Iowa Supreme Court Attorney Disciplinary Board Vs. James L. Wagner

CourtSupreme Court of Iowa
DecidedJune 26, 2009
Docket09–0504
StatusPublished

This text of Iowa Supreme Court Attorney Disciplinary Board Vs. James L. Wagner (Iowa Supreme Court Attorney Disciplinary Board Vs. James L. Wagner) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Iowa Supreme Court Attorney Disciplinary Board Vs. James L. Wagner, (iowa 2009).

Opinion

IN THE SUPREME COURT OF IOWA No. 09–0504

Filed June 26, 2009

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

Complainant,

vs.

JAMES L. WAGNER,

Respondent.

On review of the report of the Grievance Commission.

Grievance Commission in disciplinary proceeding recommends

suspension of respondent’s license to practice law. LICENSE

SUSPENDED.

Charles L. Harrington and David J. Grace, Des Moines, for

complainant.

James L. Wagner, Waterloo, pro se. 2

PER CURIAM.

This matter comes before the court on the report of a division of

the Grievance Commission of the Supreme Court of Iowa. See Iowa Ct.

R. 35.10. The Iowa Supreme Court Attorney Disciplinary Board alleged

the respondent, James L. Wagner, violated ethical rules by neglecting

client matters, prematurely taking probate fees, misrepresenting the

status of an estate to the court, failing to deposit unearned fees in his

trust account, failing to promptly return unearned fees, and failing to

cooperate with the Board. A division of the Grievance Commission of the

Supreme Court of Iowa found Wagner violated the Iowa Code of

Professional Responsibility for Lawyers and the Iowa Rules of

Professional Conduct and recommended that we suspend Wagner’s

license to practice law for a period of ninety days. 1 Upon our respectful

consideration of the findings of fact, conclusions of law, and

recommendation of the Commission, we find the respondent committed

the alleged ethical violations and suspend his license to practice law

indefinitely with no possibility of reinstatement for six months.

I. Standard of Review.

We review attorney disciplinary proceedings de novo. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Gottschalk, 729 N.W.2d 812, 815

(Iowa 2007). The Board has the burden to prove attorney misconduct by

a convincing preponderance of the evidence. Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Conrad, 723 N.W.2d 791, 792 (Iowa 2006).

This burden is less than proof beyond a reasonable doubt, but more than the preponderance standard required in the usual civil case. Once misconduct is proven, we “may

1The Iowa Rules of Professional Conduct became effective July 1, 2005, replacing the Iowa Code of Professional Responsibility for Lawyers. Some of the conduct in this case occurred before the effective date of the new rules and some after. 3 impose a lesser or greater sanction than the discipline recommended by the grievance commission.”

Id. (quoting Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Lett, 674 N.W.2d 139, 142 (Iowa 2004)). The Commission’s findings and

recommendations are given respectful consideration, but we are not

bound by them. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Isaacson, 750

N.W.2d 104, 106 (Iowa 2008).

II. Factual Findings.

The respondent has been an attorney for thirty-five years and is

currently practicing law in Waterloo, Iowa. The charges in this

disciplinary action stem from the respondent’s representation of four

separate clients. A hearing was held before a division of the Grievance

Commission on February 24, 2009. The factual findings and

conclusions reached in each case will be addressed separately.

A. Bornong Estate. In January 2004, Wagner was retained to

assist in the probate of the estate of Margaret Bornong. The executor of

the estate was the decedent’s sister, Helen McClain.

Shortly after opening the estate, Wagner obtained a fee

authorization order in the amount of $22,642. Although he had not

prepared or filed the appropriate tax returns, on March 3, 2004, Wagner

took $11,321 or one-half of the authorized fee. He took the second half

of his fees on October 1, 2005, before any final report was prepared or

filed or the court costs paid. The respondent did not place these moneys

in the client’s trust account.

Pursuant to Bornong’s will, the residuary of her estate was to be

placed in trust with the income to be distributed to her nephew, Michael

McClain, while he completed his Ph.D., but for no longer than two years

after Bornong’s death. Thereafter, the principal and accumulated income 4

was to be distributed equally to her sister’s children. Two years after her

death, the decedent’s estate remained open. On October 31, 2005,

Wagner filed an interim report informing the court that the final report

and accounting was being prepared and that all assets had been

distributed. He requested that the court allow the estate to be held open

until February 28, 2006, “to allow one of the beneficiaries to finish school

to avoid the expense of opening and administering a Trust.”

The executor, Helen McClain, died on March 2, 2006. On May 4,

2006, Michael McClain wrote to the respondent requesting the

respondent’s assistance in locating his mother’s will and voicing

concerns that his aunt’s estate had not been settled and that the tax

obligations had not been addressed. Wagner failed to respond to this

inquiry. On May 31, 2006, the respondent had filed another interim

report and request to keep Bornong’s estate open. This request was

signed by the respondent without the named alternate executor’s

knowledge or consent.

The new executor obtained new legal representation. Upon

investigation, it was discovered the respondent had failed to file some of

the required federal and state estate tax returns. Moreover, the returns

that had been prepared and/or filed were incorrect, resulting in

significant penalties and interest. It was also determined Wagner had

failed to appropriately file the required fiduciary tax forms, resulting in

additional penalties and fees. Together, these errors resulted in penalties

and interest in excess of $55,000. In addition, counsel determined

Wagner had misrepresented to the court the status of beneficiary Michael

McClain, who had completed his education five months prior to the

respondent’s initial request to hold the estate open and, further, had 5

misrepresented in the second interim report that he—Wagner—was

awaiting tax clearances. The tax returns, in fact, had not been filed.

As a result of the respondent’s dilatory handling, the estate was

not closed until June 2007, over three and one-half years after Bornong’s

death. Moreover, despite requests from the estate, Wagner failed to

refund any portion of his fees or recompense the estate for his errors.

On May 29, 2007, the executor of the estate filed a lawsuit against

Wagner, seeking damages due to Wagner’s negligence in administering

Bornong’s estate. On January 10, 2008, Wagner confessed judgment to

the executor in the sum of $66,058. On February 5, 2009, the

respondent paid the judgment plus interest and costs.

The Board asserted Wagner violated our ethical rules by (1) failing

to handle the estate with reasonable diligence and promptness; (2) failing

to adequately communicate with his client; (3) collecting probate fees

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