Opinion ID: 2594152
Heading Depth: 1
Heading Rank: 7

Heading: the hearing panel misapplied the standard of review to the hearing committee's findings of fact

Text: {19} As noted above, the competing sets of findings of fact reflect that the hearing panel disagreed with the hearing committee's assessment of Respondent's intent in failing to accurately represent the debtor's interest in the Roswell house. While the hearing committee found that Respondent's failures were the product of mistake and inadvertence, the hearing panel found that Respondent's actions were the product of fraud, deceit, and dishonesty. However, Respondent's mental state is a quintessential question of fact. See In re Clark, 87 P.3d at 830 (Determining a person's mental state requires the resolution of questions of fact.). And for the reasons that follow, we believe the hearing panel erred by reweighing the evidence and substituting its judgment for that of the hearing committee on that critical question of fact. {20} As an example of the hearing panel's improper reweighing of the evidence, the hearing panel apparently relied on portions of the debtor's testimony to find that Respondent knew before filing the bankruptcy petition that the debtor's interest in the Roswell house was greater than a life estate and worth more than one dollar. However, Respondent denied receiving such information from the debtor before filing the petition. By instead relying on the debtor's version of events, the hearing panel implicitly found that the debtor's testimony was more credible than Respondent's testimony. In so doing, the hearing panel erred by reweighing the evidence in this manner. {21} Similarly, the hearing panel's findings recite portions of the debtor's marital settlement agreement and rely on comments by the bankruptcy court judge to establish that Respondent should have clearly known from reviewing the marital settlement agreement that the debtor had a greater interest in the Roswell house than what was listed in the bankruptcy schedules. However, the hearing panel's findings seem to ignore testimony from Respondent and the debtor's prior attorney suggesting that the marital settlement agreement contained ambiguities regarding the enforceability and true value of the debtor's right to the house. Moreover, the hearing panel's findings fail to acknowledge that upon reviewing the marital settlement agreement, Respondent himself recognized that the bankruptcy schedules would need to be amended. Again, the hearing panel improperly substituted its judgment on a question of fact by reweighing the evidence. {22} What was truly at issue was whether Respondent negligently or intentionally failed to make those amendments. In an apparent effort to show that Respondent acted intentionally, the hearing panel's findings refer to a letter that Respondent sent the debtor advising that they delay asking the debtor's ex-husband to sell the house under the terms of the marital settlement agreement until after the first creditor's meeting. The letter also suggested that the debtor should be able to retain the proceeds at that time. To the extent that the hearing panel relied on this letter as evidence of a dishonest intent on Respondent's part, such reliance ignores other evidence in the record regarding Respondent's intent. {23} In particular, Respondent himself stated that one reason he did not pursue a sale of the house sooner was that he did not have the support staff to assist him in commencing litigation in the domestic relations proceeding prior to the creditor's meeting. He also testified that he did not want to bring up the issue of the house at the creditor's meeting because he was concerned about causing an emotional confrontation between the debtor and her ex-husband at the creditor's meeting. Moreover, Respondent believed that any money the debtor would receive from the sale of the house would be exempt from the bankruptcy proceeding under a wild card exemption the debtor was entitled to claim under federal bankruptcy law. In short, irrespective of whether Respondent's advice was sound, by suggesting that Respondent's letter to the debtor revealed a dishonest motive, the hearing panel failed to view the evidence in the record in the light most favorable to the hearing committee's findings. {24} The hearing panel's findings also attempt to cast doubt on Respondent's actions at the creditor's meeting. In this regard, there was evidence that Respondent failed to advise the trustee about the debtor's true interest in the house even though the trustee specifically asked the debtors during the creditor's meeting whether they had any real property. Respondent testified that he did not hear the trustee's question during the hearing and may have been distracted because he had numerous other hearings that day. In support of this explanation, the record also showed that creditor's meetings are very fast-paced with approximately forty to seventy cases on any given day. Although the hearing panel apparently discounted this explanation by pointing out that Respondent made other statements during the hearing clarifying other parts of the debtor's petition, by doing so the hearing panel erred again by reweighing the evidence and drawing inferences in the light least favorable to the hearing committee's decision rather than in the light most favorable. {25} In summary, as detailed above, there was conflicting evidence regarding Respondent's motivations for delaying, and ultimately, failing to amend the bankruptcy schedules to accurately state the debtor's interest in the Roswell house. But by finding that Respondent acted with dishonest motive, the hearing panel improperly reweighed the evidence and substituted its judgment for that of the hearing committee on a question of fact. See In re Brodsky, 2003 WL 22793917  (Ill.Atty.Reg.Disp.Com.) (recognizing that it would be improper during an intermediate administrative review in a disciplinary proceeding to reverse simply because another conclusion is possible, or because the Review Board might have reached a different conclusion if it had been called upon to find the facts in the first instance). Because the hearing panel's improper findings of fact formed the basis for its legal conclusions regarding which Rules of Professional Conduct Respondent violated, we also reject those conclusions. We, therefore, proceed to our own assessment of the hearing committee's findings, conclusions and recommendations.