In re Koch, OSB 06-116.

• Decision Date: 11 December 2008
• Docket Number: 06-117.,SC S055631.,OSB 06-116.
• Citation: 198 P.3d 910,345 Or. 444
• Parties: In re Complaint as to the Conduct of Jacqueline L. KOCH, Accused.
• Court: Oregon Supreme Court

198 P.3d 910

345 Or. 444

In re Complaint as to the Conduct of Jacqueline L. KOCH, Accused.

OSB 06-116.

06-117.

SC S055631.

Supreme Court of Oregon, En Banc.

Submitted on the Record October 10, 2008.

Decided December 11, 2008.

Jane E. Angus, Assistant Disciplinary Counsel, Oregon State Bar, Tigard, filed the brief for the Oregon State Bar.

No appearance by the accused.

PER CURIAM.

In this lawyer disciplinary proceeding, the Oregon State Bar alleged that, in the course of representing two clients, the accused violated Rule of Professional Conduct (RPC) 1.3 (neglect of a client matter); RPC 1.4(a) (failure to keep clients reasonably informed and to respond promptly to reasonable requests for information) (two counts); RPC 1.4(b) (failure to explain matters sufficiently to permit the client to make informed legal decisions); RPC 1.15-1(d) and Code of Professional Responsibility Disciplinary Rule (DR) 9-101(C)(3)¹ (failure to account for client funds and return funds when due) (four counts); RPC 1.16(d) (withdrawing from representation without taking steps to protect the client); and RPC 8.1(a)(2) (failure to comply with demands from the Bar during a disciplinary proceeding) (four counts). We find that the accused did not violate RPC 1.4(b), RPC 1.16(d), and RPC 1.15-1(d) regarding one of her clients. We find that she committed the remainder of the charged violations and suspend her for 120 days from the practice of law.

This case arises in an unusual posture. The Bar entered a default order against the accused because she did not answer the Bar's complaint. As a result of her default, the allegations in the complaint were deemed true. See Bar Rule (BR) 5.8(a); In re Magar, 337 Or. 548, 551-53, 100 P.3d 727 (2004). After the default order was entered, the Bar asked that a trial panel be appointed to determine the appropriate sanction. The Bar introduced documentary evidence at the hearing. The accused appeared at the beginning of the hearing. She made a short statement that she was sorry that her personal life had interfered with her practice and then left the room in tears.

After considering the evidence at the hearing, the trial panel did not determine whether the accused had committed the charged ethical violations. Rather, the trial panel appears to have assumed that the accused committed all the charged violations and limited its decision to determining the appropriate sanction. The panel suspended the accused from the practice of law for five months but stayed the suspension pending her completion of a year's probation. The Bar has petitioned for review of the trial panel's decision. It argues that the trial panel should have imposed a one-year suspension with no probation.

Before turning to the Bar's arguments, we note that, at the Bar's urging, the trial panel appears to have reached the question of sanctions without ever determining whether the accused had committed the charged violations. The fact, however, that the factual allegations in the complaint are deemed true as a result of the accused's default does not mean that those facts necessarily establish the charged violations by clear and convincing evidence; rather, the trial panel still has to make that finding. See In re Kluge, 332 Or. 251, 253, 27 P.3d 102 (2001) (describing that two-step process). Only after finding that an ethical violation has occurred may the trial panel determine the appropriate sanction.

Although the trial panel did not make all the necessary findings in this case, we need not remand the case to the trial panel. This court reviews the facts in bar disciplinary proceedings de novo. In re Fitzhenry, 343 Or. 86, 88, 162 P.3d 260 (2007). Although we give deference to a trial panel's express credibility findings based on the panel's observation of the witnesses' demeanor and manner of testifying, id. at 103, 162 P.3d 260, no witness testified in this case regarding the charged violations. Rather, the record on that issue consists solely of the complaint and the exhibits submitted by the Bar. It follows that we may determine on de novo review whether the Bar proved the charged violations by clear and convincing evidence before turning to whether the trial panel imposed an appropriate sanction. We first discuss the charges that arise from the accused's handling of Mark Dolbeer's dissolution proceeding and then turn to the charges that arise from her handling of Beth Anne Mahler's dissolution proceeding.

We take the facts from the allegations in the complaint, which are deemed true as a result of the accused's default, and from the documents that the Bar submitted to the trial panel. Dolbeer retained the accused in June 2003 to represent him in a dissolution proceeding, and he paid her a $1,500 retainer. The accused worked on Dolbeer's case over the next few months, and the accused notified Dolbeer of the entry of judgment in the dissolution proceeding in January 2004. After the judgment was entered, the accused did additional work regarding Dolbeer's dissolution proceeding in August and September 2004.

Beginning in December 2003, shortly before the judgment was entered, Dolbeer "called [the accused] on numerous occasions * * * to find out about refunding the rest of [his] retainer and to have a statement sent with billed hours." In May 2005, the accused prepared a statement of services,² and her office wrote a check to Dolbeer for $397, the unearned balance of his retainer. It is not clear whether the accused's office failed to put the check and the statement of services in the mail or whether those documents were lost in the mail. In any event, Dolbeer did not receive either the statement of services or the refund check.

On February 27, 2006, Dolbeer called the accused and asked about the balance of his retainer. The accused said that she had sent him a check in May 2005 and was surprised that he had not received it. "She assured [him] that she was extremely embarrassed and promised to get the check to [him] right away." When Dolbeer had not received the check by March 24, 2006, he filed a complaint with the Bar, and the Bar asked the accused for a response four days later.

The accused sent Dolbeer a check for $397 in April 2006 and sent the Bar a written response to Dolbeer's complaint on May 22, 2006. The accused acknowledged that Dolbeer had tried to contact her between December 2003 and February 2006. She said that they had spoken "intermittently between December 2003 and May 2005," that their conversations concerned whether the case was over, and that her office had cut Dolbeer a check in May 2005 for the unearned balance of his retainer. The accused explained that she had not heard from Dolbeer until February 2006, when he called to say that he had not received a refund. The accused acknowledged that, after receiving Dolbeer's February 2006 call, she had not issued him a refund check immediately. She explained that, because she "had been very ill and then learned that [her] mother was hospitalized," she had not followed up as quickly as she should have. The accused also provided time sheets, billing statements, and other records to support her explanation.

The Bar did not pursue the matter further until September 14, 2006. At that time, the disciplinary counsel for the Bar wrote the accused asking for additional information to verify her earlier explanation. When the accused did not respond to that letter, the disciplinary counsel sent her two letters during October 2006 reminding her that she had not responded. When the accused still failed to respond, the Bar turned the matter over to the Local Professional Responsibility Committee (LPRC). Twice during November, a lawyer for the LPRC called the accused but got no response. On February 6, 2007, the LPRC issued a subpoena to the accused. The accused met with the lawyer for the LPRC on February 13 and brought Dolbeer's files with her. At that meeting, the lawyer asked for additional documentation and responses to questions concerning Dolbeer. The accused said that she would provide that information but did not do so.

The Bar contends initially that the accused's failure to send Dolbeer an accounting violated three rules: (1) RPC 1.4(a), which provides that a "lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information"; (2) RPC 1.15-1(d), which provides in part that a lawyer, "upon request by the client * * * shall promptly render a full accounting regarding [client] property" held in trust; and (3) DR 9-101(C)(3), which provides that a lawyer shall "render appropriate accounts to the lawyer's client regarding [the client's funds]" in the lawyer's possession.³ We agree that the accused violated those rules when she failed, despite Dolbeer's requests, to provide him with an accounting of his funds from October 2003 to May 2005. We also find that the violations were knowing: Dolbeer's repeated requests put the accused on notice that she had failed to account for the funds that she held in trust for him. See American Bar Association's Standards for Imposing Lawyer Sanctions 7 (1991) (amended 1992) (ABA Standards) (defining knowledge).

The Bar next contends that the accused's failure to promptly return the balance of Dolbeer's retainer violated RPC 1.15-1(d), which provides that, with certain exceptions "a lawyer shall promptly deliver to the client * * * any funds or other property that the client * * * is entitled to receive." In its complaint, the Bar alleged that the "[a]ccused continued to hold the unearned balance of the [r]etainer after the [a]ccused concluded the representation."⁴ Taking that allegation as true, as we must as a result of the accused's default, we agree with the Bar that the accused violated RPC 1.15-1(d). We also find that the accused acted knowingly, at least for the period after February 27, 2006. At that point, she knew that Dolbeer had not received the ...