Disciplinary Bd. of the Supreme Court of N.D. v. Dyer (In re Dyer)

• Decision Date: 07 June 2012
• Docket Number: 20120021,Nos. 20120020,20120023.,20120022,s. 20120020
• Parties: In the Matter of the Application for DISCIPLINARY ACTION AGAINST Edwin W.F. DYER, a Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner v. Edwin W.F. Dyer, III, Respondent. In the Matter of the Application for Disciplinary Action Against Anne E. Summers, A Member of the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner v. Anne E. Summers, Respondent.
• Court: North Dakota Supreme Court

817 N.W.2d 351

2012 ND 118

In the Matter of the Application for DISCIPLINARY ACTION AGAINST Edwin W.F. DYER, a Member of the Bar of the State of North Dakota.

Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner

v.Edwin W.F. Dyer, III, Respondent.

In the Matter of the Application for Disciplinary Action Against Anne E. Summers, A Member of the Bar of the State of North Dakota.

Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner

v.Anne E. Summers, Respondent.

Nos. 20120020, 20120021, 20120022, 20120023.

Supreme Court of North Dakota.

June 7, 2012.

Paul W. Jacobson, Disciplinary Counsel, Bismarck, N.D., for petitioner.

Michael Ray Hoffman, Bismarck, N.D., for respondent Edwin W.F. Dyer, III.

Gregory Ian Runge, Bismarck, N.D. for respondent Anne E. Summers.

PER CURIAM.

[¶ 1] Disciplinary Counsel and attorneys Edwin W.F. Dyer III and Anne E. Summers objected to a report of a hearing panel of the Disciplinary Board, recommending Dyer and Summers be suspended from the practice of law for violating N.D.R. Prof. Conduct 8.1(b) and each pay half of the costs of the disciplinary proceeding. We conclude there is clear and convincing evidence Dyer and Summers violated N.D.R. Prof. Conduct 1.15(c) and 8.1(b). We order Dyer and Summers be suspended from the practice of law for nine months and each pay half of the costs and expenses of the disciplinary proceeding.

I

[¶ 2] Dyer and Summers practice law together in Bismarck. Dyer has been licensed to practice law in North Dakota since 1980 and Summers has been licensed in North Dakota since 1982. On July 24, 2009, Disciplinary Counsel petitioned for discipline against Dyer and Summers, alleging they violated N.D.R. Prof. Conduct 1.15(c) by removing money from a client trust account for their own use before fees were earned and expenses were incurred and violated N.D.R. Prof. Conduct 8.1(b) by failing to supply requested records from the trust account to the inquiry committee as part of the disciplinary investigation.

[¶ 3] After the petitions were filed, Disciplinary Counsel requested Dyer and Summers produce records relating to their trust account for the period of September 2005 through March 2008, including monthly bank account statements, individual trust account statements for each client, records of attorney time and expenses for each client who had money deposited in the trust account, and bills forwarded to the clients. Dyer and Summers refused to provide the requested documents, arguing the information was confidential and disclosure would violate N.D.R. Prof. Conduct 1.6.

[¶ 4] Disciplinary Counsel moved to compel discovery. In November 2009, the hearing panel granted Disciplinary Counsel's motion and entered an order to compel, ruling attorney-client privilege does not bar the production of the requested records and a confidentiality order would protect the confidentiality of the records. The hearing panel ordered Dyer and Summers to produce monthly trust account bank statements, individual trust account records for each client who gave the attorneys money that was deposited in the trust account, and bills forwarded to the trust account clients. The hearing panel also ordered that information about the type of work performed could be redacted from the clients' bills and that Disciplinary Counsel keep the documents confidential.

[¶ 5] On December 14, 2009, Dyer and Summers sought a supervisory writ from this Court to vacate the hearing panel's order. In January 2010, we denied the writ. Dyer and Summers continued to refuse to comply with the order to compel. On March 17, 2010, the disciplinary petitions were amended to include allegations about Dyer and Summers' failure to comply with the order to compel.

[¶ 6] On September 15, 2011, a hearing was held before the hearing panel and Disciplinary Counsel presented evidence from three of Dyer and Summers' clients and bank records from the trust account. Dyer and Summers did not testify or offer any witnesses or exhibits.

[¶ 7] On January 12, 2012, the hearing panel entered its findings of fact, conclusions of law, and recommendations. The hearing panel concluded Disciplinary Counsel did not prove Dyer and Summers violated Rule 1.15(c) by clear and convincing evidence, and dismissed the alleged violations without prejudice finding the counsel's failure to produce evidence was likely attributable to Dyer and Summers' refusal to produce the individual client trust account records. The panel found Dyer and Summers had no valid basis for refusing to produce the trust account records, the information was not protected by Rules 1.6 or 1.15, and they violated Rule 8.1(b) by knowingly failing to respond to a lawful demand for information from a disciplinary authority. The panel recommended both attorneys “be suspended from the practice of law for nine (9) months and pay half the costs of the disciplinary proceeding in the amount of $3,957.26, with the potential of six (6) months or less to be suspended if reinstatement is ordered.” The panel also recommended that after two months of suspension, Dyer and Summers may apply for reinstatement but must comply with certain conditions before being allowed to return to the practice of law, including payingthe ordered costs, producing the trust account records within 30 days of the order of suspension, providing evidence demonstrating a plan for compliance with Rule 1.15, and refraining from further disciplinary complaints regarding the trust accounts.

II

[¶ 8] We review disciplinary proceedings de novo on the record. In re Disciplinary Action against Kirschner, 2011 ND 8, ¶ 9, 793 N.W.2d 196. “ ‘Disciplinary counsel must prove each alleged violation by clear and convincing evidence, which means the trier of fact must be reasonably satisfied with the facts the evidence tends to prove and thus be led to a firm belief or conviction.’ ” Id. (quoting Disciplinary Bd. v. Askew, 2010 ND 7, ¶ 8, 776 N.W.2d 816). We give the Disciplinary Board's findings, conclusions, and recommendations due weight, but we do not act as a mere rubber stamp. Kirschner, at ¶ 9. We consider each disciplinary matter on its own facts to decide which sanction, if any, is appropriate. Id.

III

[¶ 9] Disciplinary Counsel argues the hearing panel erred in concluding there was insufficient evidence Dyer and Summers violated N.D.R. Prof. Conduct 1.15(c). He claims there was evidence Dyer and Summers removed money clients had paid in advance from the client trust account for their own use before fees were earned or expenses were incurred on behalf of their clients.

[¶ 10] Rule 1.15, N.D.R. Prof. Conduct, provides that a client's property shall be appropriately safeguarded and the lawyer must deposit the client's funds in a client trust account and keep them separate from the lawyer's own property. Under N.D.R. Prof. Conduct 1.15(c), “A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.”

[¶ 11] Evidence presented at the disciplinary hearing included testimony from three of Dyer and Summers' clients, records for the trust account from the bank, and copies of invoices sent to the clients showing the amounts the clients paid and when the work was completed. Although the hearing panel found the trust account had a negative balance on multiple occasions and the records showed a pattern of transferring funds from the trust account to the business account in increments of $500 or $1,000 indicating Dyer and Summers were not complying with the rule, the hearing panel ultimately found Disciplinary Counsel failed to prove Dyer and Summers violated N.D.R. Prof. Conduct 1.15(c). After reviewing the record, however, we conclude there was clear and convincing evidence Dyer and Summers withdrew funds from the client trust account before the fees were earned or expenses were incurred, which violated N.D.R. Prof. Conduct 1.15(c).

[¶ 12] Scot Decker testified and presented evidence he paid Dyer and Summers a $4,000 retainer on June 19, 2007. A copy of the trust account's July 31, 2007, bank statement shows the account had a balance of negative $357.04 on July 10, 2007. There was evidence Decker received an invoice from Dyer and Summers dated February 8, 2008, showing $1,503.75 worth of work had been completed on Decker's case before July 10, 2007. Based on this evidence, the client trust account should have had a balance of at least $2,496.25 on July 10, 2007, for the portion of Decker's funds that had not been earned.

[¶ 13] Ruben Voigt, one of Dyer and Summers' clients, testified and presented evidence he paid a $5,000 retainer on November 9, 2007. There was evidence he received an invoice dated August 26, 2008, showing the work completed on his case totaled $2,770.21 up to that date and the balance of his trust account on that date was $2,229.79. A copy of the February 29, 2008, bank statement for the trust account was admitted and showed the trust account had a balance of $98.83 on February 7, 2008. Voigt paid a $5,000 retainer prior to February 7, 2008, and the August 26, 2008, invoice showed the balance of Voigt's funds in the trust account at that time was $2,229.79. The trust account should have had a balance of at least $2,229.79 on February 7, 2008, for the portion of Voigt's funds that had not been earned.

[¶ 14] Shane Krueger testified and presented evidence he paid Dyer and Summers a $2,000 retainer on October 16, 2007. There was evidence Krueger received an invoice from Dyer and Summers dated December 1, 2008, showing the work completed on his case at that time. There was evidence from the February 2008 bank statement that the trust account had a balance of $98.83 on February 7, 2008, and Krueger's invoice showed $1,529.50 in work had been completed on his case at that point. There was evidence the trust account should have contained...