Title: In Re Hereford

State: oregon

Issuer: Oregon Supreme Court

Document:

668 P.2d 1217 (1983)
295 Or. 604
In re Complaint As to the Conduct of G. Brock HEREFORD, Accused.
OSB 81-101; SC 29414.

Supreme Court of Oregon, In Banc.[*]
Submitted on the Record April 26, 1983.
Resubmitted on the Record and Briefs August 15, 1983.
Decided September 7, 1983.
Teresa Ivey, Hillsboro, for Oregon State Bar.
G. Brock Hereford, pro se.
*1218 PER CURIAM.
The Oregon State Bar filed a complaint against G. Brock Hereford accusing him of unethical conduct in two separate causes. The first cause involves Hereford's conduct after he was retained by Sandra Letterman to prepare documents necessary to form an Oregon corporation and obtain a Sub-chapter S classification with the Internal Revenue Service.[1] The second cause involves Hereford's conduct in a civil case in Multnomah County wherein he had been retained to represent the defendant, Dale Fenske.
The Trial Board found Hereford guilty of all the charges in each cause of the complaint. It recommended that Hereford be given a public reprimand, be placed on probation for a period of two years, be required to complete successfully an examination in legal ethics, and be "counselled and monitored, if practicable, during probationary period, by the State Lawyer Assistance Committee." The five member Disciplinary Review Board concurred with the Trial Board's decision and its recommendations.
In its brief in this court the Oregon State Bar suggests that Hereford not be required to take an examination in legal ethics, but that he be suspended from the practice of law for a period of 30 to 60 days.
This court finds Hereford guilty of only one charge in each of the causes of complaint and not guilty of the balance of the charges. We give Hereford a public reprimand without further sanction.
On July 6, 1982, the Oregon State Bar filed its complaint against Hereford. The charging parts of the first cause are:
The Disciplinary Rules relevant to this case are:[2]
On November 16, 1982, Hereford and counsel for the Oregon State Bar entered *1219 into a stipulation of facts. As to the first cause, the stipulation in part provides:
On November 30, 1982, a hearing was held before the Trial Board. The testimony before the Trial Board was scant  apparently, because the parties did not consider it necessary to supplement fully the stipulation.
Letterman's testimony indicated that the corporate documents referred to in paragraph 2 of the stipulation were the by-laws and minutes. This is confirmed in part by Hereford's brief in this court:
As to paragraph 3 of the stipulation, Hereford testified generally as to his failure to keep in touch with Letterman, but there are no references as to particular times and places. The record does not describe the nature or purpose of the six scheduled appointments at Letterman's office which Hereford failed to keep.[3]
The most serious allegation by the Oregon State Bar in the first cause of complaint is that Hereford "failed and neglected to complete the necessary `document' to obtain a Sub-chapter S classification."
The Bar in its trial memorandum said that the only issues of fact to be decided in the first cause by the Trial Board were:
The above issues as framed by the Bar assumes a fact not stipulated by Hereford. He did not stipulate that he "failed to file" the election, but instead did stipulate that he "did not establish that the * * * election was filed in a timely manner."
Letterman was a travel agent who employed Hereford on February 27, 1981 to form a corporation to be known as "Travel Advisors, Inc." The deadline for filing the Sub-chapter S election was May 14, 1981.
On March 4, 1981, Hereford mailed to Letterman the following letter:
Letterman testified that she did not receive the above quoted letter. The Trial Board did not make any specific findings. *1220 It is undisputed that the Sub-chapter S election was not filed. Both Letterman and her certified public accountant testified that her additional tax liability for 1981 was the sum of $4,941.28. At the time of the hearing before the Trial Board, Letterman had a malpractice action against Hereford pending in the Multnomah County Circuit Court praying for the same amount.
We find that the phrase in paragraph 4 of the stipulation, "did not establish that the * * * election was filed in a timely manner" is ambiguous. The parties intended it to mean "did not follow through and see that the election was filed in a timely manner." As to damages, this may be a distinction without a difference because in either event the election was not filed and the client suffered the possible additional tax liability, but it has a bearing upon the degree of Hereford's admitted neglect for disciplinary purposes.
Hereford has admitted by the stipulation and by his brief in this court that he was negligent. He contends that his conduct was made up of isolated acts of negligence which do not warrant disciplinary action. He cites In re Robert Neil Gygi, 273 Or. 443, 450-451, 541 P.2d 1392 (1975), to support his position.
This court makes an independent review of the evidence. In re Robeson, 293 Or. 610, 629, 652 P.2d 336 (1982). The charges must be proved by clear and convincing evidence. In re Thomas, 294 Or. 505, 521, 659 P.2d 960 (1983).
Paragraph IV of the first cause of complaint is a general allegation. It in effect says:
There is evidence in the record from which we infer that the articles of incorporation of Travel Advisers, Inc. were properly prepared and filed. The only other documents mentioned in the record are the minutes, by-laws, and the election form for the Sub-chapter S corporation. We find from the stipulation and the record that Hereford did not complete and transmit the minutes and by-laws to Letterman in a timely and accurate manner and did not follow through and see that the Sub-chapter S election was filed. Because of this conduct and the further fact that Hereford did not keep six scheduled appointments with Letterman, we find him guilty of neglecting a legal matter entrusted to him under DR 6-101(A)(3). Hereford's conduct was not an isolated act of negligence but a course of negligent conduct. See In re Collier, 295 Or. 320, 667 P.2d 481 (1983).
Paragraph V of the first cause of complaint is a specific allegation. It refers only to the failure to redraft documents. The record makes reference only to the redrafting of the corporate minutes and by-laws. Paragraph V, in view of the proof, in effect says:
We find Hereford not guilty of violating DR 7-101(A)(2) and (3). There is no evidence that Hereford intentionally failed to carry out the contract of employment or that he intentionally prejudiced or damaged his client.[5] "Intentionally" is a *1221 material and key element of both DR 7-101(A)(2) and (3). In re Collier, supra.
Further, there is no evidence in the record to show that Letterman was actually damaged or prejudiced by Hereford's failure to redraft the minutes and by-laws. Letterman testified on cross examination by Hereford:
There is no doubt that Hereford did a sloppy and negligent job. He has been found guilty of it under DR 6-101(A)(3). Actual damage and prejudice is another thing. A client's inconvenience, exasperation and frustration do not necessarily add up to damage and prejudice, and the Bar proved nothing else.
The Oregon State Bar's second cause of complaint involves Hereford's conduct in a case in which he had been employed to represent Dale Fenske. The defense of the case had been referred to Hereford by another attorney. Fenske was a building contractor who had been sued by a homeowner for breach of contract and unlawful trade practices. By pretrial motion Hereford was successful in having the allegations of the complaint as to unlawful trade practices, including punitive damages and attorney fees, stricken. After the trial of the case had been postponed twice, Fenske hired another attorney, Roger Kromer, to represent him.
The charging parts of the Bar's second cause of complaint against Hereford are:
The stipulation entered into between Hereford and the counsel for the Oregon State Bar as to the second cause of complaint in part provides:
Paragraph XI of the second cause necessarily refers to the period of time prior to September 17, 1981 when Fenske replaced Hereford with Kromer as his lawyer. The records shows that there were two postponements of the trial during that period of time  one in May, 1981, and one in early September, 1981.[6] The trial in May was postponed because Hereford had a dental problem. The case was set-over in September because Hereford had a conflict with a Clackamas County Circuit Court case. There is no evidence in the record from which it could be inferred that the two postponements were not proper and reasonable. There is evidence that Hereford did not inform his client of the postponements and that the client went to the courthouse on the appointed dates expecting the case to be tried. It can be inferred that Fenske was inconvenienced but there is no evidence that he was actually damaged  such as suffering a financial loss from taking a day off work. Further, in the case of the dental problem in May, 1981, it is not known whether Hereford had an opportunity to so advise Fenske. We do not approve of Hereford's failure to notify his client of the second postponement, but by such conduct he did not intentionally "fail and neglect to carry out a contract of employment * * * to the subsequent prejudice of his client." Hereford is not guilty of violating DR 7-101(A)(2) and (3) as charged in paragraph XI of the second cause.
Paragraph X of the second cause refers to the period of time after Hereford had been discharged on September 17, 1981. Paragraphs 6, 7 and 8 of the stipulation of facts all refer to the charges in paragraph X of the second cause and that same period of time. Hereford admits that he was negligent and responsible for the postponement of the trials on January 11, 1982, and July 26, 1982.
It is clear from the stipulation of facts that Hereford promised to transmit the case file to Kromer on October 28, 1981, but did not do so until February 12, 1982, despite numerous attempts by Kromer to contact him. The result was a postponement of the January 11, 1982 trial date. When Kromer got the case file he found in it an answer, affirmative defense and counterclaim, and assumed that they had been filed with the Clerk of the Court. Kromer did not find out until shortly before the trial date of July 26, 1982 that the only answer in the court file was a general denial. This resulted in a further postponement. Hereford admits his responsibility for the postponement in his brief in this court:
Hereford's negligence in causing the January 11, 1982 and July 26, 1982 set-overs was a course of conduct and not isolated acts of negligence. In re Collier, supra. He is guilty of neglecting a legal matter entrusted to him in violation of DR 6-101(A)(3). He is not guilty of handling a legal matter without preparation adequate in the circumstances under DR 6-101(A)(2).[7]
In the nature of confession and avoidance, Hereford explains his conduct by saying that between September, 1981, and April, 1982, he moved his office seven times and therefore was not always available to his clients. One of the reasons he moved *1223 his office was to escape from his former wife. In his trial memorandum Hereford described the situation:[8]
Hereford testified before the Trial Board that he had been divorced from his previous wife and that his troubles are over. He has recently married a different woman and gives the inference that he now has a stable home. For a period of approximately eight months covering the period of January to August of 1982, Hereford did not take any new cases to allow himself a period in which to evaluate his practice and problems. Previous to that time, he had about 120 open files. He now confines his practice to about 35 cases. He has adopted the Bar's recommended tickler system and integrated it into his office set-up. In response to a question from the Trial Board, he indicated that he was willing to associate counsel on some cases. Hereford has adopted a program to observe trials in Multnomah and Washington counties.
Although Hereford's domestic difficulties do not excuse his violations of the Disciplinary Rules, we take his personal situation into account in determining a proper sanction. This follows our practice in previous disciplinary review cases. In re Loew, 292 Or. 806, 642 P.2d 1171 (1982) ("burnt out syndrome"); In re Varnes, 285 Or. 463, 591 P.2d 366 (1979) (mental illness); In re Lewelling, 244 Or. 282, 417 P.2d 1019 (1966) (excessive use of intoxicating liquor).
Here, as opposed to the Loew, Varnes, and Lewelling cases, Hereford does not have an ongoing, continuing problem. Therefore, there is no need to place Hereford on probation to protect the public. We agree with the Oregon State Bar that an examination in legal ethics is not necessary. He has not demonstrated that he was unaware of the ethical standards for lawyers. In his brief in this court, he frankly admitted that his conduct was below the standard that he had set for himself and "obviously what the public expects from members of the bar." For his violation of DR 6-101(A)(3) in each cause Hereford will receive a public reprimand.
By way of summary, we find by clear and convincing evidence that Hereford is guilty of neglecting legal matters entrusted to him under DR 6-101(A)(3) in both the first and second causes of complaint. He is not guilty of the other violations alleged in the complaint. This opinion shall serve as a public reprimand.
The Oregon State Bar is awarded costs.
[*]  Justice Lent was Chief Justice when case was argued; Justice Peterson was Chief Justice when this decision was rendered.
[1]  A certified public accountant in testifying before the Trial Board described a "Subchapter S corporation" as follows:

"Under the Internal Revenue Code, if you elect * * * to be treated under a Subchapter S, the income and deductions and so on are passed through [to] the individual's return, * * so that the tax on the income or deductions arising from any losses are taken and paid at the individual's level and not the corporate level."
[2]  The first cause of complaint does not charge a violation of DR 6-101(A)(2), but a violation of that rule is charged in the second cause.
[3]  The only reference to the appointments in the transcript of testimony is of a negative nature. Letterman testified on direct examination:

"Q. Now, Mr. Hereford has stipulated that he did not maintain contact with you and missed several scheduled appointments. Were any of those appointments made to determine whether a Subchapter S election had been filed.
"A. No."
[4]  Even if Letterman had received Hereford's letter of March 4, 1981, hindsight shows that it falls short in the following respects: (1) it casts upon the client instead of the lawyer the responsibility of the mailing of the election form, (2) it does not advise the client of the deadline, and (3) it could be interpreted as meaning that it was not necessary to file the form for a period of three years.
[5]  The Bar cites In re Loew, 292 Or. 806, 810-811, 642 P.2d 1171 (1982), as follows:

"At some point, the accused's continuing act of omission, extending over a year, could no longer be characterized as procrastination. His failure to act despite the urgings of the client and the client's second lawyer, and despite his own knowledge of his professional duty to act, must be characterized as intentional conduct."
It is impossible to draft a rule which defines when negligent conduct turns into intentional conduct. Each case must be decided on its own facts. Here we do not have enough information to attempt to make that determination. The Oregon State Bar has the burden of proof by clear and convincing evidence. In re Thomas, supra.
[6]  Fenske also testified that there was a postponement of a motion for summary judgment. There is no contention that it was necessary for Fenske to be present at that hearing.
[7]  Paragraph X of the second cause of complaint alleges Hereford violated DR 6-101(A)(2). There was no attempt by the Bar to prove that he handled a legal matter without adequate preparation. We have found no evidence in the record that would justify this charge. Including DR 6-101(A)(2) in the complaint may have been a typographical error.
[8]  The recital of the facts of the marital difficulty from the trial memorandum has become a part of the record at the invitation of the chairman of the Trial Board and without objection by the Bar.