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In re Walsh

May 16, 2008

IN THE MATTER OF EDWARD F. WALSH, IV, RESPONDENT.


Per curiam.

ORIGINAL PROCEEDING IN DISCIPLINE

Original proceeding in discipline.

Indefinite suspension.

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 disbarrment. The majority of the panel recommended a 1-year suspension. The remaining member of the panel recommended indefinite suspension or disbarrment.

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 ...


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