In re Swier

• Decision Date: 19 February 2020
• Docket Number: #29156
• Citation: 939 N.W.2d 855
• Court: South Dakota Supreme Court
• Parties: In the MATTER OF the DISCIPLINE OF Scott R. SWIER as an Attorney at Law

939 N.W.2d 855

In the MATTER OF the DISCIPLINE OF Scott R. SWIER as an Attorney at Law

#29156

Supreme Court of South Dakota.

ARGUED JANUARY 15, 2020

OPINION FILED February 19, 2020

ROBERT B. FRIEBERG, THOMAS H. FRIEBERG of State Bar of South Dakota, Beresford, South Dakota, Attorneys for Disciplinary Board.

JEFFERY G. HURD of Bangs, McCullen, Butler, Foye & Simmons, LLP, Rapid City, South Dakota, Attorneys for respondent.

GILBERTSON, Chief Justice

[¶1.] Following duly noticed hearings on June 17, 2019, and September 12, 2019, the Disciplinary Board filed findings of fact, conclusions of law, and a recommendation that attorney Scott R. Swier be publicly censured for violating Rule 1.9 (a) (Duties to Former Clients),¹ Rule 5.1 (Responsibilities of Partners, Managers, and Supervisory Lawyers),² and Rule 8.4 (a) and (d) (Misconduct),³ of the South Dakota Rules of Professional Conduct, SDCL ch. 16-18 app. This filing with the Supreme Court constitutes a formal accusation against Swier. SDCL 16-19-67(1). Swier admitted the allegations in the formal accusation. SDCL 16-19-67(3). Pursuant to its inherent authority to supervise and, where necessary, discipline attorneys, this Court conducted a hearing and now concludes that the appropriate sanction is a one-year suspension from the practice of law. SDCL 16-19-20 ; SDCL 16-19-21 ; SDCL 16-19-35(2).

BACKGROUND

[¶2.] Swier graduated from the University of South Dakota School of Law in 1997, passed the bar examination, and was admitted to practice law on January 2, 1998. He clerked for the Seventh Circuit for one year, was in private practice for seven years, and served as an assistant attorney general for three years. He purchased Tom Alberts’ law practice in Avon, South Dakota, and re-entered private practice in 2011.

[¶3.] At the time of the June 17, 2019, hearing in this matter, Swier Law Firm had offices in Avon, Sioux Falls, Corsica, Winner, and White Lake. The firm was in the process of opening an office in Wagner and had an office in Sturgis affiliated with a Sturgis law firm. The firm has an online presence that generates both client leads and interest from attorneys seeking employment with the firm. It also has a business relationship with Hoy Law. Hoy Trial Lawyers Prof. LLC, https://hoylaw.com/swier-law-/-hoy-law.html (last visited February 17, 2020).

[¶4.] Swier is the CEO of Swier Law Firm, Prof. LLC, and is primarily responsible for the management of the firm. For the majority of its existence, Swier was its sole shareholder. Swier makes all decisions regarding billing the firm’s clients after attorney employees submit timesheets to him and the firm’s finance director. The firm has employed up to eleven attorneys. As employees, each attorney has an individual guaranteed base salary. There is also an incentive bonus structure that is paid on a quarterly basis. Depending on their experience with the firm, attorneys receive a bonus on the net revenue they bring into the firm. Christmas bonuses depend on how the firm is doing financially and are at Swier’s discretion.

[¶5.] A financial planner valued the Swier Law Firm at between four to four-and-a-half million dollars based on gross revenues, net revenues, and its online presence. Swier is now a 95 percent shareholder in the firm, and his attorney sister is a 5 percent shareholder. Swier has also started to offer his attorney employees a "one one-hundredth of a percent of ownership in the firm" in order to have them feel invested in the firm. According to Swier, one attorney who became a shareholder under this arrangement and left the firm was entitled to $400 as the attorney’s share.⁴

[¶6.] In the eight years that the firm has existed, six attorneys have left Swier Law Firm. There are currently two attorneys (Swier and his sister) in the Avon office, one attorney in Winner, and two attorneys in Sioux Falls. Jake Fischer, an attorney who left and returned to Minneapolis has, according to Swier, "kind of like an of counsel relationship" with Swier Law, and an estate and business attorney works from Germany where her husband is in the military. Swier travels to the Sioux Falls office weekly and the Winner office monthly. He visits other offices on an as-needed basis. His contact with firm attorneys is also via teleconference, Skype, or GoToMeeting. As for Swier’s personal caseload, 95 percent of his practice is representing schools throughout the state. He also does some business litigation. He normally charges schools $275 per hour.

[¶7.] While Swier has no prior history with the Disciplinary Board, in a recently reported case in the North Western Reporter, the Swier Law Firm and an attorney in the firm were disqualified in a case by court order for violating the Rules of Professional Conduct on conflicts of interest. See Berggren v. Schonebaum , 2017 S.D. 89, 905 N.W.2d 563. In Berggren , in 2014, John Berggren, the buyer of a stud horse, sued Jeff Schonebaum, the seller of the horse, claiming Schonebaum misrepresented the horse’s ability to breed. Jake Fischer of Swier Law Firm, and Swier himself, appeared in the action on behalf of Berggren. Sometime later that year, Lawrence Meendering, who loaned Schonebaum the money to initially buy the horse, met with Fischer because of his concern that Schonebaum would not repay the loan and other personal loans. Fischer did not disclose that he represented Berggren. Ultimately, the Berggren complaint was amended to include Meendering as a defendant, alleging that he was jointly liable for Schonebaum’s conduct.

[¶8.] Meendering filed a motion seeking Fischer’s disqualification for violating Rule 1.18(b) and (c) of the Rules of Professional Conduct which provide, in part, that an attorney shall not use or reveal information learned in consultation with a prospective client and:

shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter[.]

Rule 1.18(c). Meendering also filed a motion to disqualify Swier Law Firm under Rule 1.10, which generally provides that an attorney’s conflicts of interest are imputed to all other members of the attorney’s firm.

[¶9.] The circuit court granted the motion to disqualify Fischer and the Swier Law Firm. There was no appeal from the order disqualifying Fischer and the Swier Law Firm from the case. Fischer did appeal from the circuit court’s order awarding attorney’s fees. Fischer, along with Swier and Michael Henderson of Swier Law Firm, represented Fischer on appeal.

THEELER COMPLAINT

[¶10.] Pursuant to Rule 8.3 (Reporting Professional Misconduct) of the South Dakota Rules of Professional Conduct, attorneys Jack Theeler and Richard J. Rylance of Morgan Theeler LLP filed a disciplinary complaint regarding Swier’s, Lindsay Harris’, and Michael Henderson’s representation of Shirley A. Hickey.

[¶11.] A history of the Hickey family is necessary to understand the dynamics of this disciplinary complaint. Shirley and Cliff Hickey married in 1956 and over the course of the next twenty years had eight children. They operated a residential and commercial contracting business, Cliff Hickey Construction (CHC), and a lumberyard in Chamberlain. They employed three of their sons in these successful businesses.

[¶12.] Warren Hickey is Shirley and Cliff’s sixth child. Beginning in 1988, CHC subcontracted HVAC work to Warren’s heating and cooling business. The expenses and profits of that business were paid from and deposited into CHC’s account. Warren and Shirley kept track of what CHC owed Warren. This business arrangement—as well as the fact that Warren lived with his parents until his early thirties, then bought the house next door to Shirley from Shirley and lived in it, and was deeded land by Shirley in 2016—created animosity and tension between the sons Shirley and Cliff employed, as well as the other siblings.

[¶13.] Cliff died in 2007. One son purchased the lumberyard while another purchased CHC’s assets. Shirley relied on Warren to maintain her properties. Shirley and Warren agreed that they would document Warren’s expenses and that he would be paid sometime later.

[¶14.] In March 2010, Shirley retained the late Carolyn A. Thompson of Thompson Law, P.C. in Sioux Falls to draft the Shirley A. Hickey Living Trust. Shirley’s youngest children, Kristina Lippert, a full-time mom, and Darren, a Chamberlain funeral director, were named successor co-trustees. If Kristina or Darren were unable or unwilling to serve, the trust named Warren to serve with the remaining successor co-trustee. The trust treated all of Shirley’s children equally regarding distribution.

[¶15.] In 2012, Shirley was diagnosed with Parkinson’s Disease

. Shirley believed that she needed to get her financial affairs in order. She and her sister, Ann, reviewed years of records to determine what she owed Warren. It took two years to determine the amount owed.

[¶16.] In November 2015, Shirley asked Thompson Law to draft a promissory note in favor of Warren. The work was assigned to attorney Lindsay Harris who was admitted to the bar in 2012. Harris drafted the promissory note and witnessed Shirley execute it on November 10, 2015. The promissory note provided that Shirley, as trustee, or her successors under the Shirley A. Hickey Living Trust, promised to pay Warren $4,000,000 with interest at an initial rate per annum equal to the federal short-term rate.⁵ Harris was not involved in ascertaining the merits of the $4,000,000 amount. Kristina was present when her mother signed the note and had no objection to its purpose or amount.

[¶17.] Harris worked with Carolyn Thompson and another associate on matters pertaining to Shirley’s life and eventually took over the file for Thompson Law. In September 2016, Shirley and Kristina met with Harris at Thompson Law to amend the Shirley A. Hickey Living Trust. T...