SUP. CT. BD. OF PROF'ETHICS v. D'ANGELO

Decision Date16 November 2000
Docket NumberNo. 00-0920.,00-0920.
PartiesIOWA SUPREME COURT BOARD OF PROFESSIONAL ETHICS AND CONDUCT, Complainant, v. N. Michael D'ANGELO, Respondent.
CourtIowa Supreme Court

Norman G. Bastemeyer and Charles L. Harrington, Des Moines, for complainant.

N. Michael D'Angelo, Oakland, pro se, for respondent.

Considered en banc.

NEUMAN, Justice.

A division of the Grievance Commission found that respondent, attorney N. Michael D'Angelo, violated at least seven provisions of the Iowa Code of Professional Responsibility for Lawyers in connection with the probate of five estates for which he was the designated attorney. The violations generally involve neglect, collecting fees before court authorization, improper trust accounting, misappropriating client funds, disregarding court orders, and failing to respond to inquiries by the Board of Professional Ethics and Conduct (Board). The Commission recommends that we suspend D'Angelo's license for not less than six months.

The matter is now before us in accordance with Iowa Supreme Court Rule 118.10. D'Angelo has filed no appeal but the Board has filed a statement urging us to consider a harsher penalty. Given the nature and number of ethical violations revealed by the record, we agree that a more serious penalty is warranted.

I. Background Facts.

D'Angelo is a sole practitioner from Oakland, Iowa. He was admitted to practice in 1971. This is not his first brush with the lawyer disciplinary system. In 1988 we admonished him for taking probate fees prematurely. He received a reprimand in 1996 for securing a judge's signature on an order that varied from a draft agreed upon by opposing counsel. Although he is described as personable and well-liked by his colleagues, he is also known as a lawyer who procrastinates and fails to get things done. Regrettably, the five probate matters before us substantiate that negative reputation.

Virginia Ford Estate. Ford's four children, acting as co-executors, hired D'Angelo to probate their mother's estate when she died in February 1995. D'Angelo had represented Virginia and her husband when they set up a family farm corporation some years earlier and divided the shares among the family members. He nevertheless included the entire value of the corporation in Virginia's estate. The children, certain Virginia held only a minority interest, hired counsel at their own expense who convinced D'Angelo to prepare a revised inventory. Thereafter D'Angelo filed the federal estate tax return late, resulting in a $1500 penalty which he eventually paid. A year later the IRS contacted one of the executors about the return, unable to get any response to requests for information from D'Angelo. The co-executor, Joan Shanno, was likewise unable to secure a response from him. She contacted a Council Bluffs lawyer, Frank Pechacek, who—after several unsuccessful tries— eventually obtained the necessary information from D'Angelo to satisfy the IRS and conclude the audit.

Pechacek was ultimately hired by the heirs to close the estate. In doing so he discovered that D'Angelo had been paid $8590 for fees and costs in November 1995. The probate court set the matter of fees for hearing, ordering D'Angelo to file an itemized breakdown of his service to the estate and costs incurred. He failed to file the itemization. The court subtracted Pechacek's fees from the amount already paid, and ordered D'Angelo to reimburse him within fifteen days. D'Angelo missed that deadline but eventually paid Pechacek with a check drawn, not on his trust account, but from his operating account.

Before the estate could be closed, co-executor Shanno was forced to pay delinquent court costs that D'Angelo had assured her would be covered by the $8590 paid at the outset. D'Angelo reimbursed her for those costs only after she filed a complaint with the Board in October 1998.

Dorothy Green Estate. Marline Bryant, daughter of D'Angelo's longtime client, Dorothy Green, hired D'Angelo to probate her mother's estate. Another daughter, Patricia Johnston, hired Pechacek to help get information about the estate that she was unable to secure from Bryant or D'Angelo. Pechacek determined that D'Angelo had not timely filed the probate inventory. The record revealed that approximately one month after the probate inventory was filed, D'Angelo secured a court order to pay full fees to himself and Bryant totaling $11,294. Pechacek also learned that Bryant, without notice to Johnston, had sold herself farm equipment, valued in the estate at $13,000, for roughly $2600.

Based on these and other irregularities, Pechacek sought Bryant's removal and the appointment of Firstar Bank as successor executor. The order appointing the successor, as amended in June 1998, required Bryant and D'Angelo to immediately pay the Green Estate the fees received prematurely, plus interest from October 28, 1995. The court also ordered D'Angelo to pay $1075 in court costs that had been advanced to him but not applied to the costs. The payments were not forthcoming and a show cause hearing was scheduled. D'Angelo satisfied the court order just days before the contempt hearing.

After Pechacek took over as attorney for the estate, he discovered no fiduciary income taxes had been filed, resulting in a substantial overpayment of taxes by the beneficiaries. Neither had an inheritance tax clearance been secured. Pechacek ultimately resolved these matters. The hearing on the closing of the estate was pending at the time of D'Angelo's disciplinary hearing.

Earl Smith Estate. Verla Mohn was the executor for the estate of Earl Smith, and D'Angelo was the estate's attorney. An October 1999 audit of D'Angelo's trust account by the Client Security and Attorney Disciplinary Commission revealed a check written by Mohn for $16,992 that was deposited in D'Angelo's office operating account. Within a month the funds had been withdrawn. Upon inquiry D'Angelo acknowledged that the check represented inheritance taxes totaling $11,104 plus $5808 for projected fees. D'Angelo admitted that the check should have been deposited in his trust account and that the fees were taken before they were earned or any court authorization had been obtained. He took them, he explained, because the executor was terminally ill and eager to wrap up her responsibilities for the estate. He had no explanation for why the funds were not deposited in his trust account. In the final report filed in the Smith Estate, D'Angelo misrepresented to the court that an accounting had been waived, when it had not, and that all statutory tax obligations had been complied with. D'Angelo eventually repaid the entire $16,992 to the Smith Estate and declined any fees for work allegedly performed.

Verla Mohn Estate. When Verla Mohn died her son, Daniel, was appointed the estate's executor. Mohn's will was admitted to probate in May 1996. The client security commission auditor inquired about a January 1997 deposit in D'Angelo's operating account for $8003 in estate legal fees. D'Angelo explained that Daniel Mohn wrote the check and left it in D'Angelo's office while he was out. He thought the fee had been approved by the court, although he could produce no order saying so, and he acknowledged that the funds were deposited directly into his operating account rather than a trust account. Another check received by D'Angelo from Mohn, in the sum of $3500, was never cashed because D'Angelo did not know what it was for. It was found in the file at a later date when the matter was transferred to another attorney for completion.

As with the Smith estate, D'Angelo returned all fees to the Mohn estate when his trust account violations came to light. He has subsequently sought no fees for work done on the estate.

Jeanette Calmer Estate. Jeanette Calmer died in March 1996 leaving a probate estate consisting solely of a modest checking account. The Pottawattamie clerk of court issued delinquency notices to the co-executors in November 1996, May 1998, and November 1998, for failure to file a probate inventory and interlocutory reports. One of the co-executors, Kaye Risden, repeatedly called D'Angelo about the status of the estate. Her calls were not returned. Eventually Risden told D'Angelo's staff that she would pick up the file and conclude the probate herself. D'Angelo contacted her and told her that would not be necessary as the estate had been finalized.

The probate file revealed a final report signed by another co-executor, but not by Risden. Nor had Risden received notice of D'Angelo's claim for attorney's fees, or a copy of D'Angelo's motion to extend the date for closing the estate. D'Angelo acknowledged that the final report was incomplete and should not have been in the court file. At the time of the disciplinary hearing in June 2000, the ninety-day extension had expired and the estate had not yet been closed.

II. Disciplinary Proceedings.

The Board's complaint, as amended in five counts, charged D'Angelo with the following violations of the Iowa Code of Professional Responsibility for Lawyers: DR 1-102(A)(3), (4), (5), (6) (engaging in illegal conduct involving moral turpitude, dishonesty or misrepresentation prejudicial to the administration of justice or that reflects adversely on fitness to practice law); DR 2-106(A) (collecting illegal fees); DR 6-101(A) (neglect and/or incompetence in matters entrusted to the lawyer); DR 7-106(A) (disregarding court order); and DR 9-102(A) (failure to keep client's funds in a trust account).

D'Angelo filed no response to the complaint, nor did he answer interrogatories or the Board's multiple requests for admissions. The Board filed a motion to compel discovery, which was likewise ignored by D'Angelo, followed by a motion for sanctions. D'Angelo's utter lack of cooperation prompted the Commission to prohibit him from calling witnesses or tendering exhibits at the hearing. He did, however, appear at the hearing and testify in...

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