Idaho State Bar v. Smith

Citation513 P.3d 1154
Decision Date15 July 2022
Docket NumberDocket No. 49155
Parties IDAHO STATE BAR, Petitioner-Respondent, v. Vernon K. SMITH, Jr., Respondent-Appellant.
CourtUnited States State Supreme Court of Idaho

Vernon K. Smith, Jr., Attorney at Law, Boise, attorney for Appellant.

Bradley Andrews, Idaho State Bar, Boise, attorney for Respondent.

BEVAN, Chief Justice

This is an attorney discipline case. Vernon K. Smith, Jr., ("Smith") appeals the Findings of Fact, Conclusions of Law, and Recommendation of the Hearing Committee of the Professional Conduct Board of the Idaho State Bar ("the Committee"). The Committee recommended suspending Smith from the practice of law for two years and imposing a condition that Smith pass the Multistate Professional Responsibility Exam ("MPRE") before being reinstated. Smith argues the Committee's decisions are not supported by clear and convincing evidence and contends his family history and other mitigating factors show the recommendation and sanctions are inappropriate. Smith timely appealed to this Court. We affirm. However, we impose a sanction over and above that recommended by the Committee.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Course of Disciplinary Proceedings and Background

On September 2, 2020, the Idaho State Bar ("the Bar") filed a complaint against Smith alleging three counts of professional misconduct encompassing six Idaho Rules of Professional Conduct and requested Smith's suspension.

Count One alleged violations of multiple provisions of the Idaho Rules of Professional Conduct (I.R.P.C.): Rule 1.7(a)(2), engaging in a conflict of interest; Rule 2.1, failing to exercise independent professional judgment and render candid advice in representing a client; Rule 8.4(c), engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; and Rule 8.4(d), engaging in conduct prejudicial to the administration of justice. Count Two alleged a violation of Rule 5.4(a), sharing legal fees with a nonlawyer, and Rule 5.4(d), practicing with or in the form of a professional corporation or association authorized to practice law for a profit where a nonlawyer owns an interest in it. Count Three also alleged Smith violated Rule 8.4 (c) and (d) by engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, and by engaging in conduct prejudicial to the administration of justice.

Smith filed his answer on September 22, 2020. In December 2020, he moved to dismiss the complaint, which the Bar opposed. On January 15, 2021, the Committee held a hearing on Smith's motion and denied it. Following a series of dispositive motions from both parties, the case proceeded to a disciplinary hearing before the Committee on June 28 and 29, 2021. A disciplinary hearing was ultimately conducted by the Committee. The Committee made forty-nine findings of fact relevant to the three counts alleged against Smith.

On August 13, 2021, the Committee issued its Findings of Fact, Conclusions of Law, and Recommendation, recommending that Smith be suspended from the practice of law for two years. The Committee concluded the Bar had proved all three counts alleged in the complaint by clear and convincing evidence and recommended Smith be suspended from the practice of law for two years, with no reinstatement until after Smith took the MPRE and passed with a minimum scaled score of 85.

Smith moved to alter or amend the Committee's Findings of Fact, Conclusions of Law, and Recommendation, which the Committee denied. Smith timely filed his appeal to this Court.

1. Facts related to Count One of the Complaint.

Smith was the attorney for his mother, Victoria Smith. In 1976, Smith became the "exclusive attorney providing legal advice" to Victoria. According to Smith, he represented Victoria "as an attorney if and when she requested [his] assistance." This representation was because he could "uniquely provide for, not only the financial needs of Victoria, but also her legal needs[.]" On February 14, 1990, about twenty-three years before she died, Victoria executed a holographic will that bequeathed all her assets to Smith and disinherited her two other children, Joseph Smith and Victoria (Vicky) Smith Converse. Smith was the only person with Victoria when she executed the will, and he served as the sole witness. Between 1997 and 2013, Smith acted as the attorney for Victoria in several legal matters.

The financial and legal relationship between Victoria and Smith was one of the matters Joseph testified to during the disciplinary hearing against Smith. In that disciplinary hearing, Joseph testified that he managed several pieces of Victoria's real property when Victoria signed the will in 1990. Joseph testified that when Victoria executed the will, he was not estranged from her. He first learned about the will several days after her funeral in September 2013. Based on this testimony, the Committee concluded there was "clear and convincing [evidence] that Joseph did not know that Victoria had executed a will or that he had been disinherited until after Victoria's death."

On July 15, 1999, nine years after she executed the holographic will, Victoria executed a durable power of attorney ("first POA"). She was 85 years old. The document named Smith as Victoria's attorney-in-fact and stated it would "endure the event of disability and death" of Victoria. Smith's legal assistant, Carolyn Puckett, notarized the document. Smith testified he prepared the first POA at Victoria's request because she wanted him to "have a power of attorney to do whatever [he] wanted to do with [her] properties." Smith waited until October 6, 2014—three days after Joseph commenced probate proceedings of Victoria's estate, to record the first POA.

On April 11, 2008, Victoria, then 94 years old, executed a second power of attorney ("second POA"). The second POA also named Smith as Victoria's attorney-in-fact, and it listed his authority as "unconditional, unlimited and all inclusive" as to her affairs and legal rights, including over her real property. John Gibson, Smith's legal receptionist, notarized the second POA. The second POA also provided:

This Durable Power of Attorney is irrevocable and shall remain in full force and effect, having been coupled with adequate consideration, and shall not be affected, altered or impaired by the event of my death or disability, and shall continue in effect for all time, as it has been my long-standing intention and desire that my son, Vernon K. Smith Jr., shall be the sole and exclusive heir of my entire estate, as I have so declared openly in the past many years, because of his commitment, dedication, and devotion to my best interests, welfare, and financial well being.

The next year, Smith married his second wife, Vicki. On May 1, 2009, Smith drafted and executed a post-nuptial personal property ownership agreement. This agreement assigned and transferred all Smith's separate personal property interests to Vicki and relinquished his rights to claim any community property interests obtained after April 19, 2009. When Smith executed the agreement, he had several creditors; Vicki testified she had none.

Several years later, on July 3, 2012, Smith formed VHS Properties, LLC, and listed himself and Victoria as members. When Smith formed VHS, Victoria was 99 years old. The next day, Smith drafted and executed a document ("transfer document") that transferred Victoria's real and personal property to VHS for $10 consideration and other "good and valuable lawful consideration." Smith executed the transfer document "pursuant to his exclusive Durable, and Irrevocable Power of Attorney" purportedly on Victoria's behalf. The document stated, in part:

WHEREAS: Victoria H. Smith had before executed her Last Will and Testament on February 14, 1990, designating therein her son, Vernon, to her sole and exclusive Heir, having done so through the formation of her Holographic Will, written by [sic] her own stationary, in her own handwriting, signed and dated by her, being done deliberately in that fashion to emphatically to [sic] convey her intentions, and to avoid any appearance of any influence by anyone having chosen to do so in accordance with the way in which her husband, Vernon K. Smith, Sr., a well-known attorney in Boise, Idaho, had so executed his Last Will and Testament by such holographic means, by which Victoria H. Smith acquired his entire inheritance to the exclusion of anyone else; and,
WHEREAS: Vernon has always been the sole source of all management, maintenance, financial means, operation and control of all assets of Victoria H. Smith, beginning after his Father's death, and especially since and after his becoming an Attorney in 1971, having at all times thereafter dedicated his life to the preservation of Victoria's assets and providing for her living need[s] and satisfaction of any obligation ....

Royal Von Puckett—Smith's friend and client who secured a judgment against Smith's ex-wife and later assigned it to Smith—notarized the signatures on the transfer document, transferring Victoria's property. See Puckett v. Bergmann , 167 Idaho 403, 470 P.3d 1212 (2020). The transfer document claimed Smith had always been the sole source of management for Victoria's assets, but during the disciplinary hearing, Joseph disagreed and testified that he was also involved in the management of Victoria's assets. The Committee concluded Smith "exaggerated his exclusive role as manager of Victoria's properties and business enterprises prior to 1992."

Along with transferring Victoria's real and personal property, Smith also drafted and executed a document on Victoria's behalf transferring and assigning Victoria's interest in VHS to himself on July 4, 2012, using the second POA. Von Puckett also notarized Smith's signature on that document. Later the same day, Smith prepared six quitclaim deeds reflecting his transfer of Victoria's real property to VHS. The deeds transferred property known as "the Chinden Property," "the Gowen Property," ...

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