Filed June 27, 2008
In re Charles Edward Whelan, Jr.
Commission No. 07 CH 114
Synopsis of Hearing Board Report and Recommendation
NATURE OF THE CASE: 1) converting funds; 2) failing to act with reasonable diligence and promptness in representing a client; 3) failing to keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information; 4) failing to refund promptly any part of a fee paid in advance that has not been earned; 5) assisting a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law; 6) failing to deliver to a client all papers and property to which the client is entitled; 7) engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; 8) engaging in conduct prejudicial to the administration of justice; and 9) engaging in conduct that tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute.
RULES DISCUSSED: Rules 1.3, 1.4(a), 1.16(e), 1.16(d), 5.5(b), 8.4(a)(4), and 8.4(a)(5) of the Illinois Rules of Professional Conduct and Supreme Court Rule 770.
RECOMMENDATION: Suspended from the practice of law for two years and until further order of the Court.
DATE OF OPINION: June 27, 2008.
HEARING PANEL: James B. Pritikin, Chair, Jessica A. O'Brien, and Mark Fitzgerald.
ADMINISTRATOR'S COUNSEL: Christine P. Anderson.
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
CHARLES EDWARD WHELAN, JR.,
Commission No. 07 CH 114
REPORT AND RECOMMENDATION OF THE HEARING BOARD
The hearing in this matter was held on May 1, 2008, at the Chicago, Illinois offices of the Attorney Registration and Disciplinary Commission ("ARDC") before the Panel of James B. Pritikin, Chair, Jessica A. O'Brien, and Mark Fitzgerald. Christine P. Anderson represented the Administrator of the ARDC. Respondent failed to appear at the hearing and was not represented by counsel.
PLEADINGS AND PRE-HEARING PROCEEDINGS
On November 21, 2007, the Administrator filed a two-count Complaint against Respondent pursuant to Supreme Court Rule 753(b). The Administrator alleged that Respondent assisted a disbarred Illinois attorney in the unauthorized practice of law, converted funds, neglected a client matter, failed to refund unearned fees in two client matters, and failed return client records. On January 4, 2008, Respondent was personally served with a copy of the Complaint. Respondent failed to file an Answer the Complaint. On January 29, 2008, the Administrator filed a motion to deem the allegations of the Complaint admitted. On February 4, 2008, that motion was granted and the allegations of the Complaint were deemed admitted. On
April 14, 2008, the Administrator filed a motion for sanctions. On April 15, 2008, that motion was granted, and Respondent was barred from testifying, calling witnesses or introducing any documents into evidence at the hearing. On April 24, 2008, Respondent filed a motion to vacate the order dated April 15, 2008. The Administrator filed a response to the motion to vacate on the same day. On April 25, 2008, Respondent's motion to vacate was denied.
The Administrator presented the testimony of one witness, and offered exhibits 1-17 which were admitted into evidence.
On March 18, 2005, the Illinois Supreme Court disbarred Jannice Whelan from the practice of law. As of November 21, 2007, her license has not been reinstated. At all times relevant to this matter, Respondent was married to and residing with Jannice and was aware of her disbarment. (Adm. Ex. 1).
Lee Reiter, a retired Skokie police sergeant, resided in Puerto Vallarta, Mexico, and maintained a residence in Skokie, Illinois. On April 8, 2005, Reiter learned that Chuck Goudie, a Chicago television news reporter, had reported that Reiter was under investigation by the FBI for his possible involvement in the 1977 disappearance and probable murder of Helen Brach, heiress to the Brach Candy fortune. After learning of the televised report, Reiter contacted the Cook County State's Attorney's office to discuss the possibility of voluntarily submitting to a polygraph test to relieve him of suspicion in the Brach case. Reiter was advised that the investigator in charge of the matter would not be available for several weeks, and any polygraph test would have to be administered after he was available.
Also on April 8, 2005, Reiter contacted Respondent and discussed the news report, and his contact with the State's Attorney's office. Reiter had known Respondent for some time prior to this date. Within a few days, Respondent advised Reiter not to submit to a polygraph test. He also told Reiter that if he returned to the United States, he could be jailed under the Patriot Act and not allowed bail. Respondent agreed to determine whether Reiter was under investigation in the Brach case, and requested that Reiter pay him a $5,000 retainer. On April 9, 2005, Gary Reiter, Reiter's brother, gave Respondent a check in the amount of $5,000. (Adm. Ex. 2).
Subsequently, Respondent telephoned Reiter and advised him that he would be coming to Puerto Vallarta to discuss the matter because it was not safe to discuss it over the telephone. Respondent also told Reiter that Jannice would accompany him. Reiter knew Jannice from a friendship he had with her parents. On April 14, 2005, Respondent and Jannice arrived in Puerto Vallarta. Reiter picked them up at the airport, and with Jannice present, Respondent discussed the matter with Reiter. Sometime between April 14, and 18, 2005, Respondent and Jannice advised Reiter and Reiter's wife, Connie, that Jannice was a criminal attorney and would be assisting Respondent in the representation of Reiter. At the time he made these statements, Respondent knew that Jannice had been disbarred and was no longer licensed to practice law. At no time did Respondent advise Reiter of these facts.
Between April 14 and 18, 2005, Respondent and Jannice met with Reiter and Connie on at least three occasions to discuss the Brach case, including Reiter's knowledge of the case, the possibility of an investigation of Reiter by law enforcement officials, and the possibility of filing a lawsuit against the reporter and television station that made the report about Reiter. They also discussed the possibility of selling the story of Reiter's claimed innocence to certain television media outlets.
On April 17, 2005, Respondent gave Reiter a retainer agreement which provided that Respondent would serve as personal counsel to Reiter and provide all necessary advice and counsel. Additionally, the agreement stated that full compensation would be determined and agreed upon by Respondent and Reiter, and did not include an hourly fee schedule or any other means of determining how Respondent's fee would be calculated. At the same time, Respondent gave Reiter a second document entitled "Compensation Agreement" which was signed by Reiter and Jannice. This document provided that "any funds which would be realized from any source from the sale of Lee Reiter's story of his innocence in regard to the Helen Brach murder shall be divided equally between Jannice Whelan and Lee Reiter." On April 18, 2005, Respondent and Jannice left Puerto Vallarta. (Adm. Exs. 3, 4).
Between April 25, 2005, and June 20, 2005, Jannice sent numerous e-mails to Reiter in which she requested information regarding the Brach case, discussed testimony of previous witnesses and defendants, discussed the news report naming Reiter, and provided legal advice to Reiter regarding the Brach case and his potential civil claim against the reporter and television station. Sometime after returning from Mexico, Respondent advised Reiter that Reiter should place his Skokie residence into a land trust to protect it from any civil claim which might be filed against him. On May 14, 2005, Jannice sent an e-mail to Reiter stating, among other things, "I am finished with the lawsuit against Channel 7 and Goudie. We [are] asking for 2 million in damages. The grounds are slander, libel, defamation of character, invasion of privacy, intentional infliction of emotional distress." On May 16, 2005, Jannice sent Reiter an e-mail suggesting how information could be obtained regarding the alleged criminal investigation by filing the civil lawsuit. She also stated, "we have to do this now because there is a one year
statute of limitations from the publishing of the 1st defamatory publication . . . let me know ASAP so I can email the completed lawsuit to you before it is filed." (Adm. Ex. 5).
Sometime before June 15, 2005, Respondent advised Reiter that the legal fees and costs to put Reiter's Skokie residence into a land trust would be $900. Steve Reiter, Reiter's son, provided Jannice with the deed and other documents requested by Respondent and Jannice to establish the trust. On June 15, 2005, Respondent e-mailed the land trust documents to Reiter for his signature. Also on that date, Steve gave Jannice a check in the amount of $900, made payable to Jannice, for the legal fees involving the land trust. On June 16, 2005, Jannice, or someone at her direction, deposited the $900 check into the bank account of Michael Whelan. Michael Whelan is Respondent and Jannice's disabled, minor son. At no time did Respondent or Jannice have authority to use the proceeds of the check for their business or personal purposes. (Adm. Exs. 6, 7).
During a trip to Mexico in June 2005, Gary, Reiter's brother, obtained the original signed land trust documents from Reiter. Subsequently, Steve gave the documents to Respondent. Reiter's signature was not notarized, and Respondent advised him that Jannice was applying for a notary, and would notarize his signature.
On June 20, 2005, Jannice sent Reiter an e-mail requesting $1,920 to obtain copies of law enforcement reports relating to the Brach case. On June 21, 2005, Steve issued Reiter's check in that amount made payable to Jannice. Also on that date, Jannice or someone at her direction, deposited the check into Michael's bank account. At no time did Respondent or Jannice have the authority to use the proceeds from the check for their business or personal expenses. As of June 27, 2005, prior to any payment for costs on behalf of Reiter, Michael's bank account was
overdrawn by $839.69. Accordingly, Respondent and Jannice had used the $900 and $1,920 given to them by Reiter for their business or personal expenses. (Adm. Exs. 8-11).
On July 29, 2005, Steve received a telephone call from Jannice advising him that she had located two unaired videotapes of a news report involving Reiter, and would need $1,000 for costs to obtain them. She also stated that the tapes would be vital to the civil action against the reporter and television station. Later that day, Respondent met with Connie and Steve at Reiter's Skokie home, and obtained a check from Steve in the amount of $1,000 made payable to Respondent. He told Steve that the check would be used to obtain the tapes. He also advised Steve and Connie that Jannice was prepared to file the civil action, but he was "holding things up" because he had a "gut feeling" that there were a few more pieces of evidence that they could obtain before filing the lawsuit. On July 30, 2005, Respondent cashed the check, and used the money for business and personal expenses. Respondent had no authority to use the money for those purposes. Respondent knew or should have known of Jannice's conduct in the case, and that he was aiding her in the unauthorized practice of law. (Adm. Ex. 12).
Between April 8, 2005, and July 29, 2005, Reiter or someone on his behalf, paid Respondent and Jannice approximately $28,000 for legal fees, costs, documents and tapes. At no time did Respondent provide Reiter with any evidence establishing whether he was formally under investigation by state or federal law enforcement authorities. At no time was Reiter indicted by state or federal officials in relation to the Brach case. (Adm. Ex. 13).
Between October 3, 2005, and October 24, 2005, Reiter left numerous messages for Respondent at three different telephone numbers requesting information regarding the case and copies of records and tapes. At no time did Respondent return any of Reiter's messages. On October 5, 2005, Steve sent an e-mail to Jannice requesting all of the documents and tapes.
Respondent failed to provide Reiter with any documents or tapes. At no time did Respondent file a civil claim against the reporter or the television station on behalf of Reiter, or cause Reiter's Skokie residence to be placed in a land trust. Respondent failed to perform sufficient services on behalf of Reiter to earn the $28,000 in fees and costs he paid, and failed to refund any of the unearned legal fees.
Steven Reiter, Reiter's son, had several conversations with Respondent and Jannice about Reiter's legal work. Respondent and Jannice were supposed to file a civil lawsuit against a reporter and television station, but they never did so. They were also supposed to put Reiter's Skokie residence into a land trust, and although Steven paid them $900, they never completed that transaction. (Tr. 21-24). In July 2005, Steven or his mother gave Respondent a check in the amount of $1,000 to obtain videotapes from the television station. (Tr. 26-27; Adm. Ex. 12). Steven did not authorize Respondent to use that money for any other purposes, and never received the tapes. (Tr. 27-28). At that time, Reiter had paid Respondent and Jannice almost $2,800 in costs for the lawsuit. (Tr. 28-28).
After July 2005, it became difficult to contact Respondent. In September 2005, Respondent told Steven that the person in charge of the Brach case was retiring and Reiter would not have to worry about it anymore. After that conversation, there was no further communication from Respondent. (Tr. 29-31).
Jannice held herself out as a practicing attorney, and neither Reiter nor Steven was aware, until September 2005, that Jannice had been disbarred. (Tr. 24-25). On October 5, 2005, Steven sent Jannice an e-mail asking for all the documents and tapes for which Reiter had paid. Steven
did not receive a response from Jannice or Respondent, or any documents or tapes. (Tr. 31-33; Adm. Ex. 14).
In September 2006, Respondent agreed to represent Leslie Geisler in her efforts to reinstate her Illinois driving privileges, which had been revoked as a result of a 1990 DUI conviction. At the time of their initial meeting, Respondent requested and received $200 from Geisler as part of his legal fees. On October 3, 2006, Thomas Kampschroer, Geisler's boyfriend, gave Respondent a check in the amount of $550, for the remainder of Respondent's legal fees. Between September 2006 and October 2006, Geisler provided Respondent with all records that she had in her possession relating to the conviction. (Adm. Ex. 15).
After October 2006, during a telephone conversation, Respondent advised Geisler that she would need to be evaluated by a certified alcohol or drug abuse counselor prior to requesting a hearing before the Illinois Secretary of State. On numerous subsequent occasions, Geisler attempted to contact Respondent to request the return of her original documents and a refund of the unearned portion of her legal fees; however, the telephone numbers Respondent had provided to her were either disconnected or had no answering service. At no time did Respondent perform sufficient services to earn the fee paid by Geisler. (Adm. Ex. 16).
On March 28, 2007, during a sworn statement before the ARDC, Respondent admitted that he had not earned the entire fee paid by Geisler, and would refund that portion of the fee and return documents to her. Respondent failed to refund the unearned fees to Geisler or return the documents to her. (Adm. Ex. 17).
Respondent has not engaged in prior misconduct.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In attorney disciplinary proceedings, the Administrator must prove the alleged misconduct by clear and convincing evidence. Supreme Court Rule 753(c)(6); In re Ingersoll, 186 Ill. 2d 163, 168, 710 N.E.2d 390 (1999). "Clear and convincing evidence is a standard of proof which, while less than the criminal standard of proof beyond a reasonable doubt, is greater than the civil standard of preponderance of the evidence." Cleary and Graham, Handbook of Illinois Evidence, § 301.6 (6th ed. 1994). This standard of proof is one in which the risk of error is not equally allocated; rather, this standard requires a high level of proof, both qualitatively and quantitatively, from the Administrator. Santosky v. Kramer, 455 U.S. 745, 764-66, 102 S. Ct. 1388 (1982); In re Tepper, 96 CH 543, M.R. 14596 (1998) (Review Bd. Dec. at 12). Suspicious circumstances are insufficient to warrant discipline. In re Lane, 127 Ill. 2d 90, 111, 535 N.E.2d 866 (1989).
In this case, based on the admitted facts and testimony presented at the hearing, we conclude that the Administrator proved, by clear and convincing evidence, that Respondent engaged in all of the alleged misconduct. Specifically, we find that Respondent:
converted funds (Count I);
failed to act with reasonable diligence and promptness in representing a client in violation of Rule 1.3 of the Illinois Rules of Professional Conduct (Count I);
failed to keep a client reasonably informed about the status of a matter and to promptly comply with reasonable requests for information in violation of Rule 1.4(a) of the Illinois Rules of Professional Conduct (Counts I and II);
failed to refund promptly any part of a fee paid in advance that has not been earned in violation of Rule 1.4(a) of the Illinois Rules of Professional Conduct (Count I);
assisted a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law in violation of Rule 5.5(b) of the Illinois Rules of Professional Conduct (Count I);
failed to deliver to a client all papers and property to which the client is entitled in violation of Rule 1.16(d) of the Illinois Rules of Professional Conduct (Count II);
engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Rule 8.4(a)(4) of the Illinois Rules of Professional Conduct (Count I);
engaged in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (Counts I and II); and
engaged in conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute, in violation of Supreme Court Rule 770 (Counts I and II).
The purpose of the disciplinary system is to protect the public, maintain the integrity of the legal system and safeguard the administration of justice. See In re Gorecki, 208 Ill. 2d 350, 802 N.E.2d 1194 (2003); In re Howard, 188 Ill. 2d 423, 721 N.E.2d 1126 (1999). "The Rules of Professional Conduct recognize that the practice of law is a public trust and lawyers are the trustees of the judicial system." In re Smith, 168 Ill. 2d 269, 287, 659 N.E.2d 896 (1995). The objective of a disciplinary inquiry is not punishment, but to protect the public from incompetent or unscrupulous attorneys, maintain the integrity of the profession, and protect the administration of justice from reproach. See In re Twohey, 191 Ill. 2d 75, 727 N.E.2d 1028 (2000). In determining the appropriate sanction for an attorney's misconduct, the purpose of the disciplinary system and the facts surrounding the misconduct must be considered. See In re Chernois, 114 Ill. 2d 527, 502 N.E.2d 722 (1986).
The discipline imposed on an attorney who has engaged in misconduct also depends on the aggravating and mitigating factors presented during that attorney's disciplinary proceedings.
See Gorecki, 208 Ill. 2d at 360-61. In this case, there are several aggravating factors and one mitigating factor.
Respondent's misconduct is aggravated by the fact that he caused harm to his client. As a result of Respondent's misconduct, his clients lost the money they paid him for legal services he failed to perform. Reiter paid Respondent a total of $28,000 and received little, if any, tangible legal services. Geisler paid Respondent $750 without obtaining the legal results she sought. Respondent failed to repay either of his clients. See In re Lewis, 118 Ill. 2d 357, 364, 515 N.E.2d 96 (1987) (harm caused by an attorney's misconduct is an aggravating factor).
Respondent's misconduct is also aggravated by the fact that he failed to participate in these disciplinary proceedings. Respondent was personally served with a copy of the complaint and was aware of these proceedings. Yet he failed to participate in the pre-hearing conferences and the hearing. An attorney's lack of cooperation in his own disciplinary proceedings demonstrates a "complete want of professional responsibility," and "indifference toward or even contempt for disciplinary procedures," and a "disregard for the authority and process of the Attorney Registration and Disciplinary Commission." In re Brody, 65 Ill. 2d 152, 156, 357 N.E.2d 498 (1976); In re Pass, 105 Ill. 2d 366, 371, 475 N.E.2d 525 (1985).
Respondent's misconduct is further aggravated because it was willful. It is apparent to us that Respondent did not intend to properly represent Reiter. He essentially did nothing except string Reiter along and take his money. Aside from having discussions with Reiter, Respondent did nothing to advance Reiter's legal interests. See In re Mason, 122 Ill. 2d 163, 175, 522 N.E.2d 1233 (1988) (willfulness can be an aggravating factor).
The only mitigating factor presented is that Respondent has had no prior discipline. Generally, the lack of a prior discipline is a significant mitigating factor, however, based on the
egregious facts of this case, we give this fact little weight. See In re Demuth, 126 Ill. 2d 1, 14, 533 N.E.2d 867 (1988).
Having considered the aggravating facts and lack of mitigating facts, we must now recommend the appropriate sanction. The Administrator recommends Respondent be suspended from the practice of law for two years and until further order of the court, and cites several cases supporting this recommendation. See In re Pass, 105 Ill. 2d 366, 475 N.E.2d 525 (1985) (two year suspension and until further order of the court); In re Loftus, 07 CH 41, M.R. 22312 (May 19, 2008) (disbarment); In re Borzeka, 99 CH 111, M.R. 18891 (September 24, 2003) (three year suspension and until further order of the court); In re Kuknyo, 01 SH 49, M.R. 17926 (March 22, 2002) (disbarment); In re Schwartz, 98 CH 92, M.R. 17696 (November 28, 2001) (one year suspension); In re May, 93 CH 320, M.R. 11764 and 11457 (four year suspension until further order of the court and payment of restitution).
After reviewing the cases cited by the Administrator, and other cases, and considering all of the evidence, we believe that a two year suspension and until further order of the Court is the appropriate sanction. We agree with the Administrator that the sanctions for the type of misconduct engaged in by Respondent range from suspension to disbarment. Accordingly, we find that based on the specific facts of this case, a two year suspension is within the appropriate range. See Borzeka, 99 CH 111. In that case, Borzeka assisted a non-attorney in the practice of law, shared fees with the non-attorney, made false statements about the non-attorney to the Character and Fitness Committee and the Inquiry Panel of the Illinois Bar Admissions Committee regarding the non-attorney's Illinois bar application, neglected a client matter, and converted funds from an estate. Borzeka participated in the disciplinary proceedings, and was suspended from the practice of law for three years.
The present case is similar to Borzeka in that in both cases the attorney assisted a non-attorney in the practice of law, neglected a client matter, and converted client funds. The suspension in the present case should be shorter than the suspension in Borzeka because Respondent, unlike Borzeka, did not make false statements to a government agency. We also believe that because Respondent failed to participate in these proceedings, the suspension should remain in effect until further order of the court. A suspension until further order of the court is appropriate where, as here, the attorney has demonstrated that he is either unable or unwilling to conform to professional standards. See In re Houdek, 113 Ill. 2d 323, 497 N.E.2d 1169 (1986). We also direct that before Respondent can be reinstated, he must pay restitution in the amount of $28,000 to Lee Reiter, and $750 to Leslie Geisler.
Therefore, in light of Respondent's misconduct, and considering the aggravating factors and relevant case law, we recommend that Respondent be suspended for two years and until further order of the court, and the payment of restitution.
Date Entered: June 27, 2008
|James B. Pritikin, Chair, Jessica A. O'Brien, and Mark Fitzgerald concurring.|