Committee on Professional Ethics and Conduct of the Iowa State Bar Ass'n v. Steele

• Decision Date: 21 October 1987
• Docket Number: No. 87-643,87-643
• Citation: 414 N.W.2d 108
• Parties: COMMITTEE ON PROFESSIONAL ETHICS AND CONDUCT OF THE IOWA STATE BAR ASSOCIATION, Complainant, v. Shirley G. STEELE, Respondent.
• Court: Iowa Supreme Court

Page 108

414 N.W.2d 108

COMMITTEE ON PROFESSIONAL ETHICS AND CONDUCT OF THE IOWA STATE BAR ASSOCIATION, Complainant, v. Shirley G. STEELE, Respondent.

No. 87-643.

Supreme Court of Iowa.

Oct. 21, 1987.

James E. Gritzner and Kasey W. Kincaid of Nyemaster, Goode, McLaughlin, Emery & O'Brien, P.C., Des Moines, for complainant.

Shirley G. Steele, Missouri City, Tex., pro se.

Considered en banc.

NEUMAN, Justice.

This disciplinary proceeding concerns a complaint filed by the Committee on Professional Ethics and Conduct of the Iowa State Bar Association (committee) against attorney Shirley G. Steele. The complaint charged that Steele misused and mishandled client funds in violation of sections EC 1-4, EC 1-5, DR 1-102(A)(1), (3), (4), (5) and (6), EC 9-6 and DR 9-102(A) and (B) of the Iowa Code of Professional Responsibility for Lawyers. A division of the Grievance Commission dismissed the complaint, concluding that the committee failed to meet its burden of proving the charges by a convincing preponderance of the evidence. In accordance with Iowa Supreme Court Rule 118.11, we granted the committee permission to appeal.

As in all lawyer disciplinary cases, we have reviewed de novo the record made before the Grievance Commission. Iowa Sup.Ct.R. 118.10. While we give respectful consideration to the commission's findings and recommendations, we are not bound by them. Committee on Professional Ethics & Conduct v. Davidson, 398 N.W.2d 856, 856 (Iowa 1987). In the case before us, we are unable to reconcile dismissal by the Grievance Commission with persuasive record evidence of ethical violations, including Steele's own admission of misconduct. Because her misconduct relates to the serious matter of a lawyer's duty to protect and preserve the property of a client, and our strict prohibition against commingling of funds, we suspend Steele's license to practice law for not less than three years.

This controversy arises out of Steele's representation of Isaiah Crawford in connection with a workers' compensation claim filed in June 1980 against John Deere Harvester Works. In October 1981, the Illinois Industrial Commission awarded Crawford $1,866.70. Crawford sought judicial review of the award, but by this time Steele had ceased practicing in Iowa and moved to Texas. She declined to represent Crawford further in the workers' compensation case, but agreed to continue representing Crawford in an unrelated appeal to the United States Supreme Court which we shall refer to as the McLaughlin case. Meanwhile, Deere satisfied the workers' compensation award plus interest by issuing a check dated November 10, 1981, in the amount of $1,984.53, made jointly payable to Steele and her client.

Beyond these bare facts, Steele's subsequent handling of Crawford's award is hotly contested. Based on the testimony of Isaiah Crawford, the committee contends that Steele endorsed Crawford's signature on the check without his authority and for the intervening six years has failed to account for the proceeds or return that portion to which Crawford is entitled. For her part, Steele contends that Crawford signed a power of attorney and contingent fee agreement authorizing her to negotiate the check on his behalf and withdraw therefrom her one-third contingency fee; that Crawford has consistently refused to accept the balance of the proceeds; and that she currently maintains funds earmarked for Crawford in a trust account awaiting this court's direction to her regarding payment.

On balance, we find Crawford's version of this six-year scenario far more persuasive for the reasons detailed below.

I. It is beyond dispute that Steele cashed the compensation award on December 15, 1981, endorsing the check in her own name and as attorney in fact for Isaiah Crawford, and that to date no part of the award has been remitted to Crawford.

At the hearing before the Grievance Commission, Crawford steadfastly maintained that at no time had he authorized Steele to endorse the compensation award on his behalf for he feared that cashing the check would jeopardize the judicial review he wished to pursue. Steele, aware of Crawford's concern but unable to convince him otherwise, justified her action based on Crawford's alleged execution of a power of attorney and contingent fee agreement which authorized her endorsement of the check and withdrawal of a $630 fee plus expenses in the McLaughlin case.

The record refutes Steele's alleged authority in two significant respects. First, in the face of Crawford's denial that he ever executed a power of attorney or contingent fee agreement, Steele was unable to produce either document. Second, Crawford's insistence that the workers' compensation check not be cashed for litigation expenses is corroborated by a letter dated December 12, 1981, in which he forwarded a money order for $300 representing the amount Steele told him would be required for the McLaughlin appeal. ¹

Moreover, Crawford testified that in the same December conversation in which he advised Steele he would be sending the money order, she led him to believe that she had returned the compensation award to Deere. This accounts for the fact that in 1985, when Crawford learned that his petition for judicial review of the compensation award had been dismissed, he contacted Deere, not Shirley Steele, to collect the sums he was due. Correspondence between Crawford and Deere confirm these contacts.

Steele denies having so misrepresented her actions, insisting that all along Crawford should have known she cashed the check in December 1981 and, but for expenses, was holding the balance in trust for him. This assurance, however, is called into question by another piece of evidence produced by the committee. Crawford received a copy of an undated letter, admittedly written by Steele sometime after June 1, 1982, purporting to respond to an inquiry by attorney Charles Levy concerning reimbursement for expenses he incurred in his earlier representation of Isaiah Crawford in connection with the workers' compensation case. Steele's response states that she was "in receipt of the check as awarded by the arbitration commission" but suggests that Levy could not be reimbursed for expenses until after the appeal was resolved. In reality, of course, the check had already been negotiated by Steele at least six months earlier.

We find it significant that Steele failed to produce any documentary evidence which would corroborate her version of her alleged agreement with Crawford. In each instance where production of such independent evidence could support Steele's version of the events, some factor ostensibly outside her control purportedly prevented her from doing so. Thus she was unable to supply a copy of the alleged power of attorney, or fee statements or any correspondence confirming notice to Crawford concerning cashing of the check or disposition of the proceeds. Explaining this lack of documentary evidence, Steele testified that upon her move to Texas she stored all of her Iowa case files in a garage and they were subsequently destroyed by hurricane Alicia. This unusual explanation was evidently accepted by the Grievance Commission. But it does not explain why five years after the compensation award was made, she still has remitted none of the proceeds to her client. To justify her inaction, she relies on Crawford's reluctance to accept the proceeds for fear of jeopardizing his appeal. But Steele did not offer a shred of evidence to suggest that she attempted to monitor the status of the judicial review proceedings or make periodic efforts to contact Crawford concerning the remaining funds.

If, as Steele contends, the balance of funds is intact, we are unable to understand why she did not remit them to Crawford upon learning of his complaint to the Iowa State Bar Association. At that time, if not previously, Steele should have known that the workers' compensation proceeding had been concluded and there was no...