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Iowa Supreme Court Attorney Disciplinary Board v. Noyes

Supreme Court of Iowa

December 13, 2019

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Appellee,
v.
EDWARD F. NOYES, Appellant.

          On appeal from the report of the Iowa Supreme Court Grievance Commission.

         In attorney disciplinary action, grievance commission recommends suspension for multiple violations of ethical rules.

          Edward F. Noyes, Fairfield, pro se.

          Tara van Brederode and Wendell J. Harms, Des Moines, for appellee.

          McDONALD, JUSTICE.

         The Iowa Supreme Court Attorney Disciplinary Board filed a complaint against attorney Edward F. Noyes after an audit of his client trust account (CTA) revealed potential violations of the Iowa Rules of Professional Conduct. A division of the Iowa Supreme Court Grievance Commission found Noyes violated the rules in four respects and recommended this court suspend Noyes's license to practice law in this state for sixty days. We find and conclude Noyes violated the Iowa Rules of Professional Conduct, but we disagree with the commission's recommended suspension. We suspend Noyes's license to practice law in Iowa for thirty days from the filing date of this opinion.

         I.

         "We review attorney disciplinary proceedings de novo." Iowa Supreme Ct. Att'y Disciplinary Bd. v. Mathahs, 918 N.W.2d 487, 489 (Iowa 2018). "The Board must prove ethical violations by a convincing preponderance of the evidence." Id. A convincing preponderance of the evidence lies between the preponderance-of-the-evidence standard in a civil case and the reasonable-doubt standard in a criminal case. Id. "We may impose a greater or lesser sanction than what the commission has recommended upon proof of an ethical violation." Id.

         II.

         By way of background, Noyes obtained his license to practice law in Iowa in 1985. Since obtaining his license, Noyes has been publicly reprimanded on four separate occasions (1998, 2012, 2014, and 2016) for violations of the rules of professional conduct. The 2014 public reprimand arose out of Noyes's failure to provide a client with a contemporaneous written accounting of services performed in violation of Iowa Court Rule 45.7(4). See Iowa Ct. R. 45.7(4) (stating a lawyer must promptly provide a client a full written accounting upon withdrawal of a fee or expense). The 2016 public reprimand arose out of Noyes's failure to adequately supervise a nonlawyer intern in violation of Iowa Rule of Professional Conduct 32:5.3. Like his most recent reprimands, this disciplinary proceeding also involves Noyes's failure to manage his CTA and supervise a nonlawyer employee.

         In September 2015, an auditor for the Iowa Supreme Court Client Security Commission audited Noyes's CTA. The audit showed client funds in the CTA were $12, 898.03 lower than they should have been. The causes of the deficiency were threefold. First, four clients had negative trust account balances in the total amount of $4162.70. Client Patrick Gunderson had a negative balance of $3000 since July 9, 2015. Gunderson's negative balance resulted from a series of advances Noyes made to Gunderson. Client Craig Howard had a negative trust account balance of $1102 since September 19, 2014. The negative balance in Howard's account resulted from Noyes over disbursing $1102 from the account. Noyes billed Howard for the amount of the over disbursement, but Howard did not pay the bill. Client Steve Knipfer had a negative balance of $55.35 since December 8, 2014. Client Emilee Steinbach had a negative balance of $5.35 since February 5, 2014. The last two negative client account balances were the results of improperly accounted for checks. Second, Noyes had not reimbursed the CTA for bank fees he paid when he received client funds by credit card payment. The accumulated credit card fees totaled $4900.88. Third, Noyes could not identify the clients associated with several CTA disbursements in the total amount of $3834.49.

         Within five days of the audit results, Noyes reimbursed the CTA with earned fees that were still in the CTA. No clients suffered personal loss.

         At the time of the audit, Noyes's firm used QuickBooks accounting software. Noyes admitted he was "personally responsible for the balancing of the trust account." He admitted that he had "no experience in QuickBooks software and relied upon [his] office manager" and a consultant. The office manager was Pam Breeding. She was responsible for the firm's accounting. The consultant was Paul Saipher. Saipher was an accountant and Certified Advanced QuickBooks ProAdvisor. Noyes hired Saipher to provide support with the installation of the software and to provide ongoing tech support, training, and consulting. Noyes paid Saipher approximately $7000 per year in consulting fees.

         After the audit, Breeding revealed she did not fully understand how to use QuickBooks but had been afraid to tell anyone at the firm about her struggles with the program. Breeding admitted that several of the problems discovered in the audit were a result of her accounting mistakes and that she had not been properly conducting the monthly reconciliations. Breeding reported, "Other than working with Paul [Saipher] I had no training in QuickBooks or accounting and [became] confused easily when errors were made." Noyes does not deny that Breeding may have stated this to the auditor.

         The Board filed the instant complaint against Noyes. The Board alleged Noyes provided financial assistance to a client, in violation of rule 32:1.8(e); commingled CTA and business funds and failed to keep proper records of client funds, in violation of rule 32:1.15(a); failed to follow Iowa Court Rules, chapter 45, in violation of rule 32:1.15(f); and failed to properly supervise staff, in violation of rule 32:5.3. The commission found the Board had proved the violations by a convincing preponderance of the evidence.

         The commission recommended that Noyes's license be suspended for sixty days. Aggravating factors included Noyes's thirty-plus years of experience practicing law, his four previous public reprimands, and the similarity between the prior violations that resulted in public reprimands and the violations in this case. Mitigating factors included Noyes's cooperation during the disciplinary process, his willingness to adjust his accounting processes to prevent future mishandling of client funds, and the lack of client harm.

         III.

         This matter was submitted to the commission on a stipulated record. See id. r. 36.16(1). The stipulation to facts "binds the parties, the grievance commission, and the supreme court." Id. r. 36.16(2). We "interpret the stipulation of facts with reference to its subject matter and in light of the surrounding circumstances and the whole record, including the state of the pleadings, issues involved, and any additional evidence elicited at a limited hearing." Id. The parties did not stipulate to the violations or sanctions, but even if they had, "[a] stipulation as to violations or sanctions is not binding on the grievance commission or the supreme court." Id. r. 36.16(3); see Iowa Supreme Ct. Att'y Disciplinary Bd. v. Lubinus, 869 N.W.2d 546, 549 (Iowa 2015) ("Stipulations of fact are ...


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