Filed October 14, 2010
In re Larry E. Smith
Commission No. 07 CH 71
Synopsis of Review Board Report and Recommendation
The Administrator-Appellee filed a one count complaint against Respondent-Appellant Larry E. Smith, charging him with misconduct related to his improper notarization of four documents. Specifically, the complaint charged him with committing a criminal act, by violating 5 ILCS 312/6-102 and 5 ILCS 312/7-105, that reflected adversely on his honesty, trustworthiness or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional Conduct; engaging in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4); and engaging in conduct tending to defeat the administration of justice or to bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770. Respondent admitted a few of the factual allegations and denied a few of them. He neither admitted nor denied most of them, claiming that he lacked sufficient information to do so. He denied all of the allegations of misconduct.
The Hearing Board found that Respondent committed all of the misconduct charged in the complaint. It recommended that Respondent be suspended for a period of nine months.
The case was before the Review Board on the exceptions of Respondent, who raised procedural objections and objected to the Hearing Board's recommended sanction. The Administrator argued that the Hearing Board's findings and its recommended sanction should be affirmed.
The Review Board affirmed the Hearing Board's findings of fact and of misconduct, except that as the Hearing Board had determined that there was not sufficient proof that Respondent had committed a criminal act, the Review Board reversed the Hearing Board's finding that Respondent had violated Rule 8.4(a)(3). The Review Board recommended that Respondent be censured.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
LARRY E. SMITH,
Commission No. 07 CH 71
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
The Administrator-Appellee filed a one-count complaint against Respondent-Appellee Larry E. Smith, charging him with misconduct involving the improper notarization of two warranty deeds and two grantor/grantee statements. The complaint alleged that Respondent committed a criminal act, by violating 5 ILCS 312/6-102 and 5 ILCS 312/7-105, that reflected adversely on his honesty, trustworthiness or fitness as a lawyer in other respects, in violation of Rule 8.4(a)(3) of the Illinois Rules of Professional Conduct; engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4); and engaged in conduct tending to defeat the administration of justice or to bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770. Respondent admitted a few of the factual allegations and denied a few of them. He neither admitted nor denied most of them, claiming that he lacked sufficient information to do so. He denied all of the allegations of misconduct.
The Hearing Board found that the Administrator had proved by clear and convincing evidence that Respondent committed all of the charged misconduct. After
consideration of all the circumstances, including Respondent's prior discipline, the Hearing Board recommended that he be suspended for nine months.
The case is now before the Review Board on exceptions filed by the Respondent, who raises procedural objections and objects to the Hearing Board's recommended sanction. The Administrator argues that the Hearing Board's report and recommendation, including its recommended sanction, should be affirmed.
The facts necessary for the Review Board's determination are summarized below.
In 1960, Irma Nicholson became the owner of a half interest in a parcel of real estate located at 1533 S. Spaulding in Chicago, (the Spaulding property). She owned the property as a tenant in common with her relatives, Frank and Frances Thomas, who owned the other half interest.
Irma Nicholson died in 1981, survived by one son, William Nicholson, Jr. The Thomases also died, leaving one daughter, Margaree Mason. William Nicholson died on November 11, 2000. His closest living relatives were five cousins, Mason, Loretta Robinson and three others. Robinson contacted the other four cousins when Nicholson died and told them that the property would have to be probated, as none of the previous owners left a will.
Tijuana Atwood was Loretta Robinson's great niece. On or about July 19, 2001, Atwood retained Respondent to prepare a small estate affidavit for her concerning Nicholson. The affidavit stated that Nicholson died without a will, leaving Atwood as his only heir. She was therefore entitled to 100% of his estate. The only property listed in the affidavit was a savings account at TCF Bank. There was no indication that Nicholson owned any real property. The undated affidavit was signed by Atwood, and her signature was notarized by Respondent.
After the affidavit was executed, Atwood asked Respondent to do a title search concerning the Spaulding property. The tract index search by Chicago Title Insurance Company, which Respondent's office requested on July 23, 2001 did not show William Nicholson's name. Instead, it showed that the property belonged to Irma Nicholson (deceased) and the Thomases. Atwood told Respondent that the Thomases were deceased relatives.
According to Respondent, Atwood brought Loretta Robinson and Margaree Mason to his office and asked him to prepare warranty deeds and grantor/grantee statements concerning the Spaulding property. Respondent prepared a deed for each of them, stating that they conveyed their interest in the property to "Tyuana Atwood" for $10.
On August 8, 2001, Respondent notarized the signatures on both deeds by signing notary blocks stating that Robinson and Mason,
personally known to me to be the same person(s) whose name(s) is (are) subscribed to the foregoing instrument, appeared before me this day in person, and acknowledged that he/she (they) signed, sealed and delivered the said instrument as his/her (their) free and voluntary act, for the uses and purposes therein set forth, including the release and waiver of the right of homestead.
The signature of Loretta L. Robinson was written, "Lorretta L. Robinson." The signature of Margaree Mason was written "Marguerite Mason." Respondent did not think it was strange that Mason's signature was different from her printed name.
Respondent also prepared a grantor/grantee statement to accompany each deed. Robinson's and Mason's signature as grantors, and Atwood's as the grantee were notarized by Respondent on August 28, 2001, with statements that the documents were subscribed and sworn to before him on that date. The deeds, with the grantor/grantee statements, were recorded by another attorney in Respondent's office.
In his sworn statement, Respondent stated that he did not prepare any of the documents and did not know who did. He denied that Atwood had appeared before him to sign the grantor/grantee statement, and thought that another attorney in his office who had been working on her case had asked him to notarize her signature.
In his answer to the complaint, Respondent admitted that he did not see either Robinson or Mason sign the warranty deeds. He neither admitted nor denied the allegations that he prepared the deeds, notarized the signatures, prepared the grantor/grantee statements or notarized the signatures on them, and neither admitted nor denied the allegations that statements that the parties had signed the documents before him were false.
While he presented no evidence in support of his claim, Respondent testified at the hearing that he had been diagnosed with an anxiety disorder, and that he was taking Paxil at both the time of his sworn statement and his answer to the complaint. Respondent explained that this had resulted in some memory problems. Six years after the fact, he had not been able to really remember what had happened. He told the truth as he remembered it1, but now that he was no longer on the medication and he had reviewed everything, he realized that in fact, he had prepared the documents. He also realized that Robinson and Mason must have appeared before him, as that was what the Notary Act required.
Loretta Robinson disagreed. She testified that she was the cousin of William Nicholson, but it was not her signature on the warranty deed. She had not authorized anyone to sign the deed for her. She had not had any contact with Respondent regarding the transfer of the Spaulding property, and had not appeared before him on August 8, 2001 to sign the grantor/grantee statement.
Respondent testified that he later realized that Atwood "first came in and said one thing and then later came in and said another." Initially she told him that Nicholson had no other heirs and no property. He explained that if she had said that Nicholson owned real property, the estate would have had to be probated.
When Atwood came to him concerning the Spaulding property, Respondent referred her to Charles Allen, another attorney in his office, as he did not handle real estate. Atwood contacted Allen in January 2002, as she had a signed contract to sell the property, and Allen agreed to represent her concerning the sale.
Allen prepared an affidavit of heirship concerning Frank and Frances Thomas, which was required by the title company. The affidavit stated that Loretta Robinson was William Nicholson's only living heir, and that she had conveyed her interest in the Spaulding property to Atwood, as had Margaree Mason. The affidavit was signed by Mason. To the best of Allen's knowledge, she actually appeared before him to sign the affidavit, which he notarized.
On March 5, 2002, Atwood sold the property for $72,000. She received $66,346.36 from the sale. After making some improvements to the property, the buyer resold it on June 17, 2002 for $172,900.
Sometime in 2005, Loretta Robinson noticed that the Spaulding property appeared to be occupied and to have undergone some renovations. She learned at the Recorder of Deeds Office that Atwood "had somehow sold the property." Robinson never filed suit to reclaim the property, as legally, neither she nor Mason had actually owned it. She never received any of the proceeds from the sale.
In In re Smith, 04 CH 78 (Hearing Bd., July 18, 2006), affirmed, (Review Board, Aug. 2, 2007), Respondent's petition for leave to file exceptions denied, No. M.R. 21877 (Mar. 17, 2008), Respondent was suspended for two years, with the second year stayed by probation subject to several conditions, after he admitted essentially all of the facts alleged in a nine-count complaint. Respondent's misconduct primarily involved his repeated failure to appear in court when his clients' cases were scheduled, and failure to advise his clients when those cases were subsequently dismissed. As a result, several of his clients' cases became time-barred. Respondent was found to have engaged in a variety of misconduct that included neglect, failure to keep his clients reasonably informed or to promptly respond to reasonable requests for information, failure to withdraw from representation of a client before a tribunal when his mental or physical condition rendered it unreasonably difficult for him to effectively carry out his employment, conversion and conduct involving dishonesty, fraud, deceit or misrepresentation.
Respondent first objects to the Hearing Board's decision to reserve ruling on his motion for directed finding.
As Counsel for the Administrator's final witness was not scheduled to arrive until after lunch, she suggested either they recess for lunch early, or take evidence out of order. After she discussed it further with Respondent, Respondent advised the Chairman that they wished to proceed with his case in chief, which consisted of his own testimony.
At the conclusion of his testimony, the hearing recessed for lunch, and then resumed with the Administrator's final witness. The Administrator rested and Respondent moved for a directed finding. His argument was based on the Administrator's failure to charge
the pertinent subsections of the Notary Act statutes and on the purported lack of proof that he improperly notarized the signatures, since Loretta Robinson testified that it was not her signature. The Chairman stated that the panel would reserve ruling and take the motion with the remainder of the case.
Respondent now argues that the Hearing Board's failure to rule on his motion was reversible error. To establish that an error is reversible, it must be substantially prejudicial and therefore unduly influence the outcome of the matter. Schaffner v. Chicago & North Western Transportation Co. 161 Ill.App.3d 742, 754, 515 N.E.2d 298, 113 Ill. Dec. 489 (1st Dist. 1987), aff'd, 129 Ill.2d 1, 541 N.E.2d 643, 133 Ill. Dec. 432 (1989). Respondent does not suggest how a ruling on the motion would have changed the outcome of the proceedings and we conclude that no prejudice occurred. The court has not required that a particular subsection of the Notary Act be specified in a complaint charging a violation of Rule 8.4(a)(3) on these grounds. See, e.g., In re Ravago, 06 CH 71 (Hearing Bd., July 8, 2008), Administrator's motion to approve and confirm allowed,, M.R. 22600 (Nov. 18, 2008). Proof of his improper notarization was provided by Respondent's admission in his answer to the complaint that he did not see either Robinson or Mason sign the warranty deeds.
Without a showing of prejudice, Respondent raises no more than a technical objection. Technical objections will not shield an attorney from discipline. In re Yamaguchi, 118 Ill.2d 417, 424, 515 N.E.2d 1235, 113 Ill. Dec. 928 (1987).
Next, Respondent objects to the Hearing Board's finding that he violated Rule 8.4(a)(3). The complaint alleged that he did so by violating 5 ILCS 312/6-102 and 5 ILCS 312/7-105.
5 ILCS 312/6-102 provides that a) in taking an acknowledgement, b) in taking a verification upon oath or affirmation, or c) in witnessing or attesting to a signature, a notary public must determine "either from personal knowledge or satisfactory evidence," that the person signing the document is actually the person he claims to be. Subsection d) of the statute further defines "satisfactory evidence" as personal knowledge, the oath or affirmation to the notary by a person with personal knowledge, or identification documents.
According to 5 ILCS 312/7-105, a notary who commits official misconduct is guilty of a) a Class A misdemeanor, if his actions were knowing and willful, and b) a Class B misdemeanor, if his actions were reckless or negligent. Respondent argues that as the complaint did not indicate which subsections of the statutes had been violated, it did not charge misconduct with enough specificity to enable him to prepare a defense to the charges. Respondent claims that he was not adequately informed as to what misconduct he was alleged to have committed and therefore, it would have been necessary for him to defend himself against all of the charges. Additionally, Respondent argues that without stating the particular subsections of both 5 ILCS 312/6-102 and 5 ILCS 312/7-105, the complaint failed to state a cause of action.
As previously noted, the court has approved findings of misconduct based on these exact charges. In re Ravago, supra, 06 CH 71; In re Blum, 08 CH 22, petition for discipline on consent allowed, M.R. 22969 (Mar. 16, 2009). We therefore reject Respondent's argument, but reverse the Hearing Board's findings on this count for reasons of our own.
Rule 8.4(a)(3) states, in part, that "[a] lawyer shall not…commit a criminal act." Therefore, in our view, a finding by either the Hearing or Review Board that a criminal act was committed should not be made in the absence of a criminal conviction rendered by a court of law.
A Hearing or Review Board panel may find, based on clear and convincing evidence, that a lawyer violated a statute that has criminal penalties, and may sanction him based on that violation if his conduct was contrary to a professional conduct rule or established precedent. But we conclude that it cannot take the additional step of finding him guilty of "a criminal act" if there has been no court rendered conviction. The reasons for this conclusion are implicit in our system of justice. A criminal defendant is entitled to trial by jury and his guilt must be proved beyond a reasonable doubt, not by clear and convincing evidence.
Supreme Court precedent supports our conclusion. See, for example, In re Harris, 93 Ill.2d 285, 292-94, 443 N.E.2d 557, 66 Ill. Dec. 631 (1982), which states:
Attorney disciplinary proceedings are not criminal in nature….a disciplinary proceeding is not to be equated with a criminal proceeding, nor is the respondent attorney entitled to the same specificity as to the offense charged, or to the full panoply of rights afforded a criminal defendant.
The point we make is illustrated most vividly by In re Ettinger, 128 Ill.2d 351, 368-69, 538 N.E.2d 1152, 131 Ill. Dec. 596 (1989). In that case a lawyer who had been acquitted of bribery in a federal criminal trial was subsequently disciplined for the same conduct. The Supreme Court affirmed the principal that "an acquittal in a criminal proceeding against an attorney will not act as a bar to subsequent disciplinary proceedings based upon substantially the same conduct," pointing out that "the burden of proof in the two proceedings is different."
Although the issue of whether the lawyer had committed "a criminal act" never arose in the disciplinary proceeding in that case, clearly no Hearing or Review Board panel, in the face of a criminal court acquittal, could have found that the lawyer had committed "a criminal act." And so it must be with all cases. In short and from a legal perspective, it simply cannot be known whether "a criminal act" has been committed until there has been a conviction rendered by a court of law.
Because there was no evidence presented that Respondent was convicted of a crime with respect to the issues in this disciplinary case, we conclude that the Hearing Board erred in finding a violation of Rule 8.4(a)(3).
Even if we did not conclude that a violation of Rule 8.4(a)(3) requires a court rendered conviction, we still would reverse the Hearing Board's finding on this count because, in effect, the Hearing Board determined that there was inadequate evidence of a criminal act. This conclusion results from the Hearing Board's finding that there was "not…sufficient evidence…to establish Respondent engaged in ‘official misconduct…." In re Smith, 07 Ch 71 (Hearing Bd., Apr. 20, 2009) at 15.
A finding of "official misconduct" is a prerequisite under 5 ILCS 312/7-105(a) or (b) for establishing the commission of a crime by a notary public. That statute, in both subsections, says that "[a] notary public…who commits any official misconduct is guilty of a…misdemeanor." The term, "official misconduct," has its own specific elements which, with respect to notary publics, are defined in two separate statutes, 5 ILCS 312/7-104 and 720 ILCS 5/33-3.
The Hearing Board only found that Respondent improperly notarized a document, in violation of 5 ILCS 312/6-102. That statute, previously set forth, does not, by itself, render an improper notarization a criminal act. As the Hearing Board concluded that there was not sufficient evidence to find that Respondent engaged in "official misconduct" as defined in the statutes, there was necessarily no finding of "a criminal act" to establish a violation of Rule 8.4(a)(3).
No objection has been raised concerning the Hearing board's findings that Respondent violated Rule 8.4(a)(4) and Supreme Court Rule 770. Those findings are supported by the evidence and therefore, they are affirmed. We turn next to the appropriate sanction.
The Hearing Board recommended that Respondent be suspended for nine months, but that recommendation is advisory only. In re Hopper, 85 Ill.2d 318, 325, 423 N.E.2d 900, 53 Ill. Dec. 231 (1981). In making its own recommendation, the Review Board must consider the case based on its own particular facts and circumstances, yet keep in mind that the purpose of discipline is not to punish the individual respondent, but to protect the public, to maintain the integrity of the profession and to protect the administration of justice from reproach. In re Timpone, 157 Ill.2d 178, 197, 623 N.E.2d 300, 191 Ill. Dec. 55 (1993). Mitigating and aggravating factors are relevant. In re Witt, 145 Ill.2d 380, 398, 583 N.E.2d 526, 164 Ill. Dec. 610 (1991).
The Hearing Board found in mitigation that there was no evidence that Respondent obtained any personal gain or benefit from his misconduct. It found that his misconduct was aggravated by his prior discipline, although the misconduct for which he was previously disciplined occurred after the misconduct in this case. It stated that Respondent should have had "a heightened awareness of his obligation to conform to the Illinois Rules of Professional Conduct after his previous disciplinary matter, yet Respondent displayed a troubling lack of candor in his contradictory testimony during these proceedings." In re Smith, 07 CH 71 (Hearing Bd., Apr. 20, 2009) at 15. We note that while Respondent gave conflicting statements regarding what he remembered, the differences were essentially immaterial. All of his statements amounted to admissions that the notarization was improper. Therefore, we conclude that Respondent's lack of candor does not weigh heavily as an aggravating factor.
Respondent's prior discipline is a legitimate aggravating factor in determining the appropriate sanction. In re Guilford, 115 Ill.2d 495, 502, 505 N.E.2d 342, 106 Ill. Dec. 36 (1987). While he is not a recidivist in the ordinary sense, the fact that this misconduct occurred before the misconduct for which he has already been disciplined does not prohibit the Review Board from recommending "the discipline it considers appropriate and which would have been imposed had the charges been presented in their normal sequence or simultaneously." In re Teichner, 104 Ill.2d 150, 167-68, 470 N.E.2d 972, 83 Ill. Dec. 552 (1984).
Respondent's misconduct in this case consisted of the improper notarization of four documents, in July and August of 2001. The nine counts of misconduct that he was found to have committed in his previous case occurred in 2002-2004. We therefore view these charges as the first in a series of mishandled cases and conclude that had they been considered simultaneously with the charges of the earlier complaint, they would not have required a sanction more severe than two years suspension, with the second year stayed by probation with several conditions that was imposed in that case. We take judicial notice of the fact that Respondent has satisfactorily complied with the conditions of probation in that case, which terminated on April 7, 2010. People v. Brown, 71 Ill.2d 151, 155, 374 N.E.2d 209, 15 Ill. Dec. 774 (1978).
Had Respondent's improper 2001 notarization been considered in a separate disciplinary case before the misconduct that followed it in 2002-2004, we conclude that censure would have been an appropriate sanction for the improper notarization. We have found guidance in reaching this determination from the following two cases:
In In re Walner, 119 Ill.2d 511, 519 N.E.2d 903, 116 Ill. Dec. 688 (1988), when the respondent lost track of his client after the client moved out of state, he agreed to a settlement of his client's personal injury case, without the client's authorization. Walner had an employee
sign the client's name to the release form, and another employee notarize the signature. Walner had not previously been disciplined. He was censured. The court noted that his actions created a substantial risk of harm to his client.
In In re Hoffman, 07 CH 88 (Hearing Bd., Aug. 21, 2008), the respondent improperly notarized a document in which a woman gave power of attorney to her son. Hoffman attested that he had witnessed her sign the document, when in fact she had not appeared and the respondent did not ask her whether she had signed it. Her son used the document to transfer approximately $40,000 from her bank accounts, and she was required to incur legal costs to revoke the power of attorney and reclaim the funds. Hoffman had no prior misconduct and received no personal gain. He was reprimanded and required to attend a professionalism seminar.
Therefore, after consideration of all the circumstances, we affirm the Hearing Board's findings of fact and findings that the Respondent violated Rule 8.4(a)(4) and Supreme Court Rule 770. We reverse its finding that Respondent committed a criminal act, in violation of Rule 8.4(a)(3). We recommend that Respondent, Larry E. Smith, be censured.
Date Entered: 14 October 2010
Stuart R. Lefstein2
1 The Hearing Board found that there was "no evidence Respondent gave false statements to the ARDC about his misconduct prior to the hearing." In re Smith, 07 CH 71 (Hearing Bd., Apr. 20, 2009) at 18.
2 Panel member Stuart R. Lefstein participated in the deliberation and decision in this case prior to his retirement from the Review Board.