IN THE SUPREME COURT OF IOWA
No. 13–1271
Filed January 3, 2014
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
DAVID L. STRAND,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
Grievance commission reports respondent committed ethical
violations and recommends his license be revoked. LICENSE
REVOKED.
Charles L. Harrington and Nicholas Trè Critelli III, Des Moines, for
complainant.
David L. Strand, Decorah, pro se.
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ZAGER, Justice.
The Iowa Supreme Court Attorney Disciplinary Board filed a
complaint against the respondent, David L. Strand, alleging he violated
the Iowa Rules of Professional Conduct and Iowa Court Rules. Although
Strand was served with the complaint, he did not respond or take part in
any proceedings. A division of the Grievance Commission of the
Supreme Court of Iowa found Strand violated numerous provisions of the
rules of professional conduct and recommended we revoke his license.
We are required to review the report of the commission. Iowa Ct. R.
35.11(1). Upon our de novo review, we find the Board established by a
convincing preponderance of the evidence Strand violated our rules of
professional conduct when he converted client funds. Therefore, we
concur with the commission’s recommendation and revoke Strand’s
license to practice law.1
I. Background Facts and Proceedings.
Strand is an Iowa attorney admitted to practice in 1984. Until his
temporary suspension effective September 20, 2012, Strand practiced in
Decorah, Iowa. On March 20, 2013, the Board filed a complaint alleging
Strand violated twelve rules of professional conduct and two Iowa Court
Rules in his representation of the Estate of Shiloh Deal and his
representation of Darlyne Hackman.
Strand’s representation of the Estate of Shiloh Deal began in
December 2007 when he agreed to represent the estate and Deal’s minor
daughter for wrongful death claims arising from an auto accident that
caused Deal’s death. In January 2008, Strand opened an estate for Deal
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Strand is the subject of an “Order of Temporary Suspension” issued by this
Court on September 20, 2012, based on his failure to cooperate with an audit of his
trust account. The suspension has not been lifted.
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and was designated attorney for the estate. Deal’s father and aunt were
appointed coadministrators of the estate, and letters of appointment were
to issue after the posting by the coadministrators of a $2000 bond.
However, on March 3, 2009, the estate was administratively closed
because the bond had not been posted and letters of appointment had
not been issued.
On or about July 20, 2009, in exchange for the settlement of the
claims of the estate and Deal’s minor daughter, Strand received two
checks for $50,000 each from the tortfeasor’s liability insurer. Strand
reached this settlement without receiving court approval. Also, while the
coadministrators signed releases to consummate the settlement, they
had no authority to do so as letters of appointment had never been
issued and the estate had been closed. Strand did not inform the
coadministrators he had already received the settlement funds from the
liability insurer. Strand kept the $100,000 paid by the liability insurer
rather than disbursing it through the estate or for the benefit of Deal’s
minor daughter.
On or about October 28, 2010, Strand received an additional
$100,000 from Deal’s underinsured carrier. Again Strand did not inform
the coadministrators that he had received the funds, nor did he receive
court approval for the settlement. Strand also kept this $100,000
payment for himself rather than disbursing it through the estate or for
the benefit of Deal’s minor daughter.
On March 14, 2012, Strand forwarded a check in the amount of
$71,000 to the coadministrators of the estate written on his client trust
account. The check bounced. When the check was presented a second
time, the check bounced a second time. Strand afterward wired $71,500
to the account of coadministrator Randall Deal. Of the $200,000
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received by Strand from the insurance companies, Strand kept $128,500
for himself. No accountings were ever provided to the court or to the
coadministrators.
Randall Deal terminated Strand’s representation and hired another
attorney. Randall Deal and the new attorney requested numerous times
that Strand transfer his files to the new attorney. Strand never
transferred the files.
After a complaint was filed with the Board regarding his handling
of this matter, Strand responded with a letter dated August 29, 2012. In
the letter, Strand made both a misrepresentation and an omission.
Strand represented that he had received an insurance settlement in the
“Winter of 2011.” In fact, Strand had received the second $100,000
payment in October 2010. Strand omitted that he had received the first
$100,000 payment in July 2009.
In April 2012, Strand represented Darlyne Hackman in the sale of
her real estate. Strand drafted the documents to complete the sale for
the price of $15,000. On April 11, 2012, the closing date, the buyer gave
Strand a check in the amount of $15,000, which Strand deposited into
his client trust account. Hackman eventually hired a new attorney.
Despite repeated demands by Hackman and her new attorney, Strand
did not pay these funds to Hackman. Finally, after Hackman filed a
disciplinary complaint against Strand, to which he did not respond,
Strand paid the funds to Hackman’s new attorney in February 2013.
The Board alleged in connection with the above two matters that
Strand violated Iowa Rules of Professional Conduct 32:1.2(a) (allocating
authority between lawyer and client), 32:1.3 (requiring a lawyer to act
diligently and promptly), 32:1.4(a) (mandating a lawyer to communicate
with his or her client), 32:1.5(a) (prohibiting collection of an
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unreasonable fee), 32:1.5(c) (requiring a contingent fee agreement to be
in writing), 32:1.15(c) (permitting a lawyer to withdraw fees from a client
trust account only as fees are earned), 32:1.15(d) (requiring prompt
delivery to client of funds that the client is entitled to receive), 32:1.15(f)
(governing client trust accounts), 32:1.16(d) (requiring upon termination
of representation a lawyer to surrender the client’s papers and property),
32:8.1(b) (prohibiting a lawyer from knowingly failing to respond to a
lawful demand for information from a disciplinary authority), 32:8.4(b)
(prohibiting a lawyer from “commit[ting] a criminal act that reflects
adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer
in other respects”), 32:8.4(c) (prohibiting a lawyer from “engag[ing] in
conduct involving dishonesty, fraud, deceit, or misrepresentation”), and
Iowa Court Rules 45.7(4) (requiring notice contemporaneous with
withdrawal of any advance fee) and 45.7(3) (permitting a lawyer to
withdraw fees from a client trust account only as fees are earned).
The Board’s complaint was served on Strand on March 21, 2013,
but Strand filed no answer or response. On April 16, the Board filed a
motion urging the commission to deem the allegations in the Board’s
complaint admitted and to limit the disciplinary hearing solely to
deciding the appropriate sanction for Strand’s conduct. The commission
granted the motion. At the hearing, the Board offered numerous exhibits
into evidence. Strand did not attend the hearing, nor did anyone appear
on his behalf.
The commission found that Strand committed all the rule
violations alleged by the Board. Among those violations, the commission
found Strand violated rule 32:1.15(d) by converting client funds. The
commission found this violation to be the most serious, and it limited the
focus of its sanction recommendation to this rule violation. Upon
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consideration of the gravity of converting client funds, the commission
recommended Strand’s license be revoked.
II. Standard of Review.
Our review of attorney discipline proceedings is de novo. Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Khowassah, 837 N.W.2d 649, 652
(Iowa 2013). The Board bears the burden of proving by a convincing
preponderance of the evidence the attorney’s misconduct. Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Weaver, 812 N.W.2d 4, 9 (Iowa 2012). The
convincing-preponderance-of-the-evidence burden requires a greater
showing than the burden imposed in a typical civil case, but it is less
demanding than proof beyond a reasonable doubt. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Marks, 831 N.W.2d 194, 197 (Iowa 2013). We
may impose a lesser or a greater sanction than the sanction
recommended by the commission if we find the Board has met its burden
and proven misconduct. Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Cannon, 821 N.W.2d 873, 877 (Iowa 2012). We note also that the
allegations in the Board’s complaint are deemed admitted when an
attorney does not answer a complaint filed by the Board. Iowa Ct. R.
36.7; Iowa Supreme Ct. Att’y Disciplinary Bd. v. Adams, 809 N.W.2d 543,
545 (Iowa 2012).
III. Discussion.
Based upon our de novo review of the record, the allegations
contained in the Board’s complaint, which are deemed admitted, and the
exhibits introduced during the hearing, there is convincing evidence in
the record to show that Strand converted client funds. After nearly one
year, after a disciplinary complaint was filed against him, and after his
license was suspended, Strand finally paid to Hackman the $15,000 due
her from the sale of her real estate. In the Deal case, it took more than
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two years and a disciplinary complaint before Strand finally paid $71,500
to the estate of $200,000 in settlement funds he had received. The
record before us does not disclose what happened to the other $128,500
in settlement funds Strand received, but he did not disburse them
through the estate or for the benefit of Deal’s minor daughter. The Board
has shown that Strand took client funds to which he had no colorable
future claim. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Stowe, 830
N.W.2d 737, 742–43 (Iowa 2013) (revoking the license of an attorney who
was convicted of a felony and converted client funds to which he had no
colorable future claim); Adams, 809 N.W.2d at 546 (revoking the license
of an attorney who took clients funds to which he had no colorable future
claim); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774 N.W.2d
301, 309 (Iowa 2009) (“Unless the attorney ‘had a colorable future claim
to the funds or did not take the funds for [the lawyer’s] own use,’
revocation will be ordered.” (quoting Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Carroll, 721 N.W.2d 788, 792 (Iowa 2006))).
“It is almost axiomatic that we will revoke the license of an
attorney who converts a client’s funds to his or her own use.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Nelsen, 807 N.W.2d 259, 266 (Iowa
2011). We revoke the licenses of attorneys who convert client funds
“because it ‘is the only way to impress on [the attorney] and others the
seriousness of these offenses.’ ” Stowe, 830 N.W.2d at 742 (quoting
Comm. on Prof’l Ethics & Conduct v. Tullar, 466 N.W.2d 912, 913 (Iowa
1991)). This case is like many other conversion cases, and it requires the
same sanction. See, e.g., id. at 741, 743 (revoking license of attorney
who stole and forged two checks from his client and housemate); Adams,
809 N.W.2d at 545–46 (revoking license of attorney who converted funds
of two clients); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Reilly, 708
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N.W.2d 82, 83, 85 (Iowa 2006) (revoking license of attorney who
converted client’s settlement funds); Iowa Supreme Ct. Bd. of Prof’l Ethics
& Conduct v. Bell, 650 N.W.2d 648, 650, 655 (Iowa 2002) (revoking
license of attorney for converting funds of nonprofit legal organization for
which he was the treasurer); Comm. on Prof’l Ethics & Conduct v. Ottesen,
525 N.W.2d 865, 866 (Iowa 1994) (“There is no place in our profession for
lawyers who convert funds entrusted to them.”).
It is unnecessary to address the other ethical violations Strand
committed because there is sufficient evidence to prove Strand converted
client funds. See Stowe, 830 N.W.2d at 741; Adams, 809 N.W.2d at 546.
Based on the proven conversion of client funds, we revoke the license of
David L. Strand to practice law in this state.
IV. Conclusion.
The license of David L. Strand to practice law in this state is
revoked. We tax the costs of this proceeding to Strand in accordance
with Iowa Court Rule 35.27(1).
LICENSE REVOKED.