In re Huffman

• Decision Date: 27 May 1999
• Citation: 983 P.2d 534,328 Or. 567
• Parties: In re Complaint as to the CONDUCT OF Bruce E. HUFFMAN, Accused.
• Court: Oregon Supreme Court

983 P.2d 534

328 Or. 567

In re Complaint as to the CONDUCT OF Bruce E. HUFFMAN, Accused.

(OSB 94-187; SC S43743)

Supreme Court of Oregon.

Argued and Submitted January 5, 1998.

Decided May 27, 1999.

Bruce E. Huffman, Nevada, argued the cause and filed the briefs in propria persona.

Mary A. Cooper, Assistant Disciplinary Counsel, Lake Oswego, argued the cause and filed the brief for the Oregon State Bar.

Before CARSON, Chief Justice, and GILLETTE, VAN HOOMISSEN, DURHAM, and KULONGOSKI, Justices.¹

PER CURIAM.

The Oregon State Bar (Bar) filed a disciplinary complaint against the accused, stating three causes of complaint. The first cause alleged that the accused obtained default judgments against a former client regarding unpaid attorney fees and costs, refused to set aside the judgments after notice of the client's bankruptcy, and disclosed client confidences or secrets in a letter dated December 10, 1993, to the client's new attorney. The Bar alleged that the accused's conduct, described in the first cause of complaint, violated Code of Professional Responsibility Disciplinary Rule (DR) 1-102(A)(4) (prohibiting conduct prejudicial to the administration of justice), DR 7-102(A)(1) (prohibiting a lawyer from taking legal action if the lawyer knows or when it is obvious that such action merely would serve to harass or maliciously injure another), and DR 7-102(A)(2) (prohibiting a lawyer from knowingly advancing an unwarranted claim or defense). The second cause of complaint alleged that the accused's December 10, 1993, letter threatened to present criminal charges to obtain an advantage in a civil matter in violation of DR 7-105(A) (a lawyer may not threaten to press criminal charges to obtain advantage in a civil matter). The third cause of complaint alleged that, by sending the December 10, 1993, letter and in testifying at a hearing regarding his default judgments, the accused knowingly revealed client confidences or secrets, or used client confidences or secrets to the disadvantage of his client or for his own advantage, in violation of DR 4-101(B) (a lawyer may not knowingly reveal or misuse client confidences or secrets).

A trial panel of the Disciplinary Board sustained the second and third causes of complaint, concluding that the accused had violated DR 7-105(A) and DR 4-101(B). The panel imposed a 120-day suspension. Our review of that sanction is automatic. ORS 9.536(2) (1995) (Supreme Court shall review matters in which panel imposes a suspension of longer than 60 days).²

This court reviews the record de novo. ORS 9.536(2) and (3); BR 10.6. The Bar has the burden of establishing alleged misconduct by clear and convincing evidence. BR 5.2. As did the trial panel, we sustain the second and third causes of complaint and conclude that the accused violated DR 7-105(A) and DR 4-101(B). We suspend the accused for two years, commencing 60 days from the date of filing of this decision.

We find the following facts. The accused was licensed to practice law in Oregon in 1980. He practiced law primarily in the Klamath Falls area. The accused represented DeMendoza in various legal matters, including a property transaction, a personal injury claim, a tax dispute, and a case in which government agents seized guns owned by DeMendoza. On August 22, 1990, during their ongoing lawyer-client relationship, the accused and DeMendoza entered into a written retainer agreement relating to an unspecified criminal matter. The accused worked on that matter and periodically billed DeMendoza. On May 2, 1991, the accused sent DeMendoza a letter indicating that, if his bill were not paid, the accused would file an action to collect his fee. DeMendoza did not pay the bill. The accused did not file an action but continued performing legal work for DeMendoza.

As of September 1, 1991, DeMendoza owed the accused $1,276.82. The accused informed DeMendoza that he would withdraw and sue if the bill were not paid by September 5. DeMendoza again failed to pay. The accused again did not withdraw or sue, but continued to perform legal work for DeMendoza for several months. By December 1991, when the accused stopped working on the matter, the total amount owed by DeMendoza, including interest, was approximately $1,700.

On October 10, 1990, DeMendoza transferred to his cousin, Javier Mendoza (Javier), a rental house in Klamath County in exchange for "love and affection." In February 1992, DeMendoza sold another piece of property for approximately $157,000 (the "Wilderness Ranch sale").

In April 1992, DeMendoza filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the Northern District of California. The petition listed the accused as an unsecured creditor with a claim of $1,920. It is undisputed that that claim arose out of the August 1990 retainer agreement between the accused and DeMendoza. On April 16, 1992, the clerk of the bankruptcy court mailed to the accused, at his then-current address, a notice of commencement of bankruptcy proceedings.³ The notice stated:

"If a creditor believes that the debtor should not receive any discharge of debts under section 727 of the Bankruptcy Code⁴ or that a debt owed to the creditor is not dischargeable under section 523(a)(2), (4), or (6) of the Bankruptcy Code,⁵ timely action must be taken in the bankruptcy court by the deadline set forth above * * *."

The deadline for objecting to discharge of the debtor or for determining the dischargeability of certain types of debts was July 13, 1992.

On August 14, 1992, the clerk of the bankruptcy court mailed to the accused, at his then-current address, a notice of discharge of debtor. The notice stated the following orders of the bankruptcy court:

"1. The above-named debtor is released from all dischargeable debts.

"2. Any judgment heretofore or hereafter obtained in any court other than this court is null and void as a determination of the personal liability of the debtor with respect to any of the following:

"(a) debts dischargeable under 11 U.S.C. sec. 523;

"(b) unless heretofore or hereafter determined by order of this court to be nondischargeable, debts alleged to be excepted from discharge under clauses (2), (4) and (6) of 11 U.S.C. sec 523(a);

"(c) debts determined by this court to be discharged.

"3. All creditors whose debts are discharged by this order and all creditors whose judgments are declared null and void by paragraph 2 above are enjoined from instituting or continuing any action or employing any process or engaging in any act to collect such debts as personal liabilities of the above-named debtor."

In February 1993, the accused filed a complaint against DeMendoza in Klamath County Circuit Court (case number 9300538CV) alleging fraud, conversion, and breach of contract. All claims were based on the unpaid debt for fees incurred under the August 1990 retainer agreement. The accused alleged that, with accrued interest, the amount owed at that time was $2,080.01. In the fraud claim, the accused alleged that DeMendoza had promised to pay him out of the proceeds of the Wilderness Ranch sale and that that representation was false and was undertaken with the intent to cause the accused to refrain from collecting his legal fees. In the conversion claim, the accused alleged that DeMendoza had converted the Wilderness Ranch sale proceeds to his own benefit, despite his promise to pay the accused's fee from those proceeds. In the breach-of-contract claim, the accused alleged that DeMendoza had breached the retainer agreement. In addition to actual damages with interest, attorney fees, and costs, the accused sought $7,500 in punitive damages.

The accused filed a motion seeking authorization to serve DeMendoza with a summons and complaint by mailing them to his last known address and posting them at the Klamath County Courthouse. The court granted the motion, and the accused employed those service methods. DeMendoza did not respond to the complaint and, on March 31, 1993, the accused obtained a default judgment against DeMendoza for $11,355.71 ($9,580.01 in damages, $1,660 in attorney fees, and $115.70 in costs).

In April 1993, the accused filed a complaint against DeMendoza and Javier (case number 9301365CV), alleging that DeMendoza had transferred the rental property in October 1990 to Javier with the fraudulent intent to avoid the debt for attorney fees to the accused. The accused alleged that the property was worth $70,000 and sought the following relief: a declaration that the property transfer to Javier was void; a money judgment for the amount of the judgment obtained in case number 9300538CV or for the value of the property, whichever was less; a sale of the property, with proceeds of the sale to be applied to the judgment that the accused had obtained in case number 9300538CV; and attorney fees and costs.

Again, the accused sought, and the court granted, authorization to serve the defendants by mailing a summons and complaint to DeMendoza's last known address and posting at the Klamath County Courthouse. The accused employed those service methods. The defendants did not respond to the complaint and, on June 3, 1993, the accused obtained a default judgment for $13,448.71 ($11,355.71 from the judgment in case number 9300538CV, $1,940 in attorney fees, and $153 in costs). The accused also obtained an order declaring the transfer from DeMendoza to Javier void and directing that the property be sold and the proceeds applied to the accused's judgment. On July 20, 1993, the property was sold at a sheriff's sale for $13,850. All but $6.81 of the proceeds were paid to the accused to satisfy the judgment in case number 9301365CV and to reimburse costs related to the sheriff's sale.

DeMendoza attempted to stop the sheriff's sale by contacting the Klamath County District Attorney's office, but he was unsuccessful. DeMendoza and Javier then retained a new lawyer, Gilstrap. In October or November 1993, the accused and Gilstrap...