State ex rel. Counsel for Discipline of the Nebraska Supreme Court v. Ellis

283 Neb. 329

808 N.W.2d 634

STATE of Nebraska ex rel. COUNSEL FOR DISCIPLINE OF the NEBRASKA SUPREME COURT, relator,

v.John P. ELLIS, respondent.

No. S–10–986.

Supreme Court of Nebraska.

Feb. 24, 2012.

Syllabus by the Court

1. Disciplinary Proceedings. A proceeding to discipline an attorney is a trial de novo on the record.

2. Disciplinary Proceedings: Appeal and Error. In an attorney discipline case, the Nebraska Supreme Court reaches its conclusion independent of the findings of the referee. However, where the credible evidence is in conflict on a material issue of fact, the Nebraska Supreme Court considers and may give weight to the fact that the referee heard and observed the witnesses and accepted one version of the facts rather than another.

3. Disciplinary Proceedings: Proof. Disciplinary charges against an attorney must be established by clear and convincing evidence.

4. Disciplinary Proceedings. In attorney discipline cases, the basic issues are whether discipline should be imposed and, if so, the type of discipline under the circumstances.

5. Disciplinary Proceedings. The Nebraska Supreme Court evaluates each attorney discipline case in light of its particular facts and circumstances and considers the attorney's acts both underlying the events of the case and throughout the proceeding.

6. Disciplinary Proceedings. In determining the appropriate sanction in an attorney disciplinary proceeding, the Nebraska Supreme Court considers the discipline imposed in similar circumstances.

7. Disciplinary Proceedings. In evaluating attorney discipline cases, the Nebraska Supreme Court considers aggravating and mitigating circumstances.

8. Disciplinary Proceedings. Cumulative acts of attorney misconduct are distinguishable from isolated incidents, therefore justifying more serious sanctions.

Kent L. Frobish, Assistant Counsel for Discipline, for relator.

James C. Morrow, of Morrow, Willnauer, Klosterman & Church, L.L.C., and, on brief, Kurt D. Maahs for respondent.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, McCORMACK, and MILLER–LERMAN, JJ.

PER CURIAM.

NATURE OF CASE

The Counsel for Discipline filed formal charges against John P. Ellis, alleging he violated his oath of office as an attorney, Neb.Rev.Stat. 7–104 (Reissue 2007), and several of the Nebraska Rules of Professional Conduct. Ellis filed an answer admitting certain factual allegations but denying he violated the rules of professional conduct. This court appointed a referee. After holding an evidentiary hearing, the referee determined Ellis had violated Neb. Ct. R. of Prof. Cond. §§ 3–501.3 (diligence); 3–501.4(a)(1) through (4) and (b) (communications); 3–501.15(d) and (e) (safekeeping property); 3–501.16(d) (declining or terminating representation); and 3–508.4(a), (c), and (d) (misconduct); and his oath of office as an attorney. Based on the seriousness of the offenses and given Ellis' similar past behavior for which he had been previously disciplined, the referee recommended disbarment. Ellis filed exceptions to the referee's report. Upon our independent review of the record, we conclude that the violations occurred and that the proper sanction is disbarment.

FACTS

Ellis was admitted to the practice of law in Nebraska in 1982. In 2003, he entered a conditional admission to charges filed by the Counsel for Discipline. Those charges alleged that due to Ellis' neglect, a client's case was dismissed. Ellis subsequently misled the client regarding the status of that case and gave false information to the Counsel for Discipline's office during the following investigation. We accepted Ellis' conditional admission and suspended him for 1 year. State ex rel. Special Counsel for Dis. v. Ellis, 265 Neb. 788, 659 N.W.2d 829 (2003). Ellis was reinstated in 2004.

At all relevant times, Ellis was engaged in the private practice of law in Omaha under the jurisdiction of the Committee on Inquiry of the Second Disciplinary District, which determined reasonable grounds existed to discipline Ellis. Accordingly, formal charges were filed. Given Ellis' answer, we appointed a referee.

With respect to the current case, the referee found facts substantially as described below. Following our de novo review of the record, we determine there is clear and convincing evidence in the record to support these facts. In 2006, Stephen and Cindy Fuller met with Ellis to talk about collecting damages as a result of personal injuries Stephen Fuller (Fuller) suffered in 2004. Ellis was hired on a one-third contingency fee contract and presented a claim to an insurance company, which denied liability. Before proceeding with the case, Ellis required a $1,000 deposit. Fuller made the deposit, and in May 2007, the funds were placed in Ellis' trust account. In June 2007, Ellis filed suit in the district court for Douglas County, and discovery began.

Around March 10, 2008, the district court sent a notice to Ellis stating that Fuller's suit would be dismissed in 30 days for lack of prosecution. Ellis did not send Fuller a copy of this notice of impending dismissal. The statute of limitations ran on Fuller's claim in February 2008. Fuller's case was dismissed with prejudice on April 10, 2008. Ellis claimed he told the Fullers about the notice of impending dismissal on March 24, 2008, when he met with them to discuss their upcoming depositions. The referee did not find this testimony credible. Ellis also claimed he sent a letter to Fuller on March 28 about the impending dismissal. The referee found that Ellis falsely claimed this letter had been sent and, on the contrary, that the evidence showed the letter “was created by [Ellis] to mislead and deceive [the] Counsel for Discipline in the investigation of this matter.” These findings by the referee are supported by the record.

The March 28, 2008, letter was not sent by certified mail. It included the statement, “If I do not hear back from you, I will assume you agree [that your case would not likely be successful] and understand that the matter will be dismissed.” The file copy of the March 28 letter resembled “a copy of a copy.” The letter did not discuss reinstatement of the case or mention the expired statute of limitations. The referee did not find it credible that the March 28 letter would include so little about the consequences of dismissal and the difficulty of reinstatement.

Ellis' firm uses “Worldox,” a document management system which assigns numbers sequentially to documents. The March 28, 2008, letter was allegedly numbered 60119, while a March 26 letter was numbered 60201. Two copies of the letter in two exhibits in the case bore no document number.

In connection with the investigation of Fuller's grievance, the Assistant Counsel for Discipline met Ellis at Ellis' office on May 3, 2010, and asked for the March 28, 2008, letter. The letter was not found in the computer system. A search for the document numbered 60119 retrieved a letter dated March 20, 2008, to a different client. A hard copy of the March 20 letter could not be found. Ellis claimed he gave the March 20 letter directly to the client; the referee determined that it was more likely the letter was used to recreate an obsolete letterhead.

Fuller stated he never received the March 28, 2008, letter and was never told of the notice of impending dismissal or the actual dismissal of his case. Unaware of the April 2008 dismissal, the Fullers continued to contact Ellis about the case through the rest of 2008 and 2009. These contacts support Fuller's claim he did not know his case had been dismissed. Although, as the referee noted, Fuller did not have a good memory for dates, he could recall facts in sequence and was able to refresh his memory from several exhibits. The referee found that Fuller was credible and that the March 28 letter was fabricated.

On July 3, 2008, Ellis sent Fuller a letter about locating a possible witness. In 2009, Ellis met Fuller and the witness, despite Ellis' apparent knowledge that the case probably could not be reinstated 1 1/2 years after it had been dismissed. This witness did not add to Fuller's case. Fuller called Ellis multiple times from October through December 2009 and left messages for Ellis.

On January 8, 2010, Fuller looked at his case file at the Douglas County District Court and learned his case had been dismissed in 2008. Fuller attempted to contact Ellis, but his calls were not returned. Fuller filed a grievance on January 12, 2010.

The remainder of Fuller's $1,000 payment was not returned until May 2010, over 2 years after the case was dismissed and only after the grievance had been filed. Ellis' employer ordered the refund. However, the referee determined that it was unclear that the failure to refund the money was due to an attempt to mislead Fuller or due to a lack of review processes at the firm for the rare case of an advance payment on a contingency fee contract.

The referee determined that Ellis did not tell Fuller his case was subject to dismissal and, once dismissed, could be reinstated only at the district court's discretion. The referee also determined that Ellis failed to advise Fuller that if the case was not reinstated, it could not be refiled, because the statute of limitations had run. The referee determined that Ellis did not explain the matter to Fuller such that Fuller could make informed decisions regarding dismissal or take action to avoid dismissal or reinstate the case. The referee determined that although Ellis had a duty to properly account for client funds, the refund was not made until well after the case was dismissed. The referee described Ellis' conduct as involving “dishonesty, fraud, deceit and misrepresentation” as well as “prejudic[e] to the administration of justice.” Upon our de novo review, we find these determinations are supported by the record.

The referee determined Ellis violated Neb. Ct. R. of Prof. Cond. §§ 3–501.3 (diligence); 3–501.4(a)(1) through (4) and (b) (comm...