| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
| Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions |
|
|
|
|
You can search the entire site. or go to the recent opinions, or the chronological or subject indices. In Re Miles (12/12/2014) sp-6975
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER .
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
In the Disciplinary Matter Involving )
) Supreme Court No. S-15366
MELINDA D. MILES, )
) ABA File No. 2010D144
Respondent. )
) O P I N I O N
)
) No. 6975 - December 12, 2014
Appeal from the Alaska Bar Association Disciplinary Board.
Appearances: John M. Murtagh, Anchorage, for Respondent.
Louise R. Driscoll, Assistant Bar Counsel, and Stephen J.
Van Goor, Bar Counsel, Anchorage, for Alaska Bar
Association.
Before: Fabe, Chief Justice, Winfree, Stowers, and Bolger,
Justices. Maassen, Justice, not participating.
WINFREE, Justice.
I. INTRODUCTION
An attorney misappropriated a deceased client's funds - rightfully
belonging to the decedent's estate - and hid this misappropriation through deception
while providing legal services to the estate's personal representative. Throughout more
than three years of disciplinary proceedings, the attorney maintained that the funds had
been gifted to her and that she was following the decedent's wishes in deceiving the
estate. The Alaska Bar Association's Disciplinary Board found that no gift had been
----------------------- Page 2-----------------------
intended or accomplished and that, among other violations, the attorney committed the
criminal act of theft, misappropriation, or wrongful conversion. The Board recommends
that we disbar the attorney. After independently reviewing the record, we agree with the
Board and impose the recommended sanction.
II. FACTS AND PROCEEDINGS
Like many disciplinary matters, this case is fact-specific. We therefore
outline the facts in detail.
A. Melinda Miles And The Moren Brothers
Melinda Miles was admitted to the Alaska Bar in 1989. During the relevant
time period Miles was a sole practitioner handling a variety of legal matters, including
will preparation and other estate planning and probate services. In 2006 Miles became
acquainted with Donald Moren, who built a fence for her as a handyman. According to
Miles they became close friends and she occasionally performed legal work for him.
In May 2008, for a fee, Miles formed Progressive Diversified Services,
LLC (Progressive) for Donald. Progressive's Articles of Organization list Donald as
both the company's organizer and its registered agent. The next day Miles signed a
notarized "Special Power of Attorney" form, prepared on her office letterhead, declaring
that she, as the "registered agent" of Progressive, appointed Donald as her "attorney-in-
fact to act in [her] capacity to . . . cash and sign checks, make deposits and withdrawals,
close the account, and otherwise have sole signatory authority and sole authority to
manage as he sees fit the Key Bank banking account for Progressive Diversified
Services, LLC." The form states that the "rights, powers, and authority" given to Donald
"shall remain in full force and effect as long as that referenced bank account is open."
That same day two bank accounts were opened at KeyBank under Progressive's name
- one business checking account with an opening deposit of $15,000, and one business
savings account with an opening deposit of $100,000. The account signature cards list
-2- 6975
----------------------- Page 3-----------------------
Miles as the sole signer for each account, and each card was signed by Miles. On each
card, between Miles's name and signature, under the word "Title," are the handwritten
words "Registered Agent."
About two weeks later Donald signed paperwork removing him as
Progressive's registered agent and making Miles the new registered agent. The "Special
Power of Attorney" form signed earlier by Miles was received by KeyBank in July.
Later Miles signed, in two places, a new signature card for Progressive's bank accounts.
Next to both signatures, in handwriting, Miles is designated as Progressive's registered
agent. On this signature card, Donald, as Progressive's "owner," is newly added as a
second signer on the accounts.
In May 2009 Donald died unexpectedly. He had no will, and his mother,
Mary, was his sole heir. Donald's brother, Patrick, had power of attorney to act on
Mary's behalf. In early June Patrick contacted Miles because he learned Miles had
assisted Donald in setting up Progressive, and Patrick wanted assistance being appointed
personal representative of Donald's estate in Alaska.
Miles did not know Donald had died until Patrick contacted her, and she
immediately began recording the time she spent reviewing Donald's file and
communicating with Patrick. On June 11 she recorded time for "[b]ank research." The
next day Miles went to KeyBank and wrote herself counter checks for the remaining
balance in each Progressive bank account: $1,162 from the business checking account
and $20,072 from the business savings account. Miles then deposited the smaller
checking account balance into her law office trust account and the larger savings account
balance into the account of a rental property company she owned. Over the next week
Miles moved $20,000 from her rental company account to her personal account and
began spending the money. Miles also changed the mailing address for Progressive's
bank statements from Donald's address to her own address.
-3- 6975
----------------------- Page 4-----------------------
The same day Miles deposited the counter checks, she wrote to Patrick that
she had "done quite a bit of checking into Donald's affairs" and "wanted . . . to
memorialize what [she had] discovered thus far." Setting out a "rough inventory" of
Donald's assets, Miles listed the smaller Progressive checking account balance of $1,162
and other possessions, including Donald's vehicle, boat, guns, electronics, and storage
unit of unknown contents. Miles did not mention the Progressive savings account. She
advised Patrick of a procedure in Alaska for handling small estates, broached the subject
of billing the estate for her services, and attached an invoice.
Patrick responded with a request that Miles procure information about
Donald's assets, including "[i]nformation from any banks in which Don[ald] had
accounts." At the end of July Miles emailed Patrick a list of the items in Donald's
storage unit. Patrick responded by email a week later:
My primary concern at this time is to obtain all information
regarding Don[ald]'s bank assets. If you are unable to obtain
[information] from Key Bank or any other bank in which
Don[ald] had assets . . . , I want to commence action in . . .
Alaska to effect my appointment as personal representative
of Don[ald]'s estate.
Miles responded by email that same day:
A long time ago I told you about the bank account at Key
Bank. There is that one account. I do not have the
information in front of me as I have been in court . . . . I have
confirmed that there are no accounts at First National, and
Mat Valley and Denalia Alaska [sic]. This only leaves . . .
Wells Fargo. . . . I can check that tomorrow . . . . I will let
you know if [Donald] did not end up closing that account as
he told me he planned to. It may be where he has additional
funds.
About a week later an attorney working with Patrick sent Miles an email,
stating: "I just wanted to touch base regarding Don[ald]'s estate. . . . Any updates
-4- 6975
----------------------- Page 5-----------------------
regarding other bank accounts?" A few days later Miles wrote a letter to Patrick, stating:
[T]his is not how I usually investigate a probate. Usually, I
gather all of the mail, and review all of the bookmarks from
the decedent's computer. That way, we know which banks
. . . to approach. This has been more of a fishing expedition
. . . . I knew a little about Donald's finances but not a lot . . . .
Information from any banks in which Don[ald] had
accounts: I have checked all of the major banks in the
Anchorage/Mat Su area. The most uncooperative was Wells
Fargo. But, I have confirmed that Donald did not have an
account there anymore. The only accounts at a bank I have
found is KeyBank. I previously sent you that information.
I have closed out that account, mainly because after I told you
the amount in that account an automatic payment for his cell
phone came through.[1] (Emphasis omitted.)
At some point in the next seven months, Patrick retained Alaska attorney
Nelson Page to assist him with Donald's estate and obtained information from KeyBank
about both Progressive accounts. In March 2010 Page contacted Miles about the two
accounts, asking why the funds were withdrawn, where the funds then were located, and
the basis of Miles's authority to write the checks from the accounts. A week later Miles
responded:
Not until I pulled Donald's file did I recall that I was,
of course, a signatory on his two accounts. One account that
he wanted to use on a daily basis, and another account, that
in light of the attorney/client privilege, I will only state that
he wanted to be certain that the money went to me if anything
1 The cell phone charge was deducted from the Progressive checking account
on the day Miles first began billing the estate - for reviewing Patrick's initial letter to
her. Miles did not complete the "[b]ank research" for which she billed the estate until
over a week later. Nine days after the cell phone charge cleared the Progressive
checking account - the same day Miles removed all of the funds from both Progressive
accounts - she informed Patrick of the checking account's balance.
-5- 6975
----------------------- Page 6-----------------------
happened to him. You may or may not know that that
account even used my social security number, and not
Donald's.
. . . .
Once I realized that I was the signatory on these
accounts, I sought legal counsel from an ethical standpoint.
I at no time or in any way wish to miss-handle [sic] these
funds. If you think otherwise please let me know.
Page responded in May that Patrick, as the personal representative of the estate, was
gathering Donald's assets and requested that Miles give Page "all property and funds
from Donald Moren that are in your possession, custody, or control" for later distribution
under the law.
Two weeks later Miles mailed Page a check for $1,162. In the
accompanying letter, Miles wrote:
Please let me know your position on the bank account that
Donald held with me as principal and with my social security
number. The main reason Donald structured that account that
way was to protect the money from his brothers. He also
claimed that one day, we would make money in joint
ventures although that never came to fruition as Donald's
time here was cut short.
Two days later Page responded that the money was Donald's to begin with and had to
be remitted to the estate, but Miles could submit to the estate the particulars of any claim
to the money. Nearly three weeks later, in mid-June, Miles responded:
I have no intentions of violating my responsibilities as a
friend nor as an attorney. . . . I am familiar with probate law
. . . . Donald wanted none of his estate upon his death to pass
to his brothers. Donald's intent was to set up a nonprobate
transfer of any funds in that account to me, and not to his
family. I was clear that I could not guarantee that outcome
without a Last Will and Testament. His failure to do that
additional step before his untimely death does not preclude
-6- 6975
----------------------- Page 7-----------------------
his wishes and intent from being followed, however.
Moreover, the law on nonprobate transfers supports that
outcome as well.
In late June Page responded, "It is apparent that you personally received
substantial sums from a business account owned by Donald Moren. I have been
operating under the impression that the funds at issue are still in your trust account. If
this is not the case, please advise me immediately." Page demanded documentation
regarding any bank accounts Donald owned or controlled, including information
regarding any joint account and any documentation of Miles's authorization to receive
the funds. Page stated, "[Y]our correspondence suggests to me that you took the money
and retained it for your personal benefit . . . ." No further correspondence between Miles
and Page or Patrick is in the record.
B. Bar Grievance And Disciplinary Proceedings
In late July 2010 Patrick filed a grievance against Miles with the Alaska Bar
Association. Donald's sole heir, his mother, died in September. Miles responded,
stating that Donald was "a close and personal friend" for whom she had occasionally
completed minor legal work for a discounted rate, but never for free, and that when
Donald died she "did not hear about it right away, because although close personal
friends, [she and Donald] were not actually running around together, and he hadn't come
to visit and chat in over a month." Regarding the Progressive accounts, she stated:
In May 2008, Donald asked me to open a bank account with
me as primary and him as secondary so that he could give
that money to me and keep his brothers, who[m] he
understood to be his beneficiaries, from obtaining it. Donald
told me that he was estranged from, and did not like his
brothers and did not want them to obtain or inherit his
money. I told Donald that the correct format would be to
make a will. He stated that he would rather just open up a
bank account for our use. I say "our" because he intended me
-7- 6975
----------------------- Page 8-----------------------
to have access to this money, and he trusted me. At no time
did I think this was unethical as Donald was a personal friend
of mine and did not have any close friends or other family
members that he would trust to have a joint account with. So
I opened this account as primary, under my name and social
security number, and Donald was placed on the account as
secondary.
On at least one occasion, I asked Donald to prepare a
[w]ill, but he would ask how much it cost, then refuse to
carry through with it.
. . . .
There were two accounts at Key Bank, Donald's
primary account, and then the account already mentioned
which contained money that had been gifted to and made
available to me at Donald's explicit insistence. I believe
(although I am not 100% certain) that Donald's primary
account was in his name as the primary signator, and that I
was secondary. The second account was in my name and
under my social security number, and the money in it had
been gifted to and made available to me by Donald. I never
solicited this gift from Donald; it was his idea to do this, and
I agreed, albeit reluctantly, although I was appreciative of his
generosity and kindness.
I disclosed the first bank account to Patrick
immediately. I did not disclose the second account as I
considered it mine, and the moneys in it to be mine. . . . I
have kept [the money].
. . . [M]y belief is that Donald gave me the contents of
the bank account when he expressed his intent that it was
available to me to spend and that I should use it if I wanted.
Thus, I have not felt it appropriate, and in fact it would
contravenes [sic] Donald's fervent wishes which he
expressed to me, for that money to go into his estate to be
divided by his estranged family.
-8- 6975
----------------------- Page 9-----------------------
Miles also described Patrick to be "as difficult and menacing as Donald had previously
described him" and stated that she had done only "non-lawyer-specific tasks" for Patrick,
like inventorying a storage unit and collecting information on Donald's account and
debts. Finally, Miles asserted that during the summer of 2009 she "made several
attempts to obtain ethical guidance on these matters," by (1) speaking "in detail" with a
"good friend and ethical attorney, Jill Dean," and (2) attempting to speak with a
professor in Seattle, Washington, whose information was on the Alaska Bar website, but
with whom she had "only played phone tag." Miles also asserted that she had not
intended to violate any ethical guidelines.
In late October 2011 bar counsel filed a petition for a formal hearing before
an area hearing committee. The petition alleged that Miles committed the following
eight counts of misconduct, misnumbered as one through six, eight, and nine:
1) representing Patrick regarding Donald's estate despite Miles's own personal
conflicting interest in Donald's assets, in violation of Alaska Rule of Professional
Conduct 1.7(a)(2);
2) acquiring a pecuniary interest in her client, Donald's, Progressive bank accounts
without following required client-protective procedures, in violation of
Rule 1.8(a);
3) acquiring a possessory or other pecuniary interest in the Progressive savings
account which was adverse to her other client, Patrick, in violation of Rule 1.8(a);
4) failing to hold the property of a client or other third persons - the Progressive
savings account funds - separate from Miles's own property, when she deposited
those funds into her own account, in violation of Rule 1.15(a);
5) failing to promptly notify those with an interest in the Progressive savings account
funds when they came into her possession, account for those funds, and deliver
them to those entitled to the funds, in violation of Rule 1.15(d);
6) failing to hold the disputed Progressive savings account funds separate from other
funds until entitlement to the funds had been determined, in violation of
Rule 1.15(e);
-9- 6975
----------------------- Page 10-----------------------
8) committing the criminal act of theft, misappropriation, or wrongful conversion,
in violation of Rule 8.4(b); and
9) engaging in conduct involving dishonesty and deceit by transferring the
Progressive savings account funds into her own account and failing to disclose
that transfer to her client Patrick, in violation of Rule 8.4(c).
Miles admitted the allegations in counts one and six, and the Bar ultimately did not
pursue counts two and nine.
In February 2012 Miles submitted an affidavit reiterating her claim that the
funds were her property because Donald previously had stated his intent to gift the
contents of the savings account to her. Miles also stated that Donald "possessed equal
or superior knowledge about his intent and plan so [Miles] did not require him to put his
understanding of his plan in writing, nor did [she] advise him to review his plan with
independent counsel." Miles also explained that her "statements to Patrick [while
representing him] . . . were impacted by Donald's intent that he wanted none of his estate
. . . to pass to his brothers."
In April, just prior to her first disciplinary hearing before the Area Hearing
Committee, Miles finally tendered to Donald's estate $20,072, the amount she had
withdrawn from the Progressive savings account. This was nearly three years after she
placed the money in her own account and nearly two years after the estate's initial
demand for the funds. After tendering the money to the estate, Miles did not present the
estate with a claim to any of it.
For reasons not relevant to our decision, the Area Hearing Committee held
two hearings. We describe the relevant testimony without differentiating between those
hearings.
Regarding her friendship with Donald, Miles testified that after her car had
been stolen by a former romantic partner he had helped her feel safe by driving her home
and going with her to her office for two to three days as her "body guard." Miles stated
-10- 6975
----------------------- Page 11-----------------------
that Donald also "staked out" her former partner's house for a few mornings and helped
Miles find a new car. Miles stated that she "probably had a crush" on Donald and that
he had offered to buy her a $600 ring, but she would not let him and instead bought it for
herself. Miles stated that although she previously had indicated that she interacted with
Donald approximately 15 to 20 times over the course of their friendship, there may have
been additional occasions when Donald "would just stop by . . . and [she would] be too
busy."
Regarding her business relationship with Donald, Miles testified that
Donald was "entrepreneurial minded" and had a lot of "outlandish ideas," and that
although Donald suggested they "could be in business together," she never did so
because she was "leery of some of his ideas." Regarding Progressive, Miles stated that
she "tried really hard to make a line between" Donald as a friend and Donald as a client,
so she billed him about $250 to form the company.
Regarding the bank accounts, Miles testified that Donald had asked her:
"If I set up the bank account with you, with rights of survivorship, does that mean my
brothers won't get any of [the money]?" Miles stated that she had told Donald she was
not sure and that she told him several times he should make a will, but he replied that he
did not know who his beneficiary would be or with "flippant responses" such as, "I don't
plan on having any money when I die." Miles stated that she then believed Donald had
set up the savings account as a joint personal bank account with a right of survivorship
in her favor.
Explaining why she had never noticed that the savings account was not, in
fact, a joint personal bank account with a right of survivorship and was instead
Progressive's business savings account, Miles testified:
Donald said that he wanted to set up two accounts. One, that
he said I should divulge to his brothers, if anything happened
-11- 6975
----------------------- Page 12-----------------------
to him; and one, that he wanted to keep from them. . . . [H]e
would use one, and then the other one we would keep money
in. And he also said, . . . [if] we do a business, I would have
access to that money, like a seed money. Or, if I needed
anything. . . . [H]e wanted to think of himself as kind of
helping to take care of me.
. . . I didn't . . . go to Key Bank and open up the
accounts. I sat in my office and I would be working, and
Donald came in and said, "Sign." And I felt that my
responsibilities, ethically, were not to be involved in anything
like that. So it wasn't like I sat there and reviewed it . . . .
[A] friend says, "Sign. I'm gonna set up a joint bank account
with you, with rights of survivorship. Sign." So, I signed.
. . . [W]here it says, . . . "Registered agent," . . . it is
handwritten later. That wasn't on there when I signed. . . .
. . . [W]hen I did that [P]ower of Attorney, . . . giving
Donald the right to use the account, I thought I was the
primary and he was the secondary. And, for some reason,
they needed something like that. And he told me to put in
there, . . . you're a registered agent of Progressive
Diversified. And . . . I just thought it was him being self-
important, I guess.
And, I was, like, "Okay. If that's what the bank wants,
there you go. Good bye."
. . . .
. . . [With the later signature card, it was] the same
thing. . . . He said something like, "The bank screwed up . . .
[a]nd we need to sign again."
And, again, I felt like my responsibility, ethically, is
not to be involved in that. . . . So, I'll help you, you're a dear
friend. So again I sign, but, I thought it was . . . just rights of
survivorship. Joint owners with rights of survivorship. I
thought I was the primary, which wa[s] why I had to give him
that power of attorney.
-12- 6975
----------------------- Page 13-----------------------
. . . .
I felt like, since I had to do the Power of Attorney, that
was really my money. But I would never take something
from Donald that he wanted.
. . . .
. . . I just felt like, as a friend, I shouldn't be . . .
[looking at the account paperwork], and to stay away from
the gift, I shouldn't be doing that.
When asked why she never withdrew any money from the savings account
during Donald's lifetime, Miles responded:
[I]f we would have done a business deal, I would have. And
I know that if I . . . [were] in financial straights, I could have
. . . . [B]ut . . . [Donald] used to make a lot of money. . . .
And then he was disabled. . . . [T]he time he got that hundred
thousand dollars, I think he owed a lot of money . . . . He
bought a brand new truck. . . . I would never just spend
Donald's money. But, I think if I ever wanted it or needed it,
I could have had some.
When asked why Donald wanted to gift the money to her, in particular, she
testified that Donald thought they someday would do business together. Miles also
thought she "was probably [Donald's] best friend at that time," though they "didn't
necessarily socialize after hours" because Miles had three young children. She stated
that Donald was charismatic and had many friends, but she also "felt like, in many ways,
he was kinda lonely." Miles stated that she attended neither the barbeque where Donald
had died nor the later celebration of Donald's life.
Miles also testified that when she started helping Patrick, she did not realize
he was one of the brothers from whom Donald wanted to keep his assets, and once she
realized her mistake, she tried to get everything done as quickly as she could. Miles
stated that Donald said the smaller account was supposed to be revealed to Donald's
-13- 6975
----------------------- Page 14-----------------------
brother "because [Donald] knew he'd keep looking for money until he found
something." Miles further stated: "[S]ince it was my money, I felt like I didn't need to
disclose the second account. I felt that legally I didn't need to disclose the first account
[either], but I would, because that's what Donald wanted." She stated that she did not
tell Patrick about the second account because she was honoring Donald's wishes and felt,
at the time, that she was "taking the high road." Miles also stated that Donald felt that
his brothers controlled his mother, so they would get the money in the event of his death.
Jill Dean, the attorney with whom Miles had discussed her ethical qualms,
also testified. Dean stated that on more than one occasion during the summer of 2009,
Miles said she had a joint account with a deceased friend who had been a client and was
not sure what to do about it. Based upon Dean's understanding that it was a joint
account, Dean had advised Miles to "hold onto the money" because she was the
surviving beneficiary and therefore had the best claim to the money.
Five character witnesses testified on Miles's behalf: a rector at her church,
who had known her for about three years; her career coach, who had acted in that
capacity for approximately six months; a fellow animal rescue volunteer, who had known
her since 2005; a friend and fellow dog musher, who had known her since 1998; and a
former client, who had known her since 2011. The career coach testified that Miles had
"expressed regret [about] the whole situation," recognized the "error in judgment on her
part," and was working on becoming more detail-oriented. The four remaining witnesses
testified that Miles had a reputation for truthfulness.
Two of Donald's close friends, William O'Brien and Robert Madson, also
testified. O'Brien stated that he first met Donald in the 1990s and that they were
roommates when Donald died. He stated that he and Donald hung out and went fishing
and boating together. He stated that Donald was using the Progressive money to run a
business selling boats, and that all he could remember Donald saying about Miles was
-14- 6975
----------------------- Page 15-----------------------
that she had helped him form Progressive and he had fixed a fence for her at some point.
He stated that Miles had never visited their residence, and that he believed Donald had
only a professional relationship with her. He stated that he did not believe Donald had
any business ventures with Miles or a close friendship with her. He added that Donald
was always coming up with business ideas and trying to "enlist" O'Brien to join him.
When asked whether Donald would give money to Miles, O'Brien stated, "No, I can say
that I'm positive he wouldn't do that."
Madson testified that he knew Donald for 36 years. He stated that his
brothers, Donald, and he all grew up in the same small town in Minnesota; they all
hunted, fished, and vacationed together; and Donald's mother was Madson's seventh
grade teacher. He stated that Donald joined Madson in Alaska in the 1980s, and that
they hunted, fished, and hung out together. He stated that Donald had quite a few close
friends, but Miles was not one of them. Madson stated that although Donald had
mentioned Miles on a couple of occasions because he had "legal dealings" with her,
Madson had never seen Donald socialize with her, and Madson "[did]n't even know
what [Miles] look[ed] like." He described Donald as "a wheeler-dealer" when it came
to business and stated that Donald was "real[ly] close" with his mother and "always
talked about her, and . . . any way . . . he could help her." He stated that Donald would
have wanted his money to go to his mother. Regarding Donald's relationship with
Patrick, Madson stated, "[Donald] didn't talk about him much, let's just put it that way."
The Area Hearing Committee found that Miles had committed the four
remaining contested counts of misconduct described in the petition: counts three, four,
five, and eight. This included the specific finding that "Miles committed a criminal act
of theft, misappropriation, or wrongful conversion." The Committee found "as a matter
of fact and law that no gift was accomplished by Donald's purported statement of an
intent to make a gift of funds to Miles." It also expressed "reasonable doubt whether
-15- 6975
----------------------- Page 16-----------------------
Donald had actually made statements to Miles intending to gift her money through a non-
probate transfer from a joint account" and stated that Miles's claims regarding such
statements were "uncorroborated and self-serving."
The Committee found "the overall evidence to be clear and convincing that
by the time Miles withdrew the funds and closed the accounts, she had actual knowledge
that they were business accounts . . . solely owned by Donald." It also found that
"Miles's testimony that at the time she withdrew the money she believed the account was
a joint personal account with right of survivorship [was] simply not credible on the
record before [the Committee]." In fact, "[e]ven if Miles believed that Donald intended
to open a joint personal account with her, she was immediately - and repeatedly -
confronted with obvious, and unmistakable evidence that Donald had, in fact, opened
only business accounts at Key Bank in the name of his solely-owned company . . . ."
The Committee found "more incredulous [sic] . . . Miles's claim that after Donald's
death, she continued to believe that the Key Bank savings account was a personal
account, even after she 'pulled Donald's file,' " remembered that she was a signer on the
two accounts, "performed 'bank research,' " obtained counter checks from both
accounts, and disclosed to Patrick the existence of only one account. Ultimately, the
Committee found:
Taken as a whole, . . . the record evidence . . . [is] clear and
convincing that any "mistaken impression" that Miles had
about the nature of the Key Bank accounts had been dispelled
by the time she withdrew the funds and closed the accounts
- that after Donald's death, Miles had actual knowledge that
the Key Bank accounts were business accounts in which she
had no ownership interest.
. . . .
. . . Miles knew that the[] funds had not been conveyed
to her . . . .
-16- 6975
----------------------- Page 17-----------------------
When evaluating the proper sanction for Miles's violations, the Committee
found that Miles's misconduct resulted in "at least the potential for serious harm"
because Miles had "deprived [Donald's estate] of its major asset" - over $20,000 -
"for almost three years and could have permanently deprived the [e]state" of that asset
but for Patrick's perseverance. Given its finding that Miles's conduct was knowing, the
Committee preliminarily concluded that the appropriate sanction for her conduct was
disbarment. The Committee found only one mitigating factor: cooperation with the Bar.
The Committee rejected Miles's argument that "delay in the disciplinary proceedings"
should be a mitigating factor, and found that the "evidence of Miles'[s] reputation for
honesty [did] not mitigate the circumstances of the violations committed." Finally, the
Committee found that "any mitigating factors [were] more than neutralized by the
[aggravating] factors . . . [of] dishonest or selfish motive; refusal to acknowledge [the]
wrongful nature of [the] conduct; substantial experience in the practice of law; and
indifference to making restitution." The Committee therefore recommended that the
Disciplinary Board impose on Miles the sanction of disbarment.2
The Board adopted the Committee's findings of fact, conclusions of law,
3
and recommendation. Miles appeals the findings that she committed the violations in
2 Area hearing committees submit written reports containing findings of fact,
conclusions of law, and recommendations to the Disciplinary Board. See Alaska Bar R.
12(i)(4). The Board may accept those reports or adopt its own, and may impose
reprimands or forward its own findings of fact, conclusions of law, and recommendations
to this court for more serious discipline. See Alaska Bar R. 10(c)(5)-(8).
3 Three days before the Board held Miles's October 2013 disciplinary
hearing, Miles moved to admit the results of a polygraph examination conducted just one
week prior. The examiner's opinion was that:
Miles was truthful when she stated . . . 1) Donald Moren had
told her the Key Bank account was a joint account with right
(continued...)
-17- 6975
----------------------- Page 18-----------------------
counts three, four, five, and eight, and requests that we impose the lesser sanction of
suspension from the practice of law for no more than three years.
III. STANDARD OF REVIEW
"We independently review the entire record in attorney disciplinary
proceedings, though findings of fact made by the Board are entitled to great weight."4
When the Board's findings of fact are appealed, "the respondent attorney bears the
5
burden of proof in demonstrating that such findings are erroneous." "[W]e ordinarily
6
will not disturb findings of fact made upon conflicting evidence." "We apply our
independent judgment to questions of law and questions concerning the appropriateness
3 (...continued)
of survivorship, 2) she failed to disclose it because she
believed she owned it, and 3) she did not know until June 12,
2009[,] that the account was a business account.
The Board found that "even if the polygraph's conclusion that . . . '[Miles] did not know
until June 12, 2009[ - the day she withdrew the Progressive savings account funds -]
that the account was a business account' is correct, it does not undercut the findings and
conclusions of the . . . Committee." We agree with the Board. It makes little difference
if Miles did not know "until" June 12, 2009, that the account was a "business account."
What matters is whether Miles believed on that day - and beyond - that she was
unquestionably entitled to the money in the account.
4
In re Disciplinary Matter of Shea , 273 P.3d 612, 619 (Alaska 2012)
(internal quotation marks omitted); cf. Alaska Bar R. 22(r) ("The Court will review
findings of fact, conclusions of law, and recommendations of discipline made by the
Board . . . .").
5
In re Disciplinary Matter of Rice , 260 P.3d 1020, 1027 (Alaska 2011)
(internal quotation marks omitted).
6 Id. (alteration omitted) (internal quotation marks omitted).
-18- 6975
----------------------- Page 19-----------------------
7
of sanctions."
IV. DISCUSSION
A. Counts Five And Eight
Miles's challenge to the Board's ultimate finding that she committed the
8 9
violations in counts five and eight is premised upon her argument that we should
overturn at least one of the following underlying factual findings: (1) no gift of the funds
in the Progressive savings account was intended or accomplished from Donald to
10
Miles, and (2) at the time Miles withdrew the funds from the account, she knew she had
no ownership interest in them.
7 In re Shea , 273 P.3d at 619 (internal quotation marks omitted); see also
Alaska Bar R. 22(r) ("The Court will decide . . . the type of discipline to be imposed
. . . .").
8 Count five alleged that Miles failed to promptly notify those with an interest
in the Progressive savings account funds when they came into her possession, account
for those funds, and deliver them to those entitled to the funds, in violation of Alaska R.
Prof. Conduct 1.15(d).
9
Count eight alleged that Miles committed the criminal act of theft,
misappropriation, or wrongful conversion, in violation of Alaska R. Prof.
Conduct 8.4(b).
10 The Area Hearing Committee found "as a matter of fact and law that no gift
was accomplished by Donald's purported statement of an intent to make a gift of funds
to Miles." It also expressed "reasonable doubt whether Donald had actually made
statements to Miles intending to gift her money through a non-probate transfer from a
joint account" and stated that Miles's claims regarding such statements were
"uncorroborated and self-serving." The Committee added that "Donald never opened
a joint account with Miles" and that "two of [Donald's] close friends testified that Miles
was not [Donald's] close friend . . . [and] did not socialize with him, and that Donald
would not have give[n] her any of his money." Based upon the Committee's reasoning,
we treat its finding that no gift was accomplished as a finding of fact that Donald lacked
donative intent.
-19- 6975
----------------------- Page 20-----------------------
To accomplish a gift, "donative intent must be clear, unmistakable, and
11
unequivocal." Miles testified that she was "most definitely" wrong in believing that the
money from the savings account belonged to her. She admitted that she had no
documentation "beyond the bank accounts" memorializing Donald's alleged intent to gift
the funds to her, and that no aspect of the bank accounts expressly entitled her to the
funds. Miles's testimony regarding Donald's alleged "donative intent" is lacking and
contradicted by the evidence: Miles testified that Donald posed a hypothetical question
regarding setting up a joint account with her, she answered that he should create a will,
and he shrugged off that answer. According to Miles, Donald then told her - though
it is unclear when or in what terms - that he was setting up a joint personal account with
rights of survivorship in Miles's favor. Donald instead created business accounts with
Miles as a signer under her putative authority as the business's registered agent, had
Miles sign a "Power of Attorney" form giving him "sole signatory authority and sole
authority to manage [those accounts] as he [saw] fit," added himself onto the accounts
as a signer under his authority as the business's owner, ran a business using the accounts,
and spent the majority of the money. Donald's close friends testified that Donald would
not have given money to Miles. Miles has therefore failed to carry her burden of proving
erroneous the Board's finding that no gift was accomplished.12
11 Roberson v. Manning , 268 P.3d 1090, 1094 (Alaska 2012).
12 We note that even if Donald had intended to gift the money to Miles, a gift
from a client to an attorney is subject to special scrutiny. See, e.g., Alaska R. Prof.
Conduct 1.8(c); Commentary Alaska R. Prof. Conduct 1.8 ("[T]he doctrine of undue
influence . . . treats client gifts as presumptively fraudulent. . . . If effectuation of a
substantial gift requires preparing a legal instrument such as a will or conveyance the
client should have the detached advice that another lawyer can provide. The sole
exception to this Rule is where the client is a relative of the donee.").
-20- 6975
----------------------- Page 21-----------------------
Miles next argues we should find she did not possess the mental state
required for the crime of theft because, even if there actually was no gift, she believed
Donald had completed a gift to her and she did not know that the funds in the savings
account belonged to someone else. But it stretches credulity that Miles, having been an
attorney in Alaska for 20 years and offering legal services in estate planning and probate,
failed to recognize a single one of the numerous signals that Donald had not, in fact,
completed a gift to her. Further, Miles's own actions are inconsistent with her professed
belief that a gift had been completed: On the day the accounts were opened in her name,
she prepared and signed the "Power of Attorney" form giving Donald "sole signatory
authority and sole authority to manage [the accounts] as he [saw] fit," and she withdrew
no money from the accounts during Donald's lifetime. Miles's explanation that she
"would never just spend Donald's money," but that she thought she could have spent
some if she wanted or needed to do so, conflicts with her argument that she believed a
gift to her had been completed and that it was her money. Miles's assertion that she
believed both accounts belonged to her also conflicts with her decisions to reveal one and
hide the other and to never present the estate with a claim of right to the money in either
account. Miles has therefore failed to carry her burden of proving erroneous the Board's
finding that Miles knew the money did not belong to her when she wrongfully converted
it to her possession.
B. Counts Three and Four
Given the egregiousness of count eight and our ultimate conclusion that
disbarment is the appropriate sanction in this case, we do not need to consider Miles's
arguments regarding counts three and four.
C. Sanctions
"Our individual examination of [the appropriate sanction in] each case is
guided but not constrained by the American Bar Association's Standards for Imposing
-21- 6975
----------------------- Page 22-----------------------
Lawyer Sanctions[,] . . . the sanctions imposed in comparable disciplinary proceedings,"
and the Board's sanction recommendation in this case.13
14
"We apply a three-step analysis to determine attorney sanctions." First,
we examine: (1) the duty or duties violated; (2) the attorney's mental state regarding
15
Second,
these violations; and (3) the "extent of the actual or potential injury" involved.
for the misconduct examined in the first step, we determine what sanctions the American
16 Finally, we
Bar Association's Standards for Imposing Lawyer Sanctions recommend.
determine "how aggravating or mitigating factors affect the recommended sanctions,"
if at all.17
Miles admitted to representing one client regarding a former client's estate
despite her own personal conflicting interest in the former client's assets and to failing
to hold more than $20,000 in disputed funds separate from other monies until entitlement
to the funds had been determined. Miles also failed to promptly notify those with an
interest in the funds when they came into her possession, failed to account for the funds,
and failed to deliver the funds to those entitled to them. Most egregiously, Miles
13 In re Disciplinary Matter of Shea , 273 P.3d 612, 619, 623 (Alaska 2012)
(internal quotation marks omitted); cf. Alaska Bar R. 16(a) ("A finding of misconduct
by the Court or Board will be grounds for (1) disbarment by the Court; or (2) suspension
by the Court for a period not to exceed five years; or (3) probation imposed by the Court;
or (4) public censure by the Court . . . .").
14 In re Shea , 273 P.3d at 622.
15 See id.
16 Id.
17 See id. (internal quotation marks omitted).
-22- 6975
----------------------- Page 23-----------------------
committed the criminal act of theft, misappropriation, or wrongful conversion.18
In committing the criminal act of theft, misappropriation, or wrongful
19
conversion, Miles's mental state was knowing. We agree with the Board that the
potential injury was great. Miles could have permanently deprived Donald's estate of
over $20,000 and withheld the money for almost three years, during which time
Donald's sole heir died. Additionally, Miles used her position to attempt to blind her
current client - the estate's personal representative - to her theft of one of the estate's
major assets. Such a duplicitous act by a member of the Bar, particularly while acting
in her capacity as an attorney, damages the reputation of the legal profession and the
legal system at large.
The American Bar Association's Standards for Imposing Lawyer Sanctions
state: "Disbarment is generally appropriate when . . . a lawyer engages in serious
criminal conduct a necessary element of which includes . . . misappropriation[] or theft
20
. . . ." We agree with the Board that only one mitigating factor applies in this case:
21
cooperative attitude toward the disciplinary proceedings. This mitigating factor is
entirely neutralized by the five aggravating factors which clearly apply: dishonest or
selfish motive, refusal to acknowledge the wrongful nature of the conduct, substantial
18 Because we do not consider Miles's arguments regarding counts three and
four, we do not consider those counts in our sanctions analysis.
19 See AS 11.46.100(1) ("A person commits theft if with intent to deprive
another of property or to appropriate property of another to oneself or a third person, the
person obtains the property of another . . . .").
20 AM . BAR ASS 'N , STANDARDS FOR IMPOSING LAWYER SANCTIONS § 5.11(a)
(1992). Given that this is the highest level sanction possible, we do not need to review
the recommended sanctions for Miles's other misconduct.
21 See id. § 9.32 (listing mitigating factors).
-23- 6975
----------------------- Page 24-----------------------
experience in the practice of law, indifference to making restitution, and illegal conduct.22
Given the egregiousness of Miles's conduct and the aggravating factors involved, we
agree with the Board that disbarment is appropriate in this case.
V. CONCLUSION
Melinda D. Miles is DISBARRED effective 30 days from today. Miles is
directed that effective today: (1) her court filings shall be limited to notices of her
impending disbarment and either withdrawals or substitutions of counsel; (2) she shall
not take any new client matters; (3) she shall take immediate action to close or transfer
to another attorney her open client matters; and (4) she shall cooperate with the Alaska
Bar Association to ensure that her open client matters are closed or transferred by her
disbarment date, including making full disclosure to Bar Counsel of the status of her
client files. The filing of a petition for rehearing shall not affect the disbarment date,
although the court will consider any such petition on an expedited basis. In the event
Miles files a petition for rehearing, the Alaska Bar Association shall respond within five
days of service of the petition.
22 See id. § 9 .22 (listing aggravating factors).
-24- 6975
 |
| Case Law Statutes, Regs & Rules Constitutions Miscellaneous |
|
