Iowa Supreme Court Attorney Disciplinary Bd. v. Heggen
| Decision Date | 10 November 2022 |
| Docket Number | 22-0376 |
| Citation | 981 N.W.2d 701 |
| Parties | IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee, v. Bonnie J. HEGGEN, Appellant. |
| Court | Iowa Supreme Court |
David L. Brown of Hansen, McClintock & Riley, Des Moines, for appellant.
Alexis W. Grove, Des Moines, for appellee.
The Iowa Supreme Court Attorney Disciplinary Board charged attorney Bonnie Heggen with violating multiple rules of professional conduct related to the management of her client trust account and a retainer paid by a client. A division of the Iowa Supreme Court Grievance Commission found Heggen violated several rules of professional conduct but found the Board failed to prove Heggen violated several others, including Iowa Rules of Professional Conduct 32:1.5(a) () and 32:8.4(b) (). The commission recommended suspending Heggen's license for six months. Heggen filed this appeal. She challenges only the commission's recommended sanction. The Board cross-appealed the commission's recommendation. The Board argues Heggen converted client funds, in violation of Iowa Rules of Professional Conduct 32:1.5(a) and 32:8.4(b), and the appropriate sanction should be the revocation of Heggen's license to practice law.
This court reviews attorney disciplinary proceedings de novo. Iowa Sup. Ct. Att'y Disciplinary Bd. v. Kozlik , 943 N.W.2d 589, 594 (Iowa 2020). The Board must prove each alleged ethical violation by a convincing preponderance of the evidence. Iowa Sup. Ct. Att'y Disciplinary Bd. v. Rhinehart , 953 N.W.2d 156, 162 (Iowa 2021). "A convincing preponderance of the evidence lies between the preponderance-of-the-evidence standard in a civil case and the reasonable-doubt standard in a criminal case." Iowa Sup. Ct. Att'y Disciplinary Bd. v. Noyes , 936 N.W.2d 440, 442 (Iowa 2019).
Heggen was admitted to practice law in 2004. During the period relevant to this matter, Heggen worked as a sole practitioner. A focus of Heggen's practice was special education law. She assisted families and students in securing special education services as required by federal and state law. The attorney–client relationship at issue in this proceeding involves Heggen's representation of a family with a student who required special education services.
The first set of disciplinary charges at issue relate to Heggen's management, or more accurately, mismanagement of her client trust account. In 2018, the Iowa Supreme Court Client Security Commission (CSC) audited Heggen's client trust account. CSC determined that Heggen had failed to maintain a check register for her client trust account. It also determined she had not performed or maintained records of the monthly triple reconciliations of her client trust account. The auditor explained to Heggen the reconciliation process, gave her a reconciliation worksheet, and explained the importance of proper accounting.
The training did not take. In 2020, CSC conducted a second audit of Heggen's client trust account. The 2020 audit found Heggen violated multiple client trust account rules. She failed to deposit funds into her client trust account. She failed to maintain a receipts and disbursements journal. She failed to maintain client ledger cards. She failed to retain records of electronic transfers from her client trust account. She withdrew fees from her client trust account before the fees were earned. She failed to notify clients in writing of withdrawals from her client trust account. And she failed to perform monthly triple reconciliations of her trust account. Despite Heggen's ongoing failure to reconcile her client trust account on a monthly basis, she filed annual statements with CSC in which she represented that she had done so.
The second set of disciplinary charges against Heggen arise out of her representation of Joann and Robert Burgett Jr. On January 10, 2020, the Burgetts retained Heggen to represent them in a dispute with their local school district. The Burgetts entered into a written attorney fee contract with Heggen. The attorney fee contract provided the Burgetts were to pay $275 per hour for all services performed. The attorney fee contract provided the Burgetts were to pay a retainer of $3,000 plus an advance of $50 for expenses. The attorney fee contract also contained an unusual provision that provided "[i]f attorney fee is paid in full by district, Clients receive refund of retainer advanced in the amount of $3000.00."
On January 10, pursuant to the attorney fee contract, the Burgetts paid Heggen the $3,000 retainer and the $50 advance for expenses. Heggen deposited the funds into her client trust account the same day. She then withdrew the funds prior to earning the fees or incurring the expenses. On the same day Heggen deposited the funds, she withdrew $2,555.25 from her client trust account. On January 16, Heggen withdrew another $475. Heggen did not notify the Burgetts of these withdrawals. Heggen's records show she did not perform any billable work for the Burgetts until January 20.
Heggen's representation of the Burgetts was successful. The Burgetts’ dispute with the district was resolved at a mediation occurring on May 22. The Burgetts agreed to dismiss their complaint against the district and release all their claims. The Burgetts received no financial consideration as part of the agreement. In exchange for the dismissal and release, the district agreed to provide the Burgetts’ son with all of the special education services requested. The district also agreed to pay "attorney's fees in the amount of $6765.00 to Bonnie Heggen." Because the district agreed to pay Heggen's fees directly to Heggen, the Burgetts were contractually entitled to receive a refund of $3,000 from Heggen after she was paid.
On May 24, two days after the successful mediation, Heggen wrote an email to the Burgetts regarding the refund. Heggen stated she would refund the $3,000 as soon as she received payment from the district's insurer. Heggen said the process usually took two to three weeks. Heggen received her payment from the district's insurer on or about June 3.
On July 1, Joann Burgett emailed Heggen about the refund. Heggen replied the same day, stating, "I should have it for you by the 15th." Heggen did not disclose to Joann that the district's insurer had already paid Heggen. Heggen did not refund the money by July 15.
On July 21, Robert Burgett Jr. telephoned Heggen and left her a voicemail about the refund. Two days later, on July 23, Heggen called Joann and left a voicemail. Heggen stated that she needed to speak "about the situation" and that she had encountered a "huge problem" causing her to take "a little longer than [she] expected to get everything ... straightened around." Heggen said the Burgetts would receive payment in "another two to three weeks." Heggen stated the delay was caused by things "completely out of [her] control." After receiving the July 23 voicemail from Heggen, Joann called Heggen back. Heggen explained the delay was due to unexpected personal expenses—she had spent her payment on a hot water heater and an air conditioner.
Joann phoned Heggen again on August 5. During this call, Heggen stated she would "try to get [the Burgetts] $2,000" but did not know when the Burgetts would receive the remaining $1,000. Joann sent Heggen a follow-up email on August 11. Joann requested the refund as "outlined in our said contract when we hired you." Heggen replied the same day and stated the following:
Joann, you cannot be paid with what I don't have; you and I are waiting for [the school district's insurer] to cut me a check for the fee they agreed to pay. There were outstanding issues that had to be worked through on behalf of this client. I have a phone call scheduled with opposing counsel at 3 o'clock today. We will finalize the last issue and I will file the dismissal this afternoon. So the check will be cut [in] two or three days. Unfortunately, I don't control that end. As soon as I have it, you will be reimbursed. Try to bear in mind I am currently working on your case again now.
Joann replied to this email and expressed confusion about whether Heggen had, in fact, already been paid by the school district. In response, Heggen left Joann a voicemail stating that she had "spent money on things [she] had to spend money on" and that the Burgetts would receive their money in "a few more days." Heggen stated she had requested the school district's insurer "cut the check ASAP."
On August 26, Heggen paid the Burgetts their refund pursuant to the parties’ written attorney fee contract.
The Board filed its complaint against Heggen in March 2021. The commission held a two-day hearing in November. The commission found Heggen violated Iowa Rules of Professional Conduct 32:1.15, subsections (a), (c), and (d), and 32:8.4(c) as well as Iowa Court Rules 45.1 ; 45.2, subsections (2), (3)(a )(1), (3)(a )(2), and (3)(a )(9) ; and 45.7, subsections (3) and (4). The commission found the Board failed to prove violations of Iowa Rules of Professional Conduct 32:1.5(a) (unreasonable fee) and 32:8.4(b) (criminal act). The commission recommended a six-month suspension of Heggen's license to practice law.
We first evaluate the charges against Heggen related to her mismanagement and maladministration of her client trust account. We find Heggen violated chapter 45, which sets forth the rules governing client trust accounts. Specifically, we find Heggen violated Iowa Court Rules 45.1 ; 45.2, subsections (2), (3)(a )(1), (3)(a )(2), and (3)(a )(9) ; and 45.7, subsections (3) and (4). Heggen does not contest the violations, conceding her business practices were "in disarray." We...
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