Tax Seizure Of Entrusted Funds Leads To Suspension

A sixty-day suspension followed by eighteen months of supervised practice has been imposed by the West Virginia Supreme Court of Appeals

The issue before us arises out of Howard J. Blyler’s (“Mr. Blyler”) acts and failures to act in his capacity as a court-appointed special commissioner with respect to judicial sales of property. Proceeds from the judicial sales were being held by Mr. Blyler in a segregated bank account established for the purpose of maintaining the proceeds pending accounting and distribution of the funds to heirs of an estate. However, the proceeds were seized from the account in order to satisfy Mr. Blyler’s personal income tax liabilities.

The court declined to follow the Hearing Panel Subcommittee’s proposed “strong reprimand” and supervision.

We have undertaken a thorough review of the record submitted, the briefs and argument of the ODC and Mr. Blyler, as well as the applicable legal precedent. This Court has carefully considered the thoughtful reasoning of the HPS. We have taken into account the view of the complainant-victim that supervised practice is acceptable and is the roadmap for achieving restitution. Moreover, we are cognizant of the unique factors surrounding the conduct at issue and the contributing tragic personal family circumstances. Our review compels this Court to impose a sixty-day suspension from the practice of law, a supervised practice period of eighteen months, the completion of additional continuing legal education in the subject of ethics, an evaluation by a licensed professional counselor, restitution together with an accounting, and to adopt the remaining sanctions recommended by the HPS.

If there’s anything I hate, it’s a weak reprimand.

The attorney was admitted by diploma privilege in 1976.

Mr. Blyler owed back taxes to the Tax Department in the approximate principal amount of twenty-five thousand dollars ($25,000.00). By March 2009, the total tax liability exceeded one hundred fifty-seven thousand dollars ($157,00.00) including accrued interest and penalties. Mr. Blyler was aware of his personal tax liability, but there is no evidence that he did anything intentionally to use client funds to satisfy his personal liability. He had no reason to anticipate that a tax levy would extend to a special commissioner’s account created to hold funds for a third party. Mr. Blyler did not have any advance notice that the funds in the “Special Account” were being seized. He learned of the levy and seizure of the funds via a mailed notice that he received two to three days after the seizure of funds was accomplished

Upon learning that the funds had been seized, Mr. Blyler immediately notified the Tax Department and the Bank that the funds levied upon were not his personal funds, but, rather, were client funds not subject to levy. Contact was also made with a representative of the Governor’s office to see if they might intervene to help recover the funds.

However, at that time, Mr. Blyler took no other steps to recover the money. Significantly, Mr. Blyler failed to notify his client of the adverse action that had been taken. Furthermore, Mr. Blyler did not notify the circuit court about the levy upon the funds in the “Special Account.”

Some background

Mr. Blyler’s law practice is a small, rural and general practice. In large part, the practice consisted of criminal defense appointments, abuse and neglect cases, domestic relations, and guardian ad litem work.

During the course of the above-described events, Mr. Blyler found himself in the midst of a personal family hardship. His wife of forty-five (45) years, Madonna Blyler, who was a school teacher, began suffering from serious cognitive problems which forced her to take an early retirement in 2008. Prior to her retirement, Mr. Blyler helped compensate for his wife’s failing mental capacity by assisting her with her teaching responsibilities. He graded all her student papers, prepared student report cards and performed various tasks that she was unable to accomplish. Her fellow teachers and school administrators also were assisting. As the problems progressed, she became unable to work. In March 2009, at the age of fifty-four, she applied for and received social security disability due to her diagnosis of early onset Alzheimer’s disease.

Mr. Blyler was a caring and devoted husband who provided his wife virtually around-the-clock care from the time of her diagnosis in March 2009 until her death in December 2014. At times, Mr. Blyler had outside help to care for his wife while he was at work, but that eventually proved difficult and unworkable. He did not have the financial means to provide her with the full-time, in-home care that she required. Mr. Blyler was committed to keeping his wife at home and out of an institutional nursing home placement…

Mr. Blyler made every effort to care for his wife and continue to work and serve the community. Eventually, during the last year of his wife’s debilitating illness, in order to meet her needs, he began restricting the amount of work he accepted. By the Fall of 2012, he ceased accepting appointments for abuse and neglect and felony cases. His number-one priority became his wife.

The court found significant mitigation

this Court concludes that the testimony overwhelmingly established the significant personal, emotional, and financial toll placed on Mr. Blyler while caring for his wife as she suffered through early onset Alzheimer’s disease, which required Mr. Blyler’s continual care and assistance in every activity of life as she progressively declined both physically and cognitively. It is plain that Mr. Blyler was devoted to the needs of his dying wife while continuing to serve a community with his small, general, rural law practice…

This Court further finds that Mr. Blyler’s cooperation, free disclosure, and attitude toward the disciplinary process constitutes a mitigating factor. Mr. Blyler entered into extensive factual stipulations and admitted violations. Additionally, the record reflects his acknowledgment of wrongdoing, tremendous remorse, and contrition.

The attorney also had extensive favorable character evidence and no selfish motive,

Chief Justice Ketchum dissented on the issue of restitution

The majority is requiring Lawyer Blyler to pay back the approximately $47,000 he owes to the estate. At the same time, the majority is taking away his opportunity to earn an income by suspending his law license. These are self-defeating sanctions that defy common sense. Even the complaining party agrees that Lawyer Blyler should be permitted to continue to practice so that restitution can be made.

(Mike Frisch)