IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA17-277
Filed: 19 December 2017
Disciplinary Hearing Commission of the North Carolina State Bar, No. 15 DHC 15
THE NORTH CAROLINA STATE BAR, Plaintiff
v.
CHRISTOPHER W. LIVINGSTON, Attorney, Defendant
Appeal by defendant from orders entered 1 July 2015, 8 and 24 February 2016,
8, 9, and 18 March 2016, and 14 July 2016, by the Honorable Beverly T. Beal, Hearing
Panel Chair of the North Carolina State Bar, Disciplinary Hearing Commission.
Heard in the Court of Appeals 5 September 2017.
Deputy Counsel David R. Johnson and Counsel Katherine Jean for plaintiff-
appellee, The North Carolina State Bar.
Christopher W. Livingston, defendant-appellant pro se.
BRYANT, Judge.
Where the Disciplinary Hearing Commission’s conclusions that Christopher
W. Livingston violated the Rules of Professional Conduct are supported by the
findings of fact which are in turn supported by the evidence, and where Livingston’s
conduct caused significant harm or potentially significant harm to the public, the
profession, or the administration of justice, we affirm the order disciplining
Livingston and imposing a five year suspension of a law license with an opportunity
to petition for a stay after two years.
N.C. STATE BAR V. LIVINGSTON
Opinion of the Court
In March 2008, defendant Christopher W. Livingston, an attorney, entered
into an agreement with a business known as Credit Collections Defense Network
(“CCDN”) to serve as an “Associate Attorney.” In that position, Livingston agreed to
accept referrals of debt-laden consumers from CCDN, which is not a law firm,
whereby CCDN would collect fees from customers and convey a portion to Livingston
for his legal services to those customers. Per the agreement, Livingston was
responsible for “legal advice, litigation, filing of pleadings, discovery responses (if
necessary), and . . . cover[ing] court appearances (if necessary)” for CCDN’s
customers.
Around 20 April 2008, Livingston concluded that CCDN was engaged in the
unauthorized practice of law by preparing court documents for CCDN’s customers to
file pro se. Livingston so advised CCDN through its representative, Colleen Lock, but
did not terminate his relationship with CCDN. As such, CCDN continued to
represent to North Carolina residents that CCDN was affiliated with licensed North
Carolina lawyers, namely Livingston.
In September 2008, Livingston filed three lawsuits against CCDN
(respectively, “Lawsuits 1, 2, and 3”) in Bladen County District Court on behalf of
three CCDN customers—William Harrison, Sheryl Lucas, and Cathy Hunt—alleging
fraud, unfair and deceptive trade practices, gross and willful legal malpractice, and
violations of both the North Carolina and federal Racketeer Influenced and Corrupt
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Opinion of the Court
Organizations Acts (“RICO”). Livingston named a number of individuals and out-of-
state business entities, including Robert Lock, Philip Manger, and R.K. Lock &
Associates d/b/a “CCDN,” but did not name the legal entity “CCDN, LLC” as a
defendant. After making appearances to challenge personal jurisdiction over the
named defendants, counsel for CCDN informed Livingston that CCDN was a limited
liability company organized in Nevada. Livingston confirmed that fact but did not
amend the complaints he had filed.
On 7 January 2009, while Lawsuits 1, 2, and 3 were still pending, Livingston
filed another lawsuit (“Lawsuit 4”) in Bladen County Superior Court against many of
the same individual named defendants. Lawsuit 4 also named CCDN, LLC as a
defendant. Livingston framed Lawsuit 4 as a class action and named an individual
plaintiff, Sharon Southwood, as the class representative.1 In a motion to certify the
class, Livingston stated that he would not provide notice to class members as required
by law. No class was ever certified.
In May 2009, the trial court dismissed Lawsuits 1, 2, and 3 for failure to name
a necessary party—CCDN, LLC—and for lack of personal jurisdiction over the
remaining defendants. The trial court concluded that none of the individual
defendants had sufficient minimum contacts for personal jurisdiction before a North
Carolina court. See Lucas v. R.K. Lock & Assocs., Nos. COA10-874, COA10-875,
1
The defendants in Lawsuit 4 subsequently removed the case to federal district court and the
matter was disposed of in the federal court’s opinion, Taylor v. Bettis, 976 F. Supp. 2d 721, 727 (2013).
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Opinion of the Court
COA10-891, 2011 WL 721289, at **5–6 (N.C. Ct. App. Mar. 1, 2011) (unpublished),
rev. denied, 365 N.C. 347 (2011).2
On 11 November 2009, Livingston commenced a RICO class action against
CCDN and other named defendants in U.S. District Court for the Eastern District of
North Carolina (“Lawsuit 5”). On or about 17 November 2009, Livingston contacted
a South Carolina attorney, Andrew Arnold, who was representing CCDN in South
Carolina litigation. Livingston left Arnold a voicemail message stating that he
represented a “national class” in his suit, that Arnold had participated in a money
laundering scheme by accepting legal fees from CCDN, and demanded that Arnold
forfeit to Livingston all fees he had received from CCDN. Livingston also threatened
to join Arnold in Lawsuit 5.
A week later, Livingston filed an amended complaint in Lawsuit 5, adding
Arnold, Arnold’s firm, the North Carolina lawyer who represented CCDN in Lawsuits
1–4 (Lee Bettis), Bettis’s firm, and individual members of Bettis’s firm who had not
participated in representing CCDN. Livingston accused the lawyers and their firms
of having knowledge of their clients’ fraudulent conduct and participating in the fraud
2 Livingston filed a motion for reconsideration of the dismissals under Rule 59, which motion
was denied. Livingston appealed, and this Court held that Livingston failed to give notice of appeal
of the trial court’s order dismissing the complaints and only appealed the denial of the motion to
reconsider. This Court dismissed the appeal and vacated an order imposing Rule 11 sanctions in a
consolidated, unpublished opinion. Lucas v. R.K. Lock & Assocs., Nos. COA10-874, COA10-875,
COA10-891, 2011 WL 721289, at *6 (N.C. Ct. App. Mar. 1, 2011) (unpublished), rev. denied, 365 N.C.
347 (2011).
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Opinion of the Court
by accepting legal fees and representing CCDN clients. The federal court later
dismissed the aforementioned lawyers and their firms from Lawsuit 5 as Livingston
had no basis in law or fact to sue them. See Taylor v. Bettis, 976 F. Supp. 2d 721,
733–34, 736–39, 741–42, 745–47, 752–54 (E.D.N.C. 2013) (denying defendants’
motion to dismiss but finding for defendants on their motion for judgment on the
pleadings and dismissing plaintiffs’ claims).
While Lawsuit 5 was still pending, on 7 January 2011, Livingston filed Lawsuit
6 in Columbus County Superior Court against the North Carolina attorneys on
substantially the same underlying facts as alleged in Lawsuit 5. By email, Livingston
informed Philip Collins, opposing counsel for the North Carolina attorneys in Lawsuit
6, that he planned to file suits against them each month for the remainder of the year.
On 22 February 2011, the Columbus County Superior Court dismissed Lawsuit 6,
which dismissal was affirmed by this Court. Cullen v. Emanuel & Dunn, PLLC, No.
COA11-921, 2012 WL 3573696, at *3, *11 (N.C. Ct. App. Aug. 21, 2012)
(unpublished).
On 10 April 2015, the North Carolina State Bar filed a complaint with the
Disciplinary Hearing Commission (the “DHC”) against Livingston alleging attorney
misconduct in violation of the North Carolina Rules of Professional Conduct (“RPC”).
Livingston filed his answer on 4 May 2015.
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Opinion of the Court
A hearing was held before the DHC from 17 to 20 May 2016. On 14 July 2016,
the DHC entered its Order of Discipline suspending Livingston’s law license for five
years with the possibility of a stay after two years. On 5 August 2016, Livingston
filed notice of appeal from the Order of Discipline and other orders entered against
him.3
_________________________________________________________
On appeal, Livingston argues the DHC (I) violated his due process and equal
protection rights; (II) erroneously found RPC violations; and (III) ordered excessive
discipline.
I
Livingston first argues the DHC violated his due process and equal protection
rights, arguing that he received “no meaningful evidentiary hearing.” Specifically,
Livingston argues the DHC took an insufficient amount of time to consider the
evidence presented, the State Bar engaged in prosecutorial misconduct, and the
findings of fact in the DHC’s order are vague. We disagree.
3 Defendant brings forth no argument in support of his appeal of the other orders; therefore,
per Rule 28(a) of the North Carolina Rules of Appellate Procedure, we deem any issues related to those
orders abandoned. See N.C. R. App. P. 28(a) (2017) (“Issues not presented and discussed in a party’s
brief are deemed abandoned.”); see also N.C. R. App. P. 28(b)(6) (“Issues not presented in a party’s
brief, or in support of which no reason or argument is stated, will be taken as abandoned.”).
Accordingly, as defendant has abandoned any argument related to these orders, we dismiss any appeal
therefrom. See State v. Bacon, ___ N.C. App. ___, ___, 803 S.E.2d 402, 406 (2017) (“Defendant has
abandoned this argument, and we dismiss it.”).
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Opinion of the Court
“The standard of review for alleged violations of constitutional rights is de
novo.” State v. Graham, 200 N.C. App. 204, 214, 683 S.E.2d 437, 444 (2009) (citation
omitted). However, “a constitutional question which is not raised and passed upon
in the trial court will not ordinarily be considered on appeal.” State v. Hunter, 305
N.C. 106, 112, 286 S.E.2d 535, 539 (1982) (citations omitted).
To the extent Livingston makes a constitutional challenge for the first time on
appeal, he contends he received “no meaningful evidentiary hearing, violating his
Fourteenth Amendment due process and equal protection and N.C. Const. Art. I § 19
Law-of-the-Land rights[.]” We briefly address this argument.
Based on our thorough review of the record in this case, we are satisfied that
“the DHC conducted a fair and unbiased process that fully comported with the
principles of due process.” See N.C. State Bar v. Sutton, ___ N.C. App. ___, ___, 791
S.E.2d 881, 891 (2016), appeal dismissed, ___ N.C. ___, 797 S.E.2d 296 (2017). Due
process was satisfied where Livingston was given notice of the allegations against
him, he filed an answer to the DHC’s complaint, served discovery on the DHC, took
depositions, attended the trial, examined witnesses, and made arguments before the
DHC, availing himself of a full and fair opportunity to participate. See N.C. State
Bar v. Braswell, 67 N.C. App. 456, 458, 313 S.E.2d 272, 274 (1984) (“The filing of a
formal complaint satisfies [a] defendant’s right to be informed of and respond to the
charges against him.”). Contrary to Livingston’s argument, due process does not
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Opinion of the Court
require the DHC to deliberate for any prescribed length of time. Livingston also
alleges the State Bar engaged in prosecutorial misconduct by failing to correct false
testimony given by Bettis. But Livingston is unable to show that Bettis’s testimony
was false, and is therefore unable to sustain a claim of prosecutorial misconduct based
on “failure to correct false testimony.” Finally, as set forth in Section II, infra, the
findings of fact in the Order of Discipline are not vague. Indeed, the DHC “ruled on
numerous motions filed by [Livingston] and issued orders containing detailed
findings of fact and conclusions of law. Therefore, the record belies [Livingston’s]
assertion that he was denied due process in connection with his disciplinary
proceeding.” Sutton, ___ N.C. App. at ___, 791 S.E.2d at 891. Accordingly,
Livingston’s argument that the DHC violated his due process and equal protection
rights, as well as his N.C. Constitutional rights, is overruled.
II
Livingston next argues the DHC erroneously found that he violated the Rules
of Professional Conduct because the findings of fact are not supported by the evidence.
We disagree.
Appeals from orders of the DHC “are conducted under the ‘whole record test,’
which requires the reviewing court to determine if the DHC’s findings of fact are
supported by substantial evidence in view of the whole record, and whether such
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Opinion of the Court
findings of fact support its conclusions of law[.]” N.C. State Bar v. Talford, 356 N.C.
626, 632, 576 S.E.2d 305, 309 (2003) (internal citations omitted).
Such supporting evidence is substantial if a reasonable
person might accept it as adequate backing for a
conclusion. The whole-record test also mandates that the
reviewing court must take into account any contradictory
evidence or evidence from which conflicting inferences may
be drawn. Moreover, in order to satisfy the evidentiary
requirements of the whole-record test in an attorney
disciplinary action, the evidence used by the DHC to
support its findings and conclusions must rise to the
standard of “clear[, cogent,] and convincing.”
Id. at 632, 576 S.E.2d at 309–10 (alteration in original) (internal citations omitted)
(quoting In re Suspension of Palmer, 296 N.C. 638, 648, 252 S.E.2d 784, 790 (1979)).
“Ultimately, the reviewing court must apply all the aforementioned factors in order
to determine whether the decision in the lower body, e.g., the DHC, ‘has a rational
basis in the evidence.” Id. at 632–33, 576 S.E.2d at 310 (citation omitted) (quoting In
re Rogers, 297 N.C. 48, 65, 253 S.E.2d 912, 922 (1979).
[U]nder the whole record test, . . . the following steps are
necessary as a means to decide if a lower body’s decision
has a “rational basis in the evidence”: (1) Is there adequate
evidence to support the order’s expressed finding(s) of fact?
(2) Do the order’s expressed finding(s) of fact adequately
support the order’s subsequent conclusion(s) of law? and (3)
Do the expressed findings and/or conclusions adequately
support the lower body’s ultimate decision? . . . [I]n cases
such as . . . those involving an “adjudicatory phase” (Did
the defendant commit the offense or misconduct?), and a
“dispositional phase” (What is the appropriate sanction for
committing the offense or misconduct?), the whole-record
test must be applied separately to each of the two phases.
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Id. at 634, 576 S.E.2d at 311.
A. Conclusions 2(a) and 2(b)
Livingston challenges Conclusions 2(a) and 2(b) as unsupported by the findings
of fact, specifically Findings of Fact Nos. 4–12, as he contends those findings are not
supported by competent evidence. Conclusions 2(a) and 2(b) state as follows:
(a) By entering into a contractual agreement with CCDN
which contemplated the sharing of legal fees with a
nonlawyer in violation of Rule 5.4(a), Livingston
attempted to violate the Rules of Professional Conduct
in violation of Rule 8.4(a);
(b) By affiliating with CCDN and providing legal services
to customers of CCDN, which was engaged in the
unauthorized practice of law in North Carolina,
Livingston assisted another in the unauthorized
practice of law in violation of Rule 5.5(d)[.]
Findings of Fact Nos. 4–12 are as follows:
4. In March 2008, Livingston entered into a contractual
agreement with Credit Collections Defense Network, LLC
(“CCDN”), whereby CCDN would refer debtors seeking
debt-relief assistance to Livingston for legal representation
(this contract hereinafter referred to as “the Associate
Attorney Agreement”).
5. CCDN was not a law firm, and was not authorized to
engage in the practice of law in North Carolina.
6. The Associate Attorney Agreement provided that
CCDN would collect fees from customers and then remit a
portion of those fees to Livingston for legal services
Livingston rendered to those customers.
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7. The Associate Attorney Agreement provided that
CCDN would “prepare drafts of all [court] filings for review
and approval” by Livingston.
8. The Associate Attorney Agreement prohibited
Livingston from “directly or indirectly attempting in any
manner to persuade any client of CCDN to cease to do
business with or to reduce the amount of business which
any such client has customarily done or actively
contemplates doing with CCDN.”
9. On or about 20 April 2008, Livingston determined that
CCDN and/or its marketing partners had prepared legal
documents for CCDN customers to file pro se or to be used
to otherwise guide pro se litigation and thus had engaged
in the unauthorized practice of law.
10. On or about 20 April 2008, Livingston advised a CCDN
representative, Colleen Lock, that, in preparing pleadings
to be filed pro se, CCDN was engaged in the unauthorized
practice of law.
11. Despite becoming aware, at least as early as April
2008, that CCDN was engaged in the unauthorized
practice of law, Livingston accepted additional clients from
CCDN rather than immediately terminate his contractual
relationship with CCDN.
12. Livingston aided CCDN’s unauthorized practice of law
in North Carolina by maintaining his affiliation with
CCDN. This allowed CCDN to continue to represent to
North Carolina residents that it was affiliated with
licensed lawyers in the state.
1. Conclusion 2(a)—Sharing of Legal Fees
Livingston contends that because he at most agreed to share fees, and binding
precedent holds that “agreement” falls short of “attempt,” Findings of Fact 4–12 are
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Opinion of the Court
“legally erroneous,” and the DHC’s conclusions that he violated Rule 5.4(a) (sharing
legal fees with a nonlawyer) and attempted to violate Rule 8.4(a)
(violating/attempting to violate the RPC or knowingly assist another to do so) should
be vacated.
Rule 5.4(a) states that “[a] lawyer or law firm shall not share legal fees with a
nonlawyer . . . .” N.C. Rev. R. Prof. Conduct, Rule 5.4(a) (2015). Although the Rules
of Professional Conduct are not criminal statutes, Livingston’s conduct in agreeing to
share fees with CCDN met each of the required elements for criminal attempt: “(1)
the intent to commit the substantive offense, and (2) an overt act done for that
purpose which goes beyond mere preparation, but (3) falls short of the completed
offense.” State v. Coble, 351 N.C. 448, 449, 527 S.E.2d 45, 46 (2000) (citation omitted)
(quoting State v. Miller, 344 N.C. 658, 667, 477 S.E.2d 915, 921 (1996)). Here, the
findings of fact show that Livingston (1) intended to improperly share fees with
CCDN, a nonlawyer entity, and entered into a contract for that purpose; (2)
performed his services under the contract; and (3) expected to be paid, but was not.
These findings, which support Conclusion 2(a), are also supported by the evidence.
First, Livingston has offered no evidence that contradicts the findings other
than his declaration that it was not his intent to share fees with a nonlawyer.4
4 Indeed, the following facts were previously before this Court and set out in this Court’s
opinion in Lucas as follows:
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Opinion of the Court
Second, Livingston testified he entered into the agreement, the agreement itself was
entered into evidence at trial, and one of Livingston’s own witnesses testified the only
reason fee sharing never happened was because CCDN failed to make the payments.
Accordingly, the findings of fact are supported by the evidence, which in turn support
the DHC’s conclusion that Livingston entered into an agreement which contemplated
the sharing of legal fees with a nonlawyer entity in violation of Rule 5.4(a).
2. Conclusion 2(b)—Assisting Another in the Unauthorized Practice of
Law
The version of Rule 5.5(d) in effect at the time of Livingston’s conduct provided
that “[a] lawyer shall not assist another person in the unauthorized practice of law.”
N.C. R. Prof. Cond., Rule 5.5(d) (2016).5 The unauthorized practice of law in North
Carolina is defined by statute, see N.C. Gen. Stat. § 84-2.1 (2015), which prohibits the
practice of law by corporations:
It shall be unlawful for any corporation to practice law . . .
or hold itself out to the public or advertise as being entitled
Livingston had previously entered into an “Associate Attorney
Agreement” (the agreement) with Credit Collections Defense Network
(aka CCDN and CCDN, LLC), which described itself in the agreement
as “a national network of consumer protection attorneys, paralegals
and administrative support personnel (‘CCDN, LLC’)[.]” Pursuant to
the agreement, Livingston was to represent clients referred by CCDN,
LLC. He would provide legal services to those clients and they would
pay a fee to CCDN, LLC. Livingston would be paid by CCDN, LLC,
pursuant to a fee schedule included in the agreement.
2011 WL 721289, at *1 (emphasis added).
5The rule in effect at the time of Livingston’s conduct was Rule 5.5(d), but this rule was
amended in 2017 and is now Rule 5.5(f).
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Opinion of the Court
to practice law; and no corporation shall organize
corporations, or draw agreements, or other legal
documents, or draw wills, or practice law, or give legal
advice, or hold itself out in any manner as being entitled to
do any of the foregoing acts, by or through any person
orally or by advertisement, letter or circular.
N.C. Gen. Stat. § 84-5(a) (2015). Under North Carolina law, a business corporation
may not provide legal services or the services of lawyers even if those services are
performed by licensed North Carolina attorneys. See Gardner v. The N.C. State Bar,
316 N.C. 285, 294, 341 S.E.2d 517, 523 (1986).
Here, Livingston concedes that CCDN was engaged in the unauthorized
practice of law. Livingston claims to have learned that CCDN was so engaged in
April 2008, after CCDN customers referred to him told him what CCDN was doing.
Livingston also concedes that he did not end his relationship with CCDN for another
six weeks. Thus, even if Livingston did not become aware that CCDN was engaged
in the unauthorized practice of law before April 2008, by his own concession, his
failure to immediately terminate his relationship with CCDN when he did become
aware of its unauthorized practice of law enabled CCDN to continue to promote
having a North Carolina attorney (Livingston) available for its customers.
Livingston’s challenges to Conclusion 2(b) and the supporting findings of fact are
unavailing and are overruled.
B. Conclusion 2(c)
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Livingston challenges the DHC’s Conclusion 2(c) as unsupported by the
findings of fact, specifically Findings of Fact Nos. 13–29, as he contends those findings
are not supported by competent evidence. Conclusion 2(c) states that “[b]y filing civil
actions against defendants in a court that he knew lacked the ability to obtain
jurisdiction over the defendants and by failing to join necessary defendants in those
actions, Livingston engaged in conduct prejudicial to the administration of justice in
violation of Rule 8.4(d)[.]” Findings of Fact Nos. 13–29 are as follows:
13. Later in 2008, after undertaking representation of
several clients that CCDN referred to Livingston,
Livingston concluded that CCDN practices were frivolous
and fraudulent and began representing CCDN customers
against CCDN.
14. In September 2008, Livingston filed three complaints
against CCDN on behalf of clients CCDN had referred to
Livingston.
15. Livingston filed these three complaints in Bladen
County District Court (hereinafter collectively referred to
as “the Bladen County actions”).
16. The Bladen County actions were captioned as follows:
(i) Hunt v. R.K. Lock & Associates, an Illinois general
partnership d/b/a Credit Collections Defense Network or
CCDN; Robert K. Lock Esp.; Colleen Lock; Philip M.
Manger Esq.; Tracy Webster; and Lawgistix, LLC, a
Florida limited liability company, Defendants, Bladen
County District Court file no. 08 CVD 883; (ii) Lucas v. R.K.
Lock & Associates, an Illinois general partnership d/b/a
Credit Collections Defense Network or CCDN; Robert K.
Lock Esq.; Colleen Lock; Philip M. Manger Esq.; and Mark
A. Cella, Bladen County District Court file no. 08 CVD 884,
(iii) Harrison v. Aegis Corporation, a Missouri corporation;
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Debt Jurisprudence, Inc., a Missouri corporation; R.K.
Lock & Associates, an Illinois general partnership d/b/a
Credit Collections Defense Network or CCDN; Robert K.
Lock Esq.; Colleen Lock; Philip M. Manger Esq.; David
Kramer; Marcia M. Murphy; and Tracy Webster,
Defendants, Bladen County District Court file no. 08 CVD
885.
17. Livingston alleged on behalf of his clients in the
Bladen County action that the defendants’ actions
constituted unfair and deceptive trade practices, fraud,
breach of contract, gross and willful legal malpractice,
violations of the “North Carolina Racketeer and Corrupt
Organizations Act”, violations of the “Credit Repair
Organizations Act”, and violations of the Racketeer
Influenced and Corrupt Organizations Act.”
18. Livingston further alleged that “CCDN sometimes
refers to itself as ‘CCDN LLC’ but no limited liability
company by that name can be found meaning that CCDN
is a general partnership.”
19. None of the other defendants Livingston named in the
Bladen County actions had personal minimum contacts
with the State of North Carolina.
20. Those defendants only had contact with North
Carolina by and through their employment by or
management of CCDN, LLC.
21. The North Carolina General Court of Justice Bladen
County, District Court Division, did not have jurisdiction
over the defendants in the Bladen County actions.
22. CCDN, LLC was a necessary party to each of the
Bladen County actions.
23. In December 2008, after Livingston filed the
complaints in the Bladen County actions, Livingston was
informed by counsel for CCDN that CCDN was a limited
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liability company existing under the laws of the State of
Nevada.
24. After being so informed, Livingston confirmed that
CCDN was a limited liability company existing under the
laws of the State of Nevada.
25. Livingston did not amend the pleadings he filed in the
Bladen County actions to name CCDN, LLC as a defendant
in such actions.
26. At the time that he filed the complaints in the Bladen
County actions, Livingston knew or should have known
that Bladen County District Court did not have jurisdiction
over the named defendants.
27. In May 2009, the Bladen County District Court
concluded that CCDN, LLC was a necessary party to the
Bladen County actions.
28. The Bladen County District Court further concluded
that the defendants in the Bladen County actions did not
have minimum contacts with North Carolina.
29. The Bladen County District Court dismissed the
Bladen County actions without prejudice in part on the
aforementioned conclusions.
Livingston makes various contentions to support his argument that the above
findings are unsupported by evidence, purely frivolous, and require “vacating”
Conclusion 2(c). However, the main thrust of his argument seems to be that he
disagrees with the DHC’s finding that he “knew or should have known that Bladen
County District Court did not have jurisdiction over the named defendants.” He also
makes the convoluted argument that if the Bladen County District Court dismissed
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Lawsuits 1, 2, and 3 for lack of jurisdiction, “it lacked power to decide any other issue,
rendering Finding [of Fact No.] 27 . . . unproven.” This argument is without merit.
Rule 8.4(d) prohibits “engag[ing] in conduct prejudicial to the administration
of justice.” N.C. Rev. R. Prof. Conduct, Rule 8.4(d) (2015).
[A] showing of actual prejudice to the administration of
justice is not required to establish a violation of Paragraph
(d). Rather, it must only be shown that the act had a
reasonable likelihood of prejudicing the administration of
justice. . . . The phrase “conduct prejudicial to the
administration of justice” in paragraph (d) should be read
broadly to proscribe a wide variety of conduct, including
conduct that occurs outside the scope of judicial
proceedings.
Sutton, ___ N.C. App. at ___, 791 S.E.2d at 897 (quoting N.C. Rev. R. Prof. Conduct
8.4, cmt. 4).
In the instant case, there is no dispute that Livingston filed Lawsuits 1, 2, and
3 on behalf of three customers of CCDN in Bladen County District Court, naming
“R.K. Lock & Associates, an Illinois general partnership doing business as Credit
Collections Defense Network or CCDN” as a defendant in each lawsuit. The
individuals named as defendants were identified as employees of R.K. Lock &
Associates, and before filing his lawsuit, Livingston failed to determine that Lock &
Associates was not doing business as CCDN. Rather, CCDN was a Nevada limited
liability company, CCDN, LLC. See Lucas, 2011 WL 721289, at *6, *6 n.3 (stating
that “Plaintiffs failed to name a necessary party, being, CCDN, LLC[,]” but
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acknowledging that “we make no determination on the merits of this issue, as it is not
properly before us” (emphasis added)).
Thus, through reasonable diligence, Livingston knew or should have known
that Lock & Associates was not CCDN. But, even after learning that CCDN was
separate from Lock & Associates, Livingston proceeded with his flawed complaints
rather than amending them or taking a voluntary dismissal and filing new
complaints, properly naming the parties. Then, after the trial court dismissed the
complaints without prejudice, Livingston proceeded to appeal rather than file new
complaints with accurate information. The appeal was dismissed because Livingston
failed to give proper notice of appeal, id. at *6, and as a result, his clients were
deprived of any opportunity to pursue whatever potentially legitimate claims they
had against the proper parties. Thus, Livingston’s failure to amend the pleadings—
his failure to take corrective action on behalf of his clients—constituted conduct
prejudicial to the administration of justice. The findings of fact are supported by the
evidence, and those findings in turn support Conclusion 2(c).
C. Conclusion 2(d)
Livingston challenges the DHC’s Conclusion 2(d) as unsupported by the
findings of fact, specifically Findings of Fact Nos. 30–35, as he contends those findings
are not supported by competent evidence. Conclusion 2(d) states that “[b]y filing a
motion for class certification without providing adequate notice for and to the class
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members, Livingston engaged in conduct prejudicial to the administration of justice
in violation of Rule 8.4(d)[.]” Findings of Fact Nos. 30–35 state as follows:
30. On 7 January 2009, Livingston filed a verified
complaint in Bladen County Superior Court against CCDN
and others on behalf of Sharon Southwood, an individual
client referred to him by CCDN, and a class of similarly
situated plaintiffs (hereinafter referred to as “the
Southwood action”).
31. The Southwood action was captioned: Sharon
Southwood, for herself and all others similarly situated,
Plaintiffs, v. The Credit Card Solution, a Texas general
partnership or sole proprietorship; CCDN LLC, a Nevada
limited liability company; R.K. Lock & Associates, an
Illinois general partnership dba Credit Collections Defense
Network or CCDN; Robert K. Lock, Jr., Esq.; Colleen Lock;
Philip M. Manger, Esq.; and Robert M. “Bob” Lindsey,
Defendants, Bladen County Superior Court file no. 09 CVS
19.
32. Livingston filed a Motion for Class Certification in the
Southwood action.
33. In order to certify a class in the Southwood action,
Livingston was required to provide adequate notice to the
class members.
34. In the Motion for Class Certification, Livingston
stated that he did not intend to satisfy the adequate notice
requirement, asserting that the notice requirement “will be
Defendants’ job, because they are the ones who have
records of all participants in their programs.”
35. No class was ever certified in the Southwood action.
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Livingston contends that he was under no duty to provide adequate notice to
class members, where he “had no contact information for the 2,219 families . . . in the
putative class besides his individual clients.”
While Rule 23 of the North Carolina Rules of Civil Procedure is silent on the
issue, “fundamental fairness and due process dictates [sic] that adequate notice of the
class action be given to [the members of the class].” Crow v. Citicorp Acceptance Co.,
319 N.C. 274, 283, 354 S.E.2d 459, 466 (1987) (citation omitted). In a later decision,
the North Carolina Supreme Court stated, “[w]e affirm our general agreement with
‘the principle . . . that the representative plaintiff should bear all costs relating to the
sending of notice because it is he who seeks to maintain the suit as a class action.’ ”
Frost v. Mazda Motor of Am., Inc., 353 N.C. 188, 198, 540 S.E.2d 324, 331 (2000)
(alteration in original) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,
359, 57 L. Ed. 2d 253, 269 (1978)).
In the instant case, Livingston filed a motion for class certification
concurrently with filing Lawsuit 4, stating as follows:
Element 6 [notice to class members] will be Defendants’
job, because they are the ones who have records of all
participants in their programs, and they can pay the costs
of notification, since they have done this wrong and should
be the only ones paying for anything to fix it.
Livingston acknowledges that the class was never certified. And, pursuant to Crow,
Livingston’s clients—the plaintiffs in Lawsuit 4—were required to give notice to the
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Opinion of the Court
members of the class as soon as possible after filing suit. See 319 N.C. at 283, 354
S.E.2d at 466. Therefore, failing to take the necessary steps to properly pursue a
class action on behalf of his clients and the proposed class jeopardized any chance of
recovery. Thus, Livingston’s position harmed his clients and was prejudicial to the
administration of justice.
With regard to Livingston’s claim that copies of the complaint filed in Lawsuit
4 and the motion for class certification were not properly introduced into evidence,
this argument also fails. At the DHC hearing, Livingston did not object to the copies
as hearsay, he objected to them based on lack of authentication. And, in any event,
as the statement of a party opponent, Livingston’s writings were admissible as an
exception to the rule against hearsay. N.C. Gen. Stat. § 8C-1, Rule 801(d) (2015). As
such, Findings of Fact Nos. 30–35 are supported by the evidence, and the findings in
turn support Conclusion 2(d).
D. Conclusion 2(e)
Livingston challenges the DHC’s Conclusion 2(e) as unsupported by the
findings of fact, specifically Findings of Fact Nos. 43–50, as he contends those findings
are not supported by competent evidence. Conclusion 2(e) states that “[b]y falsely
asserting to Arnold that he represented a national class of plaintiffs in a federal
lawsuit, Livingston knowingly made a false statement of material fact to a third
person in violation of Rule 4.1[.]” Findings of Fact Nos. 43–50 are as follows:
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43. On or about 11 November 2009, Livingston filed a
“RICO Class Complaint” (hereinafter “the federal action”)
against CCDN and other defendants in the U.S. District
Court for the Eastern District of North Carolina, case no.
7:09-cv-00183.
44. On or about 17 November 2009, Livingston telephoned
and left two voicemail messages for Andrew Arnold
(hereinafter “Arnold”), an attorney representing CCDN in
South Carolina litigation.
45. Livingston stated in the voicemail messages that he
represented “a national class” in a federal action against
CCDN, asserted that Arnold had participated in money
laundering by accepting legal fees from CCDN, and
demanded that Arnold forfeit to Livingston all the attorney
fees he had received from CCDN.
46. Livingston further stated that, if Arnold failed to turn
over funds to Livingston as demanded, Livingston would
join Arnold as a defendant in the federal action.
47. The fact that Livingston represented “a national class”
was material to Livingston’s goal of getting Arnold to
believe that the litigation at issue was substantial. By
establishing that the litigation at issue was substantial,
Livingston could further his ultimate goal of obtaining
money from Arnold.
48. At the time Livingston telephoned Arnold, Livingston
did not represent a national class in the federal action
against CCDN.
49. Livingston knew that his statements to Arnold about
representing a national class were false.
50. At the time Livingston telephoned Arnold, Livingston
had no reasonable basis for asserting that he had a valid
cause of action against Arnold.
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Livingston contends that these findings are unproven without recordings or
transcripts of the voicemails he left for Arnold, and that because Arnold already knew
that Livingston did not represent a “national class,” the DHC cannot prove that he
had “deceptive intent.”
Intent is a question that may be proved by the circumstances even in the face
of denial by a defendant. See State v. Octetree, 173 N.C. App. 228, 230, 617 S.E.2d
356, 358 (2005). In the instant case, Arnold, who represented CCDN, LLC in 2009 in
defense of civil litigation that had been filed against it in South Carolina, testified as
follows regarding Livingston’s statements that he represented a national class:
Q. In connection with your representation of CCDN, LLC,
were you contacted by the defendant in this matter, Mr.
Christopher Livingston?
A. I was.
....
Q. And what did he say?
....
A. That he represented some individuals who had been
defrauded by CCDN; that it was his belief that anyone who
received monies from CCDN, and I -- and since I was
representing them, that I would have been paid a fee from
CCDN, that that made me liable to his clients for any fees
that I would have been paid because those monies
represented the defrauded proceeds, or the proceeds from
the defraud [sic] of CCDN. So that was in general what I
recall about his -- his communication.
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....
A. . . . I think he may have mentioned . . . that at least one
of the causes of -- causes of action was a RICO cause of
action . . . and that -- I do believe he had indicated that he
was . . . that the representative claimants were part of a
larger group, and I believe he may have mentioned a class
action associated with that -- that representation.
....
Q. Okay. At the time that Mr. Livingston represented to
you that he represented a class, did you have any
information about, or understanding about, whether or not
that was true?
A. No; this was the first -- his phone call to me was the first
I had heard of any such action.
(Emphasis added).
As stated previously, Livingston has acknowledged that the class was never
certified. Thus, by stating that he represented a “national class” of plaintiffs to
Arnold, which fact is supported by the evidence, he knowingly made a false statement
of material fact to Arnold. Thus, Findings of Fact 43–50 are supported by the
evidence and in turn support the DHC’s Conclusion 2(d).
E. Conclusion 2(f)
Livingston challenges Conclusion 2(f) as unsupported by the findings of fact,
specifically Findings of Fact Nos. 40–43 and 50–59, as he contends those findings are
not supported by competent evidence. Conclusion 2(f) states as follows:
By threatening to join and joining the defendant lawyers in
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Opinion of the Court
the federal action when there was no basis in law or fact to
do so, Livingston used means that had no substantial
purpose other than to embarrass or burden a third person
in violation of Rule 4.4(a), brought claims for which there
was no basis in law or fact in violation of Rule 3.1 and
engaged in conduct prejudicial to the administration of
justice in violation of Rule 8.4(d)[.]
Findings of Fact Nos. 40–43 and 50–59 are as follows:
40. Emmanuel and R. Dunn did not participate in the
representation of CCDN.
41. Livingston cited Emanuel & Dunn’s representation of
CCDN as the basis for the litigation he threatened against
them.
42. At the time Livingston wrote the letter to Bettis and
S. Dunn, Livingston had no reasonable basis for asserting
that he had a valid cause of action against Bettis and S.
Dunn or their firm.
43. On or about 11 November 2009, Livingston filed a
“RICO Class Complaint” (hereinafter “the federal action”)
against CCDN and other defendants in the U.S. District
Court for the Eastern District of North Carolina, case no.
7:09-cv-00183.
....
50. At the time Livingston telephoned Arnold, Livingston
had no reasonable basis for asserting that he had a valid
cause of action against Arnold.
51. On or about 23 November 2009, Livingston filed an
amended complaint in the federal action.
52. Livingston included the following persons as named
defendants in the amended complaint for the federal
action: Bettis, S. Dunn, R. Dunn and Arnold (hereinafter
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“defendant lawyers”).
53. Livingston named the defendant lawyers in their
individual capacities.
54. Livingston also named the law firm of Emanuel &
Dunn, its four managing partners, and Arnold’s firm, The
Law Offices of W. Andrew Arnold, P.C., as defendants in
the federal action.
55. In the amended complaint Livingston filed in the
federal action, Livingston alleged that CCDN and other
defendants obtained the plaintiffs’ property by wire, mail,
and bank fraud and engaged in money laundering and
racketeering, causing $1,044,000,000.00 in damages.
56. Livingston also alleged that the defendant lawyers
and their law firms had knowledge of the other defendants’
fraudulent conduct and participated in fraud by accepting
legal fees from the other defendants and representing the
other defendants in litigation.
57. Livingston did not have a valid basis in law or fact to
join the defendant lawyers and their law firms in the
federal action.
58. Livingston’s act of naming the defendant lawyers and
law firms in the amended federal complaint had no
substantial purpose other than to embarrass or burden
those defendants.
59. The federal court dismissed the defendant lawyers
and their law firms from the federal action.
Rule 4.4(a) states that “[i]n representing a client, a lawyer shall not use means
that have no substantial purpose other than to embarrass, delay, or burden a third
person, or use methods of obtaining evidence that violate the legal rights of such a
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Opinion of the Court
person.” N.C. Rev. R. Prof. Conduct, Rule 4.4(a) (2015). Rule 3.1 states that “[a]
lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein,
unless there is a basis in law and fact for doing so that is not frivolous . . . .” N.C.
Rev. R. Prof. Conduct, Rule 3.1 (2015).
In the instant case, the federal court dismissed the claims brought by
Livingston in Lawsuit 5 against the attorneys of Emmanuel & Dunn as baseless.
Taylor, 976 F. Supp. 2d at 736 (“Under Plaintiffs’ logic, any attorney daring to serve
as defense counsel to a defendant named in a RICO action automatically could be
named as a RICO defendant himself. This, of course, is untenable. Concomitantly,
under these facts, accepting money in exchange for providing these traditional legal
services fails to go to the heart of CCDN’s alleged debt elimination and credit
restoration scheme.” (footnote omitted)). The federal court repeatedly observes that
Livingston presented “conclusory allegations” on behalf of his clients, but did not
present facts to support those claims. See id. at 742 (“[A]gain, this court cannot find
sufficient Plaintiffs’ wholly conclusory allegations . . . .”). Accordingly, the DHC was
correct in concluding that Livingston violated Rules 3.1, 4.4(a), and 8.4(d), where he
threatened to and did file a lawsuit against opposing counsel and members of
opposing counsel’s law firm without a basis in law or fact.
F. Conclusion 2(g)
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Livingston challenges Conclusion 2(g) as unsupported by the findings of fact,
specifically Findings of Fact Nos. 60–72, as he contends those findings are not
supported by competent evidence. Conclusion 2(g) states as follows:
By filing the Cullen complaint, Livingston brought claims
for which there was no basis in law or fact in violation of
Rule 3.1, engaged in conduct prejudicial to the
administration of justice in violation of Rule 8.4(d) and
used means that had no substantial purpose other than to
embarrass a third person in violation of Rule 4.4(a)[.]
Findings of Fact Nos. 60–72 are as follows:
60. On or about 7 January 2011, Livingston filed a
complaint on behalf of former CCDN clients Kimberly
Cullen (“Cullen”) and William Harrison, Sr. (“Harrison”) in
Columbus County Superior Court, case no. 11 CVS 20
(hereafter “Cullen complaint”).
61. Livingston named Emanuel & Dunn, Bettis, S. Dunn,
Emanuel, and R. Dunn as defendants in the case.
62. Cullen was not a resident of North Carolina and had
not had any contact with the defendants named in the
Cullen complaint.
63. Harrison had not had any contact with Emmanuel
and Dunn, S. Dunn, Emanuel or R. Dunn.
64. Harrison’s only contact with Bettis was in Bettis’s
capacity as attorney for CCDN.
65. In a 7 January 2011 email to opposing counsel, Philip
Collins, in reference to the Cullen complaint, Livingston
made the following statements: (i) “As promised, our state
level campaign kicked off yesterday with the first of many
Superior Court actions seeking justice for CCDN victims,
carefully constructed so as not to be removable to federal
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Opinion of the Court
court.”; (ii) [regarding service] “I don’t think sending
swarms of deputies or piles of certified mail will do anybody
any good.”; and (iii) “For the rest of 2011, you can expect a
new Cullen-type Superior Court case every month, each an
improvement over its predecessors. Each will also carry its
own set of written discovery, followed by depositions of all
[Emmanuel & Dunn] personnel with relevant knowledge.”
66. The federal action was pending when Livingston filed
the Cullen complaint.
67. The underlying facts in the Cullen complaint were
substantially the same as the underlying facts set forth in
the federal action.
68. Harrison was a named plaintiff in the federal action
and was the only named plaintiff in the Cullen complaint
with any ties to North Carolina.
69. The Cullen complaint failed to establish (i) any tie
between plaintiff Kimberley Cullen and North Carolina,
and (ii) harm to Cullen caused by actions of the lawyer-
defendants.
70. Livingston alleged in the Cullen complaint that Bettis
engaged in illegal conduct during his representation of a
client in Bladen County District Court. These allegations
that Livingston made against Bettis were without basis in
law or fact.
71. On 22 February 2011, the court dismissed the
plaintiff’s claims with prejudice.
72. The North Carolina Court of Appeals affirmed the
lower court’s dismissal of the Cullen Complaint.
Findings of Fact Nos. 60–72 are supported by the evidence, including the
deposition testimony of attorney Lee Bettis, an associate with Emanuel & Dunn who
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Opinion of the Court
represented the defendants as well as CCDN, LLC during the Lucas proceedings, see
Cullen, 2012 WL 3573696, at *2, and attorney Philip Collins, who represented Bettis
and others in the federal lawsuit filed by Livingston. Taylor, 976 F. Supp. 2d at 727.
First, with regard to Livingston’s allegation, among others, that Bettis engaged
in “illegal conduct during his representation of a client,” specifically that Bettis
“extend[ed] the obviously unethical offer to help Livingston draft valid
complaints against Mr. Bettis’s own clients,” Bettis testified (and clarified) as
follows:
Q. Didn’t you offer to help me draft valid complaints
against your own clients?
A. What I did was I offered to help you straighten out the
procedural issues that were so prevalent in your cases that
we never would have gotten to the merits which would have
required me to drive from here down to Bladen County and
waste my client’s time, everybody’s time and money. So
what I did was I said Chris and this is when you threatened
to -- wanted me to go outside and fight with you. I said,
“Chris, let’s just -- you’ve sued the wrong people, you’ve
sued the wrong corporations and it’s real easy to fix it,” and
I told you let’s fix it so we can get down to the merits and
stop wasting my time, my client’s time and the Court’s time
and you didn’t like that.
In the Cullen complaint, Livingston attempted to argue that Bettis’s actions—
described above—constituted “two or more offenses of obtaining property by false
pretenses in violation of NCGS § 14-100(a).” Cullen, 2012 WL 3573696, at **9–10
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Opinion of the Court
(affirming the order granting the defendants’ motion for judgment on the pleadings
with regard to the Cullen complaint). As this Court summarized,
[t]he majority of plaintiffs’ claims [brought by Livingston]
are based entirely on the conduct of Mr. Bettis while
representing the Lucas defendants and CCDN, LLC in the
Lucas litigation. The complaint alleges that Mr. Bettis
acted with an improper purpose, made knowingly
fraudulent arguments, and sought to delay any recovery for
the plaintiffs until CCDN, LLC could go out of business,
rendering any recovery against it impossible.
Id. at *3. Thus, as this Court’s opinion affirming the trial court’s grant of the
defendants’ motion for judgment on the pleadings was based on “the [in]sufficiency of
the allegations” in the Cullen complaint, see id. at *5, the DHC’s findings of fact are
supported by the evidence.
Second, with regard to the federal lawsuit, Collins, the attorney who
represented Bettis and others, testified that the federal court disposed of the matters
on the defendants’ motion for judgment on the pleadings as follows: “Dismissed all
the claims with the exception of the conversion and constructive trust,” see Taylor,
976 F. Supp. 2d at 745, 755, and later dismissed those claims as well. Collins also
testified that the factual allegations in the Cullen case, Lawsuit 4, were similar to
those contained in the federal lawsuit, Taylor v. Bettis, Lawsuit 5. Finally, Finding
of Fact No. 65, see infra Section G, is taken verbatim from Plaintiff’s Exhibit 21.
Accordingly, it is also supported by the evidence, and this finding in turn supports
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Opinion of the Court
the DHC’s ultimate conclusion Livingston violated the Rules of Professional Conduct
by filing the Cullen complaint in Bladen County Superior Court.
G. Conclusion 2(h)
Livingston challenges the DHC’s Conclusion 2(h) as unsupported by Finding
of Fact Nos. 65, as he contends that finding is not supported by competent evidence.
Conclusion 2(h) states that “[b]y threatening to file monthly additional lawsuits based
on similar allegations against Bettis and Emmanuel & Dunn and threatening to
engage in separate discovery for each lawsuit, Livingston used means that had no
substantial purpose other than to embarrass or burden a third person in violation of
Rule 4.4(a).” Finding of Fact No. 65 states, in relevant part, as follows:
65. In a 7 January 2011 email to opposing counsel, Philip
Collins, . . . Livingston made the following statements: . . .
“For the rest of 2011, you can expect a new Cullen-type
Superior Court case every month, each an improvement
over its predecessors. Each will also carry its own set of
written discovery, followed by depositions of all
[Emmanuel & Dunn] personnel with relevant knowledge.”
(Emphasis added).
Comment 2 to Rule 4.4 of the Rules of Professional Conduct states as follows:
Threats, bullying, harassment, insults, slurs, personal
attacks, unfounded personal accusations generally serve
no substantial purpose other than to embarrass, delay, or
burden others and violate this rule. Conduct that serves no
substantial purpose other than to intimidate, humiliate, or
embarrass lawyers, litigants, witnesses, or other persons
with whom a lawyer interacts while representing a client
also violates this rule.
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N.C. Rev. R. Prof. Conduct, Rule 4.4, cmt. 2.
As stated supra in Section F, this finding quotes verbatim the text of the email
Livingston sent to Collins on 7 January 2011. Livingston does not dispute that he
sent the email or made the threat that “[f]or the rest of 2011, you can expect a new
Cullen-type Superior Court case every month . . . .” The email also includes other
vaguely threatening statements such as, “it is not our goal to personally bankrupt the
lawyers at E&D [(Emanuel & Dunn)] if recovery can be had some other way” and “I
really, really suggest, not for the first time, that we all be content with $3 million for
the class of CCDN victims . . . . This will take care of fall fees and costs, too, and I
will not move for sanctions, and your individual clients’ assets will be safe.”
Accordingly, Finding of Fact No. 65 is supported by the evidence, which finding in
turn supports the DHC’s conclusion that Livingston violated Rule 4.4(a) by
threatening to file lawsuits monthly where his only purpose in doing so was to coerce
a settlement.
III
Livingston also argues the DHC ordered excessive discipline where no evidence
justified his suspension, specifically challenging disciplinary Findings of Fact Nos. 1–
10 as unsupported by the evidence, and the DHC’s Conclusions of Law Nos. 1 and 4–
10 as failing the whole record test. We disagree.
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This Court reviews additional findings of fact and conclusions of law with
respect to the disciplinary phase under the whole record test. See Talford, 356 N.C.
at 634, 576 S.E.2d at 311 (“[T]he whole-record test must be applied separately to each
of the two phases [(adjudicatory and dispositional)].”).
“Suspension [of an attorney’s license],” is . . . a form of
punishment imposed for misconduct that either results in
or threatens significant harm to “a client, the
administration of justice, the profession or members of the
public.” Thus, when imposed, findings must be made
explaining how the misconduct caused significant harm or
threatened significant harm, and why the suspension of
the offending attorney’s license is necessary in order to
protect the public.
Id. at 637, 576 S.E.2d at 312–13 (first alteration in original) (internal citation
omitted).
The trial court made the following additional findings of fact regarding
discipline which defendant challenges on appeal:
1. R. Dunn did not participate in his firm’s representation
of CCDN in defense of the claims [Livingston] brought
against CCDN on behalf of his clients.
2. Pat Leigh Pittman was a transactional lawyer who did
not participate in her firm’s representation of the claims
[Livingston] brought against CCDN on behalf of his clients.
3. Joanne K. Partin was a transactional lawyer who did
not participate in her firm’s representation of the claims
[Livingston] brought against CCDN on behalf of his clients.
4. Robert L. Emmanuel was an eighty year old, semi-
retired lawyer who did not participate in his firm’s
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Opinion of the Court
representation of CCDN in defense of the claims
[Livingston] brought against CCDN on behalf of his clients.
5. When R. Dunn was served with the complaint in the
federal action, media was present and media reported
about the lawsuit [Livingston] filed.
6. A long-time client of Emmanuel & Dunn questioned
the ability of Emmanuel & Dunn to continue in its
representation of this client because the client had become
aware of the allegations [Livingston] made against
Emmanuel and Dunn in the federal action.
7. Emmanuel & Dunn had to obtain legal representation
to defend against the lawsuits [Livingston] filed against
Emmanuel & Dunn and its lawyers.
8. Arnold had to obtain legal representation to defend
him[self] against the allegations [Livingston] made against
him and his firm in the federal action.
9. It was costly to defend against the frivolous actions
[Livingston] brought against the defendant lawyers and
their law firms.
10. On 9 August 2011, [Livingston] was sanctioned by the
United States District Court for the Eastern District of
North Carolina, Southern Division for making baseless
allegations that lawyer defendants in Caraballo v. Bagbeh
had engaged in racketeering, wire fraud, money laundering
and receipt of illegally obtained funds.
A. Five-Year Suspension
The DHC’s additional findings of fact are supported by the evidence presented
in Phase I of the trial as well as by additional evidence presented in Phase II. With
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Opinion of the Court
regard to “significant harm” caused by Livingston’s actions, Raymond Dunn of
Emanuel & Dunn testified as follows:
A The TV news coverage was allegedly Mr. Livingston
saying that our firm were fraudsters and money
launderers, and the person who was stating that
represented himself to be Mr. Livingston on the TV.
....
A We’re a small firm. We’ve been in existence . . . since
1952. We don’t advertise. The only way we get business is
by word of mouth and our reputation, and when there’s
media coverage alleging fraudulent conduct, it impacts a
small town lawyer. We don’t advertise. It’s a significant
impact on your business and on your reputation, which is
the only way that we get business.
Collins testified about Livingston’s “scurrilous allegations” and testified to the
chilling effect on the profession caused by Livingston’s filing such lawsuits against
opposing counsel. He also testified that the defense of the lawsuits cost
approximately $200,000.00. In a federal court order sanctioning Livingston in 2011
for making similar allegations against an opposing counsel, and which was admitted
into Phase II of the hearing without objection by Livingston, the federal court noted
as follows:
The court must also consider the minimum necessary to
deter future abuse. This factor is a difficult one, as Mr.
Livingston sees no error in his ways. Furthermore, the
sarcastic nature of his comments toward this court
contained within the filings leads the court to believe that
sanctions may not deter Mr. Livingston at all.
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Caraballo v. Bagbeh, NO. 7:10-CV-122-H, 2012 WL 12914657, at *2 (E.D.N.C. June
14, 2012) (unpublished).
In its order, the DHC explained its analysis of the disciplinary factors it was
required to consider and which it did consider, including the harm to Livingston’s
clients, the profession, and the administration of justice. Accordingly, imposing a
five-year suspension with an opportunity to petition for a stay after serving two years
active and upon demonstrating compliance with the enumerated conditions was fully
supported by the harm shown. See Talford, 356 N.C. at 637, 576 S.E.2d at 312–13.
B. Administrative Costs
The Order of Discipline requires defendant to pay the administrative fees and
costs of the proceeding within thirty days of service of the statement by the Secretary
of the State Bar. Livingston did not object to inclusion of this provision in the order
and argues for the first time on appeal that the administrative fees assessed against
him are “not permitted by law.” However, our General Statutes state that the State
Bar Council “may charge and collect the following fees in amounts determined by the
Council: . . . (5) An administrative fee for any attorney against whom discipline has
been imposed.” N.C. Gen. Stat. § 84-34.2 (2015). Accordingly, Livingston’s argument
is without merit and is overruled.
In conclusion, where the DHC’s conclusions of law that Livingston violated the
Rules of Professional Conduct are supported by the findings of fact which are
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Opinion of the Court
supported by the evidence and where defendant’s conduct caused significant harm or
potentially significant harm to the public, the profession, or the administration of
justice, the order disciplining Livingston and imposing a five-year suspension with
an opportunity to petition for a stay after two years is
AFFIRMED.
Judges DAVIS and INMAN concur.
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