State ex rel. Oklahoma Bar Ass'n v. Kessler

• Citation: 895 P.2d 713,1995 OK 32
• Decision Date: 04 April 1995
• Docket Number: No. 3925,3925
• Parties: STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Paul J. KESSLER, Respondent. SCBD
• Court: Oklahoma Supreme Court

Page 713

895 P.2d 713

1995 OK 32

STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Paul J. KESSLER, Respondent.

SCBD No. 3925.

Supreme Court of Oklahoma.

April 4, 1995.

Original Proceeding for Lawyer Discipline

Disciplinary proceedings brought by the Oklahoma Bar Association against Respondent alleging violations of Rule 1.15 and Rule 8.4. Respondent submitted Affidavit of Resignation, to which the Bar Association objects. We hold that not only did Respondent's affidavit fail to meet criteria of Rule 8.2, Rules Governing Disciplinary Proceedings, but that under our discretionary power, the resignation should be refused. We also find that Respondent violated Rules 1.15 and 8.4, has twice been disciplined for similar misconduct, and thus should be disbarred.

RESPONDENT DISBARRED AND ORDERED TO PAY COSTS

Janis Hubbard, Oklahoma Bar Ass'n, Oklahoma City, for complainant.

Paul J. Kessler, Oklahoma City, pro se.

SUMMERS, Justice.

The Oklahoma Bar Association brings this disciplinary proceeding against Paul Kessler, a lawyer. The Professional Responsibility Tribunal recommends disbarment. Kessler, after the hearing was held on the first of two pending complaints, filed his resignation. This Court must consider whether Kessler's resignation should be accepted. The Bar Association urges that we refuse the resignation and order disbarment. If we refuse the resignation, we must determine whether discipline is appropriate.

Kessler is no stranger to disciplinary proceedings. On January 10, 1978, he was suspended for eighteen months for violation of the rule requiring an attorney to preserve the identity of funds and property belonging to a client. State ex rel. Oklahoma Bar Ass'n v. Kessler, 573 P.2d 1214 (Okla.1978). On October, 21, 1991, he was again suspended, this time for two years and one day, for commingling and misusing client funds. State ex rel. Okla. Bar Ass'n v. Kessler, 818 P.2d 463 (Okla.1991). Currently, he has two complaints pending against him. The first, OBAD # 1111 filed June 22, 1993, has resulted in the PRT's recommendation that Kessler be disbarred. The second, OBAD # 1121 filed September 13, 1993, has been continued until the first complaint is resolved.

In the first complaint the Bar Association alleges that Kessler mishandled client funds, and misrepresented his settlement authority to the trial court and the status of the case to his clients. This complaint centered around Kessler's handling of a case for Bill and Barbara Troegners. Kessler was serving as the attorney for the Troegners to help them with the sale of a small business. Mr. Troegner was in the military, and during the transaction, was transferred to Hawaii. After he was transferred one of the investors in the business filed suit, and the Troegners were brought in as third-party defendants. The matter was set for settlement conference, but Kessler failed to inform his clients of the conference.

Mr. Troegner first learned of the settlement conference about a month after it occurred. He testified that he had not extended settlement authority to Kessler, and had not authorized him to enter into a settlement of any kind. However, Kessler appeared before Judge William Myers for the conference, agreed to a settlement in the case and indicated to both the judge and the opposing attorney that he had full settlement authority. The opposing counsel testified at the bar hearing that Kessler represented that his authority was "absolute." The settlement required the Troegners to pay $1000.00 and assign a $4,500.00 promissory note to the defendants.

After the settlement conference Kessler wrote a letter to the Troegners regarding the settlement conference. This was the first time the Troegners has been notified of the conference. Kessler did not advise his clients that he had entered a settlement agreement on their behalf. Instead, the letter stated that a settlement offer of $1000.00 and assignment of the $4500.00 promissory note had been recommended. Kessler recommended that they agree to the settlement.

This letter did not reach the Troegners until October, more than two months after it was mailed. When he received the letter Mr. Troegner called Kessler. Kessler never told his client that he had already agreed to the settlement. Mr. Troegner refused the "proposed" settlement and agreed to pay $500.00 in settlement. Troegner sent Kessler a $500.00 check, but for unknown reasons the check did not clear the bank. Kessler contacted Mr. Troegner and asked that he send a cashier's check for $510.00 to cover the "settlement" and the cost of the returned check. Troegner immediately sent a personal money order for $510.00 to Kessler. Kessler deposited the check in his client trust account. The Oklahoma County Court Clerk has no record that this money was ever paid to the court for credit toward the judgment.

Meanwhile a motion to enforce the settlement was filed by the defendant in the case. In spite of the fact that Kessler did not have authority to enter the settlement and the client had expressly refused to the terms recommended by Kessler, Kessler signed the journal entry of judgment. Kessler did not Pursuant to the judgment a garnishee summons was issued against the Troegners, in care of Kessler. Kessler falsely advised the opposing counsel that he had paid to the court clerk $500.00. Kessler then falsely advised his clients that he had paid the $500.00 to the court clerk. He did not advise them of the judgment. Instead he reported that he had made the offer of $500.00 and had heard nothing from the opposing parties until the garnishment. Mr. Troegner testified that he did not learn of the judgment until October 1992 when he made inquiry of the Oklahoma County Court Clerk.

advise his client of this settlement nor of the judgment against him.

In April of 1992, Kessler's client trust account was closed. A review of the account showed that not only had the $510.00 money order been deposited in the account, but that a bank error had been made and the original $500.00 amount (for the Troegner check that was returned) had never been deducted from the account. The $510.00 sent by money order was never returned to Troegner, even though it was not paid to the court clerk. The client trust account was closed after it became overdrawn, and the bank did not recover the owing money (including the $500.00 bank error).

This complaint was filed by the Bar Association on May 27, 1993. The Bar Association was forced to take extraordinary steps to provide Kessler with notice of the complaint and subsequent hearings because he repeatedly failed to accept certified mail, and refused to acknowledge that he had received notice of the pending complaint. After several attempts to reach Kessler a private process server was retained to personally serve him. The process server accomplished serving Kessler with a copy of the complaint, Notice of Selection and Appointment of Trial Panel, Notice of hearing, and the Order of the Professional Responsibility Tribunal directing him to respond to the Motion to Deem Allegations Admitted. A notice was also published in the Oklahoma Bar Journal.

On July 9, 1993 the hearing was scheduled but Kessler failed to appear and failed to respond. In order to give him every opportunity to present a defense the hearing was continued until September 2, 1993. The notice of the re-scheduling was mailed by certified mail to Kessler's roster address. Furthermore, a copy was hand-delivered to the post office and placed directly in the post office box of Kessler. A private process server was again hired, who made service on Kessler, providing him with copies of the earlier transcript, the amended scheduling order and the order resetting the trial date.

He again failed to appear. The Bar Association, through the General Counsel, presented its evidence. A recess was called and Kessler was paged throughout the building. Upon return and in Kessler's absence the Tribunal concluded the hearing.

Apparently, prior to the hearing, the Bar Association had presented Kessler with an affidavit of resignation. Kessler had refused to resign and did not sign the affidavit. While the record is unclear it appears that after this affidavit was sent, the Bar Association filed the second complaint against Kessler. The second complaint has been continued until the first complaint is resolved. Kessler mailed his affidavit of resignation to the Bar Association and the Bar acknowledges its receipt on September 13, 1993. Shortly thereafter, the Professional Responsibility Tribunal filed its report recommending disbarment.

The parties were given opportunity by this Court to brief the question of whether this Court should accept the voluntary resignation of Kessler. The Bar filed its brief on February 21, 1995. Kessler failed to file a brief or otherwise respond.

ACCEPTANCE OF THE RESIGNATION

Rule 8.2, Rules Governing Disciplinary Proceedings, 5 O.S.1991, Ch. 1, App. 1-A, states that "the Supreme Court may enter an order approving the resignation pending disciplinary proceedings." ¹

Governing a resignation is Rule 8.1 which states as follows:

8.1 Prerequisites for resignation

A lawyer who is the subject of an investigation into, or a pending proceeding involving, allegations of misconduct may resign membership in the Oklahoma Bar Association, and thereby relinquish the right to practice law, only by delivering to the Commission an affidavit stating that the lawyer desires to resign and that:

(a) The resignation is freely and voluntarily rendered, the lawyer is not being subjected to coercion or duress, and the lawyer is fully aware of the consequences of submitting the resignation;

(b) The lawyer is aware that there is presently pending an investigation into, or proceedings involving, allegation that there exist grounds for discipline, specifying particularly the misconduct alleged;

(c) The lawyer agrees that he may be reinstated only...