Indiana Law Controls North Dakota Disbarment

The North Dakota Supreme Court applied the substantive law of Indiana in disbarring an attorney

In September 2022, Daniel held client funds in the amount of $9,888,779 in his trust account. The client and his wife entered into a $600,000 loan agreement to LBDD Enterprise Holdings, LLC. Prior to the loan, they provided a written letter personally guaranteeing on the loan. Daniel sent the lender a letter on his firm letterhead stating the amount of funds he held and that the loan would be paid out of the funds. Both letters were intended to induce the lender to make the loan. LBDD did not pay the loan when due. Neither the client, nor his wife, nor Daniel from the trust account paid the loan when due. The lender sued Daniel for fraud and breach of contract. Daniel did not answer the complaint and it appears he is evading attempts to involve him in the civil matter.

The conduct giving rise to this complaint has the predominant effect in Indiana and under N.D.R. Prof. Conduct 8.5, the professional conduct rules of Indiana apply. The hearing panel concluded Daniel’s conduct violated Ind. R. Prof’l Cond. 1.8, Conflict of Interest: Current Clients: Specific Rules, by failing to appropriately counsel his client as to a potential conflict of interest by way of his involvement and guarantee of the loan issued to them by a third party; Ind. R. Prof’l Cond. 4.1, Truthfulness in Statements to Others, by engaging in misrepresentation, deceit, or both with regard to his own financial means to induce the production of a business loan from a third party; and Ind. R. Prof’l Cond. 8.4, Misconduct, by engaging in conduct involving fraud with regard to his client’s financial means to induce the production of a business loan from a third party.

Efforts to serve the attorney were unsuccessful and the charges were deemed admitted by default. (Mike Frisch)