Iowa Sup. Ct. Atty. Discip. Bd. v. Mccarthy

• Decision Date: 29 September 2006
• Docket Number: No. 06-0695.,06-0695.
• Citation: 722 N.W.2d 199
• Parties: IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee, v. James William McCARTHY, Appellant.
• Court: Iowa Supreme Court

Page 199

722 N.W.2d 199

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee, v. James William McCARTHY, Appellant.

No. 06-0695.

Supreme Court of Iowa.

September 29, 2006.

Dan T. McGrevey, Fort Dodge, for appellant.

Charles L. Harrington and Wendell J. Harms, Des Moines, for appellee.

STREIT, Justice.

James W. McCarthy has been admonished or reprimanded seven times for previous ethical violations. None of these previous ethical violations led to a suspension of his license to practice law. This trend ends today. The Iowa Supreme Court Attorney Disciplinary Board ("Board") accused McCarthy of improperly representing two clients with conflicting interests, neglecting client matters, and failing to respond to inquiries from the Board. The Grievance Commission of the Supreme Court of Iowa ("Commission") found McCarthy violated the Iowa Code of Professional Responsibility and recommended a one-year suspension. Due in part to mitigating factors, we suspend McCarthy's license for six months.

I. Background

McCarthy was born on April 13, 1950. Since his early childhood, he has suffered from recurrent bouts of depression.

He was admitted to practice law in 1981. He began his legal career working for a law firm in Des Moines that specialized in collections. He then secured employment with the Child Support Recovery Unit in Des Moines and later transferred to Fort Dodge. In 1987, he went into private practice with another attorney. In 1991, he became a solo practitioner. McCarthy's principal areas of practice are family law, juvenile law, bankruptcy, and criminal law. At least half of his case load relates to court appointed cases.¹

In the years since entering private practice, McCarthy has been punished numerous times for his ethical violations.

In March 1991, the Board admonished McCarthy for failing to tell his client a motion for sanctions had been filed, that the court held a hearing on the matter, and that the court imposed sanctions.

In November 1992, he was reprimanded for failing to make timely filings in a probate matter and for failing to respond to the Board's three notices about its investigation.

In December 1993, the Board admonished McCarthy when he represented an individual even though he had previously represented the individual's former spouse. The representation of this individual was adverse to the interests of the former spouse and was in a matter that was substantially related to the matter in which McCarthy had represented the former spouse. McCarthy did not receive informed consent for this representation.

In February 1996, he was reprimanded for representing a client when such representation was adverse to the interests of a former client. McCarthy had previously represented a mother in her dissolution of marriage proceedings. These proceedings involved matters of child custody, child support, and visitation. Later, McCarthy represented the father to secure a modification of the dissolution decree. This modification sought primary care and custody of the children. McCarthy also represented the interests of those children in a child in need of assistance proceeding. These representations were contrary to the interests of the mother — McCarthy's previous client. By representing the father in matters contrary to the interests of his former client, McCarthy thereby violated his continuing duty of confidentiality to the mother.

In June 2000, the Board admonished McCarthy for failing to appear for a trial and for failing to appear for a hearing.

In October 2001, the Board admonished McCarthy for neglecting a client's matter when he failed to tell the client that he was not going to pursue the client's claim against a bank.

Finally, in November of 2003, he was reprimanded for failing to respond to three notices from the Board about a complaint.

On September 12, 2005, the Board filed the present complaint against McCarthy. The complaint consisted of five counts, each count representing a separate individual alleged to be harmed by McCarthy's alleged ethical violations. One of the counts was eventually dismissed by the Board.

After the present complaint was filed, McCarthy went to an intensive treatment center in Texas for help with his depression. He participated in this program for ten weeks.

On March 26, 2006, McCarthy appeared for the hearing on this complaint. He admitted the Board's allegations in all but one of the counts. McCarthy testified about his long history of major recurrent severe clinical depression, which he blames for his ethical problems. McCarthy's physician testified extensively about McCarthy's current medical condition. In relation to McCarthy's future, the physician stated:

Well, I think it's gotten to the point where he reached the bottom of the barrel and had no way to go but up. And sometimes it takes a major disaster for people to realize they've got to change and they have to make changes now. And at least based on my last few sessions, I feel really good about how he's doing when he leaves the office.

McCarthy reports he has his depression under control for the first time in his life. He is on medication and sees a mental health professional regularly. He has made substantial changes in the operation of his private practice, including reducing his caseload and implementing better organizational tools. Additionally, McCarthy has a network of judges and attorneys committed to supporting and assisting him.

The Commission concluded McCarthy violated numerous provisions of the Iowa Code of Professional Responsibility for Lawyers and recommended a one-year suspension.

II. Standard of Review

We review attorney disciplinary proceedings de novo, Iowa Supreme Ct. Attorney Disciplinary Bd. v. D'Angelo, 710 N.W.2d 226, 229 (Iowa 2006), and review such proceedings pursuant to Iowa Court Rule 35.10. The Board has the burden to prove disciplinary violations by a convincing preponderance of the evidence. D'Angelo, 710 N.W.2d at 230. This burden is "less than proof beyond a reasonable doubt, but more than the preponderance standard required in the usual civil case." Id. (quoting Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Lett, 674 N.W.2d 139, 142 (Iowa 2004)).

III. Factual Findings

We find convincing evidence to prove the following:

A. Traster Matter

McCarthy represented Christopher Traster in a dissolution of marriage action. His wife, Scotti Traster, was represented by the father and son combination of Charles and Justin Deppe. Scotti filed her petition for dissolution on January 28, 2002. During the pendency of the dissolution action, both Christopher and Scotti agreed that McCarthy would represent them in a joint petition for bankruptcy. The parties agreed to file the petition jointly even though they were in the midst of dissolution proceedings because it would be more economical for both of them — there would be only one filing fee for the joint bankruptcy petition.² The bankruptcy petition was filed on October 21, 2002, and the debts listed in the bankruptcy petition were discharged on February 12, 2003.

On April 17, 2003, the Trasters' dissolution of marriage decree was entered. The parties had agreed upon all terms in the decree except for the payment of attorney fees. In regards to the payment of attorney fees, the court ordered:

That [Scotti] shall receive from [Christopher] the sum of $2000.00 for her attorney fees and expenses incurred herein, and that her Attorney Charles Deppe is hereby granted a judgment for said amount, to be due and payable from this date, with interest at the legal rate, until paid in full.

In response to this judgment, McCarthy sent Christopher a letter containing the following statements:

In going over your bankruptcy petition, Charles Deppe was not added as a creditor on the petition, due to the fact that he hadn't submitted a bill yet. I want to reopen the bankruptcy and include him as a creditor, so we can get rid of this legal bill. . . . I will . . . reopen the matter on your behalf only, and include Mr. Deppe as an unsecured creditor. (Emphasis added.)

On August 11, 2003, McCarthy filed a motion to reopen the bankruptcy so Christopher could discharge the court ordered attorney fee judgment. As described in the above-mentioned letter, the motion did not list Scotti as a party to the petition and did not list Scotti as a party to the debt.

Scotti eventually learned the bankruptcy case had been reopened. She contacted McCarthy and asked if she could also reopen the bankruptcy to include two recently discovered credit card debts that predated the original bankruptcy petition. McCarthy told her to fax the information on the debts to his office. He told her to stop paying on the debts because they would be discharged upon reopening the bankruptcy. Scotti sent him a copy of the bills and stopped making payments on the credit cards.

At some point, Justin Deppe contacted Scotti and informed her she would still be liable for the legal bill if Christopher's liability for the $2000 was discharged through bankruptcy. Scotti then sent a letter to McCarthy telling him she did not approve of Christopher trying to discharge the $2000 debt to her dissolution attorney.

Charles Deppe challenged Christopher's attempt to discharge the $2000 debt and was ultimately successful, in part because McCarthy did not attend the hearing on the matter.

McCarthy never amended the bankruptcy petition to include Scotti's two additional credit cards because there was some dispute as to whether Scotti was to pay the required filing fee before McCarthy filed the information about the two credit cards.

Scotti filed an ethics complaint when her checking account was garnished for failure to pay one of the two credit cards. The Board sent McCarthy three notices regarding this complaint and he failed to respond to any of the notices.

B. Schmitz Matter

McCarthy admits the following facts alleged by the Board. In May of 2003, McCarthy...