On May 11, 2020 the ARDC Review Board recommended that Rory Dean Smith be reinstated to the practice of law even though he has not been able to pay one of the loans on which he defaulted on in 2007. The lawyer ran into financial problems in 2007 and made false statements on two loan applications to two banks. The smaller of the two loans was from the Harris bank. When he was unable to repay the loans, the lawyer declared bankruptcy. Eventually, he admitted to making false statements on the loan applications and was disbarred on consent. In 2017, he petitioned for reinstatement. The ARDC objected because the respondent had been unable to repay Harris Bank. The Review Board rejected the ARDC’s argument and extended some mercy towards the respondent.
The Review Board explained the difficult situation the respondent found himself in after being disbarred.
“In the present matter, in stark contrast, Petitioner has significant debt, no savings, and a low-wage job – and yet has expressed a willingness to make restitution to Harris Bank. After he lost his job at John Marshall due to his misconduct, Petitioner depleted his retirement funds to pay for his family’s living expenses. In doing so, he incurred significant tax penalties, and, at the time of hearing, owed between $70,000 and $79,000 in back taxes, but was making payments toward his tax obligation pursuant to a payment plan. He also owes $28,000 in student loan debt and $20,000 for a career training loan. In all, he has debt of more than $120,000.
In addition, after his disbarment, Petitioner applied for numerous jobs but was not hired. Thus, since 2014, he has driven for Uber and Lyft, logging 10 hours per day on almost every day of the week. He testified that his target is to earn $200 per day, but on many days only earns $100.
We also note that, unlike in Schechet, Harris Bank has neither opposed Petitioner’s reinstatement nor made a formal demand for restitution (which of course does not discharge Petitioner from his obligation to make restitution). In fact, there is uncontroverted evidence that Harris Bank did not contact Petitioner about repaying his debt until about a month before his reinstatement hearing. (See Report of Proceedings at 437-38.) Concomitantly, there is no evidence whatsoever that Petitioner has sought to evade paying restitution to Harris Bank, as the petitioner did in Schechet.
To the contrary, the Hearing Board made a specific finding of fact that Petitioner is willing to make restitution, but is simply unable to pay in one lump sum the full amount that Harris Bank has asked for. See In re Zahn, 82 Ill. 2d 489, 494-95, 413 N.E.2d 421 (1980) (granting reinstatement notwithstanding that petitioner had several judgments unrelated to his misconduct pending against him, stating: “While several judgments remain unsatisfied, we consider the petitioner’s expressed willingness to repay these debts when he is financially able ? as indicative of his rehabilitation and fitness to practice law”).
Finally, we find compelling Petitioner’s argument that requiring him to complete restitution to Harris Bank before being reinstated would effectively bar him from being reinstated at all. As a hearing panel member stated, the Administrator’s position puts Petitioner in a “[C]atch-22. [He] can’t get a decent job because he isn’t a lawyer, and . . . because he doesn’t have a decent job, he can’t be a lawyer.” (Report of Proceedings at 485-86.) Notably, two of Petitioner’s character witnesses testified that, if he were reinstated to practice, they would hire him. (See Hearing Bd. Report at 11.) It seems to us irreconcilably illogical to bar Petitioner from being reinstated until he makes full restitution to Harris Bank given that Petitioner is far more likely to be able to repay his debt to Harris Bank if he is allowed to practice law again.
The Hearing Board clearly saw this “Catch-22” and tried to resolve it in a pragmatic and legally supportable way. While it found that Petitioner need not make additional restitution to Harris, it acknowledged that the Court may find differently, and therefore suggested that reinstatement could be granted conditionally, upon a showing that Petitioner has reached an agreement with Harris Bank to pay restitution.
In support of its alternative recommendation, the Hearing Board cited In re Prybylo. In that matter, the Hearing Board recommended that the petitioner be reinstated conditioned upon several requirements, one of which was that, prior to reinstatement, he would submit to the Administrator a schedule for payment or compromise of a malpractice judgment against him, and thereafter, would submit periodic reports that he was making payments according to the agreed-upon schedule. If he failed to make the payments, his suspension until further order would be reinstated. Prybylo, 99 RT 3003 (Hearing Bd., Aug. 7, 2000). The Court allowed the petitioner’s petition for reinstatement subject to the conditions recommended by the Hearing Board, including the condition requiring him to submit a schedule for payment or compromise of the malpractice judgment against him. Prybylo, M.R. 16003 (Sept. 20, 2001).
Although Prybylo involved a malpractice judgment unrelated to the petitioner’s misconduct and not restitution for the petitioner’s misconduct, we nonetheless find it instructive because indicates that, where a petitioner cannot afford to pay a debt outright, his willingness to enter into a payment plan weighs in favor of granting reinstatement, at least on a conditional basis. Prybylo thus provides a framework for how conditional reinstatement could be accomplished in this matter.
In sum, we find that the evidence fully supports the Hearing Board’s determination that Petitioner has established rehabilitation, present good character, and current knowledge of the law, and therefore that he should be reinstated to the practice of law. As the Hearing Board found, he understands the wrongfulness of his conduct, is remorseful, is fully rehabilitated, will be able to return to practice without harming the public, and “has much to contribute to the legal profession.” (Hearing Bd. Report at 15.) The evidence also establishes that the only way Petitioner will be able to make restitution to Harris Bank is to begin practicing law again. Given these circumstances, the Administrator’s position strikes us as draconian and counterproductive.”
Update: on September 21, 2020, the Illinois Supreme Court adopted the recommendation and reinstated the lawyer.