Misappropriation Draws Revocation
The Iowa Supreme Court concluded that an attorney’s misappropriation merited license revocation.
The court did not address other potential violations (including the below findings) in light of its conclusion.
AlphaGen Materials Technology, Inc. is an Iowa corporation. Fischer is a minority owner who has served as a director since its incorporation in 2008 and also serves as its vice president, secretary, and treasurer as well as its attorney. In March of 2012, AlphaGen was sued for breach of contract. Fischer filed an answer for the defendant and remained its counsel of record. In the months that followed, AlphaGen repeatedly failed to comply with discovery requests and court orders. After judgment was entered against the defendant, the plaintiffs pursued debtor’s examinations, and AlphaGen continued to disobey court orders. A settlement was negotiated, which included Fischer as a named party. When Fischer, AlphaGen, and AlphaGen’s president failed to honor the settlement, the plaintiffs filed a second lawsuit to enforce the settlement and pierce the corporate veil. Fischer was named as a defendant in the second lawsuit.
The pattern continued with more violations of discovery obligations and court orders. The court found the defendants, including Fischer, willfully and in bad faith violated court orders and imposed sanctions that ultimately included a default judgment. Fischer blamed an unresponsive client but offered no valid excuse for his personal failure to comply with document requests for records within his control.
In the entrusted funds matter
The Osborn matter was not included in the records reviewed by the auditor in 2019. Thus, Fischer’s client trust account was underfunded by over $16,000. Fischer testified he has no colorable future claim to the $7,500, which includes the $6,198 for the uncashed check to Travelers and the $1,302 he used to cover James’s attorney fees. Fischer acknowledged: “That was [Josh’s] money, because [Travelers] didn’t cash the check. I have no colorable claim, but I did not intentionally convert that to my own use.” Fisher admitted to “taking over $6,000 out from [his] trust account that rightfully belonged to Josh Osborn.”
The court found
Fischer argues he lacked the requisite intent to misappropriate the $7,500 from Josh. We are not persuaded. Fischer has not provided a justification for taking the $7,500. Instead, he admits he did not have the authorization to use the $7,500 for anything besides payment toward the agreed settlement. Fischer is a seasoned attorney who should have at least looked into the status of the $6,198 check when Travelers moved for enforcement of the full $15,000 judgment. Also, he should not have taken the $1,302 from Josh towards his brother’s fees because he was “mad” and without approval from his client.Fischer’s arguments that his actions were unintentional and just due to poor record-keeping do not square with the facts. Fischer did not inform his clients of Travelers’ motion to enforce the judgment, the hearing, and the judgment against them for over three years. Fischer did not and has not reimbursed Josh for the
$1,302 used to cover James’s attorney fees. Thus, we conclude Fischer misappropriated $7,500 of settlement funds he received from Josh Osborn.
As night follows day
We conclude the Board has demonstrated by a convincing preponderance of the evidence that Fischer’s misappropriation was an intentional act of theft, not a technical violation, and revocation is the appropriate sanction.
(Mike Frisch)