Lawyers behaving badly – Attorney Warren Danz suspended for 30 days When your lawyer gets disciplined by the ARDC (state ethics board), it is not only a bad reflection on them, but in my opinion, it can look bad on their future clients when they get reinstated. A Peoria workers’ compensation attorney, Warren Danz, was suspended last week from practicing law for 30 days, effective June 12th. He got suspended for lying about making improper loans to clients. Quite honestly, I’m surprised it wasn’t longer. Below is a copy of what the ARDC report said. I’m not sure what his clients will do while he’s not allowed to work on their cases, but like any other lawyer that gets temporarily suspended for ethical violations, it can’t help. Many people think that lawyers in Illinois can get away with murder, but suspensions do happen. Along with Danz, 33 other attorneys from other firms were disciplined.
Rules and Decisions
DECISION FROM DISCIPLINARY REPORTS AND DECISIONS SEARCH
Filed January 28, 2013
In re Warren E. Danz Respondent-Appellee
Commission No. 2010PR00166
Synopsis of Review Board Report and Recommendation (January 2013)
The Administrator-Appellant charged Respondent-Appellee Warren E. Danz with four counts of misconduct. Specifically, Count I of the Amended Complaint charged him with advancing financial assistance that was not a legitimate expense of litigation to more than 100 clients. Count II concerned statements made by Respondent in connection with the disciplinary matter that the complaint alleged were material and knowingly false. According to Count III, Respondent gave a person recommending his services something of value and shared a legal fee with a nonlawyer. Count IV alleged that he engaged in a conflict of interest in representing a client. Respondent admitted some of the factual allegations of the complaint and denied some of them. He denied all of the allegations of misconduct. The Hearing Board found that only the charges that Respondent improperly advanced funds to clients in Count I, and knowingly made a false statement of material fact in connection with a lawyer disciplinary matter and engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in Count II were proved by clear and convincing evidence. The Hearing Board recommended that Respondent be suspended from the practice of law for thirty days, and complete the ARDC Professional Seminar within one year of the Supreme Court’s final order of discipline. The case was before the Review Board on the exceptions of the Administrator, who objected to the Hearing Board’s recommended sanction and argued that Respondent should be suspended for ninety days. Respondent objected to the findings of Count II, and argued that he should be censured. The majority of the Review Board affirmed the Hearing Board’s factual findings and finding of misconduct, and recommended that Respondent be suspended for sixty days and be ordered to complete the ARDC Professional Seminar within one year of the Supreme Court’s final order of discipline. The dissenting panel member would have found that the charges of Count II were not proved by clear and convincing evidence, and would have recommended that Respondent be censured.
BEFORE THE REVIEW BOARD OF THE ILLINOIS ATTORNEY REGISTRATION AND DISCIPLINARY COMMISSION
|In the Matter of:WARREN E. DANZ,Respondent-Appellee,No. 578614.
|Commission No. 2010PR00166
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
The Hearing Board found that Respondent-Appellee Warren E. Danz violated Rule 1.8(d) of the Illinois Rules of Professional Conduct (1990), as charged in Count I of the Amended Complaint, by improperly advancing financial assistance or improperly advancing settlement funds to multiple clients before the settlements were final or the settlement proceeds were received. Additionally, it found in Count II that Respondent knowingly made a false statement of material fact in connection with a lawyer disciplinary matter, in violation of Rule 8.1(a)(1) of the Illinois Rules of Professional Conduct (2010), and engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(c) of those rules. The Hearing Board concluded that the Administrator did not provide clear and convincing proof that Respondent engaged in conduct prejudicial to the administration of justice, in violation of Rule 8.4(d) in Count II. As a result of the Supreme Court’s holding in In re Thomas, 2012 IL 113035 par. 92, it found that there was no violation of Supreme Court Rule 770 in any count. Further, it found that none of the remaining charges of Counts III and IV was sufficiently proved. PAGE 2: The Hearing Board recommended that Respondent be suspended from the practice of law for a period of thirty days, and be required to successfully complete the ARDC Professional Seminar within one year of the Supreme Court’s final order of discipline. The Administrator filed exceptions to its sanction recommendation, and argues that Respondent’s misconduct warrants a ninety-day suspension and completion of the Professional Seminar. Respondent contends that the Hearing Board’s findings in Count II were against the manifest weight of the evidence, and that he should be censured for the violations of Count I. For reasons discussed below, we affirm the Hearing Board’s findings of misconduct and recommend that Respondent be suspended for sixty days and successfully complete the ARDC Professional Seminar within one year of the Supreme Court’s order. No objection is made to the Hearing Board’s findings regarding Count I, in which it concluded that there was clear and convincing evidence that Respondent had improperly advanced funds to multiple clients for reasons that were not legitimate expenses of litigation. Payments were made for purposes such as advances on clients’ settlements before the settlements were finalized, travel, cab fare, job searches and in one case, funeral expenses. The Hearing Board’s findings are supported by the evidence and therefore, they are affirmed.
FINDINGS OF COUNT II
In February 2010, the Administrator initiated an investigation into Respondent’s conduct as the result of a letter received from an attorney Respondent previously had employed. In answer to the Administrator’s initial request that he respond to the charges of the letter, Respondent replied through counsel that “[r]egarding loans, it is the policy of Mr. Danz’ office not to make any client loans.” Counsel for the Administrator wrote to Respondent’s counsel, stating that “regardless of his office policy, we need him to directly answer: has he loaned PAGE 3: money to any client at any time.” The response from Respondent’s attorney explained the circumstances of payments made for the benefit of one client, Ananya Allison, but stated that except for Allison, “Mr. Danz has no recollection of giving any loans to clients.” Respondent gave a sworn statement to the ARDC on July 13, 2010. When asked if he had ever loaned money to clients, Respondent stated that “many years ago I may have had some loans, but no. We don’t?.do that.” Respondent estimated that the loans were made more than ten years beforehand. When asked if they had been the subject of an ARDC investigation he was not sure, but “thought that there was something regarding that at one point.” It was vague in his memory, but Respondent thought he had agreed to stop loaning money to clients. Although Respondent stated that he simply forgot about the loans, the Hearing Board found that Respondent’s statements that he had not loaned money to clients within the past ten years were knowingly and purposely false, and made with the intent to deceive. It found his claim that he had forgotten about the loans to be “simply impossible to believe.” The statements did not concern a single, isolated loan, but multiple ones, and Respondent had ample time to consider the circumstances before making those statements. The Hearing Board found that Respondent’s misconduct violated both Rule 8.1(a)(1) and Rule 8.4(c). Respondent argues that the Hearing Board’s findings were against the manifest weight of the evidence. He faces a heavy burden in doing so. A finding is against the manifest weight of the evidence when it appears to be arbitrary, unreasonable and not based on the evidence, and the opposite conclusion is clearly apparent. Leonardi v. Loyola University, 168 Ill.2d 83, 106, 658 N.E.2d 450 (1995); In re Winthrop, 219 Ill.2d 526, 542, 848 N.E.2d 961 (2006). PAGE 4: Rule 8.1(a)(1) prohibits a lawyer from making a statement of material fact that he knows to be false in connection with a disciplinary proceeding. Respondent’s statements that he had not loaned money to clients was false, and he admitted that they were. While testifying before the Hearing Board, Respondent admitted that he made personal loans to Salim Jamsa and Michael Marriott while they were his clients. He agreed that his records showed that he had loaned money to James French while French’s case was pending. The inaccurate information that Respondent provided was either an unintentional mistake, as Respondent argues, or a knowing attempt to mislead the Administrator. The Hearing Board’s conclusion that it was the latter resulted from its determination, after viewing his testimony, that his claim that he had not remembered the loans, either when answering the Administrator’s letter or in his sworn statement, was not believable. While the Review Board must give deference to all of the Hearing Board’s factual determinations, this is particularly true concerning its determination as to the credibility of a witness. In re Spak, 188 Ill.2d 53, 66, 719 N.E.2d 747 (1999). It is the Hearing Board’s ability to observe a witness’s testimony and evaluate his demeanor and the reliability of that testimony that requires such deference. In re Hopper, 85 Ill.2d 318, 323, 423 N.E.2d 900 (1981). The evidence supports the Hearing Board’s determination. Respondent’s loans to Jamsa, for example, were made between April 2007 and April 2008. The most recent loan was a mere two years before Respondent’s statements to the Administrator that he had not made loans to clients in ten years. The loans to Jamsa were close enough in time to Respondent’s response to the Administrator’s letter and to his sworn statement that it was reasonable for the Hearing Board to conclude that his denials were dishonest, and not the result of his faulty memory. Moreover, Jamsa himself testified that although he and Danz were friends, Danz would only give him loans PAGE 5: when Jamsa had a pending case. In short, the evidence contradicted Danz’s testimony and clearly suggested the opposite: that Danz would only loan money to Jamsa when he was an active client. While Respondent proposes an alternative theory, he does not suggest a basis from which we can conclude that the outcome he desires is clearly apparent, or that the Hearing Board’s determinations were arbitrary, unreasonable or not based upon the evidence.1 We affirm its findings that Respondent violated Rule 8.1(a) and Rule 8.4(c) in Count II.
The Hearing Board recommended that the period of suspension imposed in this case should be thirty days. Its recommendation is advisory. In re Ingersoll, 186 Ill.2d 163,178, 710 N.E.2d 390 (1999). In reaching our own recommendation, we consider the case based on its own particular facts and circumstances, yet keep in mind that the purpose of discipline is not to punish the individual respondent, but to protect the public, to maintain the integrity of the profession and to protect the administration of justice from reproach. In re Timpone, 157 Ill.2d 178, 197, 623 N.E.2d 300 (1993). Mitigating and aggravating factors are also relevant. In re Witt, 145 Ill.2d 380, 398, 583 N.E.2d 526 (1991). The Hearing Board commented that there was “significant mitigation presented to be considered in this case.” Most noteworthy was its finding that there was no evidence that the purpose of Respondent’s improper payments was to get or keep clients, or that any client was harmed by his misconduct. Prior to this case, Respondent had not been formally disciplined in more than forty years of practice. He was cooperative, which included spending a great deal of time summarizing records and explaining the purpose of checks that had been issued in numerous cases. As of the time of the hearing, Respondent no longer advanced funds or made PAGE 6: loans to clients. Character witnesses testified to his good reputation for honesty and integrity, he provided pro bono services and he made charitable donations. The Hearing Board considered the fact that Respondent engaged in an on-going pattern of misconduct by improperly advancing funds to large number of clients, and that he had agreed to stop loaning money to clients in a previous ARDC investigation to be aggravating factors. While each case is unique, predictability and fairness require that sanctions should be consistent with those imposed in cases involving comparable misconduct. In re Howard, 188 Ill. 2d 423, 440, 721 N.E.2d 1126 (1999). It is evident that had Respondent’s misconduct involved only improper advances or loans to clients, censure would have been appropriate. See, e.g., In re Cuda, 05 CH 36, petition for discipline on consent allowed, M.R. 20414 (Nov. 22, 2005), involving improper advances to nine clients; In re Vrdolyak, 98 CH 17 (Review Bd., May 12, 2000), Administrator’s petition for leave to file exceptions denied, M.R. 16866 (Sept. 22, 2000), loans to indigent clients over a period of more than 35 years; In re Adelman, 98 CH 118, petition for discipline on consent allowed, M.R. 15753 (May 25, 1999), improper advances to clients over a seven-year period. However, Respondent’s false statements in these proceedings cannot be treated lightly. In In re Towles, 97 CH 90 (Review Bd., Aug. 19, 1999), Administrator’s petition for leave to file exceptions denied; Review Board approved and confirmed, M.R. 16173 (Nov. 22, 1999), the respondent was found to have made misrepresentations to clients. After reviewing comparable cases, the Review Board determined that this misconduct alone would have required censure. However, as a result of the respondent’s misrepresentations to the ARDC and dilatory PAGE 7: behavior before the Hearing Board, it recommended that he be suspended for sixty days, with which the court agreed. False statements by an attorney constitute serious misconduct, particularly when made under oath to the ARDC. In re Mendelson, 95 CH 339 (Review Bd., Aug. 2, 1996), Administrator’s petition for leave to file exceptions allowed; sanction modified, M.R. 12894 (Nov. 26, 1996) at 12. We conclude that they require the same period of suspension in this case that we have previously recommended.- After consideration of all the circumstances of this case, we affirm the Hearing Board’s factual findings and findings of misconduct, and recommend that Respondent Warren E. Danz be suspended from the practice of law for sixty days and required to successfully complete the ARDC Professional Seminar within one year of the Supreme Court’s final order of discipline.
Respectfully Submitted,Jill W. Landsberg Keith E. Roberts, Jr.
1 Ironically, the one argument that Respondent did not make to explain his false statements is the one advanced on his behalf in the Dissent: that he did not have a clear idea of what the Administrator meant by the term “loans” and thus could not have had the mens rea to be found to have been dishonest when he denied making loans to clients. PAGE 8: Duffy, Daniel P., Panel Member2, dissenting in part: I respectfully dissent from that part of the majority’s report which finds misconduct as to Count II. Respondent asserted that certain of the funds advanced to clients were for legitimate litigation expenses or other expenses permitted by the Rules. He asserted that other funds paid clients constituted advances of clients’ settlement funds – after the case had settled, but before the settlement had been funded. He admitted having made three loans, but maintained those loans were independent of any attorney-client relationship. Respondent was charged with lying to the Administrator for denying he had made “loans” to clients. Although the Amended Complaint alleged that this “lie” extended to more than 50 instances, the Administrator’s focus, before the Board, was on the three instances that both sides characterize as “loans.” The two sides disagree on whether the loans were made based on friendship or were connected to litigation. Had the Respondent been charged with lying about the three instances that were the focus of the Administrator’s appeal, I would agree that we should defer to the Hearing Board’s determination of credibility. But that wasn’t the charge. The charge was, instead, that “Respondent Danz’s statement . . . that ?We don’t do that [loan money to clients]’ was false, as [Respondent] . . . had advanced funds to more than 50 clients.” Respondent clearly made a distinction between the various types of advances made to clients. The distinction is not without basis, as the Rule at issue, Rule 1.8(d) of the 1990 Rules, expressly permitted a lawyer to “advance or guarantee the expenses of litigation, including, but not limited to, court costs, expenses of investigation, expenses of medical examination, and costs of obtaining and presenting evidence” The Administrator, for his part, PAGE 9: treated both the advances made by Respondent he viewed as improper – and the loans characterized by the Respondent as personal – as equivalent and constituting “loans.” The treatment of the advances as improper may have been appropriate in the context of the charges of Count I – a violation of Rule 1.8(d) – but in order to prove a charge based on dishonesty, it was incumbent on the Administrator to establish that that the two sides were talking about the same thing. In my view, given all of the circumstances at issue – including the fact that the Respondent was giving a statement in the context of allegations that he had improperly advanced money to clients in violation of Rule 1.8(d) – the Administrator did not establish what was meant by the term “loan” with sufficient precision to establish mens rea. In a disciplinary proceeding, the Administrator has the burden of proving the misconduct charged by clear and convincing evidence. In re Imming, 131 Ill.2d 239, 250, 545 N.E.2d 715 (1989). I do not believe the Administrator carried his burden with regard to Count II. Given the proofs — including the glaring absence of evidence as to the 47 or more instances of “loans” that were the subject of the original charge but were left undiscussed – I would hold that the Hearing Board’s determination as to Count II was against the manifest weight of the evidence. Based on precedent, I would recommend censure for the misconduct found as to Count I. See In re Chapman, 92 SH 500, (Review Bd., Aug. 5, 1994), Administrator’s motion to approve and confirm allowed, M.R. 10545 (Jan. 25, 1995), In re Vrdolyak, 98 CH 17 (Review Bd., May 12, 2000), Administrator’s petition for leave to file exceptions denied, M.R. 16866 (Sept. 22, 2000), In re Cuda, 05 CH 36, petition for discipline on consent allowed, M.R. 20414 (Nov. 22, 2005).
Respectfully Submitted,Daniel P. Duffy
I, Kenneth G. Jablonski, Clerk of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois and keeper of the records, hereby certifies that the foregoing is a true copy of the Report and Recommendation of the Review Board, approved by each Panel member, entered in the above entitled cause of record filed in my office on January 28, 2013.
Kenneth G. Jablonski, Clerk of the Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois
2 Panel member Daniel P. Duffy participated in the deliberation and decision in this case prior to the expiration of his term as a member of the Review Board.
In re Warren Danz, 2010pr0166 (Review Board)
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