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Attorney E-Newsletter

January 2014

Most Significant Disciplinary Cases of 2013

At the end of each year, we review five of the most significant cases decided in the Pennsylvania disciplinary system during the year. We chose the cases by criteria that include:

  • Unusual or extraordinary fact situations;
  • Decisions which shed light on legal issues that often arise in disciplinary cases;
  • Decisions which discuss the meaning of one of the Rules of Professional Conduct or Rules of Disciplinary Enforcement;
  • Decisions which present reviews of prior cases on a subject;
  • Decisions regarding situations which may arise regularly in the practice of law.

After an exhaustive[1] search of the Pennsylvania disciplinary cases decided in 2013, the following five most caught our attention.

  • Donald A. Bailey, No. 1760 Disciplinary Docket No. 3, No. 11 DB 2011

    This case is significant both for the prominence of the Respondent and the issues in the case. Bailey is a former state Auditor General, United States Representative, and a decorated Vietnam War veteran.

    Bailey was charged with making false allegations of misconduct against members of the federal judiciary. Bailey insisted throughout the proceedings that the allegations were true and presented 12 witnesses and 70 exhibits in support. The Board applied the shifting burden analysis set out by the Supreme Court in Office of Disciplinary Counsel v. Price, 732 A. 2d 599 (Pa. 1999). Under this analysis, Disciplinary Counsel has the burden to produce the person against whom allegations are made testifying that the allegations are false. Once this proof is offered, the burden shifts to the Respondent to establish that the allegations are true or that after reasonably diligent inquiry, he had an objective reasonable belief they were true. The Board found that Bailey had no reasonable basis to believe his allegations were true, but concluded that all decisions adverse to him or his clients were grounded in conspiracies. The Disciplinary Board concluded that Bailey had not met his shifted burden of proof, and recommended based on precedents that he be suspended for five years. The Supreme Court accepted this recommendation and suspended Bailey for five years.

  • John L. Chaffo, Jr., No. 1710 Disciplinary Docket No. 3, No. 8 DB 2011

    Chaffo was disbarred after conviction of wire fraud and conspiracy to commit wire fraud, based on his participation in 60 incidents of mortgage fraud in which he closed transactions using documents that indicated the buyers had made significant down payments, when they had not, and other false information. This led to losses of between $1 million and $2.5 million by lenders. Chaffo was in prison at the time of the proceedings. Nonetheless he refused to accept culpability for his acts. He claimed that he was the only lawyer singled out for mortgage fraud by federal prosecutors, and that “any real estate lawyer could have found himself in a similar situation.” Far from being persuaded by his claims, the Disciplinary Board found his justifications an aggravating factor, and recommended disbarment. The Supreme Court agreed.

    The Chaffo case is of interest due to its roots in the mortgage practices leading to the financial crisis that struck the country in 2008.

  • Picard Losier, No. 1882 Disciplinary Docket No. 3, No. 256 DB 2010

    Losier resigned and accepted disbarment by consent for misconduct, which included misappropriation from an estate. He did so after a report by the Disciplinary Board which addressed an effort by Losier to establish mitigation in the form of a mental impairment. Losier offered two physicians who testified that mental conditions from which he suffered, including depression and Post Traumatic Stress Disorder (PTSD), may have contributed to his misconduct. The Disciplinary Board examined the testimony in detail under the guidance of Office of Disciplinary Counsel v. Braun, 553 A.2d 894 (Pa.1989). The Board concluded that the evidence failed to establish the necessary causation. The Board noted that Losier had not been completely candid with the physicians about the nature of his misconduct, omitting or misrepresenting significant information about what he had done. The Board concluded that the medical evidence was undermined if it was based only on the statements of an attorney it has found not to be a credible witness. The Board recommended disbarment. After the Board decision was handed down, Losier consented to disbarment, which was imposed by the Supreme Court.

    The case illustrates that the effective presentation of a mitigation defense under Braun requires that the medical experts called by the attorney asserting the defense must be fully informed of the circumstances of the lawyer’s misconduct, and take it into account in their analysis.

  • Leonard E. Sweeney, No. 1925 Disciplinary Docket No. 3, No. 42 DB 2012

    Sweeney is no stranger to the disciplinary process; he was previously suspended and reinstated, and had several incidents of private discipline. Representing a plaintiff against a defendant who filed for bankruptcy, he filed a proof of claim on behalf of his client. Subsequently the case against the debtor was dismissed, but Sweeney failed to withdraw the claim with the bankruptcy court. Due to the collection of some insurance money, the bankruptcy trustee disbursed a check to Sweeney for his client’s share based on the proof of claim. Although he knew the claim had been dismissed and was no longer valid, Sweeney deposited the check into his Interest on Lawyers Trust Account (IOLTA) and disbursed it to his client and himself. When the error was discovered, Sweeney promised to return the money, but failed to do so, necessitating legal proceedings against him and his client. He also neglected a client’s case. Sweeney appeared at the pre-hearing conference in the disciplinary case, but did not attend the hearing or file briefs in the case.

    The Disciplinary Board found that Sweeney’s prior disciplinary record and failure to participate in the hearing were aggravating factors, and recommended disbarment. The Supreme Court imposed that discipline.

    The case is of interest because it illustrates that a lawyer may not treat money as his own or a client’s if he knows it was delivered to him in error.

  • David H. Knight, No. 1937 Disciplinary Docket No. 3, No. 37 DB 2013

    Knight represented a female client in a driving under the influence (DUI) case. Knight quoted a fee of $1,000, but the client confessed she did not have funds to pay him. The parties reached an agreement that she would provide him with sexual favors in lieu of payment. Knight engaged in inappropriate conduct with the client on three occasions. He did not charge her any money as a fee. He agreed to a one-year suspension for violation of Rule 1.8(j), which prohibits a lawyer from having this type of relationship with a client that did not predate the representation.

    The case is significant because it appears to be the first case in which a Pennsylvania lawyer was disciplined specifically for violation of Rule 1.8(j).[2] In previous cases lawyers have received discipline under various rules for this type of inappropriate behavior toward clients, but this case is the first specifically grounded on the flat prohibition of Rule 1.8(j), which was added to the Rules of Professional Conduct in 2005.

Immigrant Without Documents Admitted to California Bar

By unanimous opinion dated January 2, 2014, the Supreme Court of California approved the application of Sergio Garcia for admission to the California bar. Garcia was born in Mexico, and lived in the United States from the ages of 17 months to nine years, when the family returned to Mexico. When he was seventeen, he returned to the United States with his parents. His father, a lawful permanent resident, filed for legal status for Garcia as an alien relative in 1994. That petition was still pending at the time of the decision.

Garcia graduated from college and law school in the United States and passed the California bar examination in 2009. He applied for admission to the California bar, and the Committee of Bar Examiners submitted his name for approval to the state Supreme Court, while noting his lack of legal immigration status, a matter of first impression.

The Court sought briefing on whether 8 U.S.C. 1621 prohibits the grant of a law license to Garcia. The Committee and Garcia filed separate briefs in support of the motion for admission of Garcia to the State Bar. In addition, the California Attorney General and several organizations and individuals filed amicus curiae briefs supporting Garcia’s admission. The United States Department of Justice and two individuals filed amicus curiae briefs in opposition to the motion. Section 1621(a) prohibits a person who is not lawfully present in the United States from receiving any public benefit, and Section 1621(c) specifically identifies a professional license as one such benefit. However, Section 1621(d) provides that a state may choose by statute to extend benefits to such persons by statute. In September, the California legislature passed a law providing that lack of legal immigration status does not bar a person from obtaining a law license. In the aftermath of this legislation, the Supreme Court ruled that the provisions of Section 1621(d) were satisfied and that Garcia’s admission to the practice of law should be granted.[3]

Steelers Fan Sues to Reverse Charger Win

A number of us Steeler fans took it hard when the San Diego Chargers eked out an overtime victory over the Kansas City Chiefs second-teamers to nudge the Steelers out of a playoff spot. The bitter taste didn’t get any sweeter when the NFL admitted that officials failed to call San Diego for an illegal formation on a missed Kansas City field goal attempt in the last seconds of regulation, which would have given the normally reliable Ryan Succop a second chance to put it through the uprights and vault the Steelers into the post-season.

A great discontent surged through the Steeler Nation, but few took it harder than Daniel L. Spuck of Mercer.[4] Not content to cry over spilled milk,[5] he filed a lawsuit in the United States District Court for the Western District of Pennsylvania, seeking an injunction to remedy the mighty wrong allegedly perpetrated by the men in stripes. Striving to be reasonable, he offered the court the choice of allowing Succop to rekick the ball; requiring the Chargers to play the Steelers on a neutral site; or declaring the Steelers the sixth seed in the AFC playoffs. In any event, he sought $25,000 in monetary damages for himself.

Alas, his plea fell on deaf judicial ears, and the Chargers proceeded to whomp the North Division champion Cincinnati Bengals, before losing to the eventual conference champion Denver Broncos. We have received no word on the status of the suit, but our money is on “moot.”

No lawyers were involved in the bringing of this action.

F as in Funny

For some reason a lot of legal humor comes out of intellectual property and trademark cases.[6]

Jeff Britton, owner of Exit 6, a microbrewery and pub in Cottlesville, Missouri, began marketing a beer called, for reasons known only to him, Frappicino. This caught the attention of the Starbucks Corporation, which owns the trademark for Frappuccino, a line of iced coffees. Predictably, a cease and desist letter issued from counsel for Starbucks.

Britton did not choose to fight the coffee giant, but sent a humorous response in which he acknowledged the link between Frappicino and Frappuccino, noting that it was similar because it was meant to be the same (“Lucky for us, we’re poor spellers”). He agreed to disburse to Starbucks all the profits of sales of Frappicino, which he estimated at three, and wrote a damages check for $6.00. Just in case anyone would mistake an amber brew coming out of a tap for frozen coffee, he changed the name of his brew to “The ‘F’ Word.” It is reported that under the new name, sales have doubled – to six.

Hat tip to reader Jessica Engel of Lycoming County for bringing our attention to this enlightening item.

Let Us Know

Got a tip, a link, a correction, a question, a comment, an observation, a clarification, a wisecrack, an idea you’d like to see addressed? We are always glad to hear from you. Write us at comments@padisciplinaryboard.org.

[1] We’d say exhausting, but we are indefatigable in our search for ethical insight.

[2] And for Rule 1.5(b) for failing to provide her with a written statement of the basis of his fee. Either basis.

[3] Before writing to complain of our not referring to Garcia as either an “illegal alien” or an “undocumented immigrant,” readers should review the concurring opinion of Justice Chin, which addresses this particular question. It seems that the terminology people choose to describe such people often bears a close relationship to the position they take on the issue.

[4] To be exact, the State Correctional Institution at Mercer.

[5] Or Iron City. But maybe not, considering his place of residence.

[6] See, e.g., North Face Apparel Corporation v. Williams Pharmacy, Inc. et al. Also, oddly, coming out of Missouri.