SUPREME COURT OF ARIZONA
En Banc
)
In the Matter of ) Arizona Supreme Court
) No. SB-03-0007-D
WALTER E. MOAK, )
Attorney No. 004849 ) Disciplinary Commission
) Nos. 00-0258
Respondent. ) 00-0698
)
) O P I N I O N
__________________________________)
On Sua Sponte Review
From the Disciplinary Commission
Respondent Suspended
Jennings, Strouss & Salmon, PLC Phoenix
by J. Scott Rhodes
Attorney for Walter E. Moak
State Bar of Arizona Phoenix
by Karen Clark, Senior Bar Counsel
Attorney for State Bar of Arizona
M c G R E G O R, Vice Chief Justice
¶1 The State Bar of Arizona charged Respondent Walter E.
Moak with three counts of attorney misconduct under the Arizona
Rules of Professional Conduct. After the parties stipulated to
most of the relevant facts, a hearing officer considered the
remaining factual issues, as well as aggravating and mitigating
factors. The hearing officer concluded that the State Bar had
established all counts and recommended that Moak be suspended for
six months and one day. On review, the Disciplinary Commission of
the Supreme Court (Commission) accepted the hearing officer’s
findings of fact and agreed with his conclusions of law, but
recommended a six-month suspension. Although neither party sought
review of the Commission’s decision, we exercised our right of sua
sponte review to consider further the appropriate discipline to
impose. Ariz. R. Sup. Ct. 53(e)7. We exercise jurisdiction under
Article VI, Sections 1, 3, 5.4 and 5.5 of the Arizona Constitution
and Rules 31 and 53 of the Arizona Rules of the Supreme Court.
I.
¶2 The hearing officer’s report thoroughly and clearly sets
out the relevant facts, as stipulated and found after the hearing.
The Commission and this court accept the hearing officer’s factual
findings unless they are clearly erroneous. In re Alcorn and
Feola, 202 Ariz. 62, 64 n.4, 41 P.3d 600, 602 n.4 (2002). We find
no clear error. Indeed, neither Moak nor the State Bar contests
the findings. We therefore hold that the State Bar proved the
charges of unethical conduct by clear and convincing evidence.
Because our analysis of the appropriate sanction depends upon the
facts underlying Moak’s misconduct, we describe them in some detail
below.
¶3 The hearing officer concluded that Moak violated multiple
ethical rules (ERs). With respect to count one, the hearing
officer found the following violations: 1.2 (scope of
representation); 1.3 (diligence); 1.4 (communication); 1.9
(conflict of interest: former client); 3.3 (candor toward the
2
tribunal); 8.4(c) (misconduct: dishonesty, fraud, deceit or
misrepresentation) and 8.4(d) (misconduct: prejudicial to the
administration of justice). With respect to count two, the hearing
officer concluded Moak violated ERs 3.3 (candor toward the
tribunal); 4.1 (truthfulness in statements to others); 8.4(c)
(misconduct: dishonesty, fraud, deceit or misrepresentation);
8.4(d) (misconduct: prejudicial to the administration of justice)
and also Rule 51(e) of the Arizona Rules of the Supreme Court
(willful disobedience or violation of a rule). Finally, with
respect to count three, the hearing officer concluded Moak violated
ERs 1.7(b) (conflict of interest); 1.8(a) (conflict of interest:
prohibited transactions); 1.8(e) (conflict of interest: financial
assistance) and 1.8(j) (acquiring a proprietary interest in the
cause of action).
¶4 The hearing officer next determined that Moak committed
“knowing” ethical violations, that is, he acted with a “conscious
awareness of the nature or attendant circumstances of the conduct
but [was] without the conscious objective or purpose to accomplish
a particular result.” American Bar Association Standards for
Imposing Lawyer Sanctions (ABA Standards) at 7 (1991).1 After
considering proportionality principles and weighing aggravating and
mitigating factors, the hearing officer issued his report.
1
In this opinion, we refer to each specific standard set
forth in the ABA Standards compilation as “Standard x”.
3
¶5 We review conclusions of law de novo, as does the
Commission. Ariz. R. Sup. Ct. 53(d)2, (e)11. The Commission
adopted the hearing officer’s conclusions of law and agreed that
Moak knowingly violated the Rules of Professional Conduct.2 We
also agree with those conclusions of law. In exercising its
authority to review the hearing officer’s disciplinary
recommendation, the Commission reduced Moak’s suspension period to
six months. Suspensions of six months or less differ significantly
from suspensions of more than six months. An attorney suspended
2
The ABA Standards distinguish the seriousness of
misconduct based on the attorney’s mental state: intent, knowledge
and negligence. ABA Standards at 7. An attorney acts with intent
when it is her “conscious objective or purpose to accomplish a
particular result.” Id. An attorney acts with knowledge when he
is “conscious[ly] aware[] of the nature or attendant circumstances
of the conduct but without the conscious objective or purpose to
accomplish a particular result.” Id. An attorney acts negligently
when she fails “to heed a substantial risk that circumstances exist
or that a result will follow, which failure is a deviation from the
standard of care that a reasonable lawyer would exercise in that
situation.” Id.
The ABA Standards categorize discipline according to
culpability. Consequently, determining that a violation was
committed under a particular mental state is critical. Absent
aggravating and mitigating factors, disbarment is the presumptive
sanction only when an attorney intends to deceive the court by
“improperly withhold[ing] material information, and causes serious
or potentially serious injury to a party, or causes a significant
or potentially significant adverse effect on the legal proceeding.”
Standard 6.11.
Suspension, on the other hand, is generally the appropriate
sanction when an attorney knowingly withholds information “and
takes no remedial action, and causes injury or potential injury to
a party to the legal proceeding, or causes an adverse or
potentially adverse effect on the legal proceeding.” Standard
6.12. In either case, the presence of aggravating and mitigating
factors affects whether discipline should be more or less severe
than the presumptive discipline.
4
for six months or less may resume his practice when the period of
suspension ends by filing an affidavit in lieu of application for
reinstatement. Ariz. R. Sup. Ct. 71(c). An attorney suspended
from practice for more than six months, in contrast, must complete
a formal reinstatement process before being readmitted to the State
Bar. Id. 71(d).
II.
¶6 We elected to exercise sua sponte review to consider
further the appropriate period of suspension. Both parties urge us
to adopt the Commission’s recommended six-month suspension,
although the State Bar concedes that a suspension of six months and
one day falls within the appropriate range of sanctions.
¶7 As an attorney licensed to practice in Arizona, Moak is
bound by the Rules of Professional Conduct, which exist to protect
the public, deter similar misconduct and preserve the public’s
confidence in the State Bar and the attorneys licensed under its
authority. In re Walker, 200 Ariz. 155, 161 ¶ 26, 24 P.3d 602, 608
(2001).
¶8 Once ethical violations are established, we must identify
an appropriate sanction. Our decision to impose a particular
disciplinary measure is guided by the framework of Standard 3.0,
as set forth in the ABA Standards. Id. at 161 ¶ 21, 24 P.3d at
608. Standard 3.0 outlines four determinative factors in selecting
appropriate discipline: “(a) the duty violated; (b) the lawyer’s
5
mental state; (c) the potential or actual injury caused by the
lawyer’s misconduct; and (d) the existence of aggravating or
mitigating factors.” Standard 3.0; accord In re Horwitz, 180 Ariz.
20, 25, 881 P.2d 352, 357 (1994).
A.
¶9 When an attorney faces discipline for multiple charges of
misconduct, the most serious charge serves as the baseline for the
punishment. In re Cassalia, 173 Ariz. 372, 375, 843 P.2d 654, 657
(1992) (adopting Commission report); ABA Standards at 6. We assign
the less serious charges aggravating weight. Cassalia, 173 Ariz.
at 375, 843 P.2d at 657. The State Bar and Moak stipulated, and we
agree, that count two is the most serious charge of misconduct. We
turn, therefore, to the facts underlying that count.
¶10 Moak’s misconduct detailed in count two arose out of his
representation of Julian Reed. Moak represented Reed in two
separate actions arising from two car accidents that occurred
approximately three years apart. The gravamen of this count
involves Moak’s failure to disclose, in the action based upon the
first accident, the injuries Reed received in the second accident,
and his failure to distinguish appropriately the injuries Reed
sustained in the first accident from those he sustained in the
second. Those failures misled the defendants from the first
accident and deprived them of an opportunity to prove that Reed’s
injuries resulted, at least in part, from the second accident.
6
Moak’s failures also misled the judge and the jury in the trial
involving the first accident.
¶11 On June 11, 1995, Reed sustained injuries when a
commercial truck struck his vehicle in La Paz County, Arizona.
Reed retained Moak to pursue a lawsuit against the trucking company
and its employee (La Paz defendants) and filed a complaint in
August 1996 in La Paz County. In July 1998, Reed was involved in
a second automobile accident in Gila County, Arizona. Moak also
represented Reed in a lawsuit related to the second accident, filed
in November 1998 in Gila County.
¶12 Moak’s November 1996 disclosure statement in the La Paz
action indicated that Reed had suffered severe head trauma and
resultant visual field defect, but it made no mention of a brain
injury or claim that Reed sustained any impairment of his cognitive
functioning. In response to discovery questions from defendants’
counsel, Scott Alles, Moak eventually stated that Reed would claim
damages for a “cognitive injury” consisting of a visual field
problem and difficulty adding numbers, but he produced no medical
testimony except with reference to the visual field problem.
¶13 Moak failed to supplement his disclosure statement in the
La Paz County case to reveal the Gila County accident, although it
occurred long before the La Paz action went to trial. In the Gila
County accident, Reed sustained a closed head injury with,
according to medical records, probable brain stem involvement. By
7
November 1998, the physicians treating Reed for the Gila County
injuries noted that he had started experiencing severe tremors and
short-term memory loss, amnesia and severe headaches.
¶14 In January 1999, during the deposition of an
ophthalmologist as part of the La Paz discovery, the witness
testified that Reed suffered from a “brain injury.” Despite his
knowledge of the medical records related to the Gila County
accident, Moak opposed the La Paz defendants’ attempts to conduct
additional discovery related to a “brain injury.” In his
opposition, Moak did not disclose the Gila County injury or the
medical records that attributed Reed’s brain injury to the second
accident. In addition, Moak obtained an order precluding from the
La Paz trial any evidence related to other injuries, lawsuits or
claims for damages.
¶15 In March 1999, Reed’s La Paz trial began, concluding with
an $800,000 verdict for Reed. Reed exhibited tremors throughout
his trial testimony, a physical manifestation of injuries that the
trial judge later concluded would have affected the jury’s damage
award. Reed testified that all his health problems, including a
head injury, headaches and memory problems, resulted from the La
Paz accident.3 In closing argument, Moak emphasized Reed’s brain
injury and its effects, so evident to the jury during Reed’s
3
After the trial, and in connection with the Gila County
action, Reed acknowledged that some of his injuries resulted from
the second accident.
8
testimony.
¶16 In June 1999, after the La Paz trial concluded, Moak
submitted a disclosure statement in the Gila County case. There he
disclosed Reed’s closed head injury with possible brain stem
involvement, as well as tremors, headaches and confusion.4
¶17 One month after filing the Gila County disclosure
statement, Moak responded to a motion for a new trial in the La Paz
action by arguing that Reed’s brain injury, attributed to the La
Paz accident, caused the injuries about which he had testified and
that the extent of those injuries justified the jury’s award. He
still had not disclosed the second accident to the La Paz
defendants.
¶18 Finally, during Reed’s December 1999 deposition in the
Gila County action, Moak took steps that resulted in disclosure of
the 1998 accident to the La Paz defendants. During the deposition,
Moak corrected his client’s testimony to assure full disclosure of
the La Paz accident. Inexplicably, Moak even then did not notify
the La Paz defendants of the second accident, although he asserts
that he knew defense counsel in the Gila County action would notify
Alles.
¶19 By this time, the La Paz defendants had filed an appeal.
4
The hearing officer found that the Gila County
disclosures demonstrate that Moak was aware of the overlap between
the 1995 and 1998 injuries and that he was aware of the overlap
prior to the La Paz trial.
9
When Alles learned of Reed’s deposition testimony, he successfully
requested that the court of appeals revest jurisdiction in the
trial court, where he moved for relief from the judgment. Moak
responded to various motions filed on behalf of the La Paz
defendants, generally arguing (1) that the record did not show that
Reed displayed tremors during his trial and (2) that Alles, rather
than Moak, was to blame for Moak’s failure to disclose, because
Alles failed to exercise “due diligence” in questioning about other
potential causes of Reed’s injuries.
¶20 On March 15, 2000, the La Paz trial court concluded that
Moak’s non-disclosure tainted the original verdict and ordered a
new trial. The court also awarded the La Paz defendants attorneys’
fees for trial preparation, trial and post-trial motions. Moak
then advised Reed to retain new counsel and to consider filing a
suit against him for malpractice.
¶21 On May 25, 2000, the La Paz trial court held a hearing on
the attorneys’ fee award, at which new counsel represented Reed.
At the hearing, Moak apologized for his conduct and requested that
the attorneys’ fees be charged against him alone. The court
ordered Moak to pay, and Moak has since paid, the defendants
$31,493.82 in attorneys’ fees.
B.
¶22 In conducting its proportionality review, the Commission
compared Moak’s conduct to that of the two attorneys disciplined in
10
In re Alcorn and Feola, 202 Ariz. 62, 41 P.3d 600 (2002). There,
we suspended two civil defense attorneys for six months after they
agreed to and participated in a sham trial concocted by a personal
injury plaintiff. Id. at 76 ¶ 51, 41 P.2d at 614. The Commission
concluded that because the misconduct charged against Moak in count
two was similar in nature, his suspension also should be six
months.
¶23 On balance, we agree that Moak’s misconduct is
sufficiently similar to that of Alcorn and Feola to justify the
comparison drawn by the Commission. The deception in both cases
resulted in defective trials, which needlessly wasted the time,
energy and resources of witnesses, judges and juries. In both
instances, clients suffered harm because a verdict in their favor
was vacated.
¶24 We also note differences between Moak’s misconduct and
that of Alcorn and Feola. In some respects, Moak’s conduct is less
serious. Moak is less culpable than Alcorn and Feola because those
attorneys intentionally violated ethical rules, although their
legal research and opinions solicited from other attorneys
suggested that their behavior was not inappropriate. Id. at 66 ¶
13, 74 ¶ 42, 41 P.3d 604, 612. Moak, in contrast, acted knowingly.
In addition, once Moak accepted responsibility for his misconduct,
he took steps to rectify the effects of his conduct on his clients.
¶25 In other respects, however, Moak’s conduct is more
11
serious. The defendant in the Gila County case offered Reed a
settlement. Had Reed accepted, his head injury from the second
accident might never have been discovered by the La Paz defendants,
and Moak would have successfully deceived the La Paz court and
defendants. Moreover, Moak’s conduct injured both his own client
and the La Paz defendants, who faced a substantial and invalid
verdict, whereas Alcorn and Feola’s sham trial benefitted the
plaintiff although it eventually harmed their client. Id. at 65 ¶
12, 41 P.3d at 603. Furthermore, Moak’s conduct was largely driven
by the chance for personal gain, whereas Alcorn and Feola did not
act out of self-interest. Id. By deciding not to disclose the
Gila County accident in the La Paz case, Moak acted in a manner
that could have led to double recovery for Reed’s head injury,
which in turn would have increased Moak’s fee under the contingency
fee agreement.
¶26 The presumptive discipline for Moak’s actions involving
Reed’s representation, like the presumptive discipline for Alcorn
and Feola, is suspension. Under Standard 6.12, suspension is
generally appropriate when an attorney knowingly makes a false
statement of material fact to or knowingly withholds material
information from the tribunal. Standard 6.12; see In re Alcorn and
Feola, 202 Ariz. at 75 ¶ 47, 41 P.3d at 613. The presumptive
suspension period established by the ABA Standards is six months.
Standard 2.3; see In re Alcorn and Feola, 202 Ariz. at 75 ¶ 47, 41
12
P.3d at 613. We then must determine whether the aggravating
factors, offset by the mitigating factors, justify a suspension
longer than six months.
¶27 The parties assert that the aggravating and mitigating
factors present here also mirror those considered for Alcorn and
Feola. To some extent, we agree. No one disputes that four
aggravating factors apply to Moak: dishonest or selfish motive,
Standard 9.22(b); pattern of misconduct, Standard 9.22(c); multiple
offenses, Standard 9.22(d); and substantial experience in the
practice of law, Standard 9.22(i). The parties also stipulated to
four mitigating circumstances: absence of a prior disciplinary
record, Standard 9.32(a); full and free disclosure to the
disciplinary board or cooperative attitude toward proceedings,
Standard 9.32(e); imposition of other penalties or sanctions,
Standard 9.32(k); and remorse, Standard 9.32(l).
¶28 Alcorn and Feola also established four mitigating
factors: absence of dishonest or selfish motive, Standard 9.32(b);
cooperative attitude toward proceedings, Standard 9.32(e);
imposition of other penalties or sanctions, Standard 9.32(k); and
minimal risk of reoccurrence. In re Alcorn and Feola, 202 Ariz. at
75 ¶ 46, 41 P.3d at 613.
¶29 Only one aggravating factor influenced our determination
of Alcorn and Feola’s ultimate sanction. Each had significant
experience in the practice of law, Standard 9.22(i). Id. at 74 ¶
13
44, 41 P.3d at 612.5 This aggravating factor is just one of four
established against Moak. In weighing aggravating and mitigating
factors, however, we do more than simply count the factors.
¶30 Our concern here rests with whether the Commission gave
sufficient weight to the aggravating factors, particularly the
pattern of misconduct and multiple offenses, in imposing
discipline. Over a one-year period, Moak violated fundamental
duties owed to two clients, a former client, the court and opposing
parties. This court views a continuing pattern of misconduct as
calling for a lengthy suspension. E.g., In re Murphy, 188 Ariz.
375, 380, 936 P.2d 1269, 1274 (1997) (suspending an attorney for
one year after he committed numerous ethical violations during a
real estate transaction); In re Augenstein, 178 Ariz. 133, 139, 871
P.2d 254, 260 (1994) (imposing a two-year suspension on an attorney
charged with three counts of professional misconduct and found to
violate several rules of professional responsibility). To fully
understand the gravity of Moak’s pattern of misconduct, we examine
the additional charges established by the State Bar. The strength
of those charges as aggravating factors depends, in large part,
upon the seriousness of the charges.
5
Alcorn and Feola each had a prior disciplinary sanction
that, under Standard 9.22(a), could have served as an aggravating
circumstance. In re Alcorn and Feola, 202 Ariz. at 74 ¶ 44, 41
P.3d at 612. We chose not to consider this factor because the
prior sanctions occurred several years beforehand and, thus, were
too remote in time to serve as a reliable aggravator. Id.
14
III.
A.
¶31 The first of the additional charges considered as an
aggravating factor arose out of Moak’s representation of a husband
and wife, Jacob and Renee Luster. The Lusters retained Moak to
represent them in August 1997, following an automobile accident in
which the couple sustained injury when the car driven by Jacob
collided with another. A potential conflict existed because, as
one of the drivers involved in the accident, Jacob may have
contributed to the accident. If so, Renee could assert a claim
against her husband. Moak appropriately warned the Lusters that he
could not continue to represent them both if Renee filed an action
against Jacob. See generally Ariz. R. Sup. Ct. 42, ER 1.7(a).6
Renee told Moak that she did not feel her husband was at fault.
¶32 Several months later, the Lusters told Moak that although
he should not continue representing them both, he should continue
representing Renee. In November 1997, Moak sent Jacob a letter
6
ER 1.7(a), which sets out the general rule governing
conflicts of interest, provides:
(a) A lawyer shall not represent a client if the
representation of that client will be directly adverse to
another client, unless:
(1) the lawyer reasonably believes the
representation will not adversely affect the relationship
with the other client; and
(2) each client consents after consultation.
Ariz. R. Sup. Ct. 42, ER 1.7(a).
15
stating, “You and Renee informed me that you wanted me to continue
to represent Renee and that [Jacob] would find another attorney.”
¶33 On June 2, 1998, Moak filed a lawsuit on Renee’s behalf
against James Pender, the other driver involved in the accident.
Pender’s answer named Jacob as a non-party at fault. After taking
Pender’s deposition, Moak concluded that Renee’s suit could not
proceed without naming Jacob as a defendant. On October 27, 1998,
Moak wrote Renee stating that, because of the conflict of interest
created by the continuing duties he owed to his former client,
Jacob, he was withdrawing as her counsel. Two days later, Renee
called Moak to discuss the Pender lawsuit. Moak reminded Renee
that he could not represent her. Because Renee did not want to
change counsel, she told Moak that Jacob would consent to the
continued representation.
¶34 On March 4, 1999, Moak sent Renee a letter in which he
stated, “Jacob must discuss with his own attorney whether he will
give me permission to continue to represent you even though a civil
complaint is filed against him on your behalf.” See generally
Ariz. R. Sup. Ct. 42, ER 1.9.7 Moak stressed that Jacob had not
7
ER 1.9, which sets out the general rule regarding
conflicts of interest with former clients, provides:
A lawyer who has formerly represented a client in a
matter shall not thereafter:
(a) represent another person in the same or a
substantially related matter in which that person’s
interests are materially adverse to the interests of the
former client unless the former client consents after
16
yet discussed the situation with his attorney and gave Renee the
following advice:
[I]t is my recommendation that the present lawsuit be
dismissed and a new lawsuit be filed by you without
counsel naming both James Pender and Jacob Luster as
defendants. After Luster is served with the suit papers,
he will have to deliver them to his attorney and you can
send Jacob non-uniform interrogatories asking him if he
has any objection to Moak Law Office, P.C. representing
you in the action against him and Pender. If he does
object, you will have to get another attorney or
prosecute the matter on your own.
¶35 Moak sent another letter to Renee on March 24, 1999,
asking her to contact Jacob about re-filing the lawsuit. Moak, on
his own initiative, then drafted a second complaint naming both
Jacob and Pender as defendants and mailed it to Renee on April 28,
1999, for her signature and filing. Renee alleges that she did not
receive the mailing. Meanwhile, on April 23, 1999, Moak and
Pender’s attorney filed a stipulation dismissing the original
lawsuit without prejudice.
¶36 The statute of limitations ran on Renee’s case on August
3, 1999. Near that date, Moak checked the court records and
learned that Renee had not filed the complaint he drafted in April.
Concerned about the statute of limitations, which in fact had
consultation; or
(b) use information relating to the representation
to the disadvantage of the former client except as ER 1.6
would permit with respect to a client or when the
information has become generally known.
Ariz. R. Sup. Ct. 42, ER 1.9.
17
expired, Moak signed Renee’s name to the second complaint naming
Jacob and Pender as defendants and filed it on August 13, 1999.
Renee was unaware of his action and had not given Moak permission
to sign her name or to file the complaint. In addition, Moak had
not received permission from Jacob to file a complaint against him.
Moak later explained that he believed Renee would not object to his
actions and that signing and filing the complaint on her behalf was
in her best interests.
¶37 Pender filed a motion to dismiss the second complaint for
failure to comply with the statute of limitations. After the trial
court granted his motion, Pender obtained a judgment against Renee
for $86.00 in costs.
¶38 Renee, through new counsel, filed a malpractice action
against Moak on January 17, 2001. The parties settled the case,
and Moak paid Renee $20,000 as a condition of settlement.
¶39 These facts reveal additional serious ethical misconduct.
Moak disregarded his duty of loyalty owed to Jacob Luster, his
former client, by initiating a cause of action against him in the
same matter as the prior representation without consent. See Ariz.
R. Sup. Ct. 42, ER 1.9; Foulke v. Knuck, 162 Ariz. 517, 522, 784
P.2d 723, 728 (App. 1989) (holding ER 1.9(a) “prohibits subsequent
representation of an individual whose interests are substantially
adverse to those of the former client”). Also, by filing the
complaint without Renee’s consent and forging her name to the
18
verification, Moak disregarded duties owed to his client and made
false statements to the court. See Ariz. R. Sup. Ct. 42, ERs 3.3,
4.2, and 8.4(c), (d); In re Shannon, 179 Ariz. 52, 63, 876 P.2d
548, 559 (1994) (holding an attorney violated his duty of candor to
the tribunal by changing his client’s interrogatory answers without
the client’s knowledge); In re Mahoney, 367 P.2d 148, 148 (Wash.
1961) (disbarring an attorney who, without consent, signed his
client’s name to a complaint). Moak’s actions further show that he
failed to keep Renee reasonably informed about the status of the
second complaint and failed to use reasonable promptness by not
assuring that her complaint had been filed before the statute of
limitations ran. See Ariz. R. Sup. Ct. 42, ERs 1.3, 1.4. These
facts, standing alone, could justify a suspension. This count,
therefore, substantially aggravates Moak’s misconduct.
B.
¶40 The second of the aggravating charges involved Mr. Reed,
the victim of the La Paz and Gila County accidents. During the
course of his attorney-client relationship with Moak, Reed informed
Moak that he needed money and was considering taking out a loan at
an interest rate of fifteen percent per month. Moak told Reed that
he probably would not obtain a judgment in his two lawsuits anytime
soon and that the high interest rate could offset any recovery.
¶41 Shortly thereafter, Moak’s wife approached Reed and
offered to loan him money. Reed agreed to a total of four loans
19
totaling $13,000, payable at a rate of twenty-five percent interest
per year.8 Moak drafted a separate promissory note for each of the
four loans authorizing him to withhold any future settlement funds
or awards received on Reed’s behalf and to repay the loans to his
wife with those funds. Moak did not advise Reed to seek
independent counsel concerning the proposed loan agreements.
¶42 Reed did not make any payments on the loans. Instead,
the loans were forgiven as part of Reed’s settlement of his
malpractice action against Moak.
¶43 The misconduct involved here is obvious. In In re
Stewart, we censured an attorney for advancing money to his client.
121 Ariz. 243, 245, 589 P.2d 886, 888 (1979). We held that
advances are dangerous because an attorney then “acquires an
interest in the outcome of a suit in addition to his fees [and] can
lead to the attorney placing his own recovery ahead of his
client[’s interests].” Id. Moak’s misconduct extends beyond
advancing funds to a client. Moak violated ER 1.7(b) by
representing Reed when Moak’s responsibilities to his wife could
have affected his representation of Reed. He knowingly acquired a
pecuniary interest adverse to that of Reed and provided financial
assistance to Reed in connection with pending litigation. See
8
The total consisted of the following four loans: A loan
of $5,000 made on November 19, 1999; a loan of $3,500 on December
3, 1999; a loan of $2,000 on March 30, 2000; and a loan of $2,500
on May 6, 2000.
20
Ariz. R. Sup. Ct. 42, ER 1.8(a), (e). Perhaps most seriously, he
acquired a proprietary interest in the litigation that he was
conducting for Reed. See Ariz. R. Sup. Ct. 42, ER 1.8(j). The
loan proceeds actually increased Moak’s contingency fee arrangement
with his client and gave him a direct stake in the outcome of the
trials.9 His actions placed him in a position in which his
interests could conflict with those of his client. Although Moak
does not regard this count as particularly serious, we do not
countenance any actions that carry the potential of placing a
lawyer’s interests above those of his client. This count, too,
reflects serious misconduct.
C.
¶44 Moak’s pattern of misconduct and the multiple serious
offenses he committed serve as substantial aggravators, which
significantly change the balance of mitigating and aggravating
factors. Unlike the situation in In re Alcorn and Feola, which
involved a single aggravating factor, Moak’s actions demonstrate a
pattern of serious ethical lapses.
¶45 Both parties tell us that Moak’s remorse and repayment to
the injured parties, found as a mitigating factor, sufficiently
9
We presume the expected interest income would be
community property. See Carroll v. Lee, 148 Ariz. 10, 16, 712 P.2d
923, 929 (1986) (holding that “[t]here is a strong legal
presumption that all property acquired during marriage is community
property”). The record does not include evidence indicating
otherwise.
21
demonstrate rehabilitation, and suggest that any discipline
requiring Moak to demonstrate rehabilitation is unnecessary.
Moak’s actions, however, do not show his commitment to remedying
the serious ethical deficiencies demonstrated in this disciplinary
proceeding. Even though Moak made restitution to his victims, he
failed to take measures dedicated to improving his understanding of
the ethical duties associated with being a member of the State Bar.
During the years since Moak’s misconduct, for example, he could
have enlisted a practice monitor, taken ethics enhancement classes
or attended more than the minimum required ethics continuing legal
education programs. We are unsure whether Moak fully understands
and appreciates the duties imposed by the Rules of Professional
Conduct and the magnitude of his transgressions. As a result, we
are unpersuaded by this record that similar violations will not
occur in the future.
IV.
¶46 For the foregoing reasons, we order Moak suspended from
the practice of law in Arizona for six months and one day,
beginning thirty days from the date of this opinion. Probation or
conditions of reinstatement may be appropriate upon reinstatement;
we leave this matter for consideration when Moak applies for
reinstatement.
_______________________________________
Ruth V. McGregor, Vice Chief Justice
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CONCURRING:
_______________________________________
Charles E. Jones, Chief Justice
_______________________________________
Rebecca White Berch, Justice
_______________________________________
Michael D. Ryan, Justice
_______________________________________
Andrew D. Hurwitz, Justice
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