Court Opinion

ID: 4249703
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:20:33.919215+00
Date Added: 2024-06-11T14:44:06.200714
License: Public Domain

IN THE SUPREME COURT OF IOWA
                         No. 09–0847 & 09–0848

                           Filed April 1, 2011

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

      Complainant,

vs.

DAVID L. POLSLEY,

        Respondent.
---------------------------------
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

      Complainant,

vs.

KATHRYN SUE POLSLEY,

      Respondent.

      On review of the report of the Grievance Commission of the

Supreme Court of Iowa.

      Grievance commission recommends suspensions of six months.

LICENSES REVOKED.

      Charles L. Harrington and David J. Grace, Des Moines, for

complainant.

      David L. Polsley and Kathryn Sue Polsley, Ottawa, Kansas, pro se.
                                    2

HECHT, Justice.

      The Iowa Supreme Court Attorney Disciplinary Board filed a

complaint alleging the respondents, David L. Polsley and Kathryn S.

Polsley, violated the Iowa Code of Professional Responsibility for Lawyers

by converting government property to their own use.        The Grievance

Commission of the Supreme Court of Iowa found the board had proved

the allegations of the complaint and recommended we suspend the

respondents’ licenses to practice law indefinitely with no possibility of

reinstatement for six months.    We find the board proved the Polsleys’

conduct violated several ethical rules requiring revocation of their

licenses.

      I. Factual Background and Prior Proceedings.

      The Polsleys, husband and wife, reside in Ottawa, Kansas.

Kathryn graduated from the University of Kansas School of Law in 1979,

and David graduated from the same law school in 1981. After practicing

law in Kansas for a short time, the couple moved to Iowa, took the Iowa

bar examination, and were admitted to practice in this state.       David

accepted a job offer from a Wisconsin corporation, and they moved there

in 1987. In 1991, they returned to Kansas and practiced law together

thereafter.

      In December 1998, Kathryn’s mother, Lois Simpson, fell ill with

Creutzfeldt-Jakob’s syndrome, a terminal degenerative neurological

disorder. From February 4, 1999, until July 3, 2000, Mrs. Simpson was

bedridden in a persistent vegetative state.      The Polsleys and their

children moved into Simpson’s home and served as her primary

caretakers during her illness.

      Mrs. Simpson was the beneficiary of a trust which owned a bank

account. Farm income from Mrs. Simpson’s mother and Mrs. Simpson’s
                                           3

own social security survivor’s benefits were customarily deposited into

the account. 1      As her mother’s trustee, Kathryn drew checks on the

trust’s bank account to pay the ordinary and necessary bills of the

household. 2

       Mrs. Simpson died in July 2000.             Although the Social Security

Administration (SSA) was notified of Mrs. Simpson’s death, Mrs.

Simpson’s social security payments continued to be deposited into the

trust account. 3        During the months following her mother’s death,

Kathryn drew checks on the account totaling $15,150 to David for legal

services rendered to the trust. 4          Kathryn also wrote checks on the

account to herself in the amount of $1827.19 as reimbursement for

property taxes, furnace repairs, and other expenses she incurred to keep

Mrs. Simpson’s real estate habitable and marketable after her death.

After an employee of the depository bank and the attorney for

Mrs. Simpson’s estate notified the SSA of the mistaken deposits, the

Polsleys promptly reimbursed the overpayments to the SSA.

       A. Criminal Prosecution.            In November 2002, a fifteen-count

indictment was filed against the Polsleys in U.S. District Court for the

District of Kansas.       Count one of the indictment charged the Polsleys
with felony fraud against the SSA, and the remaining counts charged

misdemeanor offenses of aiding and abetting the conversion of a social

       1The   Social Security Administration directly deposited Simpson’s benefits into
the trust’s bank account.
       2The record indicates that, at Kathryn’s direction, David occasionally prepared
checks on the trust account for Kathryn’s signature.
       3The   total amount of the SSA checks mistakenly deposited into the account was
$10,709.74.
       4Mrs.   Simpson’s estate had a value of approximately $1,000,000 at the time of
her death.
                                             4

security benefit payment.                The Polsleys each pled guilty to one

misdemeanor count in April 2003. 5

        B. Professional Discipline. Professional disciplinary proceedings

were instituted against the Polsleys in Kansas following their criminal

convictions.         After a hearing before a disciplinary panel of the Kansas

Board for the Discipline of Attorneys, the Polsleys were found to have

violated Kansas Rule of Professional Conduct (KRPC) 8.4(b) which

defined “professional misconduct” to include the commission of “a

criminal       act     that   reflects   adversely   on   the    lawyer’s    honesty,

trustworthiness or fitness as a lawyer in other respects.”                      Upon

consideration of the record made before the disciplinary panel, the

Supreme Court of Kansas found clear and convincing evidence that the

Polsleys violated KRPC 8.4(b).             The court’s finding was based on the

Polsleys’ admissions in their plea agreements that they “knowingly and

willfully converted government property to [their] own use.”                Accepting

the panel’s recommendation, the court suspended Kathryn’s license to

practice law in Kansas for two years 6 and indefinitely suspended David’s

license. 7

        Upon receipt of notice of the criminal convictions in federal court,
this court entered an order on April 5, 2007, temporarily suspending the

Polsleys’ licenses to practice law in Iowa.               Subsequently, the Iowa

        5They
            were subsequently sentenced to three months of home detention, one
hundred hours of community service, and three years of probation.
        6Kathryn’s    license to practice law in Kansas was reinstated on December 13,
2006.
        7The Kansas court concluded mitigating circumstances justified a sanction of
suspension rather than disbarment. In re David L. Polsley, 85 P.3d 693, 696–97 (Kan.
2004); In re Kathryn S. Polsley, 86 P.3d 531, 534–35 (Kan. 2004). The sanction imposed
against David in the Kansas proceedings was more severe because he had previously
been reprimanded on two occasions, including one private admonition and one public
censure.
                                    5

Supreme Court Attorney Disciplinary Board filed a complaint against the

Polsleys asserting issue preclusion and alleging their criminal acts

constituted violations of DR 1–102(A)(3) (engaging in illegal conduct

involving moral turpitude), (4) (engaging in conduct involving dishonesty,

fraud, deceit or misrepresentation), (5) (engaging in conduct prejudicial

to the administration of justice), and (6) (engaging in any other conduct

that adversely reflects on the fitness to practice law).     Following a

hearing, the grievance commission found the Polsleys had been convicted

“of a misdemeanor involving moral turpitude as well as a dishonest

intent.” The commission concluded the Polsleys violated DR 1–102(A)(3),

(4), (5), and (6) “by knowingly and willingly converting government

property to their own use, in violation of federal law.” As a sanction for

the criminal conduct, the commission recommended the Polsleys’

licenses to practice law in Iowa be suspended for an additional six

months beyond the pending temporary suspensions.

      II. Standard of Review.

      Our review of attorney disciplinary proceedings is de novo. Iowa

Ct. R. 35.10(1) (2008); Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Gottschalk, 729 N.W.2d 812, 815 (Iowa 2007).           The commission’s

findings and recommendations are given respectful consideration, but we

are not bound by them.      Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Isaacson, 750 N.W.2d 104, 106 (Iowa 2008). The board has the burden

of proving attorney misconduct by a convincing preponderance of the

evidence. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Conrad, 723 N.W.2d
791, 792 (Iowa 2006).

      “This burden is less than proof beyond a reasonable doubt,
      but more than the preponderance standard required in the
      usual civil case. Once misconduct is proven, we ‘may
                                    6
      impose a lesser or greater sanction than the discipline
      recommended by the grievance commission.’ ”

Id. (quoting Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Lett, 674
N.W.2d 139, 142 (Iowa 2004) (citations omitted)). As neither party has

appealed the commission’s recommendation, our review is pursuant to

Iowa Court Rule 35.10(1). See Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Templeton, 784 N.W.2d 761, 766 (Iowa 2010).

      III. Ethical Violations.

      The board invoked issue preclusion in this case under Iowa

Supreme Court Rule 35.7(3). Under this rule, relitigation of an issue is

precluded if
             a. The issue has been resolved in a civil proceeding
      that resulted in a final judgment, or in a criminal proceeding
      that resulted in a finding of guilt, even if the Iowa Supreme
      Court Attorney Disciplinary Board was not a party to the
      prior proceeding.
             b. The burden of proof in the prior proceeding was
      greater than a mere preponderance of the evidence.
             c. The party seeking preclusive effect has given written
      notice to the opposing party, not less than ten days prior to
      the hearing, of the party’s intention to invoke issue
      preclusion.

Iowa Ct. R. 35.7(3). In the Kansas disciplinary proceedings, the Supreme

Court of Kansas found clear and convincing evidence that the Polsleys

knowingly and willfully converted government property to their own use

and that their criminal conduct involved dishonesty.       In re David L.

Polsley, 85 P.3d 693, 696–97 (Kan. 2004) (Polsley I); In re Kathryn S.

Polsley, 86 P.3d 531, 533–35 (Kan. 2004) (Polsley II). This finding has

preclusive effect under rule 35.7(3). With these principles in mind, we

next consider whether the board has proved violations of disciplinary

rules prescribing ethical conduct for Iowa lawyers.
                                     7

       A. DR 1–102(A)(3) (Illegal Conduct Involving Moral Turpitude).

The board first asserts the Polsleys engaged in illegal conduct involving

moral turpitude. “Moral turpitude” in the context of attorney disciplinary

proceedings means illegal conduct done with a fraudulent or dishonest

intent. Comm. on Prof’l Ethics & Conduct v. Cody, 412 N.W.2d 637, 639

(Iowa 1987). The Polsleys were both convicted of a crime based on their

admission that they knowingly and willfully converted government

property to their own use.     According preclusive effect to the Kansas

Supreme Court’s finding that the Polsleys engaged in dishonesty, we

conclude the board proved by a clear preponderance of the evidence that

the Polsleys violated DR 1–102(A)(3) when they converted the trust’s

funds.

       B. DR 1–102(A)(4) (Engaging in Conduct Involving Dishonesty,

Fraud, Deceit or Misrepresentation). For the reasons stated in support

of our finding that the Polsleys committed acts involving moral turpitude,

we find the board also proved the Polsleys’ acts of conversion were

characterized by dishonesty. Accordingly, we find the board proved the

Polsleys violated DR 1–102(A)(4) in this case.

       C. DR 1–102(A)(5) (Engaging in Conduct Prejudicial to the

Administration of Justice).       The commission of a crime does not

necessarily constitute a violation of the ethical rule prohibiting conduct

prejudicial to the administration of justice.    Templeton, 784 N.W.2d at

768.     Our recent decisions have made clear that “the mere act of

committing a crime does not constitute a violation of this rule because

the rule does not simply prohibit the doing of an act.” Id. Rather, an act

is prejudicial to the administration of justice and sanctionable only if it

violates the well-understood norms and conventions of the practice of

law.     Id.   These norms include the fundamental proposition that
                                      8

attorneys must not convert property of others.         See Iowa Supreme Ct.

Att’y Disciplinary Bd. v. Carroll, 721 N.W.2d 788, 791–92 (Iowa 2006).

Accordingly,   we   conclude    the   board   proved      by   a   convincing

preponderance of the evidence that the Polsleys violated DR 1–102(A)(5).

    D. DR 1–102(A)(6) (Engaging in Conduct Adversely Reflecting on

Fitness to Practice). We now turn to the question of whether the board

has established the Polsleys violated our disciplinary rule prohibiting

conduct reflecting adversely on the Polsleys’ fitness to practice law. In

Templeton, we noted that “the mere commission of a criminal act does

not necessarily reflect adversely on the fitness of an attorney to practice

law.” Templeton, 784 N.W.2d at 767. Ordinarily, our determination of

whether an attorney’s conduct reflects adversely upon his or her fitness

to practice law turns not on whether the conduct is illegal, but rather

upon whether there is some rational connection between the specific

conduct and the actor’s fitness to practice law. Id.

      As we have noted, the Supreme Court of Kansas found by clear

and convincing evidence that the Polsleys were “convicted of theft of

government property, a crime that reflects adversely on [their] honesty

and trustworthiness.” Polsley I, 85 P.3d at 695, 697; see also Polsley II,
86 P.3d at 533, 535.     The Kansas court’s finding was made in civil

proceedings imposing a burden of proof greater than a preponderance of

the evidence. Polsley I, 85 P.3d at 697; Polsley II, 86 P.3d at 535. Upon

our review, we conclude the principles of issue preclusion also control

our determination of this issue. See Iowa Ct. R. 35.7(3). Accordingly, we

conclude the Polsleys’ conduct reflected adversely on their fitness to

practice, and therefore violated DR 1–102(A)(6).
                                      9

      IV. Sanction.

      “ ‘[I]t is almost axiomatic that the licenses of lawyers who convert

funds entrusted to them should be revoked.’ ” Iowa Supreme Ct. Bd. of

Prof’l Ethics & Conduct v. Anderson, 687 N.W.2d 587, 590 (Iowa 2004)

(quoting Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Irwin, 679
N.W.2d 641, 644 (Iowa 2004)) (cataloguing cases in which we have

revoked an attorney’s license for theft of entrusted funds).       When a

sanction less severe than revocation has been imposed against attorneys

who misappropriated a client’s money or fiduciary funds, we have found

the attorneys “had a colorable future claim to the funds or did not take

the funds for [their] own use.” Id. We find no factual basis in the record

supporting a finding that the Polsleys had a colorable future claim to the

government funds in the trust’s bank account or that the funds were not

taken for their own use. Accordingly, we conclude the proper sanction in

this case is revocation.

      V. Conclusion.

      We conclude the board proved by a convincing preponderance of

the evidence that the Polsleys violated several disciplinary rules requiring

revocation of their licenses to practice law in Iowa.

      LICENSES REVOKED.

      All justices concur except Waterman, Mansfield, and Zager, JJ.,

who take no part.