Matter of Struthers

877 P.2d 789, 179 Ariz. 216, 169 Ariz. Adv. Rep. 4, 1994 Ariz. LEXIS 74
CourtArizona Supreme Court
DecidedJuly 12, 1994
DocketSB-93-0035-D. Disc. Comm. 90-1272, 90-1323, 90-1450, 90-1757, 90-1785, 90-1830, 90-1863, 91-0301, 91-0310, 91-0375, 91-0386, 91-0416, 91-0528, 91-0631, 91-0707, 91-0884, 91-0926, 91-0949, 91-0966, 91-0967, 91-0982, 91-1058, 91-1072, 91-1089, 91-1188, 91-1278, 91-1314 and 91-1497
StatusPublished
Cited by13 cases

This text of 877 P.2d 789 (Matter of Struthers) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Struthers, 877 P.2d 789, 179 Ariz. 216, 169 Ariz. Adv. Rep. 4, 1994 Ariz. LEXIS 74 (Ark. 1994).

Opinion

OPINION

FELDMAN, Chief Justice.

The matter of Andrew Leeroy Struthers (“Struthers”) first came before this court on April 26,1991, when the State Bar of Arizona (the “Bar”) filed a motion seeking Struthers’ interim suspension, pending resolution of complaints against him. See Ariz.R.Sup.Ct. (hereinafter “Rule_”) 52(c)(2). We directed the superior court to conduct a hearing into those allegations. Rule 52(c)(6). Based on the court’s findings of fact and conclusions of law, we ordered Struthers’ interim suspension on June 13, 1991.

A hearing committee (the “Committee”) later concluded that Struthers committed 143 violations of the Rules of Professional Conduct (Rule 42) and other rules of this court, and recommended Struthers’ disbarment. The Disciplinary Commission (the “Commission”) unanimously adopted the Committee’s findings and recommendation. Struthers filed an appeal in this court opposing disbarment. We have jurisdiction to decide this matter pursuant to Rule 53(e) and Aiz. Const, art. 6, § 5(3).

FACTS

Child Support Collections (“CSC”), a debt collection agency, retained Struthers in December 1989 to work with another lawyer who had been handling CSC’s cases. The following day, the first lawyer resigned. Struthers took over her pending cases. CSC specialized in collecting overdue child support payments from divorced parents. The agency typically started its collection efforts with letters and telephone calls to the debtor. If these tactics failed, the agency turned over the accounts to the attorney. CSC worked on a contingency fee basis, retaining as its fee twenty percent of any amounts collected.

When Struthers started with CSC, the agency was owned by Robert Hydrick and run in large measure by John Star, neither of whom was an attorney. Shortly after joining CSC, Struthers sent letters to its clients, notifying them that CSC’s previous lawyer had resigned and that their files had been assigned to him. These letters also stated that each client’s existing agreement with CSC would be “honored in full.”

In January 1990, at Struthers’ suggestion, Hydrick dissolved CSC. This occurred during an investigation by the State Banking Department into allegations of irregularities in CSC’s handling of client funds and that Star was falsely holding himself out as an attorney. Struthers knew about and even represented Star and Hydrick in these matters. 1

When Hydrick dissolved CSC, Struthers superficially converted its operations into a law practice. In reality, however, CSC simply continued to operate. Star and Hydrick formed a new entity called MIROVI Inc., which was supposed to act as a managing company, providing support personnel and services for Struthers’ practice. Star and Hydrick became Struthers’ “legal assistants.”

Many clients were subsequently required to sign new agreements raising the fee to twenty-five percent of funds collected. The new agreement also called for a small retainer fee and specified that Struthers would receive any court-awarded attorneys’ fees in addition to—and not applied to—the retainer and his contingency fee.

From the beginning of Struthers’ association with CSC, he had a very large case load. At first he took over from his predecessor about 250 cases, but this number later rose to nearly 750. Athough Struthers nominally maintained his status as an independent attorney, CSC (now MIROVI) staff ran his office, his accounting system, and performed *219 other tasks, such as conducting client interviews. Star and Hydrick performed essentially the same functions as they had in CSC. Under these circumstances, many of the formalities of a law firm were abandoned, giving rise to a number of the violations discussed below.

DISCUSSION

In disciplinary proceedings, this court is an independent trier of both fact and law. In re Castro, 164 Ariz. 428, 429, 793 P.2d 1095, 1096 (1990). However, due to the large number of violations in this case, it is impractical to discuss each act charged as a violation. Rather, we follow the Commission’s findings and address only those acts and charges that warrant discussion.

The Committee, whose findings the Commission adopted, concluded that Struthers committed the following violations of the Rules of the Supreme Court and the Ethical Rules (“ER”) of the Code of Professional Conduct:

Number of Violations

Trust account violations (Rules 43 and 44) 31

ER 1.2 (scope of representation) 1

ER 1.3 (diligence) 10

ER 1.4 (communication) 26

ER 1.5 (fees) 25

ER 1.15 (safekeeping property) 26

ER 1.16 (terminating representation) 1

ER 5.3 (nonlawyer assistants) 14

ER 5.4 (professional independence) 1

ER 8.1 and Rule 51 (disciplinary investí- 8

gations)

We examine in detail some of the more egregious violations. For ease of discussion, we address them in four categories: (A) non-lawyer assistants; (B) improper fees and mishandling of client funds; (C) client contact and communications; and (D) the Bar investigation.

A. Responsibilities regarding nonlawyer assistants

It is important to note that lawyers are often responsible for the actions of their nonlawyer assistants. Ethical Rule 5.3(a) provides that a lawyer in Struthers’ position shall “make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance” that nonlawyer assistants conduct themselves according to the rules for lawyers. In addition, ER 5.3(c) holds a lawyer responsible for an employee’s misconduct if the lawyer ratifies that conduct or fails to mitigate its consequences when possible.

In the present case, however, Struthers virtually abandoned responsibility for running his office to Star and Hydrick. Although Struthers knew the Banking Department had charged Star and Hydrick with serious improprieties, he gave them total control of his office and unfettered access to his trust‘■fund. He exercised no oversight, but now argues that he “had no indication of dishonesty on the part of Mr. Hydrick or Mr. Star, only that their record keeping was not adequate.” We reject this argument, as did the Commission, on both a factual and a legal basis.

Struthers’ argument is factually flawed because his own admissions prove he knew about Star’s dishonesty early in their relationship. Struthers admitted to the Committee that although Star told him he was an attorney licensed in other states, Struthers knew from the start this was not true. He also admitted he was physically afraid of Star. Given these facts, in conjunction with the charges brought before the Banking Department, Struthers did not meet his obligation to ensure that his nonlawyer assistants complied with his professional obligations. ER 5.3(b) and Comment thereto. Although there may often be some question of what is a reasonable effort to ensure proper conduct by nonlawyer employees, at a minimum the lawyer must screen, instruct, and supervise. In re Galbasini, 163 Ariz.

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Bluebook (online)
877 P.2d 789, 179 Ariz. 216, 169 Ariz. Adv. Rep. 4, 1994 Ariz. LEXIS 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-struthers-ariz-1994.