Ligon v. Dunklin

• Decision Date: 18 January 2007
• Docket Number: No. 04-661.,04-661.
• Citation: 247 S.W.3d 498
• Parties: Stark LIGON, as Executive Director of the Supreme Court Committee On Professional Conduct, Appellant, v. Larry G. DUNKLIN, Arkansas Bar No. 81051, Appellee.
• Court: Arkansas Supreme Court

247 S.W.3d 498

Stark LIGON, as Executive Director of the Supreme Court Committee On Professional Conduct, Appellant, v. Larry G. DUNKLIN, Arkansas Bar No. 81051, Appellee.

No. 04-661.

Supreme Court of Arkansas.

January 18, 2007.

Michael E. Harmon, Little Rock, AR, for appellant.

Richard E. Holiman, Little Rock, AR, for appellee.

JIM HANNAH, Chief Justice.

This is an original action under the Arkansas Supreme Court Procedures Regulating Professional Conduct (Procedures) in which petitioner Stark Ligon, as Executive Director of the Arkansas Supreme Court Committee on Professional Conduct (Committee), seeks the disbarment of respondent Larry G. Dunklin, an attorney licensed to practice law in the State of Arkansas. Our jurisdiction is pursuant to Procedures Section 13(A).

On June 9, 2004, the Committee filed a complaint for disbarment against Dunklin, alleging the following facts. In June 1999, First Magnus Financial Corporation agreed to finance a loan to Mark Kimbrough, and Dunklin was chosen to act as closing agent for the loan. On June 17, 1999, Dunklin and Kimbrough signed documents provided by First Magnus, including the mortgage and promissory note, and returned the documents to First Magnus. First Magnus then funded the loan to Kimbrough by wiring the amount of $80,001.51 to Dunklin's IOLTA account at Bank of America. On September 1, 1999, a general warranty deed transferring property to Kimbrough was filed with the Tulsa County Clerk in Tulsa, Oklahoma; however, the mortgage was not filed until February 18, 2000. Thereafter, Kimbrough failed to make payments pursuant to the promissory note with First Magnus.

First Magnus later discovered that the mortgage had not been timely filed. Accordingly, on October 5, 2000, First Magnus filed a complaint for replevin against Dunklin in Pulaski County Circuit Court. Dunklin failed to file an answer to First Magnus's complaint, and a default judgment in the amount of $96,727.09, plus costs, post-judgment interest, and attorneys' fees was entered against Dunklin on September 28, 2001. The court of appeals affirmed the trial court's decision in October 2002. See Dunklin v. First Magnus Financial Corp., 79 Ark.App. 246, 86 S.W.3d 22 (2002).

The Executive Director filed the instant complaint for disbarment with this court on June 9, 2004, citing violations of Model Rules 1.15(a), 3.4(c), and 8.4(c). The complaint alleged ten separate counts, which involved three general categories of misconduct: Counts I-VI and VIII involved allegations of Dunklin's mismanagement of his IOLTA account; Counts VII and X alleged that, during the course of the First Magnus suit, Dunklin had falsely stated that he had never represented Kimbrough in a prior matter; and Count IX concerned Dunklin's failure to properly handle the real estate closing involving First Magnus and Kimbrough.

In response to the petition for disbarment, this court appointed the Honorable Jack Lessenberry as special judge to preside over the disbarment proceedings. See Ligon v. Dunklin, 358 Ark. 369, 190 S.W.3d 911 (2004). Subsequently, on September 19, 2005, an instrument entitled Stipulated Facts and Agreed Recommendation of Sanction was filed with the special judge. As the title indicates, the instrument was an effort to reach a settlement of the factual issues and an agreement of punishment for violations of the Model Rules of Professional Conduct. The stipulations and agreement were accepted by the special judge, and then filed with this court on September 30, 2005. This was followed by a joint motion of the parties that their recommendation, which was approved by the special judge, be accepted. Subsequently, we denied the parties' motion to waive briefing and for approval of stipulation of sanction and returned the matter to the special judge for further proceedings. Ligon v. Dunklin, 364 Ark. 38, 216 S.W.3d 118 (2005).

A hearing on the disbarment complaint was held before Judge Lessenberry on February 6, 2006. At the proceeding, the Committee called Jana Julian Gledhill, vice president and director of risk management of First Magnus; Nancy Hollis, an employee of Bank of America; and Dunklin. Dunklin called the Reverend Willis Walker Jr., and submitted the separately bound depositions of character witnesses, Circuit Judge Marion Humphrey and former municipal judge Milas Hale.

On April 19, 2006, the proceeding was reopened to hear additional evidence, and at that hearing the Committee introduced a stipulated explanation of complaints that had been lodged against Dunklin. In addition, an exhibit of a prior reprimand of Dunklin was presented and filed without objection.

In his Findings of Fact, Conclusions of Law, and Recommendation of Sanction, Judge Lessenberry concluded that Dunklin violated Model Rules 1.15(a), 3.4(c), and 8.4(c). After hearing evidence related to aggravating and mitigating factors, as well as considering the factors listed in Section 19 of the Procedures, the special judge recommended that Dunklin's license to practice law be suspended for three years. He further recommended that Dunklin's law license not be reinstated until and unless the judgment entered in Magnus v Dunklin, No. CV 2000-8954, Pulaski County Circuit Court, be satisfied in full.

The special judge's findings of fact and conclusions of law, as well as his recommended sanction, are now before this court, and both Dunklin and the Committee have appealed from the special judge's decision. Dunklin takes issue with the special judge's findings regarding Counts VII and X. The Committee contends that the special judge's findings with respect to Count VIII are clearly erroneous, that the special judge erred when he disallowed relevant evidence pursuant to Rule 404(b) of the Arkansas Rules of Evidence, and that the special judge failed to consider relevant factors pursuant to Section 19 of the Procedures.

Standard of Review

Section 1(C) of the Procedures provides that disciplinary proceedings are neither civil nor criminal in nature but are sui generis, meaning of their own kind. See Ligon v. Newman, 365 Ark. 510, 231 S.W.3d 662 (2006); Neal v. Hollingsworth, 338 Ark. 251, 992 S.W.2d 771 (1999). The special judge's findings of fact are accepted by this court unless they are clearly erroneous. Newman, supra; Ligon v. Price, 360 Ark. 98, 200 S.W.3d 417 (2004). This court imposes the appropriate sanction as warranted by the evidence. Newman, supra; Price, supra. There is no appeal from this court except as may be available under federal law. Newman, supra; Price, supra.

A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Newman, supra; Price, supra; Hollingsworth, supra. The court must view the evidence in a light most favorable to the decision of the special judge, resolving all inferences in favor of his or her findings of fact. Newman, supra. Disputed facts and determinations of the credibility of witnesses are within the province of the fact-finder. Id. The purpose of disciplinary actions is to protect the public and the administration of justice from lawyers who have not discharged their professional duties to clients, the public, the legal system, and the legal profession. Id. With this standard in mind, we now consider Dunklin's and the Committee's assertions of error.

Count VII

Dunklin first argues that the special judge erred in finding that there was a violation of Model Rule 3.4(c), as alleged in Count VII of the complaint for disbarment. Following the replevin suit filed against him by First Magnus, First Magnus sought to uncover any of Dunklin's assets to satisfy the judgment. During a deposition, Dunklin was asked whether he knew or had ever previously represented Kimbrough. Dunklin denied representing Kimbrough, but he conceded that he knew him. Despite Dunklin's testimony, however, he had, in fact, represented Kimbrough in a prior criminal matter in 1992. In addition, Dunklin had represented Kimbrough in several real estate transactions in the intervening years.

Count VII of the complaint for disbarment made the following allegations:

40. During the October 30, 2001, deposition, Dunklin denied that he had ever represented Kimbrough in any criminal proceeding.

41. Kimbrough was represented by Dunklin in Pulaski County Circuit Court Case No. 92-915 and Dunklin negotiated a guilty plea on Kimbrough's behalf.

42. By testifying that he had never represented Kimbrough in any criminal proceeding, Dunklin violated Rule 603 of the Arkansas Rules of Civil Procedure [sic], which requires that every witness testify truthfully and Model Rule 3.4(c), which requires a lawyer to not knowingly disobey an obligation under the rules of a tribunal.

Rule 3.4(c) provides that a lawyer shall not "knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists." The record reveals that in the October 30, 2001, deposition, the following exchange occurred between counsel for First Magnus and Dunklin:

Q: Prior to the time that this closing took place, did you know Mr. Kimbrough?

A: I knew — yes. Mr. Kimbrough.

Q: Had you ever represented Mr. Kimbrough prior to that time as an attorney?

A: No. I think I had probably been — he had probably consulted with me on some other — on some matters.

Dunklin was questioned about his deposition testimony at the hearing on the disbarment complaint. The following colloquy took place between Dunklin and counsel for the Committee:

Q: What was your — when you were asked did you know Mr. Kimbrough or had represented him, you denied that, did you not?

A: Well, yes. And I looked back on that and I think that he had asked me you ever — have you represented Mr. Kimbrough prior to that time and I — and — prior to the real estate actions and stuff and I said — I think...