Court Opinion

ID: 4249673
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:20:17.85731+00
Date Added: 2024-06-11T14:16:57.146493
License: Public Domain

IN THE SUPREME COURT OF IOWA
                             No. 11–0326

                         Filed August 5, 2011

IOWA SUPREME COURT ATTORNEY
DISCIPLINARY BOARD,

      Complainant,

vs.

ERIC K. PARRISH,

      Respondent.

      On review of the report of the Grievance Commission of the

Supreme Court of Iowa.

      Grievance commission reports that respondent has committed

ethical misconduct and recommends a public reprimand.       LICENSE

SUSPENDED.

      Charles L. Harrington and Elizabeth E. Quinlan, Des Moines, for

complainant.

      David L. Brown, Des Moines, for respondent.
                                           2

ZAGER, Justice.

        This attorney disciplinary proceeding comes before us on the

report of a division of the Grievance Commission of the Supreme Court of

Iowa.    See Iowa Ct. R. 35.10(1).            The Iowa Supreme Court Attorney

Disciplinary Board alleges the respondent, Eric K. Parrish, violated

multiple Iowa Rules of Professional Conduct as well as Iowa Court Rules.

The basis of these violations involve his handling of his trust account for

two clients in which Parrish withdrew funds from his trust account

before they were earned, failed to promptly notify his clients of the

withdrawals, did not earn the amounts withdrawn, and did not return

the remainder of funds upon request.

        The commission found Parrish violated several of the Iowa Rules of

Professional    Conduct      and    Iowa       Court    Rules.         The    commission

recommended Parrish receive a public reprimand, be ordered to

immediately refund the unearned fees, and attend continuing education

classes on billing and timekeeping.              Upon our consideration of the

commission’s findings of fact, conclusions of law, and recommendation,

we find Parrish violated several of our ethical rules and suspend his

license for sixty days.

        I. Scope of Review.

        We review attorney disciplinary proceedings de novo.                            Iowa

Supreme Ct. Att’y Disciplinary Bd. v. Keele, 795 N.W.2d 507, 509 (Iowa

2011).     The board must prove an attorney’s ethical misconduct by a

convincing     preponderance       of   the     evidence.        Id.     A      convincing

preponderance of the evidence is more than the preponderance standard

required in a typical civil case, but less than proof beyond a reasonable

doubt. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Schmidt, 796 N.W.2d
33,   36    (Iowa   2011).     Although         the    commission’s          findings   and
                                     3

recommendations are not binding on us, we give them respectful

consideration. Id. “Upon proof of misconduct, we may impose a greater

or lesser sanction than the sanction recommended by the commission.”

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Templeton, 784 N.W.2d 761,

764 (Iowa 2010).

        II. Findings of Fact.

        The parties entered into a stipulation and agreement which

stipulates numerous facts.      A stipulation of facts is binding on the

parties. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Gailey, 790 N.W.2d
801, 803 (Iowa 2010). A hearing was conducted in this matter resulting

in findings of fact, conclusions of law, and recommendation from the

commission.     Based upon our de novo review of the stipulation and

agreement, and the hearing record, we find the following facts.

        Parrish has been a licensed attorney in Iowa since July 1999.

Parrish is licensed to practice law in the courts of this state and has

maintained a law practice in Des Moines, Iowa, during all times material

to this matter. During the past ten years, Parrish developed a practice in

criminal defense and personal injury law. The board’s complaint alleges

Parrish engaged in multiple rule violations.     The alleged misconduct

primarily concerns trust account violations.

        A. Montgomery Ward Representation (Count I). In June 2005,

Montgomery Ward was arrested in Marion County, Iowa, on suspicion of

selling methamphetamine. At the time, he was also a suspect in a theft

case.    On October 7, he was formally charged with possession of

methamphetamine with the intent to deliver, a class “C” felony, and theft

in the second degree, a class “D” felony.

        Ward entered into an attorney fee agreement with Parrish on

October 20, indicating Ward would be billed for Parrish’s services at a
                                   4

rate of $175 per hour.    Ward’s mother paid the Parrish Law Firm a

$10,000 retainer, which Parrish deposited into the firm’s trust account

on October 21. Parrish filed an appearance for Ward in Marion County.

      Between October 25 and December 7, Parrish withdrew fees and

expenses from Ward’s trust account on six separate occasions. Parrish’s

withdrawals totaled $10,000, Ward’s entire retainer.    Parrish did not

provide Ward with a contemporaneous written notice of the withdrawals

from the trust account or a complete accounting.

      Parrish negotiated a plea agreement with the Marion County

Attorney’s Office. On June 30, 2006, Ward pled guilty to possession of

methamphetamine, a serious misdemeanor, and theft in the second

degree. At sentencing on August 11, Ward received a deferred judgment

and two years of probation.

      Immediately after sentencing, Ward requested a final bill.    After

numerous contacts to the Parrish Law Firm, Parrish finally provided

Ward a final bill on March 9, 2007. This bill reflected a statement for

fees and expenses incurred totaling $1532.54 with a credit balance of

$8467.46. The statement informed Ward that as soon as he received the

statement and agreed to its terms, the firm would send a refund of his

retainer within 30 days. While Ward agreed to the statement, no refund

was ever received by Ward, even after telephone and fax demands were

made on Parrish by an attorney who was then representing Ward.

      On July 23, Parrish sent Ward a revised billing statement for fees

and expenses totaling $3693.54, with a credit balance of $6306.46.

Parrish explained that the changes in the statement reflected that he had

used the wrong hourly rate in his previous billing. On September 25,

Parrish sent a second revised billing statement for fees and expenses

totaling $3008 with a credit balance of $6992. On October 9, Parrish
                                         5

sent a letter to Ward’s attorney indicating he would be providing a refund

based upon his previous billing statements.             Parrish never issued a

refund.

       Parrish sent yet another billing statement, which was created on

November 15, claiming Parrish had earned $3020 and Ward had a credit

of $6980. After no resolution to the fee dispute, Ward filed a complaint

against Parrish with the Polk County Fee Arbitration Committee on

December 17. Both Ward and Parrish participated in the hearing before

the committee. On January 5, 2009, the committee determined Parrish

had earned $1532.54 in fees and expenses and directed him to refund

$8467.46 to Ward. No refund has been issued.

       After Parrish’s adverse arbitration decision, and after Ward filed a

complaint against Parrish with the board, Parrish undertook a review of

Ward’s file for the purpose of providing more complete billing information

to the board.    Upon completing his review, Parrish provided a billing

statement, dated May 12, 2009, which indicated he had earned

$10,325.01 for his work in representing Ward.                    At his disciplinary

hearing, Parrish explained that he believed he earned the entire $10,000

retainer during his representation of Ward. Parrish contended that his

billing statements did not fully reflect the actual amount of work he

conducted in the case. However, Parrish acknowledged his system for

tracking the hours he worked was not adequate and further admitted

that he could not provide the commission with an accounting. Parrish

also   acknowledged    that   he   did       not   provide   a    contemporaneous

accounting of the amounts he withdrew from the trust account. Lastly,

Parrish acknowledged that no refund has yet been issued to Ward.

       B. James Bixler Representation (Count II).                  In August 2009,

James Bixler retained Parrish to represent him in a South Dakota matter
                                      6

involving a criminal charge for possession of cocaine and the civil

forfeiture of Bixler’s Harley Davidson motorcycle. On August 11, Bixler

signed a fee agreement retaining Parrish at an hourly rate of $175.

Bixler paid a $5000 retainer, which was deposited into the firm’s trust

account on August 12.        On September 28, Bixler paid Parrish an

additional $3000.

      After being retained, Parrish conducted research into South

Dakota law and had some communication with officials in South Dakota.

Parrish was not able to negotiate a plea agreement. Bixler’s motorcycle

was also forfeited, although this forfeiture was later set aside.

      On October 5, Bixler terminated Parrish’s representation in both

the criminal and civil matters.     Bixler requested a full refund of his

$3000 payment and also requested a refund of the unused portion of his

$5000 retainer.     On October 8, Parrish provided a full refund of the

$3000 payment. He did not provide a refund or an accounting regarding

the $5000 retainer.

      The records reflect that Parrish withdrew fees from Bixler’s trust

account on four separate occasions between August 10 and October 21.

Based upon a billing statement Parrish provided on March 10, 2010, the

records reflect that Parrish withdrew more in fees than what he had

earned.   Parrish also did not provide Bixler with a contemporaneous

written notice when he withdrew these funds. Lastly, Parrish’s March 10

billing statement shows Bixler was charged, at times, an hourly rate of

$200 per hour as opposed to the $175 per hour rate specified in the fee

agreement. Parrish acknowledges that a refund is owed to Bixler, but he

has refunded no money to him.
                                      7

      III. Ethical Violations.

      A. Client Funds/Trust Account and Accounting.               The board

alleged Parrish violated rules 32:1.5(a), 32:1.15(c), (d), and (f), as well as

rule 32:1.16(d).   Rule 32:1.15(f) incorporates Iowa Court Rules 45.7(3)

and 45.7(4).    We will address these alleged rule violations together

because they all apply to the handling of client funds.

      Rule 32:1.5(a) prohibits counsel from making an agreement for or

collecting “an unreasonable fee.” Rule 32:1.15 reads in relevant part:

             (c) A lawyer shall deposit into a client trust account
      legal fees and expenses that have been paid in advance, to
      be withdrawn by the lawyer only as fees are earned or
      expenses incurred.

            (d) Upon receiving funds or other property in which a
      client or a third person has an interest, a lawyer shall
      promptly notify the client or third person. Except as stated
      in this rule or otherwise permitted by law or by agreement
      with the client, a lawyer shall promptly deliver to the client
      or a third person any funds or other property that the client
      or third person is entitled to receive and, upon request by
      the client or third person, shall promptly render a full
      accounting regarding such property.

            ....

           (f) All client trust accounts shall be governed by
      chapter 45 of the Iowa Court Rules.

Rule 32:1.16(d) provides upon termination of representation, a lawyer

shall refund any advance payment of fee or expense that has not been

earned or incurred.

      Iowa Court Rules 45.1, 45.2(2), 45.3, 45.4, and 45.7 generally set

forth the details a lawyer needs to know and follow when administering

his or her trust accounts. These rules generally require a lawyer to place

client funds into a separate subaccount, withdraw payment from the

trust account only once the fee is earned, notify the client when the

attorney anticipates making a fee withdrawal, and provide the client a
                                     8

complete accounting of any such withdrawal.        The attorney must also

transmit the notice of such withdrawal and accounting no later than the

date of withdrawal.

      From this court’s de novo review of the record, we find the

convincing preponderance of the evidence establishes that Parrish has

violated several ethical rules. Pursuant to Iowa Supreme Court Board of

Professional Ethics and Conduct v. Apland, 577 N.W.2d 50, 55 (Iowa

1998), the $10,000 fee paid by Ward and the $5000 fee paid by Bixler to

Parrish were both “advance fee payments.”         These funds remain the

property of Ward and Bixler until Parrish earned them. Id.

      Rule 32:1.5(a) provides that a lawyer shall not charge or collect an

unreasonable fee or violate any restrictions imposed by law.           Iowa

Supreme Ct. Bd. of Prof’l Ethics & Conduct v. D’Angelo, 619 N.W.2d 333,

337 (Iowa 2000). “[T]aking fees in advance of earning them is illegal.” Id.

(referring to former Iowa Code of Professional Responsibility for Lawyers

DR 2–106(A)).    It is also illegal to fail to return unearned portions of

advance fees.   See Apland, 577 N.W.2d at 58 (determining failure to

return unearned portion of advance fees constitutes collection of an

excessive fee under the same rule). We find Parrish withdrew Ward and

Bixler’s entire advance fees before they had been earned and then

subsequently failed to return the unearned portions.            As such, he

collected an unreasonable fee in violation of rule 32:1.5(a).

      We also find Parrish violated rule 32:1.15(c) and rule 45.7(3) by

withdrawing funds from the trust accounts before the fees were actually

earned. See Iowa R. Prof’l Conduct 32:1.15(c) (withdrawing fees only as

earned); Iowa Ct. R. 45.7(3) (same).     Parrish stipulates to withdrawing

fees in both the Ward and Bixler matters before earning them.          The

record supports the stipulation.
                                    9

      We find Parrish violated rule 32:1.15(d) and rule 32:1.16(d) in the

Ward matter by failing to render an appropriate accounting and failing to

return advance payments which had not been earned. Ward immediately

requested a final bill following his sentencing on August 11, 2006. After

numerous telephone calls to Parrish’s office and other correspondence,

Ward received a billing statement for fees and expenses totaling

$1532.54. However, Parrish had withdrawn Ward’s entire $10,000 fee

advance from the trust account by December 7, 2005. Clearly, Parrish

had not yet earned these fees. Even after several attempts to justify the

fees, Parrish was never able to account for the $10,000 advance fee paid

to him.   When all else failed, a hearing was conducted before the fee

arbitration committee. As a result of this hearing, Parrish was ordered to

return to Ward $8467.46 as his unearned retainer.        The amount so

ordered to be refunded to Ward has yet to be paid.

      Rule 32:1.15(f) incorporates rule 45.7(4) and requires attorneys to

notify their clients in writing and provide contemporaneous accounting

when the attorney withdraws fees from the trust account. Parrish did

not advise Ward contemporaneously as to when he withdrew fees, and he

did not provide Ward a full accounting regarding these fees.     We find

Parrish violated these rules.

      Parrish also violated rules 32:1.15(d) and (f), 32:1.16(d), and

45.7(4) in the Bixler matter based upon the same type of conduct set

forth above. While he did properly deposit the advance fees into a client

trust account, he failed to notify Bixler in writing and provide a

contemporaneous accounting when he withdrew fees from the client’s

trust account and failed, upon the termination of his representation of

Bixler, to provide a prompt accounting and a refund of any unearned

fees. In each case, Parrish has violated the Iowa Rules of Professional
                                     10

Conduct as set forth above, and the Iowa Court Rules as alleged by the

board and found by the commission.

      B. Rule 32:8.4(c). This rule states, “It is professional misconduct

for a lawyer to . . . engage in conduct involving dishonesty, fraud, deceit,

or misrepresentation[.]”   Iowa R. Prof’l Conduct 32:8.4(c).      The board

contends Parrish violated this rule by repeatedly misrepresenting to

Ward that a refund was forthcoming. 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. Netti, 797 N.W.2d 591, 605 (Iowa 2011). “In the

legal sense, a misrepresentation usually requires something more than

negligence.”   Id. Accordingly, an attorney must act with some level of

scienter greater than negligence to violate rule 32:8.4(c). Id.

      We have previously found that Parrish violated rules 32:1.15(d)

and 32:1.16(d) when he failed to promptly render an accounting to his

client and promptly refund any unearned fees.          When an attorney’s

conduct violates a specific rule involving dishonesty, fraud, deceit, or

misrepresentation, we will not find the same conduct to also violate a

general rule prohibiting that conduct, such as rule 32:8.4(c). Id. While

the court finds no reasonable excuse for Parrish’s failure to promptly

refund retainers to either Ward or Bixler, from the record we cannot

conclude Parrish made knowing misrepresentations of material facts by

failing to return the retainers as promised. Therefore, we find Parrish did

not violate this rule.

      C. Rule 32:8.4(d). “It is professional misconduct for a lawyer to

engage in conduct that is prejudicial to the administration of justice[.]”

Iowa R. Prof’l Conduct 32:8.4(d). There is no typical form of conduct that

prejudices the administration of justice. Generally, acts that have been

deemed prejudicial to the administration of justice have “ ‘hampered the
                                      11

efficient and proper operation of the courts or of ancillary systems upon

which the courts rely.’ ”     Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Wright, 758 N.W.2d 227, 230 (Iowa 2008) (quoting Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Borth, 728 N.W.2d 205, 211 (Iowa 2007)).

        Examples of conduct prejudicial to the administration of
        justice include paying an adverse expert witness for
        information regarding an opponent’s case preparation,
        demanding a release in a civil action as a condition of
        dismissing criminal charges, and knowingly making false or
        reckless charges against a judicial officer.

Templeton, 784 N.W.2d at 768.

        Under the facts and circumstances involved in this case, this court

cannot conclude that Parrish’s failure to adhere to the requirements

involving his client trust account and fees hampered the efficient and

proper operation of the courts or of an ancillary system upon which the

courts rely. Accordingly, we find Parrish’s conduct did not violate this

rule.

        IV. Discipline.

        “There is no standard sanction for a particular type of misconduct,

and though prior cases can be instructive, we ultimately determine an

appropriate sanction based on the particular circumstances of each

case.” Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley (Earley I), 729
N.W.2d 437, 443 (Iowa 2007). In determining an appropriate sanction,

we consider:

        [T]he nature of the violations, the attorney’s fitness to
        continue in the practice of law, the protection of society from
        those unfit to practice law, the need to uphold public
        confidence in the justice system, deterrence, maintenance of
        the reputation of the bar as a whole, and any aggravating or
        mitigating circumstances.

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Ireland, 748 N.W.2d 498, 502

(Iowa 2008).      The court has recognized, “Where there are multiple
                                       12

violations of our disciplinary rules, enhanced sanctions may be

imposed.” Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Alexander,

574 N.W.2d 322, 327 (Iowa 1998).            When determining appropriate

discipline,   this   court   also   considers   aggravating   and   mitigating

circumstances present in the disciplinary action. Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Earley (Earley II), 774 N.W.2d 301, 308 (Iowa 2009).

Significant aggravating factors for punishment include “ ‘the existence of

multiple instances of neglect, past disciplinary problems, and other

companion violations.’ ”      Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Marks, 759 N.W.2d 328, 332 (Iowa 2009) (quoting Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Lesyshen, 712 N.W.2d 101, 106 (Iowa 2006)).

      When dealing with client trust account violations, our sanctions

have ranged from a public reprimand when the violation was relatively

minor and isolated, Iowa Supreme Ct. Att’y Disciplinary Bd. v. Piazza, 756
N.W.2d 690, 700 (Iowa 2008), to license suspension when the violation

involved poor office management and neglect, Earley I, 729 N.W.2d at

443–44, to license revocation when the violation amounted to a

misappropriation of client funds, Earley II, 774 N.W.2d at 309. Based

upon the record in this case, we are not faced with a single incident, nor

are we dealing with a case of misappropriation.               Therefore, the

suspension cases are most helpful in determining the ultimate sanction

to impose in this case.       Cases involving suspension for client trust

account violations range from two months in less serious cases, Iowa

Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Plumb, 589 N.W.2d 746, 749

(Iowa 1999), to eighteen months in very severe cases when the violations

combine with multiple instances of neglect and other ethical violations,

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Plumb, 766 N.W.2d 626, 634–

35 (Iowa 2009).
                                    13

      The commission has recommended that Parrish receive a public

reprimand.    The board has recommended that Parrish’s license to

practice law be suspended for a period of no less than four months. In

considering   aggravating   and   mitigating   circumstances,    the   prior

disciplinary history of an attorney is a factor we must consider in

imposing discipline. Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v.

Lemanski, 606 N.W.2d 11, 14 (Iowa 2000).         Since that decision, this

court has repeatedly considered prior admonitions as aggravating

circumstances that relate directly to an appropriate sanction. See, e.g.,

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Cohrt, 784 N.W.2d 777, 783

(Iowa 2010) (“A prior admonition is properly considered in determining

discipline, especially when it involves the same type of conduct as the

conduct subject to discipline.”); Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Barry, 762 N.W.2d 129, 132, 140 (Iowa 2009) (noting prior disciplinary

history included private admonition for a conflict of interest); Iowa

Supreme Ct. Att’y Disciplinary Bd. v. Gottschalk, 729 N.W.2d 812, 821

(Iowa 2007) (prior discipline included two private admonitions); Iowa

Supreme Ct. Att’y Disciplinary Bd. v. Morrison, 727 N.W.2d 115, 117, 120

(Iowa 2007) (included in the parties’ stipulation was a prior admonition

for similar conduct).

      Without setting forth specific details, Parrish has been the subject

of six private admonitions dating back to December 2001. The genesis of

each of the admonitions involved Parrish’s failure to provide an

itemization of services provided, and in at least two of the previous

admonitions, the conduct involved the withdrawal of funds from a client

trust account in excess of the fees that were actually earned. While an

error in judgment or mere negligence by an attorney is not an

appropriate basis for discipline, Parrish’s conduct over the last ten years
                                     14

has now developed into a pattern of violating the Iowa Rules of

Professional Conduct and the rules of this court relating to the

administration    of   trust   accounts.     An     additional   aggravating

circumstance involves his failure, now over many years, to return funds

to his former clients.   In the case of Ward, his refusal or inability to

return these funds is now approaching five years. While less egregious

due to the amount in question, it is instructive that Parrish likewise has

still not refunded the unearned fees to Bixler.

      We also consider any mitigating circumstances. Parrish has been

involved in providing pro bono legal services to individuals, and he is also

active and involved in the community.             Additionally, Parrish has

indicated that he is attempting to take remedial actions to improve the

billing and accounting problems that have plagued him in his practice.

This has included the firm updating both its billing system and case

management software so that this conduct will not be repeated.

However, as noted by counsel, none of these remedial actions excuse

Parrish’s failure to actually account for the time billed to his clients, to

withdraw the proper funds based on the billings, or to provide a

contemporaneous notice of withdrawals to his client. Finally, the court

notes that Parrish has taken full responsibility for his failures, and

Parrish cooperated fully in responding to the complaints.
      Having     considered    all   the   aggravating     and    mitigating
circumstances, and in our de novo review, a public reprimand under this
set of facts would not be adequate. Such a sanction might have been
appropriate had this case involved only a single incident of misconduct.
See, e.g., Iowa Supreme Ct. Att’y Disciplinary Bd. v. Sobel, 779 N.W.2d
782, 789–90 (Iowa 2010) (publicly reprimanding attorney for failure to
provide accounting for an advance fee payment); Wright, 758 N.W.2d at
                                     15

231 (finding an attorney who failed to dismiss an appeal after his client
was unable to raise enough funds warranted a public reprimand); Piazza,
756 N.W.2d at 700 (attorney received public reprimand for failing to
place advance fee payment in trust account and to provide an
accounting); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Dunahoo, 730
N.W.2d 202, 207–08 (Iowa 2007) (publicly reprimanding attorney for
failing to provide an accounting and neglect in timely closing an estate).
Unfortunately, the recurring pattern of conduct in this case warrants a
stiffer sanction—namely a suspension.
       V. Disposition.
       We have carefully considered the respondent’s current violations,
his prior history of ethical infractions, and his current fitness to practice
law.   Accordingly, we suspend Parrish’s license to practice law in the
State of Iowa for sixty days. This suspension applies to all facets of the
practice of law. See Iowa Court Rule 35.12(3). Parrish must comply with
Iowa Court Rule 35.22 dealing with the notification of clients and
counsel.   Parrish is also ordered to refund to Ward the amount of
$8467.46 and to Bixler the sum of $187.51.          Prior to reinstatement,
Parrish shall provide to the court proof that these sums have been paid.
Parrish is also ordered to attend continuing education with respect to
billing, timekeeping practices, and client trust accounts, and to submit
proof of his attendance to the court prior to reinstatement. The costs of
this action are taxed to Parrish pursuant to Iowa Court Rule 35.26.
Absent an objection by the board, and under the conditions set forth
above, we shall reinstate Parrish’s license to practice law on the day after
the sixty-day suspension period expires. See Iowa Ct. R. 35.12(2).
       LICENSE SUSPENDED.