TO BE PUBLISHED
Styrrtur (Court nf rilfuritv
2015-SC-000108-KB
KENTUCKY BAR ASSOCIATION MOVANT
V. IN SUPREME COURT
CHARLES H. SCHAFFNER RESPONDENT
OPINION AND ORDER
As a result of conduct during his representation of clients in forty-five
bankruptcy cases, Respondent Charles H. Schaffner, KBA Member No. 83759, 1
waschrgedbytInquiComsKBAFile1987wthmup
violations of the standards of professional conduct. For the reasons explained
below, we adopt the findings and conclusions of the trial commissioner that
Respondent violated each of the counts as charged by the Inquiry Commission.
We also accept the trial commissioner's recommended sanction of a 180-day
suspension from the practice of law.
I. BACKGROUND
In 2010, after twenty years of handling primarily criminal law and
personal injury cases, Respondent resumed the practice of bankruptcy law. In
connection with his practice, Respondent and his new law partner, Ed Lucas,
employed Leonard Bickers to assist in the preparation and filing of the office's
bankruptcy cases. Bickers was a convicted felon, and both he and Lucas had
1 Respondent maintains a bar, roster address of 1069 Emerson Road, Park Hills,
Kentucky, 41011.
what the trial commissioner described as a history of "prior difficulties with the
Federal Bankruptcy Courts."
During 2010 and 2011, Respondent's office filed forty-five bankruptcy
petitions. Bickers was given broad access to both office and client funds, and
broad independence in processing the bankruptcy filings. At some point
Bickers began defrauding clients and converting the fees they paid to his own
use. In addition, deficiencies in Bickers's work resulted in adverse
consequences for some clients, including dismissals of their petitions. Bickers
failed to maintain accurate records of money collected from the clients. Clients
were not given accurate receipts for the fees they paid, and the client funds
were not deposited into a client trust account as required under the applicable
rules.
While Bickers conducted his nefarious work, Respondent was suffering
through difficult personal problems involving his family and health. When,
belatedly, he became aware of the seriousness of the problem caused by
Bickers, he took appropriate action, some of which is described below. Bickers
and Lucas, however, absconded with the computer containing clients'
bankruptcy information and sensitive personal data. As a result of these
problems, Respondent was disbarred from bankruptcy court practice.
II. CHARGES
Appellant was charged by the Inquiry Commission with the following
violations: 2
All citations to violations of the Rules of Professional Conduct refer to the rules
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and numbering system that were in effect at the time of the violations.
2
Count I: SCR 3.130-1.1 by providing incompetent representation to the
bankruptcy clients;
Count II: SCR 3.130-1.15(a) by failing to deposit client funds into a trust
account and/or by failing to keep complete records of such account funds;
Count III: SCR 3.130-1.15(b) by failing to promptly deliver to clients or
former clients funds to which they were entitled and/or by failing to render a
full accounting to those clients regarding their fees paid to Respondent and/or
his assistant Leonard Bickers, who was hired to perform various Bankruptcy
related duties;
Count IV: SCR 1.130-5.3(a) by failing to ensure that his firm or practice
had in effect measures which gave reasonable assurance to non-lawyer
assistants, such as Bickers, that their conduct was compatible with
Respondent's professional obligations;
Count V: SCR 3.130-5.3(b) by failing to make reasonable efforts to ensure
that Bickers's conduct was compatible with Respondent's professional
obligations as a lawyer;
Count VI: SCR 3.130-5.3(c)(2) by having direct supervisory authority over
Bickers and being made aware of his conduct or misconduct but failing to take
timely, reasonable, remedial action regarding Bickers's conduct; and
Count VII: SCR 3.130-5.4(b) by forming a de facto partnership with
Bickers, a nonlawyer.
III. DISPOSITION AND DISCIPLINE
Following a hearing, the trial commissioner found Respondent in violation
of each of the above charges. And, while the trial commissioner noted the
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gravity of the violations, he placed great emphasis on uncontradicted mitigating
evidence presented by Respondent, including his health problems, which
included cardiac problems requiring a defibrillator implant, and his exemplary
efforts in taking care of a special-needs grandchild, saving the child from foster
care. Respondent also tendered restitution of fees to all of the aggrieved clients,
including using funds from his retirement account. The trial commissioner
recommended that Respondent be suspended from practice for 180 days.
Neither bar counsel nor the Board of Governors appealed the
recommended disposition pursuant to SCR 3.360, 3.365, and 3.370. As a
result, this matter was submitted directly to this Court. See SCR 3.360(4). 3
Becauseth rialcom is oner'sfind gsandconlusionsaresup ortedbythe
record and the law, we decline to review the recommendation of the trial
commissioner pursuant to SCR 3.370(8). SCR 3.370(9) provides "if no notice of
review is filed by either of the parties, or the Court under paragraph eight (8) of
this rule, the Court shall enter an order adopting the decision of the Board or
the Trial Commissioner, whichever the case may be, relating to all matters."
The recommendation of the trial commissioner is therefore adopted pursuant to
SCR 3.370(9).
Accordingly, it is hereby ORDERED that:
1) Respondent, Charles H. Schaffner, KBA Number 83759, 1069
Emerson Road, Park Hills, Kentucky, 41011, is adjudged guilty of violating SCR
3 "Within 30 days after the filing with the Disciplinary Clerk of: (a) the report, (b)
an order ruling on a motion under SCR 3.360(3), or (c) an amended report, whichever
is later, either party may file a notice of appeal with the Disciplinary Clerk. If no notice
of appeal is timely filed, the entire record shall be forwarded to the Court for entry of a
final order pursuant to SCR 3.370(9)." SCR 3.360(4).
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3.130-1.1; SCR 3.130-1.15(a); SCR 3.130-1.15(b); SCR 3.130-5.3(a); SCR
3.130-5.3(b); SCR 3.130-5.3(c)(2); and SCR 3.130-5.4(b) as charged in KBA File
83759;
2) Respondent is suspended from the practice of law in Kentucky for 180
days;
3) Pursuant to SCR 3.390, Respondent shall, within ten days from the
entry of this Opinion and Order, if he has not already done so, notify all clients,
in writing, of his inability to represent them; notify, in writing, all courts in
which he has matters pending of his 180-day suspension from the practice of
law; and furnish copies of all letters of notice to the Office of Bar Counsel;
4) If he has not already done so, to the extent possible, Respondent shall
immediately cancel and cease any advertising activities in which he is engaged;
and
5) In accordance with SCR 3.450, Respondent is directed to pay all costs
associated with these disciplinary proceedings against him, said sum being
S 1,188.06 for which execution may issue from this Court upon finality of this
Opinion and Order.
Minton, C.J., Abramson, Barber, Cunningham, Noble, and Venters, JJ.,
sitting. All concur. Keller, J., not sitting.
ENTERED: April 2, 2015.
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