An Attorney Registration & Disciplinary Commission Review Board affirmed a hearing board’s decision to dismiss conflict of interest charges against a Homer Glen attorney but chose to recommend a harsher punishment for charges of making false certification to the Minimum Continuing Legal Education Board than originally prescribed.
Gary K. Davidson was charged by the ARDC administrator with “engaging in a conflict of interest and other misconduct by representing clients in real estate transactions without disclosing a fee arrangement he had with a land surveyor used to perform surveys for the transactions” and for falsely certifying that he completed all CLE requirements for the reporting period ending June 30, 2016.
The hearing board ruled that the administrator had not provided substantial evidence to prove wrongdoing in the conflict of interest charges, but recommended Davidson be censured for his admitted misconduct regarding his CLE hours.
The administrator appealed the decision, but the original ruling of the hearing board was upheld on the conflict of interest charges by review board members Jill W. Landsberg, Clair A. Manning and Benedict Schwarz II.
Davidson was charged with a conflict of interest after his staff had entered into a business arrangement with land surveyor Samuel Winemiller.
Winemiller began performing surveys for residential real estate clients at Davidson’s law firm, Castle Law, in 2008 and was repeatedly chosen to work with clients “because he was reliable and provided excellent service” even on rush jobs according to Davidson’s paralegal, Michelle Fitzhenry.
Since Winemiller worked out of his home and had no support staff, Castle Law staff members frequently helped him with various administrative tasks such as typing legal descriptions, printing surveys, preparing invoices and occasionally obtaining documents from the recorder of deeds. Winemiller testified that this arrangement, which was not implemented on all closings, saved him significant time and effort.
In 2013, Winemiller informed Davidson that he was going to need to increase his surveyor’s fee from $300 to $475 per survey.
Davidson agreed to the rate increase but “expressed concern that his staff had been spending time doing administrative work for Winemiller,” of which he had only recently become aware.
Davidson and Winemiller agreed that Winemiller would reimburse Davidson’s staff for their work with a fee of $100 per survey on which the office employees assisted, a figure reached based on the paralegals’ hourly pay rate.
Thereafter Castle Law would pay Winemiller the new fee of $475 per closing and would periodically send him invoices for the work done by the firm’s staff, which he would pay from his business’ bank account.
In the charges against Davidson these payments were described as “kickbacks,” which Winemiller, Davidson and Fitzhenry all denied in testimony before the hearing board. The charges also classified the arrangement as a conflict of interest because Castle Law did not inform clients of the firm’s administrative agreement with Winemiller when his services were employed for their closings.
In order for these charges to stand, the administrator needed to prove that “respondent had a personal interest in the surveyor fees paid by his clients which gave rise to a concurrent conflict of interest.”
The administrator alleged that Davidson had a personal interest because he selected Winemiller to perform the surveys, the administrative fees were paid by Castle Law clients as part of the surveyor fees and the administrative fees were paid to Davidson at some point after each closing.
This argument was found to be insufficient because Fitzhenry was the person tasked with hiring the surveyors and there was no proof to suggest that she had hired Winemiller under any direction from Davidson.
Additionally, there was no evidence to suggest that the administrative fees Winemiller paid Castle Law came out of the surveyor fees paid by Castle’s clients since Castle Law paid the entirety of the $475 fees for surveys to Winemiller, the account Winemiller paid Castle Law from contained funds from his other clients as well as Castle and the money was paid not directly to Davidson but to the firm where it was distributed as income to all partners.
Since there was deemed to be no personal interest in the fees on Davidson’s part, the board also concluded that there had been no need for him to inform his clients of the firm’s outside arrangement with Winemiller.
The hearing board said it based its decision partially on the testimony of the witnesses. The board wrote that it found both Winemiller and Fitzhenry to be credible witnesses when they testified on Davidson’s behalf.
On the contrary, the board said “it did not give much credence” to the testimony of Davidson’s former law partner Frank Andreano, who initiated the complaint against Davidson, because the board believed it was colored by his dislike for respondent and the contentious circumstances surrounding the breakup of the firm” in 2016.
The review board upheld the hearing board’s decision since it “found no error in the hearing’s factual findings,” however, it did agree with the administrator that a harsher punishment than censure was warranted for submitting a false certification to the CLE board.
The hearing board found that “respondent engaged in conduct involving dishonesty, fraud, deceit or misrepresentation” by certifying he had completed 30 hours of CLE when he knew this was not true. Instead, he admitted he complied and completed the requirements within a grace period.
The administrator recommended a 90-day suspension as punishment for the “severe misconduct” of the false certification, a recommendation the review board concurred with.
“The rules are intended to assure that attorneys licensed to practice law in Illinois remain current regarding the requisite knowledge and skills necessary to fulfill the professional responsibilities and obligations of their respective practices and thereby improve the standards of the profession in general,” the review board wrote.
“Thus, the effectiveness of the program necessarily relies upon an honor system where attorneys are expected to voluntarily comply and honestly and accurately self-report their compliance to the MCLE Board. The failure of an attorney to fulfill the educational requirements, along with a false certification of compliance, defeats the objects of the program and thereby poses a risk of public harm.”
Since Davidson has had no prior violations in his 19-year career, the board wrote that it believed a three-month suspension “addresses the seriousness of, and will serve as an important deterrent to, this type of behavior.”
Davidson was represented in his appeal by Stephanie L. Stewart of Robinson, Stewart, Montgomery & Doppke LLC.
“Mr. Davidson is pleased with the [r]eview [b]oard’s affirmation of the [h]earing [b]oard’s dismissal of the charges regarding a conflict of interest,” Stewart said. “As to the CLE matter, he deeply regrets his conduct and fully acknowledges the importance of CLE and accurately reporting compliance. This was an aberration in Mr. Davidson’s otherwise unblemished career as an attorney and volunteer for many community organizations. He has not yet determined whether to file an exception regarding the [r]eview [b]oard’s sanction recommendation.”