In re Gordon, No. 20A00.

• Decision Date: 13 July 2000
• Docket Number: No. 20A00.
• Citation: 531 S.E.2d 795,352 N.C. 349
• Court: North Carolina Supreme Court
• Parties: In the Matter of Carolyn A. GORDON, Applicant to take the February 1998 North Carolina Bar Examination.

531 S.E.2d 795

352 N.C. 349

In the Matter of Carolyn A. GORDON, Applicant to take the February 1998 North Carolina Bar Examination.

No. 20A00.

Supreme Court of North Carolina.

July 13, 2000.

Harry H. Harkins, Jr., Atlanta, for petitioner-appellant.

Michael F. Easley, Attorney General, by Robert O. Crawford, III, Special Deputy Attorney General, for respondent-appellee North Carolina Board of Law Examiners.

MARTIN, Justice.

Carolyn A. Gordon (petitioner) graduated from Southwestern University School of Law in May 1990 and gained admittance to the California State Bar (California Bar) in June 1991. From June 1994 until April 1997, petitioner worked as in-house general counsel for Alliance Affiliated Companies (Alliance), a group of closely held companies which provided, among other things, estate-planning and insurance services. Through direct mail, referrals, and telemarketing, Alliance offered packages of estate-planning documents to customers for a flat fee. As part of Alliance's marketing approach, a sales representative visited the customer's home to obtain information necessary to execute legal documents.

In 1995 the California Bar received a complaint alleging that petitioner had violated various provisions of the California Business and Professions Code (California Code) and the California Rules of Professional Conduct (California Rules). The California Bar reviewed these allegations and determined that there were insufficient grounds for disciplinary action.

In July 1996 petitioner, along with her employer, Alliance, its principals, and other in-house counsel, was named as a defendant in a civil suit. The plaintiffs were the People of the State of California and the California Bar. The plaintiffs alleged that petitioner and the other defendants had engaged in misleading statements, unfair competition, and the unauthorized practice of law with respect to the marketing and preparation of living trusts. These alleged violations implicated various provisions of the California Rules and the California Code. In April 1997 petitioner entered into a settlement agreement and was dismissed from the lawsuit. The settlement agreement prevented her from suing the plaintiffs and provided that her actions were still subject to review by the California Bar.

On 27 June 1997 petitioner entered into an "Agreement in Lieu of Discipline" (ALD) pursuant to the California Code. Petitioner acknowledged within the ALD that she violated California Rules 1-300(A), 3-110(A), and 3-310. The ALD contained both stipulated facts and an ultimate conclusion of law that petitioner had violated three specific rules of professional conduct. The ALD required petitioner, during a two-year period, to (1) report periodically to the probation unit of the California Bar, (2) complete continuing legal education in legal ethics, (3) complete the State Bar Ethics School, and (4) refrain from specified acts. As required, petitioner reported periodically and attended the ethics school. Furthermore, she resigned from her employment with Alliance.

In August 1997 petitioner moved to North Carolina. On 3 November 1997 she applied to the North Carolina Board of Law Examiners (Board) to take the February 1998 North Carolina bar examination (exam). Petitioner was permitted to take the exam with the results sealed, pending a determination by the Board as to her character and fitness.

On 14 October 1998 petitioner appeared before the Board to present evidence supporting her qualifications of character and general fitness to practice law in North Carolina. On 29 October 1998 the Board denied her application for admission to the exam. In its order, the Board waived the general waiting period of section .0605 of the Rules Governing Admission to the Practice of Law in the State of North Carolina (Admission Rules) and provided that petitioner would be eligible to take the exam once her two-year probation period in California terminated. Petitioner appealed the Board's decision to the Superior Court, Wake County.

On 16 December 1999 the trial court filed its order affirming the Board's order, concluding that the Board's findings of fact and conclusions of law were supported by competent evidence in the record.

On appeal to this Court, petitioner contends the Board erroneously found that she had committed three acts of misconduct and that the trial court thus erred in affirming the Board's order. Specifically, petitioner argues that the Board's findings are contradicted by the ALD and her testimony before the Board.

This Court employs the whole record test when reviewing decisions of the Board. See In re Golia-Paladin, 344 N.C. 142, 149, 472 S.E.2d 878, 881 (1996),

cert. denied, 519 U.S. 1117, 117 S.Ct. 962, 136 L.Ed.2d 847 (1997); In re Legg, 325 N.C. 658, 669, 386 S.E.2d 174, 180 (1989),

cert. denied, 496 U.S. 906, 110 S.Ct. 2589, 110 L.Ed.2d 270 (1990); In re Rogers, 297 N.C. 48, 64-65, 253 S.E.2d 912, 922 (1979). Under this test there must be "substantial evidence" in support of the Board's findings of fact and conclusions of law. See Golia-Paladin, 344 N.C. at 149,

472 S.E.2d at 881; Legg, 325 N.C. at 669,

386 S.E.2d at 180; In re Moore, 308 N.C. 771, 779, 303 S.E.2d 810, 815-16 (1983). This Court has previously determined that "substantial evidence" is "relevant evidence which a reasonable mind ... could accept as adequate to support a conclusion." Golia-Paladin, 344 N.C. at 149,

472 S.E.2d at 881; see In re Legg, 337 N.C. 628, 636, 447 S.E.2d 353, 357 (1994); Moore, 308 N.C. at 779,

303 S.E.2d at 815-16. "Under the `whole record' test we must review all the evidence, that which supports as well as that which detracts from the Board's findings...." Moore, 308 N.C. at 779,

303 S.E.2d at 815-16,

quoted in Legg, 337 N.C. at 636,

447 S.E.2d at 357. "`It is the function of the Board to resolve factual disputes.'" Moore, 308 N.C. at 780,

303 S.E.2d at 816 (quoting In re Elkins, 308 N.C. 317, 321, 302 S.E.2d 215, 217,

cert. denied, 464 U.S. 995, 104 S.Ct. 490, 78 L.Ed.2d 685 (1983)). Furthermore, in hearings before the Board, "[t]he initial burden of showing good character rests with the applicant." Legg, 337 N.C. at 636,

447 S.E.2d at 357 (quoting Legg, 325 N.C. at 669,

386 S.E.2d at 180); see Rogers, 297 N.C. at 57,

253 S.E.2d at 918. Finally, the whole record test was not designed to allow this Court to replace the Board's judgment with its own when there are two reasonably conflicting views of the evidence. See In re Elkins, 308 N.C. 317, 321-22, 302 S.E.2d 215, 217-18,

cert. denied, 464 U.S. 995, 104 S.Ct. 490, 78 L.Ed.2d 685 (1983); Rogers, 297 N.C. at 65,

253 S.E.2d at 923.

In the instant case the Board found that petitioner had committed three specific acts of misconduct. Each of the three findings below, as found in the Board's order, correlate to a violation of the California Rules which petitioner admitted in her ALD:

20. ... [petitioner] did willfully aid and abet the unlawful practice of law by delegating to non-lawyer sales representatives the authority to give legal advice and present estate planning information and documents to senior citizens.

....

22. ... [petitioner] did willfully fail to competently perform services by not properly supervising subordinate staff personnel or monitoring their activities or properly reviewing their work product, resulting in the preparation of inadequate trust documents.

....

24. ... [petitioner] did willfully fail to disclose to clients that a possible conflict of interest may exist with respect to the professional relationship which she had with the annuities underwriters.

In its order, the Board states that it based these findings on the legal conclusion found in the ALD and on petitioner's testimony before the Board. The ALD contained both findings of fact and an ultimate conclusion of law. The ALD included ten specific findings of fact which, by signing the ALD, petitioner acknowledged to be true. Under the conclusion of law, the ALD contained an unequivocal admission that petitioner had violated California Rules 1-300(A), 3-110(A), and 3-310.

Notwithstanding petitioner's execution of the ALD, in which she admitted wrongdoing, petitioner maintains that contradictory evidence before the Board renders its findings of fact erroneous. The Board, in its order, states that petitioner "did willfully fail to disclose to clients that a possible conflict of interest may exist with respect to the professional relationship which she had with the annuities underwriters." Petitioner notes, however, that the ALD provides that her "only client was ... Alliance." Likewise, in her statements before the Board, petitioner continued to profess that Alliance was her only client.

Our review of the whole record reveals that, in her testimony before the Board, petitioner admitted that her employer, Alliance, was a group of closely held companies which included both an insurance company and an estate-planning company. Further, at the hearing, petitioner conceded that she reported directly to the owners of Alliance, who ultimately controlled both the insurance and the estate-planning entities. Likewise, she...