Court Opinion

ID: 2716479
Source: CourtListenerOpinion
Date Created: 2014-08-08 17:13:24.581984+00
Date Added: 2024-06-11T09:55:05.332709
License: Public Domain

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                              2014-SC-000093-KB

JAMES P. S. SNYDER                                                       MOVANT
KBA MEMBER NO. 66180

V.                            IN SUPREME COURT

KENTUCKY BAR ASSOCIATION                                          RESPONDENT

                             OPINION AND ORDER

      Movant; James P. S. Snyder, Kentucky Bar Association ("KBA") member

number 66180, whose bar roster address is 1544 Winchester Avenue, Suite

820, P.O. Box 1067, Ashland, Kentucky 41105, was admitted to the practice of

law in the Commonwealth of Kentucky on October 1, 1974. Movant's law

practice focused mainly on social security and bankruptcy matters.

      In June of 2007, Movant was contacted by a colleague to represent Alma

Energy, LLC ("Alma"), a coal mining corporation. Alma was experiencing

significant financial trouble. Consequently, Movant filed a Chapter 11

Bankruptcy petition on its behalf in the United States Bankruptcy Court for

the Eastern District of Kentucky. Shortly thereafter, Movant requested that the

bankruptcy court approve his retainer fee in the amount of $7,961.00.
          Two years later, in August of 2009, an Assistant United States Trustee

deposed Movant. When questioned about the retainer he had collected for the

Alma bankruptcy, Movant stated that he had deposited the funds in either his

personal or operating checking accounts. Movant also explained that he had

used some of the retainer to pay the filing fee for Alma's bankruptcy petition.

Movant further revealed that the law firm of Prewitt and DeBourbon had

provided him with two separate $5,000.00 checks to pay for Alma's legal fees

and expenses. Movant did not believe payments from the third party law firm

were required to be held in trust, nor did he think the payments were subject

to court approval since the checks were not taken from Alma's bankruptcy

estate.

      Movant continued to implicate himself during the deposition. For

instance, Movant testified that he had received $20,000.00 from Johnson

County Gas Company for fees incurred from its own Chapter 11 bankruptcy.

Movant acknowledged that he had not received approval from the court to

obtain this money. Once again, Movant stated that court notice and approval

was not necessary since the owner of Johnson County Gas Company paid him

directly for his representation, not out of the bankruptcy estate.

      Lastly, and arguably most damaging, was Movant's admission that he

had not maintained a trust account for the previous five years. In fact, Movant

admitted that all client funds were deposited into either his personal or

operating checking accounts.

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       Due to Movant's above-mentioned actions, he entered into an agreed

order in the United States Bankruptcy Court for the Eastern District of

Kentucky. The order mandated that he return any unearned fees and disgorge

fees totaling $19,400.00. In addition, the order required him to withdraw from

all presently filed bankruptcy cases in which meetings of the creditors had not

yet been held or confirmed plans obtained. Lastly, the order enjoined him from

filing new bankruptcy petitions for not less than nine months, after which time

he could seek reinstatement from the court. Movant's motion states that he is

currently engaged in a limited practice of la'w.

      On July 8, 2013, the Inquiry Commission issued a formal Charge, KBA

File No. 18236, containing the following counts of disciplinary violations:

Count I, Supreme Court Rule ("SCR") 3.130-1.15(a) (failure to hold client's

property in a separate account); Count II, SCR 3.130-1.15(e) (failure to deposit

advanced fees in a trust account); and Count III, SCR 3.130-3.4(c) (knowingly

disobeying an obligation under rules of a tribunal). Movant admits to violating

these three Rules of Professional Conduct.

      In an effort to resolve the pending disciplinary charges, Movant and the

KBA have negotiated a sanction pursuant to SCR 3.480(2). The negotiated

sanction imposes a public reprimand and requires Movant to be monitored by

the Kentucky Lawyers Assistance Program ("KYLAP").

      Whether this Court will accept the negotiated sanction is within our

sound discretion. Anderson v. Kentucky Bar Ass'n, 262 S.W.3d 636, 638 (Ky.

2008). In its response, the KBA contends that the recommended discipline is

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 appropriate and supported by Kentucky case law. The KBA directs us to

 several cases to support the proposed sanction. For example, in Kentucky Bar

 Ass'n v. Schilling, 361 S.W.3d 304 (Ky. 2012), the attorney subject to discipline

was appointed as the examiner for a massive bankruptcy case. Similar to the

 case before us, the attorney failed to disclose fee arrangements. The attorney

also made false or misleading statements to the court. He was found guilty of

violating four Rules of Professional Conduct, including SCR 3.130-3.3(a); SCR

3.130-3.4(c); SCR 3.130-4.1; and SCR 3.130-8.3(c). Ultimately, this Court

approved a public reprimand as the attorney's punishment. The KBA also

points to several cases in which we publicly reprimanded attorneys, who failed

to deposit retainers into their escrow accounts.    See, e.g., Kentucky Bar Ass'n v.

Bubenzer, 145 S.W.3d 842 (Ky. 2004); Keen v. Kentucky Bar Ass'n, 386 S.W.3d
737 (Ky. 2012).

       Furthermore, Movant has admitted to suffering from Obsessive

Compulsive Disorder ("OCD”), 1 which he claims was aggravated by the

daunting workload and stress he endured during the pendency of the Alma

case. Movant alleges that he was overwhelmed with legal work and had no

support staff. As a result, Movant claims that he was on the verge of a nervous

breakdown.

       1 "OCD is a type of anxiety disorder that traps people in endless cycles of
repetitive thoughts and behaviors. People with OCD are plagued by recurring and
distressing thoughts, fears, or images (obsessions) they cannot control." OCD-
Overview, WebMD , http: / /www.webmd.com/ anxiety-panic/ tc / obsessive-compulsive-
disorder-ocd-topic-overview (last visited March 27, 2014).

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      Movant states that he has been evaluated by KYLAP and now

participates in the program, although the extent of his participation is

unknown. Nonetheless, we will consider it a mitigating factor that Movant has

admitted he suffers from OCD and has sought rehabilitative services.

Additionally, this Court places great weight on the fact that Movant, in his forty

years of practice, has no disciplinary history in the Commonwealth of

Kentucky.

      Based on previous cases imposing similar discipline for analogous

misconduct, in addition to Movant's mental disorder and lack of previous

disciplinary actions, this Court finds that the consensual discipline proposed

by Movant and agreed to by the KBA is appropriate. Therefore, Movant's

motion for a public reprimand is hereby granted.

      ACCORDINGLY, IT IS ORDERED THAT:

      (1) Movant, James P. S. Snyder, KBA Member No. 66180, is found guilty

         of violating SCR 3.130-1.15(a); SCR 3.130-1.15(e); and SCR 3.130-

         3.4(c).

      (2) Movant is hereby publicly reprimanded for his unprofessional

         conduct.

      (3) Movant is ordered to complete and participate in an evaluation

         performed by a professional of KYLAP and to fully comply with any

         resulting recommendations from such evaluation.

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(4) Pursuant to SCR 3.450, Movant is directed to pay all costs associated

   with this disciplinary proceeding in the amount of $245.75, for which

   execution may issue from this Court upon finality of this Order.

All sitting. All concur.

ENTERED: April 17, 2014.

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