An attorney's misconduct in (1) borrowing money from a client without advising the client to seek independent counsel; (2) failing to diligently represent two clients; and (3) failing to cooperate with the Director of the Office of Lawyers Professional Responsibility in a disciplinary investigation, together with the attorney's failure to take reasonable steps to repay the loan and his prior discipline history, warrants indefinite suspension from the practice of law.
Attorney, Registration No. 118722 Office of Appellate Courts
Heard, considered, and decided by the court en banc.
On February 24, 2005, the Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against respondent, Gary K. Wood, alleging professional misconduct that warrants public discipline. On May 10, 2005, this court appointed a referee to hear Wood's disciplinary action. On October 4, 2005, after a hearing on the petition, the referee concluded that Wood violated Rules 1.3, 1.4, 1.8(a), 3.2, 8.1(a)(3) of the Minnesota Rules of Professional Conduct (MRPC) and Rule 25 of the Rules on Lawyers Professional Responsibility (RLPR). The referee recommended that Wood be indefinitely suspended from the practice of law and not be eligible to apply for reinstatement for at least six months. For the reasons discussed below, we conclude that Wood's misconduct warrants the recommended discipline.
Wood was admitted to practice law in Minnesota on October 21, 1977, and currently practices law in Minneapolis. Prior to the disciplinary action at issue, Wood received six separate discipline sanctions from the Office of Lawyers Professional Responsibility. Specifically, (1) on October 23, 1987, Wood received an admonition for failing to pursue a workers' compensation matter and to respond to a client's telephone calls in violation of Rules 1.3 and 1.4, MRPC; (2) on September 13, 1996, Wood received an admonition for failing to diligently represent a client and not communicating with the client in violation of Rules 1.3 and 1.4, MRPC; (3) on March 28, 2000, Wood received private probation for endorsing settlement checks without the authorization of his law firm, failing to maintain required trust account books and records, failing to provide an accounting for money withheld from a settlement, failing to diligently pursue a client matter, practicing law while on restricted status, failing to pay a court reporter, and failing to cooperate in a disciplinary investigation in violation of Rules 1.3, 1.4, 1.15, 1.15(b)(3), 5.5, 8.1(a)(3), and 8.4(c) and (d), MRPC, and Rule 25, RLPR; (4) in 2001, Wood's private probation was extended for failing to pay another court reporter in violation of Rule 8.4(d), MRPC; (5) on March 25, 2003, Wood received an admonition for failing to diligently and promptly represent a client in violation of Rule 1.3, MRPC; and (6) on February 26, 2004, Wood received an admonition for failing to diligently represent a client and failing to communicate with his client in violation of Rules 1.3 and 1.4(a), MRPC.
On February 24, 2005, the Director filed the current petition for disciplinary action alleging three counts of professional misconduct. First, the Director alleged that on July 16, 1999, Wood borrowed $20,644.96 from Client A. Wood told the client that he needed the loan to avoid a foreclosure on his home. In return, Wood drafted and signed a hand-written 30-day promissory note, which specified that the note is "payable on demand by [Client A] within 30 days if [Wood] fails to diligently seek refinancing through an approved lender." Wood did not advise Client A to seek independent counsel about the loan, and Client A did not give Wood a written consent to proceed with the loan without the advice of independent counsel. On April 2, 2004, Client A filed a complaint against Wood with the Director's office, stating Wood failed to pay back any part of the loan. On April 27, 2004, in response to Client A's complaint, Wood sent to Client A and the Director an invoice demonstrating that Wood had offset the loan payments against fees owed by Client A and several businesses in which Client A had an interest. Client A, however, was not aware of the offset and disputed the amount of the legal fees that were owed to Wood. The Director concluded that Wood's behavior in the Client A matter violated Rule 1.8(a), MRPC.
Second, the Director alleged that Wood failed to diligently represent Client B and Client B's father, Client C. The Director alleged that, in the latter half of 2001, Client B retained Wood to represent him on a matter involving an escrow account held by a title company. Wood failed to take any action on Client B's matter and failed to respond to the client's telephone calls. Wood represented Client C in an insurance claim arising from a fire that took place at one of Client C's properties. Wood failed to inform Client C of an April 2, 2002, hearing and attended the hearing without his client. Wood subsequently admitted that he did not timely comply with the opposing counsel's motion to compel discovery. The Director concluded that Wood's behavior in the Client B and Client C matters violated Rules 1.3, 1.4, and 3.2, MRPC.
Third, the Director alleged that Wood failed to cooperate with a disciplinary investigation. Specifically, on June 6, 2003, the Director received a complaint against Wood from one of Wood's clients, Client D. The complaint stated that Wood failed to deliver to Client D a $25,000 check from the sale of one of Client D's properties. On June 9, 2003, the Director sent Wood a notice of investigation and requested that Wood meet with the Director on June 24, 2003, and submit a written response before the meeting. On June 24, 2003, Wood met with the Director, but failed to provide a response to Client D's complaint. Wood then failed to respond to the Director's July 11, 2003, July 31, 2003, and August 21, 2003, written requests for further information. On September 26, 2003, the Director requested that Wood provide an immediate response to Client D's complaint. On October 5, 2003, Wood faxed to the Director a response to the complaint, but did not submit other required information until October 30, 2003. The Director concluded that Wood's non-cooperation with the investigation violated Rule 8.1 (a)(3), MRPC, and Rule 25, RLPR.
Wood did not answer the Director's petition, and on March 29, 2005, the Director filed a motion with this court for summary relief under Rule 13(b), RLPR. On April 1, 2005, we ordered that the allegations in the petition be deemed admitted and gave both parties the opportunity to submit briefs by April 25, 2005. On April 5, 2005, Wood requested permission from this court to respond to the Director's motion for summary relief, to oppose the motion, and to file an answer to the petition. The Director did not oppose the request, and on April 26, 2005, we granted Wood's motion and later appointed District Court Judge Bruce W. Christopherson as the referee to hear Wood's disciplinary action.
On September 23, 2005, the referee held a hearing. Client A testified against Wood at the hearing, and his testimony was consistent with the allegations the Director made in the petition for discipline. Client A also testified that, while attempting to obtain a judgment on Wood's home, he discovered that Wood no longer held the title to the home. Client A then stated that Wood sent him a letter at the beginning of 2005 in which Wood proposed a $200 per month repayment plan, but Client A never received any payments from Wood. Client ...