In re Discipline of Crawley

Decision Date25 May 2007
Docket NumberNo. 20060452.,No. 20060451.,20060451.,20060452.
Citation2007 UT 44,164 P.3d 1232
PartiesIn the Matter of the DISCIPLINE OF Steven CRAWLEY, # 0750. In the Matter of the Discipline of J. Keith Henderson, # 1459.
CourtUtah Supreme Court

Kate A. Toomey, Billy L. Walker, Salt Lake City, for Office of Professional Conduct.

Gregory G. Skordas, Rebecca C. Hyde, Salt Lake City, for Steven Crawley.

John T. Caine, Ogden, for J. Keith Henderson.

DURRANT, Justice:

INTRODUCTION

¶ 1 The Office of Professional Conduct (the "OPC") appeals two district court decisions, which are consolidated for purposes of our review. In each case, the district court sanctioned an attorney found to have violated the Rules of Professional Conduct with suspension but, in one case, stayed the suspension and placed the attorney on probation and, in the other case, gave the attorney leave to petition the court to stay the suspension for a period of probation. The OPC asks this court to articulate guidelines regarding the use of probation as a sanction and to review the use of probation in the two cases at issue. Because we think it salutary that district courts have the discretion to impose probation as they see fit under the Standards for Imposing Lawyer Sanctions, we decline to adopt specific guidelines regarding probation.

BACKGROUND

¶ 2 For the purpose of reviewing the use of probation in sanctioning attorneys for misconduct, we consolidated the two cases before us. But we review the facts of each case and the specifics of the misconduct at issue with respect to each attorney below.

I. STEVEN CRAWLEY

¶ 3 Steven Crawley was a shareholder in the law firm of Babcock, Bostwick, Scott, Crawley and Price and represented one of the firm's clients, Interwest Construction ("Interwest"), in two matters relevant to his misconduct. The first matter involved a primary claim against Interwest and its three third-party claims against other entities. Although each of these claims would have been enhanced by an expert report or affidavit, Crawley failed to obtain either. As a consequence, Interwest lost some of its third-party claims for lack of supporting evidence, and the district court assessed attorney fees against it. The court later granted summary judgment against Interwest, citing the lack of an expert report as part of the reason. Crawley not only failed to inform Interwest that some of its third-party claims had been dismissed and that attorney fees had been assessed against it, but also misrepresented to both Interwest and the firm the status of the matter following summary judgment.

¶ 4 The second matter involved an action against Interwest for breach of contract and Interwest's counterclaim for breach of contract and negligence. As in the first matter, Interwest's position would have been enhanced by an expert report or affidavit, which Crawley again failed to obtain. The district court entered summary judgment against Interwest on its negligence counterclaim specifically because of the absence of an expert report, but Crawley informed Interwest that its counterclaim was dismissed for reasons other than this. The court later entered an amended judgment against Interwest, which Interwest decided to appeal. Although Crawley informed Interwest that the firm would appeal the judgment and, later, that an appeal had in fact been filed in the matter, Crawley never filed the appeal.

¶ 5 Crawley's misconduct also involved actions he undertook while he was responsible for managing the firm's business affairs and finances, including renewing the firm's professional negligence insurance coverage. When filling out a renewal application for that insurance coverage, Crawley checked the box marked "No" in response to the following question: "At this time, does any applicant know of any act, omission, or circumstance that could reasonably give rise to a professional liability claim against any of the following: the firm, any past or present attorneys in the firm, or any predecessor firm." Crawley also signed the form as the "Authorized Principal or Applicant" and, in so doing, asserted that the statements he made on the form were true and that he had not misstated, omitted, or suppressed any material fact. But Crawley should have been aware that his handling of the two Interwest matters could reasonably have given rise to a professional liability claim against Crawley himself and the firm, and he failed to disclose this on the application.

¶ 6 Based on the above facts, to which both the OPC and Crawley stipulated, the district court found that Crawley had violated the following rules of the Utah Rules of Professional Conduct: 1.1 (Competence), 1.2(a) (Scope of Representation), 1.3 (Diligence), 1.4(a) (Communication), and 8.4(a) and (c) (Misconduct). The court also found the following aggravating factors: multiple offenses, conduct involving the elements of intentional dishonesty in the form of affirmative misrepresentations or omissions, and Crawley's substantial experience. And the court found the following mitigating factors: the absence of any other discipline during Crawley's twenty-eight-year career; the physical, personal, and emotional problems from which he was suffering at the time of the misconduct; that restitution was made; Crawley's good character reputation in the community; and his display of substantial remorse. The district court also noted that Crawley had been candid with the court and had done nothing to evade responsibility for his actions, that he had suffered a substantial loss of value in the firm, and that there was a possibility of other penalties and sanctions associated with his misconduct.

¶ 7 The district court determined that the appropriate presumptive sanction for Crawley's misconduct was suspension. After weighing the aggravating and mitigating factors, the court concluded that Crawley should be suspended from the practice of law for one year but that the suspension should be stayed in favor of eighteen months of probation with the following conditions: Crawley's misconduct is subject to public disclosure, he cannot engage in litigation or make any appearance in court, he cannot advertise, he must donate twenty-five hours of pro bono service, he must be seen by a mental health professional every four months and must bring a diagnosis of anxiety or depression to the court's attention, he must not violate the Rules of Professional Conduct, and he must take and pass the Multistate Professional Responsibility Examination.

II. J. KEITH HENDERSON

¶ 8 The district court made the following findings with respect to J. Keith Henderson. Henderson represented William Blakley in a matter relating to an on-the-job accident in which the truck Blakley was driving overturned. Specifically, Blakley retained Henderson to pursue unpaid workers' compensation claims that Blakley had filed with the workers' compensation insurance carrier. Henderson knew that Blakley was also pursuing a personal injury claim against another driver involved in the accident, but did not advise Blakley that a settlement in the personal injury case could affect his workers' compensation claims. Around January 2000, Blakley's personal injury attorney settled the personal injury claim.

¶ 9 Without determining the status of Blakley's personal injury claim, Henderson, in February 2000, filed an Application for Hearing requesting a hearing before the Utah Labor Commission regarding Blakley's workers' compensation claims. The insurance carrier responded with a counterclaim for reimbursement for past payments and offset of future payments to Blakley because he received settlement proceeds from the defendant in his personal injury case. The Labor Commission set a hearing for June 2, 2000. Henderson did not give Blakley a copy of the insurance carrier's response prior to this hearing.

¶ 10 On June 2, Henderson met with Blakley as they traveled to the hearing and immediately prior to it. At the hearing, the administrative law judge ("ALJ") continued the hearing without date to see if the parties could reach a settlement regarding compensation for Blakley. Prior to and after the hearing, Henderson again failed to fully explain to Blakley how the settlement in his personal injury case would affect his pending and future workers' compensation claims.

¶ 11 Blakley did not hear from Henderson after the June 2 hearing until he received a letter from Henderson dated November 30, 2000. The letter stated that the insurance carrier had a right to the third-party personal injury settlement and that Blakley was not entitled to recover a workers' compensation award.

¶ 12 On November 9, 2000, the district court suspended Henderson from the practice of law for unrelated matters for two years, but stayed all but six months of the suspension. Henderson neither notified Blakley that he was being suspended from the practice of law and could no longer represent him nor told Blakley that he would need to find a new attorney or represent himself pro se in the matter. Henderson also failed to provide Blakley with a copy of his file. Additionally, Henderson did not notify Blakley that the next hearing in his case was set for February 27, 2001, and that Blakley should attend.

¶ 13 On February 27, 2001, the ALJ conducted a status hearing in Blakley's case. When Henderson failed to appear at the hearing, the ALJ telephoned him. Henderson told the ALJ that he had withdrawn from the case because it settled, and the ALJ directed Henderson to file a withdrawal of counsel within ten days so that the case could move forward. Not only had the case not settled as of February 27, 2001, Henderson did not submit the requested withdrawal of counsel until October 15, 2002.

¶ 14 Based on these findings, the district court concluded that Henderson violated the following rules of the Utah Rules of Professional Conduct: 1.1 (Competence), 1.4 (Communication), 1.16(d) (Declining or Terminating Representation), 3.3(a) (Candor...

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