IN THE SUPREME COURT OF IOWA No. 19–1934
Filed May 22, 2020
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
MICHAEL D. KOZLIK,
Respondent.
On review of the report of the Iowa Supreme Court Grievance
Commission.
In attorney disciplinary action, grievance commission recommends
suspension for violations of ethical rules. LICENSE REVOKED.
Tara van Brederode and Allison Schmidt, Des Moines, for
complainant.
Drew Kouris, Council Bluffs, for respondent. 2
McDONALD, Justice.
The Iowa Supreme Court Attorney Disciplinary Board filed a
complaint against Michael D. Kozlik. The complaint alleged Kozlik violated
Iowa Rules of Professional Conduct 32:8.4(b) and 32:8.4(c) while acting as
the administrator of his uncle’s estate. A division of the Iowa Supreme
Court Grievance Commission found the Board failed to prove a violation of
rule 32:8.4(b) and dismissed that complaint. The commission found the
Board proved Kozlik violated rule 32:8.4(c) and recommended a public
reprimand as the sanction. We find and conclude Kozlik violated rules
32:8.4(b) and (c) by misappropriating funds from the estate without a
future colorable claim to said funds. We revoke Kozlik’s license to practice
law in the State of Iowa.
I.
Michael Kozlik was admitted to practice law in Nebraska in 1979
and in Iowa in 2000. His law office is located in Omaha. Kozlik’s primary
practice is estate planning and administration. He has served as the
personal representative in a number of estates. He has served as an expert
witness on probate fees in proceedings in Nebraska. While Kozlik primarily
practices law in Nebraska, he has performed probate work on this side of
the river.
The ethical violations in this case arise out of Kozlik’s service as the
administrator of his uncle’s estate. Duane and Frances Slightam, Kozlik’s
uncle and aunt, had no children of their own. They were very close to their
nephews Kozlik and his brother Doug. Kozlik spent a great deal of time
with his uncle and aunt, helped them on their farm, and even considered
them his second parents. Toward the end of their lives, Duane and
Frances began to lose their ability to live independently. Kozlik and other
family members convinced Frances that Duane had to move to a care 3
facility in 2013. Kozlik was appointed Duane’s guardian, and Treynor
State Bank (TS Bank) was appointed Duane’s conservator.
Duane passed away in June 2015, and Frances was the sole
beneficiary of his estate. Attorney Leo Martin opened Duane’s estate in
March 2016 in Pottawattamie County. Kozlik was appointed administrator
of Duane’s estate, and TS Bank was appointed executor. Mary Jewell, a
trust officer at TS Bank, served as the representative of TS Bank.
Six months after Duane’s estate was opened, Kozlik began to write
checks from the estate’s bank account to himself. Over the next two years
Kozlik wrote a total of twelve checks on the estate’s account made payable
to himself in the total amount of $39,350.
Date of Check Check # Amount 11/23/16 1001 900 11/23/16 1002 150 2/03/17 1004 2500 6/05/17 1005 1500 6/23/17 1006 1500 6/27/17 1007 10,000 9/08/17 1008 3500 9/29/17 1009 5000 2/28/18 1012 5000 6/08/18 1016 3500 6/13/18 1017 2300 9/25/18 1018 3500 TOTAL $39,350
According to Kozlik, all but one of the withdrawals was for fees
earned and expenses incurred in the administration of Duane’s estate.
The one exception was a withdrawal in the amount of $10,000 in June
2017. According to Kozlik, he paid himself that money as a deduction to
the estate to offset $43,000 in interest income the estate had earned upon
cashing government bonds. Kozlik testified that, as it turned out, the
estate did not need the deduction so he repaid it. However, Kozlik returned 4
only $9700 of those funds to the estate’s account in December 2017.
Kozlik did not obtain court authorization prior to making any of these
payments to himself.
Kozlik testified two or three of the checks were deposited into his
personal checking account and the remainder into his operating account
at his law firm. He testified he used the funds “for paying bills and living
expenses” and for expenses and disbursements related to his law practice.
The unauthorized payments came to light at the end of 2018.
Frances passed away in April 2018. Her will was admitted to probate later
that month. Christopher Juffer served as the attorney for Frances’s estate,
and TS Bank served as the executor. Because Frances was Duane’s sole
beneficiary and because Duane’s estate was still pending, TS Bank needed
additional information from Duane’s estate to prepare an inventory and
report in Frances’s estate. Juffer filed two delinquency notices in Duane’s
estate, alleging “substantial delays in the finalization” of Duane’s estate.
Juffer filed a petition in November 2018 to remove Kozlik as administrator
of Duane’s estate, to obtain records from Duane’s estate, and for an
accounting of Duane’s estate. Martin, the attorney for Duane’s estate,
immediately contacted Kozlik and Juffer to make arrangements to prepare
the requested documents. When Martin reviewed the documents Kozlik
sent to him, Martin discovered the unauthorized payments Kozlik had
made to himself. Martin quickly contacted Kozlik. Kozlik did not make
any excuses and took full responsibility for his conduct.
Shortly thereafter, in December 2018, Martin arranged a meeting
attended by Martin, Kozlik, Juffer, and Jewell. At the December meeting,
Martin did most of the talking, but Kozlik admitted to making payments
to himself from Duane’s estate without court authorization. Kozlik
provided copies of all the documentation regarding the payments and the 5
lone deposit related to the return of funds allegedly paid for tax planning
purposes. Kozlik stated he did not know he needed a prior court order
when he made the payments, but he understood it now. Kozlik promised
to repay all of the unauthorized payments with interest. He apologized
and admitted he committed an ethical violation. Kozlik stated he was
going to self-report to the Iowa State Bar Association and to the Iowa
Supreme Court. Kozlik repaid the funds to Duane’s estate within two
weeks of the meeting.
After Kozlik repaid the funds to Duane’s estate, there were additional
proceedings in the pending matter. As noted above, in November 2018,
Juffer had filed a petition to remove Kozlik as the administrator of Duane’s
estate. Kozlik did not resist the petition, and the court removed him as
administrator of the estate in March 2019. The order removing Kozlik as
administrator of the estate found “Kozlik does not dispute the allegation
that he inappropriately removed funds from the Estate of Duane
Slightam.” The court found Kozlik had mismanaged the estate, and the
court appointed TS Bank as succeeding administrator.
There was also the additional matter of Kozlik’s fees for the
administration of Duane’s estate. Pursuant to Code section 633.197, the
ordinary fee for Duane’s estate was capped at $9263.37. See Iowa Code
§ 633.197 (2017) (limiting reasonable fees for personal representatives).
Kozlik filed an application for a personal representative fee for reasonable
services in this amount plus reimbursement for actual and necessary
expenses in the amount of $1223.69, for a total request of $10,487.06.
Juffer, on behalf of Frances’s estate, objected to the fee request. At the
hearing on fees, Juffer testified he believed Kozlik stole funds from Duane’s
estate. Juffer testified, based on his dealings with Kozlik, that Kozlik
“knew he was not supposed to take money from the estate. He continually 6
took money from the estate. He knew he was not entitled to it.” In May
2019, the district court awarded Kozlik ordinary fees in the amount of
$4631.69 (half of the requested amount) plus expenses for a total of
$5855.38.
While these matters in Duane’s estate were being litigated and
resolved, the ethical complaint moved forward. Kozlik did in fact self-
report the unauthorized payments from the estate. The day after the
December meeting with Martin, Juffer, and Jewell, Kozlik addressed a
letter to the Iowa State Bar Association. He stated, “I am the administrator
of my uncle’s estate. I paid myself administrator fees without prior court
order.” The Iowa State Bar Association forwarded the letter to the Board.
The Board filed this complaint against Kozlik. The complaint alleged
Kozlik knowingly converted funds in violation of Iowa Code sections
714.1(2) and 714.2(2). The complaint charged Kozlik with violating Iowa
Rules of Professional Conduct 32:8.4(b) (committing “a criminal act that
reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a
lawyer”) and (c) (engaging “in conduct involving dishonesty, fraud, deceit,
or misrepresentation”). The complaint provided Kozlik with notice the
Board sought revocation of his license as a possible sanction.
At the commission hearing, Kozlik admitted he committed an ethical
violation. One of the commissioners asked Kozlik what rule he believed he
had violated. He answered, “I should not have taken money out prior to
getting a court order.” He further stated, “I paid myself fees out of Duane’s
account. I should have gotten a prior court order allowing them. It’s an
ethical violation.” However, Kozlik denied he had committed the ethical
violations charged.
Q. Your position at this hearing, though, is that you did not violate either of the rules that the Board is alleging you violated, though; is that correct? A. Well, I think they have 7 to prove that I had a mental intent to steal and that was never the case. It’s called scienter. Unless they prove scienter, their case fails. I think the testimony was from both Leo [Martin] and Mary [Jewell] that they never believed that I was stealing. I never had an intent to steal. In fact, I always had the intention of disclosing. That’s one of the reasons why I used checks. I didn’t use an ATM.
Was it dumb for me to do it without the court order? Amen, Brother. That’s me. I’m the poster child for that. I admit that freely. Did I deceive anyone? Without deception— the second allegation there has to be a deception or a cover- up. No evidence of a cover-up or a deception.
Q. So your position then is that you did violate the ethical rules, they just haven’t alleged the right ethical rules that you violated; is that right? A. I’m saying we’re responding to what they alleged. I’m not going out looking for ethical rules to be violated. I’m not going to do their work for them. Come on. I’ve already fessed up. What more do you want me to do?
On Kozlik’s motion for directed verdict, the commission found “the
evidence does not establish that the Respondent committed any criminal
act that reflected adversely on his honesty, trustworthiness or fitness as a
lawyer.” The commission dismissed the complaint based on Kozlik’s
alleged violation of rule 32:8.4(b). The commission did find Kozlik’s
unauthorized fee payments violated rule 32:8.4(c). The commission
recommended Kozlik receive a public reprimand. The Board contends
suspension of Kozlik’s license is an appropriate sanction.
II. “We review attorney disciplinary proceedings de novo.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Mathahs, 918 N.W.2d 487, 489 (Iowa
2018). “The Board must prove ethical violations by a convincing
preponderance of the evidence.” Id. “A convincing preponderance of the
evidence lies between the preponderance-of-the-evidence standard in a
civil case and the reasonable-doubt standard in a criminal case.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Noyes, 936 N.W.2d 440, 442 (Iowa
2019). We give the commission’s findings “respectful consideration, but 8
we are not bound by them.” Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Ricklefs, 844 N.W.2d 689, 696 (Iowa 2014).
“We may impose a greater or lesser sanction than what the
commission has recommended upon proof of an ethical violation.”
Mathahs, 918 N.W.2d at 489. If we conclude there has been a rule
violation, “our determination of the appropriate sanction ‘is guided by the
nature of the alleged violations, the need for deterrence, protection of the
public, maintenance of the reputation of the bar as a whole, and [the
attorney’s] fitness to continue in the practice of law.’ ” Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Laing, 832 N.W.2d 366, 367–68 (Iowa 2013)
(alteration in original) (quoting Comm. on Prof’l Ethics & Conduct v.
Kaufman, 515 N.W.2d 28, 30 (Iowa 1994)).
III.
At issue here are alleged violations of Iowa Rules of Professional
Conduct 32:8.4(b) and (c). These rules apply to an attorney’s conduct in
both his professional and nonprofessional capacities. See Iowa R. Prof’l
Conduct ch. 32 Preamble & Scope [3] (identifying rule 32:8.4 as a rule that
applies to lawyers acting in a nonprofessional capacity and stating, “For
example, a lawyer who commits fraud in the conduct of a business is subject to discipline for engaging in conduct involving dishonesty, fraud,
deceit, or misrepresentation”).
Rule 32:8.4(b) provides, “It is professional misconduct for a lawyer
to . . . commit a criminal act that reflects adversely on the lawyer’s honesty,
trustworthiness, or fitness as a lawyer in other respects[.]” Id. r. 32:8.4(b).
“We have stated that ‘[a] lawyer who commits a theft of funds engages in
conduct involving moral turpitude, dishonesty, and conduct that adversely
reflects on the lawyer’s fitness to practice law.’ ” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Den Beste, 933 N.W.2d 251, 254 (Iowa 2019) (quoting 9
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Stowe, 830 N.W.2d 737, 741
(Iowa 2013)). However, “[a] lawyer need not be charged or convicted of a
crime in order to be found in violation of this rule.” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Cross, 861 N.W.2d 211, 222 (Iowa 2015).
Rule 32:8.4(c) provides, “It is professional misconduct for a lawyer
to . . . engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation[.]” Iowa R. Prof’l Conduct 32:8.4(c). To prove a violation
of this rule, “the Board must show ‘the attorney acted with some level of
scienter greater than negligence’ ” or incompetence. Cross, 861 N.W.2d at
221 (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kersenbrock, 821
N.W.2d 415, 421 (Iowa 2012)); see Iowa Supreme Ct. Att’y Disciplinary Bd.
v. Noel, 923 N.W.2d 575, 587 (Iowa 2019). Scienter is satisfied where an
attorney acted knowingly, intentionally, or with the aim to mislead. See
Ricklefs, 844 N.W.2d at 698–99. An attorney’s “casual, reckless disregard
for the truth” also establishes sufficient scienter to support a violation of
the rule. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Clarity, 838 N.W.2d
648, 656 (Iowa 2013) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Isaacson, 750 N.W.2d 104, 109 (Iowa 2008)).
On de novo review, we conclude a convincing preponderance of the evidence shows Kozlik violated both rules. As the administrator of his
uncle’s estate, Kozlik owed a fiduciary duty to the estate. See Iowa Code
§ 633.160; id. § 633.197; Burns v. Nemo, 252 Iowa 306, 311, 105 N.W.2d
217, 220 (Iowa 1960) (“A person holding the relationship of a fiduciary has
a duty to act for the cestui’s benefit within the scope of the relationship.”).
The estate’s funds were held in trust for the administration of the estate
and the beneficiary of the estate, Frances. Over the course of two years,
Kozlik made unauthorized payments out of the estate’s account to himself
in the amount of $39,350. Kozlik testified he deposited the funds into his 10
personal checking account and his operating account at his law firm. He
returned $9700 of the funds to the estate’s account prior to his self-
payments being discovered. Kozlik used the remainder of the funds to pay
personal bills and living expsenses and to pay expenses and
disbursements related to his law practice. The misappropriation of funds
is a clear violation of both rules. See Iowa Code § 714.1(2) (“A person
commits theft when the person . . . [m]isappropriates property which the
person has in trust . . . whether such possession or control is lawful or
unlawful, by using or disposing of it in a manner which is inconsistent
with or a denial of the trust . . . .”); Iowa Supreme Ct. Att’y Disciplinary Bd.
v. Muhammad, 935 N.W.2d 24, 38 (Iowa 2019) (holding misappropriation
of client funds violated rule 32:8.4(b) and (c)); Den Beste, 933 N.W.2d at
254–55 (holding misappropriation of law firm funds violated rules
32:8.4(b) and (c)); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 933
N.W.2d 206, 213 (Iowa 2019) (holding misappropriation of client funds for
personal purposes violated rules 32:8.4(b) and (c)); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Johnson, 926 N.W.2d 553, 556–57 (Iowa 2019) (holding
misappropriation of employer funds by attorney working as an accountant
for employer violated rules 32:8.4(b) and (c)); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Carter, 847 N.W.2d 228, 232–33 (Iowa 2014) (holding
attorney misappropriation of estate funds violated rules 32:8.4(b) and (c))
and stating “any form of conversion of client funds violates our rules of
professional conduct”).
At the commission hearing, Kozlik argued that the unauthorized
payments were an honest mistake and that he lacked the requisite intent
to commit theft or misappropriation of the estate’s funds. At the
commission hearing, when asked why he made payments to himself
without a court order, Kozlik replied, “The honest answer is I didn’t know 11
I needed a court order.” Kozlik contended he did not know the payments
were improper because Nebraska law does not require an administrator to
obtain court approval prior to payment. He testified he primarily practices
in Nebraska and was merely following Nebraska law in the administration
of the estate.
We find Kozlik’s testimony unconvincing and argument unavailing
for a variety of reasons. Kozlik’s testimony and contention that he did not
know he needed court authorization prior to payment rings hollow. Kozlik
has been licensed to practice law in Iowa since 2000. He practices
primarily in the area of estate planning and administration. He has
attended numerous CLEs in the relevant area. He has worked as a lawyer
and administrator on many matters. Indeed, the evidence shows Kozlik
worked on other cases in Iowa in which he acknowledged the relevant
statutes and sought court approval of fees prior to payment. In the
Bilunas estate, Kozlik served as the attorney for the personal
representative of an estate. Kozlik filed an application for an order for
personal representative fees. In the fee application, Kozlik requested fees
for the personal representative “in the amount of $7,200, which is the
maximum allowable amount pursuant to Iowa Code Section 633.197.” In
the Duffy estate, Kozlik filed another document in which he acknowledged
“fees for ordinary services were fixed by the Court, pursuant to Iowa Code
sections 633.197 and 633.198.” When pressed on this issue during the
commission hearing, Kozlik testified he did not know what he was doing
and just filled out forms as directed by the judge in the Iowa probate cases.
In light of his forty years of experience as an attorney and twenty years of
experience in Iowa, Kozlik’s denial of a rudimentary understanding of Iowa
probate law falls flat. Kozlik’s prior legal work in Iowa probate cases 12
demonstrates he was well aware of the statutory requirement that he
obtain court approval prior to the payment of administrator fees.
We also note Kozlik’s testimony and contention that the
unauthorized payments were for earned fees does not square with the
facts. At the commission hearing, Kozlik introduced into evidence an
exhibit showing his time entries and expenses associated with the
administration of the estate. In addition to his itemized time entries,
Kozlik noted there was an additional 24.1 hours of unitemized time he
spent on the administration of the estate. Kozlik testified he did not have
itemized time entries for this additional time because his time sheets were
lost or stolen. Kozlik testified his total time and expenses amounted to
$33,623.93. Comparing the dates and amounts of the unauthorized
payments to Kozlik’s time and expense reports shows the unauthorized
payments had absolutely no relationship to the fees allegedly earned and
expenses allegedly incurred in this matter. For example, in November
2016, Kozlik wrote two checks to himself in the total amount of $1150.
However, Kozlik’s itemized billing statements, if accepted as true, show he
had earned fees in the amount of $15,907.50. During the period between
November 2016 and February 2017, Kozlik wrote a single check to himself
in the amount of $2500, but his billing statements show only $607.50 in
fees and $6.27 in expenses in the relevant time period. The remainder of
the payments and billing statements show the same miscorrelation
between the unauthorized payments and the fees allegedly earned and
expenses allegedly incurred.
In similar circumstances we have concluded the lack of any
relationship between withdrawals and fees disproved the attorney’s claim
the withdrawals were related to the fees. See, e.g., Comm. on Prof’l Ethics
& Conduct v. Coddington, 360 N.W.2d 823 (Iowa 1985). In Coddington, the 13
attorney served as a conservator. Id. at 824. The attorney “paid himself a
total of $33,600 from the conservatorship funds.” Id. All of the funds were
paid to the attorney without court authorization. Id. Subsequently, the
court issued fee orders approving $18,600 in fees. Id. The attorney was
charged with violating a number of disciplinary rules, including DR 1–
102(A), which provided a lawyer shall not “[e]ngage in conduct involving
dishonesty, fraud, deceit, or misrepresentation.” Id. at 825 (quoting Iowa
Code of Prof’l Responsibility for Lawyers DR 1–102(A)). The attorney
argued the payments were merely evidence of “negligence or careless
accounting.” Id. We rejected the contention, concluding “that the
withdrawals of ‘fees’ were frequent and seemed to have little relationship
to any amount actually owed at the time or to the court orders entered in
regard to fees.” Id.
“Proving a person’s state of mind is difficult.” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Barry, 762 N.W.2d 129, 138–39 (Iowa 2009). A person’s
intent may be inferred from the circumstances. Id. When making those
inferences in this case, we do so understanding that lawyers have
specialized knowledge:
More than this, the law takes account of a lawyer’s legal training and experience in assessing his or her state of mind. A lawyer is an adult, a man or woman of the world, not a child. He or she is also better educated than most people, more sophisticated and more sharply sensitized to the legal implications of a situation. The law will make inferences as to a lawyer’s knowledge with those considerations in mind.
Id. (quoting 1 Geoffrey C. Hazard, Jr. & W. William Hodes, The Law of
Lawyering § 1.23, at 1–46 (3d ed. 2005–2 Supp.)). Here, the circumstantial
evidence shows by a convincing preponderance of the evidence that Kozlik
misappropriated funds from Duane’s estate and used those funds to pay
his personal and business expenses. 14
This brings us to the question of sanctions. Misappropriation of
funds held in trust “results in revocation, except in instances in which the
attorney had a colorable future claim to the funds or did not take the funds
for personal use.” Carter, 847 N.W.2d at 232. The colorable-future-claim
defense exists to distinguish “for purposes of sanctions between conduct
involving trust fund violations and conduct in the nature of stealing.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Powell, 830 N.W.2d 355, 359 (Iowa
2013). “Thus, the defense generally permits an attorney to avoid
revocation of a license to practice law when . . . funds are converted for
payment of . . . fees before the fees have been earned or approved.” Carter,
847 N.W.2d at 233. “[A]n attorney in a disciplinary proceeding bears the
burden of coming forward with evidence of a colorable future claim, but
the burden to prove conversion remains with the Board.” Id. at 232–33.
The fact that this case involves nonclient funds as opposed to client funds
is immaterial in this case. See Den Beste, 933 N.W.2d at 257 (noting “the
time has come” to lessen distinction between cases involving theft of client
funds and theft of nonclient funds); Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Carroll, 721 N.W.2d 788, 792 (Iowa 2006) (“[W]e [have not] been
deterred from revoking a lawyer’s license because the funds converted
were not client funds or because the attorney was not acting in the
capacity of an attorney at the time of the misconduct.”).
Several considerations lead us to conclude Kozlik had no colorable
future claim to the funds he paid himself out of the estate’s account. First,
Kozlik’s claim that he had a colorable future claim to the misappropriated
funds is implausible on its face. Pursuant to Iowa Code section 633.197,
the ordinary fee for Duane’s estate was capped at $9263.37 plus actual
and necessary expenses. The evidence shows Kozlik had filed applications
for fees in other Iowa probate matters in which he specifically 15
acknowledged the statutory cap for ordinary fees. The evidence shows,
however, Kozlik made payments to himself for alleged fees earned and
expenses incurred in the amount of $29,350 or more than three times the
scheduled amount for ordinary fees.
But there is nothing in this record supporting the contention Kozlik
would have been entitled to extraordinary fees in the administration of his
uncle’s estate. See Iowa Code § 633.199 (identifying factors in determining
whether fees for extraordinary services should be awarded). Kozlik did not
spend an extraordinary amount of time in the administration of the estate.
See id. § 633.199(1). The estate had only a single beneficiary—Frances.
There were no legal issues to be resolved. There was no litigation involved.
There were no tax issues to be resolved. There were no complex issues
presented. See id. § 633.199(3). To the contrary, multiple witnesses
testified at the commission hearing that the estate was not complex at all.
Juffer testified the estate was “very, very simple.” The judge who presided
over the fee hearing testified “[i]t just wasn’t a complicated estate.” Kozlik’s
contention that he had a colorable claim to $29,350 in fees for the
administration of his uncle’s “very, very simple” estate is implausible given
the statutory cap for ordinary administrator fees.
Also, as discussed above, Kozlik’s unauthorized payments to himself
did not at all correlate to the fees he allegedly earned or the expenses he
allegedly incurred. This miscorrelation between the unauthorized
payments and the itemized statements belies Kozlik’s contention that the
unauthorized payments were bona fide payments for fees on an ongoing
basis. We reached a similar conclusion in Carter.
In Carter, the attorney deposited an estate’s funds in his law office
trust account. 847 N.W.2d at 230. The attorney withdrew some of the
deposited funds. Id. The board charged the attorney with violations of 16
rule 32:8.4(c) among others. Id. at 230–31. The attorney asserted a
colorable claim defense and argued “he performed legal services for the
executors in the [estate] matter that entitled him to a fee. He also claim[ed]
the loss of his billing records prevented him from showing the amount of
the fee he earned, but assert[ed] there was no evidence offered by the
Board to show he did not do any work to earn the amounts he withdrew
from the trust account.” Id. at 233. We rejected the colorable-claim
defense and concluded revocation was appropriate. Id. at 234. We
reasoned,
In the [estate] matter, Carter converted funds from his trust account that were not held as a retainer or advance fee. They were funds of the estate that could only be used as attorney fees if approved by the court. Additionally, Carter converted the funds at times that were inconsistent with an intent to take the funds as estate fees. The evidence further supported a finding that the amount of funds converted by Carter had no relationship to an amount that would be actually earned. Under these circumstances, the evidence failed to support a colorable future claim to avoid revocation. A colorable future claim to nonretainer funds does not involve a bare claim that some of the converted funds would have been earned. In essence, that is the claim asserted by Carter. Moreover, we have made it clear that conversion does not depend on the amount of funds converted.
Id. at 234 (emphasis omitted).
This case is also similar to Iowa Supreme Court Attorney Disciplinary
Board v. Kelsen, 855 N.W.2d 175 (Iowa 2014). There, the board charged
Kelsen with several disciplinary violations arising out of the management
of his trust account. Id. at 179. The commission found Kelsen violated all
the rules alleged in the complaint and recommended a public reprimand.
Id. at 177. We found Kelsen violated all of the rules alleged and “among
those violations, Kelsen converted $7500 of client funds to personal use
without a colorable future claim to the funds.” Id. We explained Kelsen’s
colorable future claim was not credible for a variety of reasons, including 17
the fact the retainer from which Kelsen withdrew funds was a limited use
retainer for costs and not a fee retainer. Id. at 185. Similarly, Kozlik's
claim that the payments to himself in this case were earned fees or he had
a colorable future claim to the funds is not credible.
As the administrator of his uncle’s estate, Kozlik owed a fiduciary
duty to the estate. See Iowa Code § 633.160. Kozlik breached that
fiduciary duty when he paid himself funds from his uncle’s estate without
a colorable claim or colorable future claim to the funds. Revocation is
required where an attorney, acting as a fiduciary, misappropriates funds.
See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Kowalke, 918 N.W.2d 158,
163 (Iowa 2018) (“[W]e have found revocation appropriate ‘in nearly every
case where an attorney converts client funds without a colorable claim.’ ”
(quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v. Guthrie, 901 N.W.2d
493, 500 (Iowa 2017))); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Suarez-
Quilty, 912 N.W.2d 150, 159–60 (Iowa 2018) (revoking the license of an
attorney who converted $630 without a colorable future claim); Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Adams, 809 N.W.2d 543, 546 (Iowa
2012); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wengert, 790 N.W.2d 94,
104 (Iowa 2010); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774
N.W.2d 301, 308–09 (Iowa 2009); Iowa Supreme Ct. Att’y Disciplinary Bd.
v. D’Angelo, 710 N.W.2d 226, 236–37 (Iowa 2006); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Reilly, 708 N.W.2d 82, 85 (Iowa 2006); Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Anderson, 687 N.W.2d 587, 590 (Iowa
2004); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Irwin, 679 N.W.2d
641, 644 (Iowa 2004) (“[I]t is almost axiomatic that the licenses of lawyers
who convert funds entrusted to them should be revoked.”); Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Lett, 674 N.W.2d 139, 144–45 (Iowa
2004); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Leon, 602 N.W.2d 18
336, 339 (Iowa 1999). When an attorney converts funds without a
colorable future claim, “we need not consider mitigating and aggravating
factors that may be present.” Guthrie, 901 N.W.2d at 500.
IV.
We revoke Kozlik’s license to practice law in the State of Iowa.
Pursuant to our rules, Kozlik may apply for readmission after a period of
at least five years. See Iowa Ct. R. 34.25(7). In the event of application for
readmission, Kozlik must demonstrate that he is “of good moral character”
and “worthy of readmission to the bar.” See id. r. 34.25(9). Kozlik must
also pay all fees. See id. r. 34.25(9)(d), (f).
LICENSE REVOKED.