John P. Higgins, attorney
Indiana Supreme Court Disciplinary Commission
john.higgins@courts.in.gov

The Rules of Professional Conduct provide the baseline standards by which all lawyers must conduct themselves, both in their professional and (sometimes) personal lives. Violations of the Rules of Professional Conduct may serve as a basis for professional discipline, ranging anywhere from a private admonishment to permanent disbarment.

Rule 1.1, which is the first Rule of Professional Conduct, states as follows:

“A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”

It is no accident that the first Rule of Professional Conduct mandates that lawyers shall be competent. All the other Rules would be meaningless without this first rule. Unless a lawyer is able to understand the law, draft legal documents, and advocate for his or her client, it makes little difference if the lawyer violates any of the other Rules of Professional Conduct. What difference does it make if the lawyer charges a reasonable fee, if that fee pays for an attorney that cannot draft a legally sufficient pleading? What difference does it make if the lawyer is diligent, if the product of that diligence is a lawsuit that is devoid of legal merit? When a member of the public visits a lawyer, they presume the lawyer is competent to advise them about their legal affairs. People trust lawyers to help them with their most pressing needs. Lawyers are expected to solve legal problems, not create them.

Despite its obvious significance, some lawyers tend to think of competence as a malpractice issue. Malpractice suits are civil lawsuits brought by a wronged client against an offending attorney. [1]. Monetary damages are the remedy in malpractice suits. [2]. On the other hand, disciplinary violations in Indiana are prosecuted by the Disciplinary Commission. [3]. The relief sought in disciplinary cases is the sanctioning of a lawyer’s license to practice law. [4]. Disciplinary and malpractice actions are not always mutually exclusive. For example, an attorney who misses a statute of limitations could be sued by the client for malpractice. The Disciplinary Commission could also bring a disciplinary case against that same attorney for violating Rules 1.1 (competence) and 1.3 (diligence) of the Indiana Rules of Professional Conduct.

So why do members of the Bar tend to think of competence as a malpractice issue?—perhaps because of the relative infrequency of disciplinary prosecutions for competence issues. From 1993 to 2014, an imprecise search returned only 23 cases where an attorney was found to have violated Rule 1.1. Compare this to more than 1,000 discipline cases during this same time period, which shows competence allegations in a disciplinary case are relatively rare.

In 2014, however, the Indiana Supreme Court has resolved two disciplinary cases concerning rather egregious instances of attorney incompetence. In In re Lehman, the Disciplinary Commission alleged that Lehman had engaged in multiple acts of incompetence in his bankruptcy practice. [5]. In one instance, one of Lehman’s clients hired him to pursue bankruptcy relief that would allow the client to continue operating his business. [6]. Lehman then proceeded to file a Chapter 7 bankruptcy petition for his client. [7]. Chapter 7 bankruptcies are liquidation bankruptcies, which means that the debtor is not permitted to continue operating his or her business. [8]. In other words, the client hired Lehman to help him preserve his business; however, Lehman’s actions ended up costing the client his business. Additionally, the Indiana Supreme Court noted in their Order that “Judges before whom [Lehman] practices gave detailed testimony regarding [Lehman]’s deficiencies in 16 different cases. They testified that [Lehman] has consistently practiced far below the average level of performance for attorneys in Elkhart County.” [9].

A second attorney competence case handed down in 2014 is In re Stern. [10]. In this case, Stern agreed to represent an elderly client who owned a dilapidated commercial building in downtown Indianapolis. [11]. The client had received an Order to Demolish from the City of Indianapolis and hired Stern to protect her against the City of Indianapolis from imposing financial liability on her for the poor shape of the building. [12]. Stern filed a lawsuit for judicial review of the Order to Demolish, but he failed to file his complaint within 10 days or verify it, both of which were jurisdictional prerequisites. [13]. Stern also joined a third party as a plaintiff in the action, even though the third party had no standing to sue. [14]. 

Stern then concocted a plan to relieve his elderly client of financial liability for the unsafe structure. Apparently under the belief that his client would not be accountable monetarily if she no longer owned the building, Stern drafted a quitclaim deed to transfer the building to Stern’s paralegal. Stern then began representing his paralegal. Unfortunately, there is a statute providing that all owners of a building after the issuance of an Order to Demolish are jointly and severally liable for the costs of demolition and other administrative costs. [15]. Thus, the transfer of the building to Stern’s paralegal did not relieve the elderly client of liability, but instead resulted in her losing the real estate to the paralegal while remaining liable for the demolition costs of the building. [16]. The transfer of the building also created a conflict of interest because Stern was simultaneously representing two clients (the elderly lady and his paralegal) who were jointly and severally liable for demolition costs. [17]. For every penny paid by one client, the other client would save a penny.

Stern then filed a “Counter-Complaint for Damages” (which should give a headache to any student of Civil Procedure) against two City employees. [18]. Not persuaded by Stern’s arguments, the Court affirmed the Order to Demolish and the building was demolished. [19]. Despite Stern’s plan, his elderly client was then assessed $17,200 for the demolition costs. [20].

Instead of appealing the original lawsuit, Stern decided to file a brand new lawsuit against the same City employees whom he had previously filed his “Counter-Complaint for Damages.” Stern, however, failed to comply with the pleading requirements of Indiana Code § 34-13-3-5(c), and also failed to file a tort claim notice before filing suit. [21]. Unsurprisingly, Stern’s second lawsuit was dismissed in its entirety. [22].

Undeterred, Stern pursued yet a third lawsuit, this time in federal court and against the Director of the Department of Metropolitan Development. [23]. In this third lawsuit, Stern sought monetary damages on behalf of his paralegal. Stern’s claims in the third suit were premised upon the fact that the City had violated the paralegal’s rights by failing to give him adequate notice that the building would be demolished. However, if the paralegal was able to obtain a judgment against the City based upon a lack of notice, and that notice was caused by the elderly client’s failure to inform the City that the building was transferred (which it was), then the elderly client would be liable for the full amount of the judgment. [24]. In other words, Stern was pursuing a case on behalf of one client that, if successful, would make his other client liable for the judgment. [25]. The district court granted summary judgment against Stern, citing multiple grounds, including failure to exhaust state remedies. The Seventh Circuit Court of Appeals affirmed, finding that Stern’s “claims were not ripe and otherwise meritless.” [26].

The hearing officer in Stern’s disciplinary case found that he violated Rule 1.1 on at least ten separate occasions based upon the above facts. Inasmuch as Stern was unable to represent his clients with competence, it is unsurprising that he did not fare too well in his subsequent discipline case. The Indiana Supreme Court observed that

“[Stern] has shown a lack of basic competence in representing himself in this disciplinary proceeding. For instance, he has filed documents that are riddled with typographical and grammatical errors and that are very difficult to understand. In response to the Commission’s verified complaint, [Stern] asserted a number of frivolous affirmative defenses. In responding to the Commission’s discovery requests, [Stern] repeatedly deleted, renumbered, and added paragraphs to the requests. Despite several opportunities to correct deficiencies in discovery responses, he still failed to respond to some discovery requests, and he gave incomplete, inaccurate or incomprehensible responses to others. In his answer to the amended complaint, [Stern] failed to respond to some allegations, responded falsely to some, and responded ‘denied admitted’ to others. [Stern] himself could not explain what ‘denied admitted’ meant. Even after several attempts and, according to his own testimony, answering the allegations to the best of his ability, [Stern] was unable to draft a legally sufficient responsive pleading.” [27].

The takeaway from Lehman and Stern is that attorneys should always ensure that they have adequate legal knowledge and skill before undertaking any representation. If an attorney is new to an area of law, thorough study and preparation are essential.

The views expressed herein are solely the views of the author, and not necessarily the views of the Indiana Supreme Court or its Disciplinary Commission.

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[1]. See generally Lucas D. Martin, 3 Ind. Law Encyc. Attorney and Client § 50 (October 2014).

[2]. Id.

[3]. See generally Ind. Admis. Disc. R. 23.

[4]. Id.

[5]. 3 N.E.3d 536 (Ind. 2014).

[6]. Id. at 536.

[7]. Id.

[8]. Id.

[9]. Id. at 537.

[10]. 11 N.E.3d 917 (Ind. 2014).

[11]. Id. at 919.

[12]. Id.

[13]. Id. (citing Ind. Code § 36-7-9-8(b) (2014)).

[14]. Id.

[15]. See Ind. Code § 36-7-9-12(a) (2014).

[16]. In re Stern, 11 N.E.3d at 919.

[17]. Id.

[18]. Id. at 919.

[19]. Id. at 920.

[20]. Id.

[21]. Id.

[22]. Id.

[23]. Id.

[24]. Id. (citing Ind. Code § 36-7-9-27(b) (2014)).

[25]. Id.

[26]. Id.

[27]. Id. at 921.