The North Carolina State Bar v. Adams

CourtCourt of Appeals of North Carolina
DecidedMarch 3, 2015
Docket14-703
StatusPublished

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Bluebook
The North Carolina State Bar v. Adams, (N.C. Ct. App. 2015).

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA14-703

Filed: 3 March 2015 THE NORTH CAROLINA STATE BAR, Plaintiff, North Carolina State Bar Disciplinary v. Hearing Commission No. 13 DHC 17 ROBERT W. ADAMS, Attorney, Defendant.

Appeal by defendant from order of discipline entered 3 February 2014 by the

North Carolina State Bar Disciplinary Hearing Commission. Heard in the Court of

Appeals 18 November 2014.

The North Carolina State Bar, by David R. Johnson and Katherine Jean, for plaintiff-appellee.

Sigmon, Clark, Mackie, Hanvey & Ferrell, P.A., by Jason White, for defendant- appellant.

STROUD, Judge.

Robert W. Adams (“defendant”) appeals from an order of discipline entered by

the North Carolina State Bar Disciplinary Hearing Commission (“the DHC”). The

DHC found that defendant had mismanaged his trust account and ordered that

defendant’s law license be suspended. Defendant argues that (1) the DHC erred in

admitting evidence of prior audits’ results; (2) substantial evidence does not support

the DHC’s findings of fact; (3) the DHC’s findings of fact do not adequately support THE NORTH CAROLINA STATE BAR V. ADAMS

Opinion of the Court

its conclusions of law; and (4) the DHC’s findings and conclusions do not adequately

support its level of discipline. We affirm the DHC’s order of discipline.

I. Background

Defendant was licensed by the North Carolina State Bar in 1972. On or about

10 November 1991, the Grievance Committee of the State Bar reprimanded

defendant for mismanagement of his trust account. On or about 5 May 1994, the

Grievance Committee admonished defendant for failure to file proper accountings in

an estate and failure to handle a refinancing transaction properly. On or about 9

August 1996, defendant was reprimanded for failure to respond to a grievance filed

by a client. On or about 23 September 1996, pursuant to a random audit, a State Bar

auditor examined defendant’s trust account and informed defendant of several

deficiencies in defendant’s management of the account. On or about 30 April 1997,

the Grievance Committee censured defendant for failure to notify his clients of a

deposition, failure to appear for the deposition, and failure to inform his clients of

sanctions ordered.

On or about 6 November 1997, the DHC imposed a two-year stayed suspension

on defendant for his neglect of a client’s case, failure to communicate with a client,

and failure to respond to the grievance. On 7 June 1999, the DHC extended

defendant’s stayed suspension. On 10 May 2000, based upon defendant’s failure to

file North Carolina individual tax returns for three prior years, the DHC imposed a

three-year suspension with an opportunity for defendant to apply for a stay of the

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remaining period of the suspension after nine months. On or about 10 October 2008,

pursuant to another random audit, a State Bar auditor examined defendant’s trust

account and informed defendant of several deficiencies in defendant’s management

of the account.

From 1 January 2012 to 1 July 2012, defendant practiced law in Hickory and

held client funds in his trust account. Among his areas of practice, defendant

represented clients in Social Security Administration cases. Defendant (1)

commingled his personal funds with client funds in the trust account, (2) failed to

ensure that checks drawn on the trust account showed the client balance, (3) failed

to reconcile the trust account quarterly, (4) failed to maintain a record related to the

electronic transfers from the trust account showing the name of the client or other

person to whom the funds belong, and (5) failed to maintain a ledger containing a

record of receipts and disbursements for each person from whom and for whom funds

were received and showing the current balance of funds held in the trust account for

each such person. See Revised Rules of Professional Conduct of the North Carolina

State Bar R. 1.15-2(a), 1.15-2(f), 1.15-2(h), 1.15-3(b)(2), 1.15-3(b)(3), 1.15-3(b)(5), and

1.15-3(d)(1) (2012).

Defendant gave Alltel Wireless (“Alltel”), a cell phone company, bank account

information for his trust account in order to pay a former client’s cell phone bill. Alltel

made drafts from the trust account on 30 January 2012, 16 February 2012, 13 March

2012, and 2 April 2012. On 24 May 2012, Alltel attempted to draft approximately

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$1,458.98 from the trust account, while the account held client funds, but the

transaction was unsuccessful because the trust account held insufficient funds to

cover the draft. Defendant’s bank issued a notice of non-sufficient funds to the State

Bar. On 25 May 2012, Alltel made a successful draft from the trust account for a

much lower amount. But defendant did not misappropriate any client funds, since

the attempted 24 May 2012 draft was unsuccessful.

On 10 July 2013, the State Bar filed a complaint against defendant alleging

that defendant had mismanaged his trust account from 1 January 2012 to 1 July

2012. Defendant failed to file an answer or any responsive pleading. On 10 December

2013, the DHC entered a default judgment against defendant, thus admitting the

State Bar’s allegations at the adjudicatory phase. On 10 January 2014, the DHC held

a hearing on the disposition phase to determine the appropriate level of discipline.

On 3 February 2014, in its order of discipline, the DHC imposed a four-year

suspension with an opportunity for defendant to apply for a stay of the remaining

period of the suspension after two years if he complies with certain conditions. On

27 February 2014, defendant gave timely notice of appeal.

II. Admission of Evidence

Defendant contends that the DHC erred in admitting the results of two prior

audits, in contravention of North Carolina Rules of Evidence 404(b) and 403. N.C.

Gen. Stat. § 8C-1, Rules 403, 404(b) (2013).

A. Standard of Review

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We review de novo the DHC’s decision to admit evidence under Rule 404(b).

See State v. Beckelheimer, 366 N.C. 127, 130, 726 S.E.2d 156, 159 (2012) (discussing

Rule 404(b) in the context of a criminal trial); N.C. Gen. Stat. § 8C-1, Rule 404(b). But

we review the DHC’s Rule 403 determination for an abuse of discretion. See

Beckelheimer, 366 N.C. at 130, 726 S.E.2d at 159; N.C. Gen. Stat. § 8C-1, Rule 403.

“An abuse of discretion results where the court’s ruling is manifestly unsupported by

reason or is so arbitrary that it could not have been the result of a reasoned decision.”

State v. Ward, 364 N.C. 133, 139, 694 S.E.2d 738, 742 (2010) (quotation marks

omitted).

B. Analysis

Attorney discipline cases have two phases: (1) an adjudicatory phase in which

the DHC determines whether the defendant committed the misconduct; and (2) a

disposition phase in which the DHC determines the appropriate discipline. N.C.

State Bar v. Talford, 356 N.C. 626, 634, 576 S.E.2d 305, 311 (2003). In a hearing

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Related

North Carolina State Bar v. Talford
576 S.E.2d 305 (Supreme Court of North Carolina, 2003)
State v. Cunningham
656 S.E.2d 697 (Court of Appeals of North Carolina, 2008)
State v. Ward
694 S.E.2d 738 (Supreme Court of North Carolina, 2010)
The NORTH CAROLINA STATE BAR v. Ethridge
657 S.E.2d 378 (Court of Appeals of North Carolina, 2008)
The NORTH CAROLINA STATE BAR v. Key
658 S.E.2d 493 (Court of Appeals of North Carolina, 2008)
State v. Beckelheimer
726 S.E.2d 156 (Supreme Court of North Carolina, 2012)
North Carolina State Bar v. Mulligan
400 S.E.2d 123 (Court of Appeals of North Carolina, 1991)
State v. Gordon
745 S.E.2d 361 (Court of Appeals of North Carolina, 2013)

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