| Cases |
| Application of Christianson, 215 N.W.2d 920, 923 (N.D. 1974) .. 33 |
| Disciplinary Board v. Balerud, 2006 ND 164, 719 N.W.2d 329 .. 35 |
| Disciplinary Board v. Boughey, 1999 ND 205, ¶12-15, 602 N.W.2d 268 ... 36 |
| Disciplinary Board v. Chinquist, 2006 ND 107, 714 N.W.2d 469 .... 35 |
| Disciplinary Board v. Edin, 2005 ND 109, ¶11, 697 N.W.2d 727 34 |
| Disciplinary Board v. Lamont, 1997 ND 63, ¶12, 561 N.W.2d 650 26, 30, 33 |
| Disciplinary Action Against Dvorak, 2000 ND 98, ¶15-16, 611 N.W.2d 147 . 19, 21 |
| Disciplinary Board v. Hoffman, 2003 ND 161, ¶24-26, 670 N.W.2d 500 ... 19 |
| Disciplinary Board v. Howe, 2001 ND 86,¶38, 626 N.W.2d 650 . 35 |
| Disciplinary Board v. McDonald, 2000 ND 87, 609 N.W.2d 418 35 |
| Disciplinary Board v. McKechnie, 2003 ND 170, 670 N.W.2d 864 .. 35 |
| Disciplinary Board v. Mertz, 2006 ND 85, ¶19 712 N.W.2d 849 . 19 |
| Disciplinary Board v. Peterson, 2004 ND 205, 689 N.W.2d 364 . 31 |
| Disciplinary Board v. Stensland, 2006 ND 251, 725 N.W.2d 191 31 |
| Disciplinary Board v. Sundby, 2005 ND 135, 701 N.W.2d 86 ...... 35 |
| Dodd v. The Florida Bar, 118 So.2d 17, 19 (Fla. 1960) ...... 26 |
| Hoffman v. Disciplinary Board, 2005 ND 171, ¶5, 704 N.W.2d 810 .. 16, 33 |
| In re Disciplinary Action Against Edwardson, 2002 ND 106, ¶21, 647 N.W.2d 126 .. 34 |
| In re Disciplinary Action Against Kaiser, 484 N.W.2d 102, 108 (N.D. 1992) 26, 33 |
| Montgomery v. Disciplinary Board, 2000 ND 127, ¶ 5, 612 N.W.2d 278 ... 16 |
| Rules and Statutes |
| Rule1.8, N.D.R. Prof. Conduct . 6, 11, 29, 31, 36, 38 |
| Rule 1.8(e), N.D.R. Prof. Conduct ... 37, 38 |
| Rule 1.8(e)(3), N.D.R. Prof. Conduct ... 30, 31 |
| Rule 3.3, N.D.R. Prof. Conduct .. 1, 10, 22, 29, 30, 31, 32, 33, 39 |
| Rule 3.3(a)(1), N.D.R. Prof. Conduct ... 28, 29 |
| Rule 3.3(a)(3), N.D.R. Prof. Conduct ... 28, 30 |
| Rule 3.4(C), N.D.R. Prof. Conduct ... 3, 17 Rule 4.1, N.D.R. Prof. Conduct ... 1, 9, 20, 22, 39 |
| Rule 4.4, N.D.R. Prof. Conduct ... 1, 9, 20, 22, 39 |
| Rule 8.1, N.D.R. Prof. Conduct .. 38, 39 |
| Rule 8.4, N.D.R. Prof. Conduct . 1, 11, 22, 31, 39 |
| Rule 8.4(f), N.D.R. Prof. Conduct ... 31, 32 |
| Rule 1.2A, N.D.R. Lawyer Discipl 2, 11, 22, 31, 32, 39 |
| Rule 1.2A(3), N.D.R. Lawyer Discipl ... 32 |
| Rule 1.3D, N.D.R. Lawyer Discipl ... 36 |
| Rule 4.5, N.D.R. Lawyer Discipl 13, 33 |
| Rule 45, NDCivP . 3, 33 |
| Standard 5.11, N.D. Stds. Imposing Lawyer Sanctions .. 34 |
| Standard 6.11, N.D. Stds. Imposing Lawyer Sanctions .. 34 |
| Standard 6.12, N.D. Stds. Imposing Lawyer Sanctions ... 34 |
| Standard 6.11, N.D. Stds. Imposing Lawyer Sanctions .. 34 |
| Standard 9.22(a), N.D. Stds. Imposing Lawyer Sanctions ... 34 |
| Standard 9.22(c), N.D. Stds. Imposing Lawyer Sanctions ... 35 |
| Standard 9.22(d), N.D. Stds. Imposing Lawyer Sanctions .. 22, 35 |
| Standard 9.22(f), N.D. Stds. Imposing Lawyer Sanctions ... 35 |
| Standard 9.22(g), N.D. Stds. Imposing Lawyer Sanctions .. 22 |
| 15 USC § 1692a .. 17 |
STATEMENT OF THE CASE
This is a disciplinary proceeding against Samuel S. Johnson for violation of the North Dakota Rules of Professional Conduct. This disciplinary matter is under the North Dakota Rules For Lawyer Discipline. Johnson was served with Petition For Discipline in File No. 4148-SE-0411 (Supreme Court No. 20070107) (A-3). He was served with Petition For Discipline in File No. 4273-SE-0508 (Supreme Court No. 20070108) (A- 9). Johnson served his Response to Petition For Discipline in File No. 4148-SE-0411 (Supreme Court No. 20070107) on April 14, 2006 (A-6), and in File No. 4273-SE-0508 (Supreme Court No. 20070108) on October 2, 2006 (A-13). The hearing panel consisted of David S. Maring, Chair; Nicholas B. Hall; and Alan D. Traeholt (A-17, 18).
An Amended Notice of Hearing was served on Johnson on November 1, 2006, setting the matters for hearing on February 6 and 7, 2006 (A-20). The hearing was held on those dates at the Hospitality Inn and Suites, in Wahpeton, ND North Dakota. Respondent Samuel S. Johnson was present with his attorney, Ronald H. McLean. Also present was Disciplinary Counsel Paul W. Jacobson. Following the hearing, respondent and Disciplinary Counsel each filed post hearing briefs with the hearing panel. Disciplinary Counsel served and filed an Affidavit of Costs and Expenses (A-31).
The hearing panel filed its Report of Hearing Panel (A-21) with the Secretary of the Disciplinary Board on April 19, 2007. The hearing panel concluded that Johnson violated Rule 4.1, N.D.R. Prof. Conduct, Truthfulness in Statements to Others; Rule 4.4 N.D.R. Prof. Conduct, Respect for Rights of Third Persons; Rule 3.3, N.D.R. Prof. Conduct, Candor Toward the Tribunal; Rule 8.4, N.D.R. Prof. Conduct, Misconduct, which provides, in part, it is professional misconduct for a lawyer to engage in conduct that is prejudicial to the administration of justice; and Rule 1.2A, N.D.R. Lawyer Discipl., which provides that a lawyer may be disciplined for engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation and for engaging in conduct prejudicial to the administration of justice (Report of Hearing Panel in File No. 4148-SE-0411 (Supreme Court No. 20070107), Conclusion 1A and 1B, A- 24-25; Report of Hearing Panel in File No. 4273-SE-0508 (Supreme Court No. 20070108), Conclusions 1A, 1B and 1C, A-28-29). The hearing panel recommends to the Court that Samuel S. Johnson be suspended from the practice of law for sixty days and pay the costs of the disciplinary proceeding in the amount of $8,760.36.(A- 30).
On May 9, 2007, Johnson filed with the Clerk of the Supreme Court his Objections to Report of Hearing Panel (A- 35 and A-37). Disciplinary Counsel filed Disciplinary Counsel's Objections to Report of Hearing Panel on the same date (A-34). Disciplinary Counsel was notified, by the Clerk, North Dakota Supreme Court, that briefs, limited to the objections raised by the Respondent and Disciplinary Counsel were simultaneously due from Respondent and Disciplinary Counsel on June 8, 2007. Disciplinary Counsel now files this brief with the Court.
STATEMENT OF FACTS
Samuel S. Johnson was admitted to practice as an attorney and counselor at law in the courts of North Dakota on November 9, 1989, and his name has appeared since that date on the roll of attorneys admitted to the Bar of North Dakota as maintained by the Supreme Court of North Dakota (Petition for Discipline, Paragraph I, File No. 4148-SE-0411, Supreme Court No. 20070107; File No. 4273-SE-0508, Supreme Court No. 20070108)(A-3, A-9); admitted Response to Petition for Discipline, Paragraph 2, File No. 4148-SE-0411, Supreme Court No. 20070107)(A-6) and (A-13).
The two matters which are the subject of the instant Report of Hearing Panel deal with different unrelated facts, having in common only that both involve professional misconduct of Samuel S. Johnson. Accordingly, the facts of each are set out separately below.
Supreme Court No. 20070107 (File No. 4148-SE-0411)
Johnson received an Admonition from Inquiry Committee Northeast dated April 2, 2004. The Admonition said:
The Committee found that Attorney Samuel S. Johnson violated Rule 3.4(C), RPC, knowingly disobey an obligation under the rules of a tribunal, in that he Johnson issued subpoenas to complainant and his father to travel to Johnson's office in Wahpeton for a deposition in a civil case, along with which he served each with a check in the amount of $69.20, provided to the witnesses pursuant to the requirement of Rule 45, NDCivP, which requires that a subpoena for attendance must be accompanied by the tendering of fees for one day's attendance and the mileage and travel expense. Complainant and his father traveled to Wahpeton pursuant to the subpoenas. Thereafter, Johnson stopped payment on the checks. Therefore, Attorney Samuel S. Johnson is hereby issued an ADMONITION by the Inquiry Committee Northeast.
Exhibit 2, A-40; Tr. 30-31, A-104-105. Johnson appealed the Admonition to the Disciplinary Board of the Supreme Court. The Disciplinary Board approved the Admonition on June 17, 2004. Exhibit 2, A-41. Johnson received the Admonition dated April 2, 2004 and notice of the Disciplinary Board's approval of the Admonition dated June 17, 2004, and he read the Admonition. Tr. 152, 162, A-110, 114. Nevertheless, even after receiving the Admonition from Inquiry Committee Northeast and the notification from the Disciplinary Board that the Admonition had been approved, Johnson did not pay the witness and mileage fees which were the subject of the Admonition. Tr. 28-29, A-102-103. On two or more occasions prior to October 13, 2004, Roger Gibbon, one of the individuals who had been subpoenaed to attend a deposition which was the subject matter of the Admonition, sent invoices to Johnson on behalf of himself and his father, the other subpoenaed witness, for $69.20 each, plus interest. Johnson did not pay the invoices. Exhibits U and V, A-81 and 82.
On or about October 13, 2004, Johnson sent a letter to Gibbon with reference to what Johnson called the "FRAUDULENT BILL." The letter read as follows:
Dear Mr. Gibbon:
You are hereby notified pursuant to the Federal Fair Debt Collections Act that you may no longer submit any documentation to me or my firm. Any future documentation submitted to me or my firm will be challenged will (sic) all civil or other alternatives available to me and my firm. Please do not take this letter lightly, Mr. Gibbon. I have had quite enough of your harassment. You do not have the right to charge me.
Mr. Gibbon, you are entering an area within which you do not want to venture. Accordingly, no further correspondence, including any billing, should be submitted to me or my firm by you, any representative on your behalf or your company.
Exhibit 1, A-39; Tr. 31-32, A-105-106.
After testifying that he had researched the issue of the applicability of the Federal Fair Debt Collection Act before he wrote the October 13, 2004, letter to Mr. Gibbon (Tr. 154-155, A-112-113), under examination by the Hearing Panel Chair, Johnson testified he spent "a long long time researching this. A tremendous amount of time." He then went on to testify that " ... there were two letters that I wrote, and, you know, that was the first one and then I wrote the second one. Okay. So, you know, some of that time is coupled with the other -- with the other letter too. So I'm not exactly sure how much time exactly, you know, but it was -- it was a considerable amount of time." The second letter to which Johnson referred was actually his August 17, 2005, appeal to the Disciplinary Board of the Admonition imposed by the Inquiry Committee, which was written long after Johnson's letter to Gibbon, and after the Admonition had been imposed by the Inquiry Committee. Tr. 165-168, A-115-118; Exhibit EE, A-83. The Hearing Panel concluded that Johnson's testimony on that topic was not credible and that the alleged good faith basis for asserting the application of the Federal Fair Debt Collections Act was developed by Johnson after his letter of October 13, 2004, was written and a disciplinary complaint was issued. Finding 8, A-23.
Supreme Court No. 20070108 (File No. 4273-SE-0508 )
Johnson represented Wesley Bladow in a divorce from Kristine Bladow (now known as Kristine Berg). The initial divorce proceeding concluded with the Entry of Judgment on January 2, 2003. Exhibit D (File No. 4273-SE-0508 ), A-89; Tr. 314, A-147. Thereafter there was a very contentious dispute between Johnson's client, Bladow, and Bladow's ex-wife, Berg, over Bladow's failure to make payments under the divorce judgment, child visitation and custody. Tr. 249-255, A-133-139. On or about August 20, 2003, counsel for Berg served a Motion to Amend the Judgment which resulted in Johnson again providing services for Bladow with respect to this divorce. Exhibit E (File No. 4273-SE-0508 ), A-94.
On November 1, 2003, and on prior occasions, Johnson talked with Bladow about the possibility that Berg would agree to resolve all pending issues being raised in the re-opened divorce proceeding if Bladow could pay a lump sum to Berg of $20,000 to $25,000. As of that time, Bladow did not have the financial wherewithal to pay $20,000 to $25,000 to Berg, nor did he have the ability to borrow that much money. On or before November 1, 2003, Johnson reviewed the provisions of Rule1.8 of the North Dakota Rules of Professional Conduct. On November 1, 2003, in the presence of Bladow and his mother, Nancy Bladow, Johnson prepared a document called Agreement to Guarantee Loan which set forth the terms and conditions under which Johnson would agree to guarantee a loan for Bladow in the amount of approximately $25,000. Johnson and Bladow signed the Agreement on November 1, 2003. It was contemplated by Johnson and Bladow that if Berg would accept a lump sum payment, Bladow would sign a promissory note at Johnson's bank and Johnson would guarantee the promissory note. Johnson would make payments on the promissory note until Bladow was financially able to take over those payments and would repay Johnson for whatever payments Johnson made. Tr. 326-344, A-148-166; compare Exhibit I (File No. 4273-SE-0508 ); A-96.
On or about November 17, 2003, Johnson wrote a letter to Tracey Lindberg, the attorney for Berg, advising Lindberg that Johnson, as a part of a Rule 408 settlement proposal, would advance money to Bladow and that Johnson would pay certain amounts to Berg. No reference was made in Johnson's letter that Bladow would be borrowing the money and Johnson guaranteeing the loan. Exhibit 6, A-48; Tr. 244, A-129.
On or about December 1, 2003, Johnson wrote another Rule 408 settlement proposal letter to Lindberg wherein Johnson indicated that he would advance money to Bladow and Johnson would pay $20,000 to Berg to settle pending issues in the divorce proceeding. No reference was made in Johnson's letter that Bladow would be borrowing the money and Johnson guaranteeing the loan. Exhibit 7, A-50; Tr. 245, A-130.
On January 21, 2004, at a hearing before the Honorable John T. Paulson during which the Rule 408 Settlement Offer was being discussed, Johnson told the Court as follows: "That was a Rule 408 settlement offer and that was an offer made by me, Judge and (sic) offer with respect to certain sums of money to be paid by me, not by Mr. Bladow, by me." Exhibit 8, page 484, A-52; Tr. 245-246, A-130-131.
On February 5, 2004, at another hearing before Judge Paulson, Bladow's testimony suggested that Johnson was the one coming up with the money to make the Rule 408 Settlement Offer with no reference made to a loan to be taken out by Bladow. Exhibit 9, page 249-251, A-53-55; Tr. 247, A-247.
The reopened divorce proceeding between Bladow and Berg was not resolved based on the proposals made by Johnson to Lindberg in his letters dated November 17, 2003, and December 1, 2003. Ultimately, Bladow did not take out a loan at Johnson's bank, nor did Johnson sign a guaranty for Bladow's loan. Tr. 413, A-172.
SAMUEL S. JOHNSON'S OBJECTIONS TO REPORT OF HEARING PANEL
File No. 4148-SE-0411 (Supreme Court No. 20070107)
1.
To that portion of finding 8 which averred that the October 13, 2004 letter written by Samuel S. Johnson was written without a good-faith basis that the federal fair debt collection act applied, that the good faith basis for the letter was developed after it was written and that Johnson's testimony was not credible on this topic.
2.
To finding 9 in that Johnson in his letter of October 13, 2007, made statements of fact and law that he knew to be untrue in that Johnson knowingly made false statements that the federal fair debt collections act prohibited Gibbon from attempting to collect the amount of the checks upon which Johnson had stopped payment and that the amount claimed was not due.
3.
To finding 10 that the letter of October 13, 2004, was written with no substantial purpose other than to embarrass or burden a third person in that Johnson's intention was to threaten and intimidate Gibbon in an effort to avoid payment of the witness and mileage fees that Johnson knew were due and owing to Gibbon and his father. Johnson had no basis for denying that the debt was owed.
4.
To finding 11 that Johnson was representing a client at the time he wrote the letter dated October 13, 2004, to Gibbon in that the service of the subpoenas and checks for witness and mileage fees arose out of Johnson's representation of Lisa Gibbon in late 2002 and early 2003 and Johnson's October 13, 2004, letter involved that representation.
5.
To the first conclusion that Johnson violated Rule 4.1, North Dakota Rules of Professional Conduct, and Rule 4.4, North Dakota Rules of Professional Conduct.
6.
To the failure of the hearing panel to consider Johnson's participation in the lawyer assistance program.
7.
To the third conclusion of the hearing panel that Johnson refused to acknowledge the wrongful nature of the conduct and that multiple offenses were considered in aggravation.
8.
To the recommendation of the hearing panel that Johnson be suspended from the practice of law for 60 days and that he be required to pay the costs and expenses of these proceedings in the amount of $8,670.36 as set forth in the affidavit of Paul W. Jacobson dated March 13, 2007.
SAMUEL S. JOHNSON'S OBJECTIONS TO REPORT OF HEARING PANEL
File No. 4273-SE-0508 (Supreme Court No. 20070108)
1.
To finding 9 that Bladow's testimony suggested that Johnson was the one coming up with the money to make the Rule 408 settlement offer with no reference made to a loan to be taken out by Bladow.
2.
To finding 11 that Johnson knowingly made a false statement of fact to Judge Paulson by stating that the Rule 408 settlement offer was made by Johnson, personally, and not by his client at a time when Johnson had already entered into an agreement to guarantee a loan to be taken out by his client and knew that any money to be paid under the Rule 8 settlement offer was to come from the loan.
3.
To finding 12 that Johnson allowed his client to make statements to the court that Johnson knew were false in that Bladow's testimony suggested that the $20,000 being offered in settlement was coming out of Johnson's pocket at a time when Johnson knew the money was to be borrowed by Bladow with Johnson guaranteeing loan. Johnson made no effort to clarify the misleading testimony.
4.
To the conclusion of the hearing panel that Johnson violated Rule 3.3, North Dakota Rules of Professional Conduct in that Johnson knowingly made a false statement to Judge Paulson on January 21 2004, when he said that the Rule 408 settlement offer was an offer made by Johnson, individually, and not by Bladow at a time when Johnson knew that Rule 1.8 of the North Dakota Rules of Professional Conduct prevented him from advancing money on behalf of his client and Johnson and his client had entered into an agreement whereby Johnson would guarantee a loan taken out by his client.
5.
To the conclusion of the hearing panel that Johnson violated Rule 8.4, North Dakota Rules of Professional Conduct in that Johnson knowingly made a false statement of fact to Judge Paulson on January 21, 2004, when he said that the Rule 408 settlement offer was made by Johnson, individually, and not by Bladow at a time when Johnson knew that Rule 1.8, North Dakota Rules of Professional Conduct, prevented him from advancing money on behalf of his client and Johnson and his client had entered into an agreement whereby Johnson would guarantee a loan taken out by his client.
6.
To the conclusion of the hearing panel that Johnson violated Rule 1.2(A), North Dakota Rules for Lawyer Discipline in that Johnson knowingly made a false statement to Judge Paulson on January 21, 2004, when he said that the Rule 408 settlement offer was made by Johnson, individually, not by Bladow at a time when Johnson knew that Rule 1.8 of the North Dakota Rules of Professional Conduct prevented him from advancing money on behalf of his client and Johnson and his client had entered into an agreement whereby Johnson would guarantee a loan taken out by his client.
7.
To the failure of the hearing panel to consider Johnson's participation in the lawyer assistance program.
8.
To the recommendation of the hearing panel that Johnson be suspended from the practice of law for 60 days and that he be required to pay the costs and expenses of these proceedings in the amount of $8,670.36 as set forth in the affidavit of Paul W. Jacobson dated March 13, 2007.
DISCIPLINARY COUNSEL'S OBJECTIONS TO REPORT OF
HEARING PANEL
1.
To the recommendation of the Hearing Panel that Samuel S. Johnson be suspended from the practice of law for sixty days, as the suspension should be for a period requiring a petition for reinstatement pursuant to Rule 4.5, North Dakota Rules for Lawyer Discipline.
2.
To the lack of a finding and conclusion that Samuel S. Johnson misled the Inquiry Committee Southeast in his response to the informal complaint, in that he did not reveal that in addition to the written agreement between himself and his client that he would guarantee a loan for the client, there was also an agreement that Johnson would make any payments owed on the loan until such time in the future the client could repay Johnson.
ARGUMENT
JOHNSON OBJECTION 1.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To that portion of finding 8 which averred that the October 13, 2004 letter written by Samuel S. Johnson was written without a good-faith basis that the federal fair debt collection act applied, that the good faith basis for the letter was developed after it was written and that Johnson's testimony was not credible on this topic.
The two aspects of this objection are (1) whether Johnson had a good faith basis for asserting that the Federal Fair Debt Collection Act could be invoked to prevent Mr. Gibbon from seeking payment for his witness fee, and (2) whether Johnson had developed the basis for justifying his threat of the applicability of the Act before, or after, he had threatened Mr. Gibbon with it in his October 13, 2004, letter. As to the former, the Hearing Panel concluded he did not. As to the latter, the Hearing Panel concluded Johnson came up with the argument after he had written the letter.
Initially, it must be noted that Johnson's letter of October 13, 2004, Exhibit 1,
A-39, had as its re line "FRAUDULENT BILL", denoting to Mr. Gibbon that Johnson would not pay on the checks on which he had stopped payment. The rest of the letter was Johnson's attempt to make Gibbon stop his collection attempts. Johnson, as the attorney for a party in a civil matter, issued a subpoena for the attendance of Roger and Kenneth Gibbon to give testimony at a deposition. The subpoena was accompanied by Johnson's tender of payment for one day's witness fee and travel expenses made by check drawn on Johnson's account. The Gibbons traveled to the place appointed for the deposition, however the deposition did not take place. Johnson stopped payment on the checks tendered to Gibbon. Tr. 25-34, A-99-108. Johnson was disciplined for his failure to make the payment in accordance with court rules. Exhibit 2, A-40. The Gibbons sought payment from Johnson of the amount of the checks for which Johnson had stopped payment. By letter dated October 13, 2004 (Exhibit 1, A-39), Johnson wrote Roger Gibbon purportedly notifying him that the Federal Fair Debt Collection Act prohibited Gibbon from submitting any further documentation to him or his firm, and ominously saying "Mr. Gibbon, you are entering an area within which you do not want to venture."
In this case, Johnson made a false claim that the Federal Fair Debt Collection Act prohibited Gibbon from attempting to collect the amount of the checks of which Johnson had stopped payment. Johnson presented expert testimony apparently to the point that his threat of the Federal Fair Debt Collection Act, mentioned in his letter, applied to Gibbon being paid. However, the expert, Johnson called to testify in support of his rationale for invoking the Act, found fault with Johnson's relying on a book that dealt with consumer debt in reaching the conclusion that the act applied to his professional obligation.
Tr. 209-215, A-122-128.
A review of the statute (Exhibit 3, A-42), can lead to no conclusion other than it applies to personal consumer debt and not to a debt incurred in the course of a professional business. The debt here was incurred as a result of the rules of procedure requiring witness fees to be paid to persons subpoenaed for a deposition. Johnson's novel and expedient purported interpretation of the act can be seen as nothing more than a rationalization for his having invoked a federal law in an attempt to frighten or burden Mr. Gibbon. The letter should never have been sent at all. Johnson should have paid the fee, as the Inquiry Committee found.
With regard to the Hearing Panel's determination that Johnson's rationale for asserting the applicability of the Fair Debt Collection Act was manufactured after he had written the letter to Mr. Gibbon, the Hearing Panel heard the testimony of Johnson. He initially claimed he had spent a tremendous amount of time researching the issue before he wrote the letter, and it was before he wrote the letter. Tr. 154-155, A-112-113. Later under examination by the Chair of the Hearing Panel, Johnson changed the story, saying " ... there were two letters that I wrote, and, you know, that was the first one and then I wrote the second one. Okay. So, you know, some of that time is coupled with the other -- with the other letter too. So I'm not exactly sure how much time exactly, you know, but it was -- it was a considerable amount of time." The second letter to which Johnson referred was actually his August 17, 2005, appeal to the Disciplinary Board of the Admonition imposed by the Inquiry Committee, which was written long after Johnson's letter to Gibbon, and after the Admonition had been imposed by the Inquiry Committee. Tr. 165-168, A-115-118; Exhibit EE, A-83. This Court accords due weight to the hearing panel's ability to assess the credibility of witnesses. Hoffman v Disciplinary Board, 2005 ND 171, ¶ 5, 704 N.W.2d 810; Montgomery v Disciplinary Board, 2000 ND 127, ¶ 5, 612 N.W.2d 278. In this case the Hearing Panel saw and heard Johnson's testimony. They concluded he was not credible. The Court has no good reason to disregard that conclusion.
JOHNSON OBJECTION 2.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To finding 9 in that Johnson in his letter of October 13, 2007, made statements of fact and law that he knew to be untrue in that Johnson knowingly made false statements that the federal fair debt collections act prohibited Gibbon from attempting to collect the amount of the checks upon which Johnson had stopped payment and that the amount claimed was not due.
Johnson used as his threat to prevent Mr. Gibbon from collecting the witness fee, which the Inquiry Committee and the Disciplinary Board had found Johnson was ethically obligated to pay, the applicability of the Federal Fair Debt Collection Act. The invocation of this federal law, along with Johnson's assertions, in his letter of October 13, 2004 (Exhibit 1, A-39), that Mr. Gibbon's attempt to collect his witness fee was fraudulent and Johnson's veiled claim that Mr. Gibbon's was "entering an area within which you do not want to venture" were combined by Johnson to dissuade Mr. Gibbon from seeking what he was entitled to, payment of the witness fee.
The Federal Act provides that it applies to transactions in which money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. 15 USC § 1692a. Johnson is a lawyer. In the course of his professional practice he represented a client in a divorce matter. In that professional capacity he subpoenaed witnesses for a deposition. He sent a check for the witness fee, pursuant to rule, with the subpoenas. He subsequently stopped payment on the checks. He was disciplined for violation of Rule 3.4(C), RPC, knowingly disobey an obligation under the rules of a tribunal, because of his conduct. The transaction, i.e., subpoenaing a witness, was not primarily for personal, family, or household purposes. The Act did not apply. Johnson's claim that it did was not true. The Hearing Panel's conclusion is well founded.
JOHNSON OBJECTION 3.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To finding 10 that the letter of October 13, 2004 was written with no substantial purpose other than to embarrass or burden a third person in that Johnson's intention was to threaten and intimidate Gibbon in an effort to avoid payment of the witness and mileage fees that Johnson knew were due and owing to Gibbon and his father. Johnson had no basis for denying that the debt was owed.
Although Johnson presented testimony of his fear of things Gibbon had said to him (Tr. 83, A-109); and presented evidence through which he attempted to put Gibbon in as bad a light as possible (Tr. 172-174, A-119-121), his excuse for not paying Gibbon the fee owed was that he did not think he was obligated to pay, even though he had been disciplined for failing to do so. One can see how Mr. Gibbon would think that he should be paid the fee when the Inquiry Committee found he should. It is much more difficult to see how Johnson could conclude that he was not obligated to pay it.
The alleged fear and loathing that Johnson seemed to have for Gibbon would lead a rational person to think he should pay the fee, especially in light of the fact that he was ethically obligated to do so. On the other hand Johnson's failure to pay, and the threatening nature of his letter to Gibbon, leads one to conclude that Johnson, in his mind, did not want to let Gibbon win the issue of whether the fee should be paid. As such, and in light of the fact that Johnson was ethically obligated to pay the witness fee, there can be no conclusion other than the threatening letter served no legitimate purpose other than to attempt to frighten Gibbon into not further seeking the payment to which he was entitled. In other words the letter was to further burden Gibbon in his attempt to recover payment. The Hearing Panel conclusion is well founded. See, Disciplinary Board v. Mertz, 2006 ND 85, ¶19 712 N.W.2d 849; Disciplinary Board v. Hoffman, 2003 ND 161, ¶24-26, 670 N.W.2d 500; Disciplinary Action Against Dvorak, 2000 ND 98, ¶15-16, 611 N.W.2d 147.
JOHNSON OBJECTION 4.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To finding 11 that Johnson was representing a client at the time he wrote the letter dated October 13, 2004 to Gibbon in that the service of the subpoenas and checks for witness and mileage fees arose out of Johnson's representation of Lisa Gibbon in late 2002 and early 2003 and Johnson's October 13, 2004 letter involved that representation.
As has been pointed out above, in the course of his professional practice Johnson represented a client in a divorce matter. In that professional capacity he subpoenaed witnesses for a deposition. He sent a check for the witness fee, pursuant to rule, with the subpoenas. He subsequently stopped payment on the checks. Later, a witness who was not paid, because of the stopped check, sought payment from Johnson. It is impossible to see how Johnson was not representing a client at the time that he wrote the letter dated October 13, 2004 to Gibbon. The Hearing Panel conclusion is well founded.
JOHNSON OBJECTION 5.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To the first conclusion that Johnson violated Rule 4.1, North Dakota Rules of Professional Conduct, and Rule 4.4, North Dakota Rules of Professional Conduct. Rule 4.1, N.D.R. Prof. Conduct provides that in the course of representing a client a lawyer shall not make a statement to a third person of fact or law that the lawyer knows to be false. In this case, Johnson made a false claim that the Federal Fair Debt Collection Act prohibited Gibbon from attempting to collect the amount of the checks of which Johnson had stopped payment. The argument concerning the false nature of Johnson's claim is set out above in the argument on Johnson's Objection 1. The invocation of the federal law was a part of the burdening of Mr. Gibbon. Johnson violated Rule 4.1.
Additionally, it must be noted that the Hearing Panel concluded that Johnson's letter of October 13, 2004, also made a false statement in claiming the money for the witness fee was not owed to Gibbon. As mentioned above, the letter began with the assertion that the bill from Gibbon was a "Fraudulent Bill". Yet, Johnson had received an admonition for failing to pay the witness fee, in accordance with the rules. The bill was a valid bill. Johnson should have paid it, rather than threatening Gibbon by his letter. Thus, in both the threat of the Federal Act and the claim that the debt was not valid, Johnson made a false statement to Gibbon in the letter.
Rule 4.4 N.D.R. Prof. Conduct provides, in part, that in representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass or burden a third person. The misconduct was in the course of representing a client, as Johnson's obligation to pay the witness fee arose from his issuance of the subpoena in the course of representing a client in a divorce proceeding. The actual motive for not paying is unclear. One may infer from the evidence at hearing that the divorce matter was particularly contentious. One may also infer that Mr. Johnson had adverse personal feelings about Roger Gibbon, from having previously represented his ex-wife in a divorce. Nevertheless, despite being found by the Inquiry Committee to have violated his ethical obligations by not paying the witness fee, Johnson chose (even after being admonished) not to pay.
Argument concerning Johnson's motive for not paying the witness fee is discussed above in response to Johnson's Objection 3. However, in light of the fact that Johnson was ethically obligated to pay the witness fee, there can be conclusion other than the threatening letter served no legitimate purpose other than to attempt to frighten Gibbon into not further seeking the payment to which he was entitled. In other words the letter was to further burden Gibbon in his attempt to recover payment. See, Disciplinary Action Against Dvorak, 2000 ND 98, ¶16, 611 N.W.2d 147.
JOHNSON OBJECTION 6.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To the failure of the hearing panel to consider Johnson's participation in the lawyer assistance program.
The Hearing Panel's report does not specifically refer to Johnson's having voluntarily referred himself to the Lawyer's Assistance Program, established by Rule 49 of the North Dakota Supreme Court Administrative Rules and Administrative Orders. Tr. 366, A-168. Nevertheless, the Hearing Panel's fourth conclusion reflects that it did consider as a mitigating factor, pursuant to Rule 9.3, North Dakota Standards for Imposing Lawyer Sanctions, personal or emotional problems of Johnson. Conclusion 4, A-25.
Accordingly, the Report of the Hearing Panel does indicate a consideration, for whatever it may be worth, of the substantial amount of evidence provided by Johnson relating to his difficulty in complying with the Rules of Professional Conduct. There is no error in the Hearing Panel not specifically referring to his voluntary participation in the program.
JOHNSON OBJECTION 7.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To the third conclusion of the hearing panel that Johnson refused to acknowledge the wrongful nature of the conduct and that multiple offenses were considered in aggravation.
Johnson objects to the two aspects of the conclusion, that there were multiple offenses and that Johnson has refused to acknowledge the wrongful nature of the conduct. Standards 9.22(d) and (g), North Dakota Standards for Imposing Lawyer Sanctions.
The fact is that the Hearing Panel found violations of North Dakota Rules of Professional Conduct 4.1 and 4.4, in File No. 4148-SE-0411. It also found violations of North Dakota Rules of Professional Conduct 3.3 and 8.4, as well as N.D.R. Lawyer Discipl.1.2A, in File No. 4273-SE-0508. So, there were multiple offenses; and the Hearing Panel correctly considered that as an aggravating factor.
As to the issue of Johnson's refusal to admit the wrongful nature of his conduct, the two day hearing on this matter shows a dogged attempt to rationalize and justify his conduct. Johnson's testimony seemed to reflect a resentment at the cost of defending himself in disciplinary proceedings, rather that an acknowledgment of any misconduct on his part. For example, when telling why he had not simply paid the $69 for the witness fee, Johnson bemoaned the fact that he had not been specifically told to pay it by the Inquiry Committee, and therefore he has had to pay $50,000 to defend the disciplinary action. Tr. 159. There is no error in the Hearing Panel's consideration of these factors in aggravation.
JOHNSON OBJECTION 8.
File No. 4148-SE-0411 (Supreme Court No. 20070107)
To the recommendation of the hearing panel that Johnson be suspended from the practice of law for 60 days and that he be required to pay the costs and expenses of these proceedings in the amount of $8,670.36 as set forth in the affidavit of Paul W. Jacobson dated March 13, 2007.
This objection primarily deals with the appropriateness of the recommended discipline. Disciplinary Counsel has objected to the discipline recommended by the Hearing Panel. The argument on this issue is dealt with below in regard to Disciplinary Counsel's objection. JOHNSON'S OBJECTION 1
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To finding number 9 that Bladow's testimony suggested that Johnson was the one coming up with the money to make the Rule 408 settlement offer with no reference made to a loan to be taken out by Bladow.
Bladow's salient testimony is reflected in Exhibit 9, a transcript of the hearing before Judge Paulson on February 5, 2004. Contained within Exhibit 9, page 249-251, A-53-55, is the testimony of Bladow concerning this issue. It includes the following:
Q: (continuing by Ms. Lindberg) Isn't it true that it's your position that you owe your attorney $30,000 and you haven't paid him a dime?
A: Yes.
Q: Yet he's willing to pay on your behalf $20,000.00
A: Pretty nice guy isn't he.
Q: is it true?
A: Yes.
Q: Did he see did he tell you to seek the advice of independent counsel?
A: No.
Q: Did he have you sign any waivers or disclosures?
A: Pertaining to what?
Mr. Johnson: Objection, Your Honor, it's illegal.
The Court: Ya, sustained. I don't know if he would even know what that would be.
Q: (continuing by Ms. Lindberg) But he didn't tell you to go see another attorney about this?
A: That I recall no
.
Q: And its all coming out of his pocket?
A: I guess.
Exhibit 9, page 250, A-54.
The record of that hearing clearly shows that Johnson's client, Bladow, was portraying Johnson as the person that would be coming up with the $20,000 that Johnson had offered to pay the former Mrs. Bladow, for the custody of the parties children. There was no reference to an agreement between Bladow and Johnson, for Johnson to guarantee a loan which would be taken out by Bladow. In fact, again as clearly shown by the above testimony, Bladow even denied that he had been advised to see another lawyer before entering into any transaction with Johnson, and that he had not signed any waiver or disclosure. Whereas, on November 1, 2003, Johnson and Bladow signed an agreement to guarantee a loan, which contained language advising Bladow to see other counsel. Exhibit 11, A-77-78. The Hearing Panel finding is clearly supported by the record.
JOHNSON'S OBJECTION 2
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To finding 11 that Johnson knowingly made a false statement of fact to Judge Paulson by stating that the Rule 408 settlement offer was made by Johnson, personally, and not by his client at a time when Johnson had already entered into an agreement to guarantee a loan to be taken out by his client and knew that any money to be paid under the Rule 408 settlement offer was to come from the loan.
At the January 21, 2004, hearing before Judge Paulson, in the Bladow post divorce matter, the former Mrs. Bladow, Kristine Berg, was being questioned by Johnson. The following colloquy and statements of Johnson occurred:
Q: And do you have the ability at your salary level to pay these bills?
A: No I don't.
Q: Why do you believe it's fair that Wes should have to pay um?
A: Well, I believe that if Wes can offer me $20,000 to buy the kids from
Mr. Johnson: Objection, your Honor, move to strike, Your Honor. That's exactly the reason why, your Honor, why I wanted that that exhibit out of evidence, because, your Honor, it's a misconception. It's she's misconstruing actually what the offer was. Your Honor
The Court: It's not an offer of settlement that this testimony is offer for
Mr. Johnson: Your Honor
The Court: it's offered for why she believes he should pay it. If he had the money
Mr. Johnson: But, your Honor, I'm telling you what she's indicating her is an she's laughing on the witness stand. She indicating exactly what was look at um laugh this is unbelievable judge. That was a Rule 408 settlement offer and that was an offer made by me, judge and offer with respect to certain sums of money to be paid by me, not by Mr. Bladow, by me. (Underline added).
Exhibit 8, page 484, A-52.
In Disciplinary Board v. Lamont, 1997 ND 63, ¶12, 561 N.W.2d 650, this Court said
We summarized the high duty of candor placed upon attorneys in In re Disciplinary Action Against Kaiser, 484 N.W.2d 102, 108 (N.D. 1992) (citations omitted):
"'Truth and candor are synonymous with justice, and honesty is an implicit characteristic of the legal profession.' ABA, The Judicial Response to Lawyer Misconduct, III.1, III.3 (1984). The primary function of our judicial system is to find the truth to reach a just conclusion. . . . Our courts are almost 'wholly dependent on members of the bar to marshal and present the true facts. . . .' Dodd [v. The Florida Bar, 118 So.2d 17, 19 (Fla. 1960)]."
Although motive for the lie is not an element of Johnson's misconduct, it must be noted that the dispute between the parties did include the failure of Bladow to make payments under the terms of the divorce. Thus the posture as presented by Bladow and his attorney was that he was not able to pay the money he was obligated to pay. It also must be noted that in his memorandum opinion (Exhibit 10, page 9, A-64), Judge Paulson was left with the understanding, as it was blatantly stated by Johnson, that Johnson was to be paying the money, which the judge believed "border[ed] on champerty."
In fact, according to Johnson's later story (and as found by the Hearing Panel), Johnson had entered into an agreement, reduced to writing on November 1, 2003, a mere two months before the hearing, under the terms of which Johnson was to insure a loan to be taken out by Bladow. Any payment of $20,000 was to be from that loan, and Bladow would ultimately be responsible for paying the money. Exhibit 11, A-77-78. Contrary to Johnson's statement to Judge Paulson the sum of money involved was to be paid by Bladow. Johnson misled the court. The Hearing Panel did not err in making the finding.
JOHNSON'S OBJECTION 3
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To finding 12 that Johnson allowed his client to make statements to the court that Johnson knew were false in that Bladow's testimony suggested that the $20,000 being offered in settlement was coming out of Johnson's pocket at a time when Johnson knew the money was to be borrowed by Bladow with Johnson guaranteeing loan. Johnson made no effort to clarify the misleading testimony.
Johnson's Objection 1, File No. 4273-SE-0508, discussed above, also dealt with the issue of Johnson's client's statements at the February 5, 2004, hearing before Judge Paulson, concerning from where the money was supposed to come to pay the $20,000 settlement offer Johnson had made to Kristine Berg's lawyer. The significant testimony of Mr. Bladow is set out in the above argument, and need not be recited again here. See Exhibit 9, page 250, A-54. Suffice it to say the transcript clearly shows that Johnson's client, Bladow, was portraying Johnson as the person that would be coming up with the $20,000 that Johnson had offered to pay the former Mrs. Bladow, for the custody of the parties children. Whereas the actual arrangement was that Bladow would obtain a loan that Johnson would guarantee. What distinguishes Finding 12 from Finding 9, is the conclusion by the Hearing Panel that Johnson allowed the misleading testimony by Bladow.
A review of the transcript shows that after the above quoted testimony of Bladow, Johnson did a redirect examination (Tr. 255-258, 262-265), at which time he could have brought out the fact that there was an agreement (Exhibit 11, A-77-78) whereby he would guarantee a loan for Bladow. Johnson did not take any action in his redirect to correct the testimony of Bladow that Johnson was willing to pay on his behalf $20,000. Under the provisions of North Dakota Rules of Professional Conduct 3.3, a lawyer must not only refrain from making a false statement to the court, but must also correct any false statement that is made. North Dakota Rules of Professional Conduct 3.3(a)(1). North Dakota Rules of Professional Conduct 3.3(a)(3) provides:
If a lawyer, the lawyer's client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal unless the evidence was contained in testimony of the lawyer's client. If the evidence was contained in testimony of the lawyer's client, the lawyer shall make reasonable efforts to convince the client to consent to disclosure. If the client refuses to consent to disclosure, the lawyer shall seek to withdraw from the representation without disclosure.
The record of the proceeding does not reflect that Johnson took any action to correct the testimony of his client. Therefore the finding of the Hearing Panel is in accord with the evidence.
JOHNSON'S OBJECTION 4
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To the conclusion of the hearing panel that Johnson violated Rule 3.3, North Dakota Rules of Professional Conduct in that Johnson knowingly made a false statement to Judge Paulson on January 21 2004 when he said that the Rule 408 settlement offer was an offer made by Johnson, individually, and not by Bladow at a time when Johnson knew that Rule 1.8 of the North Dakota Rules of Professional Conduct prevented him from advancing money on behalf of his client and Johnson and his client had entered into an agreement whereby Johnson would guarantee a loan taken out by his client.
North Dakota Rules of Professional Conduct 3.3(a)(1), CANDOR TOWARD THE TRIBUNAL, provides that a lawyer shall not knowingly make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer. The false nature of Johnson's statement to Judge Paulson is discussed above in response to Johnson's Objection 2 (File No. 4273-SE-0508).
As further background for the misleading nature of Johnson's statement to Judge Paulson, in the course of his representation of Bladow, Johnson, in November and December, 2003, wrote two letters to Ms. Berg's attorney (Exhibits 6 and 7, A-48 and 50). In both these letters, Johnson portray's himself as paying the offer, and thereby advancing money to Bladow. This is in contrast to what Johnson portrayed to the Inquiry Committee in his response to the informal complaint. There he asserted that he was merely guaranteeing a loan to be taken out by Bladow. He said "While Mr. Johnson used the words "agreed to advance" and "I would pay" what he was actually doing was advancing and paying out of contemplated borrowed funds for which he would be the guarantor." (Exhibit 11, A-71).
Johnson also submitted to the Inquiry Committee an "Agreement to Guarantee Loan", purportedly signed by he and Bladow on November 1, 2003 (Exhibit 11, ex. B, A-77), a mere two weeks before the first letter. In that Agreement it recites Johnson's supposed understanding that "consistent with the North Dakota Rules of Professional Conduct, Johnson cannot provide financial assistance to Bladow in connection with the pending litigation except that Johnson may guarantee a loan reasonably needed to enable Bladow to withstand a delay in litigation ... ." N.D.R.Prof. Conduct 1.8(e)(3), prohibits financial assistance to a client except, under some circumstances, guaranteeing a loan. Thus, if it is true that the "Agreement" was entered into on November 1, 2003, Johnson should have had in mind the obligation he had under that Rule as to the limitations on the financial dealings he was to have with his client.
Yet, despite the supposed care Johnson took in entering into the November 1, 2003, "Agreement" to guarantee a loan by Bladow, from which Bladow would supposedly pay the $20,000 settlement offer in exchange for custody of the children, a mere eleven weeks later, Johnson told Judge Paulson, at the January 20-21, 2004, hearing (Exhibit 8, page 484, A-52) "That was a Rule 408 settlement offer and that was an offer made by me, Judge and [sic] offer with respect to certain sums of money to be paid by me, not by Mr. Bladow, by me."(underline added).
The high obligation of truth and candor required of an attorney is set out in Disciplinary Board v. Lamont, 1997 ND 63, ¶12, 561 N.W.2d 650 (cited above). The Hearing Panel conclusion that Johnson violated Rule 3.3 is well founded.
JOHNSON'S OBJECTION 5
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To the conclusion of the hearing panel that Johnson violated Rule 8.4, North Dakota Rules of Professional Conduct in that Johnson knowingly made a false statement of fact to Judge Paulson on January 21, 2004 when he said that the Rule 408 settlement offer was made by Johnson, individually, and not by Bladow at a time when Johnson knew that Rule 1.8, North Dakota Rules of Professional Conduct, prevented him from advancing money on behalf of his client and Johnson and his client had entered into an agreement whereby Johnson would guarantee a loan taken out by his client.
Conclusion 1B , File No. 4273-SE-0508 (Supreme Court No. 20070108) to which Johnson objects concludes a violation of N.D.R. Prof. Conduct 8.4. N.D.R. Prof. Conduct 8.4(f) prohibits engaging in conduct that is prejudicial to the administration of justice. Violation of this rule goes hand in hand with the conclusion of a violation of North Dakota Rules of Professional Conduct 3.3, as argued above. See Disciplinary Board v. Stensland, 2006 ND 251, 725 N.W.2d 191; Disciplinary Board v. Peterson, 2004 ND 205, 689 N.W.2d 364.
JOHNSON'S OBJECTION 6
File No. 4273-SE-0508 (Supreme Court No. 20070108)To the conclusion of the hearing panel that Johnson violated Rule 1.2(A), North Dakota Rules for Lawyer Discipline in that Johnson knowingly made a false statement to Judge Paulson on January 21, 2004 when he said that the Rule 408 settlement offer was made by Johnson, individually, not by Bladow at a time when Johnson knew that Rule 1.8 of the North Dakota Rules of Professional Conduct prevented him from advancing money on behalf of his client and Johnson and his client had entered into an agreement whereby Johnson would guarantee a loan taken out by his client.
Conclusion 1C, File No. 4273-SE-0508 (Supreme Court No. 20070108) to which Johnson objects concludes a violation of N.D.R. Lawyer Discipl 1.2A. N.D.R. Lawyer Discipl. 1.2A(3), provides that a lawyer may be disciplined for engaging in conduct involving dishonesty, fraud, deceit or misrepresentation. For the same reasons as argued above concerning Johnson's conduct being a violation of N.D.R. Prof. Conduct 8.4(f) and N.D.R. Prof. Conduct 3.3, it is a violation of Rule 1.2A(3).
JOHNSON'S OBJECTION 7
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To the failure of the hearing panel to consider Johnson's participation in the lawyer assistance program.
This objection is addressed above, in response to Johnson's Objection 6, File No. 4148-SE-0411 (Supreme Court No. 20070107).
JOHNSON'S OBJECTION 8
File No. 4273-SE-0508 (Supreme Court No. 20070108)
To the recommendation of the hearing panel that Johnson be suspended from the practice of law for 60 days and that he be required to pay the costs and expenses of these proceedings in the amount of $8,670.36 as set forth in the affidavit of Paul W. Jacobson dated March 13, 2007.
This objection primarily deals with the appropriateness of the recommended discipline. Disciplinary Counsel has objected to the discipline recommended by the Hearing Panel. The argument on this issue is dealt with below in regard to Disciplinary Counsel's objection.
DISCIPLINARY COUNSEL'S OBJECTION 1.
To the Recommendation of the Hearing Panel that Samuel S. Johnson be suspended from the practice of law for sixty days, as the suspension should be for a period requiring a petition for reinstatement pursuant to Rule 4.5, North Dakota Rules for Lawyer Discipline.
The misconduct discussed above, arises out of two unrelated matters. The Panel has recommended that he be suspended for sixty days for the misconduct. It is more appropriate that the suspension imposed by the Court be of sufficient length so as to require proof of rehabilitation, in accordance with N.D.R. Lawyer Discipl. 4.5. If a lawyer is suspended from practice for more than six months, the lawyer has the burden of establishing the averments of his application for reinstatement by clear and convincing evidence, and the proof must be "of a satisfactory character and of sufficient weight to overcome the former adverse judgment as to the petitioner's character. " Hoffman v. Disciplinary Board, 2005 ND 171, ¶5, 704 N.W.2d 810, citing Application of Christianson, 215 N.W.2d 920, 923 (N.D. 1974).
A long suspension is required in this case because of the serious nature of the misconduct, as well as the extensive disciplinary history predating the present matters. Perhaps Johnson's most troubling misconduct was his violation of N.D.R. Prof. Conduct 3.3. Johnson lied to Judge Paulson in telling him that he was going to pay the settlement offer, and not his client. He deceived the court with his false statement. There was a potentially significant effect on the proceedings as part of the dispute between the parties included whether Johnson's client was unable to pay his obligations under the divorce. See Disciplinary Board v. Lamont, 1997 ND 63, ¶12, 561 N.W.2d 650, citing In re Disciplinary Action Against Kaiser, 484 N.W.2d 102, 108 (N.D. 1992).
In determining appropriate sanctions for violations of the Rules of Professional Conduct, this Court is guided by the North Dakota Standards for Imposing Lawyer Sanctions. Disciplinary Board v. Edin, 2005 ND 109, ¶11, 697 N.W.2d 727, citing In re Disciplinary Action Against Edwardson, 2002 ND 106, ¶ 21, 647 N.W.2d 126.
Standard 6.11, North Dakota Standards for Imposing Lawyer Sanctions, provides:
6.11 Disbarment is generally appropriate when a lawyer, with the intent to deceive the court, makes a false statement, submits a false document, or improperly withholds material information, and causes serious or potentially serious injury to a party, or causes a significant or potentially significant adverse effect on the legal proceeding.
Standard 6.12, North Dakota Standards for Imposing Lawyer Sanctions, provides:
6.12 Suspension is generally appropriate when a lawyer knows that false statements or documents are being submitted to the court or that material information is improperly being withheld, and takes no remedial action, and causes injury or potential injury to a party to the legal proceeding, or causes an adverse or potentially adverse effect on the legal proceeding.
Additionally, Standard 5.11, North Dakota Standards for Imposing Lawyer Sanctions , provides:
5.11 Disbarment is generally appropriate when:
(a) a lawyer engages in serious conduct a necessary element of which includes intentional interference with the administration of justice, false swearing, misrepresentation, fraud, extortion, misappropriation, or theft; or the sale, distribution or importation of controlled substances; or the intentional killing of another; or an attempt or conspiracy or solicitation of another to commit any of these offenses; or
(b) a lawyer engages in any other intentional conduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer's fitness to practice.
Additional Standards that must be considered in this case include Standard 9.22 (a), North Dakota Standards for Imposing Lawyer Sanctions, which provides that a factor to be considered in aggravation is prior disciplinary offenses. Johnson has five prior disciplines (Exhibit 5, A-43-47). As this Court has said on several occasions, disciplinary orders are not "empty noise," but are intended to protect the public. Disciplinary Board v. Howe, 2001 ND 86,¶38, 626 N.W.2d 650. Additionally, Standards 9.22 (c) (a pattern of misconduct) and (d), (multiple offenses), North Dakota Standards for Imposing Lawyer Sanctions, should be considered.
Also for consideration is Standard 9.22 (f), North Dakota Standards for Imposing Lawyer Sanctions, which provides that submission of false evidence, false statements, or other deceptive practices during the disciplinary process. As discussed below, Johnson submitted the alleged loan guarantee agreement to the Inquiry Committee and failed to inform it of the additional agreement that Johnson would be making the payments on the loan.
The appropriate discipline in this case is a suspension of six months and a day. See, Disciplinary Board v. McDonald, 2000 ND 87, 609 N.W.2d 418; Disciplinary Board v. McKechnie, 2003 ND 170, 670 N.W.2d 864; Disciplinary Board v. Sundby, 2005 ND 135, 701 N.W.2d 863; Disciplinary Board v. Balerud, 2006 ND 164, 719 N.W.2d 329; Disciplinary Board v. Chinquist, 2006 ND 107, 714 N.W.2d 469. Such a disposition will assure that Johnson must prove his ability to practice law within the requirements of his ethical obligation.
As a further recommendation of discipline, the Hearing Panel recommended that Johnson pay costs of $8,670.36. The North Dakota Rules for Lawyer Discipline provide that unless otherwise ordered by the Court or hearing panel, costs and expenses of disciplinary proceedings must be assessed against the lawyer where discipline is imposed. Rule 1.3D, NDRLD.
Disciplinary Counsel served and filed an Affidavit of Costs and Expenses, in the amount recommended to the Court by the Hearing Panel (A-31). The expenses and attorney time reflected in the Affidavit are reasonable and the Court should impose the costs recommended by the Hearing Panel. See, Disciplinary Board v. Boughey, 1999 ND 205, ¶12-15, 602 N.W.2d 268.
DISCIPLINARY COUNSEL'S OBJECTION 2.
To the lack of a finding and conclusion that Samuel S. Johnson misled the Inquiry Committee Southeast in his response to the informal complaint, in that he did not reveal that in addition to the written agreement between himself and his client that he would guarantee a loan for the client, there was also an agreement that Johnson would make any payments owed on the loan until such time in the future the client could repay Johnson.
The Petition for Discipline in File No. 4273-SE-0508 (Supreme Court No. 20070108) alleged, inter alia, that in his written response to the informal complaint, dated November 30, 2005 (Exhibit 11, A-69), Johnson portrayed the financial agreement between himself and Mr. Bladow as being that of a guarantor for a possible loan to be taken out by Bladow. Petition for Discipline, paragraph 3, A-10. Johnson's Response to Petition for Discipline asserted that he had prepared the agreement to guarantee a loan dated November 1, 2003; and that he had reviewed Rule 1.8 of the North Dakota Rules of Professional Conduct and determined that the rules did allow him to guarantee the contemplated loan. Response to Petition for Discipline (A-14).
The written response to the informal complaint, dated November 30, 2005 (A-69) did not reveal that Johnson and his client, Bladow, also agreed that in the event a loan was taken out by Bladow, that Johnson would make any payments on the loan until some later time when Bladow would repay Johnson. That information was not revealed by Johnson until his testimony at the hearing on this matter. When asked who he believed would be making the monthly payments on the loan, Johnson testified "At that point I mean we had discussed, Nancy, Wes, and I -- I mean there was no question I mean I was going to have to make the payments on the loan until Wes could somehow subsequently pay me back." Tr. 333-334, A-155-156. Johnson reaffirmed that the agreement he had with Bladow concerning the loan included the agreement that he, Johnson, would be making any payments required by the loan, until such later time as Bladow was able to pay Johnson back. Tr. 346, A-167; Tr. 371-373, A-169-171.
N.D.R. Prof. Conduct 1.8 (e) provides:
(e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that:
****
(3) a lawyer may guarantee a loan reasonably needed to enable the client to withstand delay in litigation that would otherwise put substantial pressure on the client to settle a case because of financial hardship rather than on the merits, provided that the client remains ultimately liable for repayment of the loan without regard to the outcome of the litigation and, further provided that no promise of financial assistance was made to the client by the lawyer, or by another in the lawyer's behalf, prior to the employment of that lawyer by the client.
The testimony of Johnson ultimately divulged that the information provided to the Inquiry Committee, as reflected in Exhibit 11, A-69, was not the entire agreement concerning the loan. It also showed that actual agreement was not in compliance with N.D.R. Prof. Conduct 1.8 (e). The Rule allows, under certain circumstances, for a lawyer to guarantee a loan, not make a loan to a client. Effectively, Johnson planned on making a loan to Bladow, under the subterfuge of complying with Rule 1.8.
The Inquiry Committee was deprived of salient relevant information by Johnson concerning the agreement for the loan "guarantee". N.D.R. Prof. Conduct 8.1 BAR ADMISSION AND DISCIPLINARY MATTERS, as alleged in the Petition for Discipline, provides that a lawyer in connection with a disciplinary matter, shall not knowingly make a false statement of material fact. By omitting information concerning the full agreement, Johnson misled the Inquiry Committee.
The Hearing Panel did not make a finding or conclusion in this regard. However, the evidence supports a conclusion by this Court that Johnson, in addition to his other misconduct, violated N.D.R. Prof. Conduct 8.1 by not revealing to the Inquiry Committee the agreement that Johnson would make any payments due under the loan.
CONCLUSION
This Honorable Court should suspend Samuel S. Johnson from the practice of law for six months and a day and order that he pay the costs of the proceeding in the amount of $8,670.36, for violation of Rule N.D.R. Prof. Conduct 3.3, 4.1, 4.4, 8.1, 8.4, and N.D.R. Lawyer Discipl. 1.2A.
Dated this 8th day of June, 2007.
| Paul W. Jacobson (ID 03631) | ||||||
| Disciplinary Counsel | ||||||
| Disciplinary Board of the Supreme Court | ||||||
| P. O. Box 2297 | ||||||
| Bismarck, ND 58502 | ||||||
| (701) 328-3925 | ||||||