The Tennessee Supreme Court has upheld an attorney’s five-year suspension and $7,500 in restitution, concluding that the sanctions were not arbitrary or capricious or characterized by an abuse of discretion.
This disciplinary matter arose out of an attorney’s representation of his client in an employment claim. The matter ultimately was settled for $75,000, which was paid into the attorney’s trust account. The attorney and client entered into an agreement by which the client would receive $40,000 of the settlement proceeds after payment to the attorney of remaining fees and expenses. A short time later, the attorney contacted the client stating that he had miscalculated his expenses and requested an additional $1,800 of the settlement proceeds, to which the client refused. Accordingly, the attorney refused to pay the client the $40,000 of the settlement proceeds.
The client’s initial complaint filed with the Board of Professional Responsibility was dismissed. The client subsequently filed a lawsuit against the attorney to recover the settlement money. During a deposition of the attorney during the lawsuit, the attorney stated that none of the settlement proceeds remained in his trust account. The attorney also provided certain statements regarding previous ethical violations, bankruptcies, and IRS liens. The client’s new counsel then filed a second complaint with the Board of Professional Responsibility against the attorney. Prior to the hearing of the disciplinary matter, the attorney and client entered into a settlement of the fee dispute lawsuit.
The hearing panel determined that the attorney lied under oath and failed to maintain disputed funds in his trust account, in violation of the Rules of Professional Conduct. Accordingly, the panel suspended the attorney’s law license for five years, probated after one year “conditioned upon his payment of the remaining $7,500.00 owing to [the client] and restitution to the Board for all costs of this proceeding.” The panel also ordered the attorney to perform 100 hours of public service work for each year of probated suspension and ordered that the attorney “should never have control of his client trust account.” The circuit court, on appeal, reversed the hearing panel’s decision that the attorney never should have control of his trust account, but affirmed the panel’s judgment in all other respects.
Both the attorney and the Board of Professional Responsibility appealed to the Supreme Court. In the unanimous opinion authored by Chief Justice Jeffrey S. Bivins, the Court determined that the doctrine of res judicata was inapplicable, given that the factual bases for the second disciplinary proceeding arose after the first complaint was dismissed. Additionally, the Court affirmed the restitution of $7,500, stating that the panel and courts were not bound by the terms of the fee dispute agreement. The Court then determined that the attorney’s suspension was not arbitrary or capricious or characterized by an abuse of discretion. Accordingly, the Court affirmed the circuit court’s judgment, with the exception of the imposition of a practice monitor for the attorney’s years of probation upon successful reinstatement.
To read the Court’s opinion in Peter M. Napolitano v. Board of Professional Responsibility, authored by Chief Justice Jeffrey S. Bivins, go to the opinions section of TNCourts.gov.