Opinion ID: 2760349
Heading Depth: 2
Heading Rank: 2

Heading: Bar Grievance And Disciplinary Proceedings

Text: In late July 2010 Patrick filed a grievance against Miles with the Alaska Bar Association. Donald’s sole heir, his mother, died in September. Miles responded, stating that Donald was “a close and personal friend” for whom she had occasionally completed minor legal work for a discounted rate, but never for free, and that when Donald died she “did not hear about it right away, because although close personal friends, [she and Donald] were not actually running around together, and he hadn’t come to visit and chat in over a month.” Regarding the Progressive accounts, she stated: In May 2008, Donald asked me to open a bank account with me as primary and him as secondary so that he could give that money to me and keep his brothers, who[m] he understood to be his beneficiaries, from obtaining it. Donald told me that he was estranged from, and did not like his brothers and did not want them to obtain or inherit his money. I told Donald that the correct format would be to make a will. He stated that he would rather just open up a bank account for our use. I say “our” because he intended me -7- 6975 to have access to this money, and he trusted me. At no time did I think this was unethical as Donald was a personal friend of mine and did not have any close friends or other family members that he would trust to have a joint account with. So I opened this account as primary, under my name and social security number, and Donald was placed on the account as secondary. On at least one occasion, I asked Donald to prepare a [w]ill, but he would ask how much it cost, then refuse to carry through with it. .... There were two accounts at Key Bank, Donald’s primary account, and then the account already mentioned which contained money that had been gifted to and made available to me at Donald’s explicit insistence. I believe (although I am not 100% certain) that Donald’s primary account was in his name as the primary signator, and that I was secondary. The second account was in my name and under my social security number, and the money in it had been gifted to and made available to me by Donald. I never solicited this gift from Donald; it was his idea to do this, and I agreed, albeit reluctantly, although I was appreciative of his generosity and kindness. I disclosed the first bank account to Patrick immediately. I did not disclose the second account as I considered it mine, and the moneys in it to be mine. . . . I have kept [the money]. . . . [M]y belief is that Donald gave me the contents of the bank account when he expressed his intent that it was available to me to spend and that I should use it if I wanted. Thus, I have not felt it appropriate, and in fact it would contravenes [sic] Donald’s fervent wishes which he expressed to me, for that money to go into his estate to be divided by his estranged family. -8- 6975 Miles also described Patrick to be “as difficult and menacing as Donald had previously described him” and stated that she had done only “non-lawyer-specific tasks” for Patrick, like inventorying a storage unit and collecting information on Donald’s account and debts. Finally, Miles asserted that during the summer of 2009 she “made several attempts to obtain ethical guidance on these matters,” by (1) speaking “in detail” with a “good friend and ethical attorney, Jill Dean,” and (2) attempting to speak with a professor in Seattle, Washington, whose information was on the Alaska Bar website, but with whom she had “only played phone tag.” Miles also asserted that she had not intended to violate any ethical guidelines. In late October 2011 bar counsel filed a petition for a formal hearing before an area hearing committee. The petition alleged that Miles committed the following eight counts of misconduct, misnumbered as one through six, eight, and nine: 1) representing Patrick regarding Donald’s estate despite Miles’s own personal conflicting interest in Donald’s assets, in violation of Alaska Rule of Professional Conduct 1.7(a)(2); 2) acquiring a pecuniary interest in her client, Donald’s, Progressive bank accounts without following required client-protective procedures, in violation of Rule 1.8(a); 3) acquiring a possessory or other pecuniary interest in the Progressive savings account which was adverse to her other client, Patrick, in violation of Rule 1.8(a); 4) failing to hold the property of a client or other third persons — the Progressive savings account funds — separate from Miles’s own property, when she deposited those funds into her own account, in violation of Rule 1.15(a); 5) failing to promptly notify those with an interest in the Progressive savings account funds when they came into her possession, account for those funds, and deliver them to those entitled to the funds, in violation of Rule 1.15(d); 6) failing to hold the disputed Progressive savings account funds separate from other funds until entitlement to the funds had been determined, in violation of Rule 1.15(e); -9- 6975 8) committing the criminal act of theft, misappropriation, or wrongful conversion, in violation of Rule 8.4(b); and 9) engaging in conduct involving dishonesty and deceit by transferring the Progressive savings account funds into her own account and failing to disclose that transfer to her client Patrick, in violation of Rule 8.4(c). Miles admitted the allegations in counts one and six, and the Bar ultimately did not pursue counts two and nine. In February 2012 Miles submitted an affidavit reiterating her claim that the funds were her property because Donald previously had stated his intent to gift the contents of the savings account to her. Miles also stated that Donald “possessed equal or superior knowledge about his intent and plan so [Miles] did not require him to put his understanding of his plan in writing, nor did [she] advise him to review his plan with independent counsel.” Miles also explained that her “statements to Patrick [while representing him] . . . were impacted by Donald’s intent that he wanted none of his estate . . . to pass to his brothers.” In April, just prior to her first disciplinary hearing before the Area Hearing Committee, Miles finally tendered to Donald’s estate $20,072, the amount she had withdrawn from the Progressive savings account. This was nearly three years after she placed the money in her own account and nearly two years after the estate’s initial demand for the funds. After tendering the money to the estate, Miles did not present the estate with a claim to any of it. For reasons not relevant to our decision, the Area Hearing Committee held two hearings. We describe the relevant testimony without differentiating between those hearings. Regarding her friendship with Donald, Miles testified that after her car had been stolen by a former romantic partner he had helped her feel safe by driving her home and going with her to her office for two to three days as her “body guard.” Miles stated -10- 6975 that Donald also “staked out” her former partner’s house for a few mornings and helped Miles find a new car. Miles stated that she “probably had a crush” on Donald and that he had offered to buy her a $600 ring, but she would not let him and instead bought it for herself. Miles stated that although she previously had indicated that she interacted with Donald approximately 15 to 20 times over the course of their friendship, there may have been additional occasions when Donald “would just stop by . . . and [she would] be too busy.” Regarding her business relationship with Donald, Miles testified that Donald was “entrepreneurial minded” and had a lot of “outlandish ideas,” and that although Donald suggested they “could be in business together,” she never did so because she was “leery of some of his ideas.” Regarding Progressive, Miles stated that she “tried really hard to make a line between” Donald as a friend and Donald as a client, so she billed him about $250 to form the company. Regarding the bank accounts, Miles testified that Donald had asked her: “If I set up the bank account with you, with rights of survivorship, does that mean my brothers won’t get any of [the money]?” Miles stated that she had told Donald she was not sure and that she told him several times he should make a will, but he replied that he did not know who his beneficiary would be or with “flippant responses” such as, “I don’t plan on having any money when I die.” Miles stated that she then believed Donald had set up the savings account as a joint personal bank account with a right of survivorship in her favor. Explaining why she had never noticed that the savings account was not, in fact, a joint personal bank account with a right of survivorship and was instead Progressive’s business savings account, Miles testified: Donald said that he wanted to set up two accounts. One, that he said I should divulge to his brothers, if anything happened -11- 6975 to him; and one, that he wanted to keep from them. . . . [H]e would use one, and then the other one we would keep money in. And he also said, . . . [if] we do a business, I would have access to that money, like a seed money. Or, if I needed anything. . . . [H]e wanted to think of himself as kind of helping to take care of me. . . . I didn’t . . . go to Key Bank and open up the accounts. I sat in my office and I would be working, and Donald came in and said, “Sign.” And I felt that my responsibilities, ethically, were not to be involved in anything like that. So it wasn’t like I sat there and reviewed it . . . . [A] friend says, “Sign. I’m gonna set up a joint bank account with you, with rights of survivorship. Sign.” So, I signed. . . . [W]here it says, . . . “Registered agent,” . . . it is handwritten later. That wasn’t on there when I signed. . . . . . . [W]hen I did that [P]ower of Attorney, . . . giving Donald the right to use the account, I thought I was the primary and he was the secondary. And, for some reason, they needed something like that. And he told me to put in there, . . . you’re a registered agent of Progressive Diversified. And . . . I just thought it was him being selfimportant, I guess. And, I was, like, “Okay. If that’s what the bank wants, there you go. Good bye.” .... . . . [With the later signature card, it was] the same thing. . . . He said something like, “The bank screwed up . . . [a]nd we need to sign again.” And, again, I felt like my responsibility, ethically, is not to be involved in that. . . . So, I’ll help you, you’re a dear friend. So again I sign, but, I thought it was . . . just rights of survivorship. Joint owners with rights of survivorship. I thought I was the primary, which wa[s] why I had to give him that power of attorney. -12- 6975 .... I felt like, since I had to do the Power of Attorney, that was really my money. But I would never take something from Donald that he wanted. .... . . . I just felt like, as a friend, I shouldn’t be . . . [looking at the account paperwork], and to stay away from the gift, I shouldn’t be doing that. When asked why she never withdrew any money from the savings account during Donald’s lifetime, Miles responded: [I]f we would have done a business deal, I would have. And I know that if I . . . [were] in financial straights, I could have . . . . [B]ut . . . [Donald] used to make a lot of money. . . . And then he was disabled. . . . [T]he time he got that hundred thousand dollars, I think he owed a lot of money . . . . He bought a brand new truck. . . . I would never just spend Donald’s money. But, I think if I ever wanted it or needed it, I could have had some. When asked why Donald wanted to gift the money to her, in particular, she testified that Donald thought they someday would do business together. Miles also thought she “was probably [Donald’s] best friend at that time,” though they “didn’t necessarily socialize after hours” because Miles had three young children. She stated that Donald was charismatic and had many friends, but she also “felt like, in many ways, he was kinda lonely.” Miles stated that she attended neither the barbeque where Donald had died nor the later celebration of Donald’s life. Miles also testified that when she started helping Patrick, she did not realize he was one of the brothers from whom Donald wanted to keep his assets, and once she realized her mistake, she tried to get everything done as quickly as she could. Miles stated that Donald said the smaller account was supposed to be revealed to Donald’s -13- 6975 brother “because [Donald] knew he’d keep looking for money until he found something.” Miles further stated: “[S]ince it was my money, I felt like I didn’t need to disclose the second account. I felt that legally I didn’t need to disclose the first account [either], but I would, because that’s what Donald wanted.” She stated that she did not tell Patrick about the second account because she was honoring Donald’s wishes and felt, at the time, that she was “taking the high road.” Miles also stated that Donald felt that his brothers controlled his mother, so they would get the money in the event of his death. Jill Dean, the attorney with whom Miles had discussed her ethical qualms, also testified. Dean stated that on more than one occasion during the summer of 2009, Miles said she had a joint account with a deceased friend who had been a client and was not sure what to do about it. Based upon Dean’s understanding that it was a joint account, Dean had advised Miles to “hold onto the money” because she was the surviving beneficiary and therefore had the best claim to the money. Five character witnesses testified on Miles’s behalf: a rector at her church, who had known her for about three years; her career coach, who had acted in that capacity for approximately six months; a fellow animal rescue volunteer, who had known her since 2005; a friend and fellow dog musher, who had known her since 1998; and a former client, who had known her since 2011. The career coach testified that Miles had “expressed regret [about] the whole situation,” recognized the “error in judgment on her part,” and was working on becoming more detail-oriented. The four remaining witnesses testified that Miles had a reputation for truthfulness. Two of Donald’s close friends, William O’Brien and Robert Madson, also testified. O’Brien stated that he first met Donald in the 1990s and that they were roommates when Donald died. He stated that he and Donald hung out and went fishing and boating together. He stated that Donald was using the Progressive money to run a business selling boats, and that all he could remember Donald saying about Miles was -14- 6975 that she had helped him form Progressive and he had fixed a fence for her at some point. He stated that Miles had never visited their residence, and that he believed Donald had only a professional relationship with her. He stated that he did not believe Donald had any business ventures with Miles or a close friendship with her. He added that Donald was always coming up with business ideas and trying to “enlist” O’Brien to join him. When asked whether Donald would give money to Miles, O’Brien stated, “No, I can say that I’m positive he wouldn’t do that.” Madson testified that he knew Donald for 36 years. He stated that his brothers, Donald, and he all grew up in the same small town in Minnesota; they all hunted, fished, and vacationed together; and Donald’s mother was Madson’s seventh grade teacher. He stated that Donald joined Madson in Alaska in the 1980s, and that they hunted, fished, and hung out together. He stated that Donald had quite a few close friends, but Miles was not one of them. Madson stated that although Donald had mentioned Miles on a couple of occasions because he had “legal dealings” with her, Madson had never seen Donald socialize with her, and Madson “[did]n’t even know what [Miles] look[ed] like.” He described Donald as “a wheeler-dealer” when it came to business and stated that Donald was “real[ly] close” with his mother and “always talked about her, and . . . any way . . . he could help her.” He stated that Donald would have wanted his money to go to his mother. Regarding Donald’s relationship with Patrick, Madson stated, “[Donald] didn’t talk about him much, let’s just put it that way.” The Area Hearing Committee found that Miles had committed the four remaining contested counts of misconduct described in the petition: counts three, four, five, and eight. This included the specific finding that “Miles committed a criminal act of theft, misappropriation, or wrongful conversion.” The Committee found “as a matter of fact and law that no gift was accomplished by Donald’s purported statement of an intent to make a gift of funds to Miles.” It also expressed “reasonable doubt whether -15- 6975 Donald had actually made statements to Miles intending to gift her money through a nonprobate transfer from a joint account” and stated that Miles’s claims regarding such statements were “uncorroborated and self-serving.” The Committee found “the overall evidence to be clear and convincing that by the time Miles withdrew the funds and closed the accounts, she had actual knowledge that they were business accounts . . . solely owned by Donald.” It also found that “Miles’s testimony that at the time she withdrew the money she believed the account was a joint personal account with right of survivorship [was] simply not credible on the record before [the Committee].” In fact, “[e]ven if Miles believed that Donald intended to open a joint personal account with her, she was immediately — and repeatedly — confronted with obvious, and unmistakable evidence that Donald had, in fact, opened only business accounts at Key Bank in the name of his solely-owned company . . . .” The Committee found “more incredulous [sic] . . . Miles’s claim that after Donald’s death, she continued to believe that the Key Bank savings account was a personal account, even after she ‘pulled Donald’s file,’ ” remembered that she was a signer on the two accounts, “performed ‘bank research,’ ” obtained counter checks from both accounts, and disclosed to Patrick the existence of only one account. Ultimately, the Committee found: Taken as a whole, . . . the record evidence . . . [is] clear and convincing that any “mistaken impression” that Miles had about the nature of the Key Bank accounts had been dispelled by the time she withdrew the funds and closed the accounts — that after Donald’s death, Miles had actual knowledge that the Key Bank accounts were business accounts in which she had no ownership interest. .... . . . Miles knew that the[] funds had not been conveyed to her . . . . -16- 6975 When evaluating the proper sanction for Miles’s violations, the Committee found that Miles’s misconduct resulted in “at least the potential for serious harm” because Miles had “deprived [Donald’s estate] of its major asset” — over $20,000 — “for almost three years and could have permanently deprived the [e]state” of that asset but for Patrick’s perseverance. Given its finding that Miles’s conduct was knowing, the Committee preliminarily concluded that the appropriate sanction for her conduct was disbarment. The Committee found only one mitigating factor: cooperation with the Bar. The Committee rejected Miles’s argument that “delay in the disciplinary proceedings” should be a mitigating factor, and found that the “evidence of Miles’[s] reputation for honesty [did] not mitigate the circumstances of the violations committed.” Finally, the Committee found that “any mitigating factors [were] more than neutralized by the [aggravating] factors . . . [of] dishonest or selfish motive; refusal to acknowledge [the] wrongful nature of [the] conduct; substantial experience in the practice of law; and indifference to making restitution.” The Committee therefore recommended that the Disciplinary Board impose on Miles the sanction of disbarment.2 The Board adopted the Committee’s findings of fact, conclusions of law, and recommendation.3 Miles appeals the findings that she committed the violations in 2 Area hearing committees submit written reports containing findings of fact, conclusions of law, and recommendations to the Disciplinary Board. See Alaska Bar R. 12(i)(4). The Board may accept those reports or adopt its own, and may impose reprimands or forward its own findings of fact, conclusions of law, and recommendations to this court for more serious discipline. See Alaska Bar R. 10(c)(5)-(8). 3 Three days before the Board held Miles’s October 2013 disciplinary hearing, Miles moved to admit the results of a polygraph examination conducted just one week prior. The examiner’s opinion was that: Miles was truthful when she stated . . . 1) Donald Moren had told her the Key Bank account was a joint account with right (continued...) -17- 6975 counts three, four, five, and eight, and requests that we impose the lesser sanction of suspension from the practice of law for no more than three years.