In re Petition for Disciplinary Action Against Powell, A18-1967
| Decision Date | 06 May 2020 |
| Docket Number | A18-1967 |
| Parties | In re Petition for Disciplinary Action against Karlowba R. Adams Powell, a Minnesota Attorney, Registration No. 0327335. |
| Court | Minnesota Supreme Court |
Original Jurisdiction
Took no part, McKeig, J.
Office of Appellate Courts
Susan M. Humiston, Director, Binh T. Tuong, Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.
Bobby Joe Champion, Minneapolis, Minnesota, for respondent.
1. The record supports the referee's findings of fact and conclusions of law that respondent attorney violated the Minnesota Rules of Professional Conduct. The record also supports the referee's findings of aggravating factors, except regarding lack of remorse.
2. The appropriate discipline is an indefinite suspension from the practice of law with no right to petition for reinstatement for 120 days.
Suspended.
The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against respondent, Karlowba R. Adams Powell, alleging professional misconduct warranting public discipline. The allegations of misconduct by Powell fell into four categories.1 First, the Director alleged that Powell engaged in the unauthorized practice of law. Second, the Director alleged that Powell knowingly made false statements. Third, the Director alleged that Powell mismanaged client funds. Fourth, the Director alleged that Powell failed to cooperate with the Director's investigation.
A referee held a hearing and concluded that Powell had violated the Minnesota Rules of Professional Conduct as alleged by the Director. The referee also found five aggravating factors and no mitigating factors. The referee recommended that Powell be indefinitely suspended from the practice of law and ineligible to petition for reinstatement for a period of six months.
We conclude that the referee did not clearly err in finding and concluding that Powell knowingly made false statements, engaged in the unauthorized practice of law, violated the rules about client funds, and failed to cooperate with the Director's investigation. But the referee erred in the finding on an aggravating factor: lack of remorse. We conclude that a minimum suspension of 120 days is appropriate.
Powell was admitted to practice law in Minnesota in 2003. She began her practice at a law firm. In 2011, she started her own practice focused on criminal defense and family law. Before this appeal, Powell was the subject of three disciplinary proceedings.
In 2007, Powell was privately admonished for failing to act with reasonable diligence and promptness, and failing to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. In 2016, Powell was again privately admonished for failing to diligently pursue a client's representation and failing to keep a client advised of the representation.
In the fall of 2015, Powell failed to appear on behalf of a client in court, and in 2016, she failed to cooperate with the Director's investigation. On June 14, 2017, the Director and Powell entered into a stipulation for discipline. The stipulation recommended a 45-day public suspension, effective 14 days from the date of the suspension order, and a two-year probation period upon reinstatement. On July 19, 2017, we issued an order suspending Powell from the practice of law for 45 days, effective immediately, to be followed by probation. In re Powell, 901 N.W.2d 646 (Minn. 2017) (order). We did not accept the stipulation's proposed effective date.
Some of the relevant events in this matter took place after Powell and the Director entered into the stipulation for discipline in the 2017 proceeding, but before we issued our order. A little over one week after Powell entered into the stipulation, Powell agreed to take on a new client, J.S. Powell met J.S., and her mother, J.H., on June 22, 2017, and agreed to represent J.S. in three criminal felony matters. J.S. told Powell that the case wasurgent, with an upcoming hearing on August 12, 2017. Powell did not tell J.S. or J.H. of her impending suspension. J.H. paid part of the retainer in cash, and Powell gave J.H. a payment receipt. J.H. did not countersign the payment receipt.
From July 24 to 31, 2017, Powell continued working on J.S.'s case by gathering information and providing legal advice. Powell invoiced J.S. for this work. On August 1, 2017, Powell contacted a district court clerk and a prosecutor about the possibility of a continuance. Ultimately, J.S. terminated Powell's representation, and J.H. had to quickly find a replacement attorney for her daughter.
In the summer of 2017, Powell was representing B.B. in an ongoing order for protection and child custody case. On August 1, 2017, Powell appeared on behalf of B.B. before a family court referee. Before going on the record, Powell, opposing counsel, and the guardian ad litem met in chambers to discuss scheduling with the referee. During this discussion, Powell did not mention her suspension. She said that she was unavailable until after September 16, 2017, because of vacations and several other trials. Later, Powell told the Director that she did not mention her suspension because she did not believe it was for public consumption and was not something that she was in a position to disclose.
The parties then went on the record. The referee asked Powell if she had checked her calendar for her availability for a telephone conference. Powell responded that she had checked her calendar and was not available on August 8. She said she would try to have someone cover the telephone conference for her. The referee set the telephone conference for August 8.
On August 1, Powell mailed notices dated July 28, 2017, to inform the court, opposing counsel, and her clients of her suspension. She also called clients and told them that she was suspended.
On August 7, Powell emailed the referee, opposing counsel, and the guardian ad litem in the B.B. matter, and said that she was unable to find an attorney to attend the August 8 telephone conference. She also included a paragraph discussing B.B.'s case and stating his position on ongoing issues. The August 8 telephone conference was continued until August 28, and Powell arranged for other counsel to appear on behalf of B.B. Nonetheless, in subsequent communications with the Director, Powell claimed that she found an attorney to appear and the August 8 telephone conference was held.
On September 25, 2017, we conditionally reinstated Powell to the practice of law. In re Powell, 901 N.W.2d 915 (Minn. 2017) (order). We placed Powell on supervised probation for two years. Her probation required supervision by a licensed Minnesota attorney, appointed by the Director, to monitor her compliance with the terms of her probation. In early 2018, Powell met with the members of the probation department of the Director's office because she did not have a probation supervisor.
During this meeting, the Director requested the client files for B.B. and another client, R.W. Powell provided these client files, which included fee agreements. The Director reviewed those files and discovered that Powell's fee agreements did not comply with Minn. R. Prof. Conduct 1.5(b).
After the Director discovered the non-compliant fee agreements, the Director reviewed Powell's trust and business accounts. The Director learned that B.B. had paidPowell a flat fee and that Powell had deposited the money into her business account around August 15, 2016. But Powell did not complete B.B.'s legal representation until December 11, 2017. R.W. paid Powell a flat fee on June 15, 2017, and Powell deposited the money into her business account. Powell completed R.W.'s legal services on April 20, 2018.
During the Director's investigation, the Director asked Powell where she had placed the unearned portions of the B.B. and R.W. fees. Powell said that she had deposited the fees in her trust account and agreed to provide documentation.
In March 2018, Powell told the Director's office that the fees were actually placed into her business account. She also said that a bank employee told her that the funds were placed into her business account due to a bank error. The Director's office requested that Powell provide documentation from the bank confirming the error. The Director's office followed up with Powell multiple times about providing the documentation. Powell did not do so.
On December 4, 2018, the Director filed a petition against Powell. The Director alleged that Powell made intentionally false statements, engaged in the unauthorized practice of law, violated rules pertaining to client funds, and failed to cooperate with the Director's investigation. Powell denied that any of the allegations warranted discipline.
On June 23-24, 2019, a referee conducted a discipline hearing. The referee heard testimony from six witnesses: the referee and the opposing counsel present at the August 1, 2017, hearing; the bank employee who allegedly told Powell that the deposits in the business account were bank errors; the lawyer in the Director's office that corresponded with Powell about the bank errors; J.H.; and Powell.
The referee found and concluded that Powell knowingly made false statements, engaged in the unauthorized practice of law, violated rules pertaining to client funds, and failed to cooperate with the Director's investigation. The referee also found five aggravating factors: a history of prior discipline; engaging in misconduct while on public disciplinary probation; intentional misconduct; lack of remorse; and a lack of candor with the court at the discipline hearing. The referee found no mitigating factors.
The referee concluded that Powell violated Minn. R. Prof. Conduct 1.15(h) as interpreted by Appendix 1, Section II (2),2 1.15(c)(5),3 3.4(c),4 5.5(a),5 3.3(a)(1),6 4.1,78.1(a),8 8.4(c) and (...
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