IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD vs. STEVEN C. KAISER
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IN THE SUPREME COURT OF IOWA
No. 78 / 07-0581
Filed July 27, 2007
IOWA SUPREME COURT ATTORNEY
DISCIPLINARY BOARD,
Complainant,
vs.
STEVEN C. KAISER,
Respondent.
On review of the report of the Grievance Commission.
Iowa Supreme Court Grievance Commission recommends a sixty-day
suspension of respondent’s license to practice law in this state. LICENSE
SUSPENDED.
Charles L. Harrington and Wendell J. Harms, Des Moines, for
complainant.
Frank A. Comito and Kent A. Gummert of Gaudineer, Comito &
George, L.L.P., West Des Moines, for respondent.
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WIGGINS, Justice.
The Iowa Supreme Court Attorney Disciplinary Board filed a
complaint with the Grievance Commission of the Supreme Court of Iowa
against Steven C. Kaiser alleging he violated the Iowa Code of Professional
Responsibility for Lawyers when he entered into business ventures with his
client without properly making the required disclosures to the client. The
Board charged Kaiser with violations of Iowa Code of Professional
Responsibility DR 1-102(A)(1) (a lawyer shall not violate a disciplinary rule);
DR 1-102(A)(6) (a lawyer shall not engage in conduct that adversely reflects
on the fitness to practice law); DR 5-101(A) (except with the consent of the
client after full disclosure, a lawyer shall not accept employment if the
exercise of the lawyer’s professional judgment on behalf of the client will be
or reasonably may be affected by the lawyer’s own financial, business,
property, or personal interests); DR 5-104(A) (a lawyer shall not enter into a
business transaction with a client if they have differing interests therein
and if the client expects the lawyer to exercise professional judgment
therein for the protection of the client, unless the client has consented after
full disclosure); and DR 5-105(C) (a lawyer shall not continue multiple
employment if the exercise of independent professional judgment on behalf
of a client will be or is likely to be adversely affected by the representation of
another client, except to the extent permitted by DR 5-105(D)).
The parties filed a joint stipulation of facts and their exhibits. Within
the stipulation Kaiser and the Board agreed Kaiser violated DR 1-102(A)(1),
DR 1-102(A)(6), DR 5-101(A), and DR 5-104(A). The Board also agreed to
drop its charge that Kaiser violated DR 5-105(C). The parties stipulated a
proper sanction would be a suspension of Kaiser’s law license with no
possibility for reinstatement for at least three months. The parties waived a
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hearing, filed briefs, and submitted the matter to the Commission with the
stipulation and exhibits as the record.
The Commission found “[Kaiser] entered into the business ventures
with [his client] with nothing less than honorable intentions” and these
business ventures “caused [Kaiser] considerably more financial pain than
profit.” However, the Commission found Kaiser did not meet his “very heavy
burden of disclosure.”
Instead, the Commission pointed out, “[Kaiser]
acknowledges that there is no documentation that verifies adequate
disclosure of the possible conflicts and consequences inherent in his
business venture with [his client].” The Commission noted Kaiser has never
previously been the subject of a disciplinary proceeding, but also that “the
primary aggravating factor in this case is the fact that a client that clearly
needed independent advice and advocacy was undoubtedly denied that
commodity due to [Kaiser]’s understandable self-interest in the operation of
the lawyer/client business venture.” The Commission recommended that
Kaiser’s license to practice law be suspended for at least sixty days.
On our de novo review of the record we agree with the stipulation and
the Commission’s finding that Kaiser violated DR 1-102(A)(1), DR 1102(A)(6), DR 5-101(A), and DR 5-104(A) in connection with his involvement
in creating, running, and funding businesses with his client without the
client’s prior consent after a full disclosure of the potential conflicts.
In determining the proper sanction, we must do so on the record
before the Commission. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lesyshen,
712 N.W.2d 101, 106 (Iowa 2006). We are not bound by the stipulations of
the parties.
Id.
Nor are we bound by the recommendations of the
Commission. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Powell, 726 N.W.2d
397, 400 (Iowa 2007). The sanction given in any particular case is solely
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within the authority of this court. Iowa Supreme Ct. Bd. of Prof'l Ethics &
Conduct v. Sloan, 692 N.W.2d 831, 833 (Iowa 2005).
We have imposed sanctions from a public reprimand to revocation
when an attorney has improperly conducted business transactions with a
client, with a determining factor being the egregiousness of the conduct.
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Johnston, 732 N.W.2d 448, 456
(Iowa 2007).
In this case, Kaiser did not fully disclose the potential conflicts to his
client and did not receive the client’s informed consent before proceeding to
develop and run businesses with his client. Kaiser also used his legal
knowledge to protect his own self-interests in an attempt to cover his
financial losses. However, the stipulation does not indicate that the client
suffered any harm except for having to defend lawsuits he likely would have
had to defend even if Kaiser made the proper disclosures. Considering the
nature of Kaiser’s violations, the protection of the public, deterrence of
similar misconduct by others, Kaiser’s fitness to practice law, our duty to
uphold the integrity of the profession in the eyes of the public, aggravating
circumstances, mitigating circumstances, and the sanction we have given in
similar cases, we suspend Kaiser’s license to practice law in this state for
thirty days.
Accordingly, we suspend Kaiser’s license to practice law in this state
for a period of thirty days from the date of filing this opinion. Kaiser is
eligible for reinstatement on the day after the thirty-day period expires
unless action is taken to deny reinstatement as provided in Iowa Court Rule
35.12(2). Kaiser must comply with the notification requirements of Iowa
Court Rule 35.21. We tax the costs of this action against Kaiser pursuant
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to Iowa Court Rule 35.25. Kaiser shall not be reinstated until these costs
have been paid.
LICENSE SUSPENDED.
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