Lawyer Disciplinary Bd. v. Barber

• Decision Date: 08 January 2002
• Docket Number: No. 26519.,26519.
• Citation: 566 S.E.2d 245,211 W.Va. 358
• Parties: LAWYER DISCIPLINARY BOARD, Complainant v. Timothy N. BARBER, an Active Member of the West Virginia State Bar, Respondent
• Court: West Virginia Supreme Court

566 S.E.2d 245

211 W.Va. 358

LAWYER DISCIPLINARY BOARD, Complainant v. Timothy N. BARBER, an Active Member of the West Virginia State Bar, Respondent

No. 26519.

Supreme Court of Appeals of West Virginia.

Submitted January 8, 2002.

Original Opinion Decided April 11, 2002.

Modified Opinion Decided June 7, 2002.

Amie L. Johnson, Esq., Lawyer Disciplinary Counsel, Charleston, West Virginia, Attorney for Complainant.

James B. McIntyre, Esq., McIntyre & Collias, Charleston, West Virginia, Attorney for Respondent.

PER CURIAM:

This disciplinary proceeding was instituted by the complainant, the Lawyer Disciplinary Board (hereinafter "the Board"), against the respondent, Timothy N. Barber, an active member of the West Virginia State Bar,¹ on July 19, 1999. Mr. Barber was charged with violating Rules 1.8(a)(2) and (3), 8.1(b), and 8.4(c) of the West Virginia Rules of Professional Conduct after he solicited and obtained a loan from a client. The Hearing Panel Subcommittee (hereinafter "Subcommittee") of the Board has recommended that Mr. Barber be suspended from the practice of law for six months and be required to petition for reinstatement;² that he be required to make restitution of the loan amount plus interest set forth in the promissory note as a mandatory condition of reinstatement even if six months have passed; and that he be ordered to reimburse the Board for the costs of the disciplinary proceeding. Mr. Barber objects to the recommendation.

Having reviewed the recommendation, all matters of record, and the briefs and argument of counsel, we find that Mr. Barber violated the Rules of Professional Conduct. Thus, for the reasons set forth below, the sanctions recommended by the Board as modified are hereby imposed.³

I. Facts

In August 1994, Mr. Barber was retained by Edward Helm to represent him in his divorce. In addition to the divorce, Mr. Barber also represented Mr. Helm on other legal matters, some of which involved Mr. Helm's business. Mr. Barber was Mr. Helm's attorney until June 25, 1997.

About a month prior to Mr. Helm's final divorce hearing in April 1996, Mr. Barber asked Mr. Helm to retain him to represent his new business. Mr. Barber suggested a $40,000 retainer fee. Mr. Helm declined stating that he "did not have that kind of money" because he was trying to get his new business started. Mr. Barber then told Mr. Helm that he was in trouble with the Internal Revenue Service and that he needed $100,000. He asked Mr. Helm to lend him the money and promised he would repay the loan in thirty days. Mr. Helm agreed to lend Mr. Barber the money and wrote him a check for $100,000. In return, Mr. Barber gave Mr. Helm a document entitled "Promissory Note." The handwritten note stated that the $100,000 would be repaid in thirty days at 7.5 percent interest per annum. Mr. Barber did not give or offer any collateral or security interest for the loan, nor did he advise Mr. Helm to seek the advice of other legal counsel about the loan transaction.

Mr. Barber never repaid the loan. Mr. Helm asked Mr. Barber to repay the loan on several occasions and even enlisted the help of another attorney who was a mutual friend. Eventually, Mr. Barber revealed that he did not intend to repay the full loan amount but instead, was going to offset legal fees owed to him by Mr. Helm.⁴

On September 10, 1998, Mr. Helm filed an ethics complaint against Mr. Barber. On November 5, 1998, the Office of Disciplinary Counsel (hereinafter "ODC") forwarded the complaint to Mr. Barber and requested a response within ten days pursuant to Rule 2.5 of the Rules of Lawyer Disciplinary Procedure.⁵ Mr. Barber failed to comply and a second letter was sent on December 2, 1998. Again, Mr. Barber never responded. The ODC then attempted to subpoena Mr. Barber to its office to provide a response, but was unsuccessful. Mr. Barber finally submitted a response to the ethics complaint on December 29, 1998.

The Board filed formal charges against Mr. Barber on July 19, 1999. The Subcommittee held a disciplinary hearing on March 20, 2001. Thereafter, the Subcommittee issued its report recommending Mr. Barber be suspended for six months; that he be required to make restitution of the loan amount plus interest set forth in the promissory note as a mandatory condition of reinstatement even if six months have passed; and that he reimburse the Board for the costs of the disciplinary proceeding. The Subcommittee recommended that the charge of violating Rule 8.4(c) be dismissed. Mr. Barber filed a timely objection to the recommendation.

II. Standard of Review

"Rule 3.7 of the Rules of Lawyer Disciplinary Procedure, effective July 1, 1994, requires the Office of Disciplinary Counsel to prove the allegations of the formal charge by clear and convincing evidence." Syllabus Point 1, in part, Lawyer Disciplinary Bd. v. McGraw, 194 W.Va. 788, 461 S.E.2d 850 (1995). Although the Board makes recommendations to this Court regarding sanctions to be imposed upon an attorney for ethical violations, "[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." Syllabus Point 3, Committee on Legal Ethics of the West Virginia State Bar v. Blair, 174 W.Va. 494, 327 S.E.2d 671 (1984), cert. denied, 470 U.S. 1028, 105 S.Ct. 1395, 84 L.Ed.2d 783 (1985). Accordingly,

"`A de novo standard applies to a review of the adjudicatory record made before 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 [Board's] recommendations while ultimately exercising its own independent judgment. On the other hand, substantial deference is given to the [Board'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)." Syllabus Point 2, Lawyer Disciplinary Bd. v. McGraw, 194 W.Va. 788, 461 S.E.2d 850 (1995).

Syllabus Point 3, Lawyer Disciplinary Bd. v. Cunningham, 195 W.Va. 27, 464 S.E.2d 181 (1995).

III. Discussion

A. Statute of Limitations

Mr. Barber first argues that the statute of limitations set forth in Rule 2.14 of the Rules of Lawyer Disciplinary Procedure expired before Mr. Helm filed his complaint, and therefore, the charges against him should be dismissed. As discussed above, the loan transaction occurred on March 15, 1996, but Mr. Helm did not file his complaint until September 10, 1998. Rule 2.14 provides:

Any complaint filed more than two years after the complainant knew, or in the exercise of reasonable diligence should have known, of the existence of a violation of the Rules of Professional Conduct, shall be dismissed by the Investigative Panel.

Although the rule contains a discovery provision, Mr. Barber contends that it does not apply. He asserts that Mr. Helm filed the ethics complaint to get his money back and not because he discovered that the loan constituted an ethical violation.

Regardless of Mr. Helm's intent when he filed the complaint, it is undisputed that he did not know prior to August 1998 that Mr. Barber might have violated an ethical rule by soliciting and obtaining a loan from him. It is also undisputed that Mr. Helm did not know of the existence and function of the ODC until that time. Within two months of learning this information, Mr. Helm filed his complaint.

In Lawyer Disciplinary Bd. v. Battistelli, 206 W.Va. 197, 204, 523 S.E.2d 257, 264 (1999) (hereinafter Battistelli II), this Court found that an ethical complaint was timely filed even though more than two years had passed since the alleged misconduct because there was no evidence that the complainant either knew or reasonably should have known of the ethical violation until he consulted a different attorney. In that case, attorney Battistelli was also charged with violating Rule 1.8(a) by obtaining a loan from a client. The loan transaction occurred on March 4, 1993, and the client consulted another attorney in August 1993. The complaint was filed in May 1995.

In the present case, Mr. Helm filed his complaint with the ODC soon after he learned of the possible ethical violation. Therefore, we agree with the Subcommittee's finding that this disciplinary proceeding is not time-barred.⁶

B. Rules 1.8(a)(2) and (3)

Mr. Barber was charged with violating Rules 1.8(a)(2) and (3) of the Rules of Professional Conduct which provide as follows:

(a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

....

(2) the client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and

(3) the client consents in writing thereto.

The Board found that Mr. Barber violated Rule 1.8(a)(2) because he never gave Mr. Helm a reasonable opportunity to seek the independent advice of legal counsel. The evidence shows that Mr. Barber solicited and received the loan from Mr. Helm during a meeting scheduled to discuss Mr. Helm's divorce. Mr. Helm had no opportunity to speak with another attorney and relied solely upon the advice and counsel of Mr. Barber.

We agree with the Board's finding that Mr. Barber violated Rule 1.8(a)(2). Although Mr. Helm has testified that he did not want or need independent legal advice, Rule 1.8(a)(2) unequivocally states that the client must be given a reasonable opportunity to seek the advice of independent counsel. Clearly, Mr. Helm was not given such an opportunity.

With regard to Rule 1.8(a)(3), the Board found that Mr. Barber violated this rule by not having Mr. Helm consent in writing to the loan and to the conflict of interest. Again, we agree with the Board's findings. Contrary to Mr. Barber's...