Filed September 30, 2013
In re Sharon E. Williams
Commission No. 2011PR00107
Synopsis of Review Board Report and Recommendation
This matter arises out of a two-count complaint filed by the Administrator charging Respondent with misconduct related to the fees she charged for handling an estate matter. The Administrator alleged Respondent changed her fee agreement with her clients to a contingent fee agreement after Respondent learned that there were no adverse claims to the estate. The Administrator also alleged that after Respondent was discharged by the clients, she presented her clients with a false statement of account.
During the pre-hearing proceedings, the Hearing Board Chair entered an order imposing discovery sanctions pursuant to which Respondent's answer was stricken, the allegations of the complaint were deemed admitted, and Respondent was barred from testifying or presenting any evidence at the hearing.
Based upon the admitted allegations of the Administrator's Complaint and evidence presented by the Administrator at hearing, the Hearing Board found that Respondent engaged in overreaching; breached her fiduciary duty; charged an unreasonable fee in violation of Rule 1.5; violated Rule 1.4(b) by changing the terms of the fee agreement without adequate disclosures; failed to refund unearned fees in violation of Rule 1.16; and engaged in intentional dishonesty in violation of Rule 8.4(a)(4) by submitting a false statement of account to her clients in which she misrepresented her time to justify her retention of unearned fees she had collected. The Hearing Board recommended that Respondent be suspended for a period of four (4) months, with the suspension stayed in its entirety by a one-year period of conditional probation. The conditions of probation included payment of restitution and participation in a law office management program.
Upon review, the Administrator appealed an order of the Chair of the Hearing Panel excluding one exhibit, and sought a recommendation of a suspension stayed after six months by a one year term of probation subject to conditions. The Respondent primarily challenged the Hearing Board's sanction orders and the Hearing Board's findings of misconduct.
The Review Board affirmed the findings of the Hearing Board and its decisions regarding the appropriateness of discovery sanctions and the denial of the Administrator's exhibit. The Review Board concluded that a period of suspension was warranted given the seriousness of Respondent's misconduct. The Review Board recommended that Respondent be suspended from the practice of law for four months followed by a one year term of probation subject to conditions. Like the Hearing Board, the Review Board included the payment of restitution and participation in a law office management program as conditions of probation.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
SHARON E. WILLIAMS,
Commission No. 2011PR00107
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
This matter comes to us on appeal from the Hearing Board's Report and Recommendation recommending that Respondent be suspended for a period of four months, with the suspension stayed in its entirety by a period of probation for one year subject to certain conditions, for changing the fee agreement in her favor without the required client disclosures, for knowingly charging an excessive fee in an estate matter, and for then providing a false statement of account to the clients after she was discharged.
Prior to the hearing in this matter, the allegations of the Administrator's Complaint were deemed admitted as a result of discovery sanctions entered against Respondent for her repeated and flagrant disregard of relevant rules. Respondent contends on appeal that these sanctions were an abuse of the Hearing Chair's discretion. Respondent also alleges that a number of other decisions by the Hearing Board were an abuse of discretion. She filed a request to supplement the record along with her brief; that request has been denied.
The Administrator appeals an order of the Chair of the Hearing Panel excluding one exhibit, a certified copy of federal removal proceedings, and asks this Board to recommend a
sanction that includes a period of suspension, namely a suspension stayed after six months by a one year term of probation subject to conditions.
As set forth below, we affirm the findings of the Hearing Board and its decisions regarding the appropriateness of discovery sanctions and the denial of the Administrator's exhibit. We depart somewhat from the Hearing Board by recommending that Respondent be suspended from the practice of law for four months followed by a one year term of probation subject to conditions.
Hearing Board Abused its Discretion by
Sanctioning Respondent for Her Pre-Hearing Conduct
Respondent's Pre-Hearing Conduct
The Administrator filed the Complaint in this matter on August 24, 2011. In September 2011 and November 2011, Respondent filed answers to the Administrator's Complaint but did not specifically admit or deny each allegation of the Complaint, as required by Commission Rule 233, and she also attached many documents to her Answer. The Chair of the Hearing Panel struck her answers and explained to her how to file an answer that complied with the Rules.
Rather than filing an answer that complied with the Rules, on December 29, 2011, Respondent filed a "Request for Arbitration/Mediation" asking that the disciplinary matter be set for voluntary arbitration or mediation and described the disciplinary matter as a "fee dispute". The Administrator filed a motion to strike Respondent's request for arbitration and the motion was granted. Respondent then filed a motion citing a Rule of Federal Civil Procedure asking the Chair for findings of fact in support of his rulings. On January 17, 2012, following a pre-hearing conference where the Chair denied Respondent's motion and again explained that Respondent was required by the ARDC rules to admit or deny the allegations, the Chair ordered the
Respondent to file an answer to the Complaint on or before January 31, 2012. On February 1, 2012, the Administrator filed a motion to deem the allegations of the Complaint admitted because Respondent still had not filed an answer. On February 3, 2012, Respondent filed a second amended answer that was essentially the same as the prior answer, along with the same exhibits. She also filed counterclaims, primarily alleging that the ARDC refused to accept her registration because she is African-American and that the ARDC was harassing her because of her race.
On February 9, the Chair struck the "extraneous language" in the answer, the counterclaims and the exhibits, but ordered that the answer stand as a general denial of the Administrator's allegations. Shortly thereafter, the Administrator proceeded with discovery and file a Notice to Produce and a Notice of Deposition. Respondent responded to that filing by filing a motion to remove the disciplinary case to federal court.
After the U.S. District Court remanded the matter to the ARDC, the Chair ordered Respondent to appear for a deposition on May 8, 20121, and set the hearing for June 4, 2012. Respondent did not appear for her deposition and did not file a response to the Administrator's Notice to Produce. Respondent did not contact Counsel for the Administrator either before or after the scheduled deposition to explain her absence (and indeed has never explained her absence). Finally, the Administrator filed a request to deem the allegations of the Complaint admitted and to bar the Respondent from testifying at the hearing or presenting any evidence, due to Respondent's failure to comply with discovery. The Chair granted the motion.
Respondent retained counsel following the entry of the order deeming the allegations of the Complaint admitted. Counsel filed requests to reconsider the sanction orders. These requests were denied but the hearing was postponed until July 16, 2012. At that time,
Counsel for the Respondent renewed his motions to vacate the sanction order and to present offers of proof. The Chair denied Respondent's requests.
On appeal, Respondent primarily objects to the imposition of sanctions against her. First, we note that Respondent was not ultimately sanctioned for filing an Answer that did not comply with the Rules. She won that battle, as the Chair of the Hearing Panel allowed her Answer to stand as a general denial of the Administrator's allegations. Moreover, while Respondent claims she was sanctioned as a result of her attempt to remove the disciplinary proceeding to federal court, the Hearing Board did not base its order on this action by the Respondent. Indeed the Board expressly refused to consider the removal to Federal Court as aggravation, stating, "We do not believe it was clearly established that Respondent's action was without any legal basis." HB, p. 23. Thus, the record does not support Respondent's contention. Rather, Respondent was sanctioned for her failure to appear for her deposition and for failure to comply with the Administrator's Request to Produce.
The decision to impose sanctions lies within the sound discretion of the Hearing Board and cannot be disturbed on review absent an abuse of discretion. See, e.g., R.M.Lucas Co. v. Peoples Gas Light and Coke Co., 2011 Il. App. 102955, 963 N.E.2d 274 (1st Dist. 2011); In re Golden, 09 CH 88, (Review Bd., July 23, 2012), respondent's petition for leave to file exceptions denied, No. M.R. 25509 (Nov. 19, 2012); In re Petrulis, 96 CH 546 (Review Bd., Dec. 9., 1999), approved and confirmed, No. M.R. 16556 (June 30, 2000). An abuse of discretion occurs only when no reasonable person would take the position adopted by the Hearing Board. In re Auler, 02 SH 102 (Review Bd., March 21, 2005) at 11, recommendation adopted, No. M.R. 20207 (Sept. 26, 2005).
We find that the Hearing Board did not abuse its discretion. The Hearing Board had a firm legal basis for the imposition of the sanctions. Supreme Court Rule 753(c)(3) provides in part that proceedings before the Hearing Board, including discovery practice, "shall be in accordance with the Code of Civil Procedure and the Rules of the Supreme Court as modified by rules promulgated by the Commission pursuant to Supreme Court Rule 751(a)." Commission Rule 260(e) also authorizes a Hearing Board Chair to sanction a party for discovery abuses. See, e.g., In re Spiezer, 00 SH 49 (Review Bd., March 28, 2002), Administrator's petition for leave to file exceptions as to sanction allowed, No. M.R. 18161 (Sept. 19, 2002)(complaint deemed admitted as a result of the attorney's failure to comply with discovery requests). The Administrator sought relief pursuant to Supreme Court Rule 219 (c). Supreme Court Rule 219 (c) authorizes a court to impose sanctions upon parties if the court determines that discovery rules and procedures have been abused. The rule gives the trial court the freedom to impose whatever sanctions the court deems appropriate. Supreme Court Rule 219 (c) sets forth examples of the sanctions that a court can impose, including but not limited to barring a witness from testifying, barring an offending party from maintaining a claim or defense, entering a judgment by default or dismissing a claim, or striking a party's pleadings and entering a judgment.
The Hearing Board also had a compelling factual basis for the entry of the sanction order. Respondent failed to appear for her deposition and failed to present any explanation, at any time before or after her deposition, for her failure to appear. She did not file an objection to the Notice of Deposition nor did she respond to the Notice to Produce. She had been repeatedly advised as to the rules governing disciplinary proceedings. Respondent failed to offer any evidence that her noncompliance with the discovery requests was reasonable or warranted by extenuating circumstances.
Hearing Boards have imposed similar sanctions for discovery abuses in other matters. For example, in In re Horne, 97 CH 98 (Review Bd., Feb. 16, 2000), approved and confirmed, No. M.R. 16743 (June 30, 2000), the Hearing Board imposed sanctions, including barring the respondent from testifying or introducing any documents into evidence and deeming the allegations of the complaint admitted, as a result of the respondent's failure to appear for his deposition or produce documents by a certain date. Horne had stated that he could not comply with the discovery because his son was ill, but he failed to support his claim with any documentation. Noting that Horne had engaged in a pattern of procrastination, this Board found no abuse of discretion in deeming the allegations of the complaint admitted. See also, In re Westler, 94 CH 345 (Hearing Bd., Sept. 22, 1994), approved and confirmed, No. M.R. 10606 (Jan. 25, 1995)(attorney barred from testifying or producing documents for failure to appear at deposition and submit witness list); In re Srivastava, 94 CH 844 (Hearing Bd., July 5, 1995), approved and confirmed, No. M.R. 11638 (Sept. 29, 1995)(attorney barred from testifying or producing documents for failure to appear at deposition); In re Teplitz, 97 CH 94 (Hearing Bd., June 17, 1998), approved and confirmed, No. M.R. 16148 (Nov. 19, 1999) (attorney's answer struck and allegations of complaint deemed admitted for failure to comply with discovery).
Respondent also argues that the Hearing Board's failure to allow Respondent to make an offer of proof was an abuse of discretion. The primary purpose of an offer of proof is to preserve the record for the offeror. People v. Duarte, 79 Ill. App. 3d 110, 123, 398 N.E.2d 332 (1st Dist. 1979). Because we find that the Hearing Board's exclusion of the evidence was based upon her failure to comply with discovery and was not an abuse of discretion, we find no error in the Hearing Board's refusal to allow Respondent to make an offer of proof.
Hearing Board Abused its Discretion in Denying Admission of the
Record of Respondent's Attempt to Remove the Disciplinary Matter to Federal Court
At hearing, the Administrator sought admission of a certified record of the docket sheet and the record from Respondent's attempt to remove the disciplinary proceeding s to federal court. Respondent's counsel objected to the admission on relevancy grounds and the Hearing Board, in its report, excluded the exhibit (Ex. 8).
Like discovery sanctions, the Hearing Board's rulings on the admission of evidence are not to be overturned by this Board unless the Hearing Board abused its discretion. In re Blank, 145 Ill.2d 534, 553-54, 585 N.E.2d 105 (1991). The Administrator argues that the exhibit is further proof of Respondent's "obstreperous attitude" and is relevant to demonstrate, in aggravation, that Respondent's actions were designed to improperly hinder and obstruct the disciplinary proceedings, and points to a number of cases where the Board has considered evidence of respondents who have filed frivolous prehearing motions. See, e.g., In re Samuels, 09 CH 38 (Hearing Bd., June 24, 2010) at 30-31, approved and confirmed, No. M.R. 24427 (March 21, 2011).
Again, we conclude that the Hearing Board did not abuse its discretion. The removal request was considered and rejected by a federal court, rather than by the Hearing Board, and the federal court made no specific finding that the request was meritless. The Administrator objected when Respondent attempted to admit similar documents from the federal case. Accordingly, we see no reason to disturb the decision of the Hearing Board.
Hearing Board's Findings Were
Against the Manifest Weight of the Evidence
Respondent contends that the Administrator failed to prove the allegations of the Complaint by clear and convincing evidence. Upon appeal, the findings of the Hearing Board are
entitled to deference. We will not disturb the factual findings unless they are against the manifest weight of the evidence. In re Timpone, 157 Ill.2d 178, 196, 623 N.E.2d 300 (1993). The factual findings in this matter were not against the manifest weight of the evidence. The findings were supported by the documentary evidence and the testimony of the witnesses, as well as by the admitted allegations of the Administrator's Complaint.
In disciplinary cases where the allegations of the Administrator's Complaint have been deemed admitted for failure to comply with discovery, the Administrator is not required to submit further evidence in support of the misconduct allegations of the Complaint. See, e.g., In re Golden 09 CH 88, (Review Bd., July 23, 2012), respondent's petition for leave to file exceptions denied, No. M.R. 25509 (Nov. 19, 2012). However, in this matter, the Administrator also submitted documentary evidence and the testimony of witnesses, all of which supported the Administrator's allegations.
As demonstrated at hearing, Anton Anderson and Alyssa Hill requested Respondent's services following the death of their mother, Priscilla Anderson. Pricilla Anderson died testate in June 2009, with an estate valued at approximately $300,000. Anton and Alyssa were the only beneficiaries.
Initially, at her request, the clients paid Respondent $2,500 as an advance on her fees and gave her the will, bank statements, their mother's insurance policy and other documents. They did not execute a written agreement and Respondent did not disclose her hourly fee. Four days later, after Respondent learned there was a joint account account of $27,000 and an insurance policy for $111,000 and that there were no adverse claims to the estate, Respondent insisted on a contingent fee agreement of ten percent of the value of the estate, in addition to the
$2,500 fee. Respondent did not inform her client of these facts or that they had a right to seek independent advice about the fee agreement.
Pursuant to this new fee agreement, Respondent directed the bank where the mother had a money market account to pay the approximately $27,000 to Anton and she took a fee of $2,734. She also directed the insurance company to pay the $111,0000 policy to Anton and Alicia for which she claimed an $11,000 fee. Alyssa paid her $5,500. In total, the clients paid Respondent almost $11,000 for virtually no work.
Anton then learned from someone else that Respondent's fee agreement was "not usually how it works." Anton asked for a refund and hired a new lawyer to get the file back and to deal with Respondent. The new lawyer asked Respondent for the file and for an accounting. Respondent became hostile and initially refused. She later returned one small shirt box of documents that were in disarray. She also provided a false accounting purporting to show time spent equal to the $11,000 fee and claiming that the clients owed her an additional $1,055.89 for hours worked based on an hourly fee of $350. She attempted to charge the clients over $6,000 for work performed after she knew the clients intended to discharge her including more than $3,000 for document review over the Labor Day weekend. The new attorney testified at the hearing that it took only 40 minutes to "organize" the file and that there was no evidence of any work that would support the charges in Respondent's bill.
The Hearing Board concluded, and we agree, that Respondent engaged in overreaching; breached her fiduciary duty; charged an unreasonable fee in violation of Rule 1.5; violated Rule 1.4(b) by changing the terms of the fee agreement without adequate disclosures; failed to refund unearned fees in violation of Rule 1.16; and engaged in intentional dishonesty in
violation of Rule 8.4(a)(4) by submitting a false statement of account to her clients in which she misrepresented her time to justify her retention of unearned fees she had collected.
In determining an appropriate sanction, this Board considers the nature and seriousness of the misconduct and any factors mitigating and aggravating the misconduct. In re Gorecki, 208 Ill. 2d 350, 360-61, 802 N.E.2d 1194, 1200 (2003). In addition, this Board may consider the deterrent value of the sanction, the "need to impress upon others the seriousness of the misconduct at issue," and whether the sanction will "help preserve public confidence in the legal profession." In re Twohey, 191 Ill. 2d 75, 85, 727 N.E.2d 1028, 1034 (2000).
In mitigation of her misconduct, Respondent has never been disciplined. She attended the ARDC Professionalism Seminar shortly before the hearing.
In aggravation, she caused considerable harm to unsophisticated clients. As of the date of the hearing, Respondent had refunded only $504 she had received as costs. Most importantly, she clearly does not understand the nature of any of her misconduct. We are particularly troubled by her seeming unwillingness or inability to follow basic court rules as evidenced by her actions in this matter and by her tendency to distort basic fact situations. For example, she objects to discovery after the date the discovery is due. She fails to notify anyone that she will not attend her duly noticed deposition. All these shortcomings bode ill for her clients whom she states she represents in personal injury and family law matters. We are concerned that the inappropriate conduct she displayed in the course of this matter bodes ill for her representation of clients in other litigation settings.
The Hearing Board recommended that Respondent be suspended for four months, with the suspension stayed in its entirety, by a period of probation of one year with conditions,
citing numerous cases where attorneys have been suspended for engaging in similar misconduct. See, e.g., In re Johnson, 01 SH 53 (Review Bd., Nov. 27, 2002), Administrator's petition for leave to file exceptions allowed, No. M.R. 18594 (March 19, 2003)(three month suspension and until restitution paid for charging fees of more than $15,000 for handling an estate with only $37,000 in assets); In re Potthoff, 94 SH 632 (Review Bd., Nov. 29, 1995), approved and confirmed, No. M.R. 12333(May 28, 1996)(respondent paid himself $42,000 in fees to act as executor of estate, but had not as of the hearing returned all of the $24,000 in excessive fees he was ordered to return. He was suspended for six months); In re Gerard, 132 Ill.2d 507, 548 N.E.2d 1051 (1989) (one year suspension for charging a contingent fee to "recover" certificates of deposit for an elderly client). The Hearing Board believed that a period of probation was necessary, stating, "Simply suspending Respondent for a fixed period of time and then allowing her to resume practice will do little to address" the concerns the Board had regarding her practices. The Hearing Board noted that Respondent was unaware of proper practices and had been a sole practitioner for her entire legal career. Accordingly, the Hearing Board believed that probation, with conditions, would offer Respondent an opportunity to learn from a more experienced attorney how to conduct her practice ethically.
The Hearing Board also ordered restitution of $8,230 (the amount collected pursuant to the contingency fee for collecting the life insurance proceeds and the money in the bank account) as a condition of the probation. We agree that restitution is appropriate in this matter. In re Twohey, 01 SH 50 (Hearing Bd., July 14, 2003), approved and confirmed, No. M.R. 19080 (Jan. 20, 2004).
We do not disagree with the Hearing Board that probation is appropriate in this matter, but we find no support for staying the entire period of the suspension, particularly given
the seriousness of the misconduct in this matter. Respondent's actions in knowingly taking advantage of her clients by charging them a clearly excessive fee and for engaging in dishonest conduct warrant a suspension from the practice of law. Accordingly, we recommend that Respondent be suspended for four months followed by a probationary period of one year. While we agree with the conditions of probation as suggested by the Hearing Board, we also believe that Respondent's conduct should be monitored carefully during the period of probation to insure that she understands her ethical obligations to the clients and to the courts before whom she appears.
Accordingly, we recommend that Respondent, Sharon E. Williams, be suspended for a period of four (4) months followed by a period of probation for one (1) year, subject to the following conditions which are to be satisfied prior to the termination of probation:
Respondent shall comply with the provisions of Article VII of the Illinois Supreme Court Rules on Admission and Discipline of Attorneys and the Illinois Rules of Professional Conduct and shall timely cooperate with the Administrator in providing information regarding any investigations relating to her conduct;
Respondent shall attend meetings as scheduled by the Commission probation officer. Respondent shall submit quarterly written reports to the Commission probation officer concerning the status of her practice of law and the nature and extent of her compliance with the conditions of probation;
Respondent shall, within the first thirty (30) days of probation, enroll in a law office management program sponsored by or through the Cook County, Chicago or other bar association and shall, upon enrollment, notify the Administrator, in writing, of the name of the attorney with whom Respondent is assigned to work. Respondent shall successfully complete the law office management program at least thirty (30) days prior to the end of the probation term. Through Respondent's participation in the law office management program, Respondent shall establish and utilize the following:
A system for maintaining records as required by Supreme Court Rule 769;
A diary and docketing system in accordance with the requirements established by the law office management program, including a
mechanism by which approaching statutes of limitations and other filing deadlines are noted;
A system by which telephone messages are recorded and telephone calls are returned in a timely manner;
A system by which written requests by clients for the status of their legal matters are answered, either orally or in writing, in a timely manner;
A system whereby clients are apprised at the outset of representation of the basis upon which fees will be calculated and costs paid;
For cases in which the fee is to be calculated on an hourly basis, a system by which clients are provided with regular itemized billing statements provided at least quarterly, setting forth the services performed by Respondent, the date upon which each service was performed, the time spent by Respondent on each service and the amount to be charged to the client; and
A system for the handling of funds belonging to clients and third parties that conforms to the requirements of Rule 1.15 of the Illinois Rules of Professional Conduct and instructions provided to Respondent by the Administrator, including appropriate Trust Account Procedures.
Respondent shall authorize the attorney assigned to work with her in the law office management program to:
Review all fee agreements entered into between Respondent and her clients and periodically review pleadings filed by Respondent in court for compliance with the Rules of Professional Conduct and applicable rules of civil procedure;
Disclose to the Administrator on a quarterly basis, by way of signed reports of signed reports, information pertaining to the nature of Respondent's compliance with the law office management program and the above described conditions;
Promptly report to the Administrator Respondent's failure to comply with any part of the above described conditions;
Respond to any inquiries by the Administrator regarding Respondent's compliance with the above described conditions;
Respondent shall reimburse the Commission for the costs of this proceeding as defined in Supreme Court Rule 773 and shall reimburse the Commission for any further costs incurred during the period of probation;
At least thirty (30) days prior to the termination of the period of probation, Respondent shall reimburse the Disciplinary Fund for any Client Protection payments arising from her conduct;
Respondent shall notify the Administrator within seven (7) days of any arrest or charge alleging her violation of any criminal or quasi-criminal statute or ordinance;
Respondent shall notify the Administrator within fourteen (14) days of any change of address;
At least thirty (30) days prior to the termination of the period of probation, Respondent shall complete and provide proof to the Administrator of the payment of restitution in the total amount of $8,230 to Anton Anderson and Alyssa Hill;
Probation shall be revoked if Respondent is found to have violated any of the terms of probation. If probation is revoked, Respondent shall be suspended until further order of Court.
Robert M. Henderson
I, Kenneth G. Jablonski, Clerk of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois and keeper of the records, hereby certifies that the foregoing is a true copy of the Report and Recommendation of the Review Board, approved by each Panel member, entered in the above entitled cause of record filed in my office on September 30, 2013.
Kenneth G. Jablonski, Clerk of the
1Respondent repeatedly refers to this her "second deposition", but it was not. She did, however, appear for a sworn statement prior to the filing of the complaint. This is but one example of Respondent's unwillingness or inability to understand and accept the plain meaning of rules and procedures that have been repeatedly explained to her.