In re Odo

• Citation: 375 P.3d 320,304 Kan. 844
• Decision Date: 15 July 2016
• Docket Number: No. 114,863,114,863
• Parties: In the Matter of Lyle Louis Odo, Respondent.
• Court: United States State Supreme Court of Kansas

304 Kan. 844

375 P.3d 320

In the Matter of Lyle Louis Odo, Respondent.

No. 114,863

Supreme Court of Kansas.

Opinion filed July 15, 2016

Kimberly L. Knoll, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett, Disciplinary Administrator, was with her on the formal complaint for the petitioner.

Thomas A. Hamill, of Martin, Pringle, Oliver, Wallace & Bauer, L.L.P., of Overland Park, argued the cause, and Lyle Louis Odo, respondent, argued the cause pro se.

ORIGINAL PROCEEDING IN DISCIPLINE

Per Curiam:

This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Lyle Louis Odo, of Platte City, Missouri, an attorney admitted to the practice of law in Kansas in 2007. Respondent was admitted to the practice of law in Missouri in 1975.

On August 10, 2015, the office of the Disciplinary Administrator filed a formal complaint against the respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). The respondent filed an answer on September 2, 2015. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on November 4, 2015, where the respondent was present and was represented by counsel. The hearing panel determined that respondent violated KRPC 1.7(a)(2)

(2015 Kan. Ct. R. Annot. 519) (conflict of interest); 1.8(a) (2015 Kan. Ct. R. Annot. 530) (conflict of interest); 1.8(e) (2015 Kan. Ct. R. Annot. 530) (providing financial assistance to client); 1.9(a) (2015 Kan. Ct. R. Annot. 539) (duties to former clients); 1.15(d) (2015 Kan. Ct. R. Annot. 556) (preserving client funds); and 8.4(d) (2015 Kan. Ct. R. Annot. 672) (engaging in conduct prejudicial to the administration of justice).

Upon conclusion of the hearing, the panel made the following findings of fact and conclusions of law, together with its recommendation to this court:

“Findings of Fact

....

“8. On June 24, 2011, C.M. and L.F. filed a complaint against the respondent with the disciplinary administrator's office. C.M. and L.F. also filed a complaint with the Missouri Office of Disciplinary Counsel.

“9. In August 2013, a Missouri disciplinary hearing panel conducted a hearing. In December 2013, the disciplinary hearing panel issued its written decision. The hearing panel made the following findings of fact:

‘10. On November 6, 2009, [C.M.] was a passenger in a vehicle driven by [L.F.], which was involved in a collision with a vehicle driven by an employee of Alan Cummings. The accident occurred in Atchison County, Kansas.

‘11. As a result of the accident, [C.M.] sustained a fractured hip and was life-flighted to a hospital where he was hospitalized for six days.

‘12. On December 2, 2009, [L.F.] and [C.M.] both executed a written attorney-client agreement with Respondent for legal representation of them regarding their respective injury claims arising out of the motor vehicle accident.

‘13. Respondent's law firm is located in Missouri. [C.M.] and [L.F.] met with Respondent several times at Respondent's Missouri law office. Since there was no lawsuit filed by Respondent with respect to the personal injury claim, virtually all work performed by Respondent relative to that claim occurred in Missouri. Other legal work performed by Respondent for [C.M.] involved legal proceedings before a Missouri tribunal, e.g. Circuit Court of Platte County, Missouri or the City of Tracy, Missouri Municipal Court.

....

‘15. [L.F.]'s personal injury claim was settled by Respondent on January 14, 2011.

‘16. [C.M.] terminated Respondent's services in the personal injury claim on May 10, 2011, and retained Roger D. Fincher.

‘17. [C.M.]'s personal injury claim was settled in late 2011.

‘Findings of Fact Relating to Count I:

Prohibited Transactions [Rule 4–1.8(a) ]

‘18. Beginning about February 2010, [C.M.] was unable to work and was experiencing financial distress. He investigated the possibility of obtaining loans as an advance against his anticipated personal injury settlement, and inquired of Respondent as to this possibility.

‘19. Respondent advised [C.M.] that he could arrange for him to receive loans on better terms than the sources he had investigated.

‘20. Respondent recommended [C.M.] borrow funds from Kristen Nicole Properties, Inc. (KNP).

‘21. KNP is a closed corporation which Respondent incorporated in 1994. He is President and registered agent of the corporation, and the only officer, employee, or representative it has ever had. KNP has the same address, telephone number, and email address as Respondent's law office.

‘22. At the time of its incorporation Respondent was the sole owner of KNP, but in 2005 Respondent transferred all the shares of KNP to his daughter, Kristen Nicole Odo, who is now the sole shareholder and beneficiary.

‘23. At all times in question Respondent was the registered agent of KNP, as well as its sole director and officer, and was the only person through whom [C.M.] or anyone else deals with KNP.

‘24. Respondent testified that the primary purpose of KNP is to invest in and manage real estate properties.

‘25. Respondent testified that no one receives any salaries, dividends, or income from KNP. The sole benefit of its economic activities is the appreciation of its value. Respondent testified that he transferred ownership of KNP to Kristen Nicole Odo as an estate planning action, so that she would benefit from the wealth it created upon his death or cessation of business. However, Respondent is still the only person who operates or represents KNP.

‘26. Although Respondent is not the technical owner of KNP, he still derives benefit from profits earned by the company, as according to his own testimony such profits enhance the value of his estate, and thus Respondent has an ownership, possessory, security, or other pecuniary interest in transactions with KNP for purposes of Rule 4–1.8(a).

‘27. The acts of KNP in loaning money to Respondent's client are the acts of Respondent himself since Respondent was the only officer, director and agent of the lender and controlled the checking account used to consummate the loans and personally signed each loan check. Respondent controlled each aspect of the transactions without the independent assistance of any other person. Respondent's daughter Kristen Nicole Odo had no knowledge of the loan transactions between KNP and [C.M.].

‘28. During the period from February 2010 to May 2011, Respondent arranged sixteen separate loan transactions between [C.M.] and KNP. [L.F.] signed twelve of the loan documents as a guarantor or co-signer.

‘29. Respondent served as counsel for KNP in the loan transactions, and also had an active client-attorney relationship with [C.M.] and [L.F.] at all times during the loan transactions. Respondent testified that he went through the loan documents with [C.M.] and [L.F.], answered their questions, and generally advised them as their attorney as to the loan transactions.

‘30. Respondent did not advise [C.M.] and/or [L.F.] in writing of the desirability of seeking independent legal counsel on the transaction, as required by Rule 4–1.8(a)(1).

‘31. Respondent did not fully disclose and transmit the transaction and terms on to the [sic ] [C.M.] and [L.F.] in writing in a manner that can be reasonably understood by the client, as required by Rule 4–1.8(a)(2).

‘32. [C.M.] and [L.F.] did not give informed consent, in a writing signed by them, to the essential terms of the transaction and Respondent's role in the transaction, including whether Respondent was representing them in the transaction, as required by Rule 4–1.8(a)(3).

‘33. These business transactions were secured loan transactions, documented in each case by a “Note, Disclosure and Security Agreement” (Exhibit 4) jointly executed by [C.M.] as the borrower and [L.F.] as guarantor or co-signer. Under these loan agreements, Kristen Nicole Properties, Inc. (“KNP”) was identified as the lender.

‘34. Each of the sixteen loan agreements contained the following provision: “To secure the obligations of this Loan Agreement, I give you a security interest in the Property described below. Sufficient portion of the proceeds of an injury claim against Alan Cummings which occurred November 6, 2009 to satisfy this note.”

‘35. Each of the sixteen loan transactions was secured by a lien on the proceeds of [C.M.]'s personal injury settlement, in the matter in which Respondent represented [C.M.].

‘36. Respondent, representing KNP, charged [C.M.] a transaction fee of $75 for each loan transaction, amounting to $1,200 for the sixteen transactions.

‘37. The interest rate for the loans was 180% for the first month, and 38.8% per annum, a rate the Panel finds excessive, burdensome, and possibly illegal. [Footnote: The hearing panel in the instant case concurs with the Missouri disciplinary hearing panel that in addition to the rule violations, the hearing panel also concludes that the interest rate charged by the respondent is excessive and burdensome. Further, if the transaction had occurred in Kansas, it would be illegal. See K.S.A. 16–207

.]

‘38. Respondent advised and required [L.F.] to co-sign for the loans although she acquired no interest in the loan proceeds, which were not terms fair and reasonable to [L.F.].

‘Findings of Fact Relating to Count II:

Financial Assistance to a Client [Rule 4–1–8(e) ]

‘39. From Respondent's own funds, during the course of the representation, Respondent paid various bills for medical treatment received by [C.M.]. Respondent twice paid $500 each for [C.M.]'s epidural treatments to relieve his pain. Respondent admits that such payments were for actual medical treatment received by [C.M.].

‘40. Respondent also paid $4,079 for an MRI on [C.M.]'s behalf. Respondent's amended answer characterizes this payment as a payment of “medical evaluation” rather than for “medical treatment,” but in his testimony Respondent did indeed admit that the $4,079 payment was “diagnostic” for his client's “medical treatment,” and also included...