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Board of Professional Responsibility v. Hiatt

Supreme Court of Wyoming

June 11, 2018

BOARD OF PROFESSIONAL RESPONSIBILITY, WYOMING STATE BAR, Petitioner,
v.
ROBERT W. HIATT, JR., WSB # 6-2951, Respondent.

          ORDER OF 30-DAY SUSPENSION

          E. JAMES BURKE Chief Justice

         [¶1] This matter comes before the Court upon a Report and Recommendation for Order of Public Censure filed on February 9, 2018, by the Board of Professional Responsibility of the Wyoming State Bar (BPR), and Bar Counsel's Objections to Report and Recommendation filed on February 27, 2018. The BPR concluded that Mr. Hiatt violated Rules 1.3, 1.4, 1.5, and 1.16 of the Wyoming Rules of Professional Conduct and recommended public censure and payment of costs and fees. Bar Counsel objects, contending that the appropriate sanction should include a 30-day suspension because Mr. Hiatt has been publicly censured for similar conduct in the past. Having considered the report and recommendation and Bar Counsel's objections, having reviewed the BPR's record and the transcript of the hearing before the BPR, and being fully informed in the premises, this Court finds and concludes that the record before the BPR establishes by clear and convincing evidence that Mr. Hiatt violated the Wyoming Rules of Professional Conduct. We reject the BPR's recommendation for censure, impose a 30-day suspension, and require Mr. Hiatt to reimburse unearned fees to his client and pay fees and costs to the State Bar.

         ISSUES

         [¶2] 1. Does the record contain clear and convincing evidence that Mr. Hiatt violated Rules 1.3, 1.4, 1.5, 1.15, or 1.16 of the Wyoming Rules of Professional Conduct?

         2. What is the appropriate discipline?

          FACTS

         [¶3] Mr. Hiatt has been licensed to practice law in Wyoming since 1998, and he maintains a law practice in Rock Springs, Wyoming. This matter arises from his representation of Kyle Dudzik, who contacted Mr. Hiatt in early February 2016 regarding his desire to obtain custody of his son. On March 2, 2016, Mr. Hiatt entered an attorney-client relationship with Mr. Dudzik. They executed an Attorney-Client Fee Agreement under which Mr. Hiatt agreed to perform the work for a $3, 000.00 "non-refundable flat fee." The agreement provided that Mr. Dudzik would "pay $250.00 per week by Friday of each week, until the $3000.00 BALANCE IS PAID IN FULL." Mr. Dudzik fell behind in his payments and ultimately paid the balance due after Mr. Hiatt threatened to withdraw from the case.

         [¶4] Mr. Hiatt did not wait until the fee was paid to commence work on Mr. Dudzik's matter. On March 22, 2016, he filed a petition to modify the decree of paternity which sought custody of Mr. Dudzik's son. Mother hired attorney Bobby Pineda, and on April 7, 2016, he delivered to Mr. Hiatt a filed answer and counterclaim, along with a proposed temporary visitation agreement. On April 14, 2016, Mr. Hiatt filed an answer to the counterclaim, an emergency motion for temporary custody, and a motion for expedited temporary motions hearing. Four days later, Mr. Pineda sent an email to Mr. Hiatt regarding his filings and the use of a guardian ad litem (GAL):

         Rob,

I received your motion for an emergency hearing. I don't believe there is any emergency at this point. The majority of your allegations relate to matters prior to the birth of the minor child and are not reflective of the current situation.
However, it being a Judge James case, she is going to require a Guardian Ad Litem prior to any hearing on temporary custody. Who would you suggest? I would be fine with Tim Eagler or Rob Spence. I don't think Tammy Harris is taking new cases at this point. Maybe if we finished Salgado she would take this one on.
Thanks,
Bobby

         On April 25, 2016, Mr. Hiatt replied:

I met with my Client and expressed your concerns about a GAL. I did not know [R]ob Spence was doing GAL work. No motion for GAIL [sic] is pending but my motion is. [I] still want a hearing scheduled to get all of that resolved. I have not heard from the court yet on possible hearing dates but [I] will let you know when I do. [T]hanks Rob H.

         On May 19, 2016, Mr. Hiatt again contacted Mr. Pineda regarding the use of a GAL:

Bobby [I] just met with my client and we would prefer to use [T]im [E]agler as [GAL] if we have to go that direction, which it appears we do. Thanks Rob H

         Mr. Hiatt did not serve initial disclosures 30 days after he received Mother's answer, as required by W.R.C.P. 26(a)(1.3). Consequently, on June 16, 2016, Mr. Pineda sent Mr. Hiatt a letter requesting he do so. The letter also enclosed combined interrogatories, requests for production and requests for admission to be answered by Mr. Dudzik. Initial disclosures were prepared and were signed by Mr. Dudzik on July 14, 2016. Mr. Dudzik and Mr. Hiatt also prepared answers to Mother's interrogatories, requests for production, and admissions. Mr. Dudzik hand-delivered his initial disclosures, his confidential financial affidavit, and his answers to Mother's discovery requests to Mr. Pineda's office on August 3, 2016. That day, Mr. Pineda and Mr. Hiatt exchanged emails confirming receipt of the discovery and discussing the possibility of a GAL.

         [¶5] During the month of August, Mr. Hiatt and Mr. Dudzik exchanged emails concerning records of Mother's convictions in Colorado and attempting to clarify answers to interrogatories that had been questioned by Mr. Pineda. Regarding the discovery issue, Mr. Pineda served an initial draft instead of the final draft of interrogatories that he had prepared; thus, when he read the answers, they did not align with his final draft. Accordingly, on August 16, 2016, he sent a letter to Mr. Hiatt describing his issues with the answers.[1] Mr. Hiatt forwarded the concerns to Mr. Dudzik, who responded in an email on August 29, 2016. In his response, Mr. Dudzik expressed frustration that Mr. Pineda was "trying to make [him] look bad" and stated that he is "ready for this to be in trial." That same day, Mr. Hiatt sent the following email to Mr. Dudzik:

Dear Kyle:
You are in breach of the employment contract with this firm. Payment terms as agreed to were:
1. I agree to pay The Firm its non-refundable flat fee in the amount of $3000.00. I understand The Firm has not accepted my case and will not act as my attorney until I have signed this agreement and paid the fee. Will pay $250.00 per week by Friday each week, until $3000.00 BALANCE IS PAID IN FULL.
And
8. I agree that The Firm is not required to complete work on my case and that it may withdraw as my attorney at any time if I fail to comply with the exact terms of this agreement. I understand The Firm will send written notice of intent to withdraw. The Firm shall recite as the basis for the withdrawal that there has been a breakdown in the attorney-client relationship.
Your payment should have been completed by 5/20/2016, however, your last payment towards your delinquent balance was made on 8/3/2016 which left a balance outstanding of $1150.00. [I]f the open balance of $1150.00 is not paid in full by the end of business on Friday September 2, 2016, I will file a motion to withdraw from this case as stated above.

         Mr. Dudzik responded with an email the next day, indicating that he had obtained a loan and would be dropping off the remaining balance in Mr. Hiatt's mailbox that evening. He testified that he made the payment as promised on the evening of August 30.

         [¶6] On September 6, 2016, Mr. Dudzik emailed Mr. Hiatt asking him, "What's the plan going forward?" In his September 7, 2016 response, Mr. Hiatt addressed the criminal records issues and then explained, "[T]he plan is to deal with [B]obby problems [interrogatory confusion] next week some time and to plan not to use a [GAL] and just go for a final hearing and show the judge her history and your testimony about how she is unfit to have custody." Mr. Dudzik responded the same day, asking "What are the chances we get a hearing without a [GAL]? And do you think that's the best route?" On September 20, 2016, Mr. Dudzik again emailed Mr. Hiatt, inquiring, "What's the latest? Interrogatories?" One week later, Mr. Dudzik again emailed Mr. Hiatt, questioning him, "What's the latest with things?" Mr. Hiatt did not respond to any of these emails.

         [¶7] As these events were unfolding, Mr. Hiatt was in negotiations with Bar Counsel regarding his conduct in representing a different client. On September 29, 2016, Mr. Hiatt signed an affidavit in which he conditionally admitted to violating Rules 1.3 (diligence), 1.4 (communication with client), and 1.16 (duties upon termination of representation). On November 1, 2016, this Court issued an Order of Public Censure containing the following press release:

The Wyoming Supreme Court issued an order of public censure of Rock Springs attorney Robert W. Hiatt Jr. The disciplinary order resulted from Hiatt's representation of a client in a child custody and visitation modification matter. The client paid a $5, 000.00 flat fee at the outset. Hiatt neglected to pursue the matter diligently and failed to maintain adequate communication with his client, who ultimately terminated Hiatt's representation and retained other counsel. After the client discharged Hiatt, Hiatt failed to return the unearned portion of the fee and failed to cooperate with the client and his new counsel in transferring the file. Hiatt agreed that he committed multiple violations of Rule 1.3 (diligence) and Rule 1.4 (communication with client). He also agreed that he violated Rule 1.16 (termination of representation) in failing to return the unearned portion of the fee and in failing to cooperate with the transfer of the file to replacement counsel. Hiatt agreed to return $3000.00, representing the unearned portion of the fee, to the client. Hiatt stipulated to a public censure in the matter, which was approved by the Board of Professional Responsibility and submitted to the Court. In addition to receiving a public censure, Hiatt was ordered to pay an administrative fee in the amount of $750.00 and costs of $50.00 to the Wyoming State Bar.

         [¶8] Despite his September indication to his client that they would try to proceed without a GAL, in his October 17, 2016 letter to Mr. Pineda (responding to Mr. Pineda's August 16 letter regarding the interrogatory confusion), Mr. Hiatt wrote, "Additionally, we need a decision if we are going to do a GAL (we still prefer Tim [Eagler]) or if we can just set this for a final hearing." Mr. Pineda did not respond to this letter, and there is nothing in the record to indicate that Mr. Hiatt followed up with that communication. Mr. Pineda testified that generally the party with "the more urgent issue, " in this case, Mr. Dudzik (because he was seeking the change in custody), would carry the "burden to file the motion and get the process going" to have a GAL appointed. That was never done.[2]

         [¶9] From October through early November 2016, Mr. Hiatt and Mr. Dudzik exchanged several emails discussing potential changes in child support based upon a decrease in Mr. Dudzik's income and job changes for Mother. On November 30, 2016, Mr. Dudzik emailed Mr. Hiatt asking, "Anything new?" Mr. Hiatt did not respond. On December 6, 2016, Mr. Dudzik again emailed Mr. Hiatt, "Nothing from [B]obby yet? All I see is them delaying more and more." Mr. Hiatt responded, "Nothing from anyone." Mr. Dudzik replied, "Anything you can do to try to get something going? The no response by them for months at a time is pretty old." Mr. Hiatt did not respond.

         [¶10] The record reveals no communications between Mr. Hiatt and Mr. Dudzik and no work performed by Mr. Hiatt between December 6, 2016 and February 8, 2017. On February 8, 2017, Mr. Dudzik sent the following email to Mr. Hiatt:

Rob,
Don't you think this has been going on long enough? It has been months since anything has happened on Bobby's end. Can we write him a letter? Reach out to the courts saying we're not getting a response? Anything?

         [¶11] Again, Mr. Hiatt did not respond. Mr. Dudzik testified that he called Mr. Hiatt on February 15, 2017, and left a voicemail asking Mr. Hiatt to return his call as soon as possible. As of February 20, 2017, Mr. Dudzik still had not heard from Mr. Hiatt, so he sent Mr. Hiatt a letter terminating his representation:

Dear Mr. Hiatt:
I am writing to inform you that I am no longer seeking your counsel in the matter of my child custody case. The legal relationship has been terminated, effective immediately.
You have been my attorney for more than eleven months and to date I have spent $3, 000 and have seen very little to no progress. I have emailed as recently as February 8, 2017 to once again receive no response. I followed up with a phone call on February 15, 2017 and to no avail had to leave a message and have not received a call back or email. I feel you have been completely uninvolved in this case and you have put it on the backburner.
Due to my desire to protect my child, I felt it necessary to obtain your counsel to fight for my desires, which has not happened in a timely manner. I am requesting for you to send my complete file to [Mr. Dudzik's address]. I am also seeking FULL reimbursement of the balance. I feel this is reasonable because all we have done is file a limited amount of paperwork and exchange a few emails between yourself and the other party's counsel. I also feel that because of your lack of effort on my behalf over the last eleven months, I have likely lost any chance of winning my case.
I am requesting to have my file and reimbursed fee of $3, 000 in my possession no later than the end of business day on February 28, 2017.

         [¶12] On February 27, 2017, Mr. Hiatt responded:

Dear Kyle:
I received your letter on Friday and called and left a message. Your case is not on the back burner. As you are aware, [J]udge James will not hold a hearing until a GAL has done something regarding this matter.
There are a very limited number of practitioners in this area that accept [GAL] work. I have spoken with them all and to this point, no one has committed to accepting the appointment. However, on Saturday, I heard back from an attorney I had approached before, who indicated he now has time in his work schedule to get going as a [GAL]. The terms would be for both sides to deposit $1000.00 and schedule meetings with him.
He is willing to accept your case and [B]obby [Pineda] has already approved the selection in past conservations [sic], so if you indicate to proceed, it can. I am willing to keep you as a client and see this matter through. You know how much time and effort I have put in so far getting all the initial work although [sic] the complete discovery process. Everything has been done that can be, except for a final court hearing date and [GAL] report, neither of which I have any control over. It is disingenuous of you to attempt to claim that I have "filed a limited amount of paperwork and exchanged a few emails". I have kept a copy of all communications between us including cell messages and texts and emails. All that aside, I am still willing to keep you on, and protect your ability to proceed without being disadvantaged by attempting to proceed pro se.
Bobby has indicated that you have contacted him, indicating that you are going to proceed Pro Se, that is a big mistake unless you are just willing to settle for shared custody now. Let me know right away what you want to do. I need to file the motion and order appointing so we can lock this in, but it is up to you.

         [¶13] Mr. Dudzik responded the next day with an email questioning the timing of a GAL's "sudden" availability after "months" of no progress. Mr. Dudzik commented that "[w]ith it almost being a year in, I see no possibility of me getting full custody anymore. . . . So, I don't see any use in hiring a GAL at this point." Mr. Dudzik informed Mr. Hiatt that he had become aware of his November public censure, that he was discouraged, and would not be moving forward with Mr. Hiatt as his attorney. Finally, Mr. Dudzik asked for a refund of the $3, 000 fee and for a copy of his file. Mr. Hiatt responded with a letter dated the same day:

Dear Kyle:
I received your email response to my letter dated January 27, 2017. It is clear that there has been a breakdown of the contracted attorney-client relationship. It is also clear that the real reason your decision is based on assumptions you are making concerning my public censure that you have no knowledge about. It is also clear that you have not been listening to the legal advice and guidance I have provided through out [sic] your representation concerning the state of the law and shared custody, from your comments in your response letter.
I need to file a motion to withdraw to formally get permission from the court to be let out of your case, which will end the representation.
I have the same paper file you have as you have [sic]. I have provided copies throughout the representation to you of every filing and correspondence between our side and Bobby Pineda representing [Mother]. You provided any and all information used to answer and provided discovery, so I am at a loss to know why you keep stating to send "your" file to you.
Please refer to your contract to understand that you are not due a refund. You have created a situation where I can no longer represent you which is grounds to terminate our written agreement in and of itself. Please refer to paragraph numbered 8 of the contract which state [sic] "I agree the firm is not required to complete work on my case and that it may withdraw as my attorney at any time if I fail to comply with the exact terms of this agreement." You have been in violation of the agreement due to lack of payment of the contract sum agreed to on 3/2/216 [sic], of which you did not complete until after I wrote you a letter dated August 26, 2016 siting [sic] withdrawal by September 2, 2016 as a consequence of continued non-payment. I [sic] took you five months to pay an agreement you signed in March which took the final warning about non-cooperation to get the bill paid. I will send you a copy of the motion and order of withdrawal. You are now pro se, with full acknowledgement and acceptance of any risk, of all that means [sic].

         [¶14] The district court granted Mr. Hiatt's motion to withdraw on March 7, 2017. Mr. Dudzik communicated directly with Mr. Pineda and obtained a modification order granting him liberal visitation and reducing his child support by over $150.00 per month.

         [¶15] On March 10, 2017, Mr. Dudzik submitted a complaint regarding Mr. Hiatt to the office of Bar Counsel, and on August 23, 2017, following an investigation, Bar Counsel filed a Formal Charge against Mr. Hiatt with the BPR. The charge alleged that Mr. Hiatt violated Rules 1.3, 1.4, 1.5, 1.15 and 1.16 of the Wyoming Rules of Professional Conduct. After a hearing, the BPR concluded that Bar Counsel had carried his burden of proving by clear and convincing evidence that Mr. Hiatt violated Rules 1.3, 1.4, 1.5 and 1.16, but that the alleged violation of Rule 1.15 had not been proven by clear and convincing evidence. The BPR recommended that Mr. Hiatt receive public censure, refund $1, 150.00 of Mr. Dudzik's fee, and pay a $750.00 administrative fee, plus $3, 674.39 in certified costs, to the Wyoming State Bar. Bar Counsel objects to the BPR's recommendation, arguing that the BPR failed to properly apply factors set forth in the ABA Standards for Imposing Lawyer Sanctions, and suggesting that a 30-day suspension would be the appropriate discipline under the circumstances. Mr. Hiatt did not file a response.

         STANDARD OF REVIEW

         [¶16] "The purposes of the state bar disciplinary procedure are to maintain 'the integrity of the bar, ' 'to prevent the transgressions of an individual lawyer from bringing its image into disrepute' and to 'protect the public and the administration of justice.'" Bd. of Prof'l Responsibility v. Richard, 2014 WY 98, ¶ 51, 335 P.3d 1036, 1051 (Wyo. 2014) (citing Bd. of Prof'l Responsibility v. Casper, 2014 WY 22, ¶ 7, 318 P.3d 790, 793 (Wyo. 2014); Bd. of Prof'l Responsibility v. Davidson, 2009 WY 48, ¶ 17, 205 P.3d 1008, 1015 (Wyo. 2009); In re Clark, 613 P.2d 1218, 1221 (Wyo. 1980)). "The BPR is an ancillary body structured by the Court and has no independent power, jurisdiction, or authority other than that specifically delegated to it in accordance with" the Rules of Disciplinary Procedure. Rule 16(b), Wyoming Rules of Disciplinary Procedure. In attorney disciplinary proceedings, this Court "will give due consideration to the findings and recommendations of the BPR, but the ultimate judgment in [disciplinary] proceedings . . . is vested in the Court." Id. Accordingly, this Court makes its own determination of appropriate discipline, basing its decision upon the evidence presented to the BPR. Bd. of Prof'l Responsibility v. Custis, 2015 WY 59, ¶ 19, 348 P.3d 823, 829 (Wyo. 2015); Casper, ¶ 8, 318 P.3d at 793-94.

         [¶17] Membership to the bar is by petition to the Wyoming Supreme Court. Wyo. Stat. Ann. § 33-5-104 (LexisNexis 2013). The Disciplinary Code for the Wyoming State Bar, § 1(a), provides that attorneys are subject to the exclusive disciplinary jurisdiction of this Court and the BPR. "Disciplinary proceedings are 'necessarily incident to the inherent power of courts to control properly their own affairs.'" Richard, 2014 WY 98, ¶ 52, 335 P.3d at 1052 (quoting State Bd. of Law Examiners v. Brown, 53 Wyo. 42, 49, 77 P.2d 626, 628 (Wyo. 1938)). "The Board acts as an arm of this Court in taking evidence and making findings and recommendations to this Court." And, "[a]lthough we give due consideration to the Board's findings and recommendations, the 'ultimate judgment in these cases is vested in the Court.'" Id. (quoting Casper, 2014 WY 22, ¶ 8, 318 P.3d at 793-94 and citing Mendicino v. Whitchurch, 565 P.2d 460, 466 (Wyo. 1977)); see also Davidson, 2009 WY 48, ¶ 1, 205 P.3d at 1012.

         DISCUSSION

         [¶18] We begin with an inquiry regarding whether the record before the BPR contains clear and convincing evidence establishing the charges against Mr. Hiatt. We ...


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