Court Opinion

ID: 4230031
Source: CourtListenerOpinion
Date Created: 2017-12-19 13:09:56.62185+00
Date Added: 2024-06-11T13:26:54.469085
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA17-277

                               Filed: 19 December 2017

Disciplinary Hearing Commission of the North Carolina State Bar, No. 15 DHC 15

THE NORTH CAROLINA STATE BAR, Plaintiff

             v.

CHRISTOPHER W. LIVINGSTON, Attorney, Defendant

      Appeal by defendant from orders entered 1 July 2015, 8 and 24 February 2016,

8, 9, and 18 March 2016, and 14 July 2016, by the Honorable Beverly T. Beal, Hearing

Panel Chair of the North Carolina State Bar, Disciplinary Hearing Commission.

Heard in the Court of Appeals 5 September 2017.

      Deputy Counsel David R. Johnson and Counsel Katherine Jean for plaintiff-
      appellee, The North Carolina State Bar.

      Christopher W. Livingston, defendant-appellant pro se.

      BRYANT, Judge.

      Where the Disciplinary Hearing Commission’s conclusions that Christopher

W. Livingston violated the Rules of Professional Conduct are supported by the

findings of fact which are in turn supported by the evidence, and where Livingston’s

conduct caused significant harm or potentially significant harm to the public, the

profession, or the administration of justice, we affirm the order disciplining

Livingston and imposing a five year suspension of a law license with an opportunity

to petition for a stay after two years.
                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

      In March 2008, defendant Christopher W. Livingston, an attorney, entered

into an agreement with a business known as Credit Collections Defense Network

(“CCDN”) to serve as an “Associate Attorney.” In that position, Livingston agreed to

accept referrals of debt-laden consumers from CCDN, which is not a law firm,

whereby CCDN would collect fees from customers and convey a portion to Livingston

for his legal services to those customers.       Per the agreement, Livingston was

responsible for “legal advice, litigation, filing of pleadings, discovery responses (if

necessary), and . . . cover[ing] court appearances (if necessary)” for CCDN’s

customers.

      Around 20 April 2008, Livingston concluded that CCDN was engaged in the

unauthorized practice of law by preparing court documents for CCDN’s customers to

file pro se. Livingston so advised CCDN through its representative, Colleen Lock, but

did not terminate his relationship with CCDN.            As such, CCDN continued to

represent to North Carolina residents that CCDN was affiliated with licensed North

Carolina lawyers, namely Livingston.

      In September 2008, Livingston filed three lawsuits against CCDN

(respectively, “Lawsuits 1, 2, and 3”) in Bladen County District Court on behalf of

three CCDN customers—William Harrison, Sheryl Lucas, and Cathy Hunt—alleging

fraud, unfair and deceptive trade practices, gross and willful legal malpractice, and

violations of both the North Carolina and federal Racketeer Influenced and Corrupt

                                         -2-
                                 N.C. STATE BAR V. LIVINGSTON

                                         Opinion of the Court

Organizations Acts (“RICO”). Livingston named a number of individuals and out-of-

state business entities, including Robert Lock, Philip Manger, and R.K. Lock &

Associates d/b/a “CCDN,” but did not name the legal entity “CCDN, LLC” as a

defendant. After making appearances to challenge personal jurisdiction over the

named defendants, counsel for CCDN informed Livingston that CCDN was a limited

liability company organized in Nevada. Livingston confirmed that fact but did not

amend the complaints he had filed.

        On 7 January 2009, while Lawsuits 1, 2, and 3 were still pending, Livingston

filed another lawsuit (“Lawsuit 4”) in Bladen County Superior Court against many of

the same individual named defendants. Lawsuit 4 also named CCDN, LLC as a

defendant. Livingston framed Lawsuit 4 as a class action and named an individual

plaintiff, Sharon Southwood, as the class representative.1 In a motion to certify the

class, Livingston stated that he would not provide notice to class members as required

by law. No class was ever certified.

        In May 2009, the trial court dismissed Lawsuits 1, 2, and 3 for failure to name

a necessary party—CCDN, LLC—and for lack of personal jurisdiction over the

remaining defendants.           The trial court concluded that none of the individual

defendants had sufficient minimum contacts for personal jurisdiction before a North

Carolina court. See Lucas v. R.K. Lock & Assocs., Nos. COA10-874, COA10-875,

        1
        The defendants in Lawsuit 4 subsequently removed the case to federal district court and the
matter was disposed of in the federal court’s opinion, Taylor v. Bettis, 976 F. Supp. 2d 721, 727 (2013).

                                                  -3-
                                N.C. STATE BAR V. LIVINGSTON

                                        Opinion of the Court

COA10-891, 2011 WL 721289, at **5–6 (N.C. Ct. App. Mar. 1, 2011) (unpublished),

rev. denied, 365 N.C. 347 (2011).2

       On 11 November 2009, Livingston commenced a RICO class action against

CCDN and other named defendants in U.S. District Court for the Eastern District of

North Carolina (“Lawsuit 5”). On or about 17 November 2009, Livingston contacted

a South Carolina attorney, Andrew Arnold, who was representing CCDN in South

Carolina litigation.      Livingston left Arnold a voicemail message stating that he

represented a “national class” in his suit, that Arnold had participated in a money

laundering scheme by accepting legal fees from CCDN, and demanded that Arnold

forfeit to Livingston all fees he had received from CCDN. Livingston also threatened

to join Arnold in Lawsuit 5.

       A week later, Livingston filed an amended complaint in Lawsuit 5, adding

Arnold, Arnold’s firm, the North Carolina lawyer who represented CCDN in Lawsuits

1–4 (Lee Bettis), Bettis’s firm, and individual members of Bettis’s firm who had not

participated in representing CCDN. Livingston accused the lawyers and their firms

of having knowledge of their clients’ fraudulent conduct and participating in the fraud

       2  Livingston filed a motion for reconsideration of the dismissals under Rule 59, which motion
was denied. Livingston appealed, and this Court held that Livingston failed to give notice of appeal
of the trial court’s order dismissing the complaints and only appealed the denial of the motion to
reconsider. This Court dismissed the appeal and vacated an order imposing Rule 11 sanctions in a
consolidated, unpublished opinion. Lucas v. R.K. Lock & Assocs., Nos. COA10-874, COA10-875,
COA10-891, 2011 WL 721289, at *6 (N.C. Ct. App. Mar. 1, 2011) (unpublished), rev. denied, 365 N.C.
347 (2011).

                                                -4-
                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

by accepting legal fees and representing CCDN clients. The federal court later

dismissed the aforementioned lawyers and their firms from Lawsuit 5 as Livingston

had no basis in law or fact to sue them. See Taylor v. Bettis, 976 F. Supp. 2d 721,

733–34, 736–39, 741–42, 745–47, 752–54 (E.D.N.C. 2013) (denying defendants’

motion to dismiss but finding for defendants on their motion for judgment on the

pleadings and dismissing plaintiffs’ claims).

      While Lawsuit 5 was still pending, on 7 January 2011, Livingston filed Lawsuit

6 in Columbus County Superior Court against the North Carolina attorneys on

substantially the same underlying facts as alleged in Lawsuit 5. By email, Livingston

informed Philip Collins, opposing counsel for the North Carolina attorneys in Lawsuit

6, that he planned to file suits against them each month for the remainder of the year.

On 22 February 2011, the Columbus County Superior Court dismissed Lawsuit 6,

which dismissal was affirmed by this Court. Cullen v. Emanuel & Dunn, PLLC, No.

COA11-921, 2012 WL 3573696, at *3, *11 (N.C. Ct. App. Aug. 21, 2012)

(unpublished).

      On 10 April 2015, the North Carolina State Bar filed a complaint with the

Disciplinary Hearing Commission (the “DHC”) against Livingston alleging attorney

misconduct in violation of the North Carolina Rules of Professional Conduct (“RPC”).

Livingston filed his answer on 4 May 2015.

                                         -5-
                                N.C. STATE BAR V. LIVINGSTON

                                        Opinion of the Court

        A hearing was held before the DHC from 17 to 20 May 2016. On 14 July 2016,

the DHC entered its Order of Discipline suspending Livingston’s law license for five

years with the possibility of a stay after two years. On 5 August 2016, Livingston

filed notice of appeal from the Order of Discipline and other orders entered against

him.3

              _________________________________________________________

        On appeal, Livingston argues the DHC (I) violated his due process and equal

protection rights; (II) erroneously found RPC violations; and (III) ordered excessive

discipline.

                                                  I

        Livingston first argues the DHC violated his due process and equal protection

rights, arguing that he received “no meaningful evidentiary hearing.” Specifically,

Livingston argues the DHC took an insufficient amount of time to consider the

evidence presented, the State Bar engaged in prosecutorial misconduct, and the

findings of fact in the DHC’s order are vague. We disagree.

        3 Defendant brings forth no argument in support of his appeal of the other orders; therefore,
per Rule 28(a) of the North Carolina Rules of Appellate Procedure, we deem any issues related to those
orders abandoned. See N.C. R. App. P. 28(a) (2017) (“Issues not presented and discussed in a party’s
brief are deemed abandoned.”); see also N.C. R. App. P. 28(b)(6) (“Issues not presented in a party’s
brief, or in support of which no reason or argument is stated, will be taken as abandoned.”).
Accordingly, as defendant has abandoned any argument related to these orders, we dismiss any appeal
therefrom. See State v. Bacon, ___ N.C. App. ___, ___, 803 S.E.2d 402, 406 (2017) (“Defendant has
abandoned this argument, and we dismiss it.”).

                                                -6-
                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

      “The standard of review for alleged violations of constitutional rights is de

novo.” State v. Graham, 200 N.C. App. 204, 214, 683 S.E.2d 437, 444 (2009) (citation

omitted). However, “a constitutional question which is not raised and passed upon

in the trial court will not ordinarily be considered on appeal.” State v. Hunter, 305
N.C. 106, 112, 286 S.E.2d 535, 539 (1982) (citations omitted).

      To the extent Livingston makes a constitutional challenge for the first time on

appeal, he contends he received “no meaningful evidentiary hearing, violating his

Fourteenth Amendment due process and equal protection and N.C. Const. Art. I § 19

Law-of-the-Land rights[.]” We briefly address this argument.

      Based on our thorough review of the record in this case, we are satisfied that

“the DHC conducted a fair and unbiased process that fully comported with the

principles of due process.” See N.C. State Bar v. Sutton, ___ N.C. App. ___, ___, 791
S.E.2d 881, 891 (2016), appeal dismissed, ___ N.C. ___, 797 S.E.2d 296 (2017). Due

process was satisfied where Livingston was given notice of the allegations against

him, he filed an answer to the DHC’s complaint, served discovery on the DHC, took

depositions, attended the trial, examined witnesses, and made arguments before the

DHC, availing himself of a full and fair opportunity to participate. See N.C. State

Bar v. Braswell, 67 N.C. App. 456, 458, 313 S.E.2d 272, 274 (1984) (“The filing of a

formal complaint satisfies [a] defendant’s right to be informed of and respond to the

charges against him.”). Contrary to Livingston’s argument, due process does not

                                         -7-
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

require the DHC to deliberate for any prescribed length of time. Livingston also

alleges the State Bar engaged in prosecutorial misconduct by failing to correct false

testimony given by Bettis. But Livingston is unable to show that Bettis’s testimony

was false, and is therefore unable to sustain a claim of prosecutorial misconduct based

on “failure to correct false testimony.” Finally, as set forth in Section II, infra, the

findings of fact in the Order of Discipline are not vague. Indeed, the DHC “ruled on

numerous motions filed by [Livingston] and issued orders containing detailed

findings of fact and conclusions of law. Therefore, the record belies [Livingston’s]

assertion that he was denied due process in connection with his disciplinary

proceeding.”   Sutton, ___ N.C. App. at ___, 791 S.E.2d at 891.            Accordingly,

Livingston’s argument that the DHC violated his due process and equal protection

rights, as well as his N.C. Constitutional rights, is overruled.

                                           II

      Livingston next argues the DHC erroneously found that he violated the Rules

of Professional Conduct because the findings of fact are not supported by the evidence.

We disagree.

      Appeals from orders of the DHC “are conducted under the ‘whole record test,’

which requires the reviewing court to determine if the DHC’s findings of fact are

supported by substantial evidence in view of the whole record, and whether such

                                          -8-
                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

findings of fact support its conclusions of law[.]” N.C. State Bar v. Talford, 356 N.C.
626, 632, 576 S.E.2d 305, 309 (2003) (internal citations omitted).

             Such supporting evidence is substantial if a reasonable
             person might accept it as adequate backing for a
             conclusion. The whole-record test also mandates that the
             reviewing court must take into account any contradictory
             evidence or evidence from which conflicting inferences may
             be drawn. Moreover, in order to satisfy the evidentiary
             requirements of the whole-record test in an attorney
             disciplinary action, the evidence used by the DHC to
             support its findings and conclusions must rise to the
             standard of “clear[, cogent,] and convincing.”

Id. at 632, 576 S.E.2d at 309–10 (alteration in original) (internal citations omitted)

(quoting In re Suspension of Palmer, 296 N.C. 638, 648, 252 S.E.2d 784, 790 (1979)).

“Ultimately, the reviewing court must apply all the aforementioned factors in order

to determine whether the decision in the lower body, e.g., the DHC, ‘has a rational

basis in the evidence.” Id. at 632–33, 576 S.E.2d at 310 (citation omitted) (quoting In

re Rogers, 297 N.C. 48, 65, 253 S.E.2d 912, 922 (1979).

             [U]nder the whole record test, . . . the following steps are
             necessary as a means to decide if a lower body’s decision
             has a “rational basis in the evidence”: (1) Is there adequate
             evidence to support the order’s expressed finding(s) of fact?
             (2) Do the order’s expressed finding(s) of fact adequately
             support the order’s subsequent conclusion(s) of law? and (3)
             Do the expressed findings and/or conclusions adequately
             support the lower body’s ultimate decision? . . . [I]n cases
             such as . . . those involving an “adjudicatory phase” (Did
             the defendant commit the offense or misconduct?), and a
             “dispositional phase” (What is the appropriate sanction for
             committing the offense or misconduct?), the whole-record
             test must be applied separately to each of the two phases.

                                         -9-
                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

Id. at 634, 576 S.E.2d at 311.

      A. Conclusions 2(a) and 2(b)

      Livingston challenges Conclusions 2(a) and 2(b) as unsupported by the findings

of fact, specifically Findings of Fact Nos. 4–12, as he contends those findings are not

supported by competent evidence. Conclusions 2(a) and 2(b) state as follows:

             (a) By entering into a contractual agreement with CCDN
                 which contemplated the sharing of legal fees with a
                 nonlawyer in violation of Rule 5.4(a), Livingston
                 attempted to violate the Rules of Professional Conduct
                 in violation of Rule 8.4(a);

             (b) By affiliating with CCDN and providing legal services
                 to customers of CCDN, which was engaged in the
                 unauthorized practice of law in North Carolina,
                 Livingston assisted another in the unauthorized
                 practice of law in violation of Rule 5.5(d)[.]

Findings of Fact Nos. 4–12 are as follows:

             4. In March 2008, Livingston entered into a contractual
             agreement with Credit Collections Defense Network, LLC
             (“CCDN”), whereby CCDN would refer debtors seeking
             debt-relief assistance to Livingston for legal representation
             (this contract hereinafter referred to as “the Associate
             Attorney Agreement”).

             5. CCDN was not a law firm, and was not authorized to
             engage in the practice of law in North Carolina.

             6. The Associate Attorney Agreement provided that
             CCDN would collect fees from customers and then remit a
             portion of those fees to Livingston for legal services
             Livingston rendered to those customers.

                                         - 10 -
                          N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

            7. The Associate Attorney Agreement provided that
            CCDN would “prepare drafts of all [court] filings for review
            and approval” by Livingston.

            8. The Associate Attorney Agreement prohibited
            Livingston from “directly or indirectly attempting in any
            manner to persuade any client of CCDN to cease to do
            business with or to reduce the amount of business which
            any such client has customarily done or actively
            contemplates doing with CCDN.”

            9. On or about 20 April 2008, Livingston determined that
            CCDN and/or its marketing partners had prepared legal
            documents for CCDN customers to file pro se or to be used
            to otherwise guide pro se litigation and thus had engaged
            in the unauthorized practice of law.

            10. On or about 20 April 2008, Livingston advised a CCDN
            representative, Colleen Lock, that, in preparing pleadings
            to be filed pro se, CCDN was engaged in the unauthorized
            practice of law.

            11. Despite becoming aware, at least as early as April
            2008, that CCDN was engaged in the unauthorized
            practice of law, Livingston accepted additional clients from
            CCDN rather than immediately terminate his contractual
            relationship with CCDN.

            12. Livingston aided CCDN’s unauthorized practice of law
            in North Carolina by maintaining his affiliation with
            CCDN. This allowed CCDN to continue to represent to
            North Carolina residents that it was affiliated with
            licensed lawyers in the state.

            1. Conclusion 2(a)—Sharing of Legal Fees

      Livingston contends that because he at most agreed to share fees, and binding

precedent holds that “agreement” falls short of “attempt,” Findings of Fact 4–12 are

                                        - 11 -
                                N.C. STATE BAR V. LIVINGSTON

                                       Opinion of the Court

“legally erroneous,” and the DHC’s conclusions that he violated Rule 5.4(a) (sharing

legal       fees   with   a   nonlawyer)     and       attempted   to    violate    Rule    8.4(a)

(violating/attempting to violate the RPC or knowingly assist another to do so) should

be vacated.

        Rule 5.4(a) states that “[a] lawyer or law firm shall not share legal fees with a

nonlawyer . . . .” N.C. Rev. R. Prof. Conduct, Rule 5.4(a) (2015). Although the Rules

of Professional Conduct are not criminal statutes, Livingston’s conduct in agreeing to

share fees with CCDN met each of the required elements for criminal attempt: “(1)

the intent to commit the substantive offense, and (2) an overt act done for that

purpose which goes beyond mere preparation, but (3) falls short of the completed

offense.” State v. Coble, 351 N.C. 448, 449, 527 S.E.2d 45, 46 (2000) (citation omitted)

(quoting State v. Miller, 344 N.C. 658, 667, 477 S.E.2d 915, 921 (1996)). Here, the

findings of fact show that Livingston (1) intended to improperly share fees with

CCDN, a nonlawyer entity, and entered into a contract for that purpose; (2)

performed his services under the contract; and (3) expected to be paid, but was not.

These findings, which support Conclusion 2(a), are also supported by the evidence.

        First, Livingston has offered no evidence that contradicts the findings other

than his declaration that it was not his intent to share fees with a nonlawyer.4

        4 Indeed, the following facts were previously before this Court and set out in this Court’s
opinion in Lucas as follows:

                                              - 12 -
                               N.C. STATE BAR V. LIVINGSTON

                                      Opinion of the Court

Second, Livingston testified he entered into the agreement, the agreement itself was

entered into evidence at trial, and one of Livingston’s own witnesses testified the only

reason fee sharing never happened was because CCDN failed to make the payments.

Accordingly, the findings of fact are supported by the evidence, which in turn support

the DHC’s conclusion that Livingston entered into an agreement which contemplated

the sharing of legal fees with a nonlawyer entity in violation of Rule 5.4(a).

              2. Conclusion 2(b)—Assisting Another in the Unauthorized Practice of
                 Law

       The version of Rule 5.5(d) in effect at the time of Livingston’s conduct provided

that “[a] lawyer shall not assist another person in the unauthorized practice of law.”

N.C. R. Prof. Cond., Rule 5.5(d) (2016).5 The unauthorized practice of law in North

Carolina is defined by statute, see N.C. Gen. Stat. § 84-2.1 (2015), which prohibits the

practice of law by corporations:

              It shall be unlawful for any corporation to practice law . . .
              or hold itself out to the public or advertise as being entitled

              Livingston had previously entered into an “Associate Attorney
              Agreement” (the agreement) with Credit Collections Defense Network
              (aka CCDN and CCDN, LLC), which described itself in the agreement
              as “a national network of consumer protection attorneys, paralegals
              and administrative support personnel (‘CCDN, LLC’)[.]” Pursuant to
              the agreement, Livingston was to represent clients referred by CCDN,
              LLC. He would provide legal services to those clients and they would
              pay a fee to CCDN, LLC. Livingston would be paid by CCDN, LLC,
              pursuant to a fee schedule included in the agreement.

2011 WL 721289, at *1 (emphasis added).

       5The rule in effect at the time of Livingston’s conduct was Rule 5.5(d), but this rule was
amended in 2017 and is now Rule 5.5(f).

                                             - 13 -
                           N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

            to practice law; and no corporation shall organize
            corporations, or draw agreements, or other legal
            documents, or draw wills, or practice law, or give legal
            advice, or hold itself out in any manner as being entitled to
            do any of the foregoing acts, by or through any person
            orally or by advertisement, letter or circular.

N.C. Gen. Stat. § 84-5(a) (2015). Under North Carolina law, a business corporation

may not provide legal services or the services of lawyers even if those services are

performed by licensed North Carolina attorneys. See Gardner v. The N.C. State Bar,

316 N.C. 285, 294, 341 S.E.2d 517, 523 (1986).

      Here, Livingston concedes that CCDN was engaged in the unauthorized

practice of law. Livingston claims to have learned that CCDN was so engaged in

April 2008, after CCDN customers referred to him told him what CCDN was doing.

Livingston also concedes that he did not end his relationship with CCDN for another

six weeks. Thus, even if Livingston did not become aware that CCDN was engaged

in the unauthorized practice of law before April 2008, by his own concession, his

failure to immediately terminate his relationship with CCDN when he did become

aware of its unauthorized practice of law enabled CCDN to continue to promote

having a North Carolina attorney (Livingston) available for its customers.

Livingston’s challenges to Conclusion 2(b) and the supporting findings of fact are

unavailing and are overruled.

      B. Conclusion 2(c)

                                        - 14 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

      Livingston challenges the DHC’s Conclusion 2(c) as unsupported by the

findings of fact, specifically Findings of Fact Nos. 13–29, as he contends those findings

are not supported by competent evidence. Conclusion 2(c) states that “[b]y filing civil

actions against defendants in a court that he knew lacked the ability to obtain

jurisdiction over the defendants and by failing to join necessary defendants in those

actions, Livingston engaged in conduct prejudicial to the administration of justice in

violation of Rule 8.4(d)[.]” Findings of Fact Nos. 13–29 are as follows:

             13. Later in 2008, after undertaking representation of
             several clients that CCDN referred to Livingston,
             Livingston concluded that CCDN practices were frivolous
             and fraudulent and began representing CCDN customers
             against CCDN.

             14. In September 2008, Livingston filed three complaints
             against CCDN on behalf of clients CCDN had referred to
             Livingston.

             15. Livingston filed these three complaints in Bladen
             County District Court (hereinafter collectively referred to
             as “the Bladen County actions”).

             16. The Bladen County actions were captioned as follows:
             (i) Hunt v. R.K. Lock & Associates, an Illinois general
             partnership d/b/a Credit Collections Defense Network or
             CCDN; Robert K. Lock Esp.; Colleen Lock; Philip M.
             Manger Esq.; Tracy Webster; and Lawgistix, LLC, a
             Florida limited liability company, Defendants, Bladen
             County District Court file no. 08 CVD 883; (ii) Lucas v. R.K.
             Lock & Associates, an Illinois general partnership d/b/a
             Credit Collections Defense Network or CCDN; Robert K.
             Lock Esq.; Colleen Lock; Philip M. Manger Esq.; and Mark
             A. Cella, Bladen County District Court file no. 08 CVD 884,
             (iii) Harrison v. Aegis Corporation, a Missouri corporation;

                                          - 15 -
              N.C. STATE BAR V. LIVINGSTON

                    Opinion of the Court

Debt Jurisprudence, Inc., a Missouri corporation; R.K.
Lock & Associates, an Illinois general partnership d/b/a
Credit Collections Defense Network or CCDN; Robert K.
Lock Esq.; Colleen Lock; Philip M. Manger Esq.; David
Kramer; Marcia M. Murphy; and Tracy Webster,
Defendants, Bladen County District Court file no. 08 CVD
885.

17. Livingston alleged on behalf of his clients in the
Bladen County action that the defendants’ actions
constituted unfair and deceptive trade practices, fraud,
breach of contract, gross and willful legal malpractice,
violations of the “North Carolina Racketeer and Corrupt
Organizations Act”, violations of the “Credit Repair
Organizations Act”, and violations of the Racketeer
Influenced and Corrupt Organizations Act.”

18. Livingston further alleged that “CCDN sometimes
refers to itself as ‘CCDN LLC’ but no limited liability
company by that name can be found meaning that CCDN
is a general partnership.”

19. None of the other defendants Livingston named in the
Bladen County actions had personal minimum contacts
with the State of North Carolina.

20. Those defendants only had contact with North
Carolina by and through their employment by or
management of CCDN, LLC.

21. The North Carolina General Court of Justice Bladen
County, District Court Division, did not have jurisdiction
over the defendants in the Bladen County actions.

22. CCDN, LLC was a necessary party to each of the
Bladen County actions.

23. In December 2008, after Livingston filed the
complaints in the Bladen County actions, Livingston was
informed by counsel for CCDN that CCDN was a limited

                           - 16 -
                          N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

            liability company existing under the laws of the State of
            Nevada.

            24. After being so informed, Livingston confirmed that
            CCDN was a limited liability company existing under the
            laws of the State of Nevada.

            25. Livingston did not amend the pleadings he filed in the
            Bladen County actions to name CCDN, LLC as a defendant
            in such actions.

            26. At the time that he filed the complaints in the Bladen
            County actions, Livingston knew or should have known
            that Bladen County District Court did not have jurisdiction
            over the named defendants.

            27. In May 2009, the Bladen County District Court
            concluded that CCDN, LLC was a necessary party to the
            Bladen County actions.

            28. The Bladen County District Court further concluded
            that the defendants in the Bladen County actions did not
            have minimum contacts with North Carolina.

            29. The Bladen County District Court dismissed the
            Bladen County actions without prejudice in part on the
            aforementioned conclusions.

      Livingston makes various contentions to support his argument that the above

findings are unsupported by evidence, purely frivolous, and require “vacating”

Conclusion 2(c). However, the main thrust of his argument seems to be that he

disagrees with the DHC’s finding that he “knew or should have known that Bladen

County District Court did not have jurisdiction over the named defendants.” He also

makes the convoluted argument that if the Bladen County District Court dismissed

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                              N.C. STATE BAR V. LIVINGSTON

                                     Opinion of the Court

Lawsuits 1, 2, and 3 for lack of jurisdiction, “it lacked power to decide any other issue,

rendering Finding [of Fact No.] 27 . . . unproven.” This argument is without merit.

       Rule 8.4(d) prohibits “engag[ing] in conduct prejudicial to the administration

of justice.” N.C. Rev. R. Prof. Conduct, Rule 8.4(d) (2015).

                [A] showing of actual prejudice to the administration of
                justice is not required to establish a violation of Paragraph
                (d). Rather, it must only be shown that the act had a
                reasonable likelihood of prejudicing the administration of
                justice. . . . The phrase “conduct prejudicial to the
                administration of justice” in paragraph (d) should be read
                broadly to proscribe a wide variety of conduct, including
                conduct that occurs outside the scope of judicial
                proceedings.

Sutton, ___ N.C. App. at ___, 791 S.E.2d at 897 (quoting N.C. Rev. R. Prof. Conduct

8.4, cmt. 4).

       In the instant case, there is no dispute that Livingston filed Lawsuits 1, 2, and

3 on behalf of three customers of CCDN in Bladen County District Court, naming

“R.K. Lock & Associates, an Illinois general partnership doing business as Credit

Collections Defense Network or CCDN” as a defendant in each lawsuit.                 The

individuals named as defendants were identified as employees of R.K. Lock &

Associates, and before filing his lawsuit, Livingston failed to determine that Lock &

Associates was not doing business as CCDN. Rather, CCDN was a Nevada limited

liability company, CCDN, LLC. See Lucas, 2011 WL 721289, at *6, *6 n.3 (stating

that “Plaintiffs failed to name a necessary party, being, CCDN, LLC[,]” but

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                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

acknowledging that “we make no determination on the merits of this issue, as it is not

properly before us” (emphasis added)).

      Thus, through reasonable diligence, Livingston knew or should have known

that Lock & Associates was not CCDN. But, even after learning that CCDN was

separate from Lock & Associates, Livingston proceeded with his flawed complaints

rather than amending them or taking a voluntary dismissal and filing new

complaints, properly naming the parties. Then, after the trial court dismissed the

complaints without prejudice, Livingston proceeded to appeal rather than file new

complaints with accurate information. The appeal was dismissed because Livingston

failed to give proper notice of appeal, id. at *6, and as a result, his clients were

deprived of any opportunity to pursue whatever potentially legitimate claims they

had against the proper parties. Thus, Livingston’s failure to amend the pleadings—

his failure to take corrective action on behalf of his clients—constituted conduct

prejudicial to the administration of justice. The findings of fact are supported by the

evidence, and those findings in turn support Conclusion 2(c).

      C. Conclusion 2(d)

      Livingston challenges the DHC’s Conclusion 2(d) as unsupported by the

findings of fact, specifically Findings of Fact Nos. 30–35, as he contends those findings

are not supported by competent evidence. Conclusion 2(d) states that “[b]y filing a

motion for class certification without providing adequate notice for and to the class

                                          - 19 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

members, Livingston engaged in conduct prejudicial to the administration of justice

in violation of Rule 8.4(d)[.]” Findings of Fact Nos. 30–35 state as follows:

             30. On 7 January 2009, Livingston filed a verified
             complaint in Bladen County Superior Court against CCDN
             and others on behalf of Sharon Southwood, an individual
             client referred to him by CCDN, and a class of similarly
             situated plaintiffs (hereinafter referred to as “the
             Southwood action”).

             31. The Southwood action was captioned: Sharon
             Southwood, for herself and all others similarly situated,
             Plaintiffs, v. The Credit Card Solution, a Texas general
             partnership or sole proprietorship; CCDN LLC, a Nevada
             limited liability company; R.K. Lock & Associates, an
             Illinois general partnership dba Credit Collections Defense
             Network or CCDN; Robert K. Lock, Jr., Esq.; Colleen Lock;
             Philip M. Manger, Esq.; and Robert M. “Bob” Lindsey,
             Defendants, Bladen County Superior Court file no. 09 CVS
             19.

             32. Livingston filed a Motion for Class Certification in the
             Southwood action.

             33. In order to certify a class in the Southwood action,
             Livingston was required to provide adequate notice to the
             class members.

             34. In the Motion for Class Certification, Livingston
             stated that he did not intend to satisfy the adequate notice
             requirement, asserting that the notice requirement “will be
             Defendants’ job, because they are the ones who have
             records of all participants in their programs.”

             35. No class was ever certified in the Southwood action.

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                             N.C. STATE BAR V. LIVINGSTON

                                    Opinion of the Court

       Livingston contends that he was under no duty to provide adequate notice to

class members, where he “had no contact information for the 2,219 families . . . in the

putative class besides his individual clients.”

       While Rule 23 of the North Carolina Rules of Civil Procedure is silent on the

issue, “fundamental fairness and due process dictates [sic] that adequate notice of the

class action be given to [the members of the class].” Crow v. Citicorp Acceptance Co.,

319 N.C. 274, 283, 354 S.E.2d 459, 466 (1987) (citation omitted). In a later decision,

the North Carolina Supreme Court stated, “[w]e affirm our general agreement with

‘the principle . . . that the representative plaintiff should bear all costs relating to the

sending of notice because it is he who seeks to maintain the suit as a class action.’ ”

Frost v. Mazda Motor of Am., Inc., 353 N.C. 188, 198, 540 S.E.2d 324, 331 (2000)

(alteration in original) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,

359, 57 L. Ed. 2d 253, 269 (1978)).

       In the instant case, Livingston filed a motion for class certification

concurrently with filing Lawsuit 4, stating as follows:

              Element 6 [notice to class members] will be Defendants’
              job, because they are the ones who have records of all
              participants in their programs, and they can pay the costs
              of notification, since they have done this wrong and should
              be the only ones paying for anything to fix it.

Livingston acknowledges that the class was never certified. And, pursuant to Crow,

Livingston’s clients—the plaintiffs in Lawsuit 4—were required to give notice to the

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                             N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

members of the class as soon as possible after filing suit. See 319 N.C. at 283, 354

S.E.2d at 466. Therefore, failing to take the necessary steps to properly pursue a

class action on behalf of his clients and the proposed class jeopardized any chance of

recovery. Thus, Livingston’s position harmed his clients and was prejudicial to the

administration of justice.

      With regard to Livingston’s claim that copies of the complaint filed in Lawsuit

4 and the motion for class certification were not properly introduced into evidence,

this argument also fails. At the DHC hearing, Livingston did not object to the copies

as hearsay, he objected to them based on lack of authentication. And, in any event,

as the statement of a party opponent, Livingston’s writings were admissible as an

exception to the rule against hearsay. N.C. Gen. Stat. § 8C-1, Rule 801(d) (2015). As

such, Findings of Fact Nos. 30–35 are supported by the evidence, and the findings in

turn support Conclusion 2(d).

      D. Conclusion 2(e)

      Livingston challenges the DHC’s Conclusion 2(e) as unsupported by the

findings of fact, specifically Findings of Fact Nos. 43–50, as he contends those findings

are not supported by competent evidence. Conclusion 2(e) states that “[b]y falsely

asserting to Arnold that he represented a national class of plaintiffs in a federal

lawsuit, Livingston knowingly made a false statement of material fact to a third

person in violation of Rule 4.1[.]” Findings of Fact Nos. 43–50 are as follows:

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              N.C. STATE BAR V. LIVINGSTON

                     Opinion of the Court

43. On or about 11 November 2009, Livingston filed a
“RICO Class Complaint” (hereinafter “the federal action”)
against CCDN and other defendants in the U.S. District
Court for the Eastern District of North Carolina, case no.
7:09-cv-00183.

44. On or about 17 November 2009, Livingston telephoned
and left two voicemail messages for Andrew Arnold
(hereinafter “Arnold”), an attorney representing CCDN in
South Carolina litigation.

45. Livingston stated in the voicemail messages that he
represented “a national class” in a federal action against
CCDN, asserted that Arnold had participated in money
laundering by accepting legal fees from CCDN, and
demanded that Arnold forfeit to Livingston all the attorney
fees he had received from CCDN.

46. Livingston further stated that, if Arnold failed to turn
over funds to Livingston as demanded, Livingston would
join Arnold as a defendant in the federal action.

47. The fact that Livingston represented “a national class”
was material to Livingston’s goal of getting Arnold to
believe that the litigation at issue was substantial. By
establishing that the litigation at issue was substantial,
Livingston could further his ultimate goal of obtaining
money from Arnold.

48. At the time Livingston telephoned Arnold, Livingston
did not represent a national class in the federal action
against CCDN.

49. Livingston knew that his statements to Arnold about
representing a national class were false.

50. At the time Livingston telephoned Arnold, Livingston
had no reasonable basis for asserting that he had a valid
cause of action against Arnold.

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                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

      Livingston contends that these findings are unproven without recordings or

transcripts of the voicemails he left for Arnold, and that because Arnold already knew

that Livingston did not represent a “national class,” the DHC cannot prove that he

had “deceptive intent.”

      Intent is a question that may be proved by the circumstances even in the face

of denial by a defendant. See State v. Octetree, 173 N.C. App. 228, 230, 617 S.E.2d
356, 358 (2005). In the instant case, Arnold, who represented CCDN, LLC in 2009 in

defense of civil litigation that had been filed against it in South Carolina, testified as

follows regarding Livingston’s statements that he represented a national class:

             Q. In connection with your representation of CCDN, LLC,
             were you contacted by the defendant in this matter, Mr.
             Christopher Livingston?

             A. I was.

             ....

             Q. And what did he say?

             ....

             A. That he represented some individuals who had been
             defrauded by CCDN; that it was his belief that anyone who
             received monies from CCDN, and I -- and since I was
             representing them, that I would have been paid a fee from
             CCDN, that that made me liable to his clients for any fees
             that I would have been paid because those monies
             represented the defrauded proceeds, or the proceeds from
             the defraud [sic] of CCDN. So that was in general what I
             recall about his -- his communication.

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                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

             ....

             A. . . . I think he may have mentioned . . . that at least one
             of the causes of -- causes of action was a RICO cause of
             action . . . and that -- I do believe he had indicated that he
             was . . . that the representative claimants were part of a
             larger group, and I believe he may have mentioned a class
             action associated with that -- that representation.

             ....

             Q. Okay. At the time that Mr. Livingston represented to
             you that he represented a class, did you have any
             information about, or understanding about, whether or not
             that was true?

             A. No; this was the first -- his phone call to me was the first
             I had heard of any such action.

(Emphasis added).

      As stated previously, Livingston has acknowledged that the class was never

certified. Thus, by stating that he represented a “national class” of plaintiffs to

Arnold, which fact is supported by the evidence, he knowingly made a false statement

of material fact to Arnold.    Thus, Findings of Fact 43–50 are supported by the

evidence and in turn support the DHC’s Conclusion 2(d).

      E. Conclusion 2(f)

      Livingston challenges Conclusion 2(f) as unsupported by the findings of fact,

specifically Findings of Fact Nos. 40–43 and 50–59, as he contends those findings are

not supported by competent evidence. Conclusion 2(f) states as follows:

             By threatening to join and joining the defendant lawyers in

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                          N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

            the federal action when there was no basis in law or fact to
            do so, Livingston used means that had no substantial
            purpose other than to embarrass or burden a third person
            in violation of Rule 4.4(a), brought claims for which there
            was no basis in law or fact in violation of Rule 3.1 and
            engaged in conduct prejudicial to the administration of
            justice in violation of Rule 8.4(d)[.]

Findings of Fact Nos. 40–43 and 50–59 are as follows:

            40. Emmanuel and R. Dunn did not participate in the
            representation of CCDN.

            41. Livingston cited Emanuel & Dunn’s representation of
            CCDN as the basis for the litigation he threatened against
            them.

            42. At the time Livingston wrote the letter to Bettis and
            S. Dunn, Livingston had no reasonable basis for asserting
            that he had a valid cause of action against Bettis and S.
            Dunn or their firm.

            43. On or about 11 November 2009, Livingston filed a
            “RICO Class Complaint” (hereinafter “the federal action”)
            against CCDN and other defendants in the U.S. District
            Court for the Eastern District of North Carolina, case no.
            7:09-cv-00183.

            ....

            50. At the time Livingston telephoned Arnold, Livingston
            had no reasonable basis for asserting that he had a valid
            cause of action against Arnold.

            51. On or about 23 November 2009, Livingston filed an
            amended complaint in the federal action.

            52. Livingston included the following persons as named
            defendants in the amended complaint for the federal
            action: Bettis, S. Dunn, R. Dunn and Arnold (hereinafter

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                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

            “defendant lawyers”).

            53. Livingston named the defendant lawyers in their
            individual capacities.

            54. Livingston also named the law firm of Emanuel &
            Dunn, its four managing partners, and Arnold’s firm, The
            Law Offices of W. Andrew Arnold, P.C., as defendants in
            the federal action.

            55. In the amended complaint Livingston filed in the
            federal action, Livingston alleged that CCDN and other
            defendants obtained the plaintiffs’ property by wire, mail,
            and bank fraud and engaged in money laundering and
            racketeering, causing $1,044,000,000.00 in damages.

            56. Livingston also alleged that the defendant lawyers
            and their law firms had knowledge of the other defendants’
            fraudulent conduct and participated in fraud by accepting
            legal fees from the other defendants and representing the
            other defendants in litigation.

            57. Livingston did not have a valid basis in law or fact to
            join the defendant lawyers and their law firms in the
            federal action.

            58. Livingston’s act of naming the defendant lawyers and
            law firms in the amended federal complaint had no
            substantial purpose other than to embarrass or burden
            those defendants.

            59. The federal court dismissed the defendant lawyers
            and their law firms from the federal action.

      Rule 4.4(a) states that “[i]n representing a client, a lawyer shall not use means

that have no substantial purpose other than to embarrass, delay, or burden a third

person, or use methods of obtaining evidence that violate the legal rights of such a

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                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

person.” N.C. Rev. R. Prof. Conduct, Rule 4.4(a) (2015). Rule 3.1 states that “[a]

lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein,

unless there is a basis in law and fact for doing so that is not frivolous . . . .” N.C.

Rev. R. Prof. Conduct, Rule 3.1 (2015).

      In the instant case, the federal court dismissed the claims brought by

Livingston in Lawsuit 5 against the attorneys of Emmanuel & Dunn as baseless.

Taylor, 976 F. Supp. 2d at 736 (“Under Plaintiffs’ logic, any attorney daring to serve

as defense counsel to a defendant named in a RICO action automatically could be

named as a RICO defendant himself. This, of course, is untenable. Concomitantly,

under these facts, accepting money in exchange for providing these traditional legal

services fails to go to the heart of CCDN’s alleged debt elimination and credit

restoration scheme.” (footnote omitted)). The federal court repeatedly observes that

Livingston presented “conclusory allegations” on behalf of his clients, but did not

present facts to support those claims. See id. at 742 (“[A]gain, this court cannot find

sufficient Plaintiffs’ wholly conclusory allegations . . . .”). Accordingly, the DHC was

correct in concluding that Livingston violated Rules 3.1, 4.4(a), and 8.4(d), where he

threatened to and did file a lawsuit against opposing counsel and members of

opposing counsel’s law firm without a basis in law or fact.

      F. Conclusion 2(g)

                                          - 28 -
                           N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

      Livingston challenges Conclusion 2(g) as unsupported by the findings of fact,

specifically Findings of Fact Nos. 60–72, as he contends those findings are not

supported by competent evidence. Conclusion 2(g) states as follows:

             By filing the Cullen complaint, Livingston brought claims
             for which there was no basis in law or fact in violation of
             Rule 3.1, engaged in conduct prejudicial to the
             administration of justice in violation of Rule 8.4(d) and
             used means that had no substantial purpose other than to
             embarrass a third person in violation of Rule 4.4(a)[.]

Findings of Fact Nos. 60–72 are as follows:

             60. On or about 7 January 2011, Livingston filed a
             complaint on behalf of former CCDN clients Kimberly
             Cullen (“Cullen”) and William Harrison, Sr. (“Harrison”) in
             Columbus County Superior Court, case no. 11 CVS 20
             (hereafter “Cullen complaint”).

             61. Livingston named Emanuel & Dunn, Bettis, S. Dunn,
             Emanuel, and R. Dunn as defendants in the case.

             62. Cullen was not a resident of North Carolina and had
             not had any contact with the defendants named in the
             Cullen complaint.

             63. Harrison had not had any contact with Emmanuel
             and Dunn, S. Dunn, Emanuel or R. Dunn.

             64. Harrison’s only contact with Bettis was in Bettis’s
             capacity as attorney for CCDN.

             65. In a 7 January 2011 email to opposing counsel, Philip
             Collins, in reference to the Cullen complaint, Livingston
             made the following statements: (i) “As promised, our state
             level campaign kicked off yesterday with the first of many
             Superior Court actions seeking justice for CCDN victims,
             carefully constructed so as not to be removable to federal

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                          N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

            court.”; (ii) [regarding service] “I don’t think sending
            swarms of deputies or piles of certified mail will do anybody
            any good.”; and (iii) “For the rest of 2011, you can expect a
            new Cullen-type Superior Court case every month, each an
            improvement over its predecessors. Each will also carry its
            own set of written discovery, followed by depositions of all
            [Emmanuel & Dunn] personnel with relevant knowledge.”

            66. The federal action was pending when Livingston filed
            the Cullen complaint.

            67. The underlying facts in the Cullen complaint were
            substantially the same as the underlying facts set forth in
            the federal action.

            68. Harrison was a named plaintiff in the federal action
            and was the only named plaintiff in the Cullen complaint
            with any ties to North Carolina.

            69. The Cullen complaint failed to establish (i) any tie
            between plaintiff Kimberley Cullen and North Carolina,
            and (ii) harm to Cullen caused by actions of the lawyer-
            defendants.

            70. Livingston alleged in the Cullen complaint that Bettis
            engaged in illegal conduct during his representation of a
            client in Bladen County District Court. These allegations
            that Livingston made against Bettis were without basis in
            law or fact.

            71. On 22 February 2011, the court dismissed the
            plaintiff’s claims with prejudice.

            72. The North Carolina Court of Appeals affirmed the
            lower court’s dismissal of the Cullen Complaint.

      Findings of Fact Nos. 60–72 are supported by the evidence, including the

deposition testimony of attorney Lee Bettis, an associate with Emanuel & Dunn who

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                           N.C. STATE BAR V. LIVINGSTON

                                  Opinion of the Court

represented the defendants as well as CCDN, LLC during the Lucas proceedings, see

Cullen, 2012 WL 3573696, at *2, and attorney Philip Collins, who represented Bettis

and others in the federal lawsuit filed by Livingston. Taylor, 976 F. Supp. 2d at 727.

      First, with regard to Livingston’s allegation, among others, that Bettis engaged

in “illegal conduct during his representation of a client,” specifically that Bettis

“extend[ed] the obviously unethical offer to help Livingston draft valid

complaints against Mr. Bettis’s own clients,” Bettis testified (and clarified) as

follows:

             Q. Didn’t you offer to help me draft valid complaints
             against your own clients?

             A. What I did was I offered to help you straighten out the
             procedural issues that were so prevalent in your cases that
             we never would have gotten to the merits which would have
             required me to drive from here down to Bladen County and
             waste my client’s time, everybody’s time and money. So
             what I did was I said Chris and this is when you threatened
             to -- wanted me to go outside and fight with you. I said,
             “Chris, let’s just -- you’ve sued the wrong people, you’ve
             sued the wrong corporations and it’s real easy to fix it,” and
             I told you let’s fix it so we can get down to the merits and
             stop wasting my time, my client’s time and the Court’s time
             and you didn’t like that.

      In the Cullen complaint, Livingston attempted to argue that Bettis’s actions—

described above—constituted “two or more offenses of obtaining property by false

pretenses in violation of NCGS § 14-100(a).” Cullen, 2012 WL 3573696, at **9–10

                                         - 31 -
                             N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

(affirming the order granting the defendants’ motion for judgment on the pleadings

with regard to the Cullen complaint). As this Court summarized,

             [t]he majority of plaintiffs’ claims [brought by Livingston]
             are based entirely on the conduct of Mr. Bettis while
             representing the Lucas defendants and CCDN, LLC in the
             Lucas litigation. The complaint alleges that Mr. Bettis
             acted with an improper purpose, made knowingly
             fraudulent arguments, and sought to delay any recovery for
             the plaintiffs until CCDN, LLC could go out of business,
             rendering any recovery against it impossible.

Id. at *3. Thus, as this Court’s opinion affirming the trial court’s grant of the

defendants’ motion for judgment on the pleadings was based on “the [in]sufficiency of

the allegations” in the Cullen complaint, see id. at *5, the DHC’s findings of fact are

supported by the evidence.

      Second, with regard to the federal lawsuit, Collins, the attorney who

represented Bettis and others, testified that the federal court disposed of the matters

on the defendants’ motion for judgment on the pleadings as follows: “Dismissed all

the claims with the exception of the conversion and constructive trust,” see Taylor,
976 F. Supp. 2d at 745, 755, and later dismissed those claims as well. Collins also

testified that the factual allegations in the Cullen case, Lawsuit 4, were similar to

those contained in the federal lawsuit, Taylor v. Bettis, Lawsuit 5. Finally, Finding

of Fact No. 65, see infra Section G, is taken verbatim from Plaintiff’s Exhibit 21.

Accordingly, it is also supported by the evidence, and this finding in turn supports

                                          - 32 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

the DHC’s ultimate conclusion Livingston violated the Rules of Professional Conduct

by filing the Cullen complaint in Bladen County Superior Court.

      G. Conclusion 2(h)

      Livingston challenges the DHC’s Conclusion 2(h) as unsupported by Finding

of Fact Nos. 65, as he contends that finding is not supported by competent evidence.

Conclusion 2(h) states that “[b]y threatening to file monthly additional lawsuits based

on similar allegations against Bettis and Emmanuel & Dunn and threatening to

engage in separate discovery for each lawsuit, Livingston used means that had no

substantial purpose other than to embarrass or burden a third person in violation of

Rule 4.4(a).” Finding of Fact No. 65 states, in relevant part, as follows:

             65. In a 7 January 2011 email to opposing counsel, Philip
             Collins, . . . Livingston made the following statements: . . .
             “For the rest of 2011, you can expect a new Cullen-type
             Superior Court case every month, each an improvement
             over its predecessors. Each will also carry its own set of
             written discovery, followed by depositions of all
             [Emmanuel & Dunn] personnel with relevant knowledge.”

(Emphasis added).

      Comment 2 to Rule 4.4 of the Rules of Professional Conduct states as follows:

             Threats, bullying, harassment, insults, slurs, personal
             attacks, unfounded personal accusations generally serve
             no substantial purpose other than to embarrass, delay, or
             burden others and violate this rule. Conduct that serves no
             substantial purpose other than to intimidate, humiliate, or
             embarrass lawyers, litigants, witnesses, or other persons
             with whom a lawyer interacts while representing a client
             also violates this rule.

                                          - 33 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

N.C. Rev. R. Prof. Conduct, Rule 4.4, cmt. 2.

      As stated supra in Section F, this finding quotes verbatim the text of the email

Livingston sent to Collins on 7 January 2011. Livingston does not dispute that he

sent the email or made the threat that “[f]or the rest of 2011, you can expect a new

Cullen-type Superior Court case every month . . . .” The email also includes other

vaguely threatening statements such as, “it is not our goal to personally bankrupt the

lawyers at E&D [(Emanuel & Dunn)] if recovery can be had some other way” and “I

really, really suggest, not for the first time, that we all be content with $3 million for

the class of CCDN victims . . . . This will take care of fall fees and costs, too, and I

will not move for sanctions, and your individual clients’ assets will be safe.”

Accordingly, Finding of Fact No. 65 is supported by the evidence, which finding in

turn supports the DHC’s conclusion that Livingston violated Rule 4.4(a) by

threatening to file lawsuits monthly where his only purpose in doing so was to coerce

a settlement.

                                           III

      Livingston also argues the DHC ordered excessive discipline where no evidence

justified his suspension, specifically challenging disciplinary Findings of Fact Nos. 1–

10 as unsupported by the evidence, and the DHC’s Conclusions of Law Nos. 1 and 4–

10 as failing the whole record test. We disagree.

                                          - 34 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

      This Court reviews additional findings of fact and conclusions of law with

respect to the disciplinary phase under the whole record test. See Talford, 356 N.C.

at 634, 576 S.E.2d at 311 (“[T]he whole-record test must be applied separately to each

of the two phases [(adjudicatory and dispositional)].”).

             “Suspension [of an attorney’s license],” is . . . a form of
             punishment imposed for misconduct that either results in
             or threatens significant harm to “a client, the
             administration of justice, the profession or members of the
             public.” Thus, when imposed, findings must be made
             explaining how the misconduct caused significant harm or
             threatened significant harm, and why the suspension of
             the offending attorney’s license is necessary in order to
             protect the public.

Id. at 637, 576 S.E.2d at 312–13 (first alteration in original) (internal citation

omitted).

      The trial court made the following additional findings of fact regarding

discipline which defendant challenges on appeal:

             1. R. Dunn did not participate in his firm’s representation
             of CCDN in defense of the claims [Livingston] brought
             against CCDN on behalf of his clients.

             2. Pat Leigh Pittman was a transactional lawyer who did
             not participate in her firm’s representation of the claims
             [Livingston] brought against CCDN on behalf of his clients.

             3. Joanne K. Partin was a transactional lawyer who did
             not participate in her firm’s representation of the claims
             [Livingston] brought against CCDN on behalf of his clients.

             4. Robert L. Emmanuel was an eighty year old, semi-
             retired lawyer who did not participate in his firm’s

                                          - 35 -
                           N.C. STATE BAR V. LIVINGSTON

                                 Opinion of the Court

             representation of CCDN in defense of the claims
             [Livingston] brought against CCDN on behalf of his clients.

             5. When R. Dunn was served with the complaint in the
             federal action, media was present and media reported
             about the lawsuit [Livingston] filed.

             6. A long-time client of Emmanuel & Dunn questioned
             the ability of Emmanuel & Dunn to continue in its
             representation of this client because the client had become
             aware of the allegations [Livingston] made against
             Emmanuel and Dunn in the federal action.

             7. Emmanuel & Dunn had to obtain legal representation
             to defend against the lawsuits [Livingston] filed against
             Emmanuel & Dunn and its lawyers.

             8. Arnold had to obtain legal representation to defend
             him[self] against the allegations [Livingston] made against
             him and his firm in the federal action.

             9. It was costly to defend against the frivolous actions
             [Livingston] brought against the defendant lawyers and
             their law firms.

             10. On 9 August 2011, [Livingston] was sanctioned by the
             United States District Court for the Eastern District of
             North Carolina, Southern Division for making baseless
             allegations that lawyer defendants in Caraballo v. Bagbeh
             had engaged in racketeering, wire fraud, money laundering
             and receipt of illegally obtained funds.

      A. Five-Year Suspension

      The DHC’s additional findings of fact are supported by the evidence presented

in Phase I of the trial as well as by additional evidence presented in Phase II. With

                                        - 36 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

regard to “significant harm” caused by Livingston’s actions, Raymond Dunn of

Emanuel & Dunn testified as follows:

              A     The TV news coverage was allegedly Mr. Livingston
              saying that our firm were fraudsters and money
              launderers, and the person who was stating that
              represented himself to be Mr. Livingston on the TV.

              ....

              A     We’re a small firm. We’ve been in existence . . . since
              1952. We don’t advertise. The only way we get business is
              by word of mouth and our reputation, and when there’s
              media coverage alleging fraudulent conduct, it impacts a
              small town lawyer. We don’t advertise. It’s a significant
              impact on your business and on your reputation, which is
              the only way that we get business.

Collins testified about Livingston’s “scurrilous allegations” and testified to the

chilling effect on the profession caused by Livingston’s filing such lawsuits against

opposing counsel.      He also testified that the defense of the lawsuits cost

approximately $200,000.00. In a federal court order sanctioning Livingston in 2011

for making similar allegations against an opposing counsel, and which was admitted

into Phase II of the hearing without objection by Livingston, the federal court noted

as follows:

              The court must also consider the minimum necessary to
              deter future abuse. This factor is a difficult one, as Mr.
              Livingston sees no error in his ways. Furthermore, the
              sarcastic nature of his comments toward this court
              contained within the filings leads the court to believe that
              sanctions may not deter Mr. Livingston at all.

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                           N.C. STATE BAR V. LIVINGSTON

                                     Opinion of the Court

Caraballo v. Bagbeh, NO. 7:10-CV-122-H, 2012 WL 12914657, at *2 (E.D.N.C. June

14, 2012) (unpublished).

      In its order, the DHC explained its analysis of the disciplinary factors it was

required to consider and which it did consider, including the harm to Livingston’s

clients, the profession, and the administration of justice. Accordingly, imposing a

five-year suspension with an opportunity to petition for a stay after serving two years

active and upon demonstrating compliance with the enumerated conditions was fully

supported by the harm shown. See Talford, 356 N.C. at 637, 576 S.E.2d at 312–13.

      B. Administrative Costs

      The Order of Discipline requires defendant to pay the administrative fees and

costs of the proceeding within thirty days of service of the statement by the Secretary

of the State Bar. Livingston did not object to inclusion of this provision in the order

and argues for the first time on appeal that the administrative fees assessed against

him are “not permitted by law.” However, our General Statutes state that the State

Bar Council “may charge and collect the following fees in amounts determined by the

Council: . . . (5) An administrative fee for any attorney against whom discipline has

been imposed.” N.C. Gen. Stat. § 84-34.2 (2015). Accordingly, Livingston’s argument

is without merit and is overruled.

      In conclusion, where the DHC’s conclusions of law that Livingston violated the

Rules of Professional Conduct are supported by the findings of fact which are

                                            - 38 -
                            N.C. STATE BAR V. LIVINGSTON

                                   Opinion of the Court

supported by the evidence and where defendant’s conduct caused significant harm or

potentially significant harm to the public, the profession, or the administration of

justice, the order disciplining Livingston and imposing a five-year suspension with

an opportunity to petition for a stay after two years is

      AFFIRMED.

      Judges DAVIS and INMAN concur.

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