Title: Office of Disciplinary Counsel v. Pallett

State: hawaii

Issuer: Hawaii Supreme Court

Document:

no. 27086

IN THE SUPREME COURT OF THE STATE OF HAWAI'I

OFFICE OF DISCIPLINARY COUNSEL, Petitioner, 8
JAMES M. PALLETT, Respondent. 8

 

 

(ope 99-037-5867, ODC 99-202-6032, ODC 01-375-7119)

F 108
(py: Moon, C.J., Levinson, Nakayama, Acoba, and Duffy, JJ.)

upon consideration of (1) Hearing Officer Ted A.
Chihara’s (Hearing Officer Chihara) July 9, 2004 findings of
fact, conclusion of law, and recommendation to suspend Respondent
games M. Pallett (Respondent Pallett) from the practice of law
for three months, (2) the Disciplinary Board’s January 28, 2005
report and reconmendation to suspend Respondent Pallett fron the
practice of law for five years, (3) Respondent Pallett’s
April 19, 2005 opening brief, (4) Petitioner Office of
Disciplinary Counsel’s (Petitioner ODC) May 31, 2005 answering
brief, (5) Respondent Pallett’s June 27, 2005 notice that he
would not file a reply brief, and (6) the record, we reject
Hearing Officer Chihara’s findings of fact, conclusions of law,
and recommendation, and, instead, we adopt Disciplinary Board’s
findings of fact, conclusions of law, and recommendation, except
to the limited extent that the Disciplinary Board concluded that
Respondent Pallett practiced lew while he was administratively
suspended from the practice of law.

The ODC proved by clear and convincing evidence that,

while Respondent Pallett was representing several clients in
various litigation matters, Respondent Pallett violated the
Hawai'i Rules of Professional Conduct (HRPC). While Respondent

Pallett was representing Eric Biel in a criminal case, Respondent

Pallett failed to appear in court on a Mr. Biehl’s behalf in

violation of

HRPC Rule 1.1 (requiring a lawyer to provide competent
legal representation for a client);

RPC Rule 1.3 (requiring a lawyer to act with
reasonable diligence and promptness in representing a
client);

HRPC Rule 3.2 (requiring a lawyer to make reasonable
efforts to expedite litigation consistent with the
legitimate interests of the client); and

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do 80, of to do so through the act of another).

Respondent Pallett failed to maintain financial records regarding

Me.

Bieh1 in violation of

HRPC Rule 1.15(f) (3) (requiring a lawyer to maintain,
for at least six years, complete computerized or manual
record of all funds, securities, and other properties
of a client or third person coming into the possession
of the lawyer);

HRPC Rule 1.15(g) (requiring a lawyer to maintain
copies of cash receipts, records of disbursenents, a
subsidiary ledger, and bank statements for at least six
years after completion of the employment to which they
relate); and

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, or to do so through the act of another).

Respondent Pallett failed to cooperate with Petitioner ODC’s
investigation of Mr. Biehl’s ethics complaint against Respondent
Pallett in violation of

HRPC Rule 8.1(b) (prohibiting a lawyer in connection
with a disciplinary matter from knowingly failing to
respond to a lawful demand for information from a
disciplinary authority)?

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, or to do So through the act of another); and

HRPC Rule 8.4(d) (providing that it is professional
misconduct for a lawyer to fail to cooperate during the
course of an ethics investigation or disciplinary
proceeding) .

While Respondent Pallett was representing Susan Kim and

her husband, Kim Chung Sung, Respondent Pallett failed to respond

to an opposing party’s requests for production of documents,

failed to respond to the opposing party's interrogatories, and

failed to appear at court hearings on the opposing party's two

motions to compel responses to the discovery requests in

violation of

HREC Rule 1.3 (requiring a lawyer to act with
reasonable diligence and promptness in representing a
client);

REC Rule 3.2 (requiring a lawyer to make reasonable
efforts to expedite litigation consistent with the
legitimate interests of the client);

HREC Rule 3.4(e) (prohibiting a lawyer from knowingly
disobeying an obligation under the rules of a tribunal
except for an open refusal based on an assertion that.
no valid obligation exists); and

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, oF to do So through the act of another).
Respondent Pallett misrepresented that he had served a copy of a
withdrawal and substitution of counsel document on opposing

counsel in violation of

HRPC Rule 3.3(a) (1) (a lawyer shall not knowingly make
a false statement of material fact or law to a
tribunal);

HRPC Rule 3.4(e) (prohibiting a lawyer from knowingly
disobeying an obligation under the rules of a tribunal
except for an open refusal based on an assertion that
no valid obligation exists);

HRPC Rule 4.1(a) (prohibiting a lawyer, in the course
of representing a client, from knowingly making a false
statement of material fact or law to a third person)

 

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HREC, knowingly assist or induce another to
do so, or to do So through the act of another); and

HRPC Rule 8.4(c) (providing that it is professional
misconduct for a lawyer to engage in conduct involving
Gishonesty, fraud, deceit, or misrepresentation) .

Respondent Pallett converted Ms. Kim’s funds in violation of

RPC Rule 1.15(a) (1) (requiring a lawyer to maintain a
client trust account into which the lawyer must deposit
all funds that are entrusted to the lawyers care);

HRPC Rule 1.15(c) (providing that lawyer in
possession of any funds belonging to a client, where
Such possession is incident to the lawyer's practice of
law, is a fiduciary and the lawyer shall not conmingle
such funds or property with his or her own property or
nisappropriate such funds or property to the lawyer's
own use and benefit);

HRPC Rule 1.15(c) (requiring that 2 lawyer must deposit
all funds belonging in part to a client and in part
presently or potentially to the lawyer or law firm into
a client trust account) ;

HRPC Rule 1.15(d) (requiring a lawyer to deposit all
funds into a client trust account that are entrusted to
the lawyer, except for non-refundable retainers that
are earned upon receipt) ;' and

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, or to do so through the act of another).

Respondent Pallett failed to maintain sufficient financial

records relating to his representation of Ms. Kim in violation of

RPC Rule 1.15(f) (3) (requiring a lawyer to maintain,
for at least six years, complete computerized or manual
record of all funds, securities, and other properties
of a client or third person coming into the possession
of the lawyer);

HRPC Rule 1.15(g) (requiring a lawyer to maintain
copies of cash receipts, records of disbursements, a
subsidiary ledger, and bank statements for at least six
years after completion of the employment to which they
relate); and

HRPC Rule 6.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, or to do So through the act of another).

Respondent Pallett misrepresented to Ms. Kim's previous attorney
that he had not filed the withdrawal and substitution of counsel

document when, in fact, he had actually done so, in violation of

HRPC Rule 4.1(a) (prohibiting a lawyer, in the course
of representing a client, from knowingly making a false
statement of material fact or law to a third person);

HRPC Rule @.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, or to do So through the act of another); and

 

Effective January 1, 2002, we amended Rule 1.15(d) of the Hawas's

Rules of Professional Conduct (RPC) by, among other things, deleting the

reference to “non-refundable retainers” and providing that “all f

 

retainers

fre tefundable until earned,” HRPC Rule 1-15(d) (aa amended on October 9,

2001, effective January 1, 2002).
HRPC Rule 6.4(c) (providing that it is professional
misconduct for a lawyer to engage in conduct involving
dishonesty, fraud, deceit, or misrepresentation) .

Respondent Pallett misrepresented to opposing counsel that

Respondent Pallett did not represent Ms. Kim and her husband

when, in fact, Respondent Pallett was their attorney of record,

in violation of

HRPC Rule 4.1(a) (prohibiting a lawyer, in the course
of representing a client, from knowingly making a false
Statement of material fact or law to a third person);

HRPC Rule 8.4(2) (providing that it is professional
misconduct for a lawyer to violate or attempt to
Violate the HRPC, knowingly assist or induce another to
do so, or to do so through the act of another); and

HREC Rule 8.4(c) (providing that it is professional
misconduct for a lawyer to engage in conduct involving
dishonesty, fraud, deceit, or misrepresentation) .

Respondent Pallett failed to cooperate with Petitioner ODC’s

investigation of Ms. Kim's ethics complaint against Respondent

Pallett in violation of

HRPC Rule @.1(b) (prohibiting a lawyer in connection
with a disciplinary matter from knowingly failing to
respond to a lawful demand for information from a
disciplinary authority);

HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRC, knowingly assist or induce another to
do so, or to do S0 through the act of another); and

HRPC Rule 8.4(d) (providing that it is professional
misconduct for a lawyer to fail to cooperate during the
course of an ethics investigation or disciplinary
proceeding) «

We reject the Disciplinary Board’s conclusion that

Respondent Pallett practiced law while he was administratively

suspended from the practice of law. Petitioner ODC alleged that

6
Respondent Pallett practiced law after the Child Support
Enforcenent Agency of the State of Hawai'i (the CSEA) had
informed Respondent Pallett that he was administratively
suspended from the practice of law based on Respondent Pallett’s
failure to comply with a child support obligation. However, the
CSEA was not authorized to administratively suspend Respondent
Pallett from the practice of law.

The Hawai'i legislature enacted HRS § S76D-13 (Supp.
1999) to authorize the CSEA to direct administrative agencies to
suspend licenses when the license-holders failed to meet their
mandatory child support obligations. Pursuant to the supreme

 

court’s exclusive power to promulgate rules and regulations
relating to the practice of law, the supreme court promulgated
Rule 17.1 of the Rules of the Supreme Court of the State of
Hawai'i (RSCH). RSCH Rule 17.1 authorizes the Hawai'i State Bar,
only, to suspend a lawyer from the practice of law if the CSEA
certifies that the lawyer is not in compliance with a child
support order:

Rule 17.1 Child Support Enforcement
(a) Suspension of License to Practice Law.
Upon receipt of a certification from the Child
Support Enforcement Agency of the State of Hawai‘i
(CSEA) that a person licensed to practice law in
this jurisdiction is not in compliance with an
order of support or is not in compliance with a
subpoena or warrant relating to a paternity or

child support proceeding, 7 Bar
shall_imediately suspend the license of the
person so certified.

(b) Reinstatement to Practice. A license
suspended under subsection (a) of this rule shall
not be reinstated until the CSEA or the Family
Court issues, in writing, an authorization
Canceling the certification of noncomplianc:
Upon receipt of the authorization canceling the
certification and payment of all fees and costs

 

7
RSCH Rule

assessed, including arrears, by the Hawai'i State
Bar, the Hawai'i State Bar shall reinstate the
license of the attorney.

(c) Fee Assessment. The Hawai'i State Bar
may assess @ reasonable fee for reinstating or
restoring a license and may also charge the
attorney a reasonable fee to cover the
administrative costs incurred by the Hawai'i State
Bar to comply with this rule.

17.1 (effective January 1, 1998) (emphasis added) .
The record shows that the CSEA sent a notice to the

Hawai'i State Bar and to Respondent Pallett that.

stated Respondent Pallett had failed to comply with his
child support obligation, and

directed the Hawai'i State Bar to immediately suspend
Respondent Pallett’s license to practice law pursuant
to HRS § S76D-13 (Supp. 1999).

However, absent clear and convincing evidence that the Hawai't

state Bar

administratively suspended Respondent Pallett from the

practice of law, the Disciplinary Board erred by concluding that
Respondent Pallett practiced law while he was administratively

suspended in violation of

HRPC Rule 1.4(a) (requiring a lawyer to keep a client
reasonably informed about the status of a legal matter
and promptly comply with reasonable requests for
information) ;

HRPC Rule 1.16(a) (1) (providing that a lawyer shall not
represent a client or, where representation has
commenced, shall withdraw from the representation of
the client if the representation will result in a
violation of the ERPC or other law);

HRPC Rule 1.16(d) (requiring a lawyer, upon termination
of a representation, to take steps to the extent
reasonably practicable to protect the client's
interests);

HRPC Rule 5.5(a) (prohibiting a lawyer from practicing
law in a jurisdiction where doing so violates the

8
law in a jurisdiction where doing so violates the
regulation of the legal profession in that
jurisdiction); and

+ HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to violate or attempt to
violate the HRPC, knowingly assist or induce another to
do so, or to do so through the act of another).

Nevertheless, in light of Respondent Pallett’s other
numerous ethical violations,

IT IS HEREBY ORDERED that Respondent James M. Pallett
(attorney number 3786) is suspended from the practice of law in
this jurisdiction for a period of five (5) years, effective
thirty (30) days after entry of this order, as provided by
RSCH Rule 2.16(c).

IT IS FURTHER ORDERED that’ Respondent James M. Pallett
(attorney number 3786) shall successfully complete, at his own
‘expense, and pass the Multistate Professional Responsibility
Examination before he seeks reinstatement to the practice of law
in Hawai'i.

DATED: Honolulu, Hawai'i, September 2, 2005.

Alvin T, Ito, special
assistant disciplinary

counsel, for petitioner

WiLidam A. Harrison Slice Phtoning—

(Harrison & Matsuoka),

errigee ne Rew arnacenane

srs

Wane, Dads br