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In re Hodge

Supreme Court of Kansas

December 29, 2017

In the Matter of Rickey Edward Hodge, Jr., Respondent.

         Original proceeding in discipline. Opinion filed December 29, 2017. Disbarment.

          Deborah L. Hughes, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett, Disciplinary Administrator, was with her on the brief for petitioner.

          Charles Davant IV, of Williams & Connolly LLP, of Washington, D.C., argued the cause, and John K. Villa, of the same firm, and G. Craig Robinson, of Wichita, were with him on the briefs for respondent. Rickey Edward Hodge, Jr., respondent, argued the cause pro-se.

          PER CURIAM.

         This is a contested attorney discipline proceeding against Rickey Edward Hodge, Jr., who was admitted to practice law in Kansas in September 2008. A panel of the Kansas Board for Discipline of Attorneys made lengthy findings of fact and concluded Hodge violated the Kansas Rules of Professional Conduct (KRPC) while representing a financially distressed Wichita-based landscaping company. Highly summarized, Hodge attempted to purchase the company's assets, as well as an 80-acre ranch held by the company's majority shareholder. The accusations involve conflict of interest, client exploitation, and self-dealing.

         After five days of hearings, spread out between October 2015 and March 2016, the panel unanimously determined that Hodge violated KRPC 1.7 (2017 Kan. S.Ct. R. 300) (concurrent conflict of interest); 1.8(a) (2017 Kan. S.Ct. R. 307) (conflict of interest arising from entering business transaction with client), and 1.8(b) (using information to the client's disadvantage); 4.2 (2017 Kan. S.Ct. R. 353) (communication with person represented by counsel); and 8.4(g) (2017 Kan. S.Ct. R. 379) (engaging in conduct adversely reflecting on lawyer's fitness to practice law). The panel unanimously recommended Hodge be disbarred.

         Before this court, the Disciplinary Administrator's office endorses the panel's findings and recommends disbarment. Hodge takes exceptions to the panel's findings, as well as to the recommended discipline. We hold that clear and convincing evidence establishes multiple instances of attorney misconduct and agree disbarment is appropriate.

         Procedural Background

         On July 15, 2014, the Disciplinary Administrator's office filed a formal complaint against Hodge. On August 15, 2014, Hodge filed an answer to the formal complaint, admitting many factual allegations while denying the alleged KRPC violations.

         The panel conducted hearings on October 20, 2015, December 7, 2015, December 8, 2015, March 3, 2016, and March 4, 2016. Hodge appeared in person and with counsel. After the hearings concluded, the panel issued a 65-page Final Hearing Report, making the following findings of fact and conclusions of law, together with its recommendation for discipline:

"Findings of Fact and Conclusions of Law

         "11. In addition to practicing law, the respondent owns and operates a number of businesses, including Hodge Acquisitions, L.C. Hodge Acquisitions holds various commercial, residential, and agricultural real properties for lease or for sale.

         "12. Complete Landscaping Systems, Inc., (CLS) a Wichita based landscaping company was owned by P.S. L.A. came to work for P.S. at CLS. In October, 2010, P.S. married L.A. Later, P.S. and L.A. divorced. Following their divorce, majority ownership of CLS was transferred to L.A. L.A. owned a 99% interest in CLS and P.S. retained a 1% interest in CLS following the divorce. Additionally, P.S. was to receive additional financial benefits under the transfer agreement between L.A. and P.S.

         "13. For a period of time in 2006 and 2007 and then again beginning in 2011, Trinidad Galdean, a Wichita lawyer, served as outside general counsel for CLS.

         "14. In 2009, during their marriage, P.S. and L.A. purchased an 80-acre ranch for $2.25 million from the Michaud Family Trust. The Michaud Family Trust held the mortgage on the property. P.S. and L.A. made a substantial down payment and substantial monthly payments toward the purchase of the property. After P.S. and L.A. divorced, L.A. remained in the ranch.

         "15. CLS developed financial difficulties. CLS faced lawsuits in several states including Arkansas, Florida, Kansas, Michigan, Missouri, New Jersey, Oklahoma, Pennsylvania, Texas, and Virginia. Also, L.A. developed personal financial difficulties. L.A. became past due on the ranch in excess of $100, 000. In July, 2013, L.A. owed approximately $563, 000 on the mortgage.

         "16. On November 20, 2012, a judgment was entered against CLS in Texas in Hadden vs. CLS. Later, on May 1, 2013, L.A. was served with an order to appear in aid of execution of judgment on the Hadden judgment, Sedgwick County case number 13CV0586. The Sedgwick County case was an attempt to enforce the Texas judgment.

         "17. On May 15, 2013, Mr. Galdean referred CLS to the respondent for representation in the Hadden collection litigation to attempt to mitigate the liability through a workout, a settlement, or some other form of negotiation. On May 17, 2013, L.A. met with the respondent at his office regarding the Hadden collection litigation.

         "18. At the hearing on this matter, the respondent initially testified that he never entered his appearance on behalf of CLS in the Hadden collection litigation. However, beginning on May 24, 2013, and continuing through July 26, 2013, the respondent's electronic signature block appears on many agreed orders in the Hadden collection litigation. Clearly, by approving the agreed orders, the respondent entered his appearance. The hearing panel finds that beginning May 24, 2013, the respondent was the attorney of record for CLS in the Hadden collection litigation. The respondent never withdrew from the representation.

         "19. On June 7, 2013, L.A. entered into a written fee agreement with the respondent and paid the respondent $2, 500 retainer for representation in the Hadden collection litigation.

         "20. On June 11, 2013, the respondent and L.A. met in the respondent's office to discuss CLS' collection matters.

         "21. In the course of representing CLS in the Hadden collection litigation, the respondent discovered that CLS was in serious financial difficulty. The respondent learned that CLS owed money to many subcontractors and vendors for landscape products. The respondent learned that one of CLS' largest clients stopped paying CLS due to a dispute. The respondent learned that CLS lost several other clients to competitors. The respondent came to understand that CLS did not have the capital to pay its debts. The respondent learned that CLS had litigation pending in many jurisdictions and that CLS had a number of judgments previously entered against it which remained unpaid.

         "22. The respondent also learned that L.A. was several months behind on payments on the mortgage on the ranch. At that time, L.A. had a past due balance on the ranch mortgage in the amount of approximately $113, 000-$120, 000.

         "23. On June 25, 2013, the respondent and L.A. met regarding the financial viability of CLS. L.A. was opposed to filing a chapter 7 bankruptcy. The respondent advised against filing a chapter 11 reorganization bankruptcy case because 'the lack of monthly operating revenue would likely prohibit the successfully reorganization.' The respondent told L.A. that sale of the company was unlikely because of the 'substantial tax liabilities and other mounting debts.' The respondent told L.A. that her last option was an asset sale.

         "24. Previously, in the summer of 2011, the respondent and another individual started a lawn care business called Yard Concerns. On July 17, 2011, the respondent registered a website, yardconcerns.com. Yard Concerns was formed to grow the small customer base into a steady yard service and sod company. The client base did not mature, the business did not grow, and the other individual gained other employment.

         "25. On July 16, 2013, beginning at 9:51 a.m., the following exchange took place between the respondent and L.A. via text messages:

'R. Are you free to talk in about an hour?
'L.A. I'm in KC working today. Tomorrow????
'R. Ok. I talked to Trinidad this morning and need to call him at 2 pm today. How is your cash situation right now?
'L.A. I should have the 70K any day. Nothing at the moment. Made it through payroll yesterday:) I also made the building loan payment.
'R. According to Trinidad there is approximately 20K per month due on the existing 5 settlements and the total debt is about 100K. We will need to sell the national portion of complete ASAP. I'm going to put together some paperwork and we can talk about this. As for the local operations, I have a prospective friendly buyer for that segment. We will need to address staff/tax issues and start getting you a pay check.
'L.A. . . . Hadden garnished commerce-got 400.00
'R. I know. I have a call into Carl Davis about a prospective agreement. . . .
'L.A. . . . Can you say who the potential buyer is?
'R. Yes. The prospective buyer's name is Rick Hodge and he is a super nice guy.:)
'L.A. I'm speechless! That's not normal. I owe you my life. Just blinded you on an email to Trinidad.
'R. Ok. We need to meet and talk about how we may structure this. No obligation, but I got to thinking about something that may solve several problems.'

         "26. Throughout the respondent's testimony, as well as in his initial response to the complaint and his answer, the respondent insisted that he was not personally involved in the transactions, rather the companies that he (solely) owns were involved. Specifically, the respondent stated and testified that Yard Concerns attempted to purchase CLS' assets and Hodge Acquisitions purchased the ranch, not Rick E. Hodge, Jr., attorney at law. Despite this, the respondent also testified that his 'name is synonymous with [his] businesses.' Because the companies have no owners other than the respondent, the companies are simply extensions of him. Considering all the evidence together, the hearing panel finds that the respondent's statements that the actions taken were not taken by him but rather by his companies are an attempt to obfuscate the issues at hand.

         "27. By July 10, 2013, L.A. believed that the respondent was her attorney as to CLS matters as well as her attorney regarding her problems with paying the mortgage on the ranch.

         "28. Cameron Michaud, attorney for the Michaud family trust which held the mortgage on the ranch, scheduled a meeting with L.A., in Ms. Michaud's office on July 18, 2013. L.A. asked the respondent to attend the meeting with her. The respondent agreed to attend the meeting. At the meeting, L.A. introduced the respondent as an attorney. During the meeting, the respondent informed Ms. Michaud that a third party was interested in purchasing the ranch and that the third party was willing to lease the ranch back to L.A. L.A. pulled Ms. Michaud aside and told her that the respondent was the third party interested in purchasing the ranch. Later that day, the respondent sent Ms. Michaud an email message which provided, 'Fantastic meeting you. I hope that I can facilitate a quick resolution if at all possible.'

         "29. Because L.A. expressed interest in selling CLS' assets to the respondent, on July 23, 2013, the respondent filed documents and formed Yard Concerns, L.C., as a limited liability company.

         "30. Throughout July 2013, litigation and financial troubles, including tax deficiencies, mounted for L.A. and CLS.

         "31. On July 29, 2013, the respondent met with L.A. Following the meeting, the respondent sent the following email message to L.A.:

'I wanted to clarify our conversation earlier today. It is my understanding that you believe Complete Landscaping Systems, Inc. does not, and will not, have sufficient operating funds to meet its ongoing operational obligations such as payroll, tax and mortgage expense. Moreover, you expressed that Complete Landscaping Systems, Inc. does not, and will not, have sufficient resources to meet its existing contractual obligations owed to clients and other states, nor will it have sufficient resources to meet the obligations owed to subcontractors for these contracts. Lastly, you expressed concern that Complete Landscaping Systems, Inc. does not have sufficient resources to continue ongoing litigation in Kansas, and in other jurisdictions, in addition to remitting payment for legal fees incurred by this office and Hinkle Law.
'For this reason you have requested that this office discontinue legal representation of Complete Landscaping Systems, Inc. and any parties thereto related. Please understand that if you no longer have representation in Kansas, or any other jurisdiction, you will not have anyone to litigate the claims brought against you and Complete will likely face default judgment. If this happens then the assets of Complete Landscaping Systems, Inc. may be levied to satisfy obligations owed to creditors. This will put Complete out of business.
'I also understand that you do not wish to further explore any form of bankruptcy reorganization or liquidation at this time, however, you have requested that I make contact with a prospective party that may have interest in purchasing part or all of Complete Landscaping Systems, Inc., or its assets. As stated earlier, I am a member of the organization that may be interested in purchasing part or all of Complete Landscaping Systems, Inc. or its assets. Any negotiations entered into by this organization and Complete must be at arm's length. In no way can I represent Complete Landscaping Systems, Inc. or any party affiliated with that organization because of potential future conflicts. Complete Landscaping Systems, Inc., would also be required to sign a Waiver of Conflict of Interest because Rick Hodge, Attorney At Law, L.C. represents the prospective buyer who would entertain purchasing Complete Landscaping Systems, Inc. or its assets. Although this potential purchase transaction does not directly correlate with the matter at hand, it touches on the financial matters of Complete to which I have some knowledge.
'Please reply to my email stating that you do or do not wish for my office to disengage in representation of Complete and any of its matters. Also, please reply that you do or do not wish to discuss the possibility of a third-party negotiation for the purchase of some or all of Complete or its assets.'

         That same day, at 2:44 p.m., L.A. sent the respondent an email which provided, 'Please disengage as legal representation for CLS. Please assist with the third-party negations [sic] as discussed earlier.' Four minutes later, at 2:48 p.m., L.A. sent the respondent a text message asking him if her email response was good enough.

         "32. On July 30, 2013, in the early afternoon, L.A. questioned the respondent as to whether he wanted her to participate in a conference call with Mr. Galdean and Mr. Hubbard regarding certain litigation. The respondent confirmed that L.A. should participate in the conference call. L.A. did participate in the conference call and during [the] conference call with Mr. Galdean regarding pending litigation, L.A. communicated privately with the respondent, via text messages. In those private communications, L.A. indicated that she was concerned about a case where she was named personally. The respondent advised L.A. that a certain case needed to be continued. That same day, the respondent told L.A. that he did not want her to string out litigation if she could not afford it. Although the respondent acknowledged that he could not give L.A. advice, L.A. immediately asked for advice and the respondent provided it.

         "33. On July 31, 2013, L.A. asked the respondent if they wanted to settle a specific case. The respondent advised L.A. that certain action would stay the execution of judgment and buy some time.

         "34. On August 2, 2013, a hearing on the creditor's order in aid of execution in the Hadden collection litigation was held. L.A. did not appear. Following the hearing, the respondent informed L.A. that the hearing would be reset and that he needed her to provide him with documents that Carl Davis, opposing counsel, requested. Additionally, the respondent asked L.A. whether she received his electronic mail message about a settlement.

         "35. On August 4, 2013, P.S. emailed a letter to L.A. In the letter, P.S. stated:

'It seems that you have three options that may be favorable to you . . .
'The third options, [sic] and in my opinion, the most viable one is for you to sell the house in Derby and with the proceeds you can buy yourself and your father a nice home and the rest you can use to pay bills. You have equity of about 1.5 million dollars; the equity comes from the loans you have made to yourself from Complete Landscaping. . .

         "36. On August 5, 2013, Mr. Galdean sent an email message to L.A., the respondent, and others, which provided:

'During the last discussion between, [sic] Paul, Rick and me, Rick Hodge was handling the discovery responses and deposition issues for Complete Landscaping and [L.A.] I have not received any updates on the discovery issues or depositions other than I was told by [L.A.], on July 25, that Rick was handling the issues. Rick should have the information.'

         Later that day, L.A. sent an email message to Mr. Galdean, the respondent, and others, which provided, 'As stated in recent correspondence, Rick Hodge is not representing CLS as council [sic] regarding legal issues. With that said, [P.S.] what do you need me to do?'

         "37. In order for the asset sale to move forward, L.A. needed P.S. to sell his remaining interest and dissolve or waive the non-compete agreement. On August 12, 2013, L.A. contacted the Foulston firm in Wichita, Kansas, to assist her with buying out P.S.' ownership interest and dissolving the existing non-compete he had as part of the original sale of the business to L.A. On August 13, 2013, an attorney from the Foulston firm sent L.A. an electronic mail message requesting documents and asking for information necessary to complete the work. L.A. immediately forwarded the electronic mail message to the respondent and asked him whether he had the information readily available.

         "38. On August 14, 2013, Ms. Michaud sent an electronic mail message to the respondent regarding the calculations for late fees on the ranch property. In addition to listing the late fees, Ms. Michaud stated:

'[L.A.] asked that I cc: her on emails I send to you regarding payments. I am not sure of your relationship (attorney/client). I will send this to her, along with the payout spreadsheet, later this afternoon unless I hear from you otherwise.'

         "39. On August 15, 2013, L.A. named the respondent the resident agent of CLS.

         "40. On August 16, 2013, an attorney with the Foulston firm sent L.A. An electronic mail message asking whether L.A. or CLS was the purchaser. L.A. again forwarded the electronic mail message to the respondent and asked him whether he had the answer to the question.

         "41. Again, on August 19, 2013, an attorney with the Foulston firm sent L.A. an electronic mail message asking whether L.A. or CLS was the purchaser. Additionally, the attorney requested a number of documents. L.A. asked the respondent to 'ghost' a reply to the attorney.

         "42. Later, on August 19, 2013, L.A. informed the respondent that she received an unexpected $26, 000 and sought the respondent's advice regarding the income.

         "43. On August 19, 2013, Mr. Galdean sent an email message to L.A., the respondent, and another, which provided as follows:

'Attached is the recent lawsuit received today in Maddox Irrigation, Inc. It appears service was requested the same day your other legal counsel, Rick Hodge, was designated as the Company's Resident Agent. Thus, Rick is being copied on this email.
'In regards [sic] to this lawsuit, neither I nor my firm is representing Complete Landscaping Systems, Inc. Thus, it is necessary that Complete Landscaping Systems secure other legal counsel to represent it in the lawsuit.
'Any answer to the lawsuit must be filed before September 9, 2013; otherwise a default judgment may be taken in the lawsuit against Complete Landscaping Systems, Inc.'

         In response, L.A. sent an email message to Mr. Galdean, Ms. Calisti, and the respondent as follows, '[l]et's just clarify for the umpteenth time, Mr. Hodge is not my legal representation [sic]. His firm is merely accepting the incoming cases as "Agent".'

         "44. On August 20, 2013, L.A. and Hodge Acquisitions entered into a purchase agreement regarding the ranch. The respondent agreed to purchase the ranch for $570, 000.00.

         "45. L.A. testified that they agreed that the equity in the residential property would secure his risk of loss in the purchase of the business. L.A. testified that the respondent assured her that she could remain in the ranch, that he would hire her at the lawn maintenance company at a salary which would permit her to make lease payments on the ranch, and the lease payments on the ranch would be credited toward her repurchase of the ranch.

         "46. At the hearing on this matter, the respondent testified that L.A. Was always able to repurchase the ranch for the purchase price, but that the rents collected would serve as his profit. The respondent testified that the rents were not to be counted toward the re-purchase price.

         "47. The hearing panel observed the witnesses testify at the hearing. Based upon the hearing panel's observations of all the witnesses at the hearing as well as the exhibits admitted into evidence, the hearing panel accepts L.A.'s testimony on this point and finds that the respondent's testimony in this regard lacks credibility.

         "48. The day after signing the original purchase agreement regarding the ranch, on August 21, 2013, Yard Concerns made a formal offer for the purchase of assets owned by CLS. Yard Concerns offered to purchase:

'1. All furniture, fixtures, equipment, software, vendor lists, contractor lists, rights to trade secrets, supplies, and vehicles;
'2. All commercial and residential contracts now existing and currently renewing; and
'3. All commercial and residential account receivables accrued from January 1, 2013, to current.'

         Yard Concerns also agreed:

'. . . to remit $200, 000.00 to be paid over 60 months at a rate of interest of 5.00%, for a total monthly payment of $3, 774.25, commencing October 1, 2013. Yard Concerns, L.C. reserves the right to prepay the entire purchase price in full at its discretion and at any time prior to the expiration of the 60 month term; and'

         And, Yard Concerns agreed to:

'. . . assume secured debt CLS owes to RMI, Inc. in the amount of $118, 273.10, subject to all RMI's approval of the transfer of ownership of its collateral and CLS' debt.'

         The respondent made the offer expressly conditioned upon:

'1. Written acceptance of this offer by the board of directors and all shareholders of CLS;
'2. The dissolution of any existing non-compete agreements entered into by all shareholders, managers, operations personnel, and persons with ability to limit the sale of assets, employment of any and all existing CLS personnel, and transition of accounts to Yard Concerns, L.C.;
'3. Yard Concerns, L.C. will relocate management to its corporate offices, however, in an effort to not disrupt commercial and residential services until the end of the operating season, Yard Concerns, L.C. is granted the option to rent CLS's building on a month-to-month basis at the rate of $1, 800.00 per month until Yard Concerns, L.C. is able to relocate all acquired assets to its facility;
'4. Full and complete cooperation from CLS shareholders, CLS management, CLS staff, and controllers of third-party contracts to effectuate a smooth and undisturbed of [sic] transition of assets and operations;
'5. Written waiver of conflict of interest with Rick Hodge, Attorney At Law, L.C., considering it is counsel for Yard Concerns, L.C. and its parent company, and CLS engaged Rick Hodge, Attorney At Law, L.C. to represent CLS in one limited matter in Sedgwick County District Court and to serve as Registered Agent for CLS;
'6. The execution of a non-disclosure and a non-compete agreement by each officer and shareholder of CLS for the benefit of Yard Concerns, L.C.;
'7. Re-application of all staff to Yard Concerns, L.C. period for employment;
'8. General warranty to Yard Concerns, L.C. of complete and unfettered transferability of assets being purchased, and indemnification by CLS and its shareholders as to the same;
'9. The express understanding that this is an asset sale and not an agreement to purchase CLS stock; and
'10. The express understanding that the real property assets of CLS are not being purchased by Yard Concerns, L.C.'

         Following the recitation of conditions, the respondent's offer provided as follows:

'Please advise within two (2) business days of the date of this letter of CLS' acceptance or rejection of this offer. If the same is accepted, please feel free to have your legal counsel draft the sale and asset transfer documents. Should you prefer, Yard Concerns, L.C. will do the same and submit the documents to you and your legal counsel for review and execution. If this offer is not accepted as of 5:00 p.m. on Friday, August 23, 2013, the same will be deemed rejected.'

         The respondent was aware of L.A.'s dire financial situation and knew that L.A. would be unable to secure counsel and have counsel review the agreement within two days.

         "49. That same day, on August 21, 2013, the respondent offered to L.A. To draft the dissolution of the non-compete needed from P.S. L.A. accepted the respondent's offer to draft the dissolution.

         "50. P.S. agreed to meet with L.A. regarding CLS matters, on August 22, 2013, at 1:30 p.m. The morning of the scheduled meeting, L.A. asked the respondent whether he would be able to provide a dissolution of the non-compete before 1:30 p.m. that day, in time for the meeting. The respondent agreed. At 1:56 p.m. that afternoon, the respondent forwarded the following to L.A. via electronic mail:

         'COMPLETE LANDSCAPING SYSTEMS, INC.

         'MINUTES OF A SPECIAL MEETING OF THE BOARD OF DIRECTORS AND SHAREHOLDERS

         'A special meeting of the Board of Directors and Shareholders of Complete Landscaping Systems, Inc. was held on August 22, 2013, at 1:30 p.m. at 1727 E. Second Street, Wichita, KS, pursuant to written Waiver of Notice fixing the time and place of said meeting, signed by all of the Directors and Shareholders, as follows:

         'WAIVER OF NOTICE

         'We, the undersigned, being all of the members of the Board of Directors and Shareholders of Complete Landscaping Systems, Inc., do hereby waive notice of the time, place, and purpose of a special meeting of the Board of Directors and Shareholders and do hereby fix the 22nd day of August, 2013, at 1:30 p.m., as the time, and 1727 E. Second Street, Wichita, KS as the place for the holding of said meeting, for the purpose of considering the advisability of a dissolution of the mutual covenants not to compete, executed by the parties hereto, the partial sale of assets of Complete Landscaping Systems, Inc., to Yard Concerns, L.C., pursuant to its offer dated August 21, 2013, waiver of conflict of interest for Rick Hodge, Attorney At Law, L.C., and transacting other business that may properly come before said meeting.

         'Each of us hereby waives all of the requirements of the statutes of Kansas and the By-Laws of this corporation as to notice of said meeting and formalities for the Board of Directors and Shareholders, and hereby consents to the transaction of any and all business which may lawfully come before said meeting.

         'IN WITNESS WHEREOF, We have hereunto set our hands this 22nd day of August 2013.

         '[L.A.]___

         '[P.S.]___

         'The meeting was called to order by [L.A.], President. Upon roll call, it was ascertained that [L.A.] and [P.S.] were present and the same constituted a quorum.

         'Thereupon, the Chairman stated that the meeting was duly organized and ready for the transaction of business and that the first order of business was to consider the advisability of accepting the offer to purchase partial assets of Complete Landscaping Systems, Inc., made on August 21, 2013 by Yard Concerns, L.C., and the second order of business was to consider the advisability of the dissolution of the non-compete agreement entered into by [P.S.] and [L.A.] for their mutual benefit and that of Complete Landscaping Systems, Inc., and that the third order of business was to consider the waiver of conflict for Rick Hodge, Attorney At Law, L.C.

         'The offer to purchase partial assets made by Yard Concerns, L.C., was submitted to the Board of Directors and Shareholders for their examination. The dissolution and termination of the non-complete agreement entered into for the mutual benefit of [P.S.], [L.A.], and Complete Landscaping Systems, Inc., was brought before the Board of Directors and Shareholders for discussion. The execution of Waiver of Conflict of Interest for Rick Hodge, Attorney At Law, L.C., was brought before the Board of Directors and Shareholders for discussion. After discussion, the following resolution was introduced:

'"BE IT RESOLVED, that the Board of Directors and Shareholders of Complete Landscaping Systems, Inc., hereby declare it to be advisable to ACCEPT the offer made on August 21, 2013, by Yard Concerns, L.C., for the purchase of partial assets of Complete Landscaping Systems, Inc., that the offer made by Yard Concerns, L.C., on August 21, 2013, be fully incorporated by reference herein and the terms therein be fully and completely agreed to, and that the President of Complete Landscaping Systems, Inc., be authorized to execute all transfer and sale documents required for the consummation of the transaction with Yard Concerns, L.C.; and
'"BE IT FURTHER RESOLVED, that the non-complete [sic] agreement executed by [P.S.] and [L.A.] for their mutual benefit, and that of Complete Landscaping Systems, Inc., is hereby terminated, canceled, and held for naught; and
'"BE IT FURTHER RESOLVED, that Complete Landscape Systems, Inc., hereby waives any and all conflict of interest with Rick Hodge, Attorney At Law, L.C. for its representation of Yard Concerns, L.C., the party offering to purchase assets, and Rick Hodge, Attorney At Law, L.C.'s prior or current transactions and representation of any sort or kind, whatsoever, involving Complete Landscaping Systems, Inc., in a matter in Sedgwick County District Court, and that the President of Complete Landscaping Systems, Inc., be authorized to execute all waiver documents to carry out this resolution."

         'Upon motion duly made and seconded, said resolutions were unanimously adopted.

         'There being no further business to come before the meeting, upon motion duly made, seconded and carried, the meeting was adjourned.

         '[L.A.], President___

         'Approved:

         '[P.S.], Chairman of the Board'___

         When the respondent sent the minutes and resolution, the respondent stated: '[y]ou are advised to seek legal counsel when this is discussed and before it is signed.' At the time the respondent sent the electronic mail message, he knew that L.A. and P.S. were meeting and were waiting on the documents and did not have time to seek and obtain independent legal counsel.

         "51. On August 22, 201[3], CLS, through L.A. and P.S., accepted Yard Concerns offer to purchase certain assets.

         "52. On August 29, 201[3], the respondent sent letters to CLS' existing clients informing them that Yard Concerns had acquired its account from CLS, using Yard Concerns' letterhead.

         "53. On September 3, 2013, the respondent sent a series of text messages to L.A., including:

'. . . FYI, I did tell the eagle that yard concerns purchased about 90% of cls accounts and local operations. Yc did not buy cls, just some Assets. I did not mention the pm side. We should keep that for another day. Told her yc did not buy the building either and that you would still own cls. Didn't say you were going to work for yc. She's going to call you.'

L.A. replied, 'She's going to roll with what you said. And do a follow up with me tomorrow. I don't want to talk to her unless you've coached me.'

         "54. On September 4, 2013, the Wichita Eagle published an article on Yard Concern's purchase of CLS' assets. The article was updated later that same day.

'Wichita attorney purchases most of Complete Landscaping's local assets
'UPDATED - Almost all of Complete Landscaping Systems' local business has sold.
'"We have purchased 90 percent of their local operations, " says Rick Hodge, a bankruptcy attorney.
'Hodge owns Yard Concerns, a company that until now has mainly existed to serve commercial and residential properties he owns.
'"Now we're going to try to grow it and branch out, " Hodge says.
'During a slower season in a month or two, Hodge says he'll relocate equipment he purchased from Complete Landscaping to another building.
'"We are not Complete Landscaping by any means, " he says. "Complete is still in existence."
Complete Landscaping owner [L.A.] didn't have an immediate comment.
'The company, which [L.A.] purchased in 2010, has had a series of financial and legal issues since then, much of them stemming from a dispute with Bank of America, which once had been a large national account for the company.
'"I know that Complete has been having a lot of problems, " Hodge says. "I knew they had some cash flow problems. . . . I'm fearful their entire ship is or was sinking."
'His career as a bankruptcy attorney influenced his decision to buy most of Complete Landscaping's local assets and accounts, he says.
'"I would hate to lose more jobs in the Wichita community, " Hodge says.
'He says Complete Landscaping has some great workers who have been with the company for a long time.
'"We thought, well, this might be an opportunity to help out some of the employees, " Hodge says. "Some of their key employees likely will be transitioning to us."
'It looks like Complete Landscaping will keep its headquarters at 1727 E. Second St., where Michael's Complete Lawn Care began sharing space earlier this year to save costs for both companies.
'[L.A.] says she will discuss changes at her company later this week.'

         "55. On September 4, 2013, the respondent informed L.A. that he had reached a tentative resolution with one of CLS' creditors. The respondent recommended to L.A. that she attempt to sell the building where CLS was operating. The respondent told L.A. that if all went well, 'this whole thing will blow over in a week or two and with minimal damage.'

         "56. Also on September 4, 2013, the respondent said to L.A. 'I wouldn't tell anyone a thing right now.' L.A. agreed.

         "57. That same evening, the respondent informed L.A. that he worked 'serious magic' with a creditor. The respondent told L.A. that he would help her with what to say, acknowledged that he knows she trusts him, and stated that he would help her get through this.

         "58. On September 4, 2013, the Wichita Business Journal published an article regarding sale of CLS' assets.

'Bankruptcy attorney Rick Hodge has purchased about 90 percent of the assets of Wichita's Complete Landscaping Systems, though Complete still exists.
'The Wichita Eagle reports Hodge owns Yard Concerns, a company that has mainly focused on serving the commercial and residential properties he owns, but he hopes to expand the business.
'Complete Landscaping's recent financial troubles played a role in Hodge's decision. The company was facing at least six lawsuits from businesses saying Complete owed them money. Complete CEO [L.A.] told the Wichita Business Journal the cash flow issues were the result of a dispute with what was previously a major client for Complete, Bank of America.
'Hodge said he wanted to try to protect some of the local jobs by purchasing Complete assets.
'For now, it appears Complete is continuing to operate at a building it shares with Michael's Complete Lawn Care.'

         "59. On September 6, 2013, the respondent informed L.A. that Carl Davis, expected L.A. to be at a hearing in the Hadden collection matter that day. L.A. told the respondent that she could not be at the hearing that day.

         "60. On September 10, 2013, Mark Lazzo, attorney for the bank holding the note on CLS' real property, sent a letter to CLS, P.S., and L.A., which provided:

'This office has been retained by Equity Bank ("Bank") regarding a default on the referenced loan (the "Loan") owed by Complete Landscaping Systems, Inc. ("CLS" or "Borrower") to the Bank. As you know, the Loan is personally guaranteed by you both (collectively "Guarantors") and secured by four (4) parcels of real estate owned by CLS located at 1717, 1725, and 1727 E. 2nd St. Wichita, Kansas, and 1728 E. Mildred, Wichita, Kansas, 67214 (the "Mortgaged Property") and rents generated by the property.
'In an article published in the Wichita Eagle late last week, the Bank learned, for the first time, that CLS sold all of its personal property assets to local attorney Rick Hodge. This fact has been confirmed by Mr. Hodge. In addition, the Bank learned from its own investigation that judgments exceeding $350, 000 have been entered against CLS, and federal tax liens have been filed against the company's assets.
'Be advised that the above events constitute a default on the Loan, and the Bank is hereby declaring the Loan in default. The May 30, 2013 Promissory Note (the "Note") and March 30, 2010 Business Loan Agreement ("BLA") between the Bank, CLS and Guarantors expressly provides that a default on the Loan occurs if: (a) there is a wholesale transfer of the company's assets; (b) there is a material adverse change in the company's financial condition which materially impairs CLS' ability to perform on the Loan; (c) judgments are entered against CLS which materially affect its business; (d) there is a change in control of CLS's business; and/or (e) the Bank's [sic] holds a good faith belief that CLS will be unable to perform its Loan obligations. All of the above events have occurred.

         'As of September 9, 2013, the approximate payoff on the Loan is as follows:

a. Principal balance - $292, 046.81;
b. Accrued interest at contract rate of 10% per annum through September 9, 2013 - $812.85;
c. Interest at default rate of 18% per annum after September 9, 2013 - $144.02 per day until paid in full; and
d. Late fees - $446.16.
'Interest at the default rate and late charges continue to accrue. In addition, the above does not include contractual charges which have, or may, accrue under the agreements between you and the Bank including, but not limited to, costs of suit, title searches, appraisal fees and attorney fees and expenses incurred by the Bank.
'As you know, the Bank holds an assignment of rents from the Mortgaged Property. I understand that CLS is currently receiving rent payments from tenants Yard Concerns, L.C. and Michael's Complete Lawn Care. These rent payments ...

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