Case Title: In re Leisure

Citation: 

Docket Number: S50203

State: oregon

Court: Oregon Supreme Court

Date: 2003-12-26T00:00:00Z

Document:
Filed: December 26, 2003
IN THE SUPREME COURT OF THE STATE OF OREGON
In re: Complaint as to the Conduct of:
SALLY R. LEISURE,
Accused.
(OSB 00-89; SC S50203)
    En Banc
    On review of the decision of a trial panel of the
Disciplinary Board.
    Argued and submitted November 7, 2003.
    Mary A. Cooper, Assistant Disciplinary Counsel, Lake
Oswego, argued the cause and filed the briefs for the Oregon
State Bar.
    Sally R. Leisure, Portland, argued the cause and filed the
brief for herself.
    PER CURIAM
    The complaint is dismissed.
         PER CURIAM
         In this lawyer disciplinary proceeding, the Oregon
State Bar (Bar) alleged that the accused violated a number of
disciplinary rules and statutes by (1) practicing law while
suspended from the practice of law for failure to pay an
installment due on her annual Professional Liability Fund (PLF)
assessment; (2) representing to clients, courts, and opposing
counsel, at a time that she was suspended, that she was
qualified to practice law; and (3) falsely representing, in her
application for reinstatement to the Bar, that she had not
practiced law during her suspension.  A trial panel of the
Disciplinary Board found that the accused had committed all the
violations charged in the complaint and imposed a 30-day
suspension for those violations.  The Bar sought review, arguing
that the sanction that the trial panel selected was too lenient. 
The accused asserts that she is not guilty of any of the
charges.  On de novo review, ORS 9.536(3), we conclude that the
Bar has failed to establish, by the requisite clear and
convincing evidence, BR 5.2, that the accused committed the
alleged violations.  Accordingly, we dismiss the Bar's
complaint.
         The facts are not in dispute.  In 1999, the accused
was working as a sole practitioner with a focus on debtor-creditor law.  As an active member of the Bar engaged in the
private practice of law in Oregon, the accused was required to
carry professional liability insurance, which the Bar provides
through the PLF.  ORS 9.080(2); Oregon State Bar Bylaws §§ 15.1
and 15.2.  Like other members of the Bar, the accused received
annual assessments from the PLF for the required professional
liability coverage.
         When the accused received her 1999 PLF assessment, she
decided to pay the assessment in quarterly installments, as
provided for by the assessment form.  That payment option
required the accused to sign an "Installment Payment Request"
that included the following statement:
"In consideration of being permitted to pay my 1999
Professional Liability Fund assessment * * * on an
installment basis, I agree to the following: 
(1) [setting out payment schedule and service charge]; 
(2) By electing this installment payment plan, I agree
that neither the PLF nor the Executive Director of the
Oregon State Bar will be required to send any further
notices, billings, or notices of delinquency in
connection with any future installments (including any
such notices which might otherwise be required under
ORS 9.200(1)) and I hereby waive my right to such
notices or billings.  I further agree that upon my
failure to pay any installment or other payment when
due, the PLF is authorized to forward my name to the
Executive Director of the Oregon State Bar for
immediate suspension of my membership in the Bar and
said suspension will remain in effect until all unpaid
assessments and late charges are paid in full."         
(Emphasis in original.)
         The accused signed the form and paid the first two
quarterly installments on her 1999 assessment in, respectively,
January and April.  The third installment was due, at the latest,
at 5:00 p.m. on July 12.  On June 9, and again on July 1, the PLF
sent the accused a letter stating that the payment was due and
that the accused's Bar membership would be suspended
automatically with no further notice if she did not pay by July
12.
         On July 8, 1999, the accused wrote a check for $475 to
cover her July PLF installment.  On July 16, a Friday, the
accused's bank dishonored the check for insufficient funds.  On
July 19, pursuant to the "Installment Payment Request," the PLF
caused the accused to be suspended from membership in the Bar,
effective July 13.  On that same day, the PLF sent a certified
letter to the accused, notifying her of the suspension.  Also on
July 19, at 2:15 p.m., a PLF employee telephoned the accused and
notified her of the suspension.
         During the week that followed, the accused engaged in
activities that the accused acknowledges amounted to the practice
of law:  She participated in settlement negotiations on behalf of
a client; filed papers and pleadings in court; and met with and
advised clients.  At the end of the week, on July 23, 1999, the
accused submitted $950 (which represented the accelerated balance
of her PLF assessments for the year) to the Bar.  On the same
day, she submitted an application for reinstatement to the Bar,
along with a $75 reinstatement fee.  As part of the reinstatement
application, the accused was required to, and did, sign an
affidavit that contained the following statement:  "I did not
engage in the practice of law except where authorized to do so
during the period of my suspension."
         Shortly thereafter, the Bar learned that the accused
had filed a motion in a bankruptcy proceeding on July 22, 1999. 
The Bar began an investigation and found other evidence that the
accused had practiced law between July 13 and July 23.
         The Bar ultimately filed the present complaint,
alleging that the accused (1) had practiced law unlawfully during
her suspension; (2) had misrepresented her Bar status to her
clients, courts, and opposing counsel, by failing to advise them
of her suspension; and (3) had stated falsely under oath that she
had not practiced law during the period of her suspension.  The
Bar asserted that, by doing so, the accused had violated a number
of disciplinary rules and statutes:  Disciplinary Rule (DR) 3-101(B) (unlawful practice of law); (1) ORS 9.160 (practice of
law by person who is not active member of Bar); (2) DR 1-102(A)(3) (dishonesty, misrepresentation, fraud, or
deceit); (3) and ORS 9.527(1) (engaging in act that would be
grounds for denying admission to Bar). (4)  
         As noted, a trial panel was appointed and heard
arguments and evidence in the matter.  Ultimately, the trial
panel found that the Bar had proved all the charges and that the
appropriate sanction was a 30-day suspension.
         The Bar seeks review of only the trial panel's sanction
recommendation.  It argues that a 30-day suspension is an
insufficient sanction for the conduct at issue and that, to be
consistent with past cases that involved similar conduct, a
suspension of at least one year is required.  The accused
responds that a one-year suspension would be excessive and that,
in any event, she did not commit any of the charged violations
because the suspension that is at the heart of all charges was
unlawful and void.
         We first consider whether the Bar has established that
the accused violated any or all of the disciplinary rules and
statutes that the Bar has charged her with violating.  The
validity of the suspension is an issue that is central to all the
charges.  As noted, the accused contends that the purported
suspension was unlawful.
         The accused relies on ORS 9.200(1), which provides:
     "Any member [of the Bar] in default in payment of
membership fees established under ORS 9.191(1) for a
period of 90 days, or any person in default in payment
of membership fees established under ORS 9.191(2) for a
period of 30 days after admission or as otherwise
provided by the board, or any member in default in
payment of assessed contributions to a professional
liability fund under ORS 9.080(2) for a period of 30
days, shall, after 60 days' written notice of the
delinquency, be suspended from membership in the bar. 
The notice of delinquency shall be sent by the
executive director, by registered or certified mail, to
the member in default at the last-known post-office
address of the member.  Failure to pay the fees or
contributions within 60 days after the date of the
deposit of the notice in the post office shall
automatically suspend the delinquent member. * * *."
(Emphasis added.)  The accused notes that ORS 9.200(1) sets out
in precise terms the legislatively authorized procedure and
timetable for suspending Bar members who default on their PLF
assessments.  Specifically, a member will be suspended for
defaulting on a PLF assessment if (1) he or she has been in
default for a period of 30 days; and (2) the PLF has given
written notice to the lawyer of the default and 60 days have
elapsed since the Bar sent that notice.  The accused notes that
the Bar suspended her immediately, and without notice, upon her
default.  She concludes that her suspension violated the statute
and is void.  
         The Bar responds that the accused expressly waived the
requirements of ORS 9.200(1) when she signed the aforementioned
"Installment Payment Request" form. (5)  However, the accused
contends that the purported waiver is problematic in a number of
respects.  
         The accused argues, first, that the waiver that she
signed speaks to only the notice required by ORS 9.200(1) and
does not address, by direct reference or otherwise, the 30-day
default period set out in that statute.  Thus, the accused
argues, even if the waiver were valid and enforceable, it had no
effect on the statutory requirement that the Bar wait 30 days
after the default before suspending her.  The accused also argues
that the purported waiver was and is unenforceable, because it is
contrary to the legislative policies expressed in ORS 9.200(1).  
         Finally, the accused argues that her waiver is and was
ineffective because it arose out of a policy change (of requiring
such waivers) that neither the PLF Board of Directors, nor the
Bar Board of Governors (BOG), nor this court ever adopted.  The
accused argues that the waiver requirement significantly changes
the terms and conditions under which law may be practiced in
Oregon and is ineffective unless formally adopted by the
appropriate governing bodies.  
         We first consider the words of the purported waiver and
the contention that it did not address or affect the statutory
30-day default period.  There is no question that the accused
expressly waived the 60-day notice requirement by agreeing that 
"neither the PLF nor the Executive Director of the
Oregon State Bar will be required to send any further
notices, billings, or notices of delinquency in
connection with any future installments (including any
such notices which might otherwise be required under
ORS 9.200(1)) and I hearby waive my right to such
notices or billings."    
(Emphasis added.)  It is equally clear that that sentence does
not mention, and therefore does not waive, the statutory 30-day
default period.
         There is some suggestion that the accused waived the
30-day default period in the sentence that follows:
"I further agree that upon my failure to pay any
installment or other payment when due, the PLF is
authorized to forward my name to the Executive Director
of the Oregon State Bar for immediate suspension of my
membership in the Bar."   
However, it is not clear to this court that that sentence
encompasses such a waiver, as discussed below.  
         One might argue that the reference in the sentence to
immediate suspension clearly is at odds with, and necessarily
waives, any default period that ORS 9.200(1) provides.  However,
the precise words of the purported waiver –- that, "upon my
failure to pay any installment * * * when due, the PLF is
authorized to forward my name to the Executive Director of the
Oregon State Bar for immediate suspension" –- may or may not
convey consent to immediate suspension upon default.  Certainly,
the words are read most naturally as being primarily directed to
the PLF's intention to forward names to the Bar, rather than to
controlling the Bar's actions thereafter.  That is particularly
so in light of the fact that the PLF is party to the agreement,
but the Bar is not. 
         Moreover, the sentence contains no express reference
to, or waiver of, the 30-day default period set out in ORS
9.200(1).  That fact is striking, if only because the preceding
sentence expressly identifies, as waived, "any such notices which
might otherwise be required under ORS 9.200(1)."  Indeed, given
that the waiver in the first sentence explicitly refers to the
notice provisions of ORS 9.200(1), the absence of any explicit
reference to the default period provided in the same statute
tends to support an inference that the waiver does not extend to
that aspect of the statute. 
         Ultimately, we are not persuaded that the "Installment
Payment Request" conveys a waiver of the 30-day default period
set out in ORS 9.200(1).  It follows that the accused did not
waive the statutory default period by signing the agreement.  By
suspending the accused immediately upon her default, the Bar
violated that statutory requirement.  As such, the suspension was
invalid and void.
         The foregoing conclusion disposes of this case, but it
does not communicate fully to the PLF or to the Bar additional
information that we think those two bodies deserve to have
respecting this court's view of their authority to require
lawyers who pay their PLF assessment in installments to waive the
default period provided set out in ORS 9.200(1).
         The Bar relies on the general rule stated in Turney v.
J.H. Tillman Co., 112 Or 122, 132, 228 P 933 (1924), that a
person may waive by agreement the benefit of a statutory
provision unless doing so would violate the public policy
expressed in the statute.  The Bar asserts that ORS chapter 9
expresses no "overpowering" public policy that would be violated
by an agreement to waive the 60-day notice and 30-day default
period requirements of ORS 9.200(1). 
         The Bar does not attempt, in the course of that
argument, to characterize the public policy that inheres in ORS
9.200(1) (or, more generally, in ORS chapter 9).  It merely
complains that the accused has failed to identify any public
policy expressed in ORS chapter 9 that is sufficiently important
to "overpower" the PLF's authority to create, and set the terms
for, an installment plan for paying PLF assessments.  The Bar's
approach (if we understand it correctly) is conceptually
incorrect for the reasons that follow.
         The accused's rights to notice and a default period,
which the Bar asserts that the accused waived, are statutory. 
For purposes of determining whether a statutory provision may be
waived by agreement, the relevant consideration is whether the
statute is designed, in some respect, for the public good, rather
than being directed solely to the protection of individual
rights.  Thus, in School Dist. No. 1 v. Teachers' Retirement
Fund, 163 Or 103, 95 P2d 720 (1939), this court voided, as
unenforceable, a contractual provision in certain teachers'
contracts that purported to waive any claims to disability
benefits for any illnesses arising out of pre-existing physical
impairments.  This court noted that the waiver was in conflict
with an Oregon statute that provides for a disability annuity for
teachers and that that statute was enacted for the public good
(providing for the retirement of teachers).  Id. at 106-13.  
We think that the message of the School Dist. No. 1 decision is
clear:  Statutory rights may be waived, but only to the extent
that they serve no broader public policy but are directed solely
to the protection of the individual who purports to waive
them. (6)
         We now turn to the statutory right at issue, viz., the
lawyer's right under ORS 9.200(1) to a 30-day default period and
60 days' notice before being suspended for failure to make a PLF
payment.  The Bar suggests that that is a right that may be
waived by agreement, presumably on the theory that it exists only
for the protection of the individual lawyer.  Although it is
clear that the notice and default period provisions of ORS
9.200(1) are designed, at least in part, to protect the
individual lawyer (by ensuring that the lawyer has sufficient
notice of an impending suspension and time to repair any
default), it also is clear that permitting those provisions to be
set aside by agreement would violate a legislative policy that is
concerned more broadly with the public good.  More specifically,
ORS 9.200(1) strictly controls the manner of Bar suspensions for
default on membership dues or PLF assessments, to ensure that the
suspension process is orderly and that the Bar does not overstep
its authority.  That policy reflects a concern for the chaos that
might result from unexpected and precipitous suspensions, not
just for the suspended lawyer but for courts, opposing counsel,
and, particularly, for clients.  Unnoticed, eleventh-hour
suspensions create a likelihood that clients will be left without
counsel at critical moments in pending cases.  The legislature's
decision to specify notice and default period requirements for
administrative suspensions authorized by ORS 9.200(1) is, in our
view, a clear recognition of that concern.  
         Based on the foregoing, we hold that the notice and
default period requirements of ORS 9.200(1) are designed, at
least in part, for the public good.  They cannot be waived by
agreement.  It follows that, in the present case, any waiver of
those statutory requirements by the accused would have been
ineffective and that the suspension itself also would have been
without effect, because the Bar failed to abide by the statutory
notice and default period requirements.  And, because the
suspension would have been void, it could not have served as the
basis for the Bar's contention that the accused violated DR 3-101(B) and ORS 9.160 by practicing law while suspended.  Neither
could it have supported the Bar's claim that the accused violated
DR 1-102(A)(3) or ORS 9.527(1) by falsely representing to courts,
clients, and opposing counsel, during a period of suspension,
that she was qualified to practice law.
         Finally, we note that the ineffectiveness of the
purported suspension of the accused also disposes of the Bar's
claim that the accused violated DR 1-102(A)(3) and ORS 9.527(1)
by falsely stating, in her application for reinstatement, that
she had not practiced law during the period of her suspension. 
Because the suspension was void, the accused had retained her
right to practice law throughout the relevant period.  Therefore,
the accused's statement -- "I did not engage in the practice of
law except where authorized to do so during the period of
suspension" –- was not false. (7)
         For the reasons stated, we conclude that the Bar has
failed to carry its burden of establishing, by clear and
convincing evidence, that the accused violated any disciplinary
rule or statute.  
         The complaint is dismissed. 
1. DR 3-101(B) provides:
         "A lawyer shall not practice law in a
jurisdiction where to do so would be in violation of
regulations of the profession in that jurisdiction." 
2. ORS 9.160 provides:
         "Except for the right reserved to litigants
by ORS 9.320 to prosecute or defend a cause in person,
no person shall practice law or represent that person
as qualified to practice law unless that person is an
active member of the Oregon State Bar."
3. DR 1-102(A) provides, in part:
         "It is professional misconduct for a lawyer
to:
         "* * * * *
         "(3) Engage in conduct involving dishonesty,
fraud, deceit or misrepresentation." 
4. ORS 9.527 provides, in part: 
         "The Supreme Court may disbar, suspend or
reprimand a member of the bar whenever, upon proper
proceedings for that purpose, it appears to the court
that:
         "(1) The member has committed an act or
carried on a course of conduct of such nature that, if
the member were applying for admission to the bar, the
application should be denied[.]" 
5. The Bar also argues that, whether or not the
accused received the statutory notice, she received
fair warning that she would be suspended immediately if
she failed to pay a PLF installment in a timely
fashion.  That appeal to general "fairness" is beside
the point:  The Bar's suspension of the accused either
was authorized by law or it was not. 
6. To the same general effect, see Rose v.
Etling, 255 Or 395, 397, 467 P2d 633 (1970) (party to
retail installment sales contract cannot waive benefit
of venue statute in any cause of action arising out of
the contract, because such waiver would be against
public policy); Martin v. Ore. Insurance Co., 232 Or
197, 206, 375 P2d 75 (1962) (stating general rule that
party to contract cannot waive benefits of law that
seeks to protect public as well as the individual). 
7. Our holding in this case should not be
construed as in any way condoning the accused's lack of
candor.  We hold only that, in the peculiar procedural
posture of this proceeding, the accused is not subject
to sanction.