Discipline of Drakulich, In re

• Citation: 111 Nev. 1556,908 P.2d 709
• Decision Date: 19 December 1995
• Docket Number: No. 21321,21321
• Parties: In re DISCIPLINE OF Victor G. DRAKULICH.
• Court: Supreme Court of Nevada

Page 709

908 P.2d 709

111 Nev. 1556

In re DISCIPLINE OF Victor G. DRAKULICH.

No. 21321.

Supreme Court of Nevada.

Dec. 19, 1995.

Bradley & Drendel; Hamilton & Lynch, Reno, for Appellant.

C.A. Olendorff, Las Vegas, for Respondent State Bar of Nevada.

OPINION

SPRINGER, Justice:

This is an automatic appeal from findings and recommendations of a hearing panel of the Northern Nevada Disciplinary Board of the State Bar of Nevada. The panel found that, on numerous occasions, appellant, attorney Victor G. Drakulich, shared with an individual named Harold Hall a portion of the attorney's fees appellant earned for representing clients who had been referred to appellant by Hall. The panel further found that appellant's actions violated a number of the Nevada Rules of Professional Conduct.

Based upon these findings, the panel recommends that this court suspend appellant from the practice of law in this state for a period of ninety days and assess the costs of the disciplinary proceedings against appellant. For the reasons which follow, however, we conclude that clear and convincing evidence does not support the panel's findings. Accordingly, we reject the panel's findings and recommendation.

THE FACTS

On April 9, 1990, Bar Counsel for the State Bar of Nevada filed with the Northern Nevada Disciplinary Board a four-count disciplinary complaint against appellant. ¹ Following two days of hearings, a disciplinary hearing panel returned findings of misconduct on only one of the four counts. Specifically, the panel found that appellant had committed the misconduct charged in Count IV, which alleged:

During 1988, [appellant] paid referral fees to Harold Hall, a non-lawyer then employed at the Reno Orthopedic Clinic for referring clients with potential personal injury claims to [appellant's] law office. [Appellant's] actions were in violation of Supreme Court Rules (SCR) 187, 188.1, 196.3, 197 and 203.1.

Bar counsel's case against appellant consisted primarily of the testimony of two of appellant's former legal secretaries, Muriel Skelly and Jan Marie Stellmach, and of various items of documentary evidence. The pertinent evidence adduced at the hearing is detailed below.

Muriel Skelly's Testimony

Muriel Skelly testified that, prior to becoming a licensed Nevada attorney in 1987, she worked for appellant as a legal secretary and legal assistant for two and one-half years beginning in April 1985. She maintained appellant's files and financial ledgers. She also wrote and signed checks. Skelly told the panel that Harold Hall would telephone appellant's office approximately once a week and would "give names of clients that he had told to get in touch with us." When she conveyed Hall's messages to appellant, appellant made no comments.

Bar counsel asked Skelly if she had ever heard appellant state that Hall was compensated for referring clients to appellant. Skelly answered: "No." Bar counsel also asked Skelly if Hall ever performed any investigative services, or asset checks with regard to appellant's clients and cases. Skelly answered: "Not to my knowledge." Skelly stated that she never saw Hall submit any bills to appellant's office, and that she had received instructions from appellant that "Al over at Business and Professional Collection Service would do any credit checks or asset checks that we needed because he was a client of ours."

Jan Marie Stellmach's Testimony

Stellmach testified that she worked for appellant as a legal secretary from 1987 until January 1989. She stated that she left appellant's employ because "someone told me ... that he was being investigated by the Bar Association." She further stated, however, that she did not "have a grudge against Mr. Drakulich."

In addition to clerical duties at appellant's office, Stellmach testified that she was responsible for bookkeeping, including the maintenance of the ledger sheets. Eventually, appellant also authorized her to write and sign checks.

Stellmach came to know Harold Hall as a result of his telephone calls and visits to appellant's office. Although she was unable to confirm exactly when appellant made the remark, Stellmach testified that appellant told her that "Mr. Hall was at that time office manager of a group of orthopedic physicians and that he referred cases over and he in turn got a ten percent referral fee." ² Stellmach said that she never saw any bills submitted by Hall for investigative services or asset checks, and like Skelly, Stellmach was only able to testify that she had no knowledge of Hall ever performing asset checks or investigative services for appellant. She also testified that appellant used a collection agency to perform asset checks.

Stellmach identified various items of documentary evidence introduced by bar counsel, including checks made out to Hall drawn on appellant's account and ledger entries from appellant's office files. This documentary evidence related to three cases involving clients that Hall had referred to appellant's office: (1) the "Griffey/Sabatini" case; (2) the "Colfer" case; and (3) the "Neff" case.

In the Griffey/Sabatini matter, a personal injury case, Stellmach identified a check drawn on appellant's account made payable to Hall in the amount of $616.74. The check was signed by Stellmach, and contained a notation that it was payment for "investigative services." Stellmach testified that she wrote the check at appellant's direction, that appellant instructed her to make the notation "investigative services" on any checks made payable to Hall, and that the amount of the check was ten percent of the fee appellant earned in the case. Stellmach also identified a client ledger entry from appellant's office files verifying that the amount of the check was exactly ten percent of appellant's fees, that the check was drawn on appellant's general account, and that, unlike payments made to other investigators employed by appellant, the payment to Hall was not charged as "costs" to the clients in any way. In other words, as Stellmach confirmed, the payments to Hall came out of appellant's pocket and were not charged to the client.

In the Colfer case, a case involving a suit against a local nightclub, Stellmach identified two checks drawn on appellant's account made payable to Hall in the total amount of $575.00. One of the checks was in the amount of $275.00 and was signed by appellant after Stellmach left appellant's employ. It contains a notation indicating that it was payment for an "asset check" of the nightclub involved. The other check, written to Hall in the amount of $300.00, was written and signed by Stellmach before she left appellant's office. This check contains the notation, "Colfer-investigative services." Stellmach testified that appellant told her that Hall "would be given a ten percent referral fee on that [the Colfer] case." Stellmach also identified a notation which she entered in the office ledger sheets corresponding to the $300.00 check. The notation states, "deduct $300 from fees." Stellmach explained that the payment to Hall in the Colfer case was made prior to the final settlement in that matter because Hall had "called the office some--minimum of half dozen times saying that his kids would have no Christmas if he wasn't advanced money."

Stellmach further identified a check drawn on appellant's general account made payable to Hall in the amount of $500.00. The check contains the notation: "legal assistance Kelly Neff." She stated that the check was written out by her, but signed by appellant. She verified from the ledger sheets that appellant's attorney's fees in the Neff case were $5,500.00.

Appellant's Testimony

In response to Stellmach's testimony, appellant testified that he never had any agreement whatsoever with Hall to pay him any part of the fees appellant earned in cases that Hall referred to appellant. Rather, any payments to Hall were for investigative services, asset checks and other work that Hall performed in the cases at issue.

Appellant explained that he has known Hall ever since appellant was about 10 years old. In his late teens, Hall was involved in a serious car accident which left him with neurological damage. As a result, Hall became a "different sort of person" who had difficulty remembering, in moving about, and in maintaining jobs. Hall worked for a time collecting overdue bills at the Reno Orthopedic Clinic. At one point during this period, Hall experienced financial difficulties and needed extra money for his wife and children. When Hall expressed a desire to become an investigator, appellant explained that it was not as easy as it seemed. Nonetheless, appellant told Hall he would try to find extra work for him.

Thereafter, Hall referred Kelly Neff to appellant. Neff was a personal friend of Hall's and had been injured in an automobile accident. At appellant's request, Hall obtained medical bills and records relating to Neff's injuries and a copy of the police accident report. When Neff experienced problems in obtaining medical treatment because of a lack of insurance, Hall was helpful in finding a specialist to treat Neff. Hall also ran a check on the personal assets of the woman who was responsible for the accident, and was helpful in keeping track of Neff and in updating him on the progress of the case. Appellant testified that he believed the $500.00 he paid Hall was reasonable for the work that Hall did in the case. Appellant also explained that he represented a passenger referred to him by Hall who was injured in the car along with Neff. Hall received no payments with respect to that case, however, because Hall performed no work in that case.

Similarly, appellant testified that the payment Hall received relating to the Griffey/Sabatini matter was simply a payment for work that Hall performed and not part of a fee-splitting, or referral fee arrangement. As with Neff, Hall was personally acquainted with Sabatini, who was the brother of Hall's boss...