Iowa Supreme Court Attorney Disciplinary Bd. v. Lubinus, 15–0672.

• Decision Date: 11 September 2015
• Docket Number: No. 15–0672.,15–0672.
• Citation: 869 N.W.2d 546
• Parties: IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant, v. Blake D. LUBINUS, Respondent.
• Court: Iowa Supreme Court

869 N.W.2d 546

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant

v.Blake D. LUBINUS, Respondent.

No. 15–0672.

Supreme Court of Iowa.

Sept. 11, 2015.

Charles L. Harrington and Amanda K. Robinson, Des Moines, for complainant.

Michael A. Horn of Kuntz, Laughlin & Horn, Des Moines, for respondent.

Opinion

MANSFIELD, Justice.

This matter comes before us on the report of a division of the Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R. 35.11. The Iowa Supreme Court Attorney Disciplinary Board charged attorney Blake D. Lubinus with violating several of our ethical rules by failing to deposit an advance fee into his trust account, transferring unearned fees out of his trust account, and failing to furnish contemporaneous accountings to his clients upon making trust account withdrawals. The parties stipulated as to the underlying facts. The stipulation also addressed the rule violations that had occurred and the appropriate sanction for those violations. The commission accepted the parties' stipulation as to facts and rule violations but recommended a public reprimand for Lubinus rather than the proposed thirty-day suspension.

Upon our review, we determine that all the alleged ethical violations took place. However, given the nature and extent of those violations, we believe a reprimand is an insufficient sanction and suspend Lubinus's license to practice law in Iowa for thirty days, as originally proposed by the parties.

I. Background Facts and Proceedings.

Lubinus was admitted to the Iowa bar in 2010. At the time of the alleged ethical violations, he maintained a solo practice in Polk County. Lubinus is engaged in the general practice of law with a focus on commercial collections, criminal defense, and juvenile law.

In August 2012, Lubinus was retained to represent an individual charged with operating while intoxicated (OWI). He agreed to take the case for a $1500 flat fee. Before Lubinus had received any funds from the client, he withdrew $400 from his operating account to cover the client's bond and then transferred $400 from his office trust account to his operating account. The bond ended up being only $180, and the client paid Lubinus $1680 for both the flat fee and the bond. Lubinus deposited the entire $1680 when received from the client into his operating account. At least initially, Lubinus did not restore the $400 to his trust account.

Lubinus handles collections cases on a contingent-fee basis, usually receiving between twenty and twenty-five percent of the amount collected. In this area of practice, Lubinus's law firm uses a computerized accounting system that processes payments for clients and calculates the contingent fees he is entitled to withdraw from the trust account. In June 2013, Lubinus deposited $20,379.47 total into his trust account. In July, his deposits totaled $30,879.42. During June and July, Lubinus made transfers totaling $6600 from his trust account to either his office operating account or his personal bank account. Lubinus acknowledges these funds had not yet been earned, at least in part because Lubinus had not yet completed the work for his clients by providing them with their respective shares of the collection payment. These transfers were made electronically, and Lubinus did not initially let his support staff know about them, nor did he provide contemporaneous notice to his clients.

These transfers caused accounting errors, problems with monthly reconciliations, and other issues with Lubinus's trust account. Lubinus restored $6100 to the trust account in late July and subsequently placed another $500 in escrow when he realized he had not restored the full $6600.

Lubinus reported his own actions to the Board. In an affidavit, Lubinus explained that when the premature withdrawals of $6600 occurred, “I was at a financial low point in my career. I felt desperate and did not see any way out of my short term money problems.”

Lubinus has ceased making electronic transfers out of the trust account, so all transactions from the trust account are now handled by check only. Lubinus has also taken on a law partner. The parties agree that no client lost funds as a result of Lubinus's actions and that Lubinus has repaid all funds to his trust account that were improperly transferred.

The Board filed a complaint with the grievance commission on October 13, 2014, alleging Lubinus had violated Iowa Rules of Professional Conduct 32:1.15(a), (c), and (f) and Iowa Court Rules 45.2(3)(a )(9) and 45.7(3). On October 31, Lubinus filed an answer admitting essentially all of the factual allegations and violations alleged in the complaint. The parties submitted a joint stipulation of facts, legal violations, and proposed sanction on March 31, 2015. Therein, the parties agreed to waive a formal hearing.

On April 16, the commission adopted the parties' factual statements and agreed with the stipulated rule violations. It concluded, however, that a lesser sanction was appropriate. Its report explained as follows:

In reaching its conclusion, the Commission considers several mitigating factors. Respondent self-reported his misconduct to the Board and has cooperated fully during the proceedings. Respondent admitted to the violations in an affidavit provided to the Board and dated February 25, 2014, and in an Answer filed with the Commission on October 31, 2014. Respondent has instituted procedures to prevent similar violations in the future. Respondent is relatively new to the practice of law, having been admitted in 2010, and has no previous disciplinary complaints. No clients were harmed or prejudiced as a result of Respondent's actions. Respondent has repaid to his trust account all funds that were improperly transferred. The violations were isolated, having taken place in June and July 2013 and August 2012.

Based on these mitigating factors, the commission found Lubinus's case distinguishable from other cases involving trust account violations that had resulted in suspensions. It therefore recommended that Lubinus receive a public reprimand. The matter is now before us for our independent review. In their written submissions to us regarding sanction, the Board continues to argue for a thirty-day suspension while Lubinus now urges us to accept the commission's recommendation of a public reprimand.

II. Scope of Review.

We review attorney disciplinary proceedings de novo. Iowa Ct. R. 35.11(1) ; Iowa Supreme Ct. Att'y Disciplinary Bd. v. Eslick, 859 N.W.2d 198, 201 (Iowa 2015). The Board has the burden of proving the attorney's misconduct by a convincing preponderance of the evidence. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Hedgecoth, 862 N.W.2d 354, 360 (Iowa 2015). “A convincing preponderance of the evidence is more than a preponderance of the evidence, but less than proof beyond a reasonable doubt.” Iowa Supreme Ct. Att'y Disciplinary Bd. v. Crum, 861 N.W.2d 595, 599 (Iowa 2015) (internal quotation marks omitted).

Stipulations of fact are controlling, but stipulations as to violations and appropriate sanctions do not bind us. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Bartley, 860 N.W.2d 331, 335 (Iowa 2015). We give respectful consideration to the commission's recommendations but are not bound by them. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Cross, 861 N.W.2d 211, 217 (Iowa 2015).

III. Analysis.

A. Review of Alleged Ethical Violations.

1. Iowa Rule of Professional Conduct 32:1.15(a). Rule 32:1.15(a) provides in part, “A lawyer shall hold property of clients ... that is in a lawyer's possession in connection with a representation separate from the lawyer's own property.” Iowa R. Prof'l Conduct 32:1.15(a). We find Lubinus violated rule 32:1.15(a) because he failed to deposit the advance fee he received on the OWI matter into his trust account and instead put it into an account of his own. See Iowa Supreme Ct. Att'y Disciplinary Bd. v. Clarity, 838 N.W.2d 648, 655 (Iowa 2013) (determining that a failure to deposit advance fees into a trust account violates rule 32:1.15(a)).

2. Iowa Rule of Professional Conduct 32:1.15(c). According to rule 32:1.15(c), “A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.” Iowa R. Prof'l Conduct 32:1.15(c). We determine Lubinus violated this rule by prematurely depositing the entire OWI advance fee into his operating account and by transferring funds out of his trust account before he had earned them with respect to his commercial collections cases.

3. Iowa Rule of Professional Conduct 32:1.15(f). Rule 32:1.15(f) provides that “[a]ll client trust accounts shall be governed by chapter 45 of the Iowa Court Rules.” Id. r. 32:1.15(f). Because we find violations of chapter 45 below, we agree Lubinus's conduct violated rule 32:1.15(f).

4. Iowa Court Rule 45.2(3)(a)(9). A lawyer is required to maintain “[c]opies of monthly trial balances and monthly reconciliations of the client trust accounts maintained by the lawyer.” Iowa Ct. R. 45.2(3)(a )(9). Based on Lubinus's stipulation that his improper withdrawals and transfers in June and July 2013 undermined his office's ability to maintain accurate records of his trust account, we find his conduct violated rule 45.2(3)(a )(9).

5. Iowa Court Rule 45.7(3). “A lawyer must deposit advance fee and expense payments from a client into the trust account and may withdraw such payments only as the fee is earned or the expense is incurred.” Id. r. 45.7(3). Lubinus violated this rule by prematurely shifting unearned funds out of his trust account and by depositing the entire OWI advance fee into his operating account.

6. Iowa Court Rule 45.7(4). This rule provides:

A lawyer accepting advance fee or expense payments must notify the client in writing of the time, amount, and purpose of any withdrawal of the fee or expense, together with a complete accounting. The attorney must transmit such notice no later than

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