This post examines an opinion the Indiana Supreme Court recently
issued in an attorney discipline proceeding:
In re Steele, 2015 WL 7738298
(2015) (per curiam). The court begins
its opinion by explaining that the
Indiana Supreme Court Disciplinary Commission charged Respondent, David J. Steele, with eight counts of misconduct
involving among other things theft of client funds, retaliatory disclosures of
clients' confidential information, pervasive dishonesty, and a pattern of
conduct prejudicial to the administration of justice. [Steele’s] 2003 admission
to this state's bar subjects him to this Court's disciplinary jurisdiction. See IND. CONST. article 7, § 4.
[Steele] already is under an order of
emergency interim suspension and has tendered to this Court an affidavit of
consent to discipline admitting the material facts alleged in the verified
complaint.
In re Steele, supra.
In the next section of its opinion, the Supreme Court
summarizes the facts and allegations in each of the eight counts of misconduct
noted above, starting with
Count 1. Respondent
misappropriated approximately $150,000 of client funds from his attorney trust
account. Respondent redirected most of these unearned fees into his personal or
operating account, although he sometimes `peel[ed] off a few hundred dollars’
to give to his employees as a `spot bonus.’ Respondent communicated extensively
with his office manager (`JD’) regarding these thefts and the Disciplinary
Commission inquiries prompted by these thefts.
Count 2. At the outset of a
client representation, Respondent typically would collect a $2,500 or $3,500
deposit from the client. Respondent's fee agreements purported to render these
advance fees nonrefundable, and Respondent vigorously enforced this
nonrefundability provision against clients. Additionally, Respondent
instructed his office staff to inflate billable hours and rates by a variety of
means. Respondent often would use these false billing practices as retaliation
against clients who requested a refund `or otherwise got crosswise with’ him.
Respondent regularly communicated with JD and others within his office
regarding these practices.
An illustrative example is
the following email Respondent sent to JD regarding one particular client:
`I simply cannot tell you how tired [I]
am of these people. How tired [I] am of hearing about the stupid f* * *ing
transcripts she ordered on her own and [ ] expects me to split with her. . . .
You added a line to her January bill right? A line that said, ‘emails and phone
calls to and from client, prepare for hearing,’ right? How much time did we put
down for that? I think [I] only told you like 4.5 hours right? Well f* * *
that. If she wants me to split the cost of those f* * *ing transcripts [I] told
her not to get, add another 1.5 hours to that line ok?’
Count 3. Numerous clients
requested refunds of unearned fees from Respondent, which Respondent was unable
to provide because he had stolen virtually all the funds contained within his
trust account. Respondent stalled or avoided responding to clients requesting
refunds and instructed his staff to inflate bills in an attempt to deplete the
retainers advanced by clients. When these measures failed, Respondent
occasionally issued refunds to former clients using retainers paid by new
clients. Respondent attempted to persuade JD and others to go along with these
practices and frequently reminded JD that Respondent had fired the prior office
manager when that person had questioned Respondent's unethical conduct, writing
to JD in one email:
`I very sincerely love that you get it—there
is no giving back money unless we really trashy [sic] have to. And even then,
[I] make them ask[.] I don't write checks to my clients[,] other way around. .
. .Would you believe that [the prior office manager] used to f* * *ing argue
with me about it. Argue that we should give these people their money back, ALL
their money. The money [I] used to pay their salaries. It was wildly difficult.
One of the many reasons [I] fired my boy.’
In re Steele, supra.
The opinion does not summarize whatever allegations and/or
statements were in Count 4. In a
footnote, the Supreme Court explains that “For ease of reference, our
recitation of the counts of misconduct tracks the Commission's verified
complaint and Respondent's affidavit of consent to discipline, in both of which
`Count 4’ is omitted.” In re Steele,
supra. Instead, the court went on to
summarize the statements and/or allegations in the final counts (5-9, for a
total of 8) of the Disciplinary Commission’s charging instrument. In re
Steele, supra.
Count 5. Respondent
fired JD after just two and one-half months of employment, and JD contacted the
Commission to report [his] misconduct. Upon learning this, Respondent sent JD numerous text messages and emails threatening and
intimidating JD and attempting to dissuade JD from cooperating with the
Commission. In one such message, Respondent told JD, `No one will ever hire you
if [I] get disbarred for something you told them. You think lawyers want
someone in their office who tried to get their last boss disbarred?’ In another
message, Respondent disparaged JD for his sexual orientation, writing `So is
this the part where [I] say I'll meet you on the playground and we can settle
it like men? Or like men who [ ] are so the opposite of men that they even take
their husband's last name?’
Count 6. Respondent made
false statements to the Commission during its investigation that, by Respondent's
own description, were `virtually pathological in frequency and scope.’
Respondent habitually lied in his responses to the Commission's inquiries
regarding his trust account, billing and refund practices, and numerous highly
derogatory statements Respondent had made about clients and various opposing
counsel. Respondent also lied regarding the circumstances of JD's termination
of employment, falsely telling the Commission that JD had been caught having
sex with a male client in Respondent's office and that JD had gained access to
the firm's website to
post disparaging comments against the gay community. Additionally, Respondent
brandished a handgun when he terminated JD's employment, and Respondent instructed
an associate attorney (`AA’) who witnessed this incident to lie about this fact
to the Commission.
Count 7. Respondent
frequently lied to his clients, office staff, and third parties. Respondent
also instructed his staff to `lie to all comers’ regarding Respondent's
whereabouts and other matters. Illustrative examples, among the many cited in
the verified complaint and admitted by Respondent, include Respondent falsely
telling opposing counsel that Respondent was `in a hospital room watching a
loved one die of cancer’ and falsely telling a client that Respondent was
unavailable for a meeting because his dog had just died. Respondent regularly
enlisted the aid of JD and AA to perpetuate these lies and bragged to them when
the lies were successful.
Count 8. In addition to his
firm's website (which
includes laudatory client testimonials), Respondent maintains a profile on Avvo.com, a legal
marketing website.
Respondent, by his own description, `actively manipulate[d his] Avvo reviews by
monetarily incentivizing positive reviews, and punishing clients who write
negative reviews by publicly exposing confidential information about them.’
Respondent's posted responses to negative reviews also included numerous false
statements. Compounding this misconduct, on at least one occasion Respondent
was mistaken about the identity of a negative reviewer, prompting him to expose
the confidential information of a former client other than the one who had
posted the review.
Count 9. Respondent, by his
own description, `record[ed] conversations of clients and potential clients for
[his] own personal amusement.’ Respondent shared these recordings with his
staff and his relatives. In another incident, Respondent instructed JD and AA
to record a client conversation in his absence, again for purposes of
amusement. Respondent openly mocked these recorded individuals in his
conversations with others and in a meeting with the Commission.
In re Steele, supra. You can, if you are interested, read more about Steel's behavior in the news stories you can find here and here.
The Supreme Court went on to explain that Steele “violated
these Indiana Professional Conduct Rules prohibiting the following misconduct:”
1.5(a): Making an agreement for, charging, or collecting an
unreasonable fee.
1.5(b): Failing to communicate the basis or rate of the fee for
which a client will be responsible before or within a reasonable time after
commencing the representation.
1.6(a): Revealing information relating to representation of a
client without the client's informed consent.
1.9(c)(2): Revealing information relating to the representation
of a former client except as rules permit or require.
1.15(a): Failing to safeguard property of clients; treating
client funds as his own; failing to maintain and preserve complete records of
client trust account funds.
1.15(c): Disbursing funds from a trust account for the attorney's personal use.
1.15(f): Failing to hold client funds in an IOLTA account.
1.16(d): Failing to refund an unearned fee promptly upon
termination of representation.
1.18(b): Using or revealing information learned in consultation
with prospective client, except as permitted by rule.
4.1(a): Knowingly making a false statement of material fact to a
third person in the course of representing a client.
7.1: Making a false or misleading communication about the lawyer
or the lawyer's services, including the improper use of statistical data or
other information based on past performance and the improper use of statements
or opinions as to the quality of services.
8.1(a): Knowingly making a false statement of material fact to
the Disciplinary Commission in connection with a disciplinary matter.
8.1(b): Failing to disclose a fact necessary to correct a
misapprehension known by the person to have arisen in a disciplinary matter.
8.4(b): Committing criminal acts (theft, conversion, deception)
that reflect adversely on the lawyer's honesty, trustworthiness, or fitness as
a lawyer.
8.4(c): Engaging in conduct involving dishonesty, fraud, deceit,
or misrepresentation.
8.4(d): Engaging in conduct prejudicial to the administration of
justice.
In re Steele, supra.
The Supreme Court then explained that
[o]ur analysis of appropriate
discipline entails consideration of the nature of the misconduct, the duties
violated by the respondent, any resulting or potential harm, the respondent's
state of mind, our duty to preserve the integrity of the profession, the risk
to the public should we allow the respondent to continue in practice, and any
matters in aggravation or mitigation. See Matter of Newman, 958
N.E.2d 792 (Indiana Supreme Court 2011).
In re Steele, supra.
It went on to outline its ruling in this case:
These considerations point in a single
direction here. The seriousness, scope, and sheer brazenness of
Respondent's misconduct is
outrageous. He stole approximately $150,000 from his clients, threatened and
intimidated his staff, disparaged and mocked virtually everyone around him,
lied to all comers, and obstructed the Commission's investigation.
Perhaps most disturbingly, Respondent
repeatedly and fundamentally breached the duty of confidentiality that lies at
the heart of the attorney-client
relationship. Respondent recorded privileged communications and shared those
recordings with others for his own amusement, he solicited his office staff to
do the same, and he posted client confidences and falsehoods on a legal
marketing website in
order to `punish’ certain clients and inflate Respondent's own website ranking.
`We have long emphasized that a license
to practice law is a privilege, and that privilege is conditioned upon the
faithful performance of the responsibilities imposed upon the attorney by the society that
grants the privilege.’ Matter of Keaton, 29 N.E.3d 103, 110
(Indiana Supreme Court 2015). Respondent's actions amount to a pattern of
systemic and wide-ranging misconduct,
and rather than express any regret or remorse for his actions or the harm they
have caused, Respondent has proudly trumpeted his repugnant behavior as the raison
d'etre of his practice. There can be no doubt in these circumstances
that disbarment is warranted and that Respondent's privilege to practice law
should be permanently revoked.
In re Steele, supra.
The Supreme Court concluded its opinion by explaining it had
concluded
Respondent violated the Indiana Rules
of Professional Conduct by stealing approximately $150,000 from his clients,
disclosing client confidences for purposes of both retaliation and amusement,
threatening and intimidating his office staff, lying pervasively to all comers,
obstructing the Commission's investigation, and engaging in a pattern of
conduct prejudicial to the administration of justice.
Respondent already is under an order of
emergency suspension in this cause. For Respondent's professional misconduct, the Court disbars
Respondent from the practice of law in this state effective immediately.
Respondent shall fulfill all the duties of a disbarred attorney under Admissionand Discipline Rule 23(26). The costs of this proceeding are assessed against
Respondent.
In re Steele, supra.
If you would like to watch a local TV
channel’s story on the case, you can find one here.
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