Carson, Matter of, 67826

• Decision Date: 22 January 1993
• Docket Number: No. 67826,67826
• Parties: In the Matter of David W. CARSON, Respondent.
• Court: Kansas Supreme Court

Page 47

845 P.2d 47

252 Kan. 399

In the Matter of David W. CARSON, Respondent.

No. 67826.

Supreme Court of Kansas.

Jan. 22, 1993.

Syllabus by the Court

1. The validity of Supreme Court Rule 202 (1992 Kan.Ct.R.Annot. 152) is discussed and upheld.

2. The standard of proof to warrant a finding of attorney misconduct requires that the charge be established by substantial, clear, convincing, and satisfactory evidence.

3. Hearing panels of the Kansas Board for Discipline of Attorneys have the authority to take notice of relevant court records. This authority is implicitly granted in Supreme Court Rule 202 (1992 Kan.Ct.R.Annot. 152), which provides in part, "civil judgments shall be prima facie evidence of the findings made therein...." Rule 202 would be meaningless if records from prior civil judgment cases were not admissible in disciplinary proceedings.

4. Delay does not justify the dismissal of a disciplinary case, because the overriding purpose of a disciplinary proceeding is the protection of the public. The disciplinary rules do not include any type of statute of limitations. While in some instances a delay in the proceedings may justify the dismissal of disciplinary actions, there must be a showing of prejudice to the party asserting such delay as a defense.

5. Supreme Court Rule 224(d) (1992 Kan.Ct.R.Annot. 186) requires that if a procedural variation is to justify dismissal of a disciplinary action, a respondent must show actual prejudice with clear and convincing evidence.

Stanton A. Hazlett, Deputy Disciplinary Administrator, argued the cause and was on the brief, for petitioner. Bruce E. Miller, Disciplinary Administrator, was with him on the formal complaint.

John H. Fields, of Carson & Fields, Kansas City, argued the cause and was on the brief, for respondent.

PER CURIAM:

A formal disciplinary complaint was brought against David W. Carson on May 23, 1990, in connection with his financial and legal dealings with a client, Thelma L. (Sue) Phillips. This discipline case is the second appearance of Carson before us as a result of his relationships with Phillips. In Phillips v. Carson, 240 Kan. 462, 731 P.2d 820 (1987) (Carson I ), the trial court entered summary judgment against Carson, finding that he had been professionally negligent. In Carson I, we stated, in affirming summary judgment: "We agree with the trial court that Carson's extensive breaches of the Code of Professional Responsibility proximately cased injury to his client, and that she sustained substantial actual damages." 240 Kan. at 478, 731 P.2d 820.

As to the complaint in this disciplinary case, a hearing panel of the Kansas Board for Discipline of Attorneys (the panel) unanimously determined that Carson violated:

DR 1-102(A)(1) and (6) (1992 Kan.Ct.R.Annot. 189):

"A lawyer shall not: (1) Violate a Disciplinary Rule.... (6) Engage in any other conduct that adversely reflects on his fitness to practice law."

DR 5-101(A) (1992 Kan.Ct.R.Annot. 209):

"Except with the consent of his client after full disclosure, a lawyer shall not accept employment if the exercise of his professional judgment on behalf of his client will be or reasonably may be affected by his own financial, business, property, or personal interests."

DR 5-104(A) (1992 Kan.Ct.R.Annot. 210):

"A lawyer shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise his professional judgment therein for the protection of the client, unless the client has consented after full disclosure."

DR 6-101(A)(3) (1992 Kan.Ct.R.Annot. 214):

"A lawyer shall not: ... (3) Neglect a legal matter entrusted to him."

DR 7-101(A)(1) and (3) (1992 Kan.Ct.R.Annot., 219):

"A lawyer shall not intentionally: (1) Fail to seek the lawful objectives of his client through reasonably available means permitted by law and the Disciplinary Rules, except as provided by DR 7-101(B). A lawyer does not violate this Disciplinary Rule, however, by acceding to reasonable requests of opposing counsel which do not prejudice the rights of his client, by being punctual in fulfilling all professional commitments, by avoiding offensive tactics, or by treating with courtesy and consideration all persons involved in the legal process....

"(3) Prejudice or damage his client during the course of the professional relationship, except as required under DR 7-102(B)."

and DR 7-102(A)(8) (1992 Kan.Ct.R.Annot. 219):

"In his representation of a client, a lawyer shall not: ... (8) Knowingly engage in other illegal conduct or conduct contrary to a Disciplinary Rule."

The panel considered evidence in mitigation and unanimously recommended that Carson be disciplined by suspension from the practice of law for a period of two years pursuant to Supreme Court Rule 203(a)(2) (1992 Kan.Ct.R.Annot. 153). Carson has filed exceptions to both the findings and the discipline recommended.

We have examined the record and find substantial competent evidence to support the findings of fact and conclusions of law of the panel, which we unanimously adopt.

"FINDINGS OF FACT

"The panel unanimously concludes that there is clear and convincing evidence to establish the following findings of fact:

"1. Respondent is an attorney at law....

"2. On March 28, 1984, Thelma L. (Sue) Phillips commenced civil litigation against Respondent in the District Court of Johnson County, Kansas, in the case of Thelma L. Phillips v. David W. Carson, et al., Case No. 129,377. Mrs. Phillips was granted judgment against the Respondent in the amount of $378,107.45 plus interest from May 9, 1985, at the statutory rate. The lawsuit against the Respondent was based upon his allegedly negligent handling of legal duties associated with personal loans which the Respondent obtained from Mrs. Phillips, a client and friend. The Honorable Lewis C. Smith, Judge of the District Court of Johnson County, Kansas, entered summary judgment for Mrs. Phillips against the Respondent on September 2, 1985.

"3. Respondent appealed the granting of summary judgment against him. The Kansas Supreme Court affirmed the ruling against Respondent in the case of Phillips v. Carson, 240 Kan. 462, 731 P.2d 820 (1987). In the decision of the Court authored by Justice Robert H. Miller, the Kansas Supreme Court held that Respondent's 'extensive breaches of the Code of Professional Responsibility proximately caused injury to his client, and that she sustained substantial actual damages.' 240 Kan. at 478

"4. The findings of the Kansas Supreme Court as set forth in the case of Phillips v. Carson, 240 Kan. 462, 731 P.2d 820 (1987), are adopted in their entirety and incorporated by reference as if fully set forth in this Report.

"CONCLUSIONS OF LAW

"Respondent's actions with respect to the handling of legal matters on behalf of Thelma L. (Sue) Phillips do amount to a violation of [the Canons previously referenced]."

A majority of the court disagrees with the panel's discipline recommendation. Suspension from the practice of law for a period of one year under Rule 203(a)(2) is the discipline imposed by a majority of the court.

The issues are: (1) Was Supreme Court Rule 202 (1992 Kan.Ct.R.Annot. 152) properly applied; (2) was Carson's motion to dismiss erroneously denied; (3) were the Disciplinary Administrator's exhibits (Phillips' affidavit and her suggested findings submitted to the trial court in Carson I ) properly admitted into evidence; (4) did delay in filing the complaint and bringing the matter to hearing prejudice Carson, making the imposition of discipline inequitable (5) did the evidence presented meet the clear and convincing standard, which is required for a finding of attorney misconduct; (6) should a new hearing before a different disciplinary panel have been ordered following one member's recusal; (7) would the imposition of discipline violate Carson's rights secured by the federal Bankruptcy Code and the Supremacy Clause of the United States Constitution; and (8) is the discipline recommended by the panel more harsh than justified by the facts?

Facts

The Disciplinary Administrator's Office claimed that the hearing panel should look at Carson I and apply our Rule 202. Among other things, Rule 202 states: "All other civil judgments shall be prima facie evidence of the findings made therein and shall raise a presumption as to their validity. The burden shall be on the respondent to disprove the findings made in the civil judgment." Carson objected to the use of Rule 202. The panel made no explicit statement in the final hearing report regarding its decision as to the applicability of Rule 202. However, the panel unanimously adopted the findings of Carson I in their entirety and incorporated them by reference in the final hearing report. In Carson I, we observed that Carson had not challenged "any of the facts relating to his conduct and business and professional relationship with Mrs. Phillips" or "the accuracy of the 29 paragraphs of findings of fact included within the trial court's order." 240 Kan. at 473, 731 P.2d 820. The findings in Carson I explain the factual details of Carson's dealings with Phillips. 240 Kan. at 467-70, 731 P.2d 820 (the reader is referred to Carson I for a fuller understanding of the Carson-Phillips, attorney-client, borrower-lender, mortgagor-mortgagee relationships). Other findings of fact appear in the panel's final report.

Carson filed a response during the investigation of the complaint. The first hearing was conducted on October 30, 1990, before a disciplinary panel appointed by the Chair of the Kansas Board for Discipline of Attorneys (KBDA). The panel members were Robert E. Nugent, III, Ann L. Hoover, and Michael J. Grady, Chair.

The Disciplinary Administrator called Mark Gunnison as a witness. Gunnison is a member of the law firm (McDowell, Rice and Smith, Chartered) that filed the attorney malpractice suit for Phillips against Carson. Phillips...