Kennedy, In re

CourtUnited States State Supreme Court of Delaware
Writing for the CourtBefore HERRMANN; DUFFY
Citation442 A.2d 79
PartiesIn re John B. KENNEDY, Esquire, a Member of the Bar of the Supreme Court of the State of Delaware, Respondent.
Decision Date19 February 1982

Page 79

442 A.2d 79
In re John B. KENNEDY, Esquire, a Member of the Bar of the
Supreme Court of the State of Delaware, Respondent.
Supreme Court of Delaware.
Submitted Oct. 28, 1981.
Decided Feb. 19, 1982.

Page 81

Proceeding upon a Final Report of the Censor Committee.

F. Alton Tybout (argued), of Tybout, Redfearn, Casarino & Pell, Wilmington, for the Censor Committee.

John B. Kennedy, pro se, and Samuel C. Stretton (argued), Philadelphia, Pa., for respondent.

Before HERRMANN, C. J., and DUFFY and McNEILLY, JJ.

DUFFY, Justice:

This proceeding involves a judicial review of Interpretive Guideline No. 2 of Disciplinary Rule 9-102 which governs the conduct of members of the Delaware Bar, Del.C., Vol. 16, p. 590; Supreme Court Rule 66 relating to the Clients' Security Trust Fund; and Regulation IV(13) of the Clients' Security Trust Fund, Del.C., Vol. 16, p. 632.

I

The parties to the litigation are John B. Kennedy, a Delaware lawyer (respondent), and the Censor Committee of the Supreme Court of the State of Delaware (Censor Committee). See Rule 62. In a proceeding before the Censor Committee, the parties stipulated as follows:

"1. John B. Kennedy at all pertinent times is a member of the Bar of the State of Delaware.

2. By letter dated November 24, 1980, David F. Anderson, Chairman of the Client's Security Trust Fund, requested Mr. Kennedy make his financial records available for a 'spot check to verify that your financial records are being maintained in accordance with the Court's guidelines.' The said letter stated that Mr. Kennedy's name has been selected 'at random.'

3. David F. Anderson, Chairman of the Client's Security Trust Fund, was until January 1, 1978, a partner in the law firm of which Mr. Crompton is a partner. Since that time he has been counsel to the firm.

4. At the time of the aforementioned November 24, 1980, letter was sent to Mr. Kennedy, the Censor Committee of the Supreme Court of Delaware was conducting several pending investigations involving Mr. Kennedy as a Respondent.

5. Arrangements were made for the examination of Mr. Kennedy's books on April 2, 1981.

6. Mr. Kennedy, by his counsel, Samuel C. Stretton, Esquire, by letter dated March 31, 1981, to David F. Anderson, Chairman of the Client's Security Trust Fund, advised Mr. Anderson that Mr. Kennedy would not make his books and records available for inspection as requested, and further advised Mr. Anderson that it was Mr. Kennedy's intent to challenge the interpretative guideline Number 2 of D.R. 9-102, the inspection requirements of Supreme Court Rule 66 and the inspection requirements of the regulations of the Client's Security Trust Fund. A copy of the March 31, 1981, letter is attached hereto and marked Exhibit A. The said letter was received by Mr. Anderson on April 3, 1981. Mr. Stretton had spoken with Mr. Anderson by telephone on March 31, 1981, and advised him orally of the aforementioned refusal of Mr. Kennedy and advised him the letter would be forthcoming. On April 2, 1981, representatives of the accounting firm of Frank A. Gunnip and Company, the C.P.A.'s retained by the trustees of the Client Security Trust Fund to make record examinations pursuant to Delaware Supreme Court Rule 66, were refused permission to examine Mr. Kennedy's books.

7. Mr. Kennedy has taken the position that the aforementioned rules and regulations requiring the inspection of his financial records violate his constitutional right of privacy and violate his attorney-client privilege. Further, Mr. Kennedy

Page 82

contends among other things that the selection process for the random inspection has provided no inherent safeguards to insure integrity of the selection process.

8. Mr. Kennedy states he stands ready to produce his records for inspection at the conclusion of his legal challenges if the ultimate decision should be adverse to his contentions."

After respondent had refused to make his books and records available for inspection, as requested by the Trustees of the Clients' Security Trust Fund, the Trustees referred the dispute to the Censor Committee. *

The Censor Committee thereafter made findings of fact and announced conclusions of law, as follows:

"(1) The following constitutes the Committee's findings of fact:

The respondent and the Committee entered into a stipulation of facts that either party considered relevant to the issue. Both parties agreed that all facts stated are correct. The stipulation of facts was admitted in evidence with a letter from the respondent's attorney attached to that exhibit and identified as Exhibit 'A'. The stipulation and exhibit admitted in evidence are attached to this report as 'Attachment A'. The facts in the matter before the Committee are stated in that stipulation.

(2) The Committee determined that it is not an appropriate body to resolve the legal contentions asserted by the respondent as the reason for refusing to comply with the provisions of Delaware Supreme Court Rule 66 and the Code of Professional Responsibility DR 9-102. The Committee determined that its sole function should be to determine whether the respondent has in fact refused to comply with the rule and the Professional Code of Conduct.

(3) The following constitutes the Committee's conclusions of law:

(a) The refusal of the respondent to comply with the requirements of the Trustees of the Clients' Security Trust Fund is before this Committee pursuant to the provisions of Delaware Supreme Court Rule 66(c)(i)(10).

(b) The respondent in refusing to submit to an examination by authorized agents of the Trustees of the Clients' Security Trust Fund violated DR 9-102 and specifically Interpretative Guideline 2(d).

(c) The respondent in refusing to submit to an examination by authorized agents of the Trustees of the Clients' Security Trust Fund violated DR 1-102(A) (1) in failing to comply with Interpretative Guideline 2(d) of DR 9-102.

(d) The respondent in refusing to submit to an examination by authorized agents of the Trustees of the Clients' Security Trust Fund violated DR 1-102(A) (5).

(e) The respondent in refusing to submit to an examination by authorized agents of the Trustees of the Clients' Security Trust Fund violated DR 1-102(A) (6).

(4) The Committee recommends the imposition of discipline."

Those findings and conclusions constituted the Final Report of the Committee which was docketed with the Clerk. See Rule 64. Thereafter, the respondent filed the following Exceptions to the Final Report:

Page 83

"1. The Respondent objects to the findings of violations of DR 1-102(A)(1), DR 1-102(A)(5) and DR 1-102(A)(6) since the Respondent was never given notice of these charges in the Order to Show Cause and therefore, his constitutional right to due process has been violated; the Order to Show Cause is attached and marked Exhibit A.

2. The Respondent objects to the finding that he 'violated DR 1-102(A)(1) in failing to comply with Interpretative Guideline 2(d) of DR 9-102' in that the aforementioned Interpretative Guideline is not a Disciplinary Rule, nor is it incorporated by reference into any Disciplinary Rule.

3. The Respondent objects to the finding that he violated DR 9-102 in that there is no evidence, and the stipulation of fact does not state, the Respondent failed to maintain 'identifiable bank accounts' as required by DR 9-102(A), nor is there any evidence the Respondent failed to comply with the provisions of DR 9-102(B).

4. The Respondent objects to the finding that his conduct in refusing to produce the records was 'prejudicial to the administration of justice' in violation of DR 1-102(A)(5) and 'conduct that adversely reflects on his fitness to practice law' in violation of DR 1-102(A)(6).

5. The Respondent objects to the findings of Disciplinary Rule Violations in that the Respondent contends the sections of Supreme Court Rule 66, Interpretative Guideline No. 2 of DR 9-102 and the Regulations of the Trustee of the Clients' Security Trust Fund requiring a selected attorney to produce his financial records upon request are invalid, unenforceable, and unconstitutional under both the Federal and Delaware Constitutions and in violation of an attorney's right to due process for the following reasons:

A. The said rules violate the constitutional and common law right of privacy of both the Respondent and his clients.

B. The said rules violate the attorney-client privilege between the Respondent and his clients.

C. The said rules do not provide or establish a uniform and adequate procedure for selection of an attorney for audit and, in fact, have no ascertainable standard, but are vague and circular in their language. Failure to provide for inherent safeguards in the selection process prevents the rules from being enforced.

D. The said rules are so vaguely drafted and constructed that they are unenforceable and in violation of the Respondent's constitutional right of due process.

E. The said rules, without providing for inherent safeguards in their selection process, create the appearance of impropriety in the 'random' selection of the Respondent's records for audit and, therefore, are unenforceable. Further, the failure to provide for inherent safeguards in the selection process creates the potential for abuse and harassment and, therefore, the rules should not be enforced.

F. The aforementioned failure to provide for inherent safeguards in the selection process creates the potential for selection being done on other than an impartial and fair basis; therefore, the rules should not be enforced.

G. The random selection process, which is done without 'cause,' constitutes an illegal search under both the United States and Delaware Constitutions.

6. The Respondent objects to the recommendation of the Censor Committee of 'the imposition of discipline' since the Respondent at all pertinent times has indicated he will produce the requested records if he fails in his legal challenges to the production...

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15 practice notes
  • Practice and procedure: Patent and trademark cases rules of practice; representation of others before Patent and Trademark Office,
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...258-259 (N.J. 1990); In re Heffernan, 351 N.W.2d 13, 14 (Minn. 1984); In re Austin, 333 N.W.2d 633, 634 (Minn. 1983); and In re Kennedy, 442 A.2d 79, 84-85 (Del. 1982). Thus, Sec. Sec. 11.115(f) and (g) articulate recordkeeping requirements that currently obtain for all With respect to prop......
  • Part II
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...258-259 (N.J. 1990); In re Heffernan, 351 N.W.2d 13, 14 (Minn. 1984); In re Austin, 333 N.W.2d 633, 634 (Minn. 1983); and In re Kennedy, 442 A.2d 79, 84-85 (Del. 1982). Thus, Sec. Sec. 11.115(f) and (g) articulate recordkeeping requirements that currently obtain for all With respect to prop......
  • Unnamed Attorney v. Attorney Grievance Com'n of Maryland, No. 78
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    • Court of Appeals of Maryland
    • September 1, 1997
    ...Florida Bar. The privilege arising from the Fifth Amendment through the Fourteenth Amendment is not applicable thereto. In In re Kennedy, 442 A.2d 79 (Del.1982), the Delaware Supreme Court relied in part on our opinion in Andresen, 269 Md. at 313, 305 A.2d 845, to establish the applicabilit......
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    • United States State Supreme Court of Delaware
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    ...in not responding to interrogatories and depositions is not supported by the record. Unlike the situation in In re Kennedy, Del.Supr., 442 A.2d 79 (1981), where this Court upheld Kennedy's good faith challenge to production of records involving the Clients' Security Trust Fund, Kennedy comp......
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13 cases
  • Unnamed Attorney v. Attorney Grievance Com'n of Maryland, No. 78
    • United States
    • Court of Appeals of Maryland
    • September 1, 1997
    ...Florida Bar. The privilege arising from the Fifth Amendment through the Fourteenth Amendment is not applicable thereto. In In re Kennedy, 442 A.2d 79 (Del.1982), the Delaware Supreme Court relied in part on our opinion in Andresen, 269 Md. at 313, 305 A.2d 845, to establish the applicabilit......
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    • United States State Supreme Court of Delaware
    • April 11, 1983
    ...in not responding to interrogatories and depositions is not supported by the record. Unlike the situation in In re Kennedy, Del.Supr., 442 A.2d 79 (1981), where this Court upheld Kennedy's good faith challenge to production of records involving the Clients' Security Trust Fund, Kennedy comp......
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