In re Nace, 13–BG–1439.

• Decision Date: 04 September 2014
• Docket Number: No. 13–BG–1439.,13–BG–1439.
• Citation: 98 A.3d 967
• Court: D.C. Court of Appeals
• Parties: In re Barry J. NACE, Respondent. A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 130724).

98 A.3d 967

In re Barry J. NACE, Respondent.

A Member of the Bar of the District of Columbia Court of Appeals (Bar Registration No. 130724).

No. 13–BG–1439.

District of Columbia Court of Appeals.

Argued June 3, 2014.

Decided Sept. 4, 2014.

Christopher T. Nace, Washington, DC, for respondent.

William R. Ross, Assistant Bar Counsel, with whom Wallace E. Shipp, Jr., Bar Counsel, was on the Statement Regarding Reciprocal Discipline, for the Office of Bar Counsel.

Before THOMPSON and MCLEESE, Associate Judges, and REID, Senior Judge.

PER CURIAM:

Respondent Barry Nace has been a member of the Bar of this court since 1972. Mr. Nace is also admitted to practice in Maryland, Pennsylvania, and West Virginia. In March 2013, the Supreme Court of Appeals of West Virginia found that Mr. Nace had committed numerous disciplinary violations and suspended Mr. Nace for 120 days. Lawyer Disciplinary Bd. v. Nace, 232 W.Va. 661, 753 S.E.2d 618, 621–22 (per curiam), cert. denied, ––– U.S. ––––, 134 S.Ct. 474, 187 L.Ed.2d 318 (2013). The District of Columbia Office of Bar Counsel recommends that this court impose reciprocal discipline upon Mr. Nace. We adopt that recommendation.

I.

Except as noted, the following facts are undisputed. In February 2004, Barbara Miller retained a West Virginia attorney named D. Michael Burke to represent her, in her capacity as administrator of her husband's estate, in a potential medical-malpractice claim to be filed in West Virginia. Mr. Burke asked Mr. Nace to review the case and determine whether to pursue the claim. Mr. Burke and Mr. Nace had worked together on numerous medical-malpractice cases over the preceding twenty years.

In September 2004, Ms. Miller filed a petition for bankruptcy in West Virginia. Ms. Miller retained separate legal counsel to handle the bankruptcy matter. The bankruptcy court appointed Robert Trumble as the interim trustee of the bankruptcy estate. The petition was filed as a “no asset” case and listed the malpractice action, describing the value of the action as unknown and claiming that the action was exempt. Mr. Trumble subsequently wrote to Mr. Burke, attempting to determine the value of the malpractice action. Mr. Burke replied that the action was being evaluated by Mr. Nace and that a valuation of the case could not be completed until after a medical review. Mr. Trumble subsequently sent separate letters to Mr. Burke and Mr. Nace containing the following: (1) an application to employ Mr. Burke and Mr. Nace as special counsel for the trustee, for the purpose of pursuing litigation on behalf of Ms. Miller; (2) a proposed order authorizing Mr. Trumble to employ special counsel; and (3) an affidavit indicating willingness to accept employment as special counsel.¹ The letter asked Mr. Burke and Mr. Nace to review the enclosed documents and said that, upon receipt of the signed affidavit, Mr. Trumble would submit the documents to the bankruptcy court for approval.

In February 2005, Mr. Nace signed and returned the affidavit, stating that he was “willing to accept employment by [Mr. Trumble] on the basis set forth in the Application to Employ [Special Counsel]....” After receiving affidavits from both Mr. Burke and Mr. Nace, Mr. Trumble filed the application, which the bankruptcy court approved by entering an order in March 2005. Mr. Nace claims that the order was sent to an incorrect address and that he did not receive notice of the order.

In June 2005, Ms. Miller filed a medical-malpractice complaint in the West Virginia state courts. Soon thereafter, Mr. Burke notified Ms. Miller that he had to withdraw as counsel from the medical-malpractice case due to a conflict of interest, but that Mr. Nace would continue to represent Ms. Miller. In September 2006, Ms. Miller reached a partial settlement for $75,000 with one of the medical-malpractice defendants. Later that month, Mr. Nace wrote to Ms. Miller: “[P]resumably you have a bankruptcy attorney and if so that person should call me so I know whether or not a check can be written to you.” Without informing Mr. Trumble or the bankruptcy court, Mr. Nace subsequently distributed the proceeds of the settlement to Ms. Miller. In October 2006, Ms. Miller—represented by Mr. Nace—proceeded to trial against the remaining defendants, obtaining a judgment for $500,000.

In July 2007, Mr. Trumble sent a letter to Mr. Burke asking about the status of the medical-malpractice case. Although Mr. Burke's records indicate that the letter was forwarded to Mr. Nace's address, Mr. Nace claims that he did not receive a copy of the letter. In March 2008, again without informing Mr. Trumble or the bankruptcy court, Mr. Nace sent Ms. Miller a check for over $200,000, to reflect her share of the proceeds from the medical-malpractice judgment.

In October 2008, Mr. Trumble sent letters to Mr. Burke and Mr. Nace saying that he had discovered that the medical-malpractice case had been resolved but had received neither notice of that resolution nor the bankruptcy estate's portion of the proceeds from the case. Mr. Trumble did not send the letter to Mr. Nace's correct address. In November 2008, Mr. Trumble sent a second letter to Mr. Nace at the correct address, requesting settlement documents mentioned in the October 2008 letter. In his response, Mr. Nace said that he had not received the October 2008 letter, “that there was not any settlement ... [because] the case was tried to jury verdict,” and that he was unsure why Mr. Trumble expected that Mr. Nace would contact him, because “there was no settlement.” Mr. Nace indicated in a subsequent letter that he had not heard from Mr. Trumble since signing the affidavit in February 2005 and had not received the application to employ special counsel or the order authorizing appointment of special counsel until January 2009.

Mr. Trumble filed a disciplinary complaint against Mr. Nace in West Virginia, based on Mr. Nace's failure to distribute proceeds from the medical-malpractice judgment to the bankruptcy estate.² After receiving notice of the complaint from the Office of Disciplinary Counsel (“ODC”), Mr. Nace responded by letter, saying that he had not received a copy of the application to employ special counsel in January 2005 when he received the affidavit and that he “ subsequently learned [the application] existed.”

The ODC issued a subpoena ordering Mr. Nace to appear at a hearing before an Investigative Panel of the Lawyer's Disciplinary Board (“LDB”) and to produce his “complete client file relating to [his] representation of [Mr.] Trumble.” At the hearing, Mr. Nace testified that he had not seen the application to employ special counsel or the affidavit sent by Mr. Trumble until late 2009, and that—other than the affidavit he had signed—he did not know about the bankruptcy proceeding involving Ms. Miller when he distributed the settlement proceeds to Ms. Miller. Pursuant to the subpoena, Mr. Nace turned over ninety pages of documents from four boxes of client files. Mr. Nace did not turn over his September 2006 letter asking Ms. Miller who her bankruptcy attorney was.

In October 2010, Mr. Trumble filed a complaint against Mr. Burke and Mr. Nace in the Bankruptcy Court for the Northern District of West Virginia, alleging breach of contract and legal negligence in connection with the failure to turn over medical-malpractice proceeds to the bankruptcy estate.³In re Miller, Nos. 04–3365, etc., 2013 WL 3808133, at *1–2 (Bankr.N.D.W.Va. July 21, 2013).

In October 2011, Mr. Nace appeared at a second hearing, before the West Virginia Hearing Panel Subcommittee (“HPS”). Mr. Nace testified that he had signed the affidavit because “Mr. Burke asked [him] to sign,” but that he then did not hear from Mr. Trumble until late 2008. Mr. Nace testified that although he did not recall seeing the application to employ special counsel or the proposed order, he had in fact received those documents. The HPS questioned Mr. Nace regarding his failure to produce the September 2006 letter to Ms. Miller—discovered in Mr. Burke's files—in response to the subpoena. Mr. Nace testified that he had “many, many, many files” relating to Ms. Miller's medical-malpractice case and that he had only produced documents that he thought might be appropriate. In an affidavit executed two days after the HPS hearing, Mr. Nace explained that he did not have a complete client file for Mr. Trumble, because he had never represented Mr. Trumble. Mr. Nace added that the ODC had not requested his entire file on the medical-malpractice case and that the questions and subpoena requests from the LDB “were clearly inartful.”

The HPS found by clear and convincing evidence that Mr. Nace had violated West Virginia Rules of Professional Conduct 1.1 (competence), 1.3 (diligence), 1.4(a) and (b) (communication with client), 1.15(b) (safekeeping property), 8.4(c) (dishonesty), and 8.4(d) (conduct prejudicial to administration of justice). The HPS recommended that Mr. Nace be suspended from practicing law in West Virginia for 120 days without any requirement for reinstatement, that Mr. Nace provide fifty hours of pro bono representation, and that Mr. Nace comply with the disposition of the pending bankruptcy action against him.

Mr. Nace challenged the proposed discipline in the Supreme Court of Appeals of West Virginia, arguing among other things that Mr. Trumble was not his client and that the West Virginia courts lacked jurisdiction over the disciplinary case, because Mr. Nace's responsibilities to Mr. Trumble were controlled by the bankruptcy court.

The West Virginia Supreme Court disagreed with Mr. Nace's arguments, found that Mr. Nace had committed disciplinary infractions, and adopted the sanction recommended by the HPS. The West Virginia Supreme Court determined that it had jurisdiction, because the West Virginia Rules of Professional Conduct governed Mr. Nace's duties to Mr. Trumble, and the question whether Mr. Nace had violated those...