Filed October 5, 2007
In re Betty Burns Paden
Commission No. 04 CH 116
Synopsis of Review Board Report and Recommendation
Paden was charged with breaching her fiduciary duty to her client; making a statement of material fact to a tribunal that she knew or reasonably should have known was false; committing a criminal act (forgery) that reflected adversely on her trustworthiness or fitness as a lawyer; failing to promptly deliver to her client funds to which the client was entitled; engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; and engaging in conduct that is prejudicial to the administration of justice or which tends to defeat the administration of justice or to bring the legal profession into disrepute.
Prior to the Hearing, Paden filed a motion to continue the hearing date for medical reasons. The Hearing Board denied the motion, and Paden did not attend the hearing. The Hearing Board found that the Administrator proved all of the allegations of misconduct and recommended that Paden be disbarred.
Paden argues before the Review Board that (1) the Hearing Board abused its discretion when it denied her motion to continue the hearing date, (2) the Administrator did not prove the charges against her by clear and convincing evidence, and (3) the Administrator and the Hearing Board discriminated against her on the basis of her race.
The Review Board found no abuse of discretion by the Hearing Board with respect to the denial of the motion to continue the hearing date and no basis for Paden's allegation of discrimination. The Review Board recommended that the Hearing Board's factual findings and findings of misconduct be affirmed and further recommended that Paden be disbarred.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
BETTY BURNS PADEN,
Commission No. 04 CH 116
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
This matter comes before the Review Board on the exceptions of Respondent, Betty Burns Paden, to the Hearing Board's Report and Recommendation. The Hearing Board recommended that Respondent be disbarred and be ordered to pay restitution, after finding that she breached her fiduciary duty, made misrepresentations to her client, forged her client's signature on a Power of Attorney, failed to promptly deliver funds to her client, and made false statements to a tribunal in two matters.
Respondent, who did not attend the hearing, argues on review that (1) the Hearing Board abused its discretion when it denied her motion to continue the hearing date and proceeded with the hearing in her absence, (2) the Administrator did not prove the charges by clear and convincing evidence, and (3) the Administrator and the Chair of the Hearing Board Panel racially discriminated against her.
The Administrator filed a two-count complaint against Respondent on September 9, 2004. Respondent did not appear, respond to the complaint or otherwise participate in the proceedings until February 15, 2005, when she filed a motion to quash service of the complaint. By that time, the Chair of the Hearing Board Panel had granted a motion by the Administrator to deem the allegations of the complaint admitted due to Respondent's failure to respond to the
complaint. On March 1, 2005, attorney Myron Mackoff entered his appearance on Respondent's behalf. He withdrew Respondent's motion to quash and moved to vacate the order deeming the allegations of the complaint admitted. The Chair granted the motion to vacate.
Mackoff represented Respondent until November 8, 2005, at which time he filed a motion to withdraw. Prior to filing the motion, Mackoff had informed the Chair that Respondent was not cooperating with him. Both Respondent and Mackoff participated in a prehearing conference on November 8, 2005, during which the parties and the Chair discussed Mackoff's withdrawal. The Chair indicated that he would grant the motion to withdraw and instructed Respondent to look over the case materials that Mackoff was to send to her and to advise the Chair at the next prehearing conference how she intended to proceed.
At the next prehearing conference, on November 15, 2005, Respondent advised the Chair that she had not received any documents from Mackoff and she had not contacted him. Respondent said that she intended to hire another attorney. The Chair instructed Respondent to obtain the documents she needed from Mackoff and to retain an attorney in the next two weeks. At the November 30, 2005, prehearing conference, Respondent told the Chair that she needed more time to hire an attorney and that she would need until February or March to prepare for the hearing. The Chair set the hearing date for March 15, 2006.
At the time of the subsequent prehearing conference, on January 27, 2006, Respondent had not retained an attorney. According to Respondent, although Mackoff's office advised her that Mackoff had sent her all of her documents, she still had not received them.
On March 2, 2006, Respondent filed an emergency motion to continue the hearing date on the grounds that she had not been able to find an attorney and her physician had ordered
her to stop working due to numerous medical issues, including high blood pressure, high blood sugar, high cholesterol, diabetes, and asthma.
At a March 7, 2006, prehearing conference, Respondent told the Chair that she would not appear at the hearing because she was "at stroke stage." Although the Chair denied Respondent's motion to continue the hearing, he told Respondent that he would reconsider his ruling if she would allow her physician, Dr. Carl Hill, to speak with counsel for the Administrator, Marcia Wolf, in order to explain Respondent's condition in further detail.
Despite several attempts by Commission personnel to contact Respondent, she did not participate in the prehearing conference on March 10, 2005. Attorney Wolf advised the Chair of her conversation with Dr. Hill. Dr. Hill indicated that Respondent had suffered for several years from congestive heart failure, diabetes, and high blood pressure. Her condition had not changed recently. Dr. Hill believed that stress might exacerbate her condition but was not able to give Wolf any more specific information. The Chair re-affirmed the denial of the motion to continue the hearing, based on his belief that Respondent's condition was not actually preventing her from attending the hearing.
In the two days before the hearing, Respondent filed a motion to reconsider the denial of the motion for a continuance, and appeared in person at the Commission offices to file a voluminous motion for summary judgment. Both motions were denied. Respondent did not appear for her hearing on March 15, and it proceeded in her absence. A few days after the hearing concluded, Respondent filed a motion to strike the orders denying the motion for a continuance. On April 13, 2006, she filed a post-trial motion, which the Chair declined to consider pursuant to ARDC Rule 284.
At the hearing, the Administrator presented three witnesses and a "Statement of Agreed Facts and Genuineness of Documents" that was based on Respondent's responses to the Administrator's request for admission of facts and genuineness of documents. The following evidence was adduced at the hearing.
In September 1998, Marjorie Payton hired Respondent to represent her in matters involving the estate of her late husband, Frank Payton, Sr. Payton, who lived in Michigan, asked Respondent to sell the estate's primary asset, an apartment building in Evanston. In December 1999, Payton executed a Power of Attorney authorizing Respondent to act on her behalf on all matters related to the building.
In June 2000, Respondent told Payton that she had a contract to sell the building for $77,500. Respondent sent Payton a contract dated May 15, 2000, which indicated that Leah Radcliffe was the buyer and had put down $500 in earnest money toward the $77,500 purchase price.
The Administrator presented a Power of Attorney dated July 28, 2000, purportedly authorizing Respondent to act on Payton's behalf with respect to estate matters. Respondent admitted signing her own name to the form but denied signing Payton's name. Respondent did not send the Power of Attorney to Payton prior to the sale of the building.
The closing took place on August 1, 2000. Respondent represented Payton at the closing and signed all of the closing documents on Payton's behalf. Although Respondent represented to Payton both before and after the closing that the building's purchase price was $77,500, a sales contract dated June 15, 2000, the HUD settlement statement, the Illinois transfer
declaration, and the warranty deed, all of which were signed by Respondent, indicated that the building's purchase price was $245,000.
According to the HUD settlement statement, the estate's net proceeds from the sale were $70,538.92. The remaining $174,461.08 that was subtracted from the $245,000 purchase price included a credit of $61,000 to the buyer, a payment of $87,797.57 to Carby-King construction company, a payment of $9,398.75 to a mortgage broker, a $3000 payment to Respondent, and a second mortgage of $12,250 to the seller. The title company issued a check to Payton in the amount of $70,538.92. Respondent endorsed the check and deposited it in an account at BankOne. As of July 13, 2001, when Payton discharged Respondent and hired a new attorney, Respondent had not given Payton the closing documents or the proceeds of the sale.
Attorney Robert Hutchison testified that he received a phone call from Payton's attorney in Michigan, John Verdonk, who asked him to investigate why Payton had not received any of the sale proceeds. Hutchison tried unsuccessfully to contact Respondent by telephone, by certified mail, and by visiting her home. Hutchison then discovered in the county records that the sales price of the property was $245,000, not $77,500. Hutchison testified that he sent a copy of the July 28, 2000, power of attorney to Verdonk, who showed it to Payton. Payton stated that she did not sign it and did not authorize anyone to sign it for her.
Hutchison filed a motion to compel Respondent to turn over estate assets and documents. On August 16, 2001, the probate court ordered Respondent to release the funds in the estate account to Hutchison. She sent Hutchison a check for $84,166.74, which Hutchison forwarded to Verdonk.
Also in August 2001, Respondent filed a motion to approve her attorney fees for the Payton estate. Her summary of fees that was attached to the motion stated that the building's purchase price was $77,500.
Hutchison deposed some of the parties who received part of the proceeds of the sale. Paul King, of Carby-King Construction stated that he did between $70,000 and $80,000 worth of work on the building. However, according to the report of a home inspector whom Hutchison hired, almost no work was done and Paul King's specification sheet was fabricated.
Hutchison withdrew from the matter after Payton died in 2004 and her heirs hired a different attorney. Hutchison testified that Payton never received the $84,000 that Respondent distributed from the estate account because Respondent had a petition for additional attorney fees pending.
Respondent represented Richard Hammell in a dissolution proceeding with his wife, Angela Hammell. Angela was represented by attorney Lester Barclay. Respondent filed a motion for sanctions against Barclay after he twice failed to appear on his motion to withdraw. In her motion, Respondent stated that she waited for Barclay for three hours on October 10, 2001, and for an hour and a half of October 29, 2001. In an affidavit attached to her motion, Respondent indicated that she spent four and one-half hours in court on October 10 and four hours on October 29. The court awarded Respondent $1420 in sanctions.
Barclay testified that the motions were noticed for the 9:30 a.m. call. The order entered on October 10, which was prepared by Respondent, stated that "Petitioner's attorney did not appear and the time is 10:50 a.m." Respondent wrote on the second order, entered on October 29, that Barclay "did not appear by 10:10 a.m. on a 9:30 a.m. call." In addition, Barclay
obtained transcripts of the proceedings on both days, in which Respondent stated that she had waited for one hour and ten minutes on October 10 and for two hours on October 29. Upon reconsideration, the judge reduced the sanction award to $225. Respondent appealed, and the appellate court affirmed the reduced sanction.
EVIDENCE IN AGGRAVATION
David Froylan works as an investigative assistant for the Commission. He was assigned to serve Respondent with the Administrator's complaint against her. He called and left messages for Respondent on seven occasions, but she did not return his calls. After learning that Respondent used the same address for her home and office, he went to her home on three occasions. Once, a tenant of Respondent's was present and identified Respondent as the person inside the house. Respondent would not come to the door. On another occasion, an older gentleman answered the door and said that Respondent lived there. The man then closed the door after a woman yelled from inside the house to shut the door.
Froylan also tried unsuccessfully to locate Respondent at the Daley Center. He then learned that Respondent was scheduled to appear at the Skokie courthouse. He approached Respondent there but she ignored him. A clerk identified Respondent to Froylan and he followed her out of the courtroom. He identified himself to Respondent and told her that he had a complaint to serve upon her. Respondent ignored him and kept walking. Froylan placed the complaint on a stack of papers that Respondent was holding. She then dropped the papers and continued walking.
The Hearing Board found that Respondent committed all of the charged misconduct. Specifically, it found that she breached her fiduciary duty to Payton; made a false statement of material fact or law to a tribunal in violation of Rule 3.3(a)(1) of the Illinois Rules
of Professional Conduct1 (two counts); committed a criminal act that reflects adversely on Respondent's honesty, trustworthiness or fitness as a lawyer by committing forgery, in violation of Rule 8.4(a)(3); failed to promptly deliver funds to Payton that she was entitled to receive, in violation of Rule 1.15(b); engaged in conduct involving dishonesty, actual or constructive fraud, deceit, or misrepresentation in violation of Rule 8.4(a)(4) (two counts); and engaged in conduct that is prejudicial to the administration of justice and which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute, in violation of Rule 8.4(a)(5) and Supreme Court Rule 770 (two counts).
Respondent first contends that the Hearing Board abused its discretion by denying her motion to continue the hearing date. A ruling on a motion for a continuance cannot be reversed unless the Hearing Board abused its discretion. In re Cooley, No. 91 CH 426 (Review Board, Sept. 15, 1993) at 8, approved and confirmed, Nos. M.R. 9484, 9522 (Jan. 25, 1994). After carefully reviewing the record, we cannot say that the Hearing Board abused its discretion when it denied Respondent's motion for a continuance. The record shows that Respondent attempted to delay the proceedings from their inception. She avoided service of the complaint for two months and did not participate in the proceedings at all for approximately three months after she was served. Once her attorney, Myron Mackoff, entered his appearance on March 1, 2005, the proceedings moved along. However, when Mackoff withdrew on November 8, 2005, after informing the Chair that Respondent was not cooperating with him, the matter came to a standstill.
In the four months between Mackoff's withdrawal and the hearing date, Respondent failed to engage a new attorney despite repeated admonitions from the Chair to do
so. Less than two weeks before the hearing date of March 15, 2006, Respondent filed a motion for a continuance, citing her inability to find a new attorney and health problems. Despite numerous attempts to contact Respondent, she did not participate in the conference call during which attorney Wolf advised the Chair about her conversation with Dr. Hill. Based on the Chair's understanding that Respondent suffers from chronic conditions that had not changed in the recent past and his doubts with respect to Respondent's credibility, the Chair concluded that her health did not preclude her from attending the hearing.
Considering all of the foregoing circumstances and our deference to the Chair's credibility determination, we cannot say that the Chair's ruling on the motion for a continuance was an abuse of discretion. Respondent's ability to prepare and personally file a voluminous summary judgment motion on the day before her hearing, as well as file additional motions immediately following the hearing, belies her assertion that she was unable to work and supports the Chair's ruling.
Respondent further argues that the Administrator did not prove the charges against her by clear and convincing evidence. The Administrator has the burden of proving the charged misconduct by clear and convincing evidence. In re Timpone, 208 Ill.2d 371, 380, 804 N.E.2d 560 (2004). The Hearing Board's findings of fact will not be disturbed unless they are against the manifest weight of the evidence. In re Winthrop, 219 Ill.2d 526, 542, 848 N.E.2d 961 (2006). A finding is contrary to the manifest weight of the evidence only if the opposite conclusion is clearly evident. Winthrop, 219 Ill.2d at 542, 848 N.E.2d 961. Because the Hearing Board has the opportunity to observe the witnesses' testimony, the Review Board gives particular deference to its assessments of credibility. In re Woldman, 98 Ill.2d 248, 254, 456 N.E.2d 35 (1983). Before addressing the merits of Respondent's argument, we must note that
we will not consider the numerous contentions Respondent makes that are outside the record. See ARDC Rules 302(f)(4), 302(f)(5) and 302(i).
Respondent argues that the Administrator's witnesses testified falsely, and that their testimony was based on hearsay and should have been precluded under the Dead Man's Act, 735 ILCS 5/8-201 (2004). Respondent's arguments fail for several reasons. First and foremost, Respondent chose not to attend the hearing, so the evidence she now challenges was admitted without objection. Respondent's objections at this stage are untimely. As this Board stated in In re Jennings, No. 99 SH 32 (Review Board, Sept. 27, 2000) at 11, petition for leave to file exceptions denied, No. M.R. 17394 (Mar 25, 2001), objections not raised in the trial court are generally deemed waived and may not be raised for the first time on appeal. Consequently, Respondent has waived the right to make objections to the evidence presented.
Also, Respondent has failed to cite any authority for the argument that the Administrator's evidence was improper. ARDC Rule 302(f)(5) provides that an appellant's argument shall contain his or her contentions and the reasons therefore, "with citation of the authorities and the pages of the record relied on." ARDC Rule 302(i) provides that the Review Board may, among other things, refuse to review arguments not supported by citation to the record or to legal precedent. Accordingly, we decline to consider those arguments that do not comply with the applicable ARDC Rules.
With respect to the allegedly false testimony from the Administrator's witnesses, we emphasize that credibility decisions rest with the Hearing Board. See Woldman, 98 Ill.2d at 254, 456 N.E.2d 35. It is evident from the Hearing Board's Report and Recommendation that it found the Administrator's witnesses credible and their testimony supported by the documentary
evidence. Respondent has provided no basis for reversing the Hearing Board's findings. The record amply supports the Hearing Board's findings of fact and findings of misconduct.
Next we address Respondent's contention that the Administrator and the Hearing Board discriminated against her because of her race. We cannot discern any support in the record for this argument. Respondent appears to assert, without any explanation, that the actions of the Administrator and Hearing Board with which she disagrees must have been motivated by racism. Based on our review of the record and the lack of any reasoned explanation from Respondent, we find no basis to conclude that racial discrimination of any sort took place. Respondent was treated fairly at every stage of the proceedings.
The Hearing Board recommended that Respondent be disbarred. Respondent argues that this sanction is inappropriate, but does not suggest an alternative sanction or authority in support of her argument.
The Hearing Board's recommendation is advisory. In re Ingersoll, 186 Ill. 2d 163, 178, 710 N.E.2d 390 (1999). When recommending an appropriate sanction, we are mindful of the purposes of the disciplinary system: safeguarding the public, maintaining the integrity of the profession, and protecting the administration of justice from reproach. See In re Timpone, 157 Ill.2d 178, 623 N.E.2d 300 (1993). We strive to recommend similar discipline for similar misconduct, but must evaluate each case on its own circumstances (In re Bell, 147 Ill.2d 15, 37, 588 N.E.2d 1093 (1992)), which include the nature of the misconduct and any aggravating or mitigating factors (In re Witt, 145 Ill.2d 380, 583 N.E.2d 526 (1991)).
There is no question in our minds that Respondent's deception of her client, Payton, was an egregious violation of the Rules of Professional Conduct that, when considered along with her additional misconduct and the aggravating factors, warrants disbarment.
Respondent committed forgery, violated Payton's trust, and caused her significant financial harm by depriving her of most of the proceeds of the sale of the building. The lengths to which Respondent went to deceive Payton convince us that she lacks the trustworthiness and integrity necessary to hold a license to practice law.
The aggravating factors support our conclusion that disbarment is appropriate. We agree with the Hearing Board that Respondent's failure to cooperate during the first five months of the proceedings below and her decision not to attend the hearing demonstrate an unacceptable disregard for her ethical responsibilities. See In re Brody, 65 Ill.2d 152, 156-57, 357 N.E.2d 498 (1976). In addition, the harm she caused to Payton, which she has never acknowledged, is a factor in aggravation. These factors outweigh the mitigating effect of the lack of prior discipline.
In our view, the instant case is similar to In re Hook, No. 98 CH 50 (Review Board, May 16, 2006), petition for leave to file exceptions denied, No. M.R. 21025 (Sept. 21, 2006). Hook orchestrated a series of fraudulent transactions that resulted in emptying an employee pension fund and improperly funneling the pension funds to his client's personal account. Although Hook had no prior discipline and did not personally profit from the fraudulent scheme, he was disbarred.
Further, we conclude that this matter is similar to In re Stillo, 89 Ill.2d 7, 431 N.E.2d 388 (1982), in which the supreme court disbarred an attorney for misconduct that included settling a client's case without informing the client, forging the client's name to the settlement draft and the settlement documents, and failing to advise the client of the settlement. Like Stillo, Respondent withheld information about funds to which her client was entitled, actively concealed the truth from her client, and committed forgery.
Our decision that disbarment is warranted is supported by Respondent's arguments pertaining to her motion to continue the hearing date. In her briefs and her argument before this Board, Respondent misrepresented the facts by repeatedly insisting that she was not aware that her attorney withdrew until January 27, 2006. The transcripts of proceedings, however, indicate that she participated in three telephone conferences in November 2005 during which she discussed with the Chair her attorney's withdrawal and her efforts to retain another attorney. If Respondent is not able to accurately present facts during her own disciplinary proceeding, we have little confidence that she can do so when representing clients.
Based on the foregoing precedent, our consideration of the nature of the misconduct and all of the relevant circumstances, we conclude that disbarment is necessary in order to protect the public and maintain the integrity of the legal profession. We also agree with the Hearing Board that Respondent should be required to pay restitution to the estate of Frank Payton, Sr. in the amount that should have been paid to the estate at the closing on the building, plus interest.
We recommend that the Hearing Board's findings of fact and findings of misconduct be affirmed and that Respondent be disbarred and ordered to make restitution to the estate of Frank Payton, Sr.
Date Entered: 5 October 2007
Leonard F. Amari
1 Unless otherwise specified, all Rules referred to are Illinois Rules of Professional Conduct.