NO.
27086
IN
THE SUPREME COURT OF THE STATE OF HAWAI`I
OFFICE
OF DISCIPLINARY COUNSEL, Petitioner,
vs.
JAMES
M. PALLETT, Respondent.
(ODC 99-037-5867, ODC 99-202-6032, ODC 01-375-7119)
ORDER OF SUSPENSION
(By: Moon, C.J., Levinson, Nakayama, Acoba, and Duffy, JJ.)
Upon
consideration of (1) Hearing Officer Ted A. Chihara's (Hearing Officer
Chihara) July 9, 2004 findings of fact, conclusion of law, and
recommendation to
suspend Respondent James M. Pallett (Respondent Pallett) from the
practice of law
for three months, (2) the Disciplinary Board's January 28, 2005
report and
recommendation to suspend Respondent Pallett from the practice of law
for five
years, (3) Respondent Pallett's April 19, 2005 opening brief,
(4) Petitioner
Office of Disciplinary Counsel's (Petitioner ODC) May 31, 2005
answering brief,
(5) Respondent Pallett's June 27, 2005 notice that he would not file a
reply
brief, and (6) the record, we reject Hearing Officer Chihara's findings
of fact,
conclusions of law, and recommendation, and, instead, we adopt
Disciplinary
Board's findings of fact, conclusions of law, and recommendation,
except to the
limited extent that the Disciplinary Board concluded that Respondent
Pallett practiced law while he was administratively suspended from the
practice of law.
The ODC proved by
clear and convincing evidence that, while Respondent Pallett
was representing several clients in various litigation matters,
Respondent Pallett
violated the Hawai`i Rules of Professional Conduct (HRPC). While
Respondent
Pallett was representing Eric Biel in a criminal case, Respondent
Pallett failed
to appear in court on a Mr. Biehl's behalf in violation of
- HRPC Rule 1.1 (requiring a lawyer to provide competent legal
representation for
a client);
- HRPC Rule 1.3 (requiring a lawyer to act with reasonable
diligence and
promptness in representing a client);
- HRPC Rule 3.2 (requiring a lawyer to make reasonable efforts
to expedite
litigation consistent with the legitimate interests of the client); and
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another).
Respondent Pallett
failed to maintain financial records regarding Mr. Biehl in
violation of
- HRPC Rule 1.15(f)(3) (requiring a lawyer to maintain, for at
least six years,
complete computerized or manual record of all funds, securities, and
other
properties of a client or third person coming into the possession of
the
lawyer);
- HRPC Rule 1.15(g) (requiring a lawyer to maintain copies of
cash receipts,
records of disbursements, a subsidiary ledger, and bank statements for
at least
six years after completion of the employment to which they relate); and
HRPC Rule 8.4(a) (providing that it is professional misconduct for
a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another).
Respondent Pallett failed to cooperate with Petitioner ODC's
investigation of Mr.
Biehl's ethics complaint against Respondent Pallett in violation of
- HRPC Rule 8.1(b) (prohibiting a lawyer in connection with a
disciplinary matter
from knowingly failing to respond to a lawful demand for information
from a
disciplinary authority);
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another); and
- HRPC Rule 8.4(d) (providing that it is professional
misconduct for a lawyer to
fail to cooperate during the course of an ethics investigation or
disciplinary
proceeding).
While Respondent
Pallett was representing Susan Kim and her husband, Kim Chung
Sung, Respondent Pallett failed to respond to an opposing party's
requests for
production of documents, failed to respond to the opposing party's
interrogatories, and failed to appear at court hearings on the opposing
party's
two motions to compel responses to the discovery requests in violation
of
- HRPC Rule 1.3 (requiring a lawyer to act with reasonable
diligence and
promptness in representing a client);
- HRPC Rule 3.2 (requiring a lawyer to make reasonable efforts
to expedite
litigation consistent with the legitimate interests of the client);
- HRPC Rule 3.4(e) (prohibiting a lawyer from knowingly
disobeying an obligation
under the rules of a tribunal except for an open refusal based on an
assertion
that no valid obligation exists); and
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another).
Respondent Pallett
misrepresented that he had served a copy of a withdrawal and
substitution of counsel document on opposing counsel in violation of
- HRPC Rule 3.3(a)(1) (a lawyer shall not knowingly make a
false statement of
material fact or law to a tribunal);
- HRPC Rule 3.4(e) (prohibiting a lawyer from knowingly
disobeying an obligation
under the rules of a tribunal except for an open refusal based on an
assertion
that no valid obligation exists);
- HRPC Rule 4.1(a) (prohibiting a lawyer, in the course of
representing a client,
from knowingly making a false statement of material fact or law to a
third
person);
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another); and
- HRPC Rule 8.4(c) (providing that it is professional
misconduct for a lawyer to
engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation).
Respondent Pallett
converted Ms. Kim's funds in violation of
- HRPC Rule 1.15(a)(1) (requiring a lawyer to maintain a
client trust account into
which the lawyer must deposit all funds that are entrusted to the
lawyers care);
- HRPC Rule 1.15(c) (providing that a lawyer in possession of
any funds belonging
to a client, where such possession is incident to the lawyer's practice
of law,
is a fiduciary and the lawyer shall not commingle such funds or
property with
his or her own property or misappropriate such funds or property to the
lawyer's
own use and benefit);
- HRPC Rule 1.15(c) (requiring that a lawyer must deposit all
funds belonging in
part to a client and in part presently or potentially to the lawyer or
law firm
into a client trust account);
- HRPC Rule 1.15(d) (requiring a lawyer to deposit all funds
into a client trust
account that are entrusted to the lawyer, except for non-refundable
retainers
that are earned upon receipt); (1) and
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another).
Respondent Pallett
failed to maintain sufficient financial records relating to his
representation of Ms. Kim in violation of
- HRPC Rule 1.15(f)(3) (requiring a lawyer to maintain, for at
least six years,
complete computerized or manual record of all funds, securities, and
other
properties of a client or third person coming into the possession of
the
lawyer);
- HRPC Rule 1.15(g) (requiring a lawyer to maintain copies of
cash receipts,
records of disbursements, a subsidiary ledger, and bank statements for
at least
six years after completion of the employment to which they relate); and
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another).
Respondent Pallett
misrepresented to Ms. Kim's previous attorney that he had not
filed the withdrawal and substitution of counsel document when, in
fact, he had actually done so, in violation of
- HRPC Rule 4.1(a) (prohibiting a lawyer, in the course of
representing a client,
from knowingly making a false statement of material fact or law to a
third
person);
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another); and
- HRPC Rule 8.4(c) (providing that it is professional
misconduct for a lawyer to
engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation).
Respondent Pallett
misrepresented to opposing counsel that Respondent Pallett did
not represent Ms. Kim and her husband when, in fact, Respondent Pallett
was their
attorney of record, in violation of
- HRPC Rule 4.1(a) (prohibiting a lawyer, in the course of
representing a client,
from knowingly making a false statement of material fact or law to a
third
person);
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another); and
- HRPC Rule 8.4(c) (providing that it is professional
misconduct for a lawyer to
engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation).
Respondent Pallett
failed to cooperate with Petitioner ODC's investigation of Ms.
Kim's ethics complaint against Respondent Pallett in violation of
- HRPC Rule 8.1(b) (prohibiting a lawyer in connection with a
disciplinary matter
from knowingly failing to respond to a lawful demand for information
from a
disciplinary authority);
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another); and
- HRPC Rule 8.4(d) (providing that it is professional
misconduct for a lawyer to
fail to cooperate during the course of an ethics investigation or
disciplinary
proceeding).
We reject the
Disciplinary Board's conclusion that Respondent Pallett practiced law
while he was administratively suspended from the
practice of law. Petitioner ODC alleged that Respondent Pallett
practiced law
after the Child Support Enforcement Agency of the State of Hawai`i (the
CSEA) had
informed Respondent Pallett that he was administratively suspended from
the
practice of law based on Respondent Pallett's failure to comply with a
child
support obligation. However, the CSEA was not authorized to
administratively
suspend Respondent Pallett from the practice of law.
The Hawai`i
legislature enacted HRS § 576D-13 (Supp. 1999) to authorize
the CSEA to
direct administrative agencies to suspend licenses when the
license-holders failed
to meet their mandatory child support obligations. Pursuant to the
supreme
court's exclusive power to promulgate rules and regulations relating to
the
practice of law, the supreme court promulgated Rule 17.1 of the Rules
of the
Supreme Court of the State of Hawai`i (RSCH). RSCH Rule 17.1
authorizes the
Hawai`i State Bar, only, to suspend a lawyer from the practice of law
if the CSEA
certifies that the lawyer is not in compliance with a child support
order:
Rule
17.1 Child Support Enforcement
(a)
Suspension of License to Practice Law. Upon receipt of a certification
from
the Child Support Enforcement Agency of the State of Hawai`i (CSEA)
that a person
licensed to practice law in this jurisdiction is not in compliance with
an order
of support or is not in compliance with a subpoena or warrant relating
to a
paternity or child support proceeding, the Hawai`i State Bar shall
immediately
suspend the license of the person so certified.
(b)
Reinstatement to Practice. A license suspended under subsection (a) of
this
rule shall not be reinstated until the CSEA or the Family Court issues,
in
writing, an authorization canceling the certification of noncompliance.
Upon
receipt of the authorization canceling the certification and payment of
all fees
and costs assessed, including arrears, by the Hawaii State Bar, the
Hawaii State
Bar shall reinstate the license of the attorney.
(c)
Fee Assessment. The Hawai`i State Bar may assess a reasonable fee for
reinstating or restoring a license and may also charge the attorney a
reasonable
fee to cover the administrative
costs incurred by the Hawai`i State Bar to comply
with this rule.
RSCH Rule 17.1 (effective January 1, 1998) (emphasis added).
The record shows
that the CSEA sent a notice to the Hawai`i State Bar and to
Respondent Pallett that
- stated Respondent Pallett had failed to comply with his child
support
obligation, and
- directed the Hawai`i State Bar to immediately suspend Respondent
Pallett's
license to practice law pursuant to HRS § 576D-13 (Supp.
1999).
However, absent
clear and convincing evidence that the Hawai`i State Bar
administratively suspended Respondent Pallett from the practice of law,
the
Disciplinary Board erred by concluding that Respondent Pallett
practiced law while
he was administratively suspended in violation of
- HRPC Rule 1.4(a) (requiring a lawyer to keep a client
reasonably informed about
the status of a legal matter and promptly comply with reasonable
requests for
information);
- HRPC Rule 1.16(a)(1) (providing that a lawyer shall not
represent a client or,
where representation has commenced, shall withdraw from the
representation of
the client if the representation will result in a violation of the HRPC
or other
law);
- HRPC Rule 1.16(d) (requiring a lawyer, upon termination
of a representation, to
take steps to the extent reasonably practicable to protect the client's
interests);
- HRPC Rule 5.5(a) (prohibiting a lawyer from practicing law
in a jurisdiction
where doing so violates the regulation of the legal profession in that
jurisdiction); and
- HRPC Rule 8.4(a) (providing that it is professional
misconduct for a lawyer to
violate or attempt to violate the HRPC, knowingly assist or induce
another to do
so, or to do so through the act of another).
Nevertheless, in
light of Respondent Pallett's other numerous ethical violations,
IT IS HEREBY
ORDERED that Respondent James M. Pallett (attorney number 3786) is
suspended from the practice of law in this jurisdiction for a period of
five (5)
years, effective thirty (30) days after entry of this order, as
provided by
RSCH Rule 2.16(c).
IT IS FURTHER
ORDERED that Respondent James M. Pallett (attorney number 3786)
shall successfully complete, at his own expense, and pass the
Multistate
Professional Responsibility Examination before he seeks reinstatement
to the
practice of law in Hawaii.
DATED: Honolulu,
Hawai`i, September 2, 2005.
Alvin T. Ito,
special
assistant disciplinary
counsel, for petitioner
William A. Harrison
(Harrison & Matsuoka),
for respondent
1.
Effective January 1, 2002, we amended Rule 1.15(d) of the Hawai`i Rules
of Professional Conduct
(HRPC) by, among other things, deleting the reference to
"non-refundable retainers" and providing
that "all fee retainers are refundable until earned."
HRPC Rule 1.15(d) (as amended on October 9,
2001, effective January 1, 2002).