In re Disciplinary Action Against Crary, 20010200.
Decision Date | 15 January 2002 |
Docket Number | No. 20010200.,20010200. |
Citation | 638 N.W.2d 23,2002 ND 9 |
Parties | In the Matter of the Application for DISCIPLINARY ACTION AGAINST Paul T. CRARY, a Person Admitted to the Bar of the State of North Dakota. Disciplinary Board of the Supreme Court of the State of North Dakota, Petitioner, v. Paul T. Crary, Respondent. |
Court | North Dakota Supreme Court |
Loralyn Kay Hegland, Assistant Disciplinary Counsel, Bismarck, for petitioner.
Paul T. Crary, Fargo, pro se.
[¶ 1] Disciplinary counsel filed a petition for discipline against Paul T. Crary. Crary contested the allegations of misconduct and a hearing was held before a hearing panel. The hearing panel issued its report on July 31, 2001, recommending that Crary be disbarred and that he be ordered to pay restitution to the victim. Crary failed to file a brief with this Court opposing the recommendations.1 We adopt the recommendations of the hearing panel and order that Crary be disbarred, that he pay restitution, and that he pay the costs of the disciplinary proceedings.
[¶ 2] Paul Crary has been admitted to practice law in North Dakota since 1965. In 1997, Crary's wife became acquainted with 85-year-old Mary Harris. In August 1997, Harris asked to meet with Crary to prepare a new will. Crary drafted a will for Harris, and Harris also signed documents giving Crary power of attorney. Although Harris was not related to the Crarys, over the next two-and-one-half years Crary and his wife provided general assistance to Harris, including bringing her meals, taking her to medical appointments, and visiting her regularly.
[¶ 3] In December 1997, Crary drafted a codicil to Harris's will. The codicil provided that Crary's wife would receive one-half of any funds which Harris's estate received from insurance companies, including annuities, life insurance policies, and other benefits. Crary's wife also was to receive a grandfather clock under the codicil to Harris's will.
[¶ 4] Harris also asked Crary to help with her investments. In September 1997, Crary assisted Harris in purchasing a $42,000 annuity from the Independent Order of Foresters ("IOF"). In December 1997, Crary had Harris purchase a $10,000 annuity from IOF. In January 1998, Crary assisted Harris in cashing out an existing $100,000 annuity she had purchased just over a year earlier from Bankers Life and Casualty. Harris received approximately $92,000 in proceeds from the Bankers Life annuity, and used those funds to purchase a $90,000 annuity from IOF. Throughout this series of transactions Crary never told Harris he was an agent for IOF and received commissions on the annuities she purchased.
[¶ 5] In September 1998, Harris gave Crary a check for $3,500. A note on the memo line of the check indicated it was a loan to Crary. Harris testified Crary promised to repay the loan within six months with eight percent interest. Crary never repaid the $3,500 to Harris.
[¶ 6] The relationship between Harris and the Crarys eventually soured, and in January 2000 Harris terminated Crary's legal representation. In October 2000, disciplinary counsel filed a petition for discipline, and a hearing panel was appointed. Following a hearing, the hearing panel concluded that: (1) the $3,500 payment to Crary was a loan which constituted a prohibited transaction in violation of N.D.R. Prof. Conduct 1.8(a); (2) the annuity purchases upon which Crary received commissions were prohibited transactions under N.D.R. Prof. Conduct 1.8(b); and (3) Crary's drafting of the codicil devising property to his wife was a prohibited transaction under N.D.R. Prof. Conduct 1.8(c). The hearing panel recommended that Crary be disbarred and ordered to pay restitution to Harris.
[¶ 7] We review disciplinary proceedings de novo on the record under a clear and convincing standard of proof. In re Dvorak, 1998 ND 134, ¶ 15, 580 N.W.2d 586; In re Lamont, 1997 ND 63, ¶ 8, 561 N.W.2d 650. In the context of disciplinary proceedings, de novo means we accord due weight to the findings, conclusions, and recommendations of the hearing panel, but we do not act as a mere rubber stamp. In re Howe, 2001 ND 86, ¶ 6, 626 N.W.2d 650. We consider each case on its own facts to decide what discipline is warranted. Id. Because the hearing panel had the opportunity to hear the witnesses and observe their demeanor, we accord special deference to its findings on matters of conflicting evidence. Id.
[¶ 8] The hearing panel found that Harris loaned $3,500 to Crary, that Crary failed to advise Harris she could consult another attorney about the transaction, and that Crary never repaid the $3,500. The panel concluded this transaction violated N.D.R. Prof. Conduct 1.8(a), which provides:
[¶ 9] Harris testified that Crary asked to borrow the money and said he would pay it back within six months with eight percent interest. She also testified he did not advise her to consult another attorney about the transaction. The check bears the notation "Lone [sic] to Paul Crary" on the memo line, and Harris testified she wrote that notation.
[¶ 10] When Crary was asked at the hearing whether he advised Harris to seek independent counsel when he received the $3,500, he replied:
[¶ 11] At the hearing, Crary admitted that he asked Harris for the $3,500. When asked whether the $3,500 was a loan, Crary responded:
A. Well, at the—I don't remember at the time exactly how I looked at it, but when I started looking at my out-of-pocket expenses on the thing, I could see where it couldn't have been a loan, because I had out-of-pocket expenses of several thousand dollars on this deal.
Crary's response suggests that, in hindsight, he believed he was entitled to keep the $3,500 as compensation for the personal services and expenses he and his wife had provided to Harris. Although it is clear from the record that Crary and his wife did provide personal services to Harris, the record is equally clear that there was no agreement, express or implied, for payment for those services. Nor did Crary argue the $3,500 was for legal services or expenses he had provided.
[¶ 12] On this record, we agree with the hearing panel's finding that the $3,500 was a loan to Crary at his request, that Crary did not advise Harris to seek independent counsel before entering into the transaction, and that Crary never repaid the loan. Crary's conduct violated N.D.R. Prof. Conduct 1.8(a).
[¶ 13] The hearing panel found that Crary, while acting as Harris's lawyer and with power of attorney, had Harris cash in other annuities and investments to purchase annuities from IOF without advising Harris that he was an agent for IOF and would receive commissions on those transactions, and without advising her to seek independent legal advice about the transactions. Disciplinary counsel argues Crary's conduct violated N.D.R. Prof. Conduct 1.8(b), which provides:
(b) Except as permitted or required in Rules 1.6 and 3.3, a lawyer shall not use information relating to representation of a client to the disadvantage of the client for purposes of furthering either the lawyer's or another person's interest unless after consultation, including advice to seek independent counsel, the client consents.
[¶ 14] Harris testified that Crary never told her he worked for IOF and received a commission on these transactions, and did not advise her to seek independent legal advice about the transactions. Crary testified Harris "must have known" he was an agent of IOF because he filled out the applications with her:
[¶ 15] Crary's assertion that Harris "must have known" he was an agent of IOF and receiving commissions merely because he procured the applications and assisted Harris in filling them out is not...
To continue reading
Request your trial-
In re Disciplinary Action against Bullis
...to hear the witnesses and observe their demeanor, we accord special deference to its findings on matters of conflicting evidence. In re Crary, 2002 ND 9, ¶ 7, 638 N.W.2d [¶ 13] The hearing panel found that Bullis violated N.D.R. Prof. Conduct 1.7(a), (b), and (c),1 which provide: (a) A lawy......
-
In re Disciplinary Action Against Garaas, No. 20020103
...3.1(F)(1). II [¶ 11] We review disciplinary proceedings de novo on the record. In re Edwardson, 2002 ND 106, ¶ 9, 647 N.W.2d 126; In re Crary, 2002 ND 9, ¶ 7, 638 N.W.2d 23. We accord due weight to the findings and conclusions of the hearing panel, but we do not act as a mere rubber stamp. ......
-
In re Disciplinary Action Against Giese
...3.1(F). II [¶ 7] We review disciplinary proceedings de novo on the record. In re Edwardson, 2002 ND 106, ¶ 9, 647 N.W.2d 126; In re Crary, 2002 ND 9, ¶ 7, 638 N.W.2d 23. We accord due weight to the hearing panel's findings and conclusions, but we do not act as a mere rubber stamp of the hea......
-
In re Application for Disciplinary Action Against Hoffman, No. 20030141
...and 4.4. [¶ 8] This Court reviews disciplinary proceedings de novo on the record. In re Edwardson, 2002 ND 106, ¶ 9, 647 N.W.2d 126; In re Crary, 2002 ND 9, ¶ 7, 638 N.W.2d 23. Disciplinary counsel bears the burden to prove by clear and convincing evidence the accused attorney violated the ......