Lawyer Suspended One Year for Violation of Rule 4.2

A lawyer licensed in New York has been suspended for one year for sending emails to a party he knew to be represented by counsel. See In re Matter of Henry Lung, 2018-09536 (Supreme Court of New York, Appellate Division, Second Department, dated April 18, 2020). The email communications surfaced in a domestic relations matter.

Charge one alleges that the respondent, in representing a client, communicated about the subject of the representation with a party he knew to be represented by another lawyer in the matter, without consent, in violation of rule 4.2(a) of the Rules of Professional Conduct ( 22 NYCRR 1200.0 ), as follows:

The respondent represented the father in a matrimonial action in Supreme Court, Queens County. The mother was represented by Morghan Richardson. On or about September 22, 2016, the parties entered into a so-ordered settlement of the matrimonial action, which included a parental access schedule regarding the parties’ minor child. Thereafter, on or about February 8, 2017, the mother filed a pro se family offense petition [*2] against the father in Family Court, Queens County, seeking, inter alia, an order of protection prohibiting him from having contact with her and with their minor child. The petition was granted and an order of protection was issued. Some of the email correspondence is quoted below:

“On May 12, 2017, Richardson emailed the respondent an offer to negotiate outstanding issues between the parties. In response, the respondent sent an email rejecting the offer. His email reply was copied to the mother, and included the following:

“Ever since the beginning of my representation of the father, I have recognized him to be the better parent, meaning the best interests of this child would be met with the child living with him, not your client, as the primary residential parent. Your client has taken enough rope, as the saying goes, and this nonsense needs to come to an end. You are continually advising her to commit acts of contempt of Court & forget about ever asking me to consider anger management.’ What really needs to happen here is your client needs to take classes on how to be a much better parent.

* * *

“But I know the truth Morghan, and the truth is that you are a liar. You lie and lie and continually pump your client’s head with total garbage just so that her parents (the real money train in all of this) continue to pay you. That is the real and only truth that matters in this entire case.”

The same day, Richardson replied and asked the respondent to refrain from contacting her further if he intended on “name-calling” and refusing to work collaboratively. The respondent replied on May 12, 2017, and copied the mother, stating:

“Your client is going to lose custody & if you doubt me, keep sending useless emails like this. The gravy train’ will end for you soon enough. Yes I absolutely do think of you as a liar insofar as you are actively advising your client to continue her current position.'”

Charge two alleges that the respondent, in representing a client, [*4] used means that had no substantial purpose other than to embarrass or harm a third person, in violation of rule 4.4(a) of the Rules of Professional Conduct ( 22 NYCRR 1200.0 ), by sending emails to opposing counsel, copied to opposing counsel’s client, which criticized opposing counsel, and accused opposing counsel of engaging in professional misconduct, based upon the conduct described in charge one.

Charge three alleges that the respondent engaged in conduct that adversely reflects on his fitness as a lawyer, in violation of rule 8.4(h) of the Rules of Professional Conduct ( 22 NYCRR 1200.0 ), based upon the conduct described in the two charges above.

The referee (somewhat akin to a hearing officer) recommended a one year suspension.

After consideration the Appellate Division sustained the recommendation of the Referee.

The Grievance Committee moves to confirm the report of the Special Referee, and for the imposition of such discipline upon the respondent as this Court deems just and proper. The respondent, by his counsel, moves to confirm in part and to disaffirm in part the report of the Special Referee. The respondent submits that the Special Referee properly sustained the three charges of professional misconduct, and requests that this Court consider the evidence in mitigation in determining the appropriate measure of discipline to impose.

“Based on the respondent’s admissions and the evidence adduced, we find the Special Referee properly sustained the charges. The Grievance Committee’s motion to confirm the report of the Special Referee is granted, and the respondent’s motion to confirm in part and disaffirm in part the report of the Special Referee is granted to the extent that the charges are sustained and is otherwise denied.

In determining the appropriate measure of discipline, the respondent seeks leniency, and asks this Court to consider: (1) the findings of the Special Referee, who concluded that his actions, while improper, were motivated by his desire to zealously represent his client; (2) that his misconduct was isolated to this one client matter and will not be repeated; and (3) the character evidence provided on his behalf. Notwithstanding the mitigation advanced, we find that the respondent’s claims that he acted out of frustration do not justify his violations of the Rules of Professional Conduct. He repeatedly sent emails to a party he knew to be represented, sometimes sending multiple emails on the same day and at inappropriate nonbusiness hours, which emails contained disparaging information in an aggressive tone. We find the [*6] respondent did so in an effort to criticize opposing counsel, to accuse her of engaging in professional misconduct, and to try to undermine the relationship between opposing counsel and her client. Even though the respondent knew his actions were improper, and despite being put on notice by opposing counsel that his actions were improper, he continued undeterred and without regard to the Rules of Professional Conduct. We have also considered as an aggravating factor the respondent’s extensive disciplinary history, which includes a public censure from this Court (Matter of Lung112 AD3d 148 ), four Admonitions, and two Letters of Caution.

Under the totality of the circumstances, we find that the respondent’s conduct warrants his suspension from the practice of law for a period of one year.”

Comment: Rule 4.2 prohibits this type of conduct. In this case, the sanction was more severe than typical because the lawyer used the emails to criticize his opposing counsel. The fact that he copied opposing counsel on the emails was not a mitigating factor.

Ed Clinton, Jr.

https://www.clintonlaw.net/legal-ethics.html

Three Indiana Judges Suspended For Participating In A Brawl at a White Castle

https://www.npr.org/2019/11/14/779339897/3-indiana-judges-suspended-after-white-castle-brawl-that-left-2-of-them-wounded

The NPR story lays out the facts of this bizarre encounter between three very drunk judges and two assailants, Alfredo Vasquez and Brandon Kaiser. The encounter began after a night of alcohol consumption when one of the judges raised her middle finger to Mr. Vasquez and Mr. Kaiser who were driving in a car near a White Castle parking lot. The two men parked the car and an argument began. Things rapidly escalated and there was a brawl between two of the judges and two assailants. One of the assailants had a gun and shot the Judge Adams and Judge Jacobs. The opinion does note that two judges sustained gun shot wounds and that all three judges accepted responsibility and cooperated with the investigation.

The Indiana Supreme Court summarized the facts in this fashion:

At around 12:30 a.m. on May 1, Respondents and Clark Circuit Court Magistrate William Dawkins (“Magistrate Dawkins”) met at a local bar, where they continued to drink alcohol. At around 3:00 a.m., the group walked to a strip club and tried to enter, but found that it was closed.

The group then walked to a nearby White Castle. While Magistrate Dawkins went inside, Respondents stood outside the restaurant. At around 3:17 a.m., Alfredo Vazquez and Brandon Kaiser drove past the group and shouted something out the window. Judge Bell extended her middle finger to Vazquez and Kaiser, who pulled into the White Castle parking lot and exited the vehicle. Judge Bell, who was intoxicated, has no memory of the incident but concedes that the security camera video shows her making this gesture.

A heated verbal altercation ensued, with all participants yelling, using profanity, and making dismissive, mocking, or insolent gestures toward the other group. At no time did Respondents move to another location in the parking lot to avoid a confrontation or de-escalate the conflict.

After a verbal exchange between Judge Bell and Vazquez, a physical confrontation ensued. At one point, Judge Jacobs had Kaiser contained on the ground. With his fist raised back, Judge Jacobs said, “Okay, okay, we’re done, we’re done,” or “This is over. Tell me this is over,” or words to that effect. At another point during the confrontation, Judge Adams kicked Kaiser in the back. The confrontation ended when Kaiser pulled out a gun, shot Judge Adams once, and shot Judge Jacobs twice.

Judge Adams and Judge Jacobs were transported to local hospitals for treatment of their serious injuries. Judge Adams, who sustained a single gunshot wound to the abdomen, had two emergency surgeries, including a colon resectioning. Judge Jacobs, who sustained two gunshot wounds to the chest, also had two emergency surgeries and was hospitalized for 14 days.

The opinion explains the reasoning for the suspensions as follows:

The Commission charges, and Respondents agree, that their respective conduct violated the following provisions of the Code of Judicial Conduct:

• Rule 1.2, requiring judges to act at all times in a manner that promotes public confidence in the integrity, independence, and impartiality of the judiciary; and

• Rule 3.1(C), prohibiting judges from participating in extrajudicial activities that would appear to a reasonable person to undermine the judge’s integrity, independence, or impartiality.

The Commission further charges, and Judge Adams agrees, that his conduct violated Rule 1.1 of the Code of Judicial Conduct, which requires a judge to respect and comply with the law.

Our legal system “is based upon the principle that an independent, impartial, and competent judiciary, composed of men and women of integrity, will interpret and apply the law that governs our society.” Ind. Code of Judicial Conduct, Preamble. The effectiveness of the judiciary ultimately rests on the trust and confidence that citizens confer on judges. Judges, therefore, must remain vigilant to guard against any actions that erode that public trust. Respondents’ alcohol-fueled actions during the early morning hours of May 1, 2019, fell far short of the Code’s directive to “aspire at all times to conduct that ensures the greatest possible public confidence in their independence, impartiality, integrity, and competence.” Id.

Respondents acknowledge that their misconduct damaged the public’s respect for and confidence in the integrity of the Indiana judiciary, both within the state and nationally. Their misconduct occurred while they were in Indianapolis for a statewide judicial educational event, and Judge Adams’s misconduct resulted in a criminal conviction.

The Conditional Agreements note, as mitigators, the following factors:

• Respondents have no prior disciplinary history as judges or as lawyers and this misconduct constitutes an isolated incident in their judicial careers;

• Respondents have accepted responsibility and expressed remorse for their conduct;

• Respondents have made efforts to address their behavior by contacting the Judges & Lawyers Assistance Program and by seeing counselors;

• Judge Adams and Judge Jacobs suffered serious physical injuries as a result of the altercation;

• After the physical altercation began, Judge Bell made several attempts to stop the fighting, including seeking help from those inside the White Castle by pounding on the door;

• Judge Bell immediately called 911 after shots were fired;

• Judge Adams and Judge Jacobs have been active leaders in their community; and

• Judge Adams and Judge Jacobs cooperated fully with the Commission and have been forthcoming about the incident.

“The purpose of judicial discipline is not primarily to punish a judge, but rather to preserve the integrity of and public confidence in the judicial system and, when necessary, safeguard the bench and public from those who are unfit.” In re Hawkins, 902 N.E.2d 231, 244 (Ind. 2009). The sanction must be designed to deter similar misconduct and assure the public that judicial misconduct will not be condoned. Id.

Comment: Judge Adams and Judge Jacobs were suspended for 60 days. Judge Bell was suspended for 30 days. The brawl would have gotten any judge or lawyer suspended. What made the incident much worse was the presence of a handgun and the bad decision to shoot the gun. Criminal charges remain pending against Kaiser and Vasquez.

Should A Lawyer Follow The Example of Alan Dershowitz In Responding to Allegations?

Retired Harvard Law Professor Alan Dershowitz has become embroiled in a public controversy and several lawsuits. Dershowitz represented Jeffrey Epstein and had a role in negotiating a deferred prosecution agreement tor Epstein.

Recently, one of Epstein’s accusers, who is represented by David Boies, has accused Dershowitz of inappropriate conduct. The full details of the allegations are contained in court papers in the case captioned Giuffre v. Dershowitz 19-cv-3377 (S.D. NY). There have been other lawsuits between and among Dershowitz and other lawyers who represented Giuffre or who objected to the extraordinarily lenient terms of the Epstein deferred prosecution agreement. The New Yorker recently ran a story detailing the controversy. Dershowitz has consistently denied the claims of Giuffre. Indeed, Dershowitz has denounced the allegations with such vigor that he has been sued for defamation at least twice, once by Giuffre and once by her former lawyers.

I not offering an opinion on the truth or falsity of the allegations that have been made. I’m more interested in the question of how a practicing lawyer should respond to allegations of this type.

I do not recommend that any lawyer respond to allegations in this manner. Instead, I strongly recommend that, when confronted with allegations of this nature, the lawyer respond to any media inquiries with a general denial (assuming the denial is true) and refusing any further comment. By commenting at length, there is some risk that the lawyer may inadvertently reveal a confidence of a client or make further errors. Each time the lawyer speaks he may contradict himself or offer a slightly different version of the events. In short, my advice is to shut up.

Lawyer is Reprimanded For False Statement In Motion for Extension of Time.

The case is In re Ryan Kenneth Melcher, 2018 PR 88. Melcher was employed as an assistant federal publid defender in the office of the Colorado federal defender. Melcher’s error was a mistatement of fact in a routine motion for extension of time. The Panel describes the error in this way;

2. In November 2016, Respondent was appointed to represent Rocky Allen (“Allen”) before the Tenth Circuit Court of Appeals (“Tenth Circuit”) in relation to Allen’s appeal of his 2016 federal criminal conviction for tampering with a consumer product and obtaining a controlled substance by deceit or subterfuge. The matter was captioned United States v. Rocky Allen under case number 16-1450.

PAGE 2:

3. On April 26, 2017, while representing Allen, Respondent filed a motion in Allen’s matter before the Tenth Circuit entitled “Appellant’s Unopposed Motion for 14-Day Extension of Time to File Reply Brief.” In his motion, Respondent informed both the court and his opposing counsel at the U.S. Attorney’s Office for the District of Colorado that he had multiple matters scheduled for oral arguments, and needed additional time to prepare, and included the following information in his motion:

“I also have been working on the following cases with upcoming deadlines in this Court: United States v. Archuleta, No. 16-1297 (oral argument set for May 9, 2017); United States v. Ivory, No. 15-3238 (oral argument set for May 10, 2017); United States v. Olea-Monarez, No. 16-1330 (opening brief due May 15, 2017); United States v. Allen, No. 17-1083 (opening brief due June 5, 2017).”

4. In writing that another client’s matter in United States v. Ivory was set for oral argument on May 10, 2017, Respondent knowingly made a false statement to both the court and his opposing counsel as United States v. Ivory was not set for oral argument, which Respondent knew at the time he filed his motion.

When the mistake was recognized, it was quickly corrected. Despite the correction, the ARDC made a finding that the lawyer engaged in fraudulent conduct in violation of Rule 8.4(d).

5. By reason of the conduct described above, Respondent has engaged in the following misconduct:

a. knowingly making a false statement of fact or law to a tribunal, by filing a motion for extension of time and including language that he needed additional time to prepare for oral argument in United States v. Ivory when Respondent knew there was no oral argument pending in the Ivory matter, in violation of Rule 3.3(a)(1) of the Illinois Rules of Professional Conduct (2010);

b. knowingly making a false statement of material fact or law to a third person, by serving government counsel with a motion for extension of time in which Respondent wrote that he was preparing for oral argument in United States v. Ivory when the Ivory matter was not set for oral argument, in violation of Rule 4.1(a) of the Illinois Rules of Professional Conduct (2010); andc. engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation, by purposely including false language that United States v. Ivory was set for oral argument when Respondent knew there was no oral argument pending, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010

The Panel acknowledges that the lawyer made only one false statement in the motion and that he recevied no personal benefit from that false statement. In addition, the respondent lost his job and has now been publicly embarrassed.

Comment: in my opinion this small error should have been dealt with by a private reprimand, not a public finding that the lawyer violated Rule 8.4(c). This is disciplinary overkill.

California Bar Seeks to Place Michael Avenatti on Inactive Status

The California Bar has filed a motion to place Michael Avenatti on inactive status. The Petition and Exhibits are over 500 pages long and list numerous claims that Avenatti converted funds belonging to his clients. http://www.calbar.ca.gov/About-Us/News-Events/News-Releases/state-bar-of-california-files-to-place-attorney-michael-j-avenatti-on-involuntary-inactive-status Given the allegations against Avenatti and the two pending federal indictments against him, I would imagine that the petition will be granted. That will remove Avenatti from the practice of law during the disciplinary case.

Oklahoma Imposes 90-day suspension for forging client’s name on settlement agreement.

A lawyer in Oklahoma forged his client’s signature on a settlement agreement and had that signature notarized. The Oklahoma Supreme Court described the misconduct as follows:

¶16 The formal release of claims against Pappy, et al. (excluding Barnes and Plaxico), was signed by Respondent (using Ms. Miller’s name) and the “signature” was caused to be notarized by Respondent on September 17, 2015. Respondent admits that he tried to replicate Ms. Miller’s signature as close as possible before having it notarized. Respondent also admits that he had no power of attorney or other legal authority authorizing him to sign this agreement using Ms. Miller’s name. However, Respondent alleges that he did have oral authorization to execute the formal release. However, Ms. Miller contended that she did not give Respondent permission to sign this formal release of claims against Pappy, et al….

¶25 Respondent’s actions were also a violation of ORPC Rules 8.4(a) and (c). The PRT Report found that Respondent violated Rule 8.4(c) when he endorsed the Formal Release of Claims for the Pappy, et al. settlement, signing his client’s name. Although he claimed that the signature was done with his client’s permission, she disputed that fact. But more seriously, he acknowledged that after he signed the settlement agreement, he caused that signature of his client’s name to be notarized, and by his admission, attempted to make the signature look as much as possible to the client’s signature. Though Respondent claimed to have had the client’s oral consent to effect the signature, his actions reveal that it was not, at the very least, in accord with legal procedures. He admitted that he no power of attorney or other legal authorization to sign his client’s name.

The Court also found that the respondent had mishandled settlement funds by depositing them in his operating account. (The client was made whole by the lawyer). The court also noted that the lawyer did a good job handling the case and obtained a substantial settlement for the client. Forging a client’s name on a document is usually cause for discipline. For further information please consult our website. https://www.clintonlaw.net/legal-ethics.html

The case is Oklahoma Bar Association v. Shad Withers, 2019 OK 47

Conversion of Client’s Money To Feed Gambling Habit Leads to Disbarment in Pennsylvania

The case is Office of Disciplinary Counsel v. John Kelvin Conner, 29 DB 2018. The case involved a lawyer who encourged a client to execute a durable power of attorney, naming the lawyer as the agent. The client was an elderly woman who needed round the clock healthcare. Instead of acting in the interest of the client, the lawyer withdrew over $95,000 from her account to feed a gambling habit. The Pennsylvania Supreme Court disbarred the lawyer.

ARDC Recommends 60-Day Suspension for False Statement In Motion

The ARDC Review Board has recommended a 60-day suspension for a lawyer who made a material misstatement in a motion to vacate a conviction. In Illinois an old conviction, even if you have led a blameless life, can lead to dire consequences because you are forever barred from holding any professional license – even one to cut hair. This harsh rule has been criticized and challenged but it has stood the test of time. Here a lawyer made a false statement in a motion to vacate a conviction and the Review Board has recommended a 60-day suspension.

In March 2017, Respondent agreed to represent Courtney Chester in an effort to have her 2001 battery conviction voided so that she could apply to nursing school. Chester was 17 when she was charged with battery, but she had turned 18 on the day before she pled guilty to the charge. Thus, she was 18 at the time of her guilty plea and conviction. Respondent knew she was 18 when she pled guilty.

“Respondent began conversations with Assistant States Attorney Joseph Lesner about Chester’s situation. Lesner told him to get a motion on file. Respondent thus prepared and filed with the court a motion to vacate Chester’s guilty plea and conviction. In the motion, Respondent stated that Chester was 17 at the time she was charged and sentenced. He further stated: “As [Chester] was only 17 at the time of the plea and conviction[,] her plea and conviction should properly be voided.” (Admin. Ex. 1 at 5.) He knew that statement was false when he filed the motion, because he knew that Chester was 18 when she entered her guilty plea and was sentenced.

Respondent also sent a cover letter to Lesner explaining the motion, in which he stated that Chester was “trying to become a nurse and to do so she needs to remove her conviction for battery in 2001. She was 17 at the time and was eligible for court supervision.” (Admin. Ex. 1 at 6.)

About a month after filing the motion, Respondent appeared in court on the motion to vacate, in front of Winnebago County Circuit Court Associate Judge Brian Shore. Judge Shore questioned him about the basis of the motion, pointing out that Chester was 18 

when she pled guilty and that the motion, on its face, was not correct. Respondent told Judge Shore that he did not look at the actual plea date and that, when he wrote the motion, he believed Chester was 17 at the time of her plea, but subsequently determined that she was over that age. The judge continued to press Respondent about the incorrect statement, and Respondent continued to assert to the judge that he did not intend to state something false. The judge dismissed the motion to vacate because of the “blatantly false allegation.” (Admin. Ex. 3 at 3-8.) At his disciplinary hearing, Respondent acknowledged that his statements to Judge Shore that he did not look at the actual plea date and that he believed when he wrote the motion that Chester was 17 when she pled guilty were false. (Report of Proceedings at 34-35.)”

If you have a legal ethics issue and would like to discuss it with us, do not hesitate to contact us. Also, please review our legal ethics webpage. https://www.clintonlaw.net/legal-ethics.html

The Journey Begins

Thanks for joining me! I recently moved my legal ethics blog to wordpress from Blogger. We will see how this works.

This blog typically covers legal ethics issues and disciplinary cases of note.

The new format of WordPress will take me some time to learn.

Ed Clinton

Good company in a journey makes the way seem shorter. — Izaak Walton

ARDC Hearing Board Rejects Claim that Lawyer Wrongfully Obtained Health Insurance

In a recent decision, filed March 12, 2019. the ARDC Hearing Board rejected a claim that a lawyer wrongfully held herself out as an employee of a company to obtain health insurance. Since the lawyer won her case and the panel recommended that the charges be dismissed, I’m not going to list the lawyer’s name in this blog post. 

The Hearing Board found the following facts to be relevant:

During the time Respondent worked at law firms and General Growth Properties, she received health insurance as an employee through her employers’ policies. When she started her own firm in 2009, she obtained health insurance pursuant to the Consolidated Omnibus Reconciliation Act (Cobra). At that time Respondent and her husband, who was a partner with a large company, were living with Respondent’s parents in Highland Park. (Tr. 19-20, 27-28).
Between 2009 and October 2010, Respondent decided she wanted to have a second child. Her Cobra coverage had a waiting period of twelve months for maternity benefits, and other private insurance options had a similar requirement. Her husband did not have insurance coverage through his business. Respondent testified when she mentioned the situation to her father, he told her she could be added to Horizon’s policy. She understood from his statement that she was allowed to be on the policy. (Ans. at pars. 4, 6; Tr. 29-31, 76).
Daniel Michael recalled telling Respondent he would add her to the company insurance policy. He acknowledged Respondent never worked at Horizon, but he believed she qualified for coverage because she was part owner of the company. He was not aware that only employees were covered by the policy. When he told the office accountant, Robert Berman, to make sure Respondent was added to the policy, Berman did not ask any questions or express any concerns. Daniel testified that whenever his kids needed something, they got it. (Tr. 133-35, 138-39, 145).
In or about January 15, 2011, Respondent completed parts of a Blue Cross Blue Shield “Employee Application.” She acknowledged writing “Horizon Realty Group” in the space provided for the employer’s name, and writing her own name in the space for employee. She also provided her email address, social security number, and her husband’s and daughter’s names where requested. In a section designated “Employment Status,” the following options were provided:
__ Active Employee    __COBRA Continuation    __IL Continuation    __ If Retiree, retirement date ____
Respondent did not know who placed an “x” next to “Active Employee,” or who placed other marks on the page indicating “PPO” coverage and “family” health plan. She denied filling in the date of employment and the effective date of the policy, and did not know who completed that portion of the application. (Tr. 35-43, 50-51, 75; Adm. Ex. 1).
Respondent testified she did not want life insurance coverage and therefore did not provide information pertaining to that option, such as job title, salary amount and number of hours worked in a normal week. On a separate “Waiver of Coverage” form, Respondent wrote “Horizon Realty Group” as her employer and her own name as the employee, filled in her address and social security number, and indicated she was declining life insurance coverage. She denied writing in the date of hire on that form, and does not know who filled in that information. On a page entitled “Medical Questionnaire,” Respondent wrote her name and date of birth, and supplied information for her husband and daughter. (Tr. 38, 43-47, 50-52, 74-75; Adm. Ex. 2).
Respondent acknowledged signing the application, waiver, and medical questionnaire in the spaces provided for “Signature of Employee,” and dating them January 15, 2011. By signing the application, she acknowledged the following:
I apply for coverage as indicated above, for which I am or may be eligible under the agreement with Blue Cross and Blue Shield of Illinois, a Division of Health Care Service Corporation . . . and/or Fort Dearborn Life Insurance Company . . . which are herein exclusively called the Company. I have read the above statements and represent that they are true and complete to the best of my knowledge.
(Tr. 42, 49-51, 233; Adm. Ex. 1).
Respondent did not believe she was breaking any rule by signing the forms as an employee. She testified she never thought twice about the situation after her father told her she could be on the company policy. She acknowledged she never worked for Horizon, nor was she employed by her father or any of his businesses for any purpose. She testified her brother was an employee of Horizon, and she assumed he was on the Horizon policy. (Tr. 57-59, 233-34).
Jeffrey Michael testified he did not instruct anyone to give the Employee Application to Respondent, did not give it to her himself, did not fill in any information on Respondent’s initial application or on a subsequent form to enroll an additional child, and did not provide that information to anyone. He first became aware that Respondent was on the Horizon group insurance policy when he received a request for information from the ARDC or from a bankruptcy trustee. He was not aware the company was paying both the employer and employee contribution for Respondent. (Tr. 218-26).
Jeffrey and his family were on the Horizon policy during the 2011 to 2015 time period. He testified he works for the company full time, but denied he is an employee or receives payroll wages; rather, he is paid as the sole owner of an LLC. He confirmed that Respondent was not employed by the company, and no other non-employees were on the policy. (Tr. 219-21, 225).
Robert Berman, a certified public accountant, testified he worked for Horizon Realty in or about 2010 and 2011 as an in-house accountant. His only responsibility with respect to health insurance benefits was to supply blank forms and, at Daniel or Jeffrey Michael’s request, he faxed a blank application to Respondent. He knew at the time that no payroll was being processed for Respondent. He also knew that Jeffrey, who was an owner and worked at the company, was covered by the policy. Berman denied having any discussions with Respondent regarding the completion of the application and did not recall whether the form was completed and signed when she returned it. After receiving the application, he filled in the policy number, effective date of the policy and the date of employment, which information he might have received from Jeffrey, and sent the application in for processing. He denied having any further involvement with Respondent’s health insurance, any claims she filed, or the addition of dependents to the policy. (Tr. 193-99; Adm. Ex. 1).

 
The Findings:
 

In the case before us, Respondent acknowledged she completed portions of insurance applications that identified her as an employee of Horizon when, in fact, she never worked for Horizon. Further, while covered by the Horizon policy, she submitted claims for medical services and received payments from Blue Cross. Those facts, while seemingly incriminating, must be viewed in light of other evidence and Respondent’s explanations for her conduct.
Respondent denied that her actions stemmed from any calculated plan to deceive anyone; rather, she explained that in light of her father’s statement that she could be added to the Horizon policy, she failed to give any real thought to her eligibility. We found Respondent to be a very credible witness and her explanation to be reasonable. In our opinion, her deference to her father’s judgment was realistic in light of his position of authority in the company and the fact he would be expected to have knowledge of company benefits. Respondent’s legal expertise, while extensive in the area of commercial real estate, did not encompass the interpretation of insurance benefit plans.
Even if Respondent had given greater thought to the language of the application form, the wording of the acknowledgement paragraph was vague in that it stated she was applying for coverage for which she was eligible or “may become” eligible. The Blue Cross representative was not asked to interpret that language, nor was it referenced in the terminology definitions we reviewed. With respect to an “x” next to “Active Employee,” Respondent did not recall if she made that mark. Since at least one other person entered information on the application form, we draw no conclusions with respect to that mark. We also note there were no other options provided, such as “owner” or “other.”
Aside from the issue of Respondent’s motivations, which we conclude were innocent, we find there was a complete failure of proof as to whether she was, in fact, eligible for coverage. It was incumbent upon the Administrator to provide proof of the policy terms, requirements, benefits and definitions in place at the time of the alleged wrongdoing, but that proof was lacking. The two-page undated excerpt of definitions, which was represented to be part of a “group document,” was of little assistance without the entire document, which may have contained additional definitions or addressed the issue of coverage for company owners. The fact Respondent’s brother identified himself as an owner of the company who was covered by the policy, only adds to the confusion and the possibility that further definitions may exist. The Blue Cross representative did not know if the two-page excerpt was the document referenced in the policy booklet and notably, had no opinion as to whether Respondent qualified for coverage. Additionally, the benefit applications for Horizon that were presented to us were not in effect at the time Respondent first applied for coverage and we saw no evidence that Respondent was given a copy of the actual benefits policy or any other document that defined who was entitled to coverage. As such, she had no basis to make an independent judgment that would contradict her father’s assessment.
We also find it significant that no one involved with the application process raised any objections or concerns regarding Respondent’s coverage under the Horizon policy. We saw no evidence that anything was said to Respondent – by her father, her brother, the company accountant or the insurance broker who transmitted the policy to Blue Cross – that would cause Respondent to pause and consider her actions. Likewise, we saw no indication that Jeffrey Michael’s eligibility for coverage was ever questioned when he, like Respondent, was an owner of the company and not an employee.
We have reviewed cases in which attorneys engaged in dishonest conduct by seeking insurance coverage or other benefits for themselves of family members. In See e.g. those cases the attorneys were clearly aware that eligibility requirements could not be met. In re Lewis, 2016PR00007 (Review Bd. 2018) (exceptions pending before the Supreme Court) (attorney admitted that his eligibility for benefits was dependent on his status as a domestic partner, but continued claiming benefits for eight years after the domestic partnership ended); In re Bless, 2013PR00122, M.R. 28275 (Nov. 21, 2016) (attorney who was collecting disability benefits failed to obtain approval for secondary employment, although he knew such approval was required by workplace rules, in order to continue receiving full benefits); In re Worrell, 07 CH 60, M.R. 24407 (Mar. 21, 2011) (attorney acknowledged concealing information that would prevent her step-father from receiving public aid benefits); In re Volpe, 97 CH 33, M.R. 15040 (Nov. 24, 1998) (in order to obtain health benefits, attorney listed himself and family members as employees of a family business which had ceased to exist years earlier).
The present case is more in line with In re Cooney, 2010PR00123 (Nov. 30, 2011) where an attorney relied on his employer’s assurances that he could be included in a union health benefits plan, and that the arrangement had been approved by a union officer. The attorney signed a union membership application, which had been completed for him, which inaccurately identified him as a “carpenter.” He was not familiar with the law involved and did not research what was necessary to include nontrade employees in a union benefit plan. The attorney was reprimanded for undermining the justice system and bringing the legal profession into disrepute in violation of Supreme Court Rule 770 (which rule is no longer a basis for imposing discipline), but no finding of dishonest conduct was made.
We found Respondent to be a credible witness and accept her explanation that she gave no real thought to the insurance process and instead, simply acceded to her father’s decision. While her failure to give proper consideration to her actions and investigate her eligibility for coverage was not prudent behavior, especially for an attorney, we find no evidence of dishonest intent or purpose on her part.
During closing argument, counsel for the Administrator asserted that Respondent’s conduct constituted “constructive fraud,” which requires neither actual dishonesty nor intent to deceive. Cases have held that constructive fraud occurs where a special relationship gives rise to a legal or equitable duty that, when breached, results in a detrimental effect on public or private interests. See In re Gerard, 132 Ill. 2d 507, 528-29, 548 N.E.2d 1051 (1989); Cessna v. City of Danville, 296 Ill. App. 3d 156, 168-69, 693 N.E.2d 1264 (4th Dist. 1997). We find no such relationship here. We further note that neither a constructive fraud theory, nor the facts necessary to support it, were referenced or charged in the Complaint.1For the foregoing reasons, we conclude the Administrator failed to prove a violation of Rule 8.4(c) by clear and convincing evidence.
2.    Rule 8.4(b) – engaging in a criminal act that reflects adversely on Respondent’s honesty, trustworthiness or fitness as a lawyer
The Administrator charged Respondent with violating Rule 8.4(b) by “committing insurance fraud by submitting false claims when she was not entitled to insurance coverage as an employee of HRG (Horizon Realty Group).” The criminal statute cited in the Complaint states that a person commits insurance fraud by:
Knowingly obtain[ing], attempt[ing] to obtain, or caus[ing] to be obtained, by deception, control over the property of an insurance company or self-insured entity by the making of a false claim or by causing a false claim to be made on any policy of insurance issued by an insurance company or by the making of a false claim or by causing a false claim to be made to a self-insured entity, intending to deprive an insurance company or self-insured entity permanently of the use and benefit of that property.
720 ILCS 5/17-10.5(a)(1). A “false claim” is defined as any statement made to an insurer, insurance broker or insurance agent in support of a claim for payment or as part of, or in support of, an application for insurance when the statement 1) contains false or misleading information concerning any fact material to the claim; or 2) conceals the occurrence of any event material to a person’s entitlement to insurance benefits or payment, or the amount of any benefit to which the person is entitled. 720 ILCS 5/17-0.5.
We understand this charge to be based on Respondent’s application for insurance In January 2011 and her submission of claims between February 2011 and January 2016. As a preliminary matter, we note that the statute cited in the Complaint, although admitted by Respondent to be the controlling law at the time, actually took effect in July 2011 and therefore would not govern the application submitted by Respondent in January 2011. While the predecessor statute (720 ILCS 46-1(a) and 46-1(d)(5) (2010)) is nearly identical to the statute cited in the Complaint, a charge as serious as criminal conduct requires exactitude and we will not find a violation of a statute that was not in effect at the time the conduct in question occurred. The statute cited by the Administrator does apply to Respondent’s completion of the 2014 form adding a dependent to the policy, which she signed as an employee of Horizon, as well as to the insurance claims she submitted between July 1, 2011 and January 2016.
We find that a violation of Rule 8.4(b) was not proved by clear and convincing evidence. The criminal statute requires that a person “knowingly” engage in a “deceptive act” to gain control of the property of an insurance company. In our discussion of Rule 8.4(c), we concluded that Respondent’s conduct stemmed from her lack of attention and her assumptions based on statements made by her father, rather than from any knowing behavior or conscious deceptive act meant to deprive the insurance company of its property. Moreover, there was no evidence she had the proper materials in front of her that would establish the criteria for her insurance coverage, or that she knew those criteria. For those same reasons, we find Respondent did not knowingly engage in any deceptive act in violation of the insurance fraud statute.

 
Comment: the alleged misconduct was uncovered when the company went bankrupt. Still, it strikes me as remarkably petty for someone to report this attorney to the ARDC for what was at best a paperwork mistake. Further, none of the charged conduct had anything to do with the practice of law. The final issue that should be considered is – why do people have to go through such suffering to get health insurance in this country.  https://www.clintonlaw.net/legal-ethics.html
 
Edward X. Clinton, Jr.