In re Discipline of Pallares, No. 42535 (NV 3/25/2005)
| Decision Date | 25 March 2005 |
| Docket Number | No. 42535.,42535. |
| Parties | IN RE: DISCIPLINE OF JOSE C. PALLARES, ESQ. |
| Court | Nevada Supreme Court |
Before BECKER, C. J., ROSE, J., MAUPIN, J., GIBBONS, J., DOUGLAS, J., HARDESTY, J., PARRAGUIRRE, J.
This is an automatic appeal from a Southern Nevada Disciplinary Board hearing panel's recommendation that attorney Jose Pallares be suspended for one year, to run from the date of his temporary suspension, May 24, 2003. Pallares did not file an opening brief contesting the recommendation.1 The state bar, however, filed an opening brief arguing that the recommended discipline was too lenient and that disbarment under the circumstances of this case is warranted. Pallares moved to strike the state bar's brief; the state bar opposed the motion, and asked in the alternative for leave to file an opening brief.
We conclude that the procedural rules regarding bar discipline do not provide for an appeal by the state bar, and so we grant Pallares' motion to strike the state bar's opening brief. We also deny the state bar's request for leave to file an opening brief. Additionally, although clear and convincing evidence supports the panel's findings concerning Pallares' misconduct, the recommended one-year suspension is too lenient. We therefore impose a two-year suspension, to run from the date of Pallares' temporary suspension.
Pallares was admitted to practice in Nevada in 1991. He worked for the Clark County District Attorney's office, and then for two small Las Vegas law firms, before opening his own solo practice in 1995. He mainly practiced criminal defense, but also accepted some personal injury work.
In December 2000, Pallares was diagnosed with anxiety, depression and alcoholism. Over the next two years, Pallares' compliance with his treatment plan was sporadic. According to Pallares, he would begin to feel better as the medication and abstinence took effect, and he would believe that he had "conquered" his problems and was cured. He would stop the medication, stop attending regular Alcoholics Anonymous (AA) meetings and allow himself "one or two" drinks. Of course, this would result in a relapse. This cycle was repeated three or four times from early 2001 to early 2003.
From April to September 2001, Pallares withheld part of a personal injury settlement that was earmarked to pay a chiropractor's bill. Apparently, Pallares believed that the bill was inflated, but instead of properly contesting the lien, he simply failed to pay it. The chiropractor complained to the state bar, which asked Pallares for a response. By this time, however, Pallares had given the money to the client. Pallares paid the chiropractor in November 2001. The resulting discipline case was resolved when Pallares entered into a conditional plea agreement in exchange for a 90-day suspension for the misappropriation from the chiropractor.2 Pallares did not disclose his problems with depression or alcohol to the state bar at that time; he testified that he was embarrassed and wanted to keep them private. The plea agreement was forwarded to this court for approval in September 2002.
Pallares testified that, in anticipation of the 90-day suspension, he began to shut down his practice. He reduced his staff and stopped taking new cases. He also ceased taking his medication and going to AA meetings. According to Pallares, he would go to court for his remaining criminal calendar in the mornings, return to the office with his files, and then go drink for the afternoon.
The two instances of misconduct charged in the complaint arise from Pallares' representation of three personal injury plaintiffs in a suit to recover underinsured motorist insurance benefits. The misconduct occurred in December 2002 and January 2003, after Pallares had entered into the conditional guilty plea for a 90-day suspension, but before it was approved by this court. Pallares obtained an arbitration award, which was paid by the insurer in December 2002 and January 2003. One plaintiff had a medical bill from a company called Primax for $623.36. Her settlement statement, prepared by Pallares, indicated that this amount had been paid, along with other medical bills and Pallares' fees and costs. Pallares remitted the net amount owed to the client, about $40,000, but he did not pay Primax.
Another plaintiff was also to receive a net amount of about $40,000. In addition, she had a $950 medical bill from a doctor that was to be paid from the proceeds. Pallares prepared a settlement statement stating that the doctor had been paid, and he sent a check for $24,000 to the client. At this time, Pallares told the client that another check would be coming from the insurance company, and that she would be paid the remainder then. In fact, the insurance company had already sent Pallares all amounts owed under the arbitration award. Also, the doctor had not been paid. Instead, Pallares used the funds to pay his office lease and his remaining staff member. This court's order of suspension was entered on February 7, 2003.
Pallares testified that he planned to repay the client by selling his house, which in the current market he expected to sell quickly and at a substantial profit. But his wife, who shared title to the house, refused to agree to his plan since it was their sole asset and also was the home for their two small children.
The two clients were subjected to collection efforts by Primax and the doctor and complained to the state bar. Pallares, who by now was serving the 90-day suspension, stipulated to a temporary suspension under SCR 102(4), beginning when his 90-day suspension ended.3 A formal complaint was filed, charging violations of SCR 154 (communication), SCR 165 (safekeeping property), and SCR 203(3) ().4 In his answer, Pallares admitted that he had misappropriated the remainder of the client's recovery, and denied that he had failed to pay Primax or the doctor. Sometime before the hearing, Pallares changed counsel. At the hearing, Pallares admitted that after going through his records, he could not locate evidence that Primax and the doctor had been paid. Shortly after the complaint was filed, Pallares paid restitution of all amounts owed to the client, Primax and the doctor; Pallares obtained the money from his father.
By March 2003, Pallares realized that he needed continuous treatment, and he began consulting his doctor again. He started taking medication, and enrolled in an outpatient detoxification clinic. After Pallares had successfully completed the clinic's program, he was also prescribed medication to help alleviate alcohol cravings, and he began attending regular AA and Lawyers Concerned for Lawyers meetings. Pallares testified at the hearing that he now realizes he needs help, and that he cannot control his problems on his own. Also, he has developed a positive attitude to-ward taking his medications for the long term. He has also learned to overcome his reluctance to ask for help when needed.
Before the hearing, the state bar filed a well-researched trial brief strongly arguing that disbarment was the only appropriate discipline in this case, because Pallares had already been subject to a suspension for similar misconduct, and in fact was awaiting entry of the suspension order when he engaged in the misconduct at issue in this case. The state bar maintained its position at the hearing.
Pallares' doctor, Dr. Michael Levy, who specializes in addictions, testified at the hearing on Pallares' behalf. Dr. Levy is one of 200 fellows in addiction medicine in this country. Dr. Levy testified that alcoholism, and in Pallares' case, his depression, too, are chronic, incurable, but treatable conditions. According to Dr. Levy, these conditions are not unlike diabetes, asthma or hypertension, which cannot be cured but can be controlled with proper care. He stated that any prediction for the future would be speculation, but that he would not hesitate to recommend Pallares as a lawyer so long as Pallares adheres to his treatment plan. Dr. Levy noted that he sits on the state bar's Moral Character & Fitness Committee, and so he is aware of attorney ethical standards.
Pallares admitted his misconduct and recognized its seriousness, but he presented a vigorous defense concerning the discipline to be imposed and pled for a suspension. He stated that he would agree to whatever conditions the panel and any eventual reinstatement panel thought appropriate, including limiting his practice areas or practice settings for some probationary period and continuing to adhere to his treatment plan.
Pallares presented extensive character evidence. District Judge Valerie Adair, and Justices of the Peace Doug Smith and Tony Abbatangelo, who were subpoenaed for the hearing, along with Clark County Deputy District Attorney Lynn Robinson and lawyers Tony Sanchez and Joseph Sciscento all testified on Pallares' behalf. They uniformly praised Pallares' legal skills, especially as a criminal defense attorney, and stated that they would trust him despite the misconduct charged. Judge Abbatangelo and attorney Sciscento met Pallares in law school. Judge Adair, Judge Smith and attorney Robinson met him while they all worked at the district attorney's office. Attorney Sanchez met Pallares through their work together at the Latin Chamber of Commerce and their efforts to re-establish the Latino Bar Association. Sanchez praised Pallares' community activities.
The panel unanimously decided to recommend a one-year suspension, running from May 24, 2003, the date of Pallares' temporary suspension. The panel further recommended several conditions for any eventual reinstatement. These conditions are: (1) that Pallares continue treatment for his anxiety, depression and alcoholism, as prescribed by his physician; (2) that Pallares continue regular attendance at AA and Lawyers Concerned for Lawyers meetings, as...
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