Iowa Supreme Court Attorney Disciplinary Bd. v. Fischer
| Decision Date | 15 April 2022 |
| Docket Number | 21-1068 |
| Parties | IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee, v. JOHN KARL FISCHER, Appellant. |
| Court | United States State Supreme Court of Iowa |
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee,
v.
JOHN KARL FISCHER, Appellant.
No. 21-1068
Supreme Court of Iowa
April 15, 2022
Submitted February 23, 2022
On appeal from the report of the Iowa Supreme Court Grievance Commission.
In an attorney disciplinary action, the grievance commission recommends revocation of the respondent's license to practice law based on violations of our attorney ethics rules. LICENSE REVOKED.
Tara van Brederode, Crystal Rink (until withdrawal), and Alexis W. Grove, for appellee.
Eashaan Vajpeyi and Melissa Ament of Ball, Kirk & Holm PC, Waterloo, for appellant.
Waterman, J., delivered the opinion of the court, in which all justices joined.
WATERMAN, Justice.
The Iowa Supreme Court Attorney Disciplinary Board charged attorney John Fischer with violating rules of professional conduct. The charges included misappropriation and conversion of client funds. A panel of the Iowa Supreme Court Grievance Commission found Fischer violated multiple rules of professional conduct, including conversion of client funds, and recommended revocation of his license. The Board requests revocation. Fischer admits certain violations, denies stealing, and argues for a suspension instead of revocation. On our de novo review, we determine that Fischer converted client funds without a colorable future claim, among other violations, and we therefore revoke his license to practice law in the State of Iowa.
I. Background Facts and Proceedings.
Fischer has been licensed to practice law in Iowa since 1979 and has been a solo practitioner in Vinton since 2014. He practices primarily in the areas of trusts and estates, probate, real estate, and tax. In 2012, Fischer received a private admonishment for improper collection of fees. In 2018, Fischer received a public reprimand for lack of diligence and failure to communicate with his clients. The Board's current complaint arises from Fischer's representation of several clients and audits of his trust account. Because we revoke his license for misappropriation, we truncate our discussion of the other matters. Iowa Sup. Ct. Att'y Disciplinary Bd. v. Crum, 861 N.W.2d 595, 604 (Iowa 2015) ("[T]here is ample evidence in the record to prove Crum misappropriated client funds.
Therefore, it is unnecessary for us to address Crum's other violations."). We find the following facts on our de novo review of the record.
A. AlphaGen.
AlphaGen Materials Technology, Inc. is an Iowa corporation. Fischer is a minority owner who has served as a director since its incorporation in 2008 and also serves as its vice president, secretary, and treasurer as well as its attorney. In March of 2012, AlphaGen was sued for breach of contract. Fischer filed an answer for the defendant and remained its counsel of record. In the months that followed, AlphaGen repeatedly failed to comply with discovery requests and court orders. After judgment was entered against the defendant, the plaintiffs pursued debtor's examinations, and AlphaGen continued to disobey court orders. A settlement was negotiated, which included Fischer as a named party. When Fischer, AlphaGen, and AlphaGen's president failed to honor the settlement, the plaintiffs filed a second lawsuit to enforce the settlement and pierce the corporate veil. Fischer was named as a defendant in the second lawsuit.
The pattern continued with more violations of discovery obligations and court orders. The court found the defendants, including Fischer, willfully and in bad faith violated court orders and imposed sanctions that ultimately included a default judgment. Fischer blamed an unresponsive client but offered no valid excuse for his personal failure to comply with document requests for records within his control.
B. Trust Account Audits.
Fischer was audited in 2010, 2015, and 2019. Each audit revealed Fischer and his staff failed to maintain proper records of his
client trust account. Some of his client trust accounts had negative balances. Fischer admits he did not maintain a separate account for each matter. He recognizes that he is responsible for supervising his staff and failed to "do an adequate job." Fischer admits he was "inept" and failed to prepare triple reconciliations from 2017 to 2019, contrary to his responses to annual client security commission questionnaires. The 2019 auditor concluded Fischer's client trust account was underfunded by $10, 042. The client security commission's auditors testified they could not determine if Fischer used the funds for personal use because of the lack of records. Fischer promptly reimbursed the account in full. For at least six months after the 2019 audit, Fischer successfully balanced his trust account "to the penny."
C. Osborn Matter.
Josh Osborn and his brother James Osborn own half-interests in RB Homes, Inc., which built spec homes. In 2011, high winds damaged the roof of a home they built and sold. The homebuyer's property insurer, Travelers Commercial Insurance Company, brought a subrogation action against the Osborn brothers and RB Homes. Fischer represented the defendants without a written fee agreement.
In May of 2014, the parties agreed to settle the lawsuit for $15, 000. Each brother agreed to pay half of the settlement, or $7, 500, and their share of the attorney fees. In September of 2014, Josh paid Fischer $9, 200. Josh directed Fischer to pay $7, 500 to Travelers for Josh's share of the settlement and to retain $1, 700 as Josh's half of the attorney fees. Fischer did not send Travelers a check for $7, 500. Instead, without informing Josh, Fischer used Josh's settlement
money to cover James's attorney fees and sent Travelers a check for only $6, 198...
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