“This Chicago Attorney”

An Illinois attorney has been sanctioned by the Iowa Supreme Court for misconduct while admitted pro hac vice

The charges arise out of Iowa litigation in which an out-of-state attorney admitted pro hac vice claimed, among other things, that his clients lacked knowledge of an Iowa foreclosure proceeding and, as a result, could not be precluded from bringing a separate fraud action arising out of the same transaction that gave rise to the foreclosure proceeding. In addition, the attorney supported his fraud action by claiming that his clients were without counsel at a key stage of the negotiations with the bank prior to the institution of the foreclosure. Finally, the attorney asserted that his clients were defrauded by “phony court orders” foisted upon them by the defendants.

After granting summary judgment in the fraud action adverse to the attorney’s clients, the district court found the above assertions were made “falsely and in bad faith” in an attempt to avoid the defendants’ motion for summary judgment. The district court imposed sanctions of $123,359.60 against the attorney and his clients. The district court also entered a monetary sanction of $2500 against an Iowa attorney serving as  local counsel.

…we affirm the commission’s findings and conclusions regarding the violations. We conclude that the proper sanction for these violations is an injunction prohibiting the attorney from practicing law within the State of Iowa for six months. We also order that the injunction not be lifted until the attorney demonstrates to the satisfaction of the Board that the sanctions imposed in the fraud case have been satisfied.

Justice Waterman concurred and dissented

I respectfully dissent from the majority’s six-month sanction as too lenient for this Chicago attorney whose own lies and the lies told by his clients at his direction caused considerable harm to the opposing party, his own clients, and our court system. I would extend the injunction to at least one year as recommended by the Iowa Supreme Court Grievance Commission and the Iowa Supreme Court Attorney Disciplinary Board.

The majority correctly concludes that Paul Caghan violated our disciplinary rules prohibiting intentionally false statements to the court, frivolous claims, and conduct prejudicial to the administration of justice. But the majority’s otherwise thorough review of the underlying litigation omits salient observations by the district court judge and fails to properly analyze our precedent on sanctions. The majority rests its six-month sanction on several cases involving less egregious attorney misconduct and lacking the harm to the victim and clients present here. I will begin with some choice words by the judge tasked with adjudicating the fraud action Caghan filed.

The district court found the claim by Caghan’s clients that they were unaware of the Scott County foreclosure action until November 2016 was “demonstrably untrue.”

Justices Christensen and McDonald joined. (mike Frisch)