### IN THE SUPREME COURT OF IOWA

No. 18

– 0906
Filed September 14 , 20 18

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD , Complain ant ,

vs.
TODD W. KOWALKE , Respondent

.

On review from the Iowa Supreme Court Grievance Commission.

G rievance c ommission recommends the revocation of an attorney’s license to practice law for violations of ethical rules. LICENSE
REVOKED
.

Tara van Brederode , for complainant

.

Todd W. Kowalke, Cresc o , pro se
.2

CADY , Chief Justice. The Iowa Supreme Court Attorney Disciplinary Board charged attorney Todd Kowalke with violating the rules of professional conduct during his representation of the executors of an estate. The Iowa Supreme Court Grievance Commission found Kowalke violated sever al rules of professional conduct and recommended revocation of his license to practice law. Upon our de novo review, we find Kowalke converted client funds for his personal use , and we revoke his license to practice
law in the State of Iowa.
I. Background Facts and Proceedings. Todd Kowalke practic es law in Cresco, Iowa. He was admitted to the Iowa bar in 1994. He is also a certified public accountant. In 2009, Kowalke agreed to serve a s the attorney for the
coexecutors of the estate of Violet B. Brokken. The parties entered into a fee agreement, which provided that Kowalke would accept a fee “equal to
the amount set forth in Iowa Code section 633.197.” 1 He prepared and filed a petitio n for probate of her l ast will and testament . He obtained an
order from the district court that appointed the co executors and
admit ted the will to probate

. Almost from the beginning, Kowalke neglected essential duties and responsibilities as the attorn ey for the executors. He failed to respond to an email from a great

- nephew of the decedent and was late in filing the probate inventory and the i nitial interlocutory report. In 2011, the interlocutory report indicated the f iduciary income tax returns and the final report had not be en completed

. The 2012 interlocutory report

1 Section 633.197 provides, in relevant part, “Personal representatives shall be allowed such reasonable fees as may be determined by the court for services rendered

. . . .” Iowa Code § 633.197 (2009)

.3 indicated the remaining work on the estate included filing the income tax returns, locating several great

- nephews and nieces, and completing the final report. Kowalke reported the sa me remaining work in the interlocutory reports filed in 2013, 2014, and 2015. Beginning i n 2013, the district court responded to the reports by ordering Kowalke to complete the tasks necessary to close the estate. Although Kowalke represented to the cour t in each report that the estate was near completion, he failed to meet his projected deadline each time. During the pendency of the estate, the coexecutors deposited estate funds into Kowalke’s law firm trust account. In 2011, they deposited $132,707.89 into the account. In 2015, the coexecutors deposited $38,809.06 into the account. Kowalke withdrew estate funds from the trust account on several occasions. In 2011, he withdrew $3692.18. The client ledger for the

trust account reflected this sum represented attorney fee s for his
services , but the district court had not authorize d the fee s before
Kowalke withdr ew them from the trust account . In 2015, he withdrew $2500 from the trust account and deposited the funds into his firm
business account. The memo line on the trust account check designated
the funds as “ Brokken Estate Fees ,” but the transaction again occurred
without court authorization . After making some distributions to heirs , Kowalke’s client ledger reflected a balance of $35,470.06 he ld in trust for
the estate.
In January 2016, Kowalke withdrew $10, 000 of estate funds from
the trust account for his personal use. He also withdrew approximately $23,000 of estate funds to cover expenses relating to other client

matters.4 In May 2016, Kowalke filed an application with the district court for fiduciary and attorney fe es in the estate. He computed the att orney fees to be $3692.18 , the same amount he withdrew as fees in January
2011. The court did not grant his request for attorney fees.
In March 2017, Kowalke filed another interlocutory report. The report indicated additional work needed to be performed before the estate
could be closed

. Frustrated, the district court threatened to remove
Kowalke as the representative for the coexecutors. It also ordered
Kowalke to close t he estate by July 31, 2017. Kowalke failed to comply
with this order. In August 2017, the Iowa Supreme Court Attorney Disciplinary Board filed a complaint against Kowalke st emming from his handling of
the estate. A few weeks later , the district court remo ved Kowalke as the attorney for the co executors and replaced him with attorney Robert Story

. In October 2017, attorney Story filed an application with the
district court for Kowalk e to deliver the $35,4 07. 0 6 in estate funds that
should have been in the trust account. The district court ordered Kowalke to produce an accounting and restore the funds. Kowalke failed to comply with this order. At a subsequent show cause h earing, Kowalke testified he had provided attorney Story with “the transaction ledger for the Violet Brokken Estate showing that there should be $35,407.06 in my trust
account for their benefit less fees and advances that I have taken.” He continued,

I don’t have the money. I’m sorry. I mean, that’s the bottom line. I have been working with the Grievance Commission. I have been tapping every resource I can. And as soon as I5 can, I will restore that money. But at this point I do not have the money t o restore is the bottom line on this thing. The court inquired about the absence of a court order granting his May 2016 application for $3692.18 in attorney fees. Kowalke testified
that he believed “ there was an order but maybe, you know

— I guess I did

n ot research that to see.” The court additionally inquired about the $2500 he withdrew in December 2015. Kowalke testified, “No, that was not authorized. I did not recall the original fees being taken. That was my error.” In February 2018, the court is sued a written order finding Kowalke in contempt of court.
The Board subsequently amended its complaint, and the matter proceeded to a hearing on a joint stipulation. The commission concluded
Kowalke violated the Iowa R ules of Professional C onduc t, inc luding rule 32:1.3 (failing to act with “ reasonable diligence and promptness in representing a clien t ” ), rule 32:1.5(a) (collecting a fee in violation of the law), rule 32:1.15(a) (failing to hold client “ property

. . . in

. . . lawyer’s possession in connection with a representation separa te from lawyer’s

o w n property ” ), rule 32:1.15(c) (withdrawing unearned fees from client trust account) , rule 32:1.15(d) (failing to promptly deliver and provide a full accounting of client funds), rule 32:1.15(f) (failing to abide by Iowa Court Rules gov erning client trust accounts), rule 32:3.3(a)(1) (knowingly

“ mak [ ing ] a false state ment of fact

. . . to a tribunal ” ), rule 32:8.4(b) ( “ commit [ ting ] a criminal act that reflects adversely on the lawyer’s honesty, tr ustworthiness, or fitness as a lawyer in other respects ” by violating Iowa Code section 602.10119, section 71 4.1(2), and section 714.2(1)), rule 32:8.4(c) ( “ engag [ ing ] in conduct involving dishonesty, fraud, dece it, or misrepresentation), and rule 32:8.4(d) ( “ engag [ ing ] in conduct prejudicial to the administration of justice ” ).6 The commission observed Kowalke did not submit any mitigating circumstances. Further, the commission noted several aggravating circumstances were present, including Kowal ke’s experience ; prior disciplinary record ; a pattern of misconduct ; and harm to his clients, the public, and the legal system. The commission recommended we revoke
Kowalke’s license.
II. Standard of Review. We review attorney dis ciplinary cases de n ovo. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cross , 861 N.W.2d 211, 217 (Iowa 2015). The Board has the burden of proving a violation of an ethical rule “by a convincing preponderance of the evidence.” Iowa Supreme Ct. Att’y Discip linary Bd. v. Van Gi nkel , 809 N.W.2d 96, 102 (Iowa 2012). “A convincing preponderance of the evidence is more than a preponderance of the evidence, but less than proof beyond a reasonable doubt.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Thomas , 844 N.W.2d 111, 113 (Iowa
2 014) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. McCarthy , 814 N.W.2d 596, 601 (Iowa 2012))

. Finally, “[a] stipulation of facts by the parties is binding on the parties .” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Gailey , 790 N.W.2d 801, 803 (Iowa 2010). However, we are n ot “ bound by a stipulation of a
violation or of a sanction.” Id. at 804. Upon our de novo review of the record, we “determine whether an attorney’s conduct violates our ethical rules, and if it does, w e must determine the proper sanction for the
violation.” Id. We are free to “impose a lesser or greater sanction than recommended by the commission.” Van Ginkel , 809 N.W.2d at 102.
III. Violations. On our review of the record, we agree that Kowal ke violated the rules of professi onal conduct identified by the c ommission. He neglect ed7 essential responsibilities, withdrew attorney fees without court
author ization, deposited funds into his firm business acc ount rather than trust account, failed to deliver client funds when ordered by the court, and knowingly made false state ments to the court in a report

. Most significantly, however, Kowalke converted client funds for his own

use
. Because this finding is dispositive of the outcome of th is proceeding, it is unnecessary to discuss the other violations in detail. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carter , 847 N.W.2d 228,
231

– 32 (Iowa 2014). Kowalke converted or misappropriated client funds in several ways and on multiple occ asions. First, Kowalke withdrew advance attorney fees for which he had no colorable future claim. In January 20 11, he
withdrew $3692.18 from the trust account in payment for his legal services. In December 2015, however, he again withdrew $2500 from the account as attorney fees

. When he finally sought court approval for the attorney fee payment of $3692.18 in May 2016 , he asserted the fee represented the total work performed for the estate. H e never filed a claim for additional attorney fees

. Moreover, when faced with the B oard’s claim of conversion of the $2500, he asserted no defense of a colorable
future claim to the funds. See Iowa Ct. R. 36.8(1)

– (2). An attorney commits theft when he or she “[m]isappropriates property which the person has in trust .

. . by using or disposing of it in
a manner which is inconsistent with or a denial of the trust or of the owner’s rights in such property.” Iowa Code § 714.1(2) (2015). Kowalke withdrew $2500 in advance attorney fees without any colorable future
claim in violation of Iowa Code section 714.1(2). Additionally , between January 2016 and December 31, 2017,
Kowalke converted in excess of $10, 000 in estate funds for his own8 personal use. He then converted additional funds to pay other clients.
Kowalke provided no additional explanation or context for the conversion, and conceded he had no colorable future claim to the funds.
Kowalke therefore converted client funds in violation of Iowa C ode
section s 714.1(2) and 714.2(1)

. See Iowa Code § 714.2(1) (“The theft of property exceeding ten thousand dollars in value .

. . is theft in the first degree. Theft in the first degree is a class “C” felony.”). Finally, after the district court replaced Kowalke as att orn ey for the

co executors, it ordered him to return the $35,470.0 6 in estate funds shown in his client ledger. During the show cause h earing, he stated he did not have the money and could not re store the balance to the trust

accoun t . Indeed, at the time of the hearing, Kowalke’s trust account showed a balance of $3 867.77. Thus , Kowalke misappropriated estate funds in violation of Iowa Code sections 714.1(2) and 714.2(1).
A lthough the record does not reveal if Kowalke has been ch arged with a crime, “a criminal conviction is not a prerequisite to finding a violation under our rules.” Thomas , 844 N.W.2d at 116. Professional misconduct occurs when an attorney commits “ a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects.” Iowa R. Prof’l Cond uct 32:8.4(b). Similarly, profe ssional misconduct includes “ conduct involving dishonesty, fraud, deceit, or misrepresentation.” Id. r. 32:8.4(c). Because we find Kowalke

con verted client funds held in trust for his own personal use, we find Kowalke violated rules 32:8.4(b) and (c).
IV. Sanctions. As we have repeatedly affirmed , “[t]here is no place in our profession for attorneys who convert funds entrusted to them. It is almost axiomatic that we revoke licenses of lawyers who do so.” Thomas ,9 844 N.W.2d at 117 (alteration in original) (quoting Comm. on Prof’l Ethics & Conduct v. Ottesen , 525 N.W.2d 865, 866 (Iowa 1994)). In fact, we have found revocation appropriate “in nearly every case where an attorney converts client funds without a colorable claim.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Guthrie , 901 N.W.2d 49 3 , 500 (Iowa 2017). Kowalke withdrew over $10,000 of client funds for his own personal use, and ultimately misappropriated over $31,000 of client funds. His behavior is antithetical to the standards of ethics and professionalis m we demand from Iowa atto rneys, and we agree revocation is the appropriate
sanction.
V. Conclusion. Attorney Todd Kowalke’s license to practice law in the State of Iowa is revoked. All costs in relation to this proceeding are assessed against him. Iowa Ct. R. 36.24(1).
LICENSE REVOKED. All justices concur except Wiggins, Hecht , and Christensen, JJ., who take no part.