Discipline of Stanton, Matter of, 15822

• Decision Date: 16 August 1989
• Docket Number: No. 15822,15822
• Citation: 446 N.W.2d 33
• Parties: In the Matter of the DISCIPLINE OF David J. STANTON, as an Attorney at Law.
• Court: South Dakota Supreme Court

Page 33

446 N.W.2d 33

In the Matter of the DISCIPLINE OF David J. STANTON, as an Attorney at Law.

No. 15822.

Supreme Court of South Dakota.

Argued Feb. 15, 1989.

Decided Aug. 16, 1989.

R. James Zieser, Tyndall, for Disciplinary Bd.

David J. Stanton, Rapid City, pro se.

MORGAN, Justice.

This is a disciplinary proceeding under the provisions of SDCL ch. 16-19 against David J. Stanton (Respondent), a member of The State Bar of South Dakota (State Bar). Respondent was admitted to practice as an attorney and counselor-at-law before the courts of the State of South Dakota in 1971. After admission, Respondent practiced briefly with the State Attorney General, worked for the State Supreme Court and, since 1973, engaged in private practice in Rapid City, South Dakota.

Numerous complaints regarding Respondent's representation of clients in the practice of law had been reported to the Disciplinary Board (Board) of the State Bar, which undertook to investigate the complaints. A report from that Board ¹ to this court resulted in an order on June 11, 1987, authorizing the filing of the formal accusation. By formal accusation filed on June 30, 1987, Respondent was accused of numerous acts which were violations of the Code of Professional Responsibility; in particular, the Disciplinary Rules within the purview of Canon 1: maintenance of the integrity and competence of the legal profession; Canon 4: preservation of the confidences of a client; Canon 6: competent representation of a client; and Canon 9: avoidance of even the appearance of professional impropriety. ²

The formal accusations were served by mail on June 29, 1987. A thirty-day extension was granted Respondent in which to answer the formal accusations. Respondent's answer was filed on September 2 1987. The answer generally denied any wrong doing or fault. This court, having reviewed the accusation and answer, determined that it was necessary to appoint a referee and, by order dated September 11, 1987, did appoint the Honorable Richard D. Hurd (Referee), a Circuit Judge of the State of South Dakota, to take and hear testimony and submit findings and a recommendation to this court.

Pursuant to his authority, Referee, after a telephonic conference, set the evidentiary hearing in Rapid City, to commence on January 5, 1988. Thereafter, Respondent made or caused to be made three requests for continuance of the hearing on the grounds that he had not obtained counsel. All requests were denied. An evidentiary hearing was held on January 5 and 6, 1988, at the close of which Respondent was advised that he had forty-five days to obtain an attorney or evidence would be closed. When Respondent failed to meet the forty-five-day deadline, Referee advised him that his proposed findings, conclusions and recommendations should be submitted by March 10, 1988. Thereafter, another flurry of requests for continuances to obtain counsel ensued. Finally, by letter dated May 9, 1988, attorney Rick Johnson advised Referee that he was representing Respondent ³. On August 15 and 16, 1988, an additional evidentiary hearing was held in Rapid City, at the close of which Referee announced that he might be forced to recommend disbarment in his report to the Supreme Court, if there was no other way to protect the public. Each party was given ten days to submit proposed findings, conclusions or recommendations.

Referee's report, including findings of fact, conclusions of law and recommendations, was dated September 8, 1988, and filed in this court on September 12, 1988. The transcript of Referee's hearings was filed on December 19, 1988, and, by order of this court, the last day for service and filing of objections to the report was January 3, 1989. Respondent filed no objections. The matter was then set for hearing before this court on February 15, 1989. This court heard arguments from counsel for Board and from Respondent pro se and gave Respondent twenty days within which to file written objections.

Respondent's objections took several forms. First, he submitted a "Motion to Reject Prosecution by Bar Examiners ⁴ and for an Order for New Bar Investigation." The motion was based on alleged conflicts of interest of Board's president and Board's investigator, in that they or the law firms in which they were partners had retainer contracts with one of the parties to a quiet title action arising from one of the actions of Respondent under review by Board. He further sought to exclude all testimony of one John Fousek, who had testified before Board regarding the bankruptcy transactions wherein Respondent was charged with various violations. Fousek, himself, had since absconded with a considerable amount of bankruptcy property. Through the motion and continuing through Respondent's proposed findings of fact and conclusions of law, it has been Respondent's position that his problems are related to the activities of Fousek in taking bankruptcy business away from him and hounding him for repayment of fees received without authority of the Bankruptcy Court. Respondent also made mention of being disabled by reason of an adrenaline attack, which he characterizes as a heart attack, that effectively disabled him for a period of nine months. Otherwise, he disputes Referee's findings and conclusions as though they were simply fabrications of others.

We deem it expedient to first dispose of Respondent's motions seeking to derail this proceedings. The first is the motion to exclude the testimony of John Fousek and to stay further proceedings. The import of the motion is that Fousek, who was a witness in this proceeding regarding Respondent's handling of several bankruptcy cases, has since absconded with a large amount of bankruptcy assets and has been the target of two malpractice suits in Pennington County. Respondent seeks to stay further action in this proceeding until a full investigation of Fousek's affairs can be had. We agree with the response of Board, to the effect that Fousek has now brought discredit on himself and the profession, ⁵ but that his testimony regarding Respondent's unprofessional handling of bankruptcy cases is fully supported by the testimony of other counsel who appeared and testified, as well as by the testimony of some of the clients. We deny Respondent's motion in that regard.

We next examine the motion to reject the prosecution by the "Bar Examiners" and for an order for a new Board investigation. Respondent first attacks the participation of Terrence Quinn, who is chairman of Board, on the grounds that Quinn's firm was engaged in a lawsuit which was an outgrowth of one of the complaints before the Board. What Respondent neglects to mention is that Mr. Quinn recognized the conflict of interests and did not participate in the discussion or decision of Board, except to sign the various documents as chairman of the Board. Respondent next attacks the participation of Robert Amundson, then employed as an investigator for Board, and whose partner, Pete Fuller, was retained by St. Joseph Mining, a company involved in the litigation arising from one of the cases from which a complaint arose. It appears from Board's response that Fuller's representation was solely in the area of securing mining permits and did not involve the litigation in question, which was handled by a different attorney, who was in fact a member of the Quinn firm. Respondent also urges as grounds for his motion that Amundson "employed a procedurally unfair practice" by soliciting complaints from three of his former clients. Board's response indicates that the meeting was set up by others, the State Bar was notified, and Amundson appeared as requested and merely advised the clients what they must do if they wanted to file complaints. Finally, as Board points out, in this regard, Mr. Amundson was merely an investigator, performing a routine investigation and had no vote as a member of Board. We deny Respondent's motion in this regard. We add that we know that the work of the Board and its investigators is not a happy task. They put in many hours in this very necessary endeavor to police the ranks of the Bar. We deem Respondent's attack on the ethics of the gentlemen named in his motion to be totally uncalled for, even as a desperation move in the face of Referee's report.

Because Respondent contests Referee's decision, we first determine the scope of our review as regards Referee's report. We have held:

While the findings of the referee are not conclusive, we must consider them carefully because the referee had the advantage of seeing and hearing the witnesses. If the referee's findings are supported by the evidence, they will not be disturbed by the Supreme Court.

Matter of Discipline of Dana, 415 N.W.2d 818, 822 (S.D.1987). This court has consistently refused to disturb the findings of the referee where they are supported by the evidence. Dana, supra; Matter of Discipline of Strange, 366 N.W.2d 495 (S.D.1985); Matter of Discipline of Theodosen, 303 N.W.2d 104 (S.D.1981); Matter of Walker, 254 N.W.2d 452 (S.D.1977); In re Jaquith, 79 S.D. 677, 117 N.W.2d 97 (1962); In re Goodrich, 78 S.D. 8, 98 N.W.2d 125 (1959); In re Schmidt, 70 S.D. 161, 16 N.W.2d 41 (1944).

The standard of our review of the evidence to support a referee's findings was established in the case of In Re Elliott, 18 S.D. 264, 100 N.W. 431 (1904), wherein we said:

In view of the nature and consequences of an accusation which justifies the removal or suspension of an attorney, the uniform current of authority requires the charges in such cases to be established by a clear and undoubted preponderance of the testimony.

18 S.D. at 265, 100 N.W. at 432. Accord: Jaquith, supra; Goodrich, supra; In re Sherin, 27 S.D. 232, 130 N.W. 761 (1911). We have considered Referee's report in light of the record, using the standard established in Elliott, supra.

Respondent is accused of and Referee found him subject to discipline for conduct in violation...