Losing Hope In Iowa
A $20,000 loan from estate funds drew a two-year suspension of an attorney by the Iowa Supreme Court.
In this disciplinary action, Powell is accused of obtaining a $20,000 loan from the administrator of an estate during the time he served as the designated attorney for the estate in violation of the rules of professional conduct. The administrator was the beneficiary of a $40,000 life insurance policy on the life of the decedent in the estate. The insurance company paid the insurance proceeds to Powell, and he deposited them in his law firm trust account. At the request of Powell, the administrator orally agreed to loan Powell $20,000 of the proceeds. Powell withdrew the loan proceeds from the trust account before a written loan agreement was executed. The written agreement subsequently prepared by Powell provided for the law firm to repay the loan in monthly installments at ten percent interest. The amount of each monthly payment was to be based on an unspecified amount of firm receipts received during the preceding month. Powell claimed he asked the administrator if he wished to seek independent counsel before agreeing to make the loan. The administrator denied any request was made.
Powell subsequently made sporadic and minimal monthly payments. The administrator eventually filed a breach-of-contract action. Powell settled the lawsuit by agreeing to pay $25,000 to the administrator in monthly installments of $1500.
The sanction was affected by prior discipline
we are confronted with a significant aggravating factor in this case. In addition to client harm, the pattern of unethical conduct by Powell over the last decade raises a serious and fundamental question of his fitness to practice law. See Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Beckman, 674 N.W.2d 129, 139 (Iowa 2004). We begin to lose hope that lawyers will ever understand and meet their ethical obligations when they repeatedly engage in unethical conduct. Id. At some point, public protection and the reputation of the profession justify the revocation of a license to practice law. Powell is approaching this point. He continues to fail to honor the ethical boundaries of the profession. However, we have not adopted a three-strikes approach to revocation. The current discipline will be the third for Powell, but it involves a single incident. Unlike in Beckman, we are not faced with a new series of unethical conduct that justifies losing hope that he could practice law in an ethical manner again. Cf. id. His background of discipline justifies a sanction greater than recommended by the commission, but not revocation.
Justice Wiggins dissented noting his position the last time around
I once again dissent to any sanction short of revocation. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell (Powell II), 830 N.W.2d 355, 360–64 (Iowa 2013) (Wiggins, J., dissenting) (calling for the revocation of Powell’s license). For the last twelve years, Powell has managed to use his clients’ funds contrary to our ethical rules. His extensive disciplinary history is as follows.
In 2005, Powell received a private admonition for charging an excessive fee to a client. Powell II, 830 N.W.2d at 356 (majority opinion). In 2007, we suspended Powell’s license to practice law for six months because of his numerous and persistent unethical actions involving the collection of fees from clients. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell (Powell I), 726 N.W.2d 397, 408 (Iowa 2007). In 2010, Powell received another private admonition for failing to make an accounting before withdrawing fees from his trust account. Powell II, 830 N.W.2d at 356. In 2011, we temporarily suspended Powell from practicing law for seven months and appointed a trustee to take control of his trust account in response to his various trust violations. Id. at 356, 359–60. At the time, the trustee determined his trust account was short approximately $43,000. Id. at 356. In 2013, we imposed a three-month suspension for the same trust account violations that led to his interim suspension in 2011. Id. at 359–60.
Within nine months of his most recent reinstatement, Powell once again flouted our rules of professional conduct. It is apparent to me that Powell’s practice of law does not generate enough income to support his practice or his lifestyle…
Although he did not outright convert his clients’ funds, he found a way on three separate occasions to access these funds unethically. Furthermore, he appears not to have learned anything from his prior disciplinary proceedings. For the protection of the public, and the integrity of the bar, I would revoke his license.
(Mike Frisch)