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In re L.J. Buckner

Supreme Court of Kansas

June 29, 2018

In the Matter of L.J. Buckner, Jr., Respondent.

          Original proceeding in discipline.

          Penny R. Moylan, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett, Disciplinary Administrator, was with her on the formal complaint for the petitioner.

          John J. Ambrosio, of Ambrosio & Ambrosio, Chtd., of Topeka, argued the cause, and L.J. Buckner, Jr., respondent, argued the cause pro se.

          PER CURIAM.

         This is a contested original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, L.J. Buckner, Jr., of Lenexa, an attorney admitted to the practice of law in Kansas in 1994. After respondent appeared in person and through counsel for a hearing before the panel of the Kansas Board for Discipline of Attorneys, the panel determined he violated Kansas Rules of Professional Conduct (KRPC) 1.4(b) (2018 Kan. S.Ct. R. 293) (communication); 1.5(d) (2018 Kan. S.Ct. R. 294) (fees); 1.15(a), (b), (c), (d)(1)(ii), (d)(3), and (f) (2018 Kan. S.Ct. R. 328) (safekeeping property); 1.16(d) (2018 Kan. S.Ct. R. 333) (termination of representation); 8.1(b) (2018 Kan. S.Ct. R. 379) (failure to respond to lawful demand for information from a disciplinary authority); and Kansas Supreme Court Rule 207(b) (2018 Kan. S.Ct. R. 246) (failure to cooperate in disciplinary investigation). The hearing panel also found that the respondent did not violate KRPC 1.3 (2018 Kan. S.Ct. R. 292) (diligence) and KRPC 8.4 (2018 Kan. S.Ct. R. 381) (misconduct).

         Before the panel, the Disciplinary Administrator recommended that the respondent be disbarred. Respondent's counsel acknowledged respondent's conduct supported suspension. The hearing panel unanimously recommended that the respondent be suspended for two years and, if the respondent seeks reinstatement, that he be required to undergo a reinstatement hearing under Supreme Court Rule 219 (2018 Kan. S.Ct. R. 264).

         Pursuant to Supreme Court Rule 211(f) (2018 Kan. S.Ct. R. 251) and Supreme Court Rule 212 (2018 Kan. S.Ct. R. 255), the Disciplinary Administrator filed a Notice of Appeal and Exceptions to the Hearing Panel Report, arguing the hearing panel's findings of fact support a conclusion of law that the respondent violated KRPC 8.4(c). In the alternative, the Disciplinary Administrator argued that the clear and convincing evidence of record established that respondent violated KRPC 8.4(c). Furthermore, in recommending discipline, the Disciplinary Administrator took exception to the hearing panel's findings that: (1) respondent's violations were committed knowingly, rather than intentionally and (2) that respondent's behavior was motivated by selfish conduct, rather than selfish and dishonest conduct.

         Respondent did not file exceptions to the panel's final hearing report; therefore, the panel's findings of fact are deemed admitted. Supreme Court Rule 212(c), (d); see also In re Hodge, 307 Kan. 170, 209-10, 407 P.3d 613 (2017) ("When a respondent does not take exception to a finding it is deemed admitted.").

         We unanimously hold that clear and convincing evidence supports each of the rule violations found by the panel. But we disagree with the panel's conclusion that respondent's conduct did not violate KRPC 8.4(c) and hold that the panel's findings of fact, as a matter of law, establish a violation of this rule.

         The majority of this court holds disbarment is the appropriate discipline. A minority of this court would impose indefinite suspension and require the respondent to undergo a reinstatement hearing under Supreme Court Rule 219 at which Respondent would be required to prove that full restitution has been provided to his clients and the Client Protection Fund as factually applicable.

         Facts and Procedural History

         On November 10, 2016, the office of the Disciplinary Administrator filed a formal complaint against the respondent alleging violations of the KRPC; on May 1, 2017, that office filed a first amended formal complaint. Upon motion granted December 27, 2016, the formal hearing was continued. The respondent filed an answer to the complaint on January 23, 2017, and an answer to the first amended formal complaint on May 22, 2017. Respondent filed a proposed probation plan on May 1, 2017. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on June 8, 2017, where the respondent was personally present and was represented by counsel.

         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 and Conclusions of Law
"14. On March 19, 2012, EverBank filed a foreclosure action against P.J. And D.R. On March 30, 2012, P.J. and D.R. retained Jordan O. Schwartz to represent them in the pending litigation. P.J. and D.R. agreed to pay Mr. Schwartz $500 for the first 30 days representation and $395 monthly during the course of the representation.
"15. On April 16, 2012, Mr. Schwartz entered his appearance on behalf of P.J. and D.R.
"16. Later, on February 4, 201[4], P.J. and D.R. replaced Mr. Schwartz and retained the respondent to defend them in the pending mortgage foreclosure action. Additionally, P.J. and D.R. directed the respondent to file a counterclaim against the mortgage company. Finally, P.J. and D.R. wanted to assert a punitive damages claim against the mortgage company.
"17. P.J. and D.R. entered into a written fee agreement with the respondent. While the record does not include a fully executed agreement, the parties stipulated that the agreement found at Exhibit 1 is a true and accurate copy of the written fee agreement which was fully executed by the respondent, P.J. and D.R.
"18. On February 7, 2014, the respondent sent P.J. and D.R. an email message which provided:
'I have attached my engagement letter as promised. It is different than the document that I provided to you before but is intended to be reasonable and ethical.
'My expectation is that you all would pay me $500 per month plus expenses. I have framed that as a monthly cap or monthly flat fee. I will keep track of my time in a traditional format but cap the legal fee portion as $500. I believe that doing so will allow me to treat all of your payments as earned when received as a practical matter. The way the prior document was crafted seems to leave that door open. It will also force me to keep track of my time in case we are successful in recovering fees and expenses from persons other than you. I kept much of the success fee language the same.'
Despite the respondent's statement in the email message, the respondent did not keep contemporaneous time records. The written fee agreement included the following:
'1. This Agreement is effective February 4, 2014 and Buckner had no obligation to provide legal services to Clients prior to that time.
'2. Clients are hiring Buckner to represent them in a pending mortgage foreclosure law matter now pending in Johnson County, Kansas District Court filed by EverBank against Clients and others (12CV2253). . . .
sic Buckner is entitled to and may recover the full amount of his billed fees from persons other than Clients through attorney's fee provisions or sanctions or the like.

'6. Buckner will incur various costs and expenses on Clients' behalf in performing legal services under this Agreement. Clients agrees [sic] to pay for all costs and expenses paid or owed by Clients in connection with this matter and that Buckner had advanced on Clients' behalf but have not been previously paid or reimbursed to Buckner in addition to the hourly fees described above in paragraph 5. Costs and expenses commonly include court fees; jury fees; service of process charges; court and deposition reporters' fees; photocopying and reproduction costs; notary fees; long-distance telephone charges; messenger and other delivery fees; postage; deposition costs; travel costs including parking and mileage, transportation meals and hotel costs; investigation expenses; consultant, expert witness, professional mediator, arbitrator and/or special master fees and other similar items. Except for the items listed below, costs and expenses will be charged at Buckner's cost.

'10. When Buckner's service concludes, all previously unpaid fees, costs and expenses will immediately become due and payable. Buckner is authorized to use any funds held in Buckner's trust account as a deposit (advanced fee) against costs to apply to such unpaid fees, costs and expenses. After Buckner's services conclude, upon request, Clients' file and property will be delivered to Clients whether or not Clients has [sic] paid any fees and/or costs owed to Buckner. Clients understands [sic] that to the limited extent Buckner had paid out-of-pocket expenses for items that have not yet been reimbursed by Clients, Buckner may be reimbursed for that particular expense before releasing that item.

"19. D.R. responded to the respondent's message, at 7:17 p.m. that same day, as follows:

'That is reasonable in principle. (We are all for incenting you).

sic

'For example, if they offer a $60, 000 principal reduction, and we refuse that offer, then we would not owe a success [fee] (e.g. of $12K).

In accordance with the fee agreement, P.J. and D.R. made 17 monthly payments of $500.00 to the respondent for his attorneys fees, from February, 2014, through June, 2015.

of P.J. and D.R. in the pending litigation filed by EverBank. The litigation proceeded and the court scheduled trial by jury for August 3, 2015.

'. . . Buckner did file a late request to amend his counterclaims and add punitive damages. He was clearly out of time. The final pretrial had already been heard and the trial issues were set. I had previously ruled there was not sufficient evidence to establish a fraud claim, so it was dismissed. There were no other claims for me to allow punitive damages. He still had his KCPA claims and he could have gotten attorney's fees and $10, 000 per claim, if he prevailed.

sic sic

"22. On July 27, 2015, the respondent completed his annual attorney registration form with the Clerk of the Kansas Appellate Courts. At that time, the respondent notified attorney registration that he no longer had an attorney trust account.

'Settlement gives certainty.

'Under the settlement agreement as it stands, you would have been in your house for 5 years without making a payment. Owe nothing to EverBank and have $25K in your pocket if the loss mitigation options were not acceptable to you.

'I have raised some issues with BC-what is the universe of loss mitigation options at this point (reminding them of how we got into this mess in the first place), mutual releases (as it stands, we release all claims against us [sic] but they aren't releasing any claims against us), indemnification (we don't want anyone else claiming entitlement to enforce the note).
'But the bigger issues are the amount paid and the fall back reinstatement option-which is a worst case scenario. I'll remind them that we submitted an RMA when this case was filed that OCWEN said it could not process.'
"24. P.J. and D.R. declined the mortgage company's offer and countered with $100, 000. The mortgage company then offered $49, 999. P.J. and D.R. made an additional offer to the mortgage company for $75, 000. The mortgage company did not accept P.J. and D.R.'s offer. P.J. and D.R. agreed to accept $49, 999, with the understanding that after the respondent's expenses were paid, they would receive the balance of the settlement proceeds.
"25. On July 31, 2015, P.J. and D.R. accepted the mortgage company's settlement offer. The mortgage company agreed to pay P.J. and D.R. $49, 999.00, and P.J. and D.R. agreed to surrender their home to the mortgage company.
"26. On August 20, 2015, in anticipation of receiving the settlement check, P.J. sent the respondent an email message and suggested that the respondent's August, 2015, attorney fee of $500 be taken out of the settlement proceeds. Additionally, at that time, P.J. asked the respondent to provide a list of outstanding expenses.
"27. On August 21, 2015, the respondent provided P.J. and D.R. with a list of outstanding expenses. There was a dispute as to one expense, the costs associated with the Garfield deposition.
"28. On August 24, 2015, OCWEN Loan Servicing, LLC issued check number 1663558 made payable to the respondent in the amount of $49, 999.00, to settle the matter.
"29. On August 26, 2015, the respondent sent P.J. and D.R. an email message which provided:
'Nicol has informed me that he has possession of the check-see attached.
'Once I get it, I will deposit it and disburse funds when they are available.
'Presumably, if it doesn't go out tonight, I will go pick it up from him tomorrow.
'I don't like to count my chickens before they hatch, I will put together a disbursement summary that, hopefully, we can agree upon and we will have this part behind us.'
The respondent never provided a disbursement summary.
"30. On August 29, 2015, the respondent sent an email message to P.J., which provided:
'Check came Thursday. Deposited same day. Bank says hold released September 1. If so, you'll get paid the same day.
'I have not spent a dime of it.
'I am out of town today and Monday. Will get summary to you when I can.
'Nicol wants dismissal. Will get to him Monday as required.
'Will continue to try to negotiate friendly transfer of house.'
The respondent never provided P.J. and D.R. with a summary.
"31. In late August or early September, 2015, the respondent told D.R. To consider him paid. The respondent, however, testified otherwise during the hearing on the formal complaint.
"32. Because P.J. and D.R. were required to surrender their home, they were in immediate need of the settlement proceeds to pay for the expenses related to moving from their home. D.R. asked the respondent for an initial payment of $3, 000 for moving expenses. On September 1, 2015, the respondent provided P.J. and D.R. with a check for $3, 000 to cover moving expenses.
"33. On September 1, 2015, P.J. sent the respondent an email message about wrapping up the matter. The next day, September 2, 2015, the respondent responded and asked how P.J. and D.R. proposed to allocating the remainder of the funds. That same day, P.R. sent the respondent a summary of how the settlement proceeds should be handled. After deducting for unpaid expenses, P.R. requested that the respondent disburse approximately $43, 000 to P.R. and D.R. The respondent responded by email, 'Nice try. Let's chat.'
"34. On September 3, 2015, the respondent wrote to P.J. and D.R., offering to disburse $13, 654.37 to them while keeping $30, 000 for himself. P.J. and D.R. rejected the respondent's proposal and demanded that the respondent forward the balance of the settlement proceeds after the expenses had been paid.
"35. On September 4, 2015, the respondent explained that based on correspondence with P.J., he believed he was entitled to additional attorney fees. The respondent forwarded a number of email messages to P.J. and D.R. to support his position.
"36. To date, the respondent has not disbursed any additional funds to P.J. And D.R.
"37. On September 15, 2015, the respondent filed a motion to withdraw from the representation of P.J. and D.R. in the EverBank litigation.
"38. On September 25, 2015, P.J. and D.R. filed a pro se motion for enforcement of settlement terms in the EverBank litigation, District Court of Johnson County, Kansas, case number 12CV2253. In the motion, P.J. and D.R. alleged:
'1. Pursuant to the terms of the Settlement Agreement approved by the Court on September 3, 2015 (Exhibit A), Everbank made payment of $49, 999.00. Said payment was made to Buckner, as attorney for [P.J. and D.R.].
'2. On September 1, 2015, Buckner distributed $3, 000 of the settlement funds to [P.J. and D.R.]. [P.J. and D.R.] have received no ...

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