Filed September 29, 2017
In re Ebony-Dawn Lucas
Commission No. 2016PR00103
Synopsis of Hearing Board Report and Recommendation
The Administrator charged that Respondent and an agent falsely represented Respondent as the president of a condominium association, in order to gain access to the association's bank account. Respondent owned units in the building. No attorney-client relationship was involved.
Respondent was added to the association's bank account the day after an election in which Respondent was made an assistant to the Board and another individual, Hull, was elected secretary. Those results were shown on the minutes of the meeting at which the election occurred. Hull changed those minutes, to show Respondent was the president, after she and Respondent attempted unsuccessfully to be added to the association's account. Respondent and Hull later met with a different banker, to whom the altered minutes were given, as well as additional information, which accurately identified the association officers. Respondent did not need to be president to be a signer on the account, and Hull's authority as secretary sufficed for the account changes to be made. No funds were misappropriated.
The Hearing Board concluded that the Administrator did not prove that Respondent engaged in dishonest conduct, directly or through Hull. The Hearing Board recommended that the Complaint be dismissed.
BEFORE THE HEARING BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
Commission No. 2016PR00103
REPORT AND RECOMMENDATION OF THE HEARING BOARD
SUMMARY OF THE REPORT
Respondent owned units in a condominium building. Respondent's friend, Teshera Hull, managed one of those units. At a condominium association meeting, Hull was elected secretary and Respondent was elected as an assistant to the Board. The meeting minutes reflected those results. The next day, Respondent and Hull attempted to be added as signers on the condominium association's bank account. The banker declined to add them because of a discrepancy between the roles listed for Respondent on the meeting minutes and on the Secretary of State's website.
Hull changed the minutes to match the Secretary of State's website, which showed Respondent as president of the condominium association. Respondent and Hull then met with a different banker, who added them to the account. Although the second banker was given the altered minutes, he was also given a document that correctly identified the president. The banker relied on Hull's authority as secretary to make the account changes, and Respondent did not have to be an officer of the condominium association to be a signer on the account. No funds were misappropriated.
The Hearing Board concluded there was not clear and convincing evidence that Respondent engaged in dishonest conduct, directly or through Hull. The Hearing Board recommended that the Complaint be dismissed.
The hearing in this matter was held on June 8, 2017, at the Chicago offices of the Attorney Registration and Disciplinary Commission (ARDC) before a Panel of the Hearing Board consisting of Patrick M. Blanchard, Chair, Amanda C. Jones and John F. Costello. Roona N. Shah represented the Administrator. Respondent appeared at the hearing and was represented by James A. Doppke, Jr.
The Administrator filed a one-count Complaint, alleging that Respondent engaged in misconduct related to a condominium association and its bank account. In her Answer, Respondent admitted some of the factual allegations of the Complaint, denied other factual allegations, denied misconduct and asserted affirmative defenses.
Respondent was charged with violating the Rules of Professional Conduct through the acts of another and with engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rules 8.4(a) and 8.4(c) of the Illinois Rules of Professional Conduct (2010). The charges are based on allegations that Respondent and an agent falsely represented that Respondent was the president of a condominium association, to gain access to the association's bank account.
The Administrator presented testimony from Brian Colebrook, Leslie Renee Johnson and Shavone Brooks. The Administrator also presented testimony from Respondent as an adverse witness and from Teshera Hull as a rebuttal witness. Administrator's Exhibits 1 through 7 were admitted into evidence.
Respondent testified on her own behalf and presented testimony from Yao Dinizulu, Teshera Hull and Edward Reagan. Dinizulu and Reagan testified as both occurrence and character witnesses. Respondent also presented character testimony from Marc Lipinski, Charles Drennen and Audrey Wade. Respondent's Exhibits 1 through 9 were admitted into evidence.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
In an attorney disciplinary proceeding, the Administrator has the burden of proving the misconduct charged by clear and convincing evidence. In re Thomas, 2012 IL 113035, par. 56. Clear and convincing evidence requires a high level of certainty, which is greater than a preponderance of the evidence, but less stringent than proof beyond a reasonable doubt. In re Santilli, 2012PR00029, M.R. 26572 (May 16, 2014). The Hearing Board determines whether the Administrator has met that burden. In re Edmonds, 2014 IL 117696, par. 35.
To warrant professional discipline, misconduct by an attorney must violate the Rules of Professional Conduct. In re Karavidas, 2013 IL 115767, par. 103. The misconduct with which Respondent is charged does not relate to her representation of any client. Rather, the conduct at issue involves a condominium association of which Respondent was a member. In considering the evidence, our role is not to determine whether Respondent's actions were correct, but whether the Administrator proved Respondent's conduct violated the Rules under which she was charged, i.e. Rules 8.4(a) and 8.4(c). See Karavidas, 2013 IL 115767 at par. 103.
Drexel Commons is a thirty-five unit condominium building in Chicago. Unit owners are members of the Drexel Commons Condominium Association ("Association"). The Association had a Board, generally comprised of three directors, although there could be additional directors. The Association's officers consisted of a president, secretary and treasurer, and assistants to such officers as the Board deemed appropriate. Unit owners could vote and serve on the Board themselves or designate an agent for their unit, to vote and serve on the Board on behalf of the owner. (Tr. 25, 223; Resp. Ex. 1, Declaration at 14; Resp. Ex. 1, By-Laws at 3-4, 6).
Most of the units in Drexel Commons were owned as investments and occupied by renters. Respondent owned one-third of the units in Drexel Commons, through entities she established. Noor Five, Inc. owned a comparable number of units and was the only other large scale owner. Tony Osias, who lived outside of Illinois, owned or controlled Noor Five. Osias typically communicated with other members of the Association by e-mail or through an agent. Brian Colebrook managed Noor Five's units in Drexel Commons and acted as the voting member for those units. Crump Realty Group, operated by Paul Crump, was the property manager for Drexel Commons. Crump was affiliated with Osias, Noor Five and Colebrook. (Tr. 25-26, 44, 49, 65, 67-68, 76, 121,132-33, 151, 154, 223-24, 234-36).
Other owners within Drexel Commons owned smaller shares. Leslie Johnson owned a single unit, as did Yao Dinizulu. (Tr. 62, 148). Edward Reagan managed the rental for a client who owned one unit. (Tr. 199).
Over time, Drexel Commons had been facing a number of problems. In particular, a lawsuit was pending, filed by the City of Chicago in 2011, alleging building code violations. (Tr. 68-69, 149, 230-31). Some unit owners were questioning whether Crump Realty was effectively addressing needed repairs and how it was handling Association funds. (Tr. 152). A
number of owners, including Respondent, disagreed with assessments which had been levied and had not paid assessments due on their units. (Tr. 231-32).
In addition, there were underlying disagreements between Respondent and Osias's group regarding how to resolve the problems affecting the building. According to Reagan, there were two factions fighting for control of the Board. (Tr. 68-69, 149, 201-203, 230-31). Johnson described Respondent's group and Osias's group as "vehemently feuding." (Tr. 69). Testimony from Reagan and Respondent suggested Osias had a habit of accusing other people of fraud. (Tr. 201, 270).
In 2014 and 2015, Respondent was a director and an officer on the Association Board, as was Colebrook. At that time, there were three director positions and no assistants to the Board. (Tr. 26-27; Resp. Exs. 2, 3).
On November 21, 2015, the Association had an election. According to Colebrook's testimony, the election was held because a vacancy was created when Respondent transferred ownership of one of her units to a different entity. Respondent was not present at the November 21, 2015 meeting, and another individual was elected to fill the position Respondent had held on the Board. (Tr. 28-30).
According to Respondent, she first learned of this situation when, in a conversation with Crump, he stated that he understood Respondent was no longer an owner and had been removed from the Board. Respondent testified she considered the election improper because she was still an owner and had not received notice of the meeting. From Respondent's perspective, she was still on the Board, and she complained to the Association's attorney. (Tr. 134-37, 228-29). The Association's By-Laws provided procedures for the election, removal and resignation of directors and officers, for calling meetings and for sending notices. (Resp. Ex. 1, By-Laws at 2-
7). It is not clear from the evidence whether proper notice of the November 21, 2015 meeting was sent. (Tr. 29, 50-51, 55, 74, 134-37, 228-29).
In the meantime, in December 2015, the City filed a motion in the building court case, seeking to have a receiver appointed for Drexel Commons. (Tr. 230-31). Based on Dinizulu's testimony, this raised concerns among some owners that Osias might want the Association to go into receivership, as a way to push other owners out. (Tr. 152-53). These events also led some owners to become more involved, in an effort to work together to address the problems facing the building as a group. (Tr. 149).
Based on Respondent's testimony, by December 2015, she also concluded the fighting needed to stop and the owners needed to work together to avoid receivership. Therefore, Respondent decided to pay the assessments owed on her units. She did so even though she knew by then of the attempt to remove her from the Board. (Tr. 57, 231-32).
On December 16, 2015, $63,885.63 was deposited into the Association's account at Chase Bank, which was accepted in satisfaction of all past due assessments for Respondent's units. Subsequently, two other owners, including Noor Five, paid their past due assessments. On December 28, 2015, $25,107.20 was deposited into the Association's Chase Bank account. That account contained $89,329.20 on December 31, 2015. (Tr. 44-46, 51-53, 232; Resp. Ex. 6).
January 18, 2016 Meeting
After resolving her outstanding assessments, Respondent contacted some of the other unit owners and suggested a meeting. Under the Association's By-Laws, a special meeting could be called at any time, provided it was authorized by owners holding at least twenty percent of the interests in the building. Based on Respondent's testimony, the purpose of the meeting was to hold an election to resolve issues regarding composition of the Board and enable the Board to act
to avoid receivership. The meeting was set for January 18, 2016. (Tr. 136, 229-33; Resp. Ex. 1, By-Laws at 3).
In the meantime, Respondent spoke with her friend, Teshera Hull. Hull is a medical education manager for a company that manufactures cardiovascular devices. She also has experience investing in condominium properties. Respondent initially spoke with Hull in December 2015 and told Hull about her removal from the Board and the motion for receivership. Hull also knew Crump and offered to assist as an intermediary with him. In January 2016, at Respondent's request, Hull began managing one of Respondent's units in Drexel Commons and acting as the voting agent for that unit. Before that time, Hull had no involvement with Drexel Commons. (Tr. 138-39, 162-65, 178, 273-74).
Respondent described the steps she took to notify the owners of the January 18, 2016 meeting. Conflicting evidence was presented as to the sufficiency of that process. Colebrook testified he generally received notice of meetings. Respondent did not send notice to Colebrook, but testified she sent notice to Noor Five and Osias responded, objecting to the meeting. (Tr. 34-37, 58-59, 63, 81-82, 137-38, 148-50, 206-207, 233-37, 261-63.; Adm. Ex. 1; Resp. Ex. 7). Colebrook testified he also never received notice that Hull would be a designated voting agent, even though there was a procedure for notifying the Board if the unit owner was appointing another person as the voting agent. (Tr. 37-40; Resp. Ex. 1, By-Laws at 2).
The notice regarding the January 18, 2016 meeting was dated January 7, 2016. The notice included a phone number, but not Respondent's name or address. (Tr. 137; Adm. Ex. 1). The notice read:
Dear Drexel Commons Condominium Association Owners:
Pursuant to the condominium declaration, the unit owners, comprising of more than 20% of the ownership of the property, hereby call a meeting for the following purposes:
To remove Kamil Karbaz, Brian Colebrook, and David Westbrook from the board of the Association;
To vote on a new board;
To terminate the services of Crump Realty Group as the property management company for the Association;
To discuss and vote upon hiring of a new management company;
To discuss and vote on a plumber so that permits can be pulled prior to the next court date.
The meeting will be held on Monday, January 18, 2016 at 10:00 am at the offices of The Property Law Group, LLC.
If you have any questions regarding this meeting, please contact me at (312) 672-2299
(Adm. Ex. 1).
Respondent led the meeting in which she, Johnson, Dinizulu, Hull and Reagan participated. While no other owners or representatives participated, given the number of units Respondent owned, this group exceeded the twenty-percent of votes required to constitute a quorum. (Tr. 63-64, 79, 132, 139; Adm. Ex. 2; Resp. Ex. 1, By-Laws at 2).
In relation to the election, Johnson, Hull and Respondent volunteered to serve on the Board. Osias was nominated, as Johnson and Dinizulu wanted to keep both large owners involved and were concerned it might appear improper, under the circumstances, if Respondent became an officer. (Tr. 64- 66, 154; Adm. Ex. 2). As the largest owner present, Respondent had the most votes, but opted not to use those votes to decide the election. According to Respondent's testimony, she wanted to be on the Board, but was primarily concerned with working together, since a hearing was scheduled on the motion for receivership the following Monday. (Tr. 79, 237-39).
Johnson, Hull and Osias were elected to the Board. The Board members decided who would hold what officer position and determined that Johnson would be president, Hull secretary and Osias treasurer. (Tr. 64, 139, 165, 225; Adm. Ex. 2). While there was some conflicting evidence as to how this came about, or what the position might entail, during this meeting, Respondent was made an assistant to the Board. (Tr. 67, 155, 166, 238-39; Adm. Ex. 2).
Additional matters were also addressed at the January 18, 2016 meeting. Transparency concerns were mentioned, and none of the meeting participants knew how much money the Association had in the bank at that time. The participants decided to wait to consider whether to change the management company. They also discussed the repairs needed to correct the alleged building code violations and how to accomplish those repairs. Reagan was hired to manage the construction work, and he was to obtain bids on which the owners could vote at a meeting set for January 21, 2016. The goal was to have a plan in place to address the repairs by the time of the upcoming hearing on the motion to appoint a receiver. Reagan testified he presented a plan, under which the work would be completed within six to eight months. Ultimately, the matter stalled and Reagan withdrew from the project. (Tr. 199-201; Adm. Ex. 2).
I. Respondent is charged with engaging in conduct involving dishonesty, fraud, deceit or misrepresentation by assisting Hull, as Respondent's agent, to draft minutes that falsely stated that Respondent was the president of the Association's Board, and by falsely representing herself to Chase Bank as the Board president, in order to obtain access to the Association's bank account, in violation of Rule 8.4(c).
The Administrator charged Respondent with misconduct based on allegations that Respondent falsely represented herself as president of the Drexel Commons Condominium Association in order to obtain access to the Association's bank account. According to the Administrator's allegations, Respondent did so in person at Chase Bank and by assisting Hull in drafting false minutes of an Association meeting, thereby engaging in dishonest conduct and
violating the Rules of Professional Conduct through the acts of another. The Administrator did not present clear and convincing evidence to support these charges.
B. Admitted Facts and Evidence Considered
We considered the following, in addition to the Background discussed above.
Changes to Chase Bank account
The Association maintained a checking account at Chase Bank ("Chase"). (Resp. Ex. 6). Hull wanted to add herself to the account, obtain and review the bank records and reconcile the bank statements with the budget and funds in the account. From Hull's perspective, as secretary, she was responsible for maintaining records, including bank records. (Tr. 166-69).
On January 19, 2016, Hull and Respondent went to a Chase branch on LaSalle Street, where they met with a banker. That banker declined to add them to the Association's account because the way the January 18, 2016 meeting minutes listed Respondent's role for the Association differed from the Secretary of State's listing of the Association's officers. Specifically, the meeting minutes showed Respondent was an assistant to the Board, while the Secretary of State's website showed her as the Association president. Respondent and Hull understood from the conversation with the banker that, before any changes could be made to the account, the officers listed in the meeting minutes and on the Secretary of State's website had to match. (Tr. 139-41, 170, 242-43; Adm. Ex. 2).
As an incorporated entity, the Association filed Annual Reports with the Secretary of State, which listed the Association's officers for the year. According to the Annual Report filed in 2014, Respondent was the Association president at that time. In 2015, Respondent was the Association treasurer, as reflected on the Annual Report filed on November 8, 2015. (Tr. 26; Resp. Exs. 2, 3).
Respondent testified it seemed that the banker was telling them to modify the minutes to correspond with the information on the Secretary of State's website. Respondent testified she was not comfortable doing that and called Arnell Brady, an acquaintance who worked for Chase, at a different branch. Respondent testified she asked Brady if he knew someone who could help them figure out how to handle adding their names to the Association's account and he suggested that Respondent talk with the manager at the Hyde Park branch. Respondent testified she knew she did not have to be the president to be added to the account and her conversation with Brady confirmed that understanding. Later that day, Respondent and Hull went to Chase's Hyde Park branch. (Tr. 141-42, 242-45, 247-49).
In the meantime, Hull created a second set of meeting minutes. Hull testified she did so given her understanding from the conversation at the bank earlier that day. Nothing on the face of this document indicated it was an amended version or that there were other minutes of the same meeting. In addition to other differences, according to this set of minutes, Johnson, Hull and Respondent had been elected to the Board, with Johnson as treasurer, Hull as secretary and Respondent as president. Conflicting evidence was presented whether Hull changed the minutes at her home or at Respondent's office, although Respondent acknowledged that Hull might have been at her office at sometime between the trips to the two Chase branches. (Tr. 169-70, 180-81, 244-45, 270; Adm. Ex. 3).
Respondent also prepared a document after the first meeting at Chase, specifically an Amended Corporation Annual Report, dated January 19, 2016. The Amended Report reflected the composition of the current Drexel Commons Board based on the January 18, 2016 election. The Amended Report identified Johnson, Hull, Osias and Respondent as directors, with Johnson as president, Hull as secretary and Osias as treasurer. Hull signed the Amended Report as
secretary. She understood it would be filed to update the information the Secretary of State had previously. Respondent filed the Amended Report with the Secretary of State on January 26, 2016. (Tr. 176-77, 242-43, 260-61, 267-69; Resp. Ex. 4).
When Respondent and Hull went to Chase's Hyde Park branch on January 19, 2016, they met with Shavone Brooks. Brooks, a personal banker and small business specialist, also served as the manager on duty. Brooks often dealt with condominium association accounts, and he was familiar with Chase's procedures for such accounts. Brooks described Chase's policies regarding changes to condominium association accounts and signers on such accounts, as well as the procedures he followed in dealing with such matters. (Tr. 88, 91-97, 117-19, 245).
Based on Brooks's testimony, Respondent and Hull presented a situation which was not the norm, but was acceptable. In essence, if two individuals came to Chase seeking to make changes to a condominium association account, Chase would make the changes, so long as Brooks could confirm that one of the persons present had authority to act on behalf of the association. Chase relied on that person's authority in making the changes and did not require that the other person also have authority to act on the association's behalf. Chase did not require that signers on the account be officers, or even members, of the condominium association. A person authorized to make changes to an account could add anyone as a signer on the account. (Tr. 91-97, 117-19).
Brooks did not remember some of the specifics about his meeting with Respondent and Hull. He based at least some of his testimony on what he normally did in similar situations. For example, Brooks routinely obtained identification from the persons present, confirmed that at least one of them had authority to act for the association and, if the association was incorporated,
verified the information he was given against the listing of corporate officers on the Secretary of State's website. (Tr. 95-97, 108-110, 115-16).
As Brooks recalled, Respondent told him she was the president, introduced Hull as the secretary and stated they needed to make changes to the account of their condominium association. When Brooks asked for documentation, they produced meeting minutes. Brooks did not recall, as between Respondent and Hull, who provided what documents. After determining that Drexel Commons was incorporated, Brooks looked on the Secretary of State's website. Brooks assumed from the minutes that there had been a recent election, but he did not remember Respondent directing his attention to that election or telling him that, given the recent election, the Secretary of State's website was incorrect. (Tr. 96-97, 108-111, 115-16).
According to Brooks, the meeting minutes he received showed Respondent as the president, but the Secretary of State's records did not, although he claimed both the meeting minutes and the Secretary of State's website showed Hull as the secretary. Brooks testified he accepted that information as evidence that Hull had authority to act on behalf of the Association. Based on Brooks's testimony, Hull's authority was sufficient for him to proceed and he made the account changes based on Hull's authority as secretary. (Tr. 110, 112-16, 119, 121).
Hull's name, however, did not appear on either the 2014 or 2015 Annual Reports which had been filed with the Secretary of State. According to each of those Reports, Colebrook was the Association secretary. (Resp. Exs. 2, 3). The Amended Annual Report identified Hull as the secretary. As of January 19, 2016, that Report had not yet been filed with the Secretary of State. (Resp. Ex. 4).
Respondent testified she and Hull gave Brooks the Amended Annual Report and the meeting minutes. Respondent did not remember which minutes they gave Brooks, but thought
they had both sets. Respondent testified she was uncomfortable when she learned that Hull had drafted a second set of minutes. She mentioned her discomfort to Brooks and told him that, in her view, there had to be a different way to accomplish the goal of being added to the account. Based on Respondent's testimony, Brooks told them it did not matter, the account could be changed by the secretary and Hull was the secretary. (Tr. 245-46, 270-72).
Respondent testified she and Hull gave Brooks the Amended Annual Report, which Hull had signed. That document identified Hull as secretary and Johnson as president. Respondent testified that, since the Amended Annual Report had not yet been filed, it would not have been possible for Brooks to corroborate Hull's status as secretary from the Secretary of State's website. Based on Respondent's testimony, Brooks stated he could accept an application to amend the Secretary of State website and told them to bring the Amended Report in after it had been filed. Respondent testified that was done. (Tr. 245-46, 267-72; Resp. Ex. 4).
On January 19, 2016, Hull and Respondent were added as signers to the Association's account at Chase. The signature card was prepared to preauthorize adding Johnson also as a signer on the account. Brooks testified that made sense to him, since Johnson was listed on the Secretary of State's website. Johnson signed the form at Chase a few days later. The title "president" does not appear on the signature card. Respondent and Johnson were identified with the title "signer." (Tr. 70, 112-14, 125, 142; Adm. Ex. 4).
Brooks testified that Respondent was added to the account pursuant to Hull's authority as secretary and that, as secretary, Hull could have added, or removed, anyone as a signer. Brooks testified that Respondent did not have to be the Association president to be a signer on the account. (Tr. 110, 112, 116-17, 119, 121, 124-26). Respondent and Hull also understood that, as secretary, Hull could add signers to the account and signers did not have to be Board members.
Respondent testified she never told Brooks she was the Association president and never intended to mislead him into thinking she was the president. Hull also testified she did not intend to mislead Brooks about Respondent's role. (Tr. 172-74, 247-48, 250).
Chase's file regarding Drexel Commons contained the second set of minutes and a Corporation File Detail Report which showed Johnson as president and Hull as secretary. That File Detail Report had been printed from the Secretary of State's website on May 24, 2016. (Tr. 98-101; Adm. Ex. 7). Brooks could not say whether that File Detail Report was the same document he saw in January 2016 or whether it contained the same information the Secretary of State had in January 2016. (Tr. 101-102). When the account changes were made, Brooks had taken the signature card, a document Brooks stated he had printed from the Secretary of State's website and the meeting minutes to his manager, to approve the changes. Brooks testified he took the meeting minutes because they confirmed that Hull was the secretary. (Tr. 114, 122).
Withdrawal of funds
The Association had levied a special assessment for repairs to the roof and other common areas. The Association's rules required funds collected for special assessments to be kept in a separate account and used only for the purpose stated in the notice of assessment. (Tr. 175, 239-41; Resp. Ex. 1 at Declaration at 21-22).
Based on her review of the bank statements, Hull determined that $75,000 from the special assessment had been deposited into the Association's general account at Chase. Hull also became suspicious of the withdrawals paid to Crump, which she considered excessive. (Tr. 174-75, 239).1
Hull called Respondent and informed her of the situation. Hull wanted to withdraw funds from the Chase account. Respondent agreed to meet Hull the next morning at a Chase branch in
downtown Chicago. According to Respondent's testimony, they chose that location because Respondent had to be downtown for court. (Tr. 142-43, 174-75, 239, 242, 246-47).
On January 20, 2016, Hull withdrew $75,000 from the Chase account. She received a certified check for $75,000 payable to the Association.2 This withdrawal left approximately $2,600 in the Chase account, which Hull testified was for monthly maintenance. (Tr. 174-75; Adm. Ex. 5; Resp. Ex. 6). Respondent either was present when Hull withdrew the funds or met Hull at Chase shortly thereafter. (Tr. 142-43, 182-83, 241-42, 246-47, 270).
The Board did not authorize this withdrawal at the January 18, 2016 meeting. The treasurer did not authorize the withdrawal. (Tr. 264, 266; Adm. Ex. 2). Respondent spoke with Johnson and Dinizulu about moving funds out of the Chase account, although it was not clear whether Respondent did so before the funds were withdrawn or shortly thereafter. Johnson testified she had concerns about the situation, particularly moving the money without asking whether Crump had any documentation to support the withdrawals. There was conflicting evidence as to whether Johnson expressed her concerns to Respondent. Dinizulu understood the withdrawal was made because Respondent was concerned with how Crump and Osias were handling Association funds and wanted to get control of the finances from them. (Tr. 72, 82-83, 155-56, 240-42, 270).
As Respondent knew, Hull initially kept the $75,000 check at her home. On February 3, 2016, Hull and Respondent took the check to Fifth Third Bank, where they opened a new account in the name of the Association. They deposited the $75,000 check into that account. (Tr. 143, 175, 183, 249; Adm. Ex. 6). Johnson was added to the Fifth Third account shortly after it was opened. (Tr. 77).
Subsequently, the project for which the special assessment had been levied was completed. The $75,000 was used to pay for that work and no funds were taken from the Fifth Third account for any other purpose. Respondent testified she never used any of the money for her own purposes, nor did anyone else. (Tr. 175, 250-51).
From Colebrook's perspective, the $75,000 had been taken without authority, essentially stolen. (Tr. 41-43). Colebrook was one of the plaintiffs in a civil lawsuit, filed in early 2016, against Hull, Johnson, Respondent and Osias. In that lawsuit, the court never made any finding that Respondent engaged in inappropriate conduct in being added as a signer to the Chase account or in regard to the $75,000. During a court hearing on February 10, 2016, Respondent informed the court that the $75,000 had been deposited in the Fifth Third account in the Association's name. It appears that the parties began working quickly toward resolving the issues in that lawsuit. (Tr. 47-50, 143-44, 251-54; Resp. Exs. 8, 9).
C. Analysis and Conclusions
It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation. Ill. Rs. Prof'l Conduct R. 8.4(c) (2010). Rule 8.4(c) is broadly construed, to include anything calculated to deceive, including the suppression of truth and the suggestion of falsity. Edmonds, 2014 IL 117696 at par. 53. In determining whether an attorney violated Rule 8.4(c), we consider the unique circumstances of the case at issue, including the circumstances surrounding the attorney's conduct. See In re Cutright, 233 Ill. 2d 474, 490, 910 N.E.2d 581 (2009). In analyzing whether the Administrator has proved his case, we also consider the manner in which the Administrator charged the violation occurred, consistent with the principle that the complaint must clearly and unambiguously inform the attorney of the specific acts charged and the specific rules allegedly violated by those acts. See Karavidas, 2013 IL 115767 at par. 72.
The Administrator bears the burden of proof and must establish the misconduct charged by clear and convincing evidence. Edmonds, 2014 IL 117696 at par. 35. Clear and convincing evidence requires a high level of certainty. In re Susman, 2014PR00094 (Hearing Bd. Sept. 23, 2016) (complaint dismissed). It means a degree of proof that, considering all the evidence, produces a firm and abiding belief that it is highly probable the proposition at issue is true. In re Grant, 2013PR00074 (Hearing Bd. Dec. 28, 2015) (complaint dismissed). Clear and convincing evidence does not allocate the risk of error equally between the parties, but requires greater proof, qualitatively and quantitatively, from the Administrator. In re Derico, 09 CH 42 (Hearing Bd. Feb. 22, 2011) (complaint dismissed). The Administrator's burden is not met by suspicious circumstances. In re Herrmann, 2010PR00103 (Hearing Bd. Nov. 2, 2012) (complaint dismissed).
Dishonest conduct can be found where an attorney knowingly alters a document to contain false information. E.g. In re McLaughlin, 2012PR00053, M.R. 26136 (Sept. 25, 2013). However, a finding of dishonesty does not necessarily follow from the fact that an attorney presented a document which contained inaccurate factual statements. E.g. In re Kreisman, 08 CH 107 (Hearing Bd. Feb. 7, 2011) (complaint dismissed).
According to the Complaint, Respondent violated Rule 8.4(c) by falsely representing to Chase Bank that she was the president of the Association's Board, in order to gain access to the Association's account at Chase. The Complaint alleges Respondent did so by assisting Hull, as Respondent's agent, to draft minutes that falsely stated that Respondent was the president and by Respondent's own representations at Chase's Hyde Park branch.
The Administrator did not prove Respondent violated Rule 8.4(c). We found no evidence, particularly not at a clear and convincing level, that Respondent directed Hull in
changing the minutes, suggested that Hull should change the minutes, participated in changing the minutes or assisted Hull when Hull did so. Some evidence suggested Hull might have been at Respondent's office when Hull changed the minutes, although we did not find that testimony clear and convincing. Even if Hull changed the minutes at Respondent's office, we did not find evidence to show Respondent knowingly assisted Hull in doing so or even knew Hull was changing the minutes. Therefore, the Administrator did not prove this aspect of the charge under Rule 8.4(c).
We also did not find clear and convincing evidence to support the allegation that Respondent falsely represented herself as the president at Chase's Hyde Park branch. Further, we did not find clear and convincing evidence of dishonest intent by Respondent.
Testimony from Brooks was the only evidence of any oral statement by Respondent that she was the Association president. As the trier of fact, it is our responsibility to determine the credibility of witnesses and the weight to be given to their testimony. See Edmonds, 2014 IL 117696 at par. 35. Brooks acknowledged he was uncertain about details of his meeting with Respondent and Hull, and the circumstances as a whole caused us to doubt the reliability of Brooks's memory of that meeting. Significant time had passed, and the meeting likely would not have seemed noteworthy to Brooks at the time. Further, while Brooks testified he checked the Secretary of State's website and it showed Hull as the Association secretary, Brooks could not have determined that Hull was secretary from the Secretary of State's website. The information the Secretary of State had on file at that time would have shown Colebrook as Association secretary. The document which identified Hull as secretary was the Amended Annual Report; it had not yet been filed with the Secretary of State. In making the requested account changes,
Brooks relied on Hull's authority as secretary. The fact that Brooks was mistaken about how he went about determining this critical fact gave us additional reason to question his memory.
The only other evidence to support the theory that Respondent misrepresented her status was that a document, given to Brooks, showed Respondent as the Association president. However, we were not convinced that the information given to Brooks as a whole falsely represented that Respondent was the president.
For the reasons discussed above, it seemed likely that Brooks had the Amended Annual Report. Respondent testified that she gave Brooks the Amended Annual Report. We found her testimony credible on this point and corroborated by the circumstances. Earlier that day, Respondent had prepared the Amended Annual Report. The Amended Annual Report listed the Association officers based on the January 18, 2016 election, including Johnson as president. Therefore, Brooks had a document which accurately identified the president, and it was Respondent who gave him that document. These circumstances detract from the Administrator's theory that Respondent misrepresented her status in dealing with Chase.
Brooks was very familiar with the way Chase handled accounts for condominium associations. Therefore, we credited his testimony about Chase's practices and procedures. Brooks testified that Hull's authority as secretary was sufficient for account changes to be made and that a person did not need to be an officer to be a signer on the association's account. This was consistent with Respondent's understanding. In other words, there was no real reason for Respondent to misrepresent that she was the Association president and Respondent knew it.
While $75,000 was withdrawn from the Chase account, there was no evidence that Respondent used any of that money for her own purposes, or that anyone else did so. The funds were moved, to another account in the Association's name. The money was later used to pay for
necessary building repairs. There also was a legitimate reason to move the money, as special assessment funds were to be kept in a separate account.
We are concerned that minutes of the January 18, 2016 meeting were revised, to falsely reflect Respondent as Association president, and given to Chase. During the meeting at which the altered minutes were given to Brooks, Respondent and Hull were added to the account, and most of the money was withdrawn the next day. This sequence of events arouses reasonable suspicion. Particularly given the infighting in this condominium association, Respondent's behavior displayed poor judgment and a lack of the sensible business dealings we would expect from an attorney and experienced real estate investor.
However, professional discipline can be imposed only for misconduct that is within the scope of the Rules of Professional Conduct. Karavidas, 2013 IL 115767 at par. 103. The issue here is not whether Respondent behaved wisely or fully complied with principles of condominium law, but whether her behavior violated the Rules of Professional Conduct. See id.
Further, the charges are based on conduct completely separate from Respondent's role as an attorney. While a violation of Rule 8.4(c) can be based on such conduct, (see In re Moran, 2014PR00023, M.R. 27812 (Mar. 22, 2016)), discipline for conduct occurring outside an attorney-client relationship should be limited to situations in which the conduct violates the Rules of Professional Conduct by demonstrating a lack of professional honesty which renders that attorney unworthy of public confidence. Karavidas, 2013 IL 115767 at par. 78. Particularly in light of these standards, we found the Administrator's theory of dishonest behavior attenuated.
II. Respondent is charged with violating or attempting to violate the Rules of Professional Conduct, and knowingly assisting or inducing another to do so, or doing so through the acts of another, by assisting Hull, as Respondent's agent, to draft minutes that falsely stated that Respondent was the president of the Association's Board, in order to falsely obtain access to the Association's bank account, in violation of Rule 8.4(a).
There was not clear and convincing evidence that Respondent assisted Hull in drafting minutes that falsely represented Respondent's status on the Board or directed her in doing so. The Administrator did not prove that Respondent violated Rule 8.4(a).
B. Admitted Facts and Evidence Considered
We consider the evidence referenced in Section I B above.
C. Analysis and Conclusions
It is professional misconduct for a lawyer to violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another. Ill. Rs. Prof'l Conduct R. 8.4(a) (2010). Here, the charges under Rule 8.4(a) are based on the allegation that Respondent assisted Hull, as Respondent's agent, to draft minutes that falsely stated Respondent was the president of the Board, to obtain access to the Association's bank account.
The Administrator did not prove Respondent violated Rule 8.4(a). We base this conclusion primarily on the reasoning outlined above in Section I C, which we incorporate here.
In addition, according to our research, proving the alleged violation of Rule 8.4(a) required the Administrator to show some type of affirmative, knowing conduct by Respondent that prompted or aided in Hull's preparation of the false minutes. For example, in In re Novick, 2012PR00176, M.R. 27367 (Sept. 21, 2015), the attorney submitted a letter to a prospective employer, which the attorney knew contained false information as to Novick's employment
history. Novick had asked another person to prepare the letter, which Novick knew would contain false information. We did not find comparable conduct by Respondent here, in relation to the altered minutes. This provided additional grounds for our conclusion that the Administrator did not prove Respondent violated Rule 8.4(a).
For these reasons, we recommend that the Complaint be dismissed and Respondent discharged.
Patrick M. Blanchard
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 Hearing Board, approved by each Panel member, entered in the above entitled cause of record filed in my office onSeptember 29, 2017.
Kenneth G. Jablonski, Clerk of the
1 The bank statements in evidence show several payments to Crump Realty Group in addition its monthly fee as property manager. One such payment was for $1,500. The rest were for relatively small amounts. There are no bank records in evidence for months prior to December 2015. (Tr. 265; Resp. Ex. 6).
2 The check is not in evidence. Witness testimony described it as a certified check and as a cashier's check. (Tr. 175, 242).