Court Opinion

ID: 4249520
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:19:13.231928+00
Date Added: 2024-06-11T13:56:36.512243
License: Public Domain

IN THE SUPREME COURT OF IOWA
                               No. 12–0694

                          Filed February 8, 2013

IOWA SUPREME COURT
ATTORNEY DISCIPLINARY BOARD,

      Appellee,

vs.

GEORGE QUALLEY IV and
THOMAS KARL BLEYHL,

      Appellants.

      On review of the report of the Grievance Commission of the

Supreme Court of Iowa.

      Attorneys appeal from the grievance commission recommendation

that we suspend their licenses to practice law in Iowa for thirty days.

LICENSES SUSPENDED.

      Charles L. Harrington and Patrick W. O’Bryan, Des Moines, for
complainant.

      George Qualley IV and Thomas K. Bleyhl of Qualley & Bleyhl,

P.L.C., pro se, for respondents.
                                     2

ZAGER, Justice.

      The complainant, the Iowa Supreme Court Attorney Disciplinary

Board (Board), alleges the respondents, George Qualley IV and Thomas

Bleyhl, violated numerous rules of the Iowa Rules of Professional

Conduct.    The alleged violations arose out of a sequence of events

occurring from 2008–2010. The Grievance Commission of the Supreme

Court of Iowa (commission) found Qualley and Bleyhl violated rules

32:1.4, 32:1.7, and 32:1.8. The commission recommended we suspend

both Qualley and Bleyhl from the practice of law for thirty days. Upon

our de novo review, we find both Qualley and Bleyhl violated our rules of

professional conduct and suspend each of them from the practice of law

for sixty days.

      I. Background Facts and Proceedings.

      Qualley and Bleyhl were each admitted to the Iowa bar in 2006.

They are the only partners in the law firm of Qualley & Bleyhl, P.L.C.

      The Board filed a detailed complaint against both Qualley and

Bleyhl on November 8, 2011, alleging that each of them, acting in concert

with the other, had violated multiple ethical rules.

      The commission held a hearing on February 27, 2012. On April

16, 2012, the commission issued its findings of fact and conclusions of

law and recommended we suspend each of them from the practice of law

for thirty days.      The commission further recommended that the

suspensions be staggered so as to minimize the disruption in the

operation of their law firm. Qualley and Bleyhl appeal.

      II. Standard and Scope of Review.

      We have adhered to the following standard of review for attorney

disciplinary cases:
                                          3
       “Attorney disciplinary proceedings are reviewed de novo. The
       Board bears the burden of proving misconduct by a
       convincing preponderance of the evidence, which is a lesser
       burden than proof beyond a reasonable doubt but a greater
       burden than is imposed in the usual civil case. If we
       determine the Board has met its burden and proven
       misconduct, ‘we may impose a greater or lesser sanction
       than the sanction recommended by the commission.’ ”

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cannon, 821 N.W.2d 873, 876

(Iowa 2012) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Weaver,

812 N.W.2d 4, 9 (Iowa 2012) (citations omitted)).

       III. Findings of Fact.
       In September 2008, Broadmoor Place Homeowners Association

(Broadmoor) retained Qualley and Bleyhl to assist it in collecting

delinquent dues from a homeowner in Broadmoor. The homeowner had

failed to pay monthly association dues and was in default in the amount

of $4090. The parties entered into a contingency fee agreement for this

debt collection. Qualley and Bleyhl performed a number of services in

pursuing payment from the homeowner to Broadmoor. They began by

sending a thirty-day notice to cure default as a prerequisite to initiating a

foreclosure action.     When the homeowner did not cure the default by

paying the delinquent dues, Qualley and Bleyhl proceeded to file a

foreclosure petition on behalf of Broadmoor.

       While the foreclosure action was pending, the homeowner filed for

bankruptcy.       Qualley and Bleyhl represented Broadmoor in the

bankruptcy action, filing a motion for relief from automatic stay in the

bankruptcy court. 1       This motion was unresisted and subsequently

       1While no formal agreement was ever executed between Qualley and Bleyhl and
Broadmoor as to their representation in this bankruptcy action, or the subsequent
CitiMortgage, Inc. foreclosure, it is not disputed that the parties assumed that their
representation for these services would be on an hourly basis. Qualley and Bleyhl
submitted periodic statements to Broadmoor for these services during this time that
were timely paid.
                                       4

granted.   Broadmoor obtained a decree of foreclosure on October 23,

2009. In the decree, Broadmoor acknowledged a first mortgage existed

on the subject property that was superior to their lien. During this time,

and into 2010, Qualley and Bleyhl continued to take action to execute on

Broadmoor’s lien.

      On September 11, 2009, the first mortgage holder, CitiMortgage,

Inc., commenced an action to foreclose on its mortgage.          Qualley and

Bleyhl also represented Broadmoor’s interest in this foreclosure action,

ultimately consenting to a decree recognizing the secondary position of

Broadmoor. A sheriff’s sale was scheduled for August 12, 2010. While

the record is unclear as to the reason for its action, CitiMortgage

dismissed its foreclosure action without prejudice on August 5, 2010,

one week before the sheriff’s sale of the property

      In the spring of 2010, Qualley and Bleyhl prepared the necessary

documentation for the sheriff’s sale.       However, the decree they had

obtained did not have an award of attorney fees. Similarly, none of the

preliminary       sale   documents   included   accruing   association   dues.

Broadmoor had expended $2696.59 in attorney fees to Qualley and

Bleyhl in their handling of the two foreclosure actions and the

bankruptcy. At least a portion of these attorney fees should have been

included in the judgment against the homeowner and recouped in the

sheriff’s sale.    Qualley and Bleyhl concede that the foreclosure decree

“did not include the total amount [Broadmoor] was apparently entitled

to.” In testimony before the commission, Qualley was ambivalent as to

whether he and Bleyhl had erred, stating it was “possible” Broadmoor

would have gotten a higher judgment if he and Bleyhl had included

attorney fees in the judgment amount, though he agreed Broadmoor was

entitled to attorney fees. Qualley also offered no reasonable explanation
                                     5

as to why accruing association dues were not included in the final

judgment amount provided to the sheriff as part of the execution.

      On July 27, 2010, in advance of the sheriff’s sale, Bleyhl sent an

email to Broadmoor’s property manager. This email informed her that

Broadmoor had the right to purchase the property at the sheriff’s sale,

but specifically recommended against exercising that right. This email

also informed the property manager that Qualley and Bleyhl had found a

“potential buyer,” and further noted a “potential conflict of interest” since

they would be representing both the buyer and the seller (Broadmoor).

Neither Qualley nor Bleyhl advised Broadmoor who the potential buyer

was or of the need to seek independent legal counsel. They also offered,

“[W]e do not believe this poses a problem since we are trying to get the

association completely paid off.” Broadmoor’s board elected to proceed

despite the dual representation.

      The weeks and months leading up to the sheriff’s sale offer

significant insight into the complaint filed against Qualley and Bleyhl.

Qualley and Bleyhl have a longtime friend by the name of Izaah Knox.

During the years prior to the events giving rise to this disciplinary action,

the three of them had discussed investing in real estate with the idea of

making money by “flipping” real estate in a short period of time.

      Because of the assessed value of the subject property, Qualley and

Bleyhl believed that they could buy the property cheaply, pay everyone

off, and resell it quickly at a profit of $10,000 to $20,000. Qualley and

Bleyhl approached Knox about buying the real estate at the sheriff’s sale,

and he agreed. To accomplish this, Qualley and Bleyhl organized Elite

Real Estate, L.L.C. (Elite). Elite was recorded with the secretary of state

on August 3, 2010. The initial capital of Elite was provided by Knox in

the amount of $7000.       Neither Qualley nor Bleyhl made any capital
                                     6

contribution to Elite. Then, CitiMortgage dismissed its foreclosure action

on August 5, 2010, one week before the sheriff’s sale, which allowed

Broadmoor to become the first bidder on the real estate subject only to

the first lien holder. This fact was not communicated to Broadmoor, nor

were the possible legal ramifications of the dismissal discussed with

Broadmoor. However, in an email to Qualley and Bleyhl dated August 9,

2010, several days prior to the sale, Broadmoor did request confirmation

that all association dues to date and legal fees would be included in the

price listed in the sheriff’s sale. The record does not show any response

to this email prior to the sale.

      A serious factual dispute in this matter concerns whether Qualley

and Bleyhl advised Broadmoor’s property manager of their relationship

with Elite, the potential buyer who became the eventual buyer. Qualley

and Bleyhl claim to have informed Broadmoor’s property manager of

their interest in Elite. However, the property manager testified she had

not heard of Elite prior to the sheriff’s sale.          The president of

Broadmoor’s board also stated she knew nothing about Elite prior to the

sheriff’s sale. The record is also devoid of any record or document which

would show this disclosure. Further, Broadmoor was not advised of the

need to seek independent legal advice on the potential conflict.

      On August 12, 2010, the sheriff’s sale proceeded as scheduled. On

behalf of Broadmoor, Qualley provided a written bid of $6500.

Thereafter, either Qualley or Bleyhl made an oral bid of $6900 on behalf

of Elite. As the high bidder, a sheriff’s deed was issued to Elite that day.

On September 2, 2010, Qualley and Bleyhl provided a check to

Broadmoor in the amount of $6859.08 as its proceeds from the sale of

the real estate in satisfaction of Broadmoor’s judgment in the foreclosure

action against the homeowner.       Broadmoor was dissatisfied with the
                                        7

proceeds received because the judgment did not include association dues

that had accrued during the pendency of the action or the attorney fees

expended in collecting these dues. After fruitless attempts to resolve the

matter with Qualley and Bleyhl, Broadmoor’s board president filed a

complaint with the Board on behalf of Broadmoor.

      IV. Ethical Violations.

      The Board alleged that Qualley and Bleyhl committed multiple

violations   of   the   Iowa   Rules   of   Professional   Conduct   in   their

representation of Broadmoor and Elite.

      A. Conflict of Interest.         The Board alleged that Qualley and

Bleyhl violated Iowa Rules of Professional Conduct 32:1.7 and 32:1.8.

      Rule 32:1.7 provides:

            (a) Except as provided in paragraph (b), a lawyer shall
      not represent a client if the representation involves a
      concurrent conflict of interest. A concurrent conflict of
      interest exists if:

            (1) the representation of one client will be directly
      adverse to another client; or

            (2) there is a significant risk that the representation of
      one or more clients will be materially limited by the lawyer’s
      responsibilities to another client, a former client, or a third
      person or by a personal interest of the lawyer.

             (b) Notwithstanding the existence of a concurrent
      conflict of interest under paragraph (a), a lawyer may
      represent a client if:

            (1) the lawyer reasonably believes that the lawyer will
      be able to provide competent and diligent representation to
      each affected client;

             (2) the representation is not prohibited by law;

            (3) the representation does not involve the assertion of
      a claim by one client against another client represented by
      the lawyer in the same litigation or other proceeding before a
      tribunal; and
                                     8
            (4) each affected     client   gives   informed   consent,
      confirmed in writing.

            (c) In no event shall a lawyer represent both parties in
      dissolution of marriage proceedings

Iowa R. Prof’l Conduct 32:1.7. In pertinent part, rule 32:1.8 provides:

            (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 in a manner
      that can be reasonably understood by the client;

            (2) the client is advised in writing of the desirability of
      seeking and is given a reasonable opportunity to seek the
      advice of independent legal counsel on the transaction; and

            (3) the client gives informed consent, in a writing
      signed by the client, to the essential terms of the transaction
      and the lawyer’s role in the transaction, including whether
      the lawyer is representing the client in the transaction.

             ....

            (i) A lawyer shall not acquire a proprietary interest in
      the cause of action or subject matter of litigation the lawyer
      is conducting for a client, except that the lawyer may:

            (1) acquire a lien authorized by law to secure the
      lawyer’s fee or expenses; and

             (2) contract with a client for a reasonable contingent
      fee in a civil case.

             ....

            (k) While lawyers are associated in a firm, a prohibition
      in the foregoing paragraphs (a) through (i) that applies to any
      one of them shall apply to all of them.

Id. r. 32:1.8.

      Qualley and Bleyhl represented both Broadmoor and Elite in a sale

of real estate.     In doing so, they owed a duty of loyalty not only to

Broadmoor, but also to Knox, the third partner in Elite.
                                      9

      Qualley and Bleyhl do not dispute that they advised Broadmoor

that it should not purchase the foreclosed property at the sheriff’s sale.

Nor do they dispute that they had a profit motive for creating Elite

specifically to purchase the property. The commission found that

      the entire reason for [Qualley and Bleyhl] wanting to
      purchase the property was that they saw the possibility to
      make a profit by quickly reselling it. They would not have
      engaged Mr. Knox to form Elite if this was not true.

Upon our de novo review, we concur with the commission’s factual

findings.
      We have held that it is axiomatic that representing both a buyer

and a seller in the same transaction is a conflict of interest.

      [A] lawyer’s simultaneous representation of a buyer and a
      seller in the same transaction is a paradigm of a conflict of
      interest. Beginning with such basic elements as determining
      the price and describing the property to be sold, what one
      party gets the other must concede.

Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Wagner, 599 N.W.2d
721, 726–27 (Iowa 1999) (citation and internal quotation marks omitted).

Qualley and Bleyhl disclosed to Broadmoor that they were representing

both the buyer and the seller in this transaction. However, they failed to

disclose the degree of conflict posed by this situation by not ensuring

that Broadmoor’s representative understood their personal interest in

Elite. Additionally, they failed to advise Broadmoor to seek independent

legal counsel.   As summarized by the commission, Qualley and Bleyhl

“acquired   ownership    of   the   property   without    providing   written

disclosures to either Elite or [Broadmoor], without telling them to seek

advice of independent counsel and without getting informed consent in

writing,” violating Iowa Rules of Professional Conduct 32:1.8(a)(1),

32:1.8(a)(2), and 32:1.8(a)(3).   Further, Qualley and Bleyhl “obtained a
                                    10

proprietary interest in the subject matter of an in rem proceeding where

they represented [Broadmoor],” which is prohibited under rule 32:1.8(i).

See Iowa R. Prof’l Conduct 32:1.8(i).

      Qualley and Bleyhl do not dispute that this was a conflict of

interest or that they violated our ethical rules. Upon our de novo review,

we concur with the commission’s findings, undisputed by Qualley and

Bleyhl. We find that Qualley and Bleyhl violated provisions of Iowa Rules

of Professional Conduct 32:1.7 and 32:1.8 involving conflicts of interest.

      B. Communications to Client.          The commission found that

Qualley and Bleyhl violated three distinct provisions of Iowa Rule of

Professional Conduct 32:1.4 governing communication with clients.

      “[W]hen [an attorney] represents a client whose interests differ

from those of another client, or from the [attorney’s] own interests, the

burden shifts to the [attorney] to prove that all the transactions were fair

and equitable.” Wagner, 599 N.W.2d at 723. An essential part of this

heightened standard is the requirement that the attorney must

proactively ensure and be able to demonstrate that the “client was fully

informed of the nature and effect of the transaction proposed and of [the

client’s] own rights and interests in the subject matter involved.”      Id.

(citation and internal quotation marks omitted). The commission found

neither Qualley nor Bleyhl fulfilled their responsibilities to communicate

adequately with Broadmoor.

      Rule 32:1.4(a)(1) requires a lawyer to “promptly inform the client of

any decision or circumstance with respect to which the client’s informed

consent, as defined in rule 32.1.0(e), is required by these rules.” Iowa R.

Prof’l Conduct 32:1.4(a)(1). The rules define “informed consent” as “the

agreement by a person to a proposed course of conduct after the lawyer

has communicated adequate information and explanation about the
                                        11

material risks of and reasonably available alternatives to the proposed

course of conduct.” Id. r. 32:1.0(e).

      The commission found, and we concur, that neither Qualley nor

Bleyhl fulfilled their responsibilities to provide informed consent to

Broadmoor about the conflict they faced, as required by rules 32:1.7 and

32:1.8. As previously noted, Qualley and Bleyhl failed to communicate

adequate information and explanation to either Elite or Broadmoor

regarding the conflict of interest, constituting a violation of rule

32:1.4(a)(1) in addition to the violation of conflicts rules.

      Iowa Rule of Professional Conduct 32:1.4(a)(2) requires that a

lawyer shall “reasonably consult with the client about the means by

which the client’s objectives are accomplished.” Rule 32:1.4(b) provides

that “[a] lawyer shall explain a matter to the extent reasonably necessary

to permit the client to make informed decisions regarding the

representation.”   The commission found, and we concur, that Qualley

and Bleyhl violated these two interrelated provisions.

      Qualley and Bleyhl did not properly inform anyone at Broadmoor,

including the property manager, of CitiMortgage’s dismissal of its

foreclosure action.     Qualley and Bleyhl also failed to discuss or

communicate how the dismissal of this foreclosure action may have

opened up additional legal avenues for Broadmoor, including a

discussion as to whether it might now be beneficial for Broadmoor to bid

on the property at the sheriff’s sale.       Broadmoor could not make an

informed decision as to how to proceed without the benefit of all this

information.    Additionally, Qualley and Bleyhl failed to respond to a

specific inquiry, prior to the sale, as to the full value of their bid at the

sheriff’s sale, which would have included the accruing homeowner dues

and attorney fees. Per rule 32:1.4(b), Qualley and Bleyhl were required
                                     12

to disclose this information. Per rule 32.1.4(a)(2), they were required to

consult with Broadmoor as to how Broadmoor wanted to proceed. They

did not do either of these things.

      Further, as the potential buyer, Qualley and Bleyhl knew, but

failed to inform Broadmoor, that Elite was only sufficiently capitalized to

make the initial purchase at the sheriff’s sale and had no provision for

additional capital contributions to pay for the ongoing association dues

to Broadmoor. Knowledge of these facts would have allowed Broadmoor

the ability to make more informed decisions regarding its judgment.

Now, Broadmoor is again dealing with a homeowner (Elite) that is

delinquent in its dues. Finally, the commission found that Qualley and

Bleyhl did not inform Broadmoor that the foreclosure judgment did not

include ongoing association dues from the original homeowner to

Broadmoor, nor did it include attorney fees. Qualley and Bleyhl did not

disclose this material information to Broadmoor, nor did they consult

with Broadmoor about how to use this information to fulfill Broadmoor’s

goals, again in violation of both rules 32:1.4(a)(2) and 32:1.4(b).

      Broadmoor attempted to ensure it would be made whole in the

sheriff’s sale. In an email dated August 9, 2010—three days before the

sheriff’s sale took place on August 12, 2010—the property manager

asked, “Does the sale price listed on the sheriff sale include all dues to

date and legal fees?”     Neither Qualley nor Bleyhl responded to this

inquiry. Again, this communication issue constituted violations of both

rule 32.1.4(a)(2) and 32:1.4(b). Qualley and Bleyhl did not provide this

information, and without it, Broadmoor did not have the opportunity to

make an informed decision about whether to move forward with the

sheriff’s sale or whether to make a bona fide attempt to purchase the

property itself.
                                      13

      Even after repeated attempts to obtain a full disclosure and

accounting of the judgment, accruing homeowner fees and attorney fees,

Qualley and Bleyhl were not forthcoming.               Instead, they refused to

provide the accountings, responded in derogatory terms to the legitimate

requests, and told Broadmoor that if it wanted a response, it would

charge them for it on an hourly basis.

      Qualley and Bleyhl repeatedly assert, both in their testimony in

front of the commission and in their briefs, that they properly informed

the property manager of all relevant matters and that it was the property

manager who failed to provide this information to Broadmoor’s board.

Communication       problems     between     the    property      manager     and

Broadmoor’s board are irrelevant to our analysis.            We agree with the

commission’s findings that Qualley and Bleyhl did not adequately convey

important information to the property manager, or anyone else

representing Broadmoor, in a timely manner.

      Additionally, as the commission noted, Qualley and Bleyhl did not

disclose other significant, relevant facts.        They did not disclose the

financial position of Elite, even though they were privy to that

information.      They did ultimately provide Broadmoor with all the

pleadings   and    filings   associated   with   the    matter,   including   the

foreclosure decree and the satisfaction of judgment, but this was not

sufficiently timely to assist Broadmoor in achieving its goals.         Qualley

and Bleyhl argue that they had no incentive for violating our ethics rules

with regard to appropriate communication, as Elite had not “made a

dime,” and they do not anticipate Elite will ever realize a profit from its

investment here. Yet, both Qualley and the third partner in Elite, Izaah

Knox, testified it was their intention to profit from flipping the unit.

Knox, in fact, testified they anticipated making up to $20,000 on this
                                    14

venture from their roughly $7000 investment. As Qualley testified, they

recognized the purchase was a risk. The fact that they made a decision

which ultimately turned out to be unprofitable does not mask the profit

motive.   Qualley and Bleyhl were nonetheless required to provide

adequate information to Broadmoor.

      We do not discipline for mere negligence or error in judgment.

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Sobel, 779 N.W.2d 782, 788–89

(Iowa 2010). In Sobel, we declined to find a violation when an attorney

did not communicate with his clients through an interpreter, concluding

that while the attorney’s judgment of his clients’ ability to understand

English may have been incorrect, it did not reflect adversely on his

fitness to practice law, especially as it reflected the understanding of

multiple parties who had interacted with the attorney’s clients. Id.

      The actions of Qualley and Bleyhl represented more than mere

negligence.    They did not exercise sufficient diligence to ensure

Broadmoor could make informed decisions regarding whether to bid at

the sheriff’s sale, the appropriate bid at the sheriff’s sale, and whether

Broadmoor would have wanted Elite as a buyer at the sheriff’s sale. See

Iowa R. Prof’l Conduct 32:1.4(b). Upon our de novo review, we agree with

the findings of the commission that Qualley and Bleyhl violated rules

32:1.4(a)(1), (a)(2), and (b) governing client communication.

      C. Fee Agreement.      The Board alleged that Qualley and Bleyhl

violated Iowa Rule of Professional Conduct 32:1.5(b), which governs fee

agreements and requires that “the basis or rate of the fee and expenses

for which the client will be responsible shall be communicated to the

client, preferably in writing, before or within a reasonable time after

commencing the representation.”
                                      15

      In evaluating possible violations of rule 32:1.5(b), we first

determine whether there was a written agreement. See Iowa Supreme Ct.

Att’y Disciplinary Bd. v. Dunahoo, 799 N.W.2d 524, 533 (Iowa 2011). In

the event no written agreement exists, we proceed to evaluate whether

the attorney effectively communicated the fee agreement to the client. Id.

The fee agreement Qualley and Bleyhl entered into with Broadmoor,

while in writing, contemplated a standard contingency fee agreement for

debt collection of unpaid association dues.      When the representation

evolved into legal services involving two foreclosure actions and a

bankruptcy, the better practice would clearly have been to execute a new

agreement on the basis of an hourly rate.      Nevertheless, the property

manager testified she understood the fee structure prior to the beginning

of representation. Likewise, the invoices sent to Broadmoor reflected an

hourly   fee   structure,   and   Broadmoor   paid   the   invoices   without

expressing concerns regarding the fee structure. The commission found

the Board did not prove a violation of rule 32:1.5(b), and we concur.

      D. Conduct of Dishonesty, Fraud, Deceit or Misrepresentation.

The commission characterized this as the “closest question presented,”

ultimately deciding that the Board did not prove by a convincing

preponderance of the evidence that Qualley and Bleyhl violated rule

32:8.4(c) governing dishonesty, fraud, deceit or misrepresentation. We

agree that this is an extremely close question, and Qualley and Bleyhl

are aided by the heightened standard of proof the Board must meet. See

Weaver, 812 N.W.2d at 9 (Iowa 2012) (“A convincing preponderance of

the evidence . . . is a lesser burden than proof beyond a reasonable doubt

but a greater burden than is imposed in the usual civil case.”). Upon our

de novo review, we agree that the Board failed to meet its burden in

establishing a violation of rule 32:8.4(c).
                                        16

      In the past, we have found violations of rule 32:8.4(c) in situations

in which attorneys have made false statements to the security

commission, Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kersenbrock, 821
N.W.2d 415, 421 (Iowa 2012), forged documents, Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Newman, 748 N.W.2d 786, 787–88 (Iowa 2008), and

altered documents, Iowa Supreme Ct. Att’y Disciplinary Bd. v. Schall, 814
N.W.2d 210, 213–14 (Iowa 2012). However, we require a reasonable level

of scienter to find an attorney violated rule 32:8.4(c). Iowa Supreme Ct.

Att’y Disciplinary Bd. v. Parrish, 801 N.W.2d 580, 587 (Iowa 2011) (“In

the legal sense, a misrepresentation usually requires something more

than negligence.” (Citation and internal quotation marks omitted.)).

      The commission found that Qualley and Bleyhl advised Broadmoor

not   to   purchase   the   property,    even   though   their   own   actions

demonstrated they thought it would be profitable to do so. Qualley and

Bleyhl also failed to respond in a timely manner to Broadmoor’s inquiry,

prior to the sheriff’s sale, as to whether the foreclosure judgment

included the entire amount to which Broadmoor was entitled. Instead,

Qualley and Bleyhl referred to a phantom “second sale” as a possibility

for curing any issues with the first sale, which never materialized.

      Many of the problems in this area originated after the sale was

complete. Though we do not hold Qualley and Bleyhl accountable for the

property manager’s failure to notify Broadmoor’s board of the ownership

interest Qualley and Bleyhl disclosed immediately subsequent to the

sheriff’s sale, their interactions with Broadmoor’s board and the new

property manager after the sale are problematic. Rather than respond in

a timely manner to requests for information in a way that assisted

Broadmoor in understanding the law and the proceedings, both Qualley

and Bleyhl stonewalled.     Qualley informed the new property manager
                                       17

that he was “poorly informed with respect to how a foreclosure for

homeowner’s association dues actually works.” When the new property

manager continued to press for an accounting of invoices and an

explanation regarding the conflict of interest issues, Bleyhl told him that

Broadmoor was lucky to have gotten anything and “[h]ad we [Qualley and

Bleyhl] not pursued this action, the dues owed would have been

discharged in bankruptcy and the association would be totally out of

luck.”

         Even more disturbing, Qualley and Bleyhl failed to provide billing

records and the accounting for funds that the new property manager

requested.     Representing that they had provided all of the requested

information to the previous manager, they informed the new manager

that they would charge their standard hourly rate for providing the

requested information.

         However, the commission also recognized that some of the

inaccurate statements Qualley made to his clients might have been due

to inexperience.      In support of this conclusion, it cited Qualley’s

testimony at the disciplinary hearing. “[I]t was clear that Mr. Qualley did

not understand the concept of amending the judgment.”                As the

commission noted, negligence does not violate this rule. Iowa Supreme

Ct. Att’y Disciplinary Bd. v. Netti, 797 N.W.2d 591, 605 (Iowa 2011)

(finding a level of scienter greater than negligence is required to find a

violation of rule 32:8.4(c)).

         Ultimately, the commission found credible the contention of

Qualley and Bleyhl that they intended to help Broadmoor, while

simultaneously      helping     themselves.   Though   Broadmoor’s    board

president indicated that Broadmoor had no interest in purchasing the

unit, and Broadmoor’s financial ability to do so was questionable, that
                                    18

does not relieve Qualley and Bleyhl of the responsibility of representing

Broadmoor’s interest and informing them of the possible advantages of

purchasing the unit.    To their credit, as owners in Elite, Qualley and

Bleyhl did bid a sufficient amount to cover Broadmoor’s initial judgment

and court costs. We do not believe they intended to cheat Broadmoor.

They simply did an incompetent job of fully protecting Broadmoor’s

interests. We do not believe this rises to the level of dishonesty, fraud,

deceit, or misrepresentation required to prove a violation of rule

32:8.4(c).

      V. Sanctions.

      There is no standard sanction warranted by any particular type of

misconduct.   Weaver, 812 N.W.2d at 13.       Though prior cases can be

instructive, the sanction warranted in a particular case must be based

on the circumstances of that case. Id.

      In determining the appropriate discipline, we consider the
      nature of the alleged violations, the need for deterrence,
      protection of the public, maintenance of the reputation of the
      bar as a whole, and the respondent’s fitness to continue in
      the practice of law, as well as any aggravating and mitigating
      circumstances. The form and extent of the sanctions must
      be tailored to the specific facts and circumstances of each
      individual case. Significant distinguishing factors in the
      imposition of punishment center on the existence of multiple
      instances of neglect, past disciplinary problems, and other
      companion violations.

Id. (citation and internal quotation marks omitted).

      Qualley and Bleyhl repeatedly emphasize their belief that they have

“learned their lesson” and will not reoffend. While individual deterrence

is one factor we consider, we must also consider all of the other factors

enumerated above. We have responsibilities to both the public and the

bar to discourage violations of our rules of professional conduct.
                                    19

      Qualley and Bleyhl clearly did not effectively communicate the

status of their representation to Broadmoor, in violation of our rules.

Additionally, Qualley and Bleyhl were involved in a direct conflict of

interest, failed to fully disclose the conflict of interest, and never

obtained, in writing, informed consent to the conflict as required by our

rules. They did not adequately inform either of their clients, Broadmoor

or Elite, of the facts the clients needed in order to give informed consent

to Qualley and Bleyhl’s representation.

      We have imposed a public reprimand and suspensions of varying

duration for similar conduct. Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Ta-Yu Yang, 821 N.W.2d 425, 427 (Iowa 2012) (holding public reprimand

was warranted for attorney who violated rule of professional conduct

prohibiting   attorney     from    engaging     in   conduct     involving

misrepresentation, rule requiring attorney to explain matter to extent

reasonably necessary to permit client to make informed decisions, and

rule governing conflict of interest); Netti, 797 N.W.2d at 600, 607

(imposing a two-year suspension where attorney engaged in a conflict of

interest with his client, among other violations); Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Zenor, 707 N.W.2d 176, 182, 187 (Iowa 2005)

(imposing a four-month suspension where attorney represented opposing

entities, among other violations); Iowa Supreme Ct. Att’y Disciplinary Bd.

v. Howe, 706 N.W.2d 360, 378, 381–82 (Iowa 2005) (imposing a four-

month suspension where attorney represented opposing entities, among

other violations); Wagner, 599 N.W.2d at 723 (imposing a three-month

suspension where attorney failed to inform the client of the attorney’s

financial interest in a transaction); Iowa Supreme Ct. Bd. of Prof’l Ethics

& Conduct v. Sikma, 533 N.W.2d 532, 537–38 (Iowa 1995) (imposing a

three-month suspension on attorney who engaged in undisclosed
                                     20

business transactions with a client).         We have also imposed public

reprimands for similar behavior.         Comm. on Prof’l Ethics & Conduct v.

Qualley, 487 N.W.2d 327, 328, 330–31 (Iowa 1992) (imposing a public

reprimand where attorney and his client engaged in a transaction

together intended to profit both attorney and client, but attorney did not

provide complete disclosure of his interests).

      We also consider any aggravating and mitigating factors.              We

consider cooperation with the Board’s investigation to be a mitigating

factor. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Axt, 791 N.W.2d 98,

103 (Iowa 2010).      Qualley and Bleyhl cooperated with the Board’s

investigation.   Additionally, the record does not disclose any prior

disciplinary action involving either of the respondents, which is also a

mitigating factor. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Moonen, 706
N.W.2d 391, 402 (Iowa 2005).

      Multiple   violations   of   our    ethical   rules   warrant   increased

disciplinary sanctions. Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v.

Lesyshen, 585 N.W.2d 281, 288 (Iowa 1998).            We have found Qualley

and Bleyhl violated multiple provisions of the rules.

      Qualley and Bleyhl engaged in a course of conduct that violated

multiple rules of professional conduct in an attempt to gain personal

profit. Their testimony that they did not actually accrue personal profit

does not erase their intention of profiting. Additionally, the fact that they

have lost money on the transaction has resulted in financial harm to

both Elite and Broadmoor, the two entities they represented. Elite was

not properly capitalized to hold the property for an extended period of

time. As a result, it now stands to lose its investment to either the first

mortgage holder or to Broadmoor, as Elite is in arrears on its association

dues and the status of the first mortgage is unknown. Unfortunately,
                                     21

Broadmoor again has a homeowner who is neglecting to pay the dues

owed to Broadmoor.

      Considering the aggravating and mitigating factors, and the need

to protect both the public and the bar against the type of self-dealing

that occurred here, we find suspension is warranted. We conclude that

the appropriate sanctions in this case are suspensions of both Qualley’s

and Bleyhl’s licenses to practice law for sixty days.

      VI. Disposition.

      For the above reasons, we suspend the licenses of George Qualley

IV and Thomas Bleyhl to practice law in this state for sixty days. The

suspension of George Qualley IV shall commence on the filing date of this

opinion. The suspension of Thomas Bleyhl shall commence on April 12,

2013. The suspension applies to all facets of the practice of law. Iowa

Ct. R. 35.13(3). Qualley and Bleyhl must comply with the notification

requirements of rule 35.23, and costs are taxed against them pursuant

to rule 35.27(1).    Unless the Board objects, Qualley’s and Bleyhl’s

licenses will be automatically reinstated on the day after the sixty-day

suspension period expires if all costs have been paid.      Iowa Ct. R.

35.13(2).

      LICENSES SUSPENDED.