Louisiana State Bar Ass'n v. Chatelain

• Decision Date: 19 October 1987
• Docket Number: No. 87-B-0253,87-B-0253
• Parties: LOUISIANA STATE BAR ASSOCIATION v. Robert P. CHATELAIN.
• Court: Louisiana Supreme Court

Page 1178

513 So.2d 1178

56 USLW 2321

LOUISIANA STATE BAR ASSOCIATION v. Robert P. CHATELAIN.

No. 87-B-0253.

Supreme Court of Louisiana.

Oct. 19, 1987.

Rehearing Denied Dec. 10, 1987.

Thomas O. Collins, Jr., G. Fred Ours, New Orleans, Gerard F. Thomas, Jr., Natchitoches, Roland J. Achee, Shreveport, Robert J. Boudreau, Lake Charles, Robert M. Contois, New Orleans, Frank J. Gremillion, Baton Rouge, Carrick R. Inabnett, Monroe, Harvey Lewis, New Orleans, Alfred S. Landry, New Iberia, Philippi P. St. Pe, Metairie, for applicant.

Robert P. Chatelain, Metairie, William P. Quigley, New Orleans, for respondent.

WATSON, Justice.

This is a disciplinary proceeding by the Louisiana State Bar Association against one of its members, Robert P. Chatelain, in which the Supreme Court of Louisiana has original jurisdiction. ¹

FACTS

On October 31, 1985, Chatelain acted as the Notary Public on a sale of immovable property from Urban Property Company to Louis V. Nugent. The purchase price for the property was $54,000, which was received by Chatelain from the purchaser. The net amount due to the seller after expenses was $52,685. On October 31, 1985, a check for that amount was drawn by Chatelain from the "Robert P. Chatelain, Notarial Account" with the Crescent City Bank. The check, made payable to the seller's bank, was returned for insufficient funds when presented in mid-November. Two weeks later the check was presented for a second time and again returned unpaid for insufficient funds. Despite the seller's demand, respondent refused to make the funds available or honor the check.

A civil suit was filed on December 20, 1985, in the Civil District Court for the Parish of Orleans, entitled "Urban Property Company v. Robert P. Chatelain, Louis V. Nugent, and Crescent City Bank," bearing docket number 85-21685. On May 1, 1986, a consent judgment was rendered against Chatelain for $58,505.19. On May 28, 1986, a second judgment was rendered against his malpractice insurance carrier. The seller executed a "Release and Satisfaction of Judgment" dated October 8, 1986.

The Louisiana State Bar Association's Committee on Professional Responsibility charged Chatelain with two specifications of misconduct. Specification number one alleged that Chatelain failed to maintain and properly disburse the funds tendered to him, in trust, for the act of sale; engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation which adversely reflected on his fitness to practice law; and converted client funds to his own use. These charges allege violations of Disciplinary Rules 1-102(A)(4), (6) ² and 9-102 ³ of the Code of Professional Responsibility of the Louisiana State Bar Association.

Specification number two alleged that Chatelain failed to maintain his notarial account in a proper manner and used it as an operating account. Chatelain was charged with failing to maintain complete and proper records of his client's funds. These charges allege a violation of Disciplinary Rule 9-102 ⁴ of the Code of Professional Responsibility.

Hearings were held before the Committee on September 8, 1986, October 17, 1986, and November 17, 1986. Respondent appeared at each and was represented by his counsel, William P. Quigley. In the course of these proceedings, a subpoena duces tecum was directed to respondent to produce certain records and documents. Respondent opposed this production and filed a Motion to Quash based on an assertion of his Fifth Amendment right against self-incrimination. The motion was denied by the Bar Association's hearing examiners, and respondent filed a writ of review which was denied.

Respondent produced the requested bank records which consisted of the checks, monthly statements and receipts from the trust account but persisted in his efforts to suppress the evidence. A majority of the Committee concluded that respondent was guilty of the misconduct described in the two specifications.

A petition was filed against respondent on February 3, 1987, and John M. Currier was appointed Commissioner to make findings of fact and conclusions of law. Respondent's motion to suppress his records was denied by the Commissioner and also by this court. A hearing was held before Commissioner Currier on May 11, 1987, and the documents were introduced subject to a reservation by respondent, who again asserted his Fifth Amendment right against self-incrimination. Invoking that right, he also refused to testify in his own behalf.

The Commissioner found that respondent received funds on October 31, 1985, which should have been immediately transferred to the seller of the immovable property. In spite of constant demands and a civil lawsuit, he did not produce the funds until October 8, 1986. The deposits in the notarial account did not contain enough information to indicate the source of the funds, but checks were written to pay other obligations. The Commissioner found that respondent converted and commingled funds belonging to another for his own use for a period of one year, a violation of Disciplinary Rules 1-102(A)(4), (6) and 9-102. Respondent also violated Disciplinary Rule 9-102 by failing to maintain complete and proper separation of a client's funds in a separate notarial account.

As to the self-incrimination issue, the Commissioner noted that disbarment proceedings are not criminal in nature. Louisiana State Bar Association v. Ruiz, 261 La. 409, 259 So.2d 895 (La., 1972). Citing Spevack v. Klein, 385 U.S. 511, 87 S.Ct. 625, 17 L.Ed.2d 574 (1967) as authority that an attorney may not be disbarred for refusing to testify or produce records on the grounds that there may be a violation of his Fifth Amendment right against self-incrimination, the Commissioner noted that cases decided after Spevack recognize that "the privilege against self-incrimination is applicable only when the testimony or documents sought would subject the attorney to criminal prosecution or would otherwise be incriminating." ⁵ Here, the Committee does not seek to punish respondent for his refusal to testify or produce records, as in Spevack, but because he converted and commingled his client's funds.

Additionally, the Commissioner found the wording of Disciplinary Rule 9-102 suggests that the records which respondent refused to produce fall squarely under the "required records doctrine" enunciated in Shapiro v. U.S., 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948) which provides an exception to the privilege against self-incrimination. This situation was alluded to in Spevack.

The Commissioner found sufficient evidence of conversion and commingling. After Chatelain refused to cooperate with the Committee or the Commissioner and also refused to testify, he was given an opportunity to supplement the record with letters or other evidence in mitigation. There was no mitigating evidence. When respondent delayed restitution, the conversion became intentional. The seller was denied use of the funds for a year and the buyer, named in the civil suit, incurred the cost of defense. The Commissioner found respondent acted in bad faith and recommended a three year suspension from the practice of law. The Committee on Professional Responsibility of the Louisiana State Bar Association concurs in the recommendation.

LAW

Respondent relies solely on Spevack v. Klein, supra, where a disbarment proceeding was brought against a member of the New York bar. Although various charges were initially brought against him, only the attorney's refusal to honor a subpoena duces tecum and his refusal to testify, based on his Fifth Amendment privilege against self-incrimination, survived. The New York Supreme Court ordered the attorney disbarred, holding the constitutional privilege was not available to a lawyer under Cohen v. Hurley, 366 U.S. 117, 81 S.Ct. 954, 6 L.Ed.2d 156 (1961). The United States Supreme Court reversed, holding an attorney could not be disbarred solely for relying on his privilege against self-incrimination and refusing to honor a subpoena duces tecum. The Supreme Court also held that the attorney could not be disbarred where, by invoking his right against self-incrimination, he was unable to make a record that the documents requested were private and not within the "public record rule" of Shapiro v. U.S., supra, which provides an exception to the right to refuse production of documents where the records are required to be kept by law.

In re Ruffalo, 390 U.S. 544, 88 S.Ct. 1222, 20 L.Ed.2d 117 (1968) held that disbarment proceedings are quasi-criminal adversary proceedings. Attorneys are entitled to procedural due process, which includes fair notice of the charges brought against them and an opportunity to be heard. Despite these privileges, disciplinary proceedings brought against members of a state bar are not criminal and the full panoply of a criminal defendant's rights are not available to an attorney in a bar disciplinary case.

State courts faced with the question of whether the Fifth Amendment privilege applies to compulsory production of documents in attorney disciplinary proceedings have devised various methods to deal with the problem of balancing an attorney's individual rights with the right of the bar to police and maintain the professionalism of its members. State v. MacIntyre, 41 Wis.2d 481, 164 N.W.2d 235 (1969) held that the privilege against self-incrimination protects the documents requested. Goldman v. State Bar, 20 Cal.3d 130, 141 Cal.Rptr. 447, 570 P.2d 463 (1977) compelled their production, finding an attorney not entitled to the same immunities as a criminal defendant. The Supreme Court of Illinois devised a new procedure, an extra judicial review step, in its bar disciplinary proceedings. In re Zisook, 88 Ill.2d 321, 58 Ill.Dec. 786, 430 N.E.2d 1037 (1981), cert.den. 457 U.S. 1134, 102 S.Ct. 2962, 73 L.Ed.2d 1352 (1982). Several states have held that documents concerning a client's monies have a public aspect which places them...