Possible Indefinite Bar Ticket Suspension Looms Over Lawyer For Taking Client's $63K Real Property As Security For Yet-To-Be-Earned $9.6K Fee, Then Foreclosing When Ultimately Stiffed After Providing Satisfactory Services

In Jefferson City, Missouri, LakeExpo.com reports:

• The Office of Chief Disciplinary Counsel is recommending to the Missouri Supreme Court that the law license of Sunrise Beach Attorney Gregory D. Williams be suspended for six months, according to court documents.
  
  The Disciplinary Panel’s recommendation stems from an investigation and two hearings concerning a fee agreement and surrounding circumstances between Williams and a former client, Robert Boothe.

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• The Office of Chief Disciplinary Counsel is an agency of the Missouri Supreme Court responsible for investigating allegations of misconduct by lawyers, prosecuting the cases where a lawyer’s misconduct poses a threat to the public or to the integrity of the legal profession, and maintaining current records of disciplinary information for lawyers licensed to practice law in Missouri.
  
  The Office of Chief Disciplinary Counsel provided the following information concerning the Williams investigation:
  
  Robert Boothe is the Complainant in this case. Boothe is considered disabled by the Social Security Administration due to being bipolar with schizophrenic tendencies. Boothe also has a significant criminal history. He has a felony conviction for statutory rape in 1985 and a felony conviction for robbery in 1990, both in the State of Virginia. Boothe is also a registered sex offender in Missouri. Boothe has several other criminal convictions, including driving under the influence and possession of marijuana.
  
  Boothe was arrested on September 5, 2009, by the Missouri State Water Patrol, for having expired registration on his boat, being in the possession of a Schedule IV controlled substance without a prescription, possession of less than 35 grams of marijuana, and drug paraphernalia. He went into the Camden County Jail with a bond set at $40,000.
  
  Boothe owned property, but reportedly had no liquid assets. He allegedly had insufficient funds to bond out of jail. Boothe was also unable to obtain the services of a public defender because he owned real estate.
  
  According to panel documents, Boothe owned a lakefront lot at Lake of the Ozarks known as Lot 9 of Kip's Cove that he purchased for $63,500. At the time Boothe purchased the property, it was appraised in the office of the Camden County Assessor for $46,200.
  
  Boothe had been in jail since September 5, 2009 when he called Williams’ office on September 8, 2009 and spoke to an attorney. According to court documents, Boothe told the attorney he had "no cash whatsoever but owned property worth about $200,000.” The attorney told Boothe he would have to speak with Williams.
  
  Williams visited Boothe in the Camden County Jail on or about September 8, 2009. According to court documents, Williams stated that Boothe entered into a typed Client Minimum Fee Agreement dated September 8, 2009 and a typed Installment Fee Agreement, also dated September 8, 2009. The Installment Fee Agreement referred to a fee of $3,000. The Installment Fee Agreement set out in handwriting the following: "Property at Lot 9 Kip's Cove given as collateral for this note."
  
  The Disciplinary Panel alleges neither the document, nor any separate writing, contained language that Boothe should be advised of the desirability of seeking, and he be given the reasonable opportunity, to seek the advice of independent counsel before giving Williams a security interest in his property.
  
  The panel also alleges Williams did not provide Boothe the opportunity to give informed consent, in a writing signed by Boothe, to the essential terms of the security agreement including Williams’ role in the transaction.
  
  According to court documents, the Disciplinary Panel alleges that it is unclear as to when and where the agreement was signed and if it was legally notarized. The Disciplinary Panel alleges in its written recommendation the following: “Boothe executed a Future Advance Deed of Trust in (Williams’) presence that was not witnessed by a Notary. (Williams’) secretary, later notarized that document and backdated it to September 8, 2009, a date both (Williams) and Boothe agree was not correct. Whether Boothe's signature was witnessed by or acknowledged to the Notary is unclear.”
  
  At some point after September 10, 2009, Boothe, with Williams’ assistance, was able to obtain a reduction of his bail bond to $20,000. Boothe posted bond, reportedly by paying the bail bondsman $2,000 from the sale of a motorcycle.
  
  The Missouri Supreme Court Disciplinary Panel alleges that Boothe is inarticulate, sometimes contradictory and confusing, and allegedly had little knowledge of the true significance of the legal consequences of his execution of the agreement with Williams.
  
  Boothe remained free on bond until May of 2010. At that time his bond was revoked because of a new arrest for possession of marijuana. Boothe was returned to the Camden County Jail and remained there until his plea of guilty on June 23, 2010.
  
  Williams was able to negotiate a suspended imposition of sentence on Boothe's Class C felony of possession of a controlled substance, despite Boothe's status as a persistent offender. Further, Williams was able to negotiate a misdemeanor conviction on Boothe's marijuana possession with punishment assessed at 60 days confinement, most of which Boothe already had served at
  the time of his plea.
  
  According to court documents, Boothe acknowledges he received good representation and a favorable disposition of his criminal case. Williams’ attorney fees and expenses for representation of Boothe totaled $9,682.20. Boothe acknowledged those fees and expenses were reasonable.
  
  Boothe never paid Williams for representation, according to court documents. Boothe sent letters to Williams in July and September 2010 saying he would pay some money as soon as he got an income tax refund and also would make other monthly payments.
  
  Williams sent a letter to Boothe in September 2010 advising Boothe that he would "commence collection action effective September 30, 2010, including the foreclosure on the property.” Williams foreclosed on the property and purchased the property at foreclosure sale on January 11, 2011 for $5,000, according to the Disciplinary Panel.
  
  Boothe lost his property in which he had invested $63,500. That was an injury, according to the Disciplinary Panel, regardless of Boothe's failure to pay Williams, failure to take action to avoid foreclosure and failure to successfully pursue any legal action against Williams.
  
  “The question is whether taking a security interest in real estate owned by the client for a fee that is yet to be earned violates Rule 4-1.8? We find that it does and that a lawyer practicing in observance of our Rules should have known that in 2009,”(1) the Disciplinary Panel writes in its recommendation to the Missouri Supreme Court.

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• In its concluding paragraph the Disciplinary Panel writes, “This Panel recommends that the Supreme Court issue an order giving Respondent (Williams) an indefinite suspension with leave to apply for reinstatement after six months.” Williams’ law license is currently in good status in the State Missouri. The timeline for a final decision from the Missouri Supreme Court is unclear at this juncture.(2)

For the story, see Sunrise Beach attorney to appeal possible suspension of law license to Missouri Supreme Court.

(1) According to the story, Missouri Supreme Court Rule 4-1.8(a) of the Rules of Professional Conduct states as follows:

a. A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client unless:

• the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;
• the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and
• the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer's role in the transaction, including whether the lawyer is representing the client in the transaction.

(2) Real estate conveyances from clients to their attorneys can be problematic for the latter. See, for example, Flanagan v. De Lapp, 533 S.W.2d 592 (Mo. 1976), where the Missouri Supreme Court made the following, among other, observations when slamming an attorney for taking a client's property:

• It is an almost universal rule that any client's transfer of his property to his attorney is subject to being set aside as resulting from undue influence unless the attorney is able to meet the burden of proving that the transaction was fair and equitable.

See also Real Estate Conveyances From Clients To Their Attorneys Are "Presumptively Fraudulent" Unless Lawyer Can Prove Otherwise.