IN THE SUPREME COURT OF THE STATE OF KANSAS
No. 99,410
In the Matter of EDWARD F. WALSH, IV,
Respondent.
ORIGINAL PROCEEDING IN DISCIPLINE
Original proceeding in discipline. Opinion filed May 16, 2008. Indefinite suspension.
Frank D. Diehl, Deputy Disciplinary Administrator, argued the cause and
was on the brief for petitioner.
Edward F. Walsh, IV, Respondent, was on the brief and argued the cause
pro se.
Per Curiam: This is a contested proceeding in discipline filed against the
Respondent
Edward F. Walsh, IV, an attorney licensed to practice law in Kansas since 1997. On October 13,
2005, the Kansas Supreme Court suspended the Respondent's license to practice law for failing to
comply with the annual administrative requirements to maintain a law license. At the time of oral
argument in this case, the Respondent's Kansas license remained suspended, although he was still
able to practice law in Missouri.
The Formal Complaint in this case alleged that the Respondent violated Kansas Rules of
Professional Conduct (KRPC) 4.1 (2007 Kan. Ct. R. Annot. 527) (truthfulness in statements to
others); 8.4(c) (2007 Kan. Ct. R. Annot. 559) (misconduct involving dishonesty, fraud, deceit or
misrepresentation); and Supreme Court Rule 207 (2007 Kan. Ct. R. Annot. 288), for failing to
assist the Disciplinary Administrator in the investigation of his actions. The alleged violations
arose out of the Respondent's actions and inaction involving two separate estate sales and the
disciplinary investigation that followed.
Weiss Complaint
In 2005, Wyndolyn Weiss contacted a company by the name of Lynn Steely, Inc., d/b/a
Lynn Steely Estate Sales for purposes of inspecting her property for sale. Lynn Steely is the
Respondent's wife. Thereafter, the Respondent, as a representative of Lynn Steely Estate Sales,
met Weiss in her home and inspected her property for sale. Weiss, who is legally blind, entered
into a written contract with the Respondent. The contract required Lynn Steely Estate Sales to
pay Weiss the amount owing to her within 30 days of the last day of the sale.
On November 11, 2005, Lynn Steely Estate Sales conducted a sale on Ms. Weiss'
property in Missouri. After Ms. Weiss did not timely receive the amount owing to her, she
contacted an attorney, David L. McKinney. McKinney called the Lynn Steely Estate Sales' office
and left numerous messages in Weiss' behalf. Neither the Respondent nor his wife returned
McKinney's telephone calls. On December 22, 2005, McKinney discovered that the Respondent
was listed as the registered agent for the Lynn Steely Estate Sales. McKinney left a message for
the Respondent. Approximately 1 week later, the Respondent returned McKinney's telephone call.
On December 30, 2005, the Respondent agreed to provide McKinney with a full accounting of
the sale, a copy of the signed contract, the key to the house, and the buyout receipts early during
the first week of January 2006. However, the Respondent failed to provide these items to
McKinney as promised. Thereafter, on January 9, 2006, McKinney again called the Respondent.
The Respondent failed to return the telephone calls.
On January 18, 2006, McKinney wrote to the Respondent and demanded payment on
behalf of Weiss in the amount of $3,250. After the letter had been sent by McKinney but before it
had been received by the Respondent, the Respondent called and left a message for McKinney.
The Respondent stated that he had mailed the requested information that day.
On January 20, 2006, McKinney received a letter from the Respondent, dated January 17,
2006, but postmarked January 19, 2006. The Respondent did not send a full accounting of the
sale, the key to the house, or the buyout receipts. The Respondent's letter contained an offer to
settle the matter for $1,375. The Respondent also enclosed a signed copy of the second contract
entered into by the parties. That same day, McKinney again wrote to the Respondent and
requested that he provide the full accounting that he previously promised to provide. McKinney
informed the Respondent that Weiss wished to review the accounting before she decided whether
to accept the Respondent's offer. Again, the Respondent failed to provide the requested
accounting. Despite the fact that she had not had the opportunity to review an accounting of the
sale, Weiss agreed to accept the Respondent's offer to conclude the matter. As a result, on
February 22, 2006, McKinney again wrote to the Respondent. McKinney accepted the
Respondent's offer to settle the matter for $1,375. McKinney instructed the Respondent to pay
the entire amount owing by March 14, 2006, or Weiss would revoke her acceptance. The
Respondent failed to pay the agreed amount by March 14, 2006.
Johnson Complaint
On November 20, 2005, Richard W. and Ruth Ellen Johnson and the
Respondent entered
into a contract. The contract provided that the Lynn Steely Estate Sales would organize and hold
an estate sale of Ellen Johnson's mother's belongings in Kansas City, Missouri. The Respondent
signed the contract as a representative of the company. According to the contract, in exchange for
conducting the sale, the Johnsons agreed to pay Lynn Steely Estate Sales 31% of the gross
receipts. The Respondent agreed to provide the Johnsons with at least 40% of their share of the
proceeds within 14 days of the sale and the remaining funds within 30 days of the sale.
Lynn Steely Estate Sales conducted sales of the Johnsons' property on December 2, 2005,
and January 6, 2006, through January 8, 2006. Because they did not receive the proceeds from
the estate sale according to the terms of the contract, Richard Johnson called the Respondent on
January 30, 2006. The Respondent informed Richard Johnson that he would deliver the proceeds
of the sales no later than February 3, 2006. On February 9, 2006, the Johnsons sent the
Respondent a letter and an electronic mail message, demanding payment. On February 10, 2006,
the Respondent sent three checks to the Johnsons by courier. Each of the three checks was signed
by Lynn Steely. Check number 3077 was dated February 3, 2006, and payable in the amount of
$1,109.75. Check 3079 was post-dated February 17, 2006, and payable in the amount of $2,500.
Check 3078 was post-dated February 24, 2006, and payable in the amount of $2,500.
On February 24, 2006, the Johnsons attempted to deposit the three checks into their bank
account. However, their bank returned each of the checks because there were not sufficient funds
in the Lynn Steely, Inc., bank account to cover the checks. On March 2, 2006, the Johnsons went
to the bank which held the Lynn Steely, Inc., bank account and were informed that there were
insufficient funds in the account to pay any of the checks.
On March 10, 2006, the Respondent offered to pay the Johnsons $7,000 to settle the
dispute. They rejected his offer. On March 14, 2006, the Johnsons offered to settle the matter for
$9,275. They gave the Respondent until March 16, 2007, to accept the offer. The Respondent did
not accept the Johnsons' offer. Thereafter, the Johnsons filed a civil suit against Lynn Steely, Inc.,
the Respondent, and Ms. Steely.
Disciplinary Investigation and Proceedings
On May 23, 2006, Weiss filed a complaint with the Disciplinary Administrator's office.
The Disciplinary Administrator forwarded to the Respondent at his last registered address a copy
of the complaint along with a letter directing the Respondent to provide a written response to the
complaint. The Respondent did not receive the letter and the copy of the complaint at that time
because the Respondent had moved from his last registered address. The Respondent failed to
notify attorney registration of his current address.
On June 19, 2006, Richard and Ruth Ellen Johnson filed a complaint with the Disciplinary
Administrator's office. On June 21, 2006, the Disciplinary Administrator wrote the Respondent
and directed him to file a written response to the complaint. The letter was forwarded to the
Respondent's last registration address. However, the Respondent no longer remained at his last
registration address and, as a result, did not receive the letter.
Thereafter, on August 3, 2006, Clifford Cohen, the attorney appointed to investigate the
two complaints, wrote to the Respondent at his new address. In his letter, Cohen directed the
Respondent to contact him and schedule an interview. Additionally, Cohen directed the
Respondent to provide a written response to the complaint. The Respondent failed to contact
Cohen's office and the Respondent failed to provide written responses to the complaints.
On August 31, 2006, Cohen sent an electronic mail message to the Respondent. On
September 4, 2006, the Respondent responded to Cohen's electronic mail message. After
receiving the Respondent's September 4, 2006, electronic mail message, Cohen directed the
Respondent to contact him within 30 days and let him know if he resolved the claims by the
Johnsons and Weiss. Thereafter, on September 5, 2006, the Respondent forwarded his current
address to Cohen, and Cohen provided the Respondent with a copy of the complaints.
On September 28, 2006, Cohen sent the Respondent an additional electronic mail
message, notifying the Respondent that he scheduled an interview with the Respondent for
October 6, 2006, at Cohen's office. Cohen directed the Respondent to bring his files, documents,
and photographs of the Johnsons' property and Weiss' property. The Respondent did not appear
at Cohen's office for an interview as directed. Additionally, the Respondent never provided Cohen
with his files, documents, and photographs relating to the Johnson property and Weiss' property.
On December 11, 2006, the Respondent finally provided the Disciplinary Administrator a
written response to the Johnsons' complaint. The Respondent never provided a response to Weiss'
complaint.
On June 26, 2007, approximately 6 weeks prior to the hearing on this matter, the
Respondent and Weiss settled her claim against him and entered into a general release. As a
result, the Respondent paid Weiss $1,570.89.
On August 4, 2007, the Respondent and the Johnsons entered into a general release. As a
result, the Respondent paid the Johnsons $6,500. Additionally, the Respondent promised to pay
them an additional $1,000 or before August 31, 2007. In addition to the written general release,
the Respondent included an oral provision that the settlement was conditioned upon the Johnsons
refraining from voluntarily testifying at the disciplinary hearing scheduled for August 16, 2007.
Also on August 4, 2007, the Johnsons forwarded a notarized letter to the Disciplinary
Administrator. In the letter, they stated that they were satisfied with the settlement and that they
no longer were seeking any sanction or disciplinary action against the Respondent.
Prior to the disciplinary hearing, the Respondent talked by phone with Sally Harris, the
presiding officer of the hearing panel, to request a prehearing conference and to discuss
procedure. During that call the Respondent asked whether the hearsay rule applied in disciplinary
matters, stated that he had heard "rumors" that some of the named witnesses would not be
appearing, and requested confirmation that the burden of proof is clear and convincing evidence.
Thereafter, Harris contacted the Deputy Disciplinary Administrator, Frank D. Diehl, to schedule a
pretrial conference and, in fairness to counsel, relayed her conversation with the Respondent.
Thereafter, a prehearing conference was held by telephone on August 14, 2007. On August 15,
2007, the day before the hearing, Diehl had Richard Johnson served with a subpoena to appear at
the disciplinary hearing.
At the hearing before the panel of the Kansas Board for Discipline of Attorneys, the
Respondent disputed some of the allegations of the Disciplinary Administrator. The Disciplinary
Administrator then asked the hearing panel to also consider whether the Respondent violated
KRPC 3.4(f) (2007 Kan. Ct. R. Annot. 514) (fairness to opposing party and counsel). The
Disciplinary Administrator recommended indefinite suspension or disbarment. The majority of the
panel recommended a 1-year suspension. The remaining member of the panel recommended
indefinite suspension or disbarment.
In the final hearing report, the panel concluded that the Respondent violated KRPC 3.4(f),
KRPC 4.1(a), and Kan. Sup. Ct. R. 207(b). KRPC 3.4(f) prohibits a lawyer from requesting
another to refrain from voluntarily providing testimony, stating:
"A lawyer shall not:
. . . .
(f) request a person other than a client to refrain from voluntarily
giving relevant information to another party unless:
(1) the person is a relative or an employee or other agent of a client;
and
(2) the lawyer reasonably believes that the person's interests will not be
adversely affected by refraining from giving such information."
The panel stated: "The Respondent violated KRPC 3.4(f) when, in negotiating the settlement
of
Mr. and Mrs. Johnson's claim against him, he included a condition that Mr. and Mrs. Johnson
refrain from voluntarily providing testimony in the disciplinary hearing."
KRPC 4.1(a) provides that "[i]n the course of representing a client a lawyer shall not
knowingly . . . make a false statement of material fact or law to a third person." The panel
concluded the Respondent violated KRPC 4.1(a) when he knowingly and intentionally informed
McKinney that he had forwarded the requested materials (the accounting, the key to Weiss' home,
and the buyout receipts) on January 18, 2006.
Kansas Supreme Court Rule 207(b) provides:
"It shall be the duty of each member of the bar of this state to aid the
Supreme Court, the Disciplinary Board, and the Disciplinary Administrator in
investigations concerning complaints of misconduct, and to communicate to the
Disciplinary Administrator any information he or she may have affecting such
matters."
The panel concluded the Respondent knew that he was required to forward a written
response to
Weiss' initial complaint. Because the Respondent knowingly failed to provide a written response
to the initial complaint filed by Weiss, the hearing panel concluded that the Respondent violated
Supreme Court Rule 207(b).
In making this recommendation for discipline, the hearing panel considered the factors
outlined by the American Bar Association in its Standards for Imposing Lawyer Sanctions
(hereinafter "Standards"). Pursuant to Standard 3, the factors to be considered are the duty
violated, the lawyer's mental state, the potential or actual injury caused by the lawyer's
misconduct, and the existence of aggravating or mitigating factors. With respect to this standard,
the hearing panel noted the following considerations:
"Duty Violated. The Respondent violated his duty to the public to maintain
his
personal integrity.
"Mental State. The Respondent knowingly violated his duty.
"Injury. As a result of the Respondent's misconduct, the Respondent caused
actual
harm to the public and to the legal profession.
"Aggravating or Mitigating Factors. Aggravating circumstances are any
considerations or factors that may justify an increase in the degree of discipline to
be imposed. In reaching its recommendation for discipline, the Hearing Panel, in
this case, found the following aggravating factors present:
"Dishonest or Selfish Motive. The Respondent's misconduct was
motivated
by dishonesty and selfishness. The Respondent was dishonest to Mr. [McKinney].
Additionally, the Respondent engaged in dishonest conduct during the disciplinary
process when he required Mr. and Mrs. Johnson to refrain from voluntarily giving
testimony as a condition of the settlement.
"Bad Faith Obstruction of the Disciplinary Proceeding by Intentionally
Failing to Comply with Rules or Orders of the Disciplinary Process. First, the
Respondent failed to provide a written response to Ms. Weiss' complaint. Second,
the Respondent failed to provide a timely written response to Mr. and Mrs.
Johnson's complaint. Finally, the Respondent intentionally attempted to obstruct
the disciplinary hearing by requiring that Mr. and Mrs. Johnson refrain from
voluntarily testifying at the disciplinary hearing. The Hearing Panel, therefore,
concludes that the Respondent knowingly and intentionally obstructed the
disciplinary proceeding.
"Refusal to Acknowledge Wrongful Nature of Conduct. As an attorney,
the Respondent has certain obligations and duties that are constant regardless of
whether the Respondent is acting as an attorney or not. It is clear from the
Respondent's testimony that he believes that he is not bound by his obligations and
duties when acting in a capacity other than as an attorney. The Respondent is
mistaken. Further, the Respondent never acknowledged his transgressions.
Accordingly, the Hearing Panel concludes that the Respondent's refusal to
acknowledge his misconduct is an aggravating factor in this case.
"Mitigating circumstances are any considerations or factors that may justify
a reduction in the degree of discipline to be imposed. In reaching its
recommendation for discipline, the Hearing Panel, in this case, found the following
mitigating circumstances present:
"Absence of a Prior Disciplinary Record. The Respondent has not
previously been disciplined.
"Personal or Emotional Problems if Such Misfortunes have Contributed to a
Violation of the Kansas Rules of Professional Conduct. The Respondent's father has been
ill, the Respondent has suffered financial problems, and the Respondent is now separated
from his wife. It appears from the record that the Respondent's personal problems may
have contributed to his misconduct.
"Previous Good Character and Reputation in the Community Including any
Letters from Clients, Friends, and Lawyers in Support of the Character and
General Reputation of the Attorney. The Respondent is an active and productive
member of the bar in Kansas City, Missouri. He enjoys the respect of his peers and
clients and generally possesses a good character and reputation as evidenced by
letters received by the Hearing Panel.
"Any Statement by the Complainant Expressing Satisfaction with
Restitution and Requesting No Discipline. Generally, a statement by the
complainant expressing satisfaction with restitution and requesting no discipline
would be a mitigating factor. However, such a statement is presumed to be a
voluntary statement. Thus, Respondent's Exhibit B would be evidence in mitigation
had the statement been voluntary. It appears that Mr. and Mrs. Johnson's letter
was compelled through the settlement of the case. As such, the Hearing Panel
concludes that it is not a mitigating factor in this case. Rather, testimony related to
this issue constituted an additional violation of the Kansas Rules of Professional
Conduct."
Additionally, the Hearing Panel thoroughly examined and considered the following
Standards:
"Disbarment is generally appropriate when a lawyer:
(a) intentionally tampers with a witness and causes serious or
potentially serious injury to a party, or causes significant or
potentially significant interference with the outcome of the
legal proceeding; or
(b) makes an ex parte communication with a judge or juror with
intent to affect the outcome of the proceeding, and causes
serious or potentially serious injury to a party, or causes
significant or potentially significant interference with the
outcome of the legal proceeding; or
(c) improperly communicates with someone in the legal system
other than a witness, judge, or juror with the intent to
influence or affect the outcome of the proceeding, and
causes significant or potentially significant interference with
the outcome of the legal proceeding." Standard 6.31.
"Suspension is generally appropriate when a lawyer engages in communication
with an individual in the legal system when the lawyer knows that such
communication is improper, and causes injury or potential injury to a party or
causes interference or potential interference with the outcome of the legal
proceeding." Standard 6.32.
"Suspension is generally appropriate when a lawyer knowingly engages in conduct
that is a violation of a duty owed to the profession, and causes injury or potential
injury to a client, the public, or the legal system." Standard 7.2.
At the hearing on this matter, the Disciplinary Administrator made two recommendations.
First, if the hearing panel concluded that the Respondent violated KRPC 3.4, then the Disciplinary
Administrator's recommendation was that the Respondent should be disbarred. Second, if the
hearing panel did not conclude that the Respondent violated KRPC 3.4, then the Disciplinary
Administrator's recommendation was that the Respondent be indefinitely suspended from the
practice of law. Prior to the hearing, the Respondent provided the hearing panel with a proposed
plan of probation. However, at the hearing on this matter, the Respondent recommended that he
be censured.
The majority of the panel then made its recommendation for discipline, as follows:
"The Hearing Panel is troubled by the Respondent's behavior leading up to
the disciplinary hearing in this case. The Respondent intentionally sought to
prevent witnesses, listed on the Disciplinary Administrator's Witness and Exhibit
List, from voluntarily attending and testifying at the disciplinary hearing. The
Respondent's behavior in this regard is reprehensible. It is incumbent upon the
Respondent, prior to practicing law in Kansas again, to recognize and appreciate
the seriousness of his obstructionist activities.
"Based upon the findings of fact, conclusions of law, and the Standards
listed above, a majority of the Hearing Panel recommends that the Respondent be
suspended for a period of one year from the practice of law in the state of Kansas."
In his concurring opinion, panel member John D. Gatz stated:
"I agree with the findings and conclusions set forth in the Final Opinion of
the Hearing Panel. However, the discipline recommended by the majority of the
panel is not commensurate with the seriousness of the conduct of the Respondent.
The Respondent disregarded his obligations to Mrs. Weiss and to Mr. and Mrs.
Johnson. He disregarded the requests of investigator Cohen. He disregarded the
requests of the Office of the Disciplinary Administrator. For the most part, he
delayed dealing with the requests of Weiss and Johnson until the eve of the
Disciplinary Hearing, and in Johnson's case, completely responded to them only
days before the hearing and then conditioned the settlement upon the withdrawal
of the Johnson complaint and a solicited promise not to appear at the hearing.
"Mr. Walsh questioned the jurisdiction of the panel based on the fact that
all conduct in question occurred in the state of Missouri. He also suggested that at
all times relevant to the conduct in issue, he was not acting as an attorney. In his
opening remarks he stated:
'The evidence will show that in the fall of 2005 I was working as
the Business Manager for a company known as Lynn Steely, Inc.,
d/b/a Lynn Steely Estate Sales. In that capacity I was not acting as
an attorney.'
The Respondent testified that a different standard of conduct applied to his work
as an employee of Lynn Steely, Inc. and his work as an attorney.
"The Respondent disregarded investigator Cohen's requests. At the time of
this hearing, Mr. Cohen had been investigating ethics complaints for 18 years.
When asked what the Respondent should have done but failed to do, Mr. Cohen
testified:
'At a minimum, he should have filed a detailed written response to
the Johnson and Weiss complaints certainly after he got copies of
them from me, assuming he didn't have them earlier. Secondly, he
should have come into my office for an interview. Thirdly, he
should have produced the records that I specifically requested in
writing from him. Those three things put together signify a
substantial lack of cooperation.'
"He promised an accounting to Mrs. Weiss through her attorney, Mr.
McKinney. As evidenced by the facts in Paragraphs 8, 9, 10, and 11, the
Respondent promised an accounting which was never produced and told Mr.
McKinney that he mailed the information on January 18th when, in fact, the letter
was not posted until January 19th.
"The Respondent's testimony during the hearing convinced this panel
member that he never intended to provide an accounting to Mrs. Weiss, the
Johnsons or Mr. Cohen despite his promise or promises to provide accountings.
When pressed by the panel members on this issue, the Respondent admitted that
records are kept of estate sales including records of transactions; money is counted
and the count is recorded; proceeds are deposited into accounts and a written
record is maintained. These kinds of records were kept for the Weiss sale and for
the Johnson sale. The Respondent admitted that both Weiss and Johnson asked for
an accounting. The Respondent testified 'they asked me for an item-by-item
accounting, which we do not maintain.' Finally, the Respondent was asked:
'Q.: Do you think you – as the contact with the business and
these people, do you think you had some sort of obligation
to just give them some written verification of what was
sold, when it was sold, and for how much?
'A.: No, because Lynn's perspective was that was proprietary,
and unless it had been agreed to, it was not to be released.
This exchange convinced this panel member that the Respondent never intended to provide
the
accountings that were promised to Weiss and Johnson. It would have been a simple matter to tell
them the contract did not authorize or require the Respondent's employer to provide an
accounting. The facts document that the Respondent attempted to frustrate the efforts of Mrs.
Weiss and her attorney and the Johnsons and their attorney in collecting the monies to which they
were entitled and receiving the information they had requested.
"The facts document that the Respondent intended to ignore, delay and frustrate
the
disciplinary process. That is particularly evident in the Respondent's admission that he raised as
a condition of settlement, that the Johnsons withdraw their complaint, and further conditioned
the settlement upon Mr. and Mrs. Johnson refraining from voluntarily appearing at the
Disciplinary Hearing.
"At best, the Respondent's conduct demonstrates a callous indifference to his
obligations
as an attorney. At worst, the Respondent's conduct demonstrates an intended effort to circumvent
his responsibilities as an attorney and as a representative of Lynn Steely, Inc. to Mrs. Weiss and
Mr. and Mrs. Johnson, and to circumvent and avoid the disciplinary process. The Respondent
should be indefinitely suspended or disbarred."
During oral arguments before this court, the Respondent acknowledged the serious
ramifications of his actions. When asked why he did not cooperate with the disciplinary
investigation, the Respondent stated that his life was in shambles at the time and he simply did not
want to deal with the possible disciplinary violations. He stated that, at the time, he was just
hoping that if he did not deal with the accusations of disciplinary violations, they would just go
away. Respondent stated he now realizes that was not the best way to handle the situation.
Analysis
The applicable standard of review in disciplinary cases is well settled:
"We view the findings of fact, conclusions of law, and recommendations
made by the disciplinary panel as advisory only, but we give the final hearing
report the same dignity as a special
verdict by a jury or the findings of a trial court.
Thus the disciplinary panel's report will be adopted where amply sustained by the
evidence, but not where it is against the clear weight of the evidence. When the
panel's findings relate to matters about which there was conflicting testimony, this
court recognizes that the panel, as the trier of fact, had the opportunity to observe
the witnesses and evaluate their demeanor. Therefore, we do not reweigh the
evidence or pass on credibility of witnesses. [Citation omitted.] We merely
examine any disputed findings of fact and determine whether clear and convincing
evidence supports the panel's findings. [Citation omitted.] If so, the findings will
stand." In re Comfort, 284 Kan. 183, 190, 159 P.3d 1011 (2007).
Reliance on Statements Outside the Record
First, the Respondent takes exception to the inclusion of a footnote in the final hearing
report regarding statements he purportedly made to the presiding officer, Sally Harris, on a
prehearing conference call. The Respondent reportedly told Harris he had heard "rumors" that
some of the named witnesses would not be appearing and requested confirmation that the burden
of proof was clear and convincing evidence. The Respondent argues the panel's reliance on these
statements violated Supreme Court Rule 211(e) (2007 Kan. Ct. R. Annot. 304), requiring all
witnesses to be sworn and all proceedings and testimony to be recorded, because such statements
were neither sworn nor recorded. Accordingly, the Respondent contends that because the
statements affected his credibility as a whole, the panel's reliance on the statements invalidates the
entire proceeding. Additionally, the Respondent contends the panel's reliance on these statements
violated his due process rights because the Respondent was never made aware of the panel's
concern with these statements or given an opportunity to explain such statements.
Even if the panel's inclusion of the statements in the footnote to the final hearing report
was a deviation from the rules and procedures set out in Supreme Court Rule 211(e), we have
stated that any deviation from the rules and procedures does not constitute a defense in a
disciplinary proceeding and is not grounds for dismissal absent a clear and convincing showing of
actual prejudice to the respondent. Supreme Court Rule 224 (2007 Kan. Ct. R. Annot. 364).
Here, the complained of statements have to do with the settlement of the Johnsons' claim
against the Respondent and the allegation that, as part of their settlement agreement, the
Respondent made the Johnsons agree not to voluntarily testify against him at the disciplinary
hearing. Mr. Johnson's assessment of their settlement agreement containing such a provision was
uncontroverted testimony presented at the disciplinary hearing. Moreover, the Respondent himself
stated, "I remember raising it as a condition of settlement that I wanted them to withdraw all
complaints." Panel member Claus then asked the Respondent, "I guess my question–my
direct
question was whether or not you raised as a condition of settlement that they not voluntarily
testify at this proceeding." The Respondent answered, "It's possible." Consequently, the evidence
presented at the disciplinary hearing already established the Respondent's attempts to prevent the
Johnsons from testifying against him at the disciplinary hearing. Further, the Respondent was
given an opportunity to defend himself against such accusations and explain the context, if any, of
such a condition of the settlement agreement, or dispute its existence. The Respondent failed to
do so. No matter what the Respondent's intentions were in making the complained of statements
to Ms. Harris, or even whether he in fact made such statements, the evidence presented was clear
that the Respondent had attempted to get the Johnsons to agree not to testify against him at a
disciplinary hearing. As such, the Respondent has failed to establish any real prejudice by the
panel's inclusion of the complained of statements in the footnote to the final hearing report.
Settlement as a Mitigating Factor
The Respondent argues the panel erred in concluding that the Johnsons' letter was
compelled through the settlement of the case and, therefore, was not a mitigating factor. He
argues further that even if the letter is deemed "compelled" through the settlement of the case,
there is still no clear and convincing evidence to conclude that it was not voluntary since the
settlement, itself, was voluntary. The Respondent is correct that "[a]ny attorney misconduct must
be established by substantial, clear, convincing, and satisfactory evidence." In re
Comfort, 284
Kan. at 190, citing In re Lober, 276 Kan. 633, 636, 78 P.3d 442 (2003). However,
the
Respondent cites no authority for his position that each aggravating and mitigating factor must be
supported by clear and convincing evidence. Rather, the panel must consider the evidence
presented with respect to aggravating and mitigating circumstances and determine how much
weight to assign to each in arriving at an appropriate discipline. Here, it appears the panel did
consider the Johnsons' letter, but decided not to give it much weight as a mitigating factor
because it was compelled as part of a settlement.
Although the Respondent is correct that it would appear the Johnsons' decision to enter
into a settlement agreement was voluntary, the panel found their letter expressing satisfaction with
restitution and requesting no discipline was compelled as a condition of the settlement. Mr.
Johnson testified that the release was negotiated, that he had to make concessions in order to get
paid, and that getting paid was his major consideration. There was ample evidence presented to
support the panel's finding that the letter was compelled and this court should not reweigh the
evidence. As such, the panel did not err in failing to give weight to the letter as a mitigating
factor.
Subject Matter Jurisdiction
The Respondent contends the hearing panel did not have subject matter jurisdiction in this
case both because the complained of conduct pertains to actions occurring outside the practice of
law and in Missouri, rather than in Kansas. Petitioner cites Kansas case precedent where attorneys
were disciplined for actions that occurred outside of the practice of law. In In re
Kershner, 250
Kan. 383, 388, 827 P.2d 1189 (1992), a non-practicing attorney was disciplined after being
convicted of two felony convictions for selling unregistered securities. However, as Respondent
points out, the attorney in Kershner was charged with violating MRPC 8.4 (now
KRPC 8.4),
which provides in relevant part:
"It is professional misconduct for a lawyer to:
. . . .
(b) commit a criminal act that reflects adversely on the
lawyer's honesty, trustworthiness or fitness as a lawyer in other
respects;
(c) engage in conduct involving dishonesty, fraud, deceit or
misrepresentation;
. . . .
(g) engage in any other conduct that adversely reflects on
the lawyer's fitness to practice law." 1991 Kan. Ct. R. Annot. 308.
Here, while the Respondent was not charged with committing a criminal act under KRPC
8.4(b),
he was charged with violating KRPC 8.4(c). Accordingly, the hearing panel would have the same
jurisdiction to examine the issue as was present in Kershner. The fact that the hearing
panel
ultimately did not find the Respondent had violated KRPC 8.4(c) does not affect the jurisdiction
of the panel to consider the issue in the first place. As such, the hearing panel had jurisdiction to
consider the complaint in this case.
The Respondent seems to focus only on the fact he was charged with violating KRPC
4.1(a), which does appear to require the lawyer to be practicing law, as it deals with making false
statements in the course of representing a client. Regardless, evidence was presented
to establish
that the Respondent was practicing law. The most direct evidence of the Respondent's role as an
attorney representing Lynn Steeley Estate Sales can be found in his letter to Lance Weber, an
attorney representing the Johnsons, dated March 10, 2006. In that letter, the Respondent states:
"This letter is sent in my capacity as counsel for Lynn Steely, Inc., d/b/a/ Lynn Steely Estate
Sales." The Respondent then proposes a settlement agreement with the Johnsons for the
above-stated matter. As such, evidence established that even the Respondent, himself, viewed his
role as
that of an attorney for the company.
Further, evidence established the Respondent knowingly made a false statement of fact
when he intentionally informed McKinney that he had forwarded the requested materials (the
accounting, the key to Weiss' home, and the buyout receipts) on January 18, 2006. The
Respondent attempts to argue that he was practicing law only when he issued letters written on
firm letterhead and that he was not acting as an attorney in his negotiations with McKinney over
the Weiss complaint. However, the evidence indicates the Respondent was serving as counsel for
Lynn Steely Estate Sales in negotiating settlements between the company and Weiss and the
Johnsons. Consequently, the evidence indicates the complained of actions by the Respondent did
occur while engaging in the practice of law.
Additionally, violations of KRPC 3.4(f) and Supreme Court Rule 207(b) do not require
the Respondent to have been practicing law. Rather, KRPC 3.4(f) prohibits a lawyer from
requesting persons other than clients to refrain from voluntarily giving relevant information to
another party, and Rule 207(b) requires only that a lawyer cooperate in disciplinary investigations.
Consequently, the hearing panel clearly had subject matter jurisdiction to determine
whether or not the Respondent had violated the rules of professional conduct for attorneys and
the Supreme Court Rules, regardless of whether the actions in question occurred while practicing
law.
Further, we have previously determined that Kansas attorneys can be disciplined for
conduct committed outside of Kansas. Supreme Court Rule 201 (2007 Kan. Ct. R. Annot. 257)
establishes the jurisdiction of the court, and therefore, the jurisdiction of the hearing panel, and
states: "Any attorney admitted to practice law in this state and any attorney specially admitted by
a court of this state for a particular proceeding is subject to the jurisdiction of the Supreme Court
and the authority hereinafter established by these Rules." 2007 Kan. Ct. Rules Annot. 257.
Petitioner cites In re Arnold, 274 Kan. 761, 762, 56 P.3d 259 (2002), for the
proposition
that "[t]he jurisdiction of the Kansas Supreme Court and the Kansas Board for Discipline of
Attorneys is not limited to practice in the state courts of Kansas." Although the Respondent is
correct that Arnold is somewhat distinguishable in that it dealt with the court's
jurisdiction over
the actions of an attorney occurring before a federal court in Kansas, rather than before a state
court, there is still nothing limiting the jurisdiction of this court over the actions of an attorney
admitted to practice law in Kansas merely because those actions occur in another state. See
In re
Eastepp, 258 Kan. 766, 907 P.2d 842 (1995) (attorney suspended for 1 year from practice
of law
in Kansas for actions that occurred in Colorado). Accordingly, the Respondent's claim that the
hearing panel and this court lack subject matter jurisdiction over the complained of actions lacks
merit.
Sufficiency of Evidence
The Respondent contends the hearing panel did not have a sufficient basis to determine
that he violated KRPC 4.1 and KRPC 8.4(c). In his reply brief, the Respondent also claims there
was an insufficient basis for the hearing panel to determine he had violated KRPC 3.4(f).
Throughout this issue in his briefs, the Respondent sometimes refers to Rule 8.2 or 8.2(c).
However, there was no allegation or finding that the Respondent violated KRPC 8.2 (2007 Kan.
Ct. R. Annot. 557) (judicial and legal officials). Moreover, KRPC 8.2(c) does not exist. As such,
it appears the Respondent meant to refer to KRPC 8.4(c). While the Disciplinary Administrator
alleged the Respondent had violated KRPC 8.4(c), the hearing panel did not find a violation of
8.4(c). Accordingly, the only issue to be determined is whether a sufficient basis existed to
support the hearing panel's finding that the Respondent violated KRPC 4.1(a) and 3.4(f). In his
brief, the Respondent acknowledged there was a sufficient basis to conclude he was not
cooperative with the disciplinary investigation, in violation of Supreme Court Rule 207.
Again, KRPC 4.1(a) provides that "[i]n the course of representing a client a lawyer shall
not knowingly . . . make a false statement of material fact or law to a third person." Here, the
evidence established that the Respondent was representing himself and Lynn Steely Estate Sales in
negotiating with McKinney and he knowingly and intentionally informed McKinney that he had
forwarded requested materials, i.e. the accounting, the key to Weiss' home, and the
buy out
receipts, on January 18, 2006. In fact, the Respondent had not mailed out the requested items
and, instead, sent out a letter on January 19, 2006, offering to settle the matter for $1,375.00.
This evidence is sufficient to support the hearing panel's finding that the Respondent violated
KRPC 4.1(a).
With respect to KRPC 3.4(f), the evidence showed that in negotiating the settlement of
the Johnsons' claim against him, the Respondent included a condition that the Johnsons refrain
from voluntarily providing testimony in the disciplinary hearing. This evidence is sufficient to
support the hearing panel's finding that the Respondent violated KRPC 3.4(f).
KRPC 3.4(f) states:
"A lawyer shall not:
. . . .
(f) request a person other than a client to refrain from voluntarily
giving relevant information to another party unless:
(1) the person is a relative or an employee or other agent of a client;
and
(2) the lawyer reasonably believes that the person's interests will not be
adversely affected by refraining from giving such information." (Emphasis added.)
2007 Kan. Ct. R. Annot. 514.
The Respondent contends the exception to Rule 3.4(f) is applicable because any condition
to refrain from voluntarily testifying was not adverse to the Johnsons' interest and that the panel
erred in failing to make any finding with respect to the exception. The Respondent's argument,
however, ignores the first requirement of the exception. In fact, in quoting KRPC 3.4(f) in his
brief, the Respondent takes the language in subsection (1) out of the rule and replaces it with an
ellipse. In order for the exception to Rule 3.4(f) to apply, both subsection (1) and subsection (2)
must be met. Here, the Johnsons were not a relative or an employee or other agent of Lynn Steely
Estate Sales. As such, the exception to Rule 3.4(f) is not applicable and the hearing panel did not
err in failing to make a finding as to the exception.
Conclusion
We conclude there is ample, uncontested evidence in the record to support the finding that
the Respondent violated KRPC 3.4(f), KRPC 4.1(a), and Kan. Sup. Ct. R. 207(b). Although the
recommendation by the majority of the panel for the Respondent to be suspended from the
practice of law for 1 year is within the ABA guidelines, the recommendation of the panel is
advisory only. The recommendation of the panel shall not prevent the court from imposing
discipline greater or lesser than that recommended by the panel or the disciplinary administrator.
Supreme Court Rule 212(f) (2007 Kan. Ct. R. Annot. 317). Considering the facts and
circumstances of this case, we consider indefinite suspension to be the appropriate discipline, and
we adopt the reasoning of hearing panel member John D. Gatz in his concurring opinion.
IT IS THEREFORE ORDERED that Edward F. Walsh, IV, be and is hereby indefinitely
suspended from the practice of law in Kansas in accordance with Supreme Court Rule 203(a)(2)
(2007 Kan. Ct. R. Annot. 261).
IT IS FURTHER ORDERED that this opinion be published in the Kansas Reports and
that the costs of these proceedings be assessed to the Respondent.
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