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In re Hult

Supreme Court of Kansas

February 16, 2018

In the Matter of Matthew Edgar Hult, Respondent.

         Original proceeding in discipline.

          Kimberly L. Knoll, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett, Disciplinary Administrator, was with her on the formal complaint for the petitioner.

          Matthew Edgar Hult, respondent, appeared pro se.

          OPINION

          Per Curiam:

         This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Matthew Edgar Hult, of Olathe, an attorney admitted to the practice of law in Kansas in 2012.

         On March 14, 2017, the office of the Disciplinary Administrator filed a formal complaint against the respondent alleging violations of the Kansas Rules of Professional Conduct (KRPC). The respondent failed to file an answer. On May 15, respondent emailed a document titled Motion to Continue the hearing date. The hearing panel filed an order on May 17, denying respondent's motion. On May 19, respondent filed a proposed probation plan. On May 23, respondent filed a document entitled "pleading" in which he admitted that he violated KRPC 1.1, 1.3, 1.5, 1.16, 3.2, 3.4(c), 8.3, and 8.4(d), and Kansas Supreme Court Rules 207 and 211. Respondent also stipulated that he violated KRPC 8.1(b); however, the disciplinary administrator did not charge respondent with violation of that rule. A hearing was held on the complaint before a panel of the

          Kansas Board for Discipline of Attorneys on May 23, where the respondent was personally present. The hearing panel determined that respondent violated KRPC 1.1 (2018 Kan. S.Ct. R. 289) (competence); 1.3 (2018 Kan. S.Ct. R. 292) (diligence); 1.4(a) (2018 Kan. S.Ct. R. 293) (communication); 1.5 (2018 Kan. S.Ct. R. 294) (fees); 1.15(a) (2018 Kan. S.Ct. R. 328) (safekeeping property); 1.16(d) (2018 Kan. S.Ct. R. 333) (termination of representation); 3.2 (2018 Kan. S.Ct. R. 343) (expediting litigation); 3.4(c) (2018 Kan. S.Ct. R. 347) (fairness to opposing party and counsel); 8.4(d) (2018 Kan. S.Ct. R. 381) (engaging in conduct prejudicial to the administration of justice); 8.3(a) (2018 Kan. S.Ct. R. 380) (reporting professional misconduct); Kansas Supreme Court Rule 207(c) (2018 Kan. S.Ct. R. 246) (failure to report action); and Kansas Supreme Court Rule 211(b) (2018 Kan. S.Ct. R. 251) (failure to file answer in disciplinary proceeding).

         Upon conclusion of the hearing, the panel made the following findings of fact and conclusions of law, together with its recommendation to this court:

         "Findings of Fact

         . . . .

         "DA12242

         "12. After being admitted to practice law in Kansas, the respondent established an immigration practice. In addition to his Kansas office, the respondent opened an office in Sioux City, Iowa. While the respondent was not licensed to practice law in the state courts of Iowa, his license to practice law in Kansas authorized him to practice immigration law in Iowa under Iowa Rule 32:5.5, which provides as follows:

'(d) A lawyer admitted in another United States jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that:
. . . .
(2) are services that the lawyer is authorized to provide by federal law or other law of this jurisdiction.'

         "13. In Iowa, when an attorney establishes a practice under Iowa Rule 32:5.5(d)(2), the attorney must comply with Iowa Rule 39.16:

'An attorney who establishes an office or other systematic and continuous presence in Iowa for the practice of law under the provisions of rule of professional conduct 32:5.5(d)(2) shall file the annual statement required by rule 39.8(1) and annual questionnaire required by rule 39.11, pay the annual fee and assessment due under rules 39.5 and 39.6, comply with all provisions of chapter 45, cooperate with investigations and audits under rule 39.10, and be subject to the provisions of rule 39.12.'
The respondent failed to file the annual statement required by Iowa Rule 39.8(1), failed to file the annual questionnaire required by Iowa Rule 39.11, failed to pay the annual fee and assessment due under Iowa Rules 39.5 and 39.6, and failed to maintain a trust account as required by Iowa rule 45.1 ('funds a lawyer receives from clients or third persons for matters arising out of the practice of law in Iowa shall be deposited into one or more identifiable interest-bearing trust accounts located in Iowa').

         "14. In April 2013, the respondent was notified of his obligations under the Iowa rules by the Office of Professional Regulation of the Iowa Supreme Court. The correspondence directed the respondent to comply with the provisions of the rules within 30 days. The respondent failed to comply with the directives contained in the correspondence.

         "15. On December 9, 2013, the respondent completed the statement and questionnaire. In the questionnaire, the respondent disclosed that he did not keep all funds of clients for matters involving the practice of law in Iowa in separate interest-bearing trust accounts located in Iowa. The respondent also stated that all retainers, regardless of size, are not deposited in his trust account. For further explanation, the respondent stated that he does not keep client funds, that he worked only on immigration cases, that all fees are earned on a flat fee basis, and that the flat fees are deposited into his business account. Along with the statement and questionnaire, the respondent forwarded the fee in the amount of $225.00 to the Iowa registration authority

         "16. In January 2014, the respondent notified the registration authority in Iowa that he was closing his Sioux City office. Because his December 2013, statement and questionnaire had not been processed yet, the registration authority in Iowa withdrew the respondent's statement and questionnaire and returned the fee paid.

         "17. On February 28, 2014, the respondent vacated his office space in Sioux City, Iowa. However, the respondent continued to maintain a website advertising his immigration law practice in Iowa.

         "18. Sometime in 2014, a complaint was filed against the respondent with the Iowa attorney disciplinary board for his failure to comply with the trust account rules and the multijurisdictional practice registration rules.

         "19. On October 27, 2014, Charles Harrington, the Administrator for the attorney disciplinary board, wrote to the respondent. The letter provided:

'The above complaint filed against you came on for reconsideration by the Board at its recent hearing meeting.
'The Board found that at all times relevant to the complaint you maintained an office in Sioux City for the practice of federal immigration law. You were admitted to the practice of law in Kansas but not in Iowa except as permitted by Iowa R. Prof'l Conduct 32:5.5(d)(2). The Board has jurisdiction as to your professional conduct in Iowa pursuant to Iowa R. Prof'l Conduct 32:8.5(a) (lawyer not admitted in Iowa is subject to disciplinary authority of Iowa if lawyer provides or offers to provide any legal services in this state).
'In April 2013, you received correspondence from the Office of Professional Regulation of the Supreme Court of Iowa (OPR) that you were required to comply with Iowa Ct. R. 39.16 (attorneys practicing in Iowa under multijurisdictional practice rule) and other rules regulating multijurisdictional practice in the state. This included detailed information about relevant provisions of the Iowa Rules of Court, including chapter 32 (Rules of Professional Conduct), chapter 39 (Client Security Commission), and chapter 45 (Client Trust Account Rules). OPR's letter emphasized in bold font, "The [Client Security Commission Combined Statement and Questionnaire] report form due in 2013 is enclosed. You must prepare and file this form with our office within 30 days after the date of this memorandum, with the fees shown on the form and described below."
'You continued to practice immigration law in Iowa for another eight months without filing the required report and paying the fees. Finally, in December 2013 you belatedly filed the report and paid the fees. (In early 2014 you closed your office in Sioux City and the Board has received no information indicating you continued to practice in Iowa.)
'The Board concluded that your practice in Iowa for many months without timely compliance with rule 39.16 was contrary to Iowa R. Prof'l Conduct 32:5.5(a) (lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction).
'The Board's investigation disclosed another serious concern regarding your former practice in the state. In the statement you filed with the Client Security Commission in December 2013, you acknowledged you did not keep all funds of clients for matters involving the practice of law in Iowa in a client trust account and that you did not even have an Iowa trust account. You explained you charged only flat fees, not "retainers." The Board found that you considered these flat fees to be earned upon receipt and prior to completion of the clients' cases.
'Although you sought to distinguish a flat fee from a retainer, Iowa case law holds that a flat fee is a "special retainer" and must be deposited into a client trust account, to be withdrawn only as earned. See Iowa Supreme Ct. Att'y Disciplinary Bd. v. Denton, 814 N.W.2d 548, 551 (Iowa 2012) (reprimanding Colorado lawyer for failing to deposit a flat fee paid by Iowa client in federal immigration matter into a client trust account). Iowa R. Prof'l Conduct 32:1.15(a) requires a lawyer to hold a client's funds separate from the lawyer's own funds. 32:1.15(c) provides that "[a] lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred."

'Iowa Ct. R. 45.10 specifically addresses the handling of flat fees.

"(1) Definition. A flat fee is one that embraces all services that a lawyer is to perform, whether the work be relatively simple or complex.
"(2) When deposit required. If the client makes an advance payment of a flat fee prior to performance of the services, the lawyer must deposit the fee into the trust account.
"(3) Withdrawal of flat fee. A lawyer and client may agree as to when, how, and in what proportion the lawyer may withdraw funds from an advance fee payment of a flat fee. The agreement, however, must reasonably protect the client's right to a refund of unearned fees if the lawyer fails to complete the services or the client discharges the lawyer. In no event may the lawyer withdraw unearned fees."

See Iowa R. Prof'l conduct 32:1.15(f) (requiring compliance with chapter 45 rules).

'The Board concluded you violated rules 32:1.15(a), 32:1.15(c), and 32:1.15(f) by failing to maintain a client trust account in Iowa and by failing to deposit advance flat fee payments into such an account.
'It was the determination of the Board that you be and hereby are publicly reprimanded for violating Iowa's client trust account and multijurisdictional practice rules.'

         "20. Also on October 27, 2014, the Clerk of the Grievance Commission of the Supreme Court of Iowa wrote to the respondent, enclosing a copy of the Iowa attorney disciplinary board's letter and notifying respondent that he had 30 days to file exceptions to the Board's letter. The respondent failed to file exceptions to the board's letter.

         "21. On January 15, 2015, the Iowa Supreme Court publicly reprimanded the respondent.

         "22. The Iowa disciplinary authority forwarded the materials to the Kansas disciplinary administrator. The Kansas disciplinary administrator docketed the materials as a complaint against the respondent. On January 28, 2015, the disciplinary administrator sent a letter to the respondent directing the respondent to file a response to the complaint within 20 days.

         "23. On February 13, 2015, the respondent filed a response to the complaint, stating in relevant part:

'Firstly, I would like to explain the situation that took place in Iowa. I had a small office there to handle only Federal Immigration cases, which I can practice in all fifty states of the U.S.A. The Iowa Bar contacted me and wanted me to pay a fee for being a lawyer practicing in the state, but not licensed in Iowa. So I paid the fee. Then I decided to close the office in Iowa. That is when I was contacted by the office, and was told that they would refund the fee to me, because I was not going to be practicing in Iowa. They then refunded the fee, and I made arrangements with the office rental company to close and move out of the office, which I did. No deadlines were ever issued to me on when I had to leave the State.
'Subsequently, after closing the office they filed a complaint against me for not closing the office and for not paying the fee. I submitted to them a written letter from the property company that I had indeed closed the office. The part where I faltered was that I did not shut down the office website immediately, and to the disciplinary agency in Iowa that was evidence that I was still practicing there. So I then submitted documents that showed I did indeed shut down the website, and had vacated the office, and the State of Iowa.
'The above actions did not satisfy them. They did not set any deadline for me to close the business, and I did pay the fee, but they returned it to me. I provided evidence that I had closed the office and left the State. I feel like they are treating me unfairly since I am not a licensed attorney in the State of Iowa, but there was no reasoning with them, even after I submitted the necessary evidence. They decided to railroad me because they knew I would have no ability to defend myself. I object to their decision to file a complaint against me.'
In his response, the respondent did not address his failure to establish and maintain a trust account in Iowa. Additionally, respondent did not acknowledge his failure to comply with the Iowa multijurisdictional practice registration rules.
"DA12318

         "24. In 2014, J.W. retained the respondent to obtain citizenship for his two step-children who were residing in Kenya. According to the fee agreement, J.W. retained the respondent on May 29, 2014. According to J.W., he retained the respondent on September 1[6], 201[4].

         "25. In the fee agreement, J.W. agreed to pay the respondent $1, 160 for attorney fees and $840 for filing fees. J.W. paid the fees over time. By January 26, 2015, J.W. had paid the respondent in full.

         "26. The respondent did not deposit the $840.00 paid for filing fees into an attorney trust account. The respondent did not have a trust account.

         "27. On September 26, 2014, J.W. and his wife, T.W., wrote to the respondent seeking an update regarding the status of the representation. On September 29, 2014, the respondent responded to J.W., stating, 'Everything is moving ahead, we should be getting receipts for their cases from the government in a couple of weeks.'

         "28. J.W. and T.W. called the respondent by telephone multiple times. The respondent failed to return J.W. and T.W.'s telephone calls.

         "29. On November 24, 2014, J.W. and T.W. wrote to the respondent, again seeking a status update. Although the record does not contain the respondent's response, he clearly responded to J.W. and T.W.'s inquiry. Later, on November 24, 2014, J.W. and T.W. thanked the respondent for the response and requested the United States Custom and Immigration Services ('USCIS') receipt numbers. At that time, they reminded the respondent that J.W.'s mother also wished to sponsor the children. The respondent did not provide J.W. and T.W. with the USCIS receipt numbers.

         "30. On January 6, 2015, J.W. wrote to the respondent:

'I am writing to ask please, please [sic] respond to my text and phone calls, You are our hope!!!!!! I've [sic] called and text [sic] without any returns, or guidance please let me know of any progress if any. Are you waiting for full payment to help us??? Please if so let us know immediately as I will send it now. Also please send receipts for payment sent. I don't [sic] see why you don't [sic] send updates periodically, you [sic] do carry our our [sic] hope in your hands. Please understand our concerns and send updates immediately.'

         "31. On January 7, 2015, the respondent responded to J.W. and T.W.'s inquiries:

'My assistant says you have been trying to reach. [sic] I apologize for not responding, but I am away on vacation since Christmas. This is our slowest time of ...

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