THE STATE OF SOUTH CAROLINA 

In The Supreme Court 

In the Matter of David Weldon Gantt, Respondent. 

Appellate Case No. 2014-002495 

Opinion No. 27483 

Submitted December 1, 2014 – Filed January 21, 2015 

PUBLIC REPRIMAND 

Lesley M. Coggiola, Disciplinary Counsel, and Barbara 

M. Seymour, Deputy Disciplinary Counsel, both of 

Columbia, for Office of Disciplinary Counsel. 

Frank L. Eppes, Esquire, of Eppes & Plumblee, PA, of 

Greenville, for respondent. 

PER CURIAM: In this attorney disciplinary matter, the Office of Disciplinary 

Counsel and respondent have entered into an Agreement for Discipline by Consent 

(Agreement) pursuant to Rule 21 of the Rules for Lawyer Disciplinary 

Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court 

Rules (SCACR). In the Agreement, respondent admits misconduct and consents to 

the imposition of a confidential admonition or public reprimand with conditions. 

We accept the Agreement and issue a public reprimand with conditions as set forth 

hereafter in this opinion. The facts, as set forth in the Agreement, are as follows. 

Facts 

In 1999, respondent began practicing law with Fredrick Scott Pfeiffer. Over the 

years, Mr. Pfeiffer began to enter into various business ventures with clients, some 

of which involved real estate investment and development. Respondent developed 

a fairly extensive real estate practice and, from time to time, closed loans for 

entities with which Mr. Pfeiffer was involved, either as an investor or owner. 
Respondent represented a company (Client A) owned by three clients in 

connection with the development of a tract of property (Development 1). ABC 

Company, a company owned by Mr. Pfeiffer and his client, Client X, assisted 

Client A in financing the Development 1 project. 

In April 2006, Mr. Pfeiffer approached respondent regarding a new development 

project (Development 2) with the three firm clients who owned Client A. Mr. 

Pfeiffer and the three clients told respondent that they needed someone with good 

credit to guarantee a loan in order to obtain financing for the Development 2 

project. The clients agreed to give respondent an interest in the new development 

company, called Development 2 Company, as payment for legal fees incurred in 

connection with the Development 1 closings and other work performed for them. 

In exchange, respondent agreed to personally guarantee the loan obtained by 

Development 2 Company. 

Mr. Pfeiffer prepared the corporate formation documents for Development 2 

Company on behalf of respondent and the three clients. Although respondent 

believed that his interest in Development 2 Company was only ten percent, the 

corporate documents show respondent as a fifty percent shareholder. In any event, 

Development 2 Company was owned by respondent and the three clients from 

March 2006 until January 2007 when respondent relinquished his ownership 

interest. 

Respondent acknowledges that it was a conflict of interest for him to engage in a 

business transaction with law firm clients. See Rule 1.8(a), RPC, Rule 407, 

SCACR. He acknowledges he failed to ensure that the terms of the transaction 

were fully disclosed and transmitted in writing in a manner that could be easily 

understood by the clients. He further admits that he failed to advise his clients in 

writing of the desirability of seeking the advice of independent legal counsel 

regarding the formation of Development 2 Company. Further, respondent 

acknowledges that he failed to communicate to the clients reasonably adequate 

information and an explanation about the material risks and reasonably available 

alternatives to entering into a partnership with their attorney. Respondent admits 

he failed to obtain his clients' informed consent, in writing signed by the clients, to 

proceeding with the formation of the partnership and waiving the conflict of 

interest. 

During the time respondent held an ownership interest in Development 2 

Company, the company borrowed the initial funds to purchase the Development 2 

property with plans to subdivide it for development and sale. Respondent assisted 
with the closings on the loans to finance the initial purchase of the property by 

Development 2 Company, including preparing mortgages to secure those loans. 

Development 2 Company obtained loans of approximately two million dollars 

from ABC Company to make the initial purchase of Development 2. At various 

times during respondent's representation of Development 2 Company in connection 

with the funding and sales of Development 2, Mr. Pfeiffer transferred partial 

ownership of ABC Company to various companies in which respondent had an 

ownership interest, including the law firm. 

To cover the remaining purchase price of Development 2, Development 2 

Company obtained a loan of approximately four million dollars from Client B, a 

company owned by Client C. Respondent had represented both Client B and 

Client C in unrelated business litigation prior to assisting Development 2 Company 

with the financing from Client B. 

Respondent acknowledges that it was a conflict of interest for him to engage in 

business transactions between law firm clients and companies in which he and/or 

his law partner held an interest. See Rule 1.8(a), RPC, Rule 407, SCACR. He 

acknowledges he failed to ensure the terms of the transactions were fully disclosed 

and transmitted in writing in a manner that could be easily understood by the 

clients. He further admits that he failed to advise his clients in writing of the 

desirability of seeking the advice of independent legal counsel regarding 

Development 2 Company borrowing funds to finance the purchase of Development 

2 from companies owned or represented by respondent and/or his law partner. 

Further, respondent acknowledges that he failed to communicate to the clients 

reasonably adequate information and an explanation about the material risks and 

reasonably available alternatives to entering into transactions in which respondent 

and/or his law partner held an interest in the other contracting party. Respondent 

further admits that he failed to obtain his clients' informed consent, in writing 

signed by the clients, to proceeding with the financing transactions and waiving the 

conflicts of interest. 

The terms of the purchase money loan from Client B required Development 2 

Company to repay two million dollars within ninety days, then refinance the 

remaining amount of approximately two million dollars. There were two existing 

homes on the property that were not encumbered. Development 2 Company 

planned to sell those two parcels, then recruit several "investors" to purchase 

undeveloped lots and use those proceeds to pay off the loan balances to both Client 
 

B and ABC Company. Most of the individual investors borrowed money from 

traditional banks to fund their investments in Development 2. 

There were three parties in these transactions: 1) the investor who was the 

borrower; 2) Development 2 Company which was the seller; and 3) the bank which 

was the lender. Essentially, the investor borrowed money from the bank and paid 

that money to Development 2 Company at the closing. The bank received a 

mortgage and promissory note from the investor. The investor entered into a "buyback" agreement with Development 2 Company in which Development 2 

Company would make the monthly payments on the investor's mortgage during 

construction and would then buy the property back from the investor once the 

house was built. Development 2 Company agreed to "buy-back" the property from 

the investor by paying off the mortgage balance and paying the investor a "fee" of 

between ten and fifty thousand dollars within one year. 

In conducting these closings, respondent used a document entitled "Conflict of 

Interest Disclosure" (Disclosure) in which the investor/purchaser and Development 

2 Company/seller acknowledged respondent's dual representation of the parties in 

the closing and his limited obligations to the lender. Respondent added a sentence 

to the Disclosure that stated, "Finally, the closing attorney has a limited equity 

interest in the Seller." Approximately half of the closing files did not contain a 

signed Disclosure. Of those that did, many of the Disclosures were undated. 

Respondent did not disclose to the banks or the investor/purchasers the extent of 

his interest in Development 2 Company. Further, he did not disclose to the banks 

or the investor/purchasers that the funds were being used to repay Development 2 

Company's obligations to ABC Company (respondent's partner's company) and to 

Client B (respondent's client's company) instead of for the construction of homes 

on the property. 

Respondent conducted the closings on the sale of the two existing homes. He 

disbursed the sales proceeds to Development 2 Company. In addition, respondent 

conducted all of the closings on the "sale" parcels of Development 2 from 

Development 2 Company to individual investors. Respondent paid the funds from 

the investor closings to Development 2 Company. Respondent did not know how 

those funds were spent and had no control over the management of Development 2 

Company's accounts. Although he was a part owner of Development 2 Company, 

respondent did not examine any Development 2 Company financial records to 

confirm that the company had the financial ability to feasibly make the loan 

payments or buy back the properties as agreed. 
In the course of trying to obtain commercial financing to restructure Development 

2 Company and pay off the high interest loans from Client B and ABC Company, 

one traditional bank would not permit respondent to close the loan because of his 

conflict of interest. In January 2007, respondent transferred his interest back to 

Development 2 Company to allow the other members to restructure the company 

and refinance the project. This transfer of ownership did not release respondent's 

personal guarantees. 

Ultimately, Development 2 Company defaulted on ABC Company's and Client B's 

loans. Further, the investors defaulted on many of the bank loans because 

Development 2 Company failed to make the required monthly payments to pay off 

the mortgages. Various lawsuits, bankruptcies, and receiverships followed. At 

least one bank alleged that it was not aware of the buy-back/investor arrangements 

and believed it was making construction loans and that the investors were in fact 

buyers. 

Respondent acknowledges it was a conflict of interest for him to conduct closings 

on loans to which his company was a party. See Rule 1.7 and 1.8(a), RPC, Rule 

413, SCACR. He further admits that his Disclosure form was insufficient because 

it failed to advise the parties in writing of the desirability of seeking the advice of 

independent legal counsel regarding the transactions. He further acknowledges 

that the Disclosure form was insufficient because he failed to communicate to the 

parties reasonably adequate information and an explanation about the material 

risks and reasonably available alternatives to going forward with a closing attorney 

who had an interest in the transactions. Respondent further admits that he failed to 

obtain the parties' informed consent, in writing signed by the parties, to proceeding 

with the closings and a waiver of the conflict of interest in each case. 

Law 

Respondent admits that by his conduct he has violated the following provisions of 

the Rules of Professional Conduct, Rule 407, SCACR: Rule 1.7 (notwithstanding 

conflict of interest, lawyer may represent client if: (1) lawyer reasonably believes 

lawyer will be able to provide competent and diligent representation to affected 

client; (2) representation is not prohibited by law; (3) representation does not 

involve the assertion of a claim by one client against another client represented by 

lawyer in the same litigation or other proceeding before a tribunal; and (4) affected 

client gives informed consent, confirmed in writing) and Rule 1.8(a) (lawyer shall 

not enter into a business transaction with client or knowingly acquire an 

ownership, possessory, security or other pecuniary interest adverse to client unless: 
 

(1) transaction and terms on which lawyer acquires interest are fair and reasonable 

to client and are fully disclosed and transmitted in writing in manner that can be 

reasonably understood by client; (2) client is advised in writing of desirability of 

seeking and is given reasonable opportunity to seek advice of independent legal 

counsel on transaction; and (3) client gives informed consent, in writing signed by 

client, to essential terms of transaction and lawyer's role in the transaction, 

including whether lawyer is representing client in transaction). 

Respondent also admits he has violated the following Rules for Lawyer 

Disciplinary Enforcement, Rule 413, SCACR: Rule 7(a)(1) (it shall be ground for 

discipline for lawyer to violate Rules of Professional Conduct). 

Conclusion 

We find respondent's misconduct warrants a public reprimand.1 Accordingly, we 

accept the Agreement and publicly reprimand respondent for his misconduct. 

Respondent shall pay the costs incurred in the investigation and prosecution of this 

matter by ODC and the Commission on Lawyer Conduct (the Commission) within 

thirty (30) days of the date of this opinion. Further, respondent shall complete the 

Ethics School portion of the South Carolina Bar's Legal Ethics and Practice 

Program within one (1) year of the date of this opinion and provide certification of 

completion of the program to the Commission no later than ten (10) days after the 

conclusion of the program. 

PUBLIC REPRIMAND. 

TOAL, C.J., PLEICONES, BEATTY, KITTREDGE and HEARN, JJ., 

concur. 

1 Respondent's disciplinary history includes an admonition issued in 2010. See 

Rule 7(b)(4), RLDE (Court can consider admonition in subsequent proceeding as 

evidence of prior misconduct solely upon issue of the sanction to be imposed).