Lawyer Disciplinary Bd. v. Kupec, 23011.

• Citation: 202 W.Va. 556,505 S.E.2d 619
• Decision Date: 02 April 1998
• Docket Number: No. 23011.,23011.
• Parties: LAWYER DISCIPLINARY BOARD, Petitioner, v. Thomas W. KUPEC, A Member of the West Virginia State Bar, Respondent.
• Court: West Virginia Supreme Court

505 S.E.2d 619

202 W.Va. 556

LAWYER DISCIPLINARY BOARD, Petitioner, v. Thomas W. KUPEC, A Member of the West Virginia State Bar, Respondent.

No. 23011.

Supreme Court of Appeals of West Virginia.

Submitted February 17, 1998.

Decided April 2, 1998.

Sherri D. Goodman, Chief Counsel, Steven Johnston Knopp, Lawyer Disciplinary Counsel, for Petitioner.

Amy Smith, Herbert G. Underwood, Steptoe & Johnson, Charleston, for Respondent. DAVIS, Chief Justice:

This is a lawyer disciplinary proceeding against respondent, Thomas W. Kupec, a member of the West Virginia State Bar. The Office of Disciplinary Counsel (hereinafter "ODC")¹ prosecuted this matter for the petitioner, Lawyer Disciplinary Board (hereinafter the "Board"). The Board's Hearing Panel Subcommittee (hereinafter "HPS")² found that Mr. Kupec misappropriated funds held by him in a special account. HPS recommended that this Court suspend Mr. Kupec from the practice of law for sixty (60) days; that Mr. Kupec be required to file with the ODC a summary outlining the manner in which his trust accounts have been established, monitored and audited; that Mr. Kupec agree to the periodic audit by the ODC of any trust account maintained solely or jointly by him; that Mr. Kupec secure an additional six (6) hours of Continuing Legal Education (hereinafter "CLE") credit in Ethics and Office Management; and that all costs of the proceedings be assessed against Mr. Kupec. As is more fully set out in the body of this opinion, any sanction imposed upon Mr. Kupec is held in abeyance pending the remand of this matter to the HPS.

I. FACTS

This case arises out of the sale of property by Mr. Kupec in his capacity as a Special Commissioner appointed by the Circuit Court of Ritchie County. On February 26, 1985, Mr. Kupec conducted a court ordered public sale of certain property. The property was sold for $50,800.00. An order was entered on April 17, 1985, by Judge Daniel Douglas³ confirming the sale, approving expenses and fees, and providing for the distribution of the proceeds from the sale. Pursuant to Judge Douglas' order, Mr. Kupec was obligated to pay to his client, Freda Bumgardner, all sums due her from the sale; deduct approved fees and expenses; and remit to the General Receiver for the Circuit Court of Ritchie County the remaining balance of $28,802.26 for any parties unknown to the court. On April 24, 1985, the Governor appointed Judge Sam White to fill the vacancy resulting from Judge Campbell's death. On May 21, 1985, Mr. Kupec tendered his report of Final Receipts and Disbursements and Distributions, along with a check in the amount of $28,802.26, to Judge White. Judge White refused to enter a final order in the case. Judge White returned the check to Mr. Kupec indicating the amount of attorney's fee charged by Mr. Kupec of $3,860.00 was too high.

For reasons not apparent from the record, the case languished without activity until 1992. On March 12, 1992, Judge White held a hearing regarding disbursement of the funds. During that hearing, Mr. Kupec advised Judge White that he could immediately tender the balance of $28,802.26 to the circuit court. However, the full property sale balance of $28,802.26 was not paid to the General Receiver for the Circuit Court of Ritchie County until September, 1992.

On May 6, 1992, Judge White filed a complaint against Mr. Kupec regarding the property sale funds. An investigation for probable cause was conducted by the Investigative Panel of the Board. The investigation revealed that from the period January 31, 1990, through February 28, 1992, monies were consistently withdrawn from the account in which the $28,802.26 was deposited. At one point, the account reached a low of $5,892.97. In fact, on the day Mr. Kupec informed Judge White that he could instantly write a check for the balance, the account contained $13,817.61. The Investigative Panel also discovered that Mr. Kupec had placed the $28,802.26 in his firm's account,⁴ which was used for client funds, including advances of costs and expenses.⁵ The evidence revealed that Mr. Kupec and members of his firm used portions of the $28,802.26 to pay expenses in other cases over a seven year period.

As a result of the investigation, Mr. Kupec was formally charged by the Investigative Panel with violating the following provisions of the Rules of Professional Conduct: Rule 1.15(b), Rule 1.3, Rule 3.3(a)(1), and Rule 8.4(b), (c) and (d); and violating the now superseded Code of Professional Responsibility, DR 6-101(A)(3) and DR 1-102(A)(5). The formal charges were filed on July 14, 1995. ODC prosecuted the charges before HPS. Prior to the evidentiary hearing, Mr. Kupec filed a written motion to dismiss all of the charges on the basis of untimeliness. ODC filed a response opposing the motion. It appears that the chairperson for HPS dismissed the charged violations of Rule 1.3, DR 6-101(A)(3) and DR 1-102(A)(5) by order dated July 22, 1996. The July 22, 1996, order was affirmed by HPS on August 15, 1996.⁶

Evidence was taken on the remaining charges. HPS found that the evidence established Mr. Kupec "utiliz[ed] and permitt[ed] others in his firm to utilize funds from the special account to subsidize other litigation expenses over a period of years and in the amounts of thousands of dollars[.]" Based upon this finding, HPS concluded that Rule 1.15(b)⁷ was violated by Mr. Kupec. HPS dismissed all remaining charges.⁸ In view of its finding that Mr. Kupec had violated Rule 1.15(b), HPS recommended that this Court suspend Mr. Kupec from the practice of law for sixty (60) days; that Mr. Kupec be required to file with the ODC a summary outlining the manner in which his trust accounts have been established, monitored and audited; that Mr. Kupec agree to the periodic audit by the ODC of any trust account maintained solely or jointly by him; that Mr. Kupec secure an additional six (6) hours of CLE credit in Ethics and Office Management; and that all costs of the proceedings be assessed against Mr. Kupec. Mr. Kupec objects to the finding of a violation of Rule 1.15(b). ODC does not oppose the sanctions as recommended by HPS.

II. STANDARD OF REVIEW

In syllabus point 2 of Lawyer Disciplinary Bd. v. McGraw, 194 W.Va. 788, 461 S.E.2d 850 (1995), this Court articulated its standard of review in lawyer disciplinary matters:

A de novo standard applies to a review of the adjudicatory record made before the [Hearing Panel Subcommittee of the Lawyer Disciplinary Board] as to questions of law, questions of application of the law to the facts, and questions of appropriate sanctions; this Court gives respectful consideration to the [Hearing Panel Subcommittee's] recommendations while ultimately exercising its own independent judgment. On the other hand, substantial deference is given to the [Hearing Panel Subcommittee's] findings of fact, unless such findings are not supported by reliable, probative, and substantial evidence on the whole record. Syl. pt. 3, Committee on Legal Ethics v. McCorkle, 192 W.Va. 286, 452 S.E.2d 377 (1994).

It was held in syllabus point 3, in part, of In re Brown, 166 W.Va. 226, 273 S.E.2d 567 (1980), that "[a]bsent a showing of some mistake of law or arbitrary assessment of the facts, recommendations made by the [Hearing Panel Subcommittee] ... are to be given substantial consideration." We have also made clear that "[t]his Court is the final arbiter of legal ethics problems and must make the ultimate decisions about public reprimands, suspensions or annulments of attorneys' licenses to practice law." Syl. Pt. 3, Committee on Legal Ethics v. Blair, 174 W.Va. 494, 327 S.E.2d 671 (1984).

In deciding on the appropriate disciplinary action for ethical violations, this Court must consider not only what steps would appropriately punish the respondent attorney, but also whether the discipline imposed is adequate to serve as an effective deterrent to other members of the Bar and at the same time restore public confidence in the ethical standards of the legal profession.

Syl. Pt. 3, Committee on Legal Ethics v. Walker, 178 W.Va. 150, 358 S.E.2d 234 (1987). It is from this standard of review that we analyze the questions of law, findings of fact and recommendations by the HPS to this Court.

III. DISCUSSION

A. The Rules of Lawyer Disciplinary Procedure

We take this opportunity to clearly articulate the authority and procedure of the Board and its entities when recommending the discipline for an attorney. We will discuss and explain the relationship of the Board, the ODC, the Investigative Panel, the HPS and this Court in lawyer disciplinary matters. More specifically, we will address the authority of this Court to review and accept or reject the dismissal of formal charges filed against an attorney by the Investigative Panel.

We begin with the basics. The authority of the Supreme Court "to regulate and control the practice of law in West Virginia, including the lawyer disciplinary process, is constitutional in origin." Lawyer Disciplinary Bd. v. Vieweg, 194 W.Va. 554, 558, 461 S.E.2d 60, 64 (1995). See W.Va. Const. art. VIII, § 3 ("The court shall have power to promulgate rules ... for all of the courts of the State relating to ... practice and procedure, which shall have the force and effect of law."). "The exclusive authority to define, regulate and control the practice of law in West Virginia is vested in the Supreme Court of Appeals." Syl. pt. 1, State ex rel. Askin v. Dostert, 170 W.Va. 562, 295 S.E.2d 271 (1982). See also Syl., Christie v. W. Va. Health Care Cost Review Authority, 176 W.Va. 420, 345 S.E.2d 22 (1986). In an effort to effectively and efficiently carry out this Court's constitutional obligation to the practice of law in this state, we adopted by order approved May 25, 1994 (effective July 1, 1994), the Rules of Lawyer Disciplinary Procedure (hereinafter the "Rules of LDP") to supersede the provisions of Article VI of the By-Laws of the West Virginia...