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In re Application for Disciplinary Action Against Ward

Supreme Court of North Dakota

June 9, 2016

In the Matter of the Application for Disciplinary Action Against Michael Ward, a Member of the Bar of the State of North Dakota Disciplinary Board of the Supreme Court, Petitioner
v.
Michael Ward, Respondent

          Ryan A. Heintz (argued) and Kara J. Johnson (appeared), Disciplinary Staff, for petitioner.

          Ronald H. McLean (argued) and Ian McLean (appeared), for respondent.

          PER CURIAM

         [¶ 1] Attorney Michael Ward objects to a report of a hearing panel of the Disciplinary Board finding he violated rules of professional conduct and recommending he be suspended from the practice of law for two months and pay the costs and expenses of the disciplinary proceeding. We conclude there is clear and convincing evidence Ward violated N.D.R. Prof. Conduct 1.3, N.D.R. Prof. Conduct 1.4, and N.D.R. Prof. Conduct 1.16(e). We accept the hearing panel's recommendation, suspend Ward from the practice of law for two months, and order he pay $8, 284.78 for the costs and expenses of the proceeding.

         I

         [¶ 2] Ward was admitted to practice law in North Dakota in July 1966 and currently practices as a member of a law firm in Minot. In his private practice, Ward primarily focuses on accounting, estates, IRS related matters, and bankruptcy. Bankruptcy accounts for about 20 percent of Ward's practice. Brenda Grubb was one of Ward's administrative assistants. She worked with Ward for 13 years and assisted Ward with two to ten bankruptcy petitions per month. Grubb left the firm in 2012, but returned to work with Ward for a short period from April 22 to May 25, 2013. This disciplinary proceeding stems from Ward's representation of Robert and Kelly Stigen in their bankruptcy case.

         [¶ 3] The hearing panel found that on April 24, 2013, the Stigens paid Ward $1, 500 to secure a Chapter 7 discharge in bankruptcy, and on May 20, 2013, Ward filed on behalf of the Stigens an 84-page bankruptcy petition. On June 28, 2013, the Stigens attended the meeting of creditors with Ward and the bankruptcy trustee. The Stigens brought to the meeting their unfiled 2012 tax returns, which indicated they would receive refunds, and learned the trustee wanted an appraisal on a snowmobile they owned. The Stigens subsequently obtained an appraisal and claim they gave it to Ward. Between July 1 and November 4, 2013, the trustee sent eight letters to Ward and called him with questions about the Stigens' unfiled tax returns and the appraisal of the snowmobile. Ward did not forward these letters to the Stigens. Ward ceased contact with the trustee, even though the trustee threatened an adversary action against the Stigens. After being contacted by the IRS, the Stigens filed the tax returns.

         [¶ 4] On November 26, 2013, the bankruptcy trustee filed an adversary complaint against the Stigens to deny the bankruptcy discharge for failing to provide the trustee with the tax refunds and the snowmobile appraisal. Upon being served, the Stigens unsuccessfully attempted to contact Ward, so they found a different attorney to take their case and file an answer to the adversary complaint. The Stigens and the bankruptcy trustee eventually entered into a settlement agreement and the adversary proceeding was dismissed. One of the conditions of the settlement agreement, demanded by the trustee, was that the Stigens file a disciplinary complaint against Ward. After taking over representation, the new attorney asked Ward for the Stigens' file, but Ward did not provide a complete copy of the file. Following commencement of these proceedings, about seven months after Ward's termination of representation, Ward returned the $1, 500 flat fee to the Stigens.

         [¶ 5] The petition for discipline against Ward alleged violations of N.D.R. Prof. Conduct 1.1 (competence), N.D.R. Prof. Conduct 1.3 (diligence), N.D.R. Prof. Conduct 1.4 (communication), and N.D.R. Prof. Conduct 1.16(e) (terminating representation) while acting as the Stigens' attorney in their bankruptcy case. Ward denied the charges and requested dismissal. Following a hearing, the panel found Ward violated these rules because he failed to be competent in his representation of the Stigens in the bankruptcy proceedings, failed to be diligent in his representation by not promptly providing information to the bankruptcy trustee, failed to have reasonable and sufficient communication with the Stigens regarding their bankruptcy, and failed to provide the Stigens' subsequent lawyer with their complete client file. The panel specifically found "the Stigens' testimony regarding the events and documentation both provided to and received from Ward regarding their bankruptcy was more credible than that of Ward or members of Ward's staff, " and "Ward's failures to adequately communicate what was occurring within the Stigens' bankruptcy was due to negligence." The panel recommended that Ward be suspended from the practice of law for two months and pay $8, 284.78 for the costs and expenses of the disciplinary proceeding.

         II

         [¶ 6] Ward argues the hearing panel erred in determining there was clear and convincing evidence that he violated any of the rules of professional conduct charged.

         [¶ 7] In Disciplinary Bd. v. Carpenter, 2015 ND 111, ¶ 9, 863 N.W.2d 223, we explained:

This Court reviews disciplinary proceedings de novo on the record. Disciplinary Board v. Light, 2009 ND 83, ¶ 6, 765 N.W.2d 536 (citations omitted). Disciplinary counsel must prove each alleged violation by clear and convincing evidence, which means the trier of fact must be reasonably satisfied with the facts the evidence tends to prove and thus be led to a firm belief or conviction. Id. The evidence need not be undisputed to be clear and convincing. Id. We give due weight to the findings, conclusions, and recommendations of the Disciplinary Board, but we do not act as a mere rubber stamp for the Board. Id. To decide which sanction, if any, is appropriate, each disciplinary matter must be considered on its own facts. Id.
Because the hearing panel has the opportunity to hear witnesses and observe their demeanor, we accord special deference to the panel's findings on matters of conflicting evidence. Disciplinary Board v. Bullis, 2006 ND 228, ¶ 12, 723 N.W.2d 667. Similarly, we defer to the hearing panel's findings on the credibility of a witness, because the hearing panel has the opportunity to observe the witness's demeanor and hear the witness testify. Disciplinary Board v. Johnson, 2007 ND 203, ¶ 22, 743 N.W.2d 117.

(quoting Disciplinary Bd. v. Askew, 2010 ND 7, ¶¶ 8-9, 776 N.W.2d 816).

         A

         [¶ 8] Ward argues the hearing panel erred in determining there was clear and convincing evidence that he violated N.D.R. Prof. Conduct 1.3 relating to diligence.

         [¶ 9] Rule 1.3, N.D.R. Prof. Conduct provides that "[a] lawyer shall act with reasonable diligence and promptness in representing a client." Comment [1] to N.D.R. Prof. Conduct 1.3 states in part:

[1] A lawyer should pursue a matter on behalf of a client despite opposition, obstruction or personal inconvenience to the lawyer, and take whatever lawful and ethical measures are required to vindicate a client's cause or endeavor. A lawyer must also act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's behalf.

Diligence is a core requirement "of an attorney's duty to zealously and faithfully pursue a clients's interests, " and an attorney's "lack of preparation, lack of attention, lack of vigilance and lack of communication undermine the caliber of attorney performance, the quality of the result[, ] the temper of the relationship with the client, " and "diminishes client trust and confidence in the attorney." Disciplinary Bd. v. Britton, 484 N.W.2d 110, 112 (N.D. 1992).

         [¶ 10] The hearing panel found that between July 1 and November 4, 2013, the bankruptcy trustee sent eight letters to Ward and made a phone call to him raising questions about the Stigens' tax returns and the requested appraisal of the snowmobile and asked Ward to contact him about these concerns. The panel found Ward did not forward the letters to the Stigens or provide them with any instruction how to respond to the trustee's concerns, and failed to provide documentation and information to the trustee that was provided to him by the Stigens. The panel found "Ward totally ceased contact" with the trustee between August 28, 2013 and November 4, 2013. The panel concluded there was clear and convincing evidence Ward violated N.D.R. Prof. Conduct 1.3 because he "knowingly failed to promptly provide information and documentation regarding the Stigens' taxes and snowmobile, to the bankruptcy trustee."

         [¶ 11] Ward claims there is not clear and convincing evidence of a violation of the rule because the Stigens were difficult clients who did not heed his advice. Ward testified he did not recall receiving an appraisal of the snowmobile even though he requested one from the Stigens. Ward also blames these disciplinary proceedings on the bankruptcy trustee and suggests that the Stigens' testimony is suspect because they were required to bring this disciplinary proceeding as part of the settlement agreement. Therefore, Ward argues the Stigens' testimony is skewed because of their desire to be discharged in bankruptcy.

         [¶ 12] Although the settlement provision is unusual, a reasonable inference to be drawn from it is the trustee's frustration in dealing with Ward in this bankruptcy proceeding. The hearing panel specifically found "the Stigens' testimony regarding the events and documentation both provided to and received from Ward regarding their bankruptcy was more credible than that of Ward or members of Ward's staff." Deferring to the panel's findings on credibility, see Carpenter, 2015 ND 111, ¶ 9, 863 N.W.2d 223, we conclude there is clear and convincing evidence Ward violated N.D.R. Prof. Conduct 1.3. SeeDisciplinary Bd. v. Seaworth, 1999 ND 229, ...


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