Committee on Professional Ethics and Conduct of the Iowa State Bar Ass'n v. Hall, 90-1059
| Decision Date | 21 November 1990 |
| Docket Number | No. 90-1059,90-1059 |
| Citation | 463 N.W.2d 30 |
| Parties | COMMITTEE ON PROFESSIONAL ETHICS AND CONDUCT OF THE IOWA STATE BAR ASSOCIATION, Appellant, v. James W. HALL, Appellee. |
| Court | Iowa Supreme Court |
Norman G. Bastemeyer and Charles L. Harrington, Des Moines, for appellant.
James W. Hall, Cedar Rapids, pro se.
Considered by McGIVERIN, C.J., and SCHULTZ, LAVORATO, SNELL and ANDREASEN, JJ.
In this attorney discipline proceeding involving respondent attorney James W. Hall, we review the Grievance Commission's findings, conclusions and recommendation pursuant to Iowa Supreme Court Rule 118.11. Our review is de novo. See Iowa Sup.Ct.R. 118.11.
The Grievance Commission found that respondent violated numerous disciplinary rules. The violations stem from a $350,000 loan respondent received from the Citizens State Bank, Hopkinton, Iowa, allegedly through dishonesty, and numerous business ventures with a client, Walter Ronk. The commission recommended a four month suspension of Hall's license to practice law.
Complainant, Committee on Professional Ethics and Conduct, filed an application for permission to appeal the commission's recommendation pursuant to court rule 118.11. We granted the application. Based upon the record made before the Grievance Commission, we revoke respondent's license to practice law in the courts of this state.
I. Motion to dismiss. As a preliminary matter, respondent asserts that we should not reach the merits of this case on appeal because the Grievance Commission erred when it failed to grant respondent's motion to dismiss. Hall urges defenses of res judicata, estoppel, laches and deprivation of due process. The commission found no merit in these contentions and neither do we. Accordingly, we overrule Hall's motion to dismiss urged before us.
II. Facts. Hall is an attorney licensed to practice law in this state. His office is in Cedar Rapids. In addition to his law practice, respondent also became involved in several business ventures in the late 1970's and early 1980's. Respondent's conduct in these business ventures has led to the allegations of both complaints, which were consolidated by the Grievance Commission, in this proceeding.
The committee bears the burden of proving the allegations of the complaints by a convincing preponderance of the evidence. Committee on Professional Ethics & Conduct v. Davison, 414 N.W.2d 97, 98 (Iowa 1987). By that standard, the record shows the following facts.
A. Commission docket no. 252. On May 14, 1982, Citizens State Bank loaned respondent, president of Lux Pullets, Inc., $350,000 in the form of two promissory notes in the amounts of $200,000 and $150,000. Respondent signed the notes. Respondent falsely represented to the bank that the loans would be used to purchase 60,000 laying hens and equipment for the hen operation of Lux Pullets, Inc. In fact, the notes provided on their face that they were purchase money loans and would be used to purchase hens and equipment.
The note in the amount of $150,000 states that the purpose of the credit is to "purchase 60M laying hens." The note also granted the lender a security interest under the Uniform Commercial Code (UCC), Iowa Code chapter 554, in the 60,000 laying hens. Finally, the note provided that the loan was to be repaid "from proceeds of eggs from approximately 60,000 laying hens...."
The note in the amount of $200,000 states that the purpose of the credit was to "purchase Big Dutchman poultry equipment." The note also granted the lender a security interest under the UCC in the "Big Dutchman equipment sufficient for housing approximately 60M laying hens."
Respondent signed UCC financing statements acknowledging Citizen State Bank's security interest in the laying hens and the Big Dutchman equipment sufficient to house approximately 60,000 laying hens. Citizens State Bank filed these financing statements with the Iowa Secretary of State.
The equipment and laying hens were never acquired by respondent or his company and, thus, the bank received no collateral or security for the loans. The $350,000 was used by respondent for other purposes, and most of the money was never repaid to the bank by respondent or his company. The bank sustained a loss of more than $300,000 on the two notes.
Respondent admits that the loans were not used to purchase hens and equipment to house the hens. However, respondent claims that there was no misrepresentation because the bank was never told that the $350,000 would be used to purchase hens and equipment to house the hens. The evidence clearly supports the contrary conclusion as found by the Grievance Commission.
The notes and security instruments alone establish that the parties viewed the loans as purchase money transactions to be secured by hens and equipment purchased with the loan proceeds. This view is also supported by the testimony of a vice-president and the chairman of the board of Citizens State Bank. Any evidence that a contrary agreement was intended was not persuasive to the commission nor to us.
In connection with this transaction, the Grievance Commission concluded that respondent's conduct violated DR 1-102(A)(1) (), DR 1-102(A)(3) (), DR 1-102(A)(4) (), DR 1-102(A)(6) (), and EC 1-5 (lawyer should refrain from all illegal and morally reprehensible conduct). We agree.
The Grievance Commission also concluded, and we agree, that respondent made later false statements regarding the May 14, 1982, transaction with Citizens State Bank. The first of these statements occurred when respondent testified in a sworn deposition in a related civil lawsuit that the $350,000 in loans from Citizens State Bank were unsecured loans. The second false statement was a written response to a committee inquiry in which respondent stated that the bank knew that the money loaned on May 14, 1982, would not be used to purchase hens and equipment for Lux Pullets, Inc.
The commission found, and we agree, that the untruthful deposition testimony that the loans were unsecured violated DR 1-102(A)(1) (), DR 1-102(A)(3) (), DR 1-102(A)(4) (), DR 1-102(A)(5) (), DR 1-102(A)(6) (), and EC 1-5 (lawyer should refrain from all illegal and morally reprehensible conduct).
Hall's false statement to the committee violated DR 1-102(A)(1) (), DR 1-102(A)(4) (), DR 1-102(A)(5) (), DR 1-102(A)(6) (), EC 1-4 (duty to assist committees having responsibility for disciplinary rules), and EC 1-5 (lawyer should refrain from all illegal and morally reprehensible conduct).
B. Commission docket no. 262. The allegations of this complaint arise from respondent's business ventures with his client, Walter Ronk, over a period of approximately four years.
Ronk had been a client of respondent's law firm for several years and at various times prior to 1978 respondent had acted as Ronk's legal counsel. Beginning in 1978, respondent and Ronk entered into several joint business ventures. During all of their joint business dealings, Ronk regarded respondent as his attorney and looked to him for advice. Some of the business ventures will be recounted below to demonstrate their nature.
In 1978, Ronk and respondent entered into a joint investment in a Louisiana business that purchased and operated oil rig supply boats. To finance their investment, Ronk and respondent jointly borrowed sums totaling in excess of $200,000 from Texas Commerce Bank of Houston, Texas, and Merchants National Bank of Cedar Rapids. Prior to the agreement between the parties, respondent never advised Ronk that his personal involvement in the joint venture might affect his professional judgment on Ronk's behalf, and, prior to the agreement, respondent also never advised Ronk that he should seek independent legal counsel with respect to the venture.
A later venture, entered into in 1979, was an agreement between respondent, Ronk, and Pfeiler (also a client of respondent) to purchase an apartment complex in Florida and convert it into condominiums. The three men jointly borrowed $200,000 from First Bank and Trust Company of Boca Raton, Florida to purchase the complex. Later, respondent and Ronk jointly executed two notes in the sum of $290,000 payable to Merchants National Bank of Cedar Rapids, for loans relating to the Florida complex. At no time did respondent advise Ronk that his professional relationship with Pfeiler, or his personal interests in the transaction, might affect his professional judgment on Ronk's behalf. Nor, prior to the agreement, did Hall advise Ronk that he should seek independent legal counsel with respect to the venture.
Another example of respondent's business ventures with Ronk occurred when a partnership, consisting of respondent, Pfeiler and others, agreed to purchase a warehouse in Cedar Rapids. In need of short term financing to finalize the deal, Pfeiler suggested that respondent ask Ronk to co-sign a note with Pfeiler at United States Bank in Cedar Rapids. Respondent presented this proposition to Ronk and he...
To continue reading
Request your trial
-
Attorney Grievance v. Shaw
...the Matter of Pepe, 140 N.J. 561, 659 A.2d 1379 (1995)(suspension for using marijuana and sharing it with others); Iowa State Bar Ass'n v. Hall, 463 N.W.2d 30, 31 (Iowa 1990) (falsely obtaining loan from a bank, giving false deposition testimony about the loan, and negligently entering into......
-
Att'y Griev. Comm'n of MD v. Shaw
...In the Matter of Pepe, 659 A.2d 1379 (N.J. 1995)(suspension for using marijuana and sharing it with others); Iowa State Bar Ass'n v. Hall, 463 N.W.2d 30, 31 (Iowa 1990) (falsely obtaining loan from a bank, giving false deposition testimony about the loan, and negligently entering into busin......
-
Iowa Supreme Court Attorney Disciplinary Bd. v. Bieber
...Iowa Supreme Court Board of Professional Ethics & Conduct v. Vinyard, 656 N.W.2d 127, 132 (Iowa 2003); Committee on Professional Ethics & Conduct v. Hall, 463 N.W.2d 30, 35–36 (Iowa 1990); and Committee on Professional Ethics & Conduct v. Littlefield, 244 N.W.2d 824, 825–26 (Iowa 1976). The......
-
Interstate Power Co. v. Kansas City Power & Light Co., C89-3033.
......v. . IOWA-ILLINOIS GAS & ELECTRIC COMPANY and Bob McKiness ... Id. at 8. Plaintiff notified the State of Iowa and the Environmental Protection Agency ... which are based on defendant's pre-1957 conduct and that the agreement does not clearly and ......