Opinion ID: 2611450
Heading Depth: 1
Heading Rank: 6

Heading: suspension and disbarment

Text: The Bar argues that the disciplinary court misread and misapplied the Standards for Imposing Lawyer Sanctions in imposing a three-year suspension rather than disbarment on Babilis. We agree. The Standards that are relevant in deciding whether suspension or disbarment is the appropriate remedy are stated in rules 4.2, 4.3, and 6. In pertinent part, these rules read as follows: Rule 4.2 Disbarment. Disbarment is generally appropriate when a lawyer: (a) knowingly engages in professional misconduct as defined in Rule 8.4(a), (d), (e), or (f) of the Rules of Professional Conduct [13] with the intent to benefit the lawyer or another or to deceive the court, and causes serious or potentially serious injury to a party, the public, or the legal system, or causes serious or potentially serious interference with a legal proceeding; or (b) engages in serious criminal conduct, a necessary element of which includes intentional interference with the administration of justice, false swearing, misrepresentation, fraud, extortion, misappropriation, or theft; or the sale, distribution, or importation of controlled substances; or the intentional killing of another; or an attempt or conspiracy or solicitation of another to commit any of these offenses; or (c) engages in any other intentional misconduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer's fitness to practice law. (Emphasis added.) Rule 4.3 Suspension. Suspension is generally appropriate when a lawyer: (a) knowingly engages in professional misconduct as defined in Rule 8.4(a), (d), (e), or (f) of the Rules of Professional Conduct[ [14] ] and causes injury or potential injury to a party, the public, or the legal system, or causes interference or potential interference with a legal proceeding; or (b) engages in criminal conduct that does not contain the elements listed in Standard 4.2(b) but nevertheless seriously adversely reflects on a lawyer's fitness to practice law. Rule 6.1. [Aggravation and Mitigation] Generally. After misconduct has been established, aggravating and mitigating circumstances may be considered and weighed in deciding what sanction to impose. [15] Rules 4.2 and 4.3 set out standards that establish disbarment or suspension as the presumptive levels of discipline. Rule 6 provides for the adjustment of the presumptive discipline according to mitigating and aggravating factors. Suspension may be imposed for a period of anywhere between six months and three years, but the actual period of suspension should be subject to a degree of flexibility in fixing the exact sanction, giving effect to mitigating and aggravating circumstances. [16] The presumptive discipline may be increased from suspension, for example, to disbarment in the case of overwhelming aggravating factors, or decreased from suspension to a reprimand in the case of unusual or substantial mitigating factors. Usually, adjustments under rule 6 will simply involve more precise tailoring of the presumptive sanction according to the principle stated in rule 1.3: The standards constitute a system for determining sanctions, permitting flexibility and creativity in assigning sanctions in particular cases of lawyer misconduct. In addition, under rule 2.9, a court may impose in conjunction with any order of discipline (a) [a requirement for payment of] restitution; (b) assessment of costs; (c) limitation upon practice; (d) appointment of a receiver; (e) a requirement that the lawyer take the bar examination or professional responsibility examination; [or] (f) a requirement that the lawyer attend continuing education courses. [17] The disciplinary court found that suspension was the proper presumptive level of discipline under rule 4. The court stated that rule 4.2, relating to disbarment, provides three categories of misconduct qualifying for disbarment. Though Mr. Babilis' misconduct could be described as included under subparts (a) and (c), it does not fit well under subpart (b). The court thus held that rule 4.3(a) and (b), which pertains to suspension, most accurately described the misconduct of Mr. Babilis. The court erred in reading rule 4.2. Subparagraphs (a), (b), and (c) of that rule do not require that all three subdivisions be violated for disbarment to be the presumptive discipline. Subparagraphs (a), (b), and (c) are set off with the disjunctive or. A finding under any one of the three is sufficient to establish disbarment as the presumptive sanction. Paragraphs (a) of rules 4.2 and 4.3 use identical language, except that 4.2(a), unlike 4.3(a), requires that the violation of the Rules of Professional Conduct be done with the intent to benefit the lawyer or another or to deceive the court. Thus, the difference between the sanctions of disbarment and suspension under paragraphs (a) of rules 4.2 and 4.3 lies in the attorney's motive and in the relative severity of the conduct. The disciplinary court found that Babilis took money from the Kerns estate trust account, intentionally failed to account for assets of the estate, and intentionally over-billed the Kernses for costs and expenses and that he did all this with the intent to benefit himself or to deceive the court. The record amply supports the disciplinary court's factual findings. Babilis induced the Kernses to enter into an exorbitant and wholly improper contingency fee agreement. Babilis arranged for fees to be paid him both as counsel for Thomas Kerns as representative of the estate and as counsel for Thomas Kerns as claimant, thereby violating the proscription on excessive and improper fees. As counsel for the personal representative of the estate, Babilis had a statutory right to recover a reasonable fee, [18] see Utah Code Ann. § 75-3-718; Utah Code J. Admin. Rule 6-501, but he demanded one-third of the estate under a contingent fee agreement. He also concealed property belonging to the estate, which he converted or attempted to convert to his own use. He attempted to charge the estate nonexistent or over-billed costs. He submitted documents, including sworn affidavits, to the probate court reflecting a false accounting of the estate's assets. He lied to the Kernses on more than one occasion in an attempt to conceal his misconduct and admitted to having made errors or mistakes only when squarely confronted with specific instances of misconduct, and he lied to both the probate court and the disciplinary court with respect to particular aspects of his misconduct. In short, the record is replete with examples of deceit, dishonesty, and misrepresentation, all motivated by Babilis' desire to enrich himself. Accordingly, disbarment was presumptively the appropriate sanction under rule 4.2(a). In applying rule 6, the disciplinary court found multiple aggravating factors and few mitigating factors. The court found that Babilis' conduct was self-serving and part of an established pattern of misconduct that encompassed not only the Kerns case but also his dealings with other clients, so that this was one of multiple instances of misconduct. In addition, the court found that Babilis had not satisfactorily acknowledged the wrongful nature of his actions and that the Kernses were vulnerable victims of his misconduct. The court also examined other potential aggravating factors, such as a prior record of discipline and submission of false evidence. As potential mitigating factors, Babilis produced favorable testimony from some of his other clients and evidence of personal and emotional problems that he was suffering at the time. The court did not find these factors to be substantial mitigating or aggravating considerations. [19] The only factor that the court explicitly treated as mitigating was the four-year delay in the disciplinary process. The Bar objected to the court's finding on this issue because the delay was occasioned by a number of factors, including the transition to the new disciplinary procedural rules that necessitated refiling the complaint in district court and collateral bankruptcy and tax evasion proceedings in which Babilis was embroiled. The court found that the delay was not occasioned specifically by [the] fault of either party but nevertheless concluded that Babilis had been prejudiced to some degree by the delay in both ability to recollect and the effect adverse publicity has had on him personally and on his practice. In any event, the delay was not prejudicial. There are no facts indicating that Babilis opposed the delay or even complained about it. Indeed, at least some of the delay was apparently for his benefit so that he could resolve other pressing concerns. The disciplinary court concluded that the cloud of disrepute engendered by bad publicity on [r]espondent and his practice [was] not insubstantial. Nevertheless, Babilis was the person responsible for this, and it is difficult to comprehend how the delay harmed his reputation; rather, it enabled him to push back the day of judgment. In sum, the aggravating factors were substantial and numerous, and the mitigating factors were minor and did not justify lessening the presumptive disclosure of disbarment. In our view, disbarment was the appropriate sanction. The Bar additionally requests that we adopt as a general rule the principle that intentional misappropriation of client funds will result in disbarment unless the lawyer can demonstrate truly compelling mitigating circumstances. The Bar asserts that such a rule is necessary to protect the public, to place all lawyers on notice of the consequences of intentional misappropriation, and to ensure consistency of result in attorney discipline cases. We agree. Intentional misappropriation of a client's funds is always indefensible; it strikes at the very foundation of the trust and honesty that are indispensable to the functioning of the attorney-client relationship and, indeed, to the functioning of the legal profession itself. See In re Davis, 754 P.2d 63, 66 (Utah 1988); In re Wilson, 81 N.J. 451, 409 A.2d 1153, 1154-55 (1979); Carter v. Ross, 461 A.2d 675, 676 (R.I.1983); cf. In re Smith, 925 P.2d 169, 174 (Utah 1996). The honesty and loyalty that all lawyers owe their clients are irrevocably shattered by an intentional act of misappropriation, and the corrosive effect of such acts tends to undermine the foundations of the profession and the public confidence that is essential to the functioning of our legal system. Lawyers should be on notice that an intentional act of misappropriation of a client's funds is an act that merits disbarment.