Iowa Supreme Court Board of Professional Ethics & Conduct v. Gallner

621 N.W.2d 183, 2001 Iowa Sup. LEXIS 3, 2001 WL 40290
CourtSupreme Court of Iowa
DecidedJanuary 18, 2001
Docket00-1247
StatusPublished
Cited by31 cases

This text of 621 N.W.2d 183 (Iowa Supreme Court Board of Professional Ethics & Conduct v. Gallner) 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 Board of Professional Ethics & Conduct v. Gallner, 621 N.W.2d 183, 2001 Iowa Sup. LEXIS 3, 2001 WL 40290 (iowa 2001).

Opinion

CADY, Justice.

The Board of Professional Ethics and Conduct charged Sheldon M. Gallner with engaging in conduct in violation of the Code of Professional Responsibility involving misrepresentation, excessive attorney fees, an improper fee arrangement as a reward for the referral of business, and endorsement of a client’s name on a check without authorization. The Grievance Commission recommended Gallner be reprimanded and admonished for engaging in various counts of misrepresentation. It recommended the other claims be dismissed. On our review, we find Gallner violated numerous provisions of the Code of Professional Responsibility, and we suspend his license to practice law.

I. Background Facts and Proceedings.

Sheldon Gallner practices law in Council Bluffs. He is an experienced lawyer and practiced with his brother until recent years. Gallner primarily practices in the area of workers’ compensation and is recognized for his expertise in the area. He has practiced for more than twenty-five years. Pie was the president of the Iowa Association of Workers’ Compensation Attorneys at the time of the proceedings. Gallner was reprimanded in 1994 for advancing living expenses to clients.

The evidence produced at the hearing before the Commission revealed multiple acts of misconduct. The thrust of the violations focused on the various times Gallner misstated the amount of his fee for representing injured workers in workers’ compensation claims in letters written to the Social Security Administration office in Council Bluffs. On several occasions, Gall-ner informed the Social Security Administration office his attorney fee for representing a client in a workers’ compensation case was greater than the amount he charged his client. On another occasion, Gallner never charged a fee for representing an injured worker in a claim for uncontested weekly healing-period benefits, but informed the Social Security Administration office that a fee had been charged in a bogus amount. In total, Gallner wrote at least six such letters over a period of ten years.

The Social Security Administration used the information supplied by Gallner to determine whether to limit benefits to injured workers who received both social security disability benefits and workers’ compensation benefits. 1 The Social Security Administration deducts the amount of attorney fees from the amount of workers’ compensation benefits to determine whether to limit social security disability benefits. 2 By reporting exaggerated attorney fees to the Social Security Administration, Gallner enabled some of his clients to receive more social security disability benefits than they would have been entitled to under the law.

*186 Gallner offered many reasons to justify his actions. He claimed the offset law was confusing and permitted a lawyer to report the fee that could have been charged by the attorney instead of the actual fee charged. He also claimed that he began to follow the practice after talking to other lawyers who believed it was permissible to report a fee not actually received. Gallner offered testimony at the hearing from an attorney who opined that it was permissible for a lawyer to utilize the actual fee for workers’ compensation purposes and a larger fee for the purposes of the Social Security Administration. The Board offered expert testimony to the cpntrary.

Gallner also challenged the motives of those responsible for initiating the ethics complaint. One of these people was a former client who also brought an unsuccessful malpractice action against Gallner. Another was his brother.

The evidence at the hearing also addressed allegations that Gallner charged two clients excessive fees on various occasions and, on another occasion, returned a fee to a client as a reward for the referral of clients to his office. There was further evidence that Gallner signed a name of a client on the back of a check made payable to the client and Gallner without authorization from the client. Gallner promptly realized the mistake and informed his client. The client was called into the office, and the matter was resolved.

The Commission found some of the letters written by Gallner to the Social Security Administration on behalf of clients misstated his fee. It concluded these letters violated DR 7-102(A)(5) (knowingly making false statements on behalf of a client). The Commission found that two letters written in 1985 and one letter written in 1993 were violations of the Code. In these letters, Gallner stated he received or took a fee in a specific amount or a percentage of a specific amount of the recovery. The amount of the fee, however, was false. The Commission found that other letters written in 1994 and 1995 may have been misleading, but were not specific enough to constitute misstatements. In one letter, Gallner stated he had a “contract to take 25%” of the weekly compensation. In another letter, Gallner stated he had a contract that entitled him to twenty-five percent of the weekly benefit amount. The Commission found these letters did not contain misstatements because Gallner did not specifically state the fee was taken.

The Commission further found the evidence did not support a finding that Gall-ner charged excessive fees or returned a fee to a client as a reward for the referral of business. Finally, the Commission found Gallner mistakenly signed his chent’s name on the back of a check, but his conduct did not violate DR 9 — 102(B)(1).

The Commission recommended Gallner be publicly reprimanded for writing the false letters and privately admonished for writing the misleading letters. It recommended the other counts be dismissed.

II. Scope of Review.

Our review is de novo. Ct. R. 118.10. We give respectful consideration to the recommendations of the Commission, but ultimately decide the appropriate discipline under the specific facts of each case. Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Beckman, 557 N.W.2d 94, 95 (Iowa 1996). The misconduct must be proven by a convincing preponderance of the evidence. Id.

III. Violations.

The applicable federal regulations clearly provide that the actual legal expenses incurred by a disabled worker in obtaining workers’ compensation benefits are deducted from the amount of workers’ compensation benefits received by the worker to determine any offset of social security disability benefits. See 20 C.F.R. § 404.408(d) (2000) (“[ajmounts paid or incurred, or to be incurred” for legal expenses are excluded from the computation *187 of reduced workers’ compensation benefits so long as they reflect “the actual amount of [legal] expenses already incurred or a reasonable estimate”). In each letter Gall-ner wrote to the Social Security Administration, he misstated the amount of the fee. In two of the letters, the representations were indirect, but clearly enough to constitute false representations.

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Bluebook (online)
621 N.W.2d 183, 2001 Iowa Sup. LEXIS 3, 2001 WL 40290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/iowa-supreme-court-board-of-professional-ethics-conduct-v-gallner-iowa-2001.