Curtis, Matter of
| Decision Date | 08 December 1995 |
| Docket Number | No. SB-94-0086-D,SB-94-0086-D |
| Citation | 908 P.2d 472,184 Ariz. 256 |
| Parties | In the Matter of a Member of the State Bar of Arizona, David W. CURTIS, Jr., Respondent. |
| Court | Arizona Supreme Court |
David Curtis, Jr. ("Respondent") appeals from the recommendation of the Arizona Supreme Court Disciplinary Commission ("Commission") that he be suspended from the practice of law, be placed on probation thereafter, and pay restitution.
The Commission found that during the course of representing a client in a civil matter, Respondent lacked competence, lacked diligence, failed to maintain proper client communication, and failed to adequately protect his client's interests upon termination of the representation. Specifically, the Commission found that Respondent violated Ethical Rule ("ER") 1.1 (competence), ER 1.4 (communication), and ER 1.16(d) (). Rules of Professional Conduct, Rule 42, Ariz.R.Sup.Ct.
Respondent argues that although imprudent, most of the conduct the Commission found improper did not violate any ethical rule. Respondent additionally asserts that any violation that may have occurred did not harm the client and does not warrant suspension.
We have jurisdiction under Ariz.R.Sup.Ct. 53(e).
The State Bar filed a complaint against Respondent in January 1993. A hearing was conducted on November 13, 1993, at which Respondent was represented by counsel. At that hearing, both Respondent and his wife, who had previously served as Respondent's secretary, testified as to circumstances and events relevant to the complaint. The Hearing Officer recommended a six-month suspension, probation, and restitution that encompassed Respondent's retainer ($375) as well as damages ($3,000) the client allegedly suffered as a result of Respondent's conduct. Pursuant to Rule 53(c)(5), Respondent filed his objection to the Hearing Officer's findings and recommendation. The Commission, by a five-to-four vote, generally adopted the Hearing Officer's findings of fact and conclusions of law. However, by the same vote, the Commission rejected the Hearing Officer's recommended sanctions, recommending instead a three-month suspension, probation, and $375 in restitution. The four dissenters believed a shorter but unspecified suspension was appropriate. Disciplinary Commission Report, November 2, 1994. Respondent appealed pursuant to Rule 53(e).
With this procedural background, we turn to the facts established in the record.
In June 1988, Arizona Pool Builders ("Arizona Pool") contracted with Client to build a swimming pool at his Apache Junction residence. Client arranged financing through a bank, which held the funds in escrow and paid them to Arizona Pool as construction progressed. The construction met with a multitude of problems, some details of which are relevant for background purposes.
It happened that Client's back yard, where the pool was to be installed, was essentially a landfill and was not structurally capable of supporting a pool without extensive excavation and backfilling. Apache Junction officials discovered the landfill when they arrived to extinguish an underground fire touched off by an Arizona Pool welder. The officials refused to permit construction to proceed until the necessary corrective ground work was accomplished.
Arizona Pool, however, soon went bankrupt and stopped working on the pool. Although Arizona Pool had been paid only for work done, and most of the funds still remained in escrow, Client had to expend funds beyond those originally contemplated to remove the landfill and backfill his property. Client ultimately found another contractor to complete the pool. Unfortunately, most of the work done by Arizona Pool had to be "undone" to accomplish the excavation work and then "redone" by the new contractor. The new contractor was paid primarily from the remaining escrow funds, with the balance of its charges paid directly by Client. The exact allocation of the amounts paid by Client between the unexpected groundwork and the duplication of Arizona Pool's original work is not established in the record.
Client believed that all amounts expended in excess of that originally contracted for with Arizona Pool were attributable to Arizona Pool's negligence. Accordingly, Client contacted the Registrar of Contractors to recover what he believed Arizona Pool owed him. The Registrar informed Client that no action could be taken unless and until the bankruptcy court lifted its stay in Arizona Pool's bankruptcy case. Client then retained counsel to get the stay lifted. The attorney originally retained by Client found that he had a conflict of interest and withdrew. Client then retained Respondent. The scope of this representation is now at issue.
Respondent's position is that he was initially retained by Client to look into the status of Arizona Pool's bankruptcy matter. Respondent maintains that he did just that, and in the course of doing so expended the $375 retainer. After informing Client that it was useless to proceed against Arizona Pool, Client terminated the representation. Client contends that he retained Respondent to get the stay lifted so that he could make a claim against the Contractor's Recovery Fund 1 ("Fund") and that he never asked Respondent to try to reach Arizona Pool's assets, including its contractor's license bond. Client further alleges that he never terminated the representation, that he believed Respondent was still working on the matter, and that Respondent failed to pursue the requested representation. As a result, Client alleges his claim against the Fund was barred by the statute of limitations.
In June or July 1989, after Client's original attorney withdrew, Client telephoned Respondent and discussed his claim against Arizona Pool. Client then sent Respondent copies of documents, including a letter from the Registrar, 2 a letter from Client's first attorney, 3 the bankruptcy notification in Arizona Pool's case, and a bankruptcy proof of claim form.
The Registrar's letter clearly indicated that Arizona Pool was in bankruptcy and that the Registrar could take no action until the stay was lifted. It also informed Client that he might qualify to recover from the Fund if he met certain conditions spelled out in the letter, one of which was filing a claim against the Fund before the two-year statute of limitations ran.
Respondent claims he made some telephone calls and determined that Arizona Pool was actually in bankruptcy, had no assets, and claims against its contractor's bond exceeded the bond's indemnity limit. Respondent wrote Client on August 11, 1989 informing him that:
According to your documents, [Arizona Pool] has filed bankruptcy. The form indicates there are no assets. There is no point in filing a proof of claim if there are no assets. There is nothing to be gained by paying out legal fees where there is no chance of recovery. Enclosed are your documents.
Whether Respondent actually enclosed documents is disputed.
Upon receiving Respondent's letter, Client telephoned and told Respondent that he did not want to go after Arizona Pool or its license bond but through the Registrar of Contractors. Respondent told Client to send him $375 for the time he had already spent, along with documentation to show the basis of his claim.
On September 1, 1989, Respondent received a letter 4 from Client confirming the prior telephone conversation and explaining that his goal was to recover from the Registrar of Contractors. It is true that Client never specifically mentioned the Fund by name, but based on the cumulative correspondence and his own testimony, Respondent must have known that this is exactly what Client referred to when he directed Respondent to "get my money back from the [Registrar] of Contractors." 5 Enclosed with this letter was a check for $375, a handwritten list of expenses without explanation, and copies of the same documents Client previously sent to Respondent.
What took place between September 1, 1989 and May 23, 1990 is hotly contested. Respondent claims he went to the Bankruptcy Court in person to check the records, confirmed the bankruptcy status of Arizona Pool, again informed Client that Arizona Pool was bankrupt with no assets, that Client never gave him the information he needed to proceed against the Fund, that Client never provided him with suitable information to establish the basis of his claim, that he telephoned Client around October 1, 1989 to give him this information, and that Client terminated the representation, stating that he would handle the matter himself. Client asserts that he made repeated attempts to contact Respondent by telephone to check on his case, that Respondent refused to return most of the telephone calls, and that he never discharged Respondent.
On May 23, 1990, Client sent Respondent a certified letter that read as follows:
I have tried repeatedly to get in touch with you regarding my paperwork on Arizona Pool and the registrar of contractors. Since you don't have the courtesy to return my calls, I think its time you just returned my money and papers and I will find a lawyer to handle it before my two year statute runs out. I am asking for all my money because you did not even read the letter. To start with, if you had read the letter you would have gone after the recovery fund and not the company's asset; of which there were none. I called once and talked [to you] but at the time you couldn't find the paper work so I read it to you off my copy. It's too bad you are so busy you can't help the little man. Please return everything and I will see what can be done. I hope your delay and neglect does not cause me any trouble and that...
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