Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation and good law / bad law checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Ligon v. Rees
Citations: 364 S.W.3d 28; 2010 Ark. 225; 2010 Ark. LEXIS 264Docket: 09-556
Court: Supreme Court of Arkansas; May 13, 2010; Arkansas; State Supreme Court
Stark Ligon, Executive Director of the Supreme Court Committee on Professional Conduct, appeals the Committee's order suspending attorney Frank David Rees's law license for thirty days, to run consecutively to a prior forty-two-day suspension. Ligon raises seven points of appeal, asserting that the suspension is insufficient given Rees's proven misconduct and that the Committee erred in not finding violations of various Model Rules of Professional Conduct, specifically Rule 8.4(c) in several counts and Rule 1.2(a) in others. Additionally, he claims the Committee's failure to vote on Count H.2 constitutes error. The Supreme Court affirms the Committee's findings but modifies Rees's suspension to one year, crediting him for the thirty days already served. The underlying incident involves Teahna Mooney, who suffered significant injuries in a car accident while a passenger in a vehicle driven by Emerson George, the at-fault driver. Mooney, in bankruptcy at the time, hired attorney David Throesch to represent her claims against George and others. Subsequently, she signed a personal injury contract with Rees, who represented her until he filed to substitute counsel. Notably, Rees also represented George in a separate matter without disclosing this conflict to either party, violating professional conduct rules. Furthermore, Rees arranged for Mooney to receive prohibited financial assistance through an apartment rental from his brother, adding to the ethical violations. Ms. Mooney reported no income and unemployment on her application form. She met with Robert Rees on August 26, 2003, and subsequently signed a one-year Lease Agreement with a corporation he owned, along with a Promissory Note for $9,866.67, which included $700 monthly rent, a $350 deposit, and a $1,000 pet deposit, all due in twelve months. Rees communicated with his brother, David Rees, acknowledging that the Note would be paid from the proceeds of Ms. Mooney's lawsuit, and David agreed to protect Robert's lien from her settlement. Ms. Mooney vacated the apartment by February 2005, although her daughter may have remained until May 2005. Robert Rees later submitted a final bill for $21,316.67 to Arlon Woodruff, which included late charges incurred during the lease period. It was understood from the beginning that Ms. Mooney would not pay rent until her lawsuit was resolved. In November 2005, Woodruff settled Robert Rees's claim for $15,000 from Mooney's recovery. On the same day she met Rees, he arranged and personally guaranteed a $7,500 loan for her, later renewing it in August 2004, for which he paid the accrued interest. This loan was paid off in November 2005 from her lawsuit recovery. However, these financial arrangements constituted prohibited assistance under Model Rule 1.8(e) (2002). In December 2003, Ms. Mooney accused Rees of unwanted sexual harassment, which he acknowledged. A Release was signed by her on September 20, 2004, covering the harassment and malpractice allegations, which she claimed was signed under duress. She received a $1,000 check at that time but was dissatisfied with the agreement and did not negotiate the check until November 2004. A new Release limited to the sexual harassment claim was drafted, providing $4,000 to Ms. Mooney, and did not release Rees from liability for malpractice. A modified Release was sent to Woodruff on October 26, 2004, and a check for $3,000 was issued on November 1, 2004. Ms. Mooney signed the modified Release and deposited both checks on November 15, 2004, but no signed copy of the $4,000 Release has been produced. Mr. Woodruff provided the Office of Professional Conduct with a two-page Affidavit and Release for Ms. Mooney, drafted in Rees's law office but never signed. The affidavit asserts that neither Rees nor Ms. Mooney engaged in inappropriate behavior. Woodruff's email dated February 21, 2007, confirms the affidavit's origin. Emerson George sought Rees's representation after his wife suffered a medical incident on January 23, 2004. On January 30, 2004, Rees entered into a Temporary Agreement with George, allowing 90 days for investigation of a potential medical negligence claim, with a contingency fee of 45% upon recovery. Rees failed to inform George that he was already representing Ms. Mooney, whose lawsuit named George as a defendant. Mrs. George passed away on April 12, 2004, and on March 26, 2004, Rees filed a complaint for Ms. Mooney against multiple defendants, including Emerson George. George was served on April 5, 2004, and upon receiving the suit papers, he brought them to Rees, who then realized he had inadvertently sued another client. The Memphis law firm Glassman, Edwards, Wade, Wyatt entered the case for Sonrise and George. On April 26, 2004, Rees communicated with opposing counsel about the conflict, acknowledging he could not represent George during the Mooney case. The 90-day period of the Temporary Agreement would end around April 30, 2004. On July 20, 2004, Rees informed George that he did not believe there was a viable medical malpractice claim. By August 2004, Rees was considering deposing George in the Mooney lawsuit, set for trial on November 8, 2004. On September 7, 2004, Rees provided opposing counsel with an affidavit detailing his concurrent representation of George and Mooney and filed a motion for voluntary nonsuit with prejudice against George in the Mooney case, which was approved by Judge Larry Boling on the same day. Emerson George sought legal representation from attorney Kent Rubens due to a conflict of interest involving Rees, who was formerly George's attorney and was representing Ms. Mooney in a lawsuit against George. In early September 2004, Rees dismissed George from the case with prejudice without adequately informing Mooney of the implications. On September 9, 2004, Rees replaced himself with Arlon Woodruff as Mooney's attorney for her upcoming trial. This dismissal jeopardized Mooney's case against George's employer, Sonrise, leading to Sonrise filing a motion to dismiss based on respondeat superior. However, on November 1, 2004, Woodruff successfully argued to reinstate George as a defendant, overturning Rees's dismissal. During this hearing, the judge inquired about the reporting of Rees's conflict, which was being handled by George and Rubens. Subsequently, a formal complaint against Rees was filed in March 2007, citing multiple violations of the Model Rules of Professional Conduct. Rees denied several allegations but admitted to violating certain rules regarding conflicts of interest and improper referrals. A proposed disciplinary resolution involving a license suspension was submitted but ultimately rejected by the court for further review. On July 25, 2008, Mr. Rees received a notification regarding the findings and order from a Committee panel, along with his right to request a public hearing before a different panel. Subsequently, on August 11, 2008, he requested a de novo hearing and a stay of the panel's action. The Committee scheduled hearings for several pending matters, including this case, to take place from February 3-5, 2009, with a pretrial conference occurring on January 13, 2009. The Committee's findings and order were filed with the court on February 23, 2009, which included the following conclusions regarding Mr. Rees's conduct: 1. Mr. Rees did not violate Model Rule 1.2(a) concerning the allegations in Counts A.1, A.2, and A.3. 2. He violated Model Rule 1.4(b) (Count B.1) for failing to inform his client, Emerson George, about a prior representation that posed a conflict of interest, thereby denying George the opportunity to seek alternative counsel for potential medical negligence claims related to his late wife's death. 3. He also violated Model Rule 1.4(b) (Count B.2) for not advising Teahna Mooney about his representation of Emerson George, which created a conflict of interest that could adversely affect her litigation. 4. Mr. Rees violated Model Rule 1.7(a) (Count C.1) by accepting representation of Emerson George while already representing Teahna Mooney in a directly adverse matter, without informing Mooney of the conflict, which prevented her from giving informed consent. These findings indicate significant breaches of professional conduct rules regarding client communication and conflict of interest. A lawyer must not represent a client if doing so directly conflicts with another client's interests unless the lawyer reasonably believes that the representation will not adversely affect either client and both clients consent after consultation (Model Rule 1.7(a)). Frank David Rees violated Model Rule 1.7(b) by representing both Emerson George and Teahna Mooney simultaneously. His obligations to Mooney materially limited his ability to fairly represent George, particularly since he would soon be required to sue George on behalf of Mooney. George was not informed of Rees's prior representation of Mooney and thus could not consent to the dual representation. Rees's actions constituted multiple violations of Model Rule 1.7(b) as he could not adequately represent both clients due to conflicting responsibilities, and there was no informed consent from Mooney after consultation. Additionally, Rees violated Model Rule 1.8(e) by improperly facilitating financial assistance to Mooney through an apartment provided by his brother during her litigation, which was prohibited under ethical rules. This arrangement involved a rental agreement understood to be repaid from any recovery in Mooney's litigation, with Rees referring her to his brother for this assistance. A negotiated sum of $15,000 was paid to Robert Rees related to the apartment used by Ms. Mooney, while other service providers remained unpaid. Frank David Rees’s actions violated Model Rule 1.8(e), which prohibits lawyers from providing financial assistance to clients regarding pending or contemplated litigation, with limited exceptions. On August 26, 2003, Rees facilitated a personal loan of $7,575.00 for Ms. Mooney from Regions Bank, which he personally guaranteed despite her unemployment and lack of assets to repay the loan. This constituted prohibited financial assistance. On August 24, 2004, the loan was refinanced for $7,675.00, also guaranteed by Rees, with $7,575.00 used to pay off the prior loan. This renewal further violated Rule 1.8(e). Additionally, on August 30, 2004, Rees Law Firm issued a check for $438.40 to pay interest on Ms. Mooney's loan, again constituting financial assistance prohibited by the same rule. Each of these actions was unanimously determined to be in violation of Model Rule 1.8(e). Frank David Rees was found to have violated Model Rule 1.8(h) due to his actions on September 20, 2004, when he or his agent obtained a general release of liability from his client, Teahna Mooney, in exchange for a payment that escalated from $1,000 to $4,000. This release included claims of sexual harassment, assault, and outrage. Rees failed to provide Ms. Mooney with written advice regarding the appropriateness of independent legal representation concerning the release, which she executed under duress. Conversely, Rees was unanimously found not to have violated Model Rule 8.4(c) across several counts (G.1 to G.5). However, he did violate Model Rule 8.4(d) due to legal maneuvers that complicated Ms. Mooney's case against Sonrise, necessitating additional court time and potentially jeopardizing her case after a non-suit order against a defendant was filed on September 8, 2004. Following these findings, the Committee suspended Rees's law license for thirty days, to be served consecutively with a prior forty-two-day suspension, and ordered him to pay $676.60 in costs. Mr. Ligon is appealing the Committee's decision, which will be reviewed de novo, focusing on whether the Committee's factual findings were clearly erroneous and ensuring the actions taken align with the evidence presented. The credibility of witnesses is given deference to the Committee, while legal conclusions are reviewed without such deference. Mr. Ligon appeals the Committee's thirty-day suspension of Mr. Rees's law license, arguing it is insufficient given Mr. Rees's alleged unwanted sexual advances towards Ms. Mooney, which he believes should be classified as an ethical violation. Ligon presents additional evidence of Rees's past sexual behavior to support a more severe sanction, advocating for a penalty aligned with case law from another jurisdiction. In response, Mr. Rees claims that any conflict-of-interest violations were unintentional and did not harm clients, asserting that the Committee's conclusions were based on witness credibility. Rees argues that his actions stemmed from compassion rather than intentional misconduct and that Ligon's references to prior allegations not presented to the Committee should be disregarded. The court affirms it will not consider Ligon's new evidence, emphasizing that he should have presented it during the Committee hearing. Ultimately, while the court notes the seriousness of Rees's conduct, it finds the thirty-day suspension may not sufficiently reflect this severity, in accordance with the Procedures for addressing serious misconduct. Serious misconduct is defined as conduct violating the Model Rules that could lead to sanctions affecting a lawyer's license. It qualifies as serious if it involves misappropriation of funds, likely substantial prejudice to clients, dishonesty or fraud, a pattern of similar misconduct, prior public sanctions showing disregard for professional duties, or constitutes a 'Serious Crime.' Factors for imposing sanctions include the misconduct's nature, seriousness, client damage, impact on the profession, protection of future clients, lawyer's profit from the misconduct, likelihood of recurrence, intentionality, deterrent effect, maintenance of profession's respect, conduct during the committee's action, prior disciplinary history, and any mitigating factors (excluding claims of impairment unless recovery programs are pursued in good faith). The court found that the Committee's decision to suspend Mr. Rees's license for thirty days was against the preponderance of the evidence. The Committee identified twelve violations across six Rules, including failures to inform clients adequately, conflicts of interest, lack of consent, providing financial assistance linked to litigation, and prejudicial actions against a key defendant. These violations resulted in substantial prejudice to both Ms. Mooney and Mr. George, confirming Mr. Rees's actions constituted serious misconduct. The severity of the misconduct was underscored by its impact on Ms. Mooney's ability to pursue her lawsuit, necessitating corrective actions by her subsequent attorney. Mr. Rees's conduct necessitates a sanction that ensures protection for future clients, prevents repetition of misconduct, deters other attorneys, and upholds the legal profession's integrity. Consequently, his sanction is modified to a one-year suspension, credited for the thirty days already served. Mr. Ligon contends that the Committee erred by not finding Mr. Rees in violation of Rule 8.4(c) for failing to disclose a conflict of interest regarding his representation of Ms. Mooney against Mr. George. Ligon asserts that Rees should have disclosed this conflict and finds his claim of forgetfulness implausible. In response, Rees argues his actions, although mistaken, did not amount to dishonesty or deceit and that he promptly informed both parties once he recognized the conflict. After reviewing the evidence, the court concluded that the Committee's decision not to find a violation of Rule 8.4(c) was not clearly erroneous, as the determination of misconduct involves assessing witness credibility, which the Committee is better positioned to evaluate. Additionally, Ligon argues that Rees failed to disclose a material conflict to Ms. Mooney by accepting Mr. George as a client. Rees counters that he was unaware of the conflict until Mr. George informed him, asserting that this lack of knowledge negates any claims of deceit or dishonesty. The Committee's authority to resolve conflicting testimonies was recognized. The Committee reviewed evidence and testimony regarding Mr. Rees's actions and maintained deference to its role in assessing the credibility of witnesses. The determination of whether Mr. Rees's failure to disclose his representation of Mr. George to Ms. Mooney constituted dishonesty or misrepresentation relied on the credibility of conflicting testimonies. The Committee did not err in concluding there was no violation of Rule 8.4(c) in this regard. In a separate claim, Mr. Ligon argued that Mr. Rees violated Rule 8.4(c) by accepting a fee from Ms. Mooney after receiving payment from her to release him from liability. While Ligon characterized Rees’s actions as dishonest, the Committee found no evidence of fraud or misrepresentation in the transaction. Although Rees’s acceptance of fees may have been ill-advised, it did not amount to a violation of the rule. Additionally, Ligon contended that Mr. Rees violated Rule 1.2(a) by representing Mr. George, which he argued contradicted Ms. Mooney's expectation of loyalty. Rees countered that Ms. Mooney's primary objective was to recover damages for her injuries, which she successfully achieved with a $260,000 verdict. The Committee agreed with Rees, determining that Ligon's arguments did not fit within the framework of Rule 1.2(a), which focuses on a lawyer's obligation to abide by a client's decisions concerning representation objectives. Thus, loyalty is critical but must align with the client's actual goals, which were met in this case. Loyalty is a fundamental element of the attorney-client relationship but not an objective of representation. Ms. Mooney engaged Mr. Rees for legal services specifically to pursue a personal-injury claim stemming from a motor-vehicle accident. The obligations of attorney loyalty and conflict of interest avoidance are ethical duties under the Rules, not client objectives. Therefore, the Committee's finding of no violation of Rule 1.2(a) was not clearly erroneous because Ms. Mooney did not intend for Mr. Rees to refrain from making unwanted sexual advances as part of her representation. Mr. Ligon contended that unwanted sexual advances by Mr. Rees constituted a violation of Rule 1.2(a), but Mr. Rees argued that this application of the rule was inappropriate, emphasizing that the main objective was Ms. Mooney's pursuit of monetary recovery, not the nature of Mr. Rees's conduct. The Committee, positioned to assess evidence and witness credibility, did not err in its conclusion regarding Rule 1.2(a). Additionally, Mr. Ligon claimed that the Committee failed to rule on Count H.2, which alleged that Mr. Rees's nonsuit of Mr. George led to unnecessary court time and violated Rule 8.4(d). He sought a de novo judgment on this count, but Mr. Rees argued that Ligon waived this issue by not addressing it with the Committee and that the court's role is to review, not to make original judgments on such matters. Furthermore, Mr. Rees asserted that evidence showed Ms. Mooney's case would not have been trial-ready regardless of the nonsuit, and the Committee did not specifically vote on Count H.2 after finding a violation in Count H.1. Mr. Ligon did not make any verbal or written request for the Committee to vote or rule on the allegation in Count H.2 after their initial decision or order. Although he claims the Committee was obligated to rule on the alleged violation under P. Reg. Prof'l Conduct. 11(C) and 12(B), this argument is rejected. Section 11(C) states that after a public hearing, the panel must deliberate and announce its findings immediately, but it does not require a vote on every allegation. Section 12(B) allows for de novo appeals from the panel's actions, but the failure to obtain a ruling from the Committee prevents appellate review, as established in previous cases. Therefore, since Mr. Ligon did not receive a ruling on his allegation, the court cannot review his appeal. The court affirms the Committee's findings and modifies Mr. Rees's suspension to one year, crediting him for thirty days served. Additionally, the court notes that on the day of this case's submission, three other related cases involving Mr. Rees were also submitted for decision. The determination to impose an increased sanction is influenced by the disciplinary record of the attorney, Mr. Rees, particularly a pattern of serious misconduct related to conflicts of interest as highlighted in specific cases. The review of sanctions necessitates consideration of the lawyer's prior disciplinary record as mandated by the Procedures Regulating Professional Conduct. The opinion stresses the importance of viewing Rees's four cases collectively rather than as isolated incidents to accurately assess a pattern of misconduct. The two identified conflicts of interest are deemed indicative of such a pattern, which is significant in determining the severity of the sanction. Consequently, a heightened sanction of one year is concurred upon. Additionally, the appeal involves multiple cases against Rees, and there is mention of a lack of a notice of appeal filed by him, as well as a request to consider prior court decisions and depositions that may suggest further misconduct. Lastly, the relevance of section 11(C) regarding voting unanimity in findings is noted, although not applicable in this instance due to the unanimous decision of the Committee.