Court Opinion

ID: 2670486
Source: CourtListenerOpinion
Date Created: 2014-04-18 00:05:23.698925+00
Date Added: 2024-06-11T13:07:37.176191
License: Public Domain

PRESENT:   All the Justices

NEIL KUCHINSKY
                                             OPINION BY
v.     Record No. 131656           JUSTICE ELIZABETH A. McCLANAHAN
                                           April 17, 2014
VIRGINIA STATE BAR, EX REL.
THIRD DISTRICT COMMITTEE

        FROM THE CIRCUIT COURT OF THE CITY OF COLONIAL HEIGHTS
     Charles E. Poston, Chief Judge Designate, Ann Hunter Simpson
               and Walter W. Stout III, Judges Designate

       In this appeal of right from an attorney disciplinary

proceeding before a three-judge panel appointed pursuant to Code

§ 54.1-3935, we consider whether an attorney violated Rules

1.8(a), 3.4(d), and 8.4(a) of the Virginia Rules of Professional

Conduct.

                      I.   Facts and Proceedings

A. Background and Prior Private Admonition

       Neil Kuchinsky is an attorney licensed to practice law in

the Commonwealth.   In March 2008, Dillwyn T. Person (“Person” or

“Dillwyn”) hired Kuchinsky to represent him in connection with

Dillwyn’s claim for a portion of his father’s estate. 1   Person

and Kuchinsky entered into a contingency fee agreement providing

that Kuchinsky would receive one-third of the first $50,000

recovered, or its fair market value, and one-fourth of anything

recovered in excess of that amount, or its fair market value.

1
  Person’s father, Thomas McCoy Person, died intestate. At the
time of his passing, Thomas Person owned several parcels of land
in the City of Emporia and Greensville County, Virginia.
Kuchinsky then filed a partition suit on behalf of Person

against Person’s siblings in the Greensville County Circuit

Court.   After filing the partition suit, Kuchinsky drafted a

quitclaim deed, which was executed by Person.   The quitclaim

deed granted Kuchinsky a 25% interest in any “right, title, and

interest” Person may possess in the six parcels of land that

were the subject matter of the partition suit against Person’s

siblings “as well as 25% of any other real estate interest

[Person] may have that may appear of record.”   The quitclaim

deed was recorded in the Greensville County Circuit Court. 2

     In December 2008, the Virginia State Bar (“VSB”) received a

complaint submitted by Dillwyn’s brother, Clinton Person.      The

complaint alleged that Kuchinsky’s acquisition of a 25%

quitclaim interest in the subject matter of the underlying

partition suit was a “clear conflict of interest.”   In an

agreed-upon disposition, a subcommittee of the Third District

Committee, Section I, of the VSB, found that Kuchinsky violated

Rule 1.8(j) of the Virginia Rules of Professional Conduct by

2
  Sometime after the quitclaim deed was recorded, Person
dismissed Kuchinsky as his counsel. However, later that year,
Person re-employed Kuchinsky and executed a second fee agreement
which stated that Person would pay Kuchinsky’s attorney’s fees
for any unproven bar complaints lodged against Kuchinsky,
reaffirmed that Kuchinsky had earned “all prior fees” (including
the 25% quitclaim interest), and waived potential conflicts of
interest in the renewed representation.

                                 2
acquiring “a proprietary interest in the cause of action or

subject matter of litigation.” 3   As a result, Kuchinsky was

issued a private admonition without terms on February 18, 2010.

B. Events Occurring After the Private Admonition

     On March 24, 2010, an Order was entered in the partition

suit between Person and his siblings appointing a Special

Commissioner for the purpose of conveying the property that was

subject to the suit.   The Special Commissioner then executed a

deed conveying to Kuchinsky a 25% interest and to Person a 75%

interest in two specific parcels of real estate, 211 Wadlow

Street and 640 Clay Street in Emporia, Virginia.    After the deed

was issued, Kuchinsky wrote to the Special Commissioner and

asked him to “[p]lease file ‘our’ deed as soon as possible.” 4

The Special Commissioner’s Deed was then recorded in the

Greensville County Circuit Court.

     After the Special Commissioner’s deed was recorded,

Kuchinsky proceeded to file two actions against Person.     First,

3
  The subcommittee’s determination was based on Kuchinsky’s
acquisition of the quitclaim deed from Person, as well as his
acquisition of a similar interest from another client.
4
  Initially, Kuchinsky had objected to the Special Commissioner’s
deed, stating that he intended his 25% quitclaim interest to be
a “springing attorney’s lien for legal work, not as a
proprietary interest.” Therefore, Kuchinsky argued,
“conveyances and debts set forth by the Commissioner as
transferable or payable to Neil Kuchinsky should be permitted to
be converted to a deed of trust and note” between himself and
Person.
                                   3
Kuchinsky filed a Warrant in Debt against Person in the

Greensville County General District Court.    The court entered a

default judgment against Person for $2,896 in principal, $6,756

in attorney’s fees, and $53 in court costs.   The same day,

Kuchinsky recorded the default judgment as a lien against the

jointly owned properties.   Secondly, Kuchinsky filed a suit

against Person in the Greensville County Circuit Court to

partition the jointly owned properties.

     Before serving Person in the partition suit, Kuchinsky

sought to negotiate an agreement by which Person would pay

Kuchinsky for his interest in the properties.   Prior to the

completion of that transaction, however, Person filed a

complaint with the VSB in September 2010 alleging that Kuchinsky

“took total advantage of my faith and ignorance in him for his

self-interest.”   Subsequently, during the pendency of the VSB’s

investigation into Person’s complaint, Kuchinsky served Person

with notice of the partition suit.   The case was referred to the

Commissioner in Chancery for Greensville County, who conducted a

hearing. 5

5
  Kuchinsky and Person eventually reached an agreement whereby
Person signed a promissory note for fees and costs owed to
Kuchinsky, secured by a deed of trust. Finally, in November
2011, Kuchinsky executed and recorded a deed conveying his 25%
interest in the jointly owned properties back to Person.
Subsequently, pursuant to Kuchinsky’s request, the Greensville
County Circuit Court issued an order of nonsuit in Kuchinsky’s
partition suit against Person.
                                 4
     In June 2012, the VSB filed a Charge of Misconduct against

Kuchinsky pursuant to the Rules of the Virginia Supreme Court,

Part 6, § IV, ¶ 13-16(A).   Specifically, the VSB alleged that

Kuchinsky violated Rules 1.8(a), 3.4(d), and 8.4(a) 6 through his

conduct towards Person after the issuance of the prior

6
  In relevant part, the rules Kuchinsky was charged with
violating, all of which appear in Part 6, § II of the Rules of
Court, read as follows:

     Rule   1.8   –    Conflict   of  Interest:   Prohibited
     Transactions
     (a) A lawyer shall not enter into a business
     transaction with a client or knowingly acquire an
     ownership, possessory, security, or other pecuniary
     interest adverse to a client unless:
          (1) the transaction and terms on which the lawyer
          acquires the interest are fair and reasonable to
          the   client    and   are  fully   disclosed   and
          transmitted in writing to the client in a manner
          which can be reasonably understood by the client;
          (2) the client is given a reasonable opportunity
          to seek the advice of independent counsel in the
          transaction; and
          (3) the client consents in writing thereto.

     Rule 3.4 – Fairness to Opposing Party and Counsel
     A lawyer shall not:
                             . . . .
     (d) Knowingly disobey or advise a client to disregard
     a standing rule or a ruling of a tribunal made in the
     course of a proceeding, but the lawyer may take steps,
     in good faith, to test the validity of such rule or
     ruling.

     Rule 8.4 – Misconduct
     It is professional misconduct for a lawyer to:
     (a) violate or attempt to violate the Rules of
     Professional Conduct, knowingly assist or induce
     another to do so, or do so through the acts of
     another.

                                 5
admonition.   After referral to the Third District Committee,

which conducted a hearing, the Committee found, by clear and

convincing evidence, that Kuchinsky had violated Rules 1.8(a),

3.4(d), and 8.4(a) of the Rules of Professional Conduct and

issued Kuchinsky a public reprimand without terms.    The District

Committee then issued a Written Determination explaining its

decision.   In its Determination, the District Committee made

several findings of fact.   Then, in a section titled “Nature of

Misconduct,” the District Committee listed the rules that it

found Kuchinsky had violated.     Under each rule, the District

Committee stated that “[r]espondent’s actions that violated this

rule include, but are not limited to, the following” and

provided a non-exhaustive list of Kuchinsky’s actions it found

to be in violation of each rule. 7

     Kuchinsky filed a notice of appeal and demand for review of

the District Committee’s determination by a three-judge panel,

pursuant to Code § 54.1-3935. 8   After each party submitted

7
  The Written Determination also noted that one member of the
Committee dissented from the District Committee’s finding that
Kuchinsky violated Rule 3.4(d) by disregarding the VSB’s prior
admonition on the basis that the Committee member “did not
believe that the Committee is a ‘tribunal’ within the
contemplation of the rule.”
8
  On the same day, Kuchinsky also filed a Motion to Reconsider
the District Committee’s determination on the basis that one of
the Committee members should have recused himself from the
proceedings. The District Committee denied Kuchinsky’s Motion
                                   6
briefs, the panel heard argument and issued an Order holding

that there was substantial evidence in the record to support the

District Committee’s decision.     Subsequently, the panel issued a

Memorandum Order incorporating the District Committee’s findings

of fact in full and affirming its decision.

     Kuchinsky appeals.

                             II.   Analysis

A. Standard of Review

     To prove that an attorney violated the Rules of

Professional Conduct, the VSB must present clear and convincing

evidence of the violation.    Livingston v. Virginia State Bar,

286 Va. 1, 10, 744 S.E.2d 220, 224 (2013).    When reviewing a

disciplinary decision by a three-judge panel:

     “[W]e will make an independent examination of the
     whole record, giving the factual findings . . .
     substantial weight and viewing them as prima facie
     correct.    While not given the weight of a jury
     verdict, those conclusions will be sustained unless it
     appears they are not justified by a reasonable view of
     the evidence or are contrary to law.”

Green v. Virginia State Bar ex rel. Seventh Dist. Comm., 274 Va.
775, 783, 652 S.E.2d 118, 121 (2007) (quoting El-Amin v.

Virginia State Bar, 257 Va. 608, 612, 514 S.E.2d 163, 165

(1999)).   Furthermore, “[c]onsistent with well-established

to Reconsider, and the issue raised therein is not before this
Court on appeal.
                                    7
appellate principles, we view the evidence and all reasonable

inferences that may be drawn therefrom in the light most

favorable to the Bar, the prevailing party below.”   Id.

B. Kuchinsky’s “Right to a Meaningful Appeal”

     In his first assignment of error, Kuchinsky argues that he

was deprived of his right to a meaningful appeal because the

District Committee’s Determination stated under each finding of

a Rule violation: “Respondent’s actions that violated this rule

include, but are not limited to, the following.” (Emphasis

added.)   Because the listings of facts which followed were not

exhaustive, Kuchinsky asserts that the three-judge panel could

not properly determine which facts the District Committee

considered in making its decision.

     An attorney subject to disciplinary proceedings is entitled

to notice and the opportunity to be heard.   Pappas v. Virginia

State Bar, 271 Va. 580, 587, 628 S.E.2d 534, 538 (2006).     In

construing this right, we have held that “it is only necessary

that the attorney be informed of the nature of the charge

preferred against him and be given an opportunity to answer.”

Moseley v. Virginia State Bar, 280 Va. 1, 3, 694 S.E.2d 586, 589

(2010) (internal quotation marks omitted).   Although we have not

previously considered the extent of an attorney’s due process

rights in the context of an appeal, we have held that “[t]he

procedures outlined in Part Six [of the Rules of the Supreme

                                 8
Court of Virginia] ensure the integrity of the disciplinary

process and protect the rights of the attorney.”            Pappas, 271
Va. at 587, 628 S.E.2d at 538.

     Part 6, § IV, ¶ 13-16(Y) of the Rules of Court establishes

what a District Committee must include in its written

determination.   Specifically, the Rule states:

     If a District Committee finds that the evidence shows
     the Respondent engaged in Misconduct by clear and
     convincing evidence, then the Chair shall issue the
     District   Committee’s   Determination, in   writing,
     setting forth the following:

     1. Brief findings    of   the       facts   established     by   the
     evidence;

     2. The nature of the Misconduct shown by the facts so
     established, including the Disciplinary Rules violated
     by the Respondent; and

     3. The sanctions    imposed,        if   any,   by   the   District
     Committee.

In the case at bar, the District Committee’s Determination

satisfied each of the three requirements.            It included findings

of fact, explained the nature of Kuchinsky’s misconduct that was

established by those facts, and stated what sanction was to be

imposed.   Part 6, § IV, ¶ 13-16(Y) does not require that a

District Committee list the specific facts relied upon in

finding individual rule violations.           Therefore, the District

Committee did not err by failing to include an exhaustive list

for each violation.

                                     9
        Furthermore, Kuchinsky’s argument that the three-judge

panel could not ascertain what facts the District Committee

considered in making its decision lacks merit.    A three-judge

panel appointed pursuant to Code § 54.1-3935 reviews a District

Committee determination to determine “whether there is

substantial evidence in the record upon which the District

Committee could reasonably have found as it did.”    Va. Sup. Ct.

R., Part 6, § IV, ¶ 13-19(E) (emphasis added).    Thus, in

addition to the District Committee’s findings of fact, a three-

judge panel has the benefit of considering the entire record in

reviewing a District Committee’s Determination.    Accordingly, we

hold that Kuchinsky was not deprived of his right to a

meaningful appeal in this case.

C. Rule 1.8(a)

        Rule 1.8(a) of the Rules of Professional Conduct states

that:

        (a) A lawyer shall not enter into a business
        transaction with a client or knowingly acquire an
        ownership, possessory, security or other pecuniary
        interest adverse to a client unless:

             (1) the transaction and terms on which the lawyer
             acquires the interest are fair and reasonable to
             the   client   and   are   fully   disclosed   and
             transmitted in writing to the client in a manner
             which can be reasonably understood by the client;

             (2) the client is given a reasonable opportunity
             to seek the advice of independent counsel in the
             transaction; and

                                  10
          (3) the client consents in writing thereto.

     The District Committee found that Kuchinsky violated Rule

1.8(a) through his “continued ownership interest in [Person’s]

property and his pursuit of a partition of the property pursuant

to his interest as set forth in the deed” and through his

“failure to formally terminate his representation prior to

filing suit against Person in district court and circuit court.”

 1. Kuchinsky Acquired a 25% Interest in Two Specific Properties
             Through the Special Commissioner’s Deed

     Kuchinsky argues that his continued interest in Person’s

property was not an acquisition of an interest in the property.

To violate Rule 1.8(a), an attorney must “knowingly acquire an

ownership, possessory, security or other pecuniary interest

adverse to a client.” (Emphasis added.)

     While the quitclaim deed gave Kuchinsky a 25% interest in

Person’s undivided ownership interests in the six properties at

issue in the underlying partition suit against Person’s

siblings, the Special Commissioner partitioned, at Kuchinsky’s

request as counsel for Person, the various interests in those

properties.   The Special Commissioner’s Deed then conveyed to

Kuchinsky a 25% interest and to Person a 75% interest in two of

the six properties - to the exclusion of Kuchinsky's other co-

tenants’ interests implicated by the execution of the quitclaim

deed, and to the exclusion of Kuchinsky’s interests in the other

                                11
four properties.   Accordingly, Kuchinsky and Person thereafter

exclusively owned the two properties as tenants in common.

Thus, only Kuchinsky and Person had the "right to possess, use

and enjoy [these two] common propert[ies],” City of Richmond v.

Suntrust Bank, 283 Va. 439, 443, 722 S.E.2d 268, 271 (2012)

(quoting Graham v. Pierce, 60 Va. (19 Gratt.) 28, 38 (1869)).

Moreover, although Kuchinsky initially objected to the Special

Commissioner’s Deed, he later wrote a letter to the Special

Commissioner encouraging him to record it; and Kuchinsky did not

disclaim the deed after it was recorded.   Through these actions,

Kuchinsky “knowingly acquire[d]” an interest in Person’s

property for purposes of Rule 1.8(a).

   2. The Common Law Exceptions to the Rules of Champerty and
             Maintenance do not apply to Rule 1.8(a)

     Alternatively, Kuchinsky contends that his actions are

protected by the common law exception to the doctrine of

champerty and maintenance for aiding the indigent.    See 3B

Michie’s Jurisprudence, Champerty and Maintenance, § 2 (“Aiding

the indigent is one of the generally recognized exceptions to

the law of maintenance.”).   Because Person could not afford to

pay an attorney in advance, Kuchinsky argues that his fee

arrangement with Person falls within the exception.   We

disagree.

                                12
     In relevant part, Comment 16 to Rule 1.8 explains that

“Paragraph (j) states the traditional general rule that lawyers

are prohibited from acquiring a proprietary interest in

litigation. This general rule, which has its basis in common law

champerty and maintenance, is subject to specific exceptions

developed in decisional law and continued in these Rules.”

(Emphasis added.)   However, unlike the earlier disciplinary

proceeding against Kuchinsky, the case at bar does not involve a

Rule 1.8(j) violation.   There is no common law doctrine which

permits an attorney to “knowingly acquire an ownership,

possessory, security or other pecuniary interest adverse to a

client” in violation of Rule 1.8(a) simply because the client is

indigent.

3. Person was Still Kuchinsky’s Client at the Time the Offending
                        Conduct Occurred

     Finally, Kuchinsky asserts that Person was no longer his

client at the time the offending conduct took place because

“nothing remained to be done in Person’s case” and because

Person allegedly informed Kuchinsky that he did not intend to

pay Kuchinsky for his services.    We reject this argument.

     During the hearing before the District Committee, Kuchinsky

testified that by the time he filed the partition suit against

Person on May 18, 2010 “[t]here may have been some rents that

remained to be divided, cash assets” from the underlying

                                  13
partition suit between Person and his siblings.   Additionally,

Kuchinsky acknowledges on brief that no final order had been

entered in the underlying partition suit when he acquired the

Special Commissioner’s deed and filed his partition suit against

Person.   Finally, Kuchinsky took no steps to formally withdraw

from his representation of Person in accordance with Rule

1.16(b) before engaging in the violative conduct. 9

     Therefore, Person was still Kuchinsky’s client at the time

he knowingly acquired an interest in Person’s property, and we

hold that the three-judge panel did not err in affirming the

District Committee’s finding that Kuchinsky violated Rule 1.8(a)

of the Rules of Professional Conduct.

D. Rule 8.4(a)

     Rule 8.4(a) of the Rules of Professional Conduct

establishes that “[i]t is professional misconduct for a lawyer

to . . . violate or attempt to violate the Rules of Professional

Conduct, knowingly assist or induce another to do so, or do so

through the acts of another.”

     As we explained in Part II.C., supra, Kuchinsky violated

Rule 1.8(a) by acquiring an interest in Person’s property

9
  In relevant part, Comment 8 to Rule 1.16 states that “[a]
lawyer may withdraw if the client refuses to abide by the terms
of an agreement relating to the representation, such as an
agreement concerning fees or court costs.” Thus, although
Person allegedly informed Kuchinsky that he would not honor
their fee agreement, the representation continued absent
Kuchinsky’s withdrawal.
                                14
through the Special Commissioner’s Deed, by asking that the

Special Commissioner record the deed, and by pursuing a

partition of Person’s property once the deed had been recorded.

Therefore, he also committed professional misconduct under Rule

8.4(a) by violating the Rules of Professional Conduct, both

through his own acts and through the acts of the Special

Commissioner.

     However, Kuchinsky argues that we should reverse the three-

judge panel’s finding that he violated Rule 8.4(a) because “a

redundancy of charges in disciplinary proceedings is

disfavored.”    In support, Kuchinsky cites Morrissey v. Virginia

State Bar, 248 Va. 334, 448 S.E.2d 615 (1994).    In Morrissey, a

three-judge panel found that Respondent violated DR 1-102(A)(4)

of the former Virginia Rules of Professional Responsibility,

which stated that “[a] lawyer shall not . . . [e]ngage in

conduct involving dishonesty, fraud, deceit, or

misrepresentation which reflects adversely on a lawyer's fitness

to practice law.” 10   Id. at 336, 448 S.E.2d at 616.   On appeal,

the VSB assigned as cross-error the panel’s failure to also find

that Respondent had violated former DR 1-102(A)(3), which

10
  The panel also found that Respondent violated former DR 8-101,
which prohibited a lawyer serving in public office from
“[a]ccept[ing] anything of value” when the lawyer “knows or it
is obvious that the offer is for the purpose of influencing his
action as a public official.” However, that portion of the
opinion is not relevant to the issue presented by the case at
bar.
                                  15
established that “[a] lawyer shall not . . . . [c]ommit a crime

or other deliberately wrongful act that reflects adversely on

the lawyer’s fitness to practice law.”   Id. at 334, 448 S.E.2d

at 621.   We rejected the VSB’s argument and affirmed the panel’s

decision, holding that “[a]lthough Morrissey's concealments were

deliberate and wrongful, we do not think that the language of DR

1-102(A)(3) indicates a clear intent to provide multiple

punishment for such acts under the circumstances of this case.”

Id. (citing Fitzgerald v. Commonwealth, 223 Va. 615, 635, 292
S.E.2d 798, 810 (1982)).

     In contrast to the rules at issue in Morrissey, Rule 8.4(a)

clearly supports a finding that an attorney has committed

professional misconduct under Rule 8.4(a) in addition to a

finding that the attorney violated another underlying Rule of

Professional Conduct.   Rule 8.4(a) states that a violation or

attempted violation of another rule is professional misconduct.

This misconduct provision would be rendered meaningless if it

did not provide for the imposition of a separate and additional

violation.   It is a “well established rule of construction that

a statute ought to be interpreted in such manner that it may

have effect, and not be found vain and elusive.”   McFadden v.

McNorton, 193 Va. 455, 461, 69 S.E.2d 445, 449 (1952).     We

believe that the same principle applies to our interpretation of

the Rules of Professional Conduct.   Accordingly, we hold that

                                16
the three-judge panel did not err in affirming the District

Committee’s finding that Kuchinsky violated Rule 8.4(a) of the

Rules of Professional Conduct.

E. Rule 3.4(d)

     In relevant part, Rule 3.4(d) of the Rules of Professional

Conduct states that “[a] lawyer shall not . . . [k]nowingly

disobey . . . a standing rule or a ruling of a tribunal made in

the course of a proceeding, but the lawyer may take steps, in

good faith, to test the validity of such rule or ruling.”

     The District Committee found that Kuchinsky violated Rule

3.4(d) by “continu[ing] to pursue his ownership interest in

Person’s property” after receiving the prior admonition from the

VSB and by failing to “divest himself of his ownership interest

[in Person’s property] until one year after he received Person’s

[bar] complaint.”   However, the admonition issued to Kuchinsky

was a private admonition without terms.    The admonition did not

require that Kuchinsky divest himself of his interest in

Person’s property, nor did it indicate that he must refrain from

taking additional steps to secure his interest.   Rather, it

merely stated that Kuchinsky violated Rule 1.8(j) by acquiring

the original quitclaim deed from Person.   Because the private

admonition issued to Kuchinsky did not include terms requiring

that Kuchinsky either take or refrain from taking any action, he

could not “knowingly disobey” the admonition.   Accordingly, we

                                 17
hold that the three-judge panel erred in affirming the District

Committee’s finding that Kuchinsky violated Rule 3.4(d) of the

Rules of Professional Conduct. 11

                          III.   Conclusion

     We affirm the three-judge panel’s decision with regard to

Rules 1.8(a) and 8.4(a), reverse its decision with regard to

Rule 3.4(d), and remand the case for reconsideration of the

sanction to be imposed.

                                                Affirmed in part,
                                                reversed in part,
                                                and remanded.

11
  The related issue of whether a disciplinary arm of the VSB
constitutes a “tribunal” for purposes of Rule 3.4(d) is not
before this Court on appeal.
                                    18