Opinion ID: 2518069
Heading Depth: 1
Heading Rank: 10

Heading: Counts 14 and 15: violations of former RPC 3.4(c) and 8.4(d)

Text: ¶ 38 For counts 14 and 15, the hearing officer found that Preszler violated former RPC 3.4(c) (stating that a lawyer must not [k]nowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists) and 8.4(d) (defining professional misconduct to include [e]ngag[ing] in conduct that is prejudicial to the administration of justice.). The hearing officer used standard 6.0 to determine the presumptive sanction: 6.21 Disbarment is generally appropriate when a lawyer knowingly violates a court order or rule with the intent to obtain a benefit for the lawyer or another, and causes serious injury or potentially serious injury to a party, or causes serious or potentially serious interference with a legal proceeding. 6.22 Suspension is generally appropriate when a lawyer knows that he or she is violating a court order or rule, and causes injury or potential injury to a client or a party, or causes interference or potential interference with a legal proceeding. 6.23 Reprimand is generally appropriate when a lawyer negligently fails to comply with a court order or rule, and causes injury or potential injury to a client or other party, or causes interference or potential interference with a legal proceeding. ABA STANDARDS at 13. The hearing officer concluded the presumptive sanction is disbarment, and the Board upheld his determination. Preszler does not argue that he acted without intent to obtain a benefit for himself; rather, he claims that his actions were negligent, not knowing, and that the actual or potential harm was not serious. Accordingly, Preszler believes that the presumptive sanction should be a reprimand. We disagree. ¶ 39 The knowledge analysis is slightly different than it was for count 1. Former RPC 3.4(c) itself contains a similar knowledge element, stating a violation occurs when a lawyer [k]nowingly disobey[s] an obligation under the rules of a tribunal. Former RPC 8.4(d) does not include a mental state element, but standard 6.21 applies only if the attorney knowingly violate[d] a court order or rule. Thus, to have violated former RPC 3.4(c) and to be subject to a presumptive sanction of disbarment, Preszler had to be consciously aware that his conduct violated a court order or rule. ¶ 40 After reviewing the record, we conclude that substantial evidence supports the hearing officer's finding that Preszler knew he could not remove the funds absent court approval. Preszler had worked on bankruptcy cases since 1985 or 1986. Preszler himself presented the bankruptcy court order approving Preszler's employment as Kinnie's personal injury attorney, and this order stated his compensation shall be made in accordance with the relevant federal statutes and court rules, which required approval by the bankruptcy judge prior to the time payment is disbursed. Ex. 15. The order also contained a declaration that Preszler had read the application materials and verified that they are true and accurate and that they disclose all material facts required to the best of my knowledge and belief. Ex. 11. Preszler admitted that, as of August 2003, he knew he needed an order authorizing payment of compensation before he could get paid. In fact, Preszler had prepared such orders in several prior cases. Exs. 24-31. ¶ 41 Also, the hearing officer could infer that Preszler concealed his disbursement from the Gerrards because Preszler, contrary to his general practice, failed to prepare a contingent fee settlement statement. Similarly, because Preszler did not disclose to Hames a complete version of his client ledger, the hearing officer could infer that Preszler sought to conceal his actions from Hames. These inferences reflect Preszler's consciousness of guilt. The foregoing facts, when taken as a whole, constitute substantial evidence supporting the finding that Preszler acted knowingly. ¶ 42 Preszler argues that his actions related to counts 14 and 15 did not cause serious actual or potential injury because, when questioned by Hames, he immediately reimbursed the amounts. A `[p]otential injury' is defined as the harm to a client, the public, the legal system or the profession that is reasonably foreseeable at the time of the lawyer's misconduct, and which, but for some intervening factor or event, would probably have resulted from the lawyer's misconduct. ABA Standards Definitions at 7. Preszler concedes that if the true nature of the time spent on the case and the lack of risk were known to the trustee[,] he would not have approved the fee. Opening Br. of Resp't Preszler at 28-29. If not for Hames' intervention, the Gerrards' bankruptcy would have been harmed. This is a potential injury. And the underlying misconduct potentially injured multiple parties. In addition to the Gerrards, the evidence demonstrates that Preszler's failure to comply with the bankruptcy rules and laws deprived the trustee, the creditors, and the bankruptcy court the opportunity to review and determine whether the attorney fees were reasonable. Substantial evidence supports the hearing officer's determination that Preszler's actions caused serious actual or potential injury. ¶ 43 Because Preszler acted knowingly and caused a serious actual or potential injury, the hearing officer and the Board correctly determined that the presumptive sanction for counts 14 and 15, even if merged, is disbarment. [5]