Iowa Supreme Court Attorney Disciplinary Bd. v. Earley

Decision Date06 September 2019
Docket NumberNo. 19-0662,19-0662
Citation933 N.W.2d 206
Parties IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant, v. Kyle L. EARLEY, Respondent.
CourtIowa Supreme Court

Tara van Brederode and Crystal W. Rink, Des Moines, for complainant.

Kyle L. Earley, Grinnell, pro se.

MANSFIELD, Justice.

A newly admitted Iowa attorney received retainers to handle family law matters, did essentially no work on those matters, and used the funds instead for personal purposes. The Iowa Supreme Court Attorney Disciplinary Board sought revocation of the attorney’s license, and the attorney did not contest revocation or argue he had a colorable future claim to the funds when he converted them. A division of the Iowa Supreme Court Grievance Commission held a hearing and concluded that most of the alleged ethical violations had occurred and that revocation was the proper sanction. On our review, we agree with the commission and therefore revoke the attorney’s license to practice law.

I. Facts and Procedural History.

Kyle Earley graduated from law school in 2017 and was admitted to the Iowa bar that same year. At relevant times, he maintained a solo private practice in Grinnell. This disciplinary proceeding concerns Earley’s representation of two different clients.

A. Ryan Patterson Matter. In 2018, Earley began representing Ryan Patterson in a dissolution of marriage action. Patterson agreed to pay Earley $250 per hour with a cap of $1500. Patterson also agreed to pay $300 for anticipated expenses. On April 27, Patterson’s mother gave Earley a check in the amount of $1800 for the representation. Earley deposited this check into his client trust account the same day. Thereafter, Earley drafted a petition for dissolution that he did not file. He performed no other work on the case.

Between March 14 and July 25, Earley moved $5910 from his client trust account into his business checking account. He also moved $2590 from his client trust account into his personal checking account. By July 31, these account transfers left $2 remaining in Earley’s client trust account. The unearned portion of the funds received for the Patterson dissolution matter were among those transfers. Earley did not notify Patterson of the time, amount, or purpose of the withdrawals or furnish an accounting.

On June 12, in a responsive letter to the Office of Professional Regulation, Earley self-reported his conversion of client funds:

The main purpose of this letter ... is to self-report multiple ethics violations regarding my trust account management.
I'm not sure where to start, so I will start at the beginning.

Earley went on to describe a variety of challenges he faced as he began his legal career as a solo practitioner. He explained that due to financial strain, he took on cases that were beyond his realm of expertise. He began experiencing depression and anxiety. Earley described his ongoing resentment toward his father. He noted that his father, an attorney, had committed ethical violations of his own before ultimately being disbarred. Earley continued,

With respect to my violations, I don't have the specifics at the moment. I just know that I've taken money from my trust account before I earned it, multiple times. If I were to estimate, I would say at least 5 times. I will fully cooperate with your Office however. I will release my trust account records and give you my compensation agreement records.
I am deeply sorry for my actions. I am ashamed and embarrassed. I am completely lost at the moment. I honestly don't know what I want, or how I want this situation to play out. But I know that I'm not in a good place, mentally right now. And that I need help. So, I'm asking for help.

On August 7, Earley sent a letter to Patterson admitting he had taken Patterson’s $1800 without earning the funds:

I apologize for taking so long to respond to you. The truth is that I've been avoiding this conversation because I am ashamed of my actions.
There’s really no easy way to say this, so I'll just say it. I no longer have your $1800, nor can I represent you in your divorce case.
For what it’s worth, I am GENUINELY sorry for my actions. Eventually, I will make this right. You have my word as a man. But I realize that doesn't really mean much at this point in time.
I figure that I at least owe you an explanation. So, here it is.
Several months ago I began to experience crippling anxiety, which coincided with mounting financial difficulties. I attempted to get treatment, but nothing helped. I have since made the decision to quit the practice of law and have withdrawn from all of my cases.
I have enclosed a copy of a letter that I sent to the Office of Professional Regulation (which oversees attorneys in Iowa) back in June, self-reporting multiple ethics violations (including the handling of your flat fee payment). I've enclosed this letter so that you may have a little bit of insight into what was happening with my state of mind at the time.
Factually, here is what occurred with respect to your situation. I deposited your $1800 flat fee payment in my trust account on 4/27/18. Legally, I'm only supposed to draw that money out after I've earned it. In your particular case, I don't recall doing much work on your divorce, other than some in person conversations that we had while I was working with you on your criminal cases. But, for all practical purposes, I acknowledge that I didn't do any real work on your case. Thus, I was not entitled to withdraw any of that $1800 from my account. Doing so was against the terms of our compensation agreement and was a violation of Iowa attorney ethical rules.
You can find information on how to file an ethics complaint against an Iowa attorney at www.iowacourts.gov. I have also enclosed a copy of the Attorney Complaint Form with this letter. As I mentioned, I have self-reported my violations. But I encourage you to file an official complaint as well.
Please know that at no time did I misuse your money with immoral intentions. At the time I withdrew the money, I just really needed the cash (for financial obligations). Since I fully intended on handling your entire divorce, I thought (at the time) that I was only infringing on the Iowa ethical rules. I don't mean to minimize the importance of following the ethical rules. I only mean that, from your perspective, I thought it would be a "no harm, no foul" situation. However, shortly after taking out your money, my entire world just sort of collapsed and I was unable to function anymore. At that point, I was obligated to remove myself from the practice of law. Having done so, I now have no way to fulfill the terms of our agreement.

On September 21, the Client Security Commission sent a letter to Earley regarding the Patterson matter. See Iowa Ct. R. 39.12. The letter notified Earley that Patterson had sought $1800 in reimbursement from the Clients' Security Trust Fund. The Client Security Commission requested documents from Earley as part of its investigation into the matter.

On September 28, Earley responded as follows:

I believe my letter to Mr. Patterson dated August 7, 2018 (which was attached to your claim notice letter), sufficiently explains what occurred with respect to the situation with Mr. Patterson. Simply put, I wronged Mr. Patterson. My actions were inexcusable. I deserve punishment and Mr. Patterson deserves to be reimbursed for his financial loss.
I am deeply ashamed of my behavior. At this point, all I can do is apologize, try to make things right (as best I can) and attempt to learn and grow from what has been an enormously difficult 1st year of my law practice.

B. Jonathan Beltz Matter. In 2018, Earley also began representing Jonathan Beltz in a dissolution matter. The parties agreed to a rate of $250 per hour with fees to be capped at $1500. On March 14, Beltz tendered $900 in cash to Earley for the representation. The same day, Earley deposited the $900 into his client trust account. Earley performed only one hour of work on Beltz’s case.

The fund transfers that Earley made between March 14 and July 25 included the unearned portion of Beltz’s $900 advance fee payment. Earley did not notify Beltz of the time, amount, or purpose of the withdrawals, and he did not provide Beltz with a complete accounting.

Also on September 28, Earley said the following in a letter to Beltz:

I apologize for taking so long to write this letter. The truth is that I have been avoiding contacting you because I am ashamed and embarrassed of my behavior.
Here’s the short version of what occurred since our last contact. Basically, I experienced a prolonged struggle with mental health issues, lasting several months, which manifested as extreme, crippling anxiety. I handled the experience very poorly. I withdrew from all of my cases (for ethical reasons) and basically disappeared from the world for a few months.
During that process, I spent the money that was in my trust account, which included the $900 flat fee payment you gave me to handle your divorce.
Ethically, I am not allowed to withdraw ANY of that money from my trust account until I have earned it and informed you. As you can see from my billing below, I did not bill out the entire $900, nor did I inform you of my withdraw[al] of any of that money. These are very serious violations of the Iowa attorney ethical rules.
You can find information on how to file an ethics complaint against an Iowa Attorney at www.iowacourts.gov. I have also enclosed a copy of the Attorney Complaint form with this letter. I have already self-reported these violations. But I encourage you to file an official complaint as well.
I will eventually make this right and refund your entire $900. However, I have had a difficult few months in which I have not been working and have had no income. In addition, there are other clients of mine that are in similar positions. It may be quite a while before I can make that right with everyone.
In the meantime, I have recently learned about "The Client[s'] Security Trust
...

To continue reading

Request your trial
5 cases

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT