IN RE DISCIPLINARY ACTION AGAINST LYONS, No. A09-472.

• Citation: 780 N.W.2d 629
• Decision Date: 08 April 2010
• Docket Number: No. A09-472.
• Parties: In re Petition for DISCIPLINARY ACTION AGAINST Thomas John LYONS, Jr., a Minnesota Attorney, Registration No. 249646.
• Court: Supreme Court of Minnesota (US)

780 N.W.2d 629

In re Petition for DISCIPLINARY ACTION AGAINST Thomas John LYONS, Jr., a Minnesota Attorney, Registration No. 249646.

No. A09-472.

Supreme Court of Minnesota.

April 8, 2010.

Martin A. Cole, Director, Timothy M. Burke, Senior Assistant Director, Office of Lawyers Professional Responsibility, St. Paul, MN, for petitioner.

Eric T. Cooperstein, Minneapolis, MN, for respondent attorney.

OPINION

PER CURIAM.

In March 2009, the Director of the Office of Lawyers Professional Responsibility (Director) served and filed a petition for disciplinary action against respondent Thomas Lyons, Jr. The Director alleged that Lyons' failure to disclose his client's death during settlement negotiations and false and misleading statements made to opposing counsel and to the Director about the client's death constituted unprofessional conduct warranting public discipline. Lyons served and filed a general denial. Pursuant to Rule 14 of the Minnesota Rules on Lawyers Professional Responsibility (RLPR), a referee hearing was held, after which the referee filed findings of fact, conclusions of law, and a recommendation for discipline with our court. The referee recommended that Lyons be indefinitely suspended from the practice of law in the State of Minnesota with no right to petition for reinstatement for a minimum of 12 months. We adopt the referee's recommended discipline.

Lyons was admitted to practice law in Minnesota on October 28, 1994. At all times relevant to these proceedings, Lyons was engaged in the practice of law at a law firm known as the Consumer Justice Center, P.A., in Vadnais Heights, Minnesota. Lyons has been disciplined on seven previous occasions. In December of 1998, Lyons was both admonished and placed on private probation for separate incidents of misconduct; in 2001, he was publicly reprimanded and placed on probation for two years; in 2002, Lyons was admonished; and he was again admonished in 2005. In addition, Lyons received two separate amended admonitions in 2007. Lyons' previous discipline resulted from material misrepresentations, prosecuting frivolous claims, and failure to follow appropriate procedure.

In 2006, Lyons was retained by a man who had been erroneously reported by Trans Union, LLC, a credit reporting agency, to be dead. In September 2006, a complaint against Trans Union under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x (2000), was filed in the United States District Court for the District of Montana. Lyons arranged for a Montana attorney, Sean Frampton, to serve as local counsel.

On September 18, 2007, Lyons and counsel for Trans Union engaged in a settlement conference, but no settlement was reached. On October 6, 2007, the client was hospitalized. On October 7, Frampton sent Lyons an email that said the client "is ill and in critical conditions sic. Please keep him in your prayers. Call and I will explain." On October 8, Lyons replied, "Are you in the office today or on your cell phone? Should I explore settlement with Defendant?" On October 9, Frampton replied, "The doctors will be pulling the life support today. Sadly, he isn't going to make it. Upon direction of the client's wife, please settle the lawsuit with Trans Union." That same day, Lyons replied, "I will do so and report back to you ASAP. I am totally confused by the series of events leading up to this tragic loss. Please advise when you have more information about the funeral and wake." Lyons then emailed Trans Union, expressing the need to "confirm settlement positions" and requesting that Trans Union respond by telephone. The client died on October 9.

On October 26, 2007, Trans Union sent an email to Lyons offering to settle the claim for $19,000. The following day, Lyons accepted the offer by email and requested that opposing counsel "draft the release and order the check made payable to the Consumer Justice Center trust account." Lyons did not inform Trans Union of the client's death. On November 6, Trans Union sent Lyons a settlement agreement and release. The following week, Lyons emailed Frampton, asking whether the client's wife could sign the agreement as "power of attorney." Frampton replied that the client's wife could sign the settlement agreement because she was the personal representative of the estate. Although the settlement documents were not yet signed, a stipulation dismissing the case with prejudice was filed electronically with the federal court on December 14, 2007.

In an email to Trans Union dated January 7, 2008, Lyons noted that he was "still working on the client who was hospitalized and I think the release is being signed by his wife or power of attorney." Trans Union changed the signature line of the settlement agreement to read "Agent (Attorney-In-Fact)" and instructed Lyons to attach the power of attorney to the agreement as an exhibit. On January 14, 2008, the agreement, signed by the client's wife as personal representative of the estate rather than under a power of attorney, was returned to Trans Union.

Upon receiving the signed settlement agreement, Trans Union emailed Lyons asking if the client had passed away. Two days later, Lyons responded, "Yes — HOW IRONIC." The referee found and Lyons does not dispute that this e-mail on January 31, 2008, was Lyons's first disclosure to Trans Union that the client had died. The day following Lyons' disclosure, Trans Union asked, "When did he die? When did you find out?" Lyons replied, "Unsure. Recently." Trans Union responded by asking, "Did he die before or after we agreed to settle?" Lyons replied, "We settled before I found out he passed away." Trans Union again asked, "Did the client die before or after we agreed to settle?" Lyons replied that the client "died after we agreed to settle." Trans Union demanded to know, "On what date did the client die? On what date did you find out?" Lyons replied, "Unsure of exact dates — sorry. I learned about it from local counsel afterwards — that is why we had to redo the signature block to estate after you sent it to us with only the client's name."

Thirteen minutes after this last reply to Trans Union on February 5, 2008, Lyons emailed Frampton and Lyons' legal assistant that Trans Union "is trying to avoid payment on this settlement." Lyons instructed his legal assistant to "pull the file and we will pinpoint to best we can the exact date of settlement" with Trans Union. Despite telling Trans Union's counsel both that the client had not died, and that he had not learned of the client's death until after the case was settled in late October, Lyons wrote to Frampton: "The client's date of death was 10/9/07 and I believe that was confirmed in an email the following week by Sean Frampton."

Trans Union then sent an email to Frampton, with a copy to Lyons, asking Frampton to fill in the dates as to when the client died and when his counsel found out. Despite Lyons' earlier email to Frampton acknowledging that Frampton had informed him of the client's death within a week of the client's passing, Lyons emailed Frampton:

FYI—

I don't know that it is necessary to respond to him. However if you do here is the sequence as I understand it.

The client passed away 10/9/07

Trans Union offers 19k on 10/26/07

I accept via email on 10/27/07

There are no emails from you to me on notification of the client's death until after November 1, 2007.

Any questions please call.

Frampton responded to Lyons that the matter was irrelevant as they did not have an obligation to advise Trans Union of the client's death and that he would defer to Lyons' recollection. Lyons replied, "I agree completely. Just defer to me." In response to another inquiry from Trans Union, Lyons wrote, "THE CLIENT DIED ON 10/9/07. ACCORDING TO OUR EMAILS WE SETTLED ON 10/27/07. I DID NOT LEARN OF HIS PASSING UNTIL AFTER WE SETTLED — SORRY EXACT DATE UNKNOWN BY MYSELF OR FRAMPTON. SEND THE CHECK AND WE CAN CLOSE OUR FILES." Trans Union then asked Frampton directly when he found out about the client's death; Frampton responded that he found out on the day the client died.

Trans Union indicated that it would not be bound by the settlement and, as a result, Frampton filed an action in Montana state court to enforce the settlement agreement. Trans Union counterclaimed and added Lyons and Frampton as parties. That litigation was resolved when Lyons agreed to pay $7,500 to the client's wife.

On April 7, 2008, the Director notified Lyons that an ethics complaint had been filed with respect to the settlement and that Lyons should submit "all documents that evidence, memorialize, or refer or relate in any way to, any communications, whether verbal, written or electronic, you had with any person regarding the death of the client." In response, Lyons provided some documentation, including a number of emails. The Director subsequently obtained additional emails from other sources. At the referee hearing, Lyons testified that he had provided the Director with all the information he could locate in his files, that his practice was to print emails he received before deleting the electronic copies, and that his email provider did not provide copies of deleted emails more than 60 days after deletion. The referee found that Lyons' failure to provide the Director with the emails, which were later obtained by the Director from other sources, violated Rule 25(a), RLPR.¹ The referee also noted that Lyons had written in an email that he "may have telephone call notes" relating to the client's death, but failed to provide any such notes to the Director.

After Lyons provided his initial response, the Director requested that Lyons "state how and from whom he learned the client had died." Lyons replied that it was his recollection that he heard from Frampton sometime in early November, after the settlement had been negotiated. Lyons similarly testified at the referee hearing that he did not recall receiving actual notice of the client's death...