In re Huffman

• Citation: 509 P.3d 1253
• Decision Date: 27 May 2022
• Docket Number: 123,280
• Parties: In the MATTER OF Donna L. HUFFMAN, Respondent.
• Court: United States State Supreme Court of Kansas

509 P.3d 1253

In the MATTER OF Donna L. HUFFMAN, Respondent.

No. 123,280

Supreme Court of Kansas.

Opinion filed May 27, 2022.

Deborah L. Hughes, Deputy Disciplinary Administrator, argued the cause, and Gayle B. Larkin, Disciplinary Administrator, was with her on the brief for petitioner.

Donna L. Huffman, respondent, argued the cause and was on the briefs pro se.

ORIGINAL PROCEEDING IN DISCIPLINE

Per Curiam:

This is a contested attorney discipline proceeding against Donna L. Huffman, of Oskaloosa, who was admitted in 2010 to practice law in Kansas. After a five-day hearing, a panel of the Kansas Board for Discipline of Attorneys unanimously concluded Huffman violated the Kansas Rules of Professional Conduct while representing homeowners in multiple lawsuits over the mortgage on their residence. The panel determined her litigation tactics included filing multiple lawsuits containing frivolous claims, making what was characterized as "extensive and needless" discovery requests, and serially relitigating settled issues. A federal district court at one point imposed a $5,000 sanction against her. Ultimately, the homeowners were assessed nearly $290,000 in their lender's legal fees, which exceeded the mortgage principal. The lender's attorneys billed over $700,000 for their work.

The panel unanimously found Huffman violated KRPC 1.1 (competence) (2022 Kan. S. Ct. R. at 327); KRPC 3.1 (meritorious claims) (2022 Kan. S. Ct. R. at 390); KRPC 3.5 (impartiality and decorum of the tribunal) (2022 Kan. S. Ct. R. at 396); KRPC 8.2 (judicial and legal officials) (Kan. S. Ct. R. at 432); and KRPC 8.4 (misconduct) (2022 Kan. S. Ct. R. at 434). A majority of the panel recommends published censure, while a dissenting panel member recommends a 90-day suspension. The Office of the Disciplinary Administrator recommends indefinite suspension. Huffman challenges some factual findings and conclusions of law and recommends a private admonition.

We hold clear and convincing evidence establishes attorney misconduct as to KRPC 1.1 (competence), KRPC 3.1 (meritorious claims), and KRPC 8.4 (misconduct). A majority of the court rejects the panel's findings and conclusions as to KRPC 3.5 (impartiality and decorum of the tribunal) and KRPC 8.2 (judicial and legal officials) as being unsupported by clear and convincing evidence. A minority of the court would have found these additional violations.

Based on the violations found, we suspend Huffman from practicing law in this state for a period of two years, while granting her the possibility for probation after 90 days upon approval by the Disciplinary Administrator's office of a practice supervision plan for the remaining suspension period, all to be followed by a reinstatement hearing once she completes the two-year term. If a disagreement arises between Huffman and the Disciplinary Administrator's office over the practice supervision plan, either or both may file a motion with this court to resolve that dispute about the plan or compliance with its terms.

PROCEDURAL BACKGROUND

The Disciplinary Administrator filed a formal complaint on January 10, 2019, and an amended complaint on September 4, 2019, alleging various KRPC violations against Huffman. She filed an answer on February 19, 2019. The panel conducted hearings on November 6-8 and December 19-20, 2019. She appeared pro se. The panel issued a 71-page final hearing report. It provides in relevant part:

"Findings of Fact

"Background Facts

"46. The hearing panel finds the following facts, by clear and convincing evidence:

"47. In 2008, R.B. obtained a variable rate loan in the amount of $184,222.00 from Security National Mortgage Company to purchase a home and signed a promissory note to that effect. R.B. is listed as the only borrower and only he signed the note. However, the note was secured by a mortgage signed by both R.B. and his wife, S.B. Wells Fargo serviced the loan and eventually came to own the promissory note. R.B. and S.B. made regular monthly payments.

"48. In May, 2009, R.B. applied with Wells Fargo to refinance the house. According to a computerized system of recording communications, employees of Wells Fargo made contact with R.B. as follows:

a. On May 15, 2009, C.M. completed the welcome call with R.B.

b. On May 17, 2009, the loan terms were changed to accommodate R.B.'s request, June 24, 2009, was listed as the anticipated closing date, and Wells Fargo approved R.B.'s credit.

c. On May 20, 2009, C.M. left a message for R.B. to return the call to ‘go over loan’ information.

d. On May 21, 2009, C.M. went over loan information with R.B. C.M. faxed documents to him so the documents could be returned quickly.

e. On May 28, 2009, the loan terms were changed to accommodate R.B.'s request. The anticipated closing date remained June 24, 2009. Also on May 28, 2009, C.M. requested additional documentation from R.B.

f. On June 4, 2009, C.M. called R.B. regarding the additional documentation. On June 10, 2009, C.M. left a message for R.B. confirming receipt of the additional requested documentation. On June 18, 2009, the loan terms were changed to accommodate R.B.'s request and the anticipated closing date remained listed as June 24, 2009.

g. On June 18, 2009, R.B. called Wells Fargo and left a message for C.M. R.B. was frustrated. J.D. told R.B. that the loan should be ‘final approved’ in time to close the following week. R.B. indicated that he is a truck driver, he would be home Wednesday, June 24, and he could sign either Wednesday, June 24 or Thursday, June 25.

h. On June 19, 2009, C.M. called R.B. and left a message for him, confirming that she received his message. C.M. confirmed that she would call R.B. to schedule closing when the file was back. The loan terms were changed to accommodate R.B.'s request and the anticipated closing date remained listed as June 24, 2009.

i. On June 22, 2009, C.M. called R.B. and left a message that she needed R.B.'s W-2 and she would resubmit the file to get a ‘clear to close.’ On June 24, 2009, C.M. forwarded the file to get a ‘clear to close.’ On June 24, 2009, S.H. received a complete decision and the transaction was approved. That same day, C.M. entered a closing handoff date.

j. On June 25, 2009, C.M. printed the note and the mortgage/deed. Additionally, C.M. twice sent the closing package to the settlement agent and twice the settlement agent downloaded the closing package.

"49. R.B. did not sign the closing documents. The record does not establish why R.B. did not sign the closing documents or whether R.B. was provided with a specific time and location of closing.

"50. Even though the closing did not occur, the closing agent, Transcontinental Title Company, mistakenly informed Wells Fargo that the closing occurred.

"51. Wells Fargo executed a Certificate of Satisfaction on July 3, 2009, which provided that R.B. and S.B.'s 2008 mortgage had been released. Wells Fargo filed the Certificate of Satisfaction concerning the 2008 Mortgage with the Shawnee County Register of Deeds. Wells Fargo sent a letter of congratulations to R.B. and S.B. on July 6, 2009, informing them of the loan payoff.

"52. On July 13, 2009, C.M. noted that R.B. did not sign the closing documents, but that the loan had been funded by Wells Fargo as authorized by M.M. on June 30, 2009. C.M. also noted that she had been trying to contact R.B. to find out what happened. C.M. did not make any additional notes about contact with R.B. "53. Over the course of four months, Wells Fargo sent R.B. statements with the lower monthly payment amount that would have been due had the closing actually occurred.

"54. On October 27, 2009, Wells Fargo marked the refinance loan for deletion because closing never occurred.

"55. On October 29, 2009, C.Y. of Wells Fargo wrote to R.B. and explained that the 2008 mortgage was paid off in error. C.Y. also informed R.B. that Wells Fargo would continue to hold its lien against the property and that payment would continue to be due under the 2008 mortgage.

"56. On November 13, 2009, Mortgage Electronic Registration Systems (‘MERS’) executed a ‘Caveat as to [the] Existence of a Mortgage Lien Due to Erroneous Release of Mortgage’ (‘Caveat’). This document, signed by L.S., essentially stated that the Certificate of Satisfaction had been executed in error and that R.B. and S.B. were still required to pay the 2008 mortgage as their debt was never fully paid. L.S. filed the Caveat with the Shawnee County Register of Deeds on November 20, 2010.

"57. R.B. and S.B. continued to make the lower monthly payments that would have been due had the closing taken place.

"Case No. 10-CV-4141

"58. On October 22, 2010, R.B. and S.B. sued MERS and L.S. for slander and disparagement of title, conversion, negligence, fraud and/or misrepresentation, and violations of the Kansas Consumer Protection Act (‘KCPA’) in Shawnee County District Court case number 10-C-1517. On November 16, 2010, the defendants removed the case to the United States District Court for the District of Kansas case number 10-CV-4141.

"59. Wells Fargo declared the 2008 loan to be in default and on December 20, 2010, commenced foreclosure proceedings in Shawnee County District Court case number 10-C-1808. On January 6, 2011, Wells Fargo dismissed the foreclosure action because of the pending federal litigation.

"60. On April 15, 2011, Wells Fargo moved to intervene in the federal suit. On August 3, 2011, the magistrate judge granted Wells Fargo's motion to intervene over the respondent's objection. On August 4, 2011, Wells Fargo filed its answer to the petition and counterclaims against R.B. and S.B. for a declaratory judgment regarding the Certificate and Caveat, equitable reinstatement of the 2008 mortgage, and foreclosure on the 2008 mortgage.

"61. On December 30, 2011, the respondent filed a motion on behalf of R.B. and S.B. essentially requesting the court to reconsider the order allowing Wells Fargo to intervene. The district court denied the motion as untimely and because the

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