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In re Blume

Supreme Court of Kansas

June 28, 2019

In the Matter of Gregory V. Blume, Respondent.

         Original proceeding in discipline. Indefinite suspension.

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

          Gregory V. Blume, respondent, argued the cause and was on the briefs pro se.

          PER CURIAM.

         This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Gregory V. Blume, an Overland Park attorney admitted to the practice of law in Kansas in 1977.

         On September 8, 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 timely filed an answer to the complaint on October 2, 2017. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on November 21, 2017, where the respondent was personally present and was represented by counsel, Jonathan C. Becker. The hearing panel determined that respondent violated KRPC 3.1 (2019 Kan. S.Ct. R. 349) (meritorious claims and contentions); 3.3(a)(1) (2019 Kan. S.Ct. R. 350) (candor toward tribunal); 3.4(d) (2019 Kan. S.Ct. R. 353) (compliance with discovery request); 4.4(a) (2019 Kan. S.Ct. R. 363) (respect for rights of third persons); 8.4(c) (2019 Kan. S.Ct. R. 387) (conduct involving dishonesty, fraud, deceit, or misrepresentation); and 8.4(d) (conduct prejudicial to the administration of justice).

         The hearing focused on whether the respondent's behavior with respect to four issues should lead to disciplinary sanction under the rules cited in the complaint. The first issue arose out of the inadequacy of his response to a discovery request. The second and third arose out of two incidents that occurred during a deposition, when he called the videographer a Nazi and, in common parlance, flipped off a representative of an opposing party. The fourth issue arose out of his motion to set aside an earlier agreed judgment.

         After the hearing, the panel made findings of fact and arrived at conclusions of law and a disciplinary recommendation for this court. They read in pertinent part:

"Findings of Fact
. . . .
"8. L.O., a co-owner of Superior Acquisition Group, Inc. (hereinafter 'Superior') was married to G.O. G.O. did not have an individual ownership interest in Superior.
"9. In May, 2011, First National Bank of Omaha (hereinafter 'FNBO') loaned $1, 900, 000 to Superior in three separate financing agreements: a $300, 000 line of credit and two $800, 000 term loans. The loans were cross-collateralized and secured by various properties, including a certificate of deposit owned by L.O. and G.O., with a value of $100, 282.
"10. Both L.O. and G.O. signed an agreement pledging the certificate of deposit as security for the three loans. According to the pledge agreement, FNBO could take possession of the certificate of deposit upon default of any of the three loans.
"11. In June, 2011, L.O. and G.O. opened a money market account at FNBO and transferred the balance of the pledged certificate of deposit to the money market account.
"12. FNBO required L.O. and G.O. to execute another agreement, pledging the money market account as security for the three financing agreements because that account now contained the proceeds of the previously pledged certificate of deposit.
"13. On March 27, 2012, J.S. of FNBO sent L.O. an email message [that] stated, 'Please sign this and get back to me ASAP sir, for some reason this slipped through the cracks or we misplaced it?'
"14. According to L.O., he explained to J.S. that G.O. was not available to sign the agreement. Also according to L.O., J.S. instructed L.O. to sign G.O.'s name because [J.S.] needed the pledge agreement signed that day. L.O. did not have authorization from G.O. to sign her name. L.O. signed his name and G.O.'s name to the money market pledge agreement.
"15. In May 2012, the $300, 000 line of credit matured and Superior defaulted on the loan. Superior's default on the $300, 000 line of credit triggered a default on the other two loans.
"16. On June 8, 2012, pursuant to the money market pledge agreement, FNBO seized $186, 000 from the money market account.
"17. In September 2012, FNBO filed suit against L.O., Superior, and the other owner of Superior, in Johnson County District Court, case number 12-CV-7213. On February 11, 2013, the parties entered into a stipulated journal entry granting summary judgment and foreclosure on Superior's property. [District Judge David W. Hauber] entered judgment against all three defendants for $1, 555, 142.66.
"18. On June 6, 2014, the respondent filed suit against FNBO on behalf of G.O., regarding its seizure of the money market account. The petition alleged:
. . . .
'38. On March 27, 2012, Defendant Bank represented to [L.O.] that it needed his signature and [G.O.]'s signature on a document that it had misplaced or that had fallen through the cracks.
'39. On March 12, [sic] 2012, Defendant Bank represented to [L.O.] that it needed the signatures that day.
'40. Upon being informed that [G.O.] was unavailable, Defendant Bank instructed [L.O.] to sign [G.O.'s] name.
'41. Defendant Bank then faxed the signature page only to [L.O.]'s office.
'42. [L.O.] signed his name and [G.O.]'s name to the signature page and returned it to the Defendant Bank, as instructed.'
"19. On May 7, 2015, FNBO served its first request for production of documents on G.O. FNBO requested that G.O., '[p]roduce each and every document evidencing, concerning, or memorializing any and all communications between [J.S.] and [L.O.].' FNBO clearly requested J.S.'s March 27, 2012, email message in the first request for production.
"20. On June 3, 2015, L.O. filed a chapter 7 voluntary petition in bankruptcy.
"21. On June 9, 2015, the respondent filed G.O.'s responses to FNBO's first request for production of documents, and identified '[o]ne email from [J.S.] to Defendant [sic] will be produced at the Law Offices of Gregory V. Blume, 7199 West 98th Terrace, Suite 130, Overland Park, Kansas 66212' as a document to be produced.
"22. Subsequently, on July 24, 2015, FNBO's counsel emailed the respondent, confirming the parties' agreement that FNBO would inspect and copy responsive documents at respondent's office on July 28, 2015. On July 27, 2015, respondent sent an email message to FNBO's counsel, as follows:
'. . . As you know, [L.O.] filed bankruptcy in May. Because of the bankruptcy stay, [L.O.] did not respond to his set of RPDs. When we were last in Court on June 15th, you told Judge [James F.] Vano that you planned to seek relief from the automatic stay. We have not received anything to that effect and we have no documents from [L.O.]. He wants to hire his own counsel now and I have recommended a competent young woman. Many of your document request [sic] for [G.O.] relate to [L.O.]'s documents. [G.O.] herself does not have many documents of her own. We have scanned in what she has. We understand that she has a continuing duty to supplement these. This may save you some time and gas. Please let me know if you plan to come out and review the hard copies of the attached. GVB'
The respondent attached an 80-page document to the email message. The respondent did not include J.S.'s March 27, 2012[, ] email within these documents. FNBO's counsel replied to the respondent on July 27, 2012, stating, '[i]f the PDF contains a copy of all documents currently in your possession, then I see no reason to come out to your office tomorrow and review the hard copies at this time.'
"23. The respondent did not reply to this email message or otherwise indicate that he had any other additional documents in his possession that were not contained within the 80-page attachment.
"24. The respondent did not produce the March 27, 2012, email until J.S.'s deposition on August 18, 2015. After FNBO's counsel completed his direct examination of J.S., the respondent offered the March 27, 2012, email as Exhibit 26 to the deposition. FNBO's counsel objected to the introduction of [the] March 27, 2012, email message because it had not been previously produced to FNBO in response to its request for production of documents. The respondent indicated that he did not provide the email message during discovery because '[i]t's a document produced by [L.O.]. His document requests are not due yet' [due to the bankruptcy filing].
"25. On September 4, 2015, FNBO filed an adversary proceeding in L.O.'s bankruptcy, seeking to have its judgment declared to be nondischargeable, claiming that L.O. forged G.O.'s signature on several loan documents and overstated real property values on two personal financial statements.
"26. On September 10, 2015, FNBO filed a motion for sanctions based on the respondent's failure to timely produce the March 27, 2012, email message. The respondent filed a memorandum in opposition to the motion for sanctions on September 28, 2015, arguing that (1) the email message was FNBO's document and G.O. was not obligated to produce a copy of a document which FNBO had in its possession, (2) FNBO failed to produce this document to the respondent, (3) the respondent's failure to produce the email message was inadvertent, and (4) counsel for FNBO neglected to contact the respondent about the omission.
"27. That same day, on September 10, 2015, [District Judge James F. Vano] held a status conference. During the status conference, the respondent stated that he did not produce the email message during discovery because 'it's an impeachment document.'
"28. On November 13, 2015, [Judge Vano] held a hearing on the motion for sanctions. Regarding the March 27, 2012, email message, the respondent stated, 'Judge, we didn't withhold it. I considered it an impeachment document.' But, yet, still later in that same hearing, the respondent stated, '[i]t was [L.O.]'s document. When he took bankruptcy, I couldn't go near him.' Ultimately, the following exchange between the respondent and the court occurred:
'THE COURT: You're admitting you did not include that in your responses to the request for production of documents.
'MR. BLUME: Not at that time.
'THE COURT: Because you were holding it back-
'MR. BLUME: No. I didn't have it.
'THE COURT: -for impeachment?
'THE COURT: You had it when the deposition started; didn't you?
'MR. BLUME: Yes, [L.O.] gave it to me.
'THE COURT: Was he present for [J.S.]'s deposition?
'MR. BLUME: Of course not. That's why-it was up in Nebraska.
'THE COURT: You had it before the deposition started?
'MR. BLUME: Yes, sir.
'THE COURT: And you knew at that point in time you had not produced it in response to the request for production of documents. Is that what you are saying?
'MR. BLUME: No, sir. I am saying I considered it an impeachment document at that time that I probably wouldn't need, because I couldn't believe they would submit perjurious testimony.
'THE COURT: Did you produce it in response to the request for production of documents?
'MR. BLUME: I did-as a supplement response? I did not produce it at the time, because I didn't ...

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