Matter of Schmidt

880 P.2d 310, 118 N.M. 213, 33 N.M. St. B. Bull. 1145, 1994 N.M. LEXIS 324
New Mexico Supreme Court·Decided September 7, 1994·No. 22128·Published·Cited by 8 cases

Opinion

OPINION

PER CURIAM.

This matter came before the Court for consideration of the recommendation of the Disciplinary Board that the discipline set forth in a conditional agreement not' to contest and consent to discipline executed by Carl J. Schmidt be imposed by this Court. The consent to discipline provides for a three-year suspension, the second and third years of which would be deferred if Schmidt satisfies a series of conditions set forth in the agreement. In the event Schmidt satisfies all conditions during the first year of his suspension, he would be placed on supervised probation during the remaining two years of suspension. The Court has determined that imposing the discipline set forth in the agreement is appropriate.

This proceeding arose out of a real estate transaction involving a New Mexico corporation, A and L Associates, Inc., owned by Luther Miller and A1 Wood. Schmidt performed legal work for both of these men for many years. Except for bills submitted early in the relationship, Schmidt made no claim for legal fees until the events occurred that are the subject of this proceeding.

The legal services Schmidt performed for Miller and Wood included the incorporation of A and L Associates, Inc. Although Schmidt performed the incorporation, no stock was .ever issued and no minutes of corporate meetings were kept. Miller claimed that only he and Wood had an ownership interest in A and L. Schmidt claimed that Wood promised him an ownership interest in the corporation as repayment for legal services he had performed and that he was an officer in the corporation, although no documents reflected that Schmidt had an ownership interest in the corporation.

The only asset of A and L was a parcel of land on Central Avenue in Albuquerque. This land was deeded to the corporation by A1 Wood, who had owned it for many years. For several years, unsuccessful efforts were made to develop the property. Schmidt had some involvement in these efforts. On February 5, 1992, after the property had been listed for sale, Schmidt, purporting to act as the Secretary/Vice-President of A and L, issued a deed for the property to a third person. The deed was recorded on February 10, 1992. Schmidt also had the person to whom he deeded the property execute a deed to the property to his son. That deed was recorded by Schmidt on September 14, 1992.

Schmidt transferred the .property without the knowledge or consent of Miller, Wood, or A and L. In the summer of 1992, Miller entered into a contract for the sale of the property. Shortly before a closing scheduled for July of 1992, the title company notified Miller that title to the property was no longer held by A and L.

When Miller demanded that Schmidt deed the property back to A and L, Schmidt threatened to reveal confidential information he had learned in the course of representing Miller. Schmidt refused to return the property to A and L unless Miller agreed to pay him a portion of the proceeds from the sale.

In September of 1992, when efforts failed to convince Schmidt to have the property deeded back to A and L, Miller, the Estate of A1 Wood (Wood died in June of 1992), and A and L filed suit against Schmidt and others who might claim an interest in or have a lien against the A and L property. In that suit, Schmidt claimed Wood had granted him a one-third interest in the property in return for negotiating the release of liens and litigating a quiet title action to remove several clouds on the title to the property. Schmidt also claimed that Miller had no interest in the property or in A and L and asserted counterclaims for attorney’s fees against Miller, the Estate of Wood, and A and L. A court order was entered voiding the deeds Schmidt had drafted to the property. Subsequently, after trial on the merits, Schmidt was determined to have no interest in the property. Schmidt also failed on his counterclaim for attorney’s fees.

The specification of charges filed in this proceeding charged Schmidt with violating the following Rules of Professional Conduct: SCRA 1986, 16-102(A), by failing to abide by the client’s decisions concerning the objectives of the representation; SCRA 1986, 16-104(A), by failing to inform the client about the status of the representation; SCRA 1986,16-106, by revealing information relating to the representation of a client without the client’s consent; SCRA 1986,16-108(A), by engaging in a prohibited business transaction with a client; SCRA 1986, 16-801(A), by knowingly making a false statement of material fact in connection with a disciplinary proceeding; SCRA 1986, 16-804(C), by engaging in conduct involving dishonesty, deceit, and misrepresentation; and SCRA 1986, 16-804QH), by engaging in conduct reflecting adversely on his fitness to practice law. By entering into the conditional agreement not to contest and consent to discipline, Schmidt agrees not to contest these charges, in exchange for the discipline recited above.

Assuming arguendo Schmidt’s claim of having an ownership interest in A and L or its real property, the uncontested charges reflect serious misconduct by Schmidt. If Schmidt had such an interest, he violated SCRA 1986, 16-108(A), by failing to comply with the requirements for entering into a business transaction with a client. Most notably, Schmidt failed to obtain the client’s written consent to the alleged transaction. Of a more serious nature was the action taken by Schmidt when he learned the property had been placed for sale. Schmidt could have taken a legitimate course of action to assert a claim. For a licensed lawyer to resort to issuing false and unauthorized deeds to protect an asserted interest in a client’s property is antithetical to a lawyer’s duties to the client and the legal system.

In the consent to discipline agreement, Schmidt acknowledged that, in 1983, he received an informal admonition for violating one of the rules he has agreed not to contest in this proceeding, SCRA 1986, 16-108. Pursuant to SCRA 1986, 17-308, the fact Schmidt had been admonished for the same conduct within the last ten years is relevant to the determination of the appropriate discipline to be imposed in this case. Repeated instances of the same conduct for which a lawyer previously has been disciplined generally will result in more severe discipline. In re Rivera, 112 N.M. 217, 218, 813 P.2d 1015, 1016 (1991). Application of this doctrine is necessary to protect the lawyer’s clients, the public, and the legal system. In re Tapia, 108 N.M. 650, 652, 777 P.2d 378, 380 (1989). Suspension or disbarment is especially appropriate in a case where the lawyer has engaged in deceptive conduct. See In re Siler, 106 N.M. 292, 293, 742 P.2d 504, 505 (1987); In re Hartley, 107 N.M. 376, 377, 758 P.2d 790, 791 (1988).

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Matter of Schmidt, 880 P.2d 310, 118 N.M. 213, 33 N.M. St. B. Bull. 1145, 1994 N.M. LEXIS 324 (N.M. 1994).

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