Court Opinion

ID: 4250249
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:24:12.101822+00
Date Added: 2024-06-11T13:53:59.170468
License: Public Domain

IN THE SUPREME COURT OF IOWA
                          No. 105 / 06-0695

                       Filed September 29, 2006

IOWA SUPREME COURT ATTORNEY
DISCIPLINARY BOARD,

      Appellee,

vs.

JAMES WILLIAM McCARTHY,

      Appellant.

________________________________________________________________________
      On review of the report of the Grievance Commission.

      Grievance Commission reports respondent has committed ethical

misconduct and recommends suspension of respondent’s license to

practice law. LICENSE SUSPENDED.

      Dan T. McGrevey, Fort Dodge, for appellant.

      Charles L. Harrington and Wendell J. Harms, Des Moines, for
appellee.
                                      2

STREIT, Justice.

      James W. McCarthy has been admonished or reprimanded seven

times for previous ethical violations.      None of these previous ethical

violations led to a suspension of his license to practice law. This trend

ends today.     The Iowa Supreme Court Attorney Disciplinary Board

(“Board”) accused McCarthy of improperly representing two clients with

conflicting interests, neglecting client matters, and failing to respond to

inquiries from the Board.     The Grievance Commission of the Supreme

Court of Iowa (“Commission”) found McCarthy violated the Iowa Code of

Professional Responsibility for Lawyers and recommended a one-year

suspension. Due in part to mitigating factors, we suspend McCarthy’s

license for six months.

      I. Background

      McCarthy was born on April 13, 1950. Since his early childhood,

he has suffered from recurrent bouts of depression.

      He was admitted to practice law in 1981. He began his legal career

working for a law firm in Des Moines that specialized in collections. He

then secured employment with the Child Support Recovery Unit in

Des Moines and later transferred to Fort Dodge. In 1987, he went into
private practice with another attorney.        In 1991, he became a solo

practitioner.   McCarthy’s principal areas of practice are family law,

juvenile law, bankruptcy, and criminal law. At least half of his case load

relates to court appointed cases. 1

      In the years since entering private practice, McCarthy has been

punished numerous times for his ethical violations.

       1McCarthy told the Commission he had approximately 330 open cases at the

time he received this complaint.
                                      3

      In March 1991, the Board admonished McCarthy for failing to tell

his client a motion for sanctions had been filed, that the court held a

hearing on the matter, and that the court imposed sanctions.

      In November 1992, he was reprimanded for failing to make timely

filings in a probate matter and for failing to respond to the Board’s three

notices about its investigation.

      In December 1993, the Board admonished McCarthy when he

represented an individual even though he had previously represented the

individual’s former spouse.     The representation of this individual was

adverse to the interests of the former spouse and was in a matter that

was substantially related to the matter in which McCarthy had

represented the former spouse.        McCarthy did not receive informed

consent for this representation.

      In February 1996, he was reprimanded for representing a client

when such representation was adverse to the interests of a former client.

McCarthy had previously represented a mother in her dissolution of

marriage proceedings.      These proceedings involved matters of child

custody, child support, and visitation. Later, McCarthy represented the

father to secure a modification of the dissolution decree.               This
modification sought primary care and custody of the children. McCarthy

also represented the interests of those children in a child in need of

assistance proceeding.      These representations were contrary to the

interests of the mother—McCarthy’s previous client. By representing the

father in matters contrary to the interests of his former client, McCarthy

thereby violated his continuing duty of confidentiality to the mother.

      In June 2000, the Board admonished McCarthy for failing to

appear for a trial and for failing to appear for a hearing.
                                    4

      In October 2001, the Board admonished McCarthy for neglecting a

client’s matter when he failed to tell the client that he was not going to

pursue the client’s claim against a bank.

      Finally, in November of 2003, he was reprimanded for failing to

respond to three notices from the Board about a complaint.

      On September 12, 2005, the Board filed the present complaint

against McCarthy. The complaint consisted of five counts, each count

representing a separate individual alleged to be harmed by McCarthy’s

alleged ethical violations. One of the counts was eventually dismissed by

the Board.

      After the present complaint was filed, McCarthy went to an

intensive treatment center in Texas for help with his depression.      He

participated in this program for ten weeks.

      On March 26, 2006, McCarthy appeared for the hearing on this

complaint.   He admitted the Board’s allegations in all but one of the

counts.   McCarthy testified about his long history of major recurrent

severe clinical depression, which he blames for his ethical problems.

McCarthy’s physician testified extensively about McCarthy’s current

medical condition. In relation to McCarthy’s future, the physician stated:

            Well, I think it’s gotten to the point where he reached
      the bottom of the barrel and had no way to go but up. And
      sometimes it takes a major disaster for people to realize
      they’ve got to change and they have to make changes now.
      And at least based on my last few sessions, I feel really good
      about how he’s doing when he leaves the office.

      McCarthy reports he has his depression under control for the first

time in his life.   He is on medication and sees a mental health

professional regularly.    He has made substantial changes in the

operation of his private practice, including reducing his caseload and

implementing better organizational tools. Additionally, McCarthy has a
                                     5

network of judges and attorneys committed to supporting and assisting

him.

       The   Commission     concluded    McCarthy     violated    numerous

provisions of the Iowa Code of Professional Responsibility for Lawyers

and recommended a one-year suspension.

       II. Standard of Review

       We review attorney disciplinary proceedings de novo, Iowa

Supreme Ct. Attorney Disciplinary Bd. v. D’Angelo, 710 N.W.2d 226, 229

(Iowa 2006), and review such proceedings pursuant to Iowa Court Rule

35.10. The Board has the burden to prove disciplinary violations by a

convincing preponderance of the evidence. D’Angelo, 710 N.W.2d at 230.

This burden is “less than proof beyond a reasonable doubt, but more

than the preponderance standard required in the usual civil case.” Id.

(quoting Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Lett, 674
N.W.2d 139, 142 (Iowa 2004)).

       III. Factual Findings

       We find convincing evidence to prove the following:

       A. Traster Matter

       McCarthy represented Christopher Traster in a dissolution of
marriage action. His wife, Scotti Traster, was represented by the father

and son combination of Charles and Justin Deppe.             Scotti filed her

petition for dissolution on January 28, 2002. During the pendency of

the dissolution action, both Christopher and Scotti agreed that McCarthy

would represent them in a joint petition for bankruptcy.         The parties

agreed to file the petition jointly even though they were in the midst of

dissolution proceedings because it would be more economical for both of

them—there would be only one filing fee for the joint bankruptcy
                                        6

petition. 2 The bankruptcy petition was filed on October 21, 2002, and

the debts listed in the bankruptcy petition were discharged on February

12, 2003.

      On April 17, 2003, the Trasters’ dissolution of marriage decree was

entered. The parties had agreed upon all terms in the decree except for

the payment of attorney fees. In regards to the payment of attorney fees,

the court ordered:

            That [Scotti] shall receive from [Christopher] the sum
      of $2000.00 for her attorney fees and expenses incurred
      herein, and that her Attorney Charles Deppe is hereby
      granted a judgment for said amount, to be due and payable
      from this date, with interest at the legal rate, until paid in
      full.

      In response to this judgment, McCarthy sent Christopher a letter

containing the following statements:

             In going over your bankruptcy petition, Charles Deppe
      was not added as a creditor on the petition, due to the fact
      that he hadn’t submitted a bill yet. I want to reopen the
      bankruptcy and include him as a creditor, so we can get rid
      of this legal bill. . . . I will . . . reopen the matter on your
      behalf only, and include Mr. Deppe as an unsecured
      creditor. (Emphasis added.)

      On August 11, 2003, McCarthy filed a motion to reopen the
bankruptcy so Christopher could discharge the court ordered attorney

fee judgment. As described in the above-mentioned letter, the motion did

not list Scotti as a party to the petition and did not list Scotti as a party

to the debt.

      Scotti eventually learned the bankruptcy case had been reopened.

She contacted McCarthy and asked if she could also reopen the

bankruptcy to include two recently discovered credit card debts that

predated the original bankruptcy petition. McCarthy told her to fax the

        2Neither the Board nor the Commission discussed whether this represented a

conflict of interest in and of itself. Therefore we do not reach this issue.
                                    7

information on the debts to his office. He told her to stop paying on the

debts because they would be discharged upon reopening the bankruptcy.

Scotti sent him a copy of the bills and stopped making payments on the

credit cards.

      At some point, Justin Deppe contacted Scotti and informed her she

would still be liable for the legal bill if Christopher’s liability for the

$2000 was discharged through bankruptcy. Scotti then sent a letter to

McCarthy telling him she did not approve of Christopher trying to

discharge the $2000 debt to her dissolution attorney.

      Charles Deppe challenged Christopher’s attempt to discharge the

$2000 debt and was ultimately successful, in part because McCarthy did

not attend the hearing on the matter.

      McCarthy never amended the bankruptcy petition to include

Scotti’s two additional credit cards because there was some dispute as to

whether Scotti was to pay the required filing fee before McCarthy filed the

information about the two credit cards.

      Scotti filed an ethics complaint when her checking account was

garnished for failure to pay one of the two credit cards. The Board sent

McCarthy three notices regarding this complaint and he failed to respond
to any of the notices.

      B. Schmitz Matter

      McCarthy admits the following facts alleged by the Board. In May

of 2003, McCarthy was appointed to represent L.A.C. in a child in need of

assistance case.    The Iowa Department of Human Services assigned

Cheryl Schmitz to this case. Schmitz filed a complaint against McCarthy

with the Board.     McCarthy did not respond to either of the Board’s

notices about the complaint.
                                    8

      C. Aguilera Matter

      McCarthy admits the following facts alleged by the Board.          On

March 28, 2000, the Iowa District Court appointed McCarthy to

represent Jose Aguilera with regard to an appeal of his postconviction

relief case. On May 12, 2000, the clerk of the supreme court issued a

notice of default and assessment of penalty to McCarthy because he

failed to file and serve a combined certificate.   On July 28, 2000, the

clerk of the supreme court dismissed the Aguilera appeal for want of

prosecution pursuant to Iowa Rule of Appellate Procedure 6.19(1).

McCarthy also ignored two letters sent by Aguilera inquiring into his

appeal. McCarthy failed to respond to two subsequent notices of

complaint sent by the Board in regards to this matter.

      D. Kobel Matter
      McCarthy admits the following facts alleged by the Board. On July

1, 2004, the Iowa District Court appointed McCarthy to represent Dawn

Kobel with regard to an appeal of her conviction. On July 24, 2004, the

clerk of the supreme court issued a notice of default and assessment of

penalty to McCarthy because he failed to file and serve a combined

certificate. On February 22, 2005, the clerk of the supreme court issued

a notice of default and assessment of penalty to McCarthy because he

failed to file Kobel’s proof brief and failed to designate the appendix

contents. On March 24, 2005, the clerk of the supreme court dismissed

the Kobel appeal for want of prosecution. See Iowa R. App. P. 6.19(1).

      IV. Ethical Violations

      Convincing evidence proves the following ethical violations:

      A. Representation of Two Clients with Differing Interests

      The Board charged, and the Commission found, McCarthy’s

decision to reopen the Traster bankruptcy on Christopher’s behalf so
                                       9

that he could discharge Christopher’s liability for Scotti’s legal bills

violated DR 5-105 (focusing on the threat posed to a lawyer’s “exercise of

independent professional judgment on behalf of a client” when two

clients’ differing interests come into play).

      DR 5-105(C) provides:

             A lawyer shall not continue multiple employment if the
      exercise of independent professional judgment on behalf of a
      client will be or is likely to be adversely affected by the
      representation of another client, except to the extent
      permitted under DR 5-105(D). (Emphasis added.)

      DR 5-105(D) provides:

            [a] lawyer may represent multiple clients if it is
      obvious that the lawyer can adequately represent the interest
      of each and if each consents to the representation after full
      disclosure of the possible effect of such representation on the
      exercise of the lawyer’s independent professional judgment
      on behalf of each.

      However unwise it was for McCarthy to serve as Christopher

Traster’s attorney for the dissolution proceedings while simultaneously

serving as both Scotti and Christopher’s attorney for the purposes of a

joint bankruptcy petition, that decision became acutely unethical when

he decided to amend the bankruptcy petition only on Christopher’s
behalf. McCarthy’s attempt to discharge Christopher’s liability for a legal

bill that Christopher was required to pay for his wife was clearly adverse

to Scotti’s interests.    If Christopher’s liability for the legal bill was

discharged, then Scotti was still arguably liable for the bill because her

liability had not been discharged and she was the one who had signed

the original contract for legal services.

      Both of the Trasters were McCarthy’s clients for the original

bankruptcy petition and the decision to amend the petition constituted

the same matter as the original petition. An attorney cannot represent
                                       10

two parties in a bankruptcy petition and then, six months after the

bankruptcy discharge, use the knowledge and information discerned

from both clients in the original action to amend the bankruptcy petition

to the detriment of one of the original parties. We find such actions were

violations of DR 5-105(C) and (D).

      B. Neglect

      The record supports the Commission’s finding that McCarthy

committed professional neglect on numerous occasions.              See DR 6-

101(A)(3) (providing a lawyer shall not neglect a client’s legal matter); see

also Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Moorman, 683
N.W.2d 549,   551   (Iowa   2004)    (defining   professional   neglect   as

“indifference and a consistent failure to perform those obligations that a

lawyer has assumed, or a conscious disregard for the responsibilities a

lawyer owes to a client”).

      In the Aguilera and Kobel matters, appeals were dismissed as a

result of McCarthy’s neglect.     See Moorman, 683 N.W.2d at 552-53

(holding attorney’s failure to comply with rules of appellate procedure, as

well as subsequent notices to cure the defaults issued by the clerk of

court, reveals a blatant pattern of neglect and constitutes a “conscious
disregard” for the responsibilities an attorney owes a client and the

court).   Such dilatory handling of client matters is a disservice to the

client and the judicial system. Iowa Supreme Ct. Attorney Disciplinary

Bd. v. Kadenge, 706 N.W.2d 403, 408-09 (Iowa 2005).

      McCarthy’s conduct in these matters violated DR 1-102(A)(1)

(providing a lawyer shall not violate a disciplinary rule); DR 1-102(A)(5)

(providing a lawyer shall not engage in conduct that is prejudicial to the

administration of justice); DR 1-102(A)(6) (providing a lawyer shall not

engage in any other conduct that adversely reflects on the fitness to
                                     11

practice law); DR 6-101(A)(3) (providing a lawyer shall not neglect a

client’s legal matter); DR 7-101(A)(1) (providing a lawyer shall not

intentionally fail to seek the lawful objectives of a client); DR 7-101(A)(2)

(providing a lawyer shall not intentionally fail to carry out a contract of

employment); DR 7-101(A)(3) (providing a lawyer shall not intentionally

prejudice or damage a client during the course of the professional

relationship); and DR 7-102(8) (providing a lawyer shall not knowingly

engage in conduct contrary to a disciplinary rule in the representation of

a client).

       C. Failure to Cooperate with the Board

       McCarthy was dilatory in responding to the Board’s notices of

complaint in the Traster, Schmitz, Aguilera, and Kobel matters. While

McCarthy filed an answer to the Board’s complaint, his initial lack of

cooperation wasted the Board’s valuable time and limited resources. See

Kadenge, 706 N.W.2d at 409. His lack of cooperation also prejudiced the

Board’s ability to gather all pertinent facts regarding the complaints. Id.

Delay in responding to the Board is a violation of DR 1-102(A)(5), (6)

(conduct prejudicial to administration of justice and conduct reflecting

adversely on fitness to practice law).       See Comm. on Prof’l Ethics &
Conduct v. Bromwell, 389 N.W.2d 854, 857 (Iowa 1986) (holding failure to

respond to grievance committee violates the proscription against conduct

prejudicial to administration of justice).

       V. Sanction

       When determining the proper sanction, we consider the nature of

the alleged violations, the fitness of the attorney to continue to practice

law, the need to protect the public from persons unfit to practice law, the

need to uphold the public’s confidence in the integrity of our system of

justice, the need to deter other attorneys from committing similar
                                    12

misconduct, maintenance of the reputation of the bar as a whole, and

any aggravating or mitigating circumstances. Iowa Supreme Ct. Bd. of

Prof'l Ethics & Conduct v. Kallsen, 670 N.W.2d 161, 164 (Iowa 2003). The

form and extent of a disciplinary sanction “must be tailored to the

specific facts and circumstances of each individual case.”      Comm. on

Prof’l Ethics & Conduct v. Rogers, 313 N.W.2d 535, 537 (Iowa 1981).

      We understand depression is a serious illness and applaud

McCarthy’s continuing efforts to seek treatment.        While his ongoing

battle with depression may explain why he neglected clients and failed to

cooperate with the Board, it does not excuse his unethical conduct. See,

e.g., Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Thompson, 595
N.W.2d 132, 136 (Iowa 1999) (attorney suspended for two months when

ethical violations occurred during a period of depression and active

alcoholism). In addition, we are not convinced depression played a factor

in his poor decision to recommend that one of his clients amend a joint

bankruptcy petition to the detriment of his other client.

      These current violations illustrate that McCarthy has not learned

from his previous reprimands and admonishments. In both 1993 and

1996 he was sanctioned for representing clients with interests adverse to
those of former clients.   Also, in 1992, 2000, 2001, and 2003 he was

reprimanded for violations relating to neglect and/or failing to respond to

inquiries from the Board. We therefore agree with the Commission that a

suspension is warranted.      Nonetheless, there are sufficient mitigating

factors to justify a six-month suspension. For the first time in his life,

McCarthy’s depression appears to be under control and he has made

great strides in treatment.   Moreover, he has strong support from the

bench and bar.
                                   13

      VI. Conclusion

      McCarthy is suspended indefinitely from the practice of law with

no possibility of reinstatement for at least six months. This suspension

shall apply to all facets of the practice of law as provided in Iowa Court

Rule 35.12(3) and requires notification of clients as outlined in Iowa

Court Rule 35.21.    Upon any application for reinstatement, McCarthy

must establish that he has not practiced law during the suspension

period and he has in all ways complied with the requirements of Iowa

Court Rule 35.13. In his application for reinstatement, McCarthy must

provide this court with an evaluation by a licensed health care

professional verifying his fitness to practice law. Before obtaining this

evaluation, McCarthy shall submit the name of the proposed evaluator

and the nature of the evaluation to the Board for its prior approval.

Costs are taxed to McCarthy pursuant to Iowa Court Rule 35.25(1).

      LICENSE SUSPENDED.