Filed March 28, 2013
In re James Thomas Ball
Commission No. 09 CH 21
Synopsis of Review Board Report and Recommendation
This matter arises out of Respondent's attempts to obtain compensation after a vehicle he leased was towed and was either destroyed or sold by the City of Chicago. The Administrator filed a one count Complaint charging Respondent with making false statements in connection with the settlement of a claim Respondent filed against the City of Chicago in violation of Rules 4.1, 3.3, 8.4(a)(4) and 8.4(a)(5).
Following a hearing, the Hearing Board issued a report concluding that Respondent engaged in the misconduct alleged by the Administrator and recommending that Respondent be suspended for a period of three months. Both the Administrator and the Respondent filed exceptions to the Hearing Board's Report and Recommendation. Respondent challenged the findings of the Hearing Board and asked that the charges be dismissed. Both Respondent and the Administrator challenged the recommendation of the Hearing Board. The Respondent contended that a reprimand or censure was warranted should the Review Board conclude that Respondent engaged in misconduct. The Administrator requested that the Review Board recommend that Respondent be suspended from the practice of law for one year.
The Review Board upheld the findings of the Hearing Board. In determining the appropriate sanction recommendation, the Review Board noted that Respondent's dishonest conduct in knowing to a court and to an opposing party warranted a recommendation of a suspension. Given the mitigation presented by Respondent and given that the misconduct arose out of an isolated matter, the Review Board concluded that a three month suspension served the purposes of the disciplinary process.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
In the Matter of:
JAMES THOMAS BALL,
Commission No. 09 CH 21
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
This matter arises out of Respondent's attempts to obtain compensation after a vehicle he leased was towed and was either destroyed or sold by the City of Chicago. The Administrator filed a one count Complaint charging Respondent with making false statements in connection with the settlement of a claim Respondent filed against the City of Chicago in violation of Rules 4.1, 3.3, 8.4(a)(4) and 8.4(a)(5). The Hearing Board concluded that Respondent engaged in the misconduct alleged by the Administrator and recommended that Respondent be suspended for a period of three months. Both the Administrator and the Respondent have filed exceptions to the Hearing Board's Report and Recommendation. Respondent challenges the findings of the Hearing Board. Both Respondent and the Administrator challenge the recommendation of the Hearing Board. For the reasons stated below, we affirm the findings of the Hearing Board and also recommend that Respondent be suspended for a period of three months.
The Hearing Board's Report and Recommendation provides a detailed statement of its factual findings in this case. In summary, in approximately 1996, Respondent leased a 1996 Toyota 4Runner through Bank of America and insured the vehicle through Government Employees Insurance Company ("Geico"). As of November 2000, Respondent owed Bank of America approximately $25,000 on the lease. Pursuant to the Geico insurance policy, when Geico made a payment under the policy it became subrogated to the insured's rights of recovery against others, and the insured had an obligation to do whatever was necessary to secure Geico's rights and not do anything to prejudice those rights.
On or about November 1, 2000, the City of Chicago ("City") booted, seized and impounded Respondent's vehicle for unpaid parking tickets totaling approximately $2,000. Sometime thereafter, the vehicle was either destroyed or sold by the City of Chicago. On December 12, 2000, Respondent, who had years of experience dealing with insurance companies as a plaintiff's personal injury attorney, reported the loss to Geico. Respondent had several conversations with Geico representatives in late 2000 and early 2001. While the parties disputed the exact content of some of these conversations, Respondent agreed that he informed Geico he intended to sue the City of Chicago and was considering adding Geico as a party. Geico declined to be added as a plaintiff to any suit filed by Respondent. Respondent also agreed that Geico never stated, either verbally or in writing, that it was waiving its subrogation rights.
In early 2001, Dan Byrd, a clams adjuster with Geico, sent Respondent a reservation of rights letter, stating that Geico was not waiving any of its rights or admitting any obligations under Respondent's policy. Shortly thereafter, Geico asked Respondent if he had filed a lawsuit and Respondent replied that he had not yet done so, but was considering adding
Geico as a defendant if Geico continued to refuse to pay his claim. Respondent became belligerent and told Geico that he earned a living suing insurance companies. Geico replied that Geico was investigating the claim to determine if Respondent's policy covered the loss.
Respondent's claim was unusual. The vehicle in question had a value of substantially less than the amount owed on the lease and the vehicle supposedly had pre-existing body damage and had been disposed of before Respondent filed the claim. Geico was concerned that Respondent had a duty to mitigate any damage and had not moved quickly to claim his vehicle from the City. Ultimately, however, Geico determined to pay the claim. In April 2001, after determining the value of the vehicle as a total loss, Geico made payment to Bank of America in the amount of $15,118.36. Respondent conceded he was notified orally of the payment but denied receipt of a written communication regarding the payment.
Between April 2001 and November 2004, Respondent had no communications with Geico. In November 2001, Respondent brought suit against the City of Chicago for unjust enrichment in the conversion of his vehicle. Respondent did not inform Geico of the lawsuit. In or about January 2003, the City agreed to pay Respondent $21,000 and Respondent agreed to dismiss his claims. As part of the settlement agreement, with respect to a sentence listing the payees of the settlement check, Respondent crossed out the phrase "and lien claimants, if any". In addition, Respondent represented that "no other person or entity has or has had any interest in the claims or causes of action referred to herein, that [Respondent] and [his] attorney have the sole right and exclusive authority to execute this Agreement and receive the sums specified herein; and that he has not sold, assigned, transferred, conveyed, or otherwise disposed of any of the claims or causes of action referred to herein." Respondent did not advise the City of Geico's
payment to Bank of America or of Geico's subrogation interests. Respondent did not advise Geico of the settlement.
Geico did not learn of the settlement until November 2004, when a Chicago police officer requested information about Respondent's claim because Respondent was considering filing a class action lawsuit against the city. The officer informed Geico that Respondent was claiming that he had not been compensated by his insurance company. After Geico's counsel received and reviewed the settlement agreement, Geico determined that the company had not waived its subrogation rights. On February 5, 2005, Geico sent a letter to Respondent demanding payment of the $15,118.36 Geico had paid to Bank of America.
When Geico did not receive payment from Respondent, Geico filed a lawsuit against Respondent to recover the money that Geico had paid to Bank to America. During the litigation with Geico and also at his disciplinary hearing, Respondent contended that his suit against the City was for claims separate and apart from Geico's subrogated interests, although his suit against the City does not reflect other claims. Geico's suit against Respondent proceeded to trial and a judgment was entered against Respondent for the full amount of $15,118.36. In delivering the ruling, the Court stated that Respondent's representation in his settlement agreement with the City that "no other person or entity has or has had an interest in the claims or causes of actions referred to herein" was a "falsity." On appeal, the Illinois Appellate Court affirmed the judgment of the trial court. After the judgment was entered in favor of Geico, Respondent paid Geico $17,000 for the amount Geico paid to Bank of America and interest.
After considering the evidence, we agree with the Hearing Board's conclusion that Respondent's representation in the settlement agreement with the City of Chicago, as set
forth above, was false and Respondent knew of the falsity. As noted by the Hearing Board, "The plain language that no other entity ?has or has had' any interest in the claim asserted in the lawsuit is directly contrary to the provision in Respondent's insurance policy regarding Geico's subrogation rights upon its payment for a loss. Once Geico paid out on Respondent's claim, it stepped into the shoes of the insured, and could then pursue its subrogation rights if it chose to do so. See Trogub v. Robinson, 366 Ill. App. 3d 838, 846-67, 853 N.E.2d 59 (1st Dist. 2006) (Geico insurance policy gave insurer right to sue in subrogation but did not obligate insurer to file a subrogation action)."
Respondent contends that the Hearing Board erred in concluding that the Administrator proved that Respondent presented to the court a representation that Respondent knew was false. Before this Board, Respondent contends that he was asserting a valid legal position, even if the courts did not support his position. While Respondent argues that the Hearing Board gave undue weight to the findings of the trial court and appellate court in Geico's action against Respondent, the Hearing Board noted that the court's finding was not binding on the Board, but could be considered with the other evidence. See, In re Owens, 144 Ill. 2d 372, 378-79, 581 N.E.2d 633 (1991).
Respondent continues to contend, as he did at hearing, that Geico did not have a subrogation interest in the proceeds of his settlement. At hearing, Respondent argued that Geico did not have a subrogation interest because his lawsuit against the City was for other losses, such as his loss of personal property and his remaining liability to Bank of America on his lease. However, the Hearing Board noted that Respondent did not claim those losses in his lawsuit with the City, nor did he mention those losses to Geico. Thus, we agree that Respondent's suit against the City was not for claims separate and apart from the subrogated interests. Moreover, in
asserting in the settlement agreement that no entity has or has had an interest in the claim, Respondent ignores the fact that Bank of America, the owner of the vehicle, had an interest in the claim as well as Geico. Respondent now claims he was uncertain whether Geico had paid Bank of America and, if so, how much. Such uncertainty further belies his statement in the settlement agreement.
Respondent also continues to contend before this Board that Geico waived its subrogation rights. Respondent argues that he reasonably believed that Geico, by refusing to participate in the case against the City, "conducted itself in a manner inconsistent with any intention other than to waive subrogation." The Hearing Board concluded, and we agree, that Geico's refusal to be a party to a lawsuit brought by Respondent could not reasonably be interpreted by Respondent, who had experience working with insurance companies, as a waiver to pursue its own action if Geico paid out on Respondent's claim or to otherwise pursue its subrogation rights. Moreover, even after Geico stated it did not want to be a party to Respondent's lawsuit, Geico clearly stated in a subsequent letter to Respondent that Geico was not waiving any of its rights. Accordingly, this matter is not similar to the cases cited by Respondent in support of a waiver. Cf., Home Ins. Co. v. Cincinnati Ins. Co., 213 Ill.2d 307, 821 N.E.2d 269 (2004) and Chicago Hosp. Risk Pooling Program v. Illinois State Med. Inter-Ins. Exch., 397 Ill.App.3d 512, 925 N.E.2d 1216 (2010).
In reaching our conclusion that Respondent knowingly made a false statement of material fact to the City and to the court in violation of Rule 4.1 and 3.3, we give deference to the Hearing Board's assessment of the witnesses' demeanor and credibility. In re Spak, 188 Ill.2d 53, 719 N.E.2d 747, 754 (1999). The factual findings of the Hearing Board are entitled to deference, and they should not be disturbed unless they are against the manifest weight of the
evidence. In re Timpone, 157 Ill.2d 178, 196, 623 N.E.2d 300 (1993). Motive and intent are rarely susceptible to direct proof and must generally be inferred from the attorney's conduct and the surrounding circumstances. See, In re Stern, 124 Ill.2d 310, 315, 529 N.E.2d 562, 565 (1988). In assessing an attorney's conduct, we are not required to be naive, impractical, or blind to the intent apparent from the evidence. In re Krasner, 32 Ill.2d 121, 127, 204 N.E.2d 10, 13(1965). We can find no basis to disturb the Hearing Board's carefully considered findings.
We also see no reason to disturb the Hearing Board's finding that, in looking at the totality of Respondent's actions, Respondent violated Rule 8.4(a)(4) by engaging in conduct involving dishonesty, fraud, deceit and misrepresentation. We agree with the Hearing Board that Respondent's failure to provide Geico with key information regarding his actions against the City of Chicago prevented Geico "from asserting a possible roadblock to his own financial gain." Finally, we uphold the conclusion that Respondent's conduct was prejudicial to the administration of justice in violation Rule 8.4(a)(5), as Geico was forced to bring a lawsuit against Respondent to recover the payment Geico made to Bank of America.
In recommending a sanction, we are mindful that the purpose of the attorney disciplinary system is not to punish the attorney for his misconduct, but "to protect the public, maintain the integrity of the legal profession, and protect the administration of justice from reproach." In re Winthrop, 219 Ill. 2d 526, 559, 848 N.E.2d 961, 981(2006). In determining the appropriate sanction, we consider the nature of the misconduct charged and proved, and any aggravating and mitigating circumstances shown by the evidence. In re Gorecki, 208 Ill. 2d 350, 360-61, 802 N.E.2d 1194, 1200 (2003). While the Hearing Board's recommendation is advisory,
we too strive to recommend a sanction that is "consistent with those imposed in other cases involving comparable misconduct." In re Chandler, 161 Ill.2d 459, 472, 641 N.E.2d 473 (1994).
In mitigation, Respondent has not been previously disciplined and he cooperated in the proceedings. Two character witnesses testified on his behalf. The Hon. Edward Washington, judge in the Circuit Court of Cook County, testified that Respondent was truthful when appearing before him, that he had a good reputation, and that he was an excellent lawyer. Attorney Patricia Nowak testified that she has been an opposing counsel on cases with Respondent and has always found Respondent to be fair and aboveboard in his dealings with her. She testified that Respondent has a reputation for being honest.
Respondent has provided pro bono legal services to individuals and groups. He has represented pro bono a group of indigent farmers in Ohio regarding a tax issue, a children's art gallery, a family who was forced out of their home for delinquent rent, and elderly persons through Resurrection Home Health. He is not currently practicing law. We also note in mitigation that Respondent's conduct did not involve the representation of a client and arises out of a private dispute essentially concerning a personal debt.
While the Administrator has requested that we consider various allegations of additional dishonesty as aggravation, we give the appropriate deference to the Hearing Board's consideration of this evidence and to their accompanying credibility findings. Accordingly, we do not consider these allegations as aggravating evidence when making our recommendation for a sanction.
Respondent engaged in knowing dishonesty to a court and to an opposing party and his misconduct is serious enough to warrant a recommendation of a period of suspension, as opposed to a censure. However, Respondent's isolated misconduct, particularly given
consideration of the mitigation, warrants less than a recommendation of a suspension of one year, as suggested by the Administrator. The Hearing Board relied on a number of cases in support of a three month suspension, including In re Heyl, 96 CH 690, M.R. 12944 (Nov. 26, 1996)(three month suspension for falsely reporting the date of an accident to the attorney's insurer so the uninsured driver of the other car could obtain insurance and testifying in court to the false date) and In re Grosky, 96 CH 624, (Review Bd., May 13, 1998), No. M.R. 15043 (Sept. 28, 1998)(three month suspension for preparing and sending a letter containing false information to opposing counsel in an effort to mislead the opposing counsel). We agree that a three month suspension recommendation properly recognizes the seriousness of Respondent's misconduct, serves the purposes of the disciplinary process, and is consistent with the precedent.
We affirm the findings of fact and conclusions of misconduct as found by the Hearing Board. We recommend that Respondent, James Thomas Ball, be suspended from the practice of law for three months.
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 March 28, 2013.
Kenneth G. Jablonski, Clerk of the