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Bar Counsel Report: May 2012

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bar counsel report
May 2012
LETTERS OF REPRIMAND File Nos.: 09-050-2854, 09-152-2854
Letter of Reprimand imposed when attorney failed to supervise nonlawyer assistants. Between September 2008 and 2009 Nonlawyer A and Nonlawyer B operated a foreclosure rescue scam (Company). The Company charged $2,500 retainers and misled customers, letting them believe the Company’s services would stop ongoing foreclosures on their homes and/or obtain loan modifications. In most cases, Nonlawyers A and B required the victims to pay a monthly charge of $150 for litigation costs in addition to the original retainers of $2,500 for the duration of the litigation, despite the fact neither were licensed as attorneys in Nevada. Nonlawyer A was later indicted and charged with 12 felony counts. Attorney was employed with Company on or about November 3, 2008. Attorney received a weekly pay check ranging from $1,200 to $1,500. Attorney stated much of his responsibility centered around explaining the case status to the clientele of the Company and providing an overview of judicial process. Attorney also stated that he made himself available for the review of mortgage documents, legal research and, on occasion, reviewed forms for applicability of law. In November 2008, Client met with Nonlawyer A. Client stated Nonlawyer A outlined the process and how the Company worked. Client stated that his wife was in the Philippines and Nonlawyer A explained that a special power-of-attorney could be drafted on her behalf. Client stated that he informed Nonlawyer A that he was already in default on his loan and had been negotiating with his lender for almost a year. On December 3, 2008, Client told Nonlawyer A that he would be joining his wife in the Philippines for a vacation. Client stated that Nonlawyer A told him to take the documents with him and have the U.S. Embassy in Manila notarize the documents and then mail them back to the United States. Client further stated he went to the office of the Company and was told his documents were not ready so he waited. Client stated he was waiting in the office and that Attorney came in, however, he continued waiting for another seven hours to speak with Attorney. Client stated that once inside Attorney’s office he was advised that they would be filing the complaint pro per and Client was told that if he needed an attorney he could retain one. Client stated Attorney gave him instructions on what to do with the documents and handed him a business card telling him to e-mail anytime. Client stated he was confused because he thought Attorney was his lawyer and he left Attorney’s office in good spirits thinking he was going to save his home. Once in Manila, Client claims he had the documents notarized and mailed back to Attorney. Client stated that during his vacation the mortgage company had posted a three-day notice on his front door, which his brother-in-law discovered. Client explained he called Attorney and had a copy of the notice delivered to Attorney and he personally e-mailed Attorney a copy. Client stated Attorney explained there was a process to an eviction. First the three-day notice would be served followed by
a seven-day notice then an unlawful detainer that would take 45 days before an eviction. Client stated he asked Attorney what could be filed to stop the eviction process. Client did get the seven-day notice and he kept e-mailing Attorney with questions asking directions on what to do. Client also received a 24-hour notice that was posted by a Constable. Client provided the State Bar of Nevada with copies of the e-mails sent to Attorney. Over a period of three weeks, numerous e-mails were exchanged as well as telephone calls between Client and Attorney at 2 a.m. from the Philippines. As the e-mail chains continued, Attorney stated that Attorney was just a lawyer trying to inform Client and that Client should contact the Company because they had his file. Ultimately, Client and his wife lost their home. Attorney received a LETTER OF REPRIMAND for violating RPC 1.2 (Scope of Representation and Allocation of Authority between Client and Lawyer), RPC 1.3 (Diligence), RPC 1.4 (Communication), RPC 5.3 (Responsibilities Regarding Nonlawyer Assistants) and RPC 5.5 (Unauthorized Practice of Law).
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Letter of Reprimand imposed when attorney engaged in feesplitting with a nonlawyer processing loan modifications. Attorney was approached by Nonlawyer, the owner of Loan Modification Company, in February of 2009 after Nonlawyer moved from working with another attorney. Loan Modification Company provided loan modification services and Nonlawyer indicated she wanted to associate her company with a local attorney. Attorney stated that he engaged Loan Modification Company to provide processing services for home loan modifications on a case-by-case basis. Some of the clients were referred by Loan Modification Company and some were Attorney’s clients obtained by other means. Attorney stated that there were approximately 20 cases in total and that Attorney met with each individual client for an initial consultation. Attorney would then have Loan Modification Company’s staff follow up with the banks and monitor the progress of the cases. Client was referred to Attorney by Loan Modification Company and signed a retainer agreement with Attorney. Client stated he hired Attorney to facilitate Deeds in Lieu of Foreclosure (DIL) for his primary residence and a second property. Client had paid Attorney $2,500 up front and later filed the grievance because he didn’t feel that Attorney provided the services he was promised. Client stated that Attorney had counseled him to stop paying his mortgage. Client demanded a refund and was refused. Attorney confirmed the retainer amount and claimed that he paid a portion of that fee to Loan Modification Company to handle the communications with the bank regarding both properties. Attorney stated that Attorney’s firm attempted to negotiate DIL on both properties but that Client’s bank was insisting on proceeding with a short sale process prior to proceeding with the DIL process. Attorney stated that he referred Client to a real estate agent and that ultimately both of Client’s properties got short sale contracts. Attorney denied ever telling Client to stop paying his mortgage and insisted that Attorney had earned his fee, which was nonrefundable. The parties went through the fee dispute process and Client was ultimately awarded $1,100. Attorney stated that Attorney received a few phone calls from other clients after a few months, worrying about the status of their loan modifications and that Attorney attempted to obtain
Nevada Lawyer May 2012
bar counsel report
May 2012 a status from Non-Lawyer. When Attorney was unable to do so, Attorney personally pulled the files and determined that the cases had not been processed by Nonlawyer the way she had told Attorney. Attorney subsequently resolved Attorney’s remaining open files, either through obtaining a result or giving refunds and severed Attorney’s relationship with Loan Modification Company and Nonlawyer. Based upon the foregoing, the Panel of the Southern Nevada Disciplinary Board was concerned with Attorney’s association with Nonlawyer who was practicing law without a license and fee splitting. Attorney entered into a contract for legal services with Nonlawyer when Attorney knew or should have known she would use Attorney’s office and/or work-product to engage in the unauthorized practice of law. What constitutes the “practice of law” must be determined on a case-by-case basis; the practice of law includes activities calling for the exercise of trained judgment in applying the general body of legal knowledge to the specific problem of a client and recommending a course of action. Nonlawyer was receiving a set monetary amount for each client based on the assessment of the complexity of the loan modification which in turn is fee splitting. Attorney received a LETTER OF REPRIMAND for violating RPC 5.4 (Professional Independence of a Lawyer). resolved, then the funds are to be interplead pursuant to Achrem v. Expressway Plaza Ltd. Partnership, 112 Nev. 737, 917 P.2d 447 (1996). Although Attorney claimed ignorance of any dispute that Client may have had against Doctor, it was Attorney’s obligation to determine whether Doctor’s charges were accepted or disputed by Client. Further, upon terminating representation of a client, Attorney was to “immediately deliver to the client all papers, documents, pleadings and items of tangible personal property that belong to or were prepared for that client” NRS 7.055 (Duty of discharged attorney to deliver certain materials to client; enforcement; adjudication of claims to materials); see also RPC 1.16(d) (Declining or terminating representation). Attorney received a LETTER OF REPRIMAND in this matter for violating RPC 1.15 (Safekeeping Property) and RPC 1.16 (Declining or Terminating Representation)
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Letter of Reprimand imposed when attorney failed to supervise nonlawyer assistant. Attorney also ordered to pay restitution to the Client in the amount of $500. Client retained Attorney to represent him in a personal injury matter that occurred in or about February 2008. However, during the course of representation, the attorney/client relationship deteriorated to the point where Attorney terminated his representation of Client A. Attorney’s response to the state bar indicated that Client A had become verbally abusive to Attorney and staff. While representing Client, Attorney received monies from the defendant’s insurance company to pay his medical expenses. After terminating Client, Attorney, without first seeking Client’s prior consent or approval, paid Doctor from the $3,342.61 the insurance company provided for medical treatment. Client’s complaint to the state bar, in part, took issue with Doctor’s services. Attorney’s response stated that the payment was made pursuant to a physician lien Client entered into with Doctor in February 2008, which deemed Client’s assignment of proceeds “irrevocable.” Client also complained that Attorney refused to return his file, demanding that Client first pay for Attorney’s copy costs. Attorney had previously waived $481.58 in attorney’s fees that allegedly remained owing. Client noted that since Attorney was fully paid, he was entitled to his file. The state bar subsequently asked Attorney to return Client’s file, which Attorney declined, stating that Attorney had an obligation to maintain Client’s file for a period of seven years. In this instance, Attorney failed to consult with Client prior to distributing the funds Attorney possessed for his matter and distributed the funds without his prior knowledge or consent. Accordingly, Attorney distributed funds to Doctor without ascertaining whether a dispute existed regarding his charges, relying upon language contained in Doctor’s physician lien. Pursuant to RPC 1.15(e), if there is a dispute between two persons regarding settlement funds, the funds are to be kept separate until the dispute is resolved. If the dispute cannot be
In December 2008, Client contacted Attorney’s law office regarding a traffic ticket issued to her 17-year-old son. Client found Attorney via a website in which Attorney advertised representation for traffic tickets. Client spoke telephonically with Attorney’s non-lawyer assistant who, according to Client, informed her that Attorney could appear in court on her son’s behalf. Client subsequently faxed nonlawyer a copy of the traffic ticket and a credit card authorization in the amount of $100. Client never met or spoke with Attorney. On January 9, 2009, Client received a notice from the Municipal Court that she and her son were required to appear in court on February 10, 2009. When Client contacted the court, she was informed there was no attorney-of-record appearance in the matter, nor had the court been contacted in regard to representation by an attorney. Client then called Attorney’s office on January 12, 2009, and left a message that she claimed went unreturned until March 30, 2009. In the meantime, Client and her son appeared for the court hearing on February 10, 2009, and the matter was adjudicated at that time. Client complained that Attorney was retained to appear in court and settle her son’s traffic ticket but failed to do so and further failed to send any correspondence to explain Attorney’s lack of ability to perform. Client was also upset that Attorney refused to refund the fee. In his response to the state bar, Attorney stated that Attorney would be more than happy to file a motion to quash the bench warrant. However, Attorney would not refund the attorney’s fees paid by Client. Client’s reply to Attorney’s response maintained that she called Attorney’s firm on January 12, 2009, and received no further communication from Attorney’s office until March 2009, and that was because she had filed a credit card dispute regarding the $100 she had previously authorized. Client also noted that she never received any correspondence or anything in writing regarding the representation. Further, Client indicated that no bench warrant was ever issued. Client reiterated that the municipal court issued a continued on page 46
Letter of Reprimand imposed when attorney failed to supervise nonlawyer assistants.
May 2012
Nevada Lawyer
bar counsel report
May 2012
Resignation with charges pending: SCR 98(5)(b) Types of possible discipline listed generally: SCR 102 Attorneys convicted of crimes: SCR 111 Conditional guilty plea agreements (discipline by consent): SCR 113 Reciprocal discipline: SCR 114 Disbarred/Suspended attorneys: SCR 115 Reinstatement: SCR 116 Disability Inactive: SCR 117 Supreme Court Rules (SCRs):
DISBARMENT – License to practice revoked. SUSPENSION – License suspended for a time certain, ineligible to practice. More than six months requires petition for reinstatement and court order. DISABILITY INACTIVE – Ineligible to practice until further order of the court. In the interim, disciplinary proceedings held in abeyance. INTERIM TEMPORARY SUSPENSION – Interim suspension based on showing of a substantial threat of serious harm to the public, in effect until further court order, usually after hearing. RESIGNATION WITH CHARGES PENDING – Ineligible to practice. Requires Bar Counsel approval. Resignation is irrevocable, with readmission only possible upon application as a new admittee. PUBLIC REPRIMAND – Misconduct found and public censure issued, including attorney’s name and the underlying facts and charges. Published in Nevada Lawyer and made available to the press. Remains eligible to practice law. LETTER OF REPRIMAND – Lowest level of discipline. Not published, but disclosed upon request under the new rules. May also include up to a $1,000 fine and restitution. Remains eligible to practice. ADMINISTRATIVE SUSPENSION – Attorneys may be administratively suspended for failure to pay bar fees (SCR 98(12)), and/or for failure to complete and report the required Continuing Legal Education hours (SCR 212). While these are not disciplinary suspensions, the attorney is ineligible to practice law until the deficiency is remedied and the procedures to transfer back to active status completed as set forth in the applicable rules.
summons to appear on January 6, 2009, not a bench warrant, and she and her son appeared before the court in February 2009. In regard to the credit card dispute, Client stated that Attorney rebilled her Visa and threatened collections if she protested. The state bar subsequently sent Attorney a follow-up letter on June 29, 2009, regarding Attorney’s involvement in forming the attorneyclient relationship with Client’s son. Attorney’s supplemental response denied that Attorney were retained to appear in the matter and disputed that Client’s sole contact in retaining and interacting with his firm was through a nonlawyer assistant. Attorney claimed that nonlawyer took down all pertinent information, “explained our fee structure and the process by which we would adjudicate her son’s ticket.” Attorney claimed that Client retained Attorney’s office “for the purposes of the fax adjudication alone.” Attorney further stated that “nonlawyer was trained to explain this to her and made no representation that I would not become the attorney of record or make any personal appearance nor would it have been reasonable to believe that I would perform anything else but a fax adjudication for the fee of $100.” Attorney also claimed that “Ms. Client did not indicate at that time that her son... was a minor.” Attorney further indicated that Attorney “reviewed the file” on December 22, 2008, and “determined the citation would be appropriate for a fax adjudication.” Attorney acknowledged failing to recognize that Client’s son was born in April 1991. Attorney then “directed” Attorney’s nonlawyer assistant to prepare a Court Appearance Request Form which was faxed to the Henderson Municipal Court. Attorney stated that Attorney did not appear at the January 6, 2009, hearing because Attorney was not paid to appear. Attorney noted that “my non-lawyer assistant was trained to explain that to her and in fact did explain that to her in the intake process.” Attorney contended that, since the court required that Client appear with her son, a bench warrant would have been issued even if Attorney had appeared. Attorney’s supplemental response repeated Attorney’s assertion that three calls were placed to Client and went unreturned, and Attorney disputed receiving a telephone call from Client on January 12, 2009. Attorney claimed that Attorney did not hear further from Client until March 2009, when Attorney received a charge-back notice from Client’s credit card. Attorney disputed the charge-back and it was reversed. Attorney stated that the reversal occurred because the credit card company apparently agreed that “I had performed as promised and the poor resolution of the matter came as a result of Ms. Client’s failure to communicate with this office....” Attorney concluded that Attorney did not believe that allowing a nonlawyer assistant to “complete intake paperwork is an ethical violation. It is fairly common practice among attorneys in all areas of law to delegate the intake process to non-lawyer assistants and I believe especially so for minor traffic violations.” The Office of Bar Counsel contacted the municipal court on August 18, 2009. The “bench warrant” Attorney claimed was issued was, as Client correctly noted, a Summons to Appear as no appearance was made on January 6, 2009. To date, no bench warrant has been issued in regard to this matter. As Attorney should have been aware, the attorney-client privilege must be formed between a licensed attorney and the client, and not a non-attorney assistant. Cases such as these illustrate why. Most, if not all, of the problems that arose in this matter would not have occurred if Attorney had personally met or spoken with Client. Attorney received a LETTER OF REPRIMAND in this matter for violating RPC 5.3 (Responsibilities Regarding Nonlawyer Assistants) and RPC 5.5 (Unauthorized Practice of Law). Attorney was also ordered to pay Client RESTITUTION in the amount of $500 pursuant to SCR 102(7) (Types of discipline).
Nevada Lawyer May 2012

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