KENTUCKY BAR ASSOCIATION V. DENO C. CAPELLO, JR.
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TO BE PUBLISHED
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2006-SC-0225-KB
KENTUCKY BAR ASSOCIATION
MOVANT
IN SUPREME COURT
DAVID A. WEINBERG
RESPONDENT
AND
2006-SC-0226-KB
KENTUCKY BAR ASSOCIATION
MOVANT
IN SUPREME COURT
V.
RESPONDENT
DENO C. CAPELLO, JR.
AND
2006-SC-0227-KB
KENTUCKY BAR ASSOCIATION
V.
MOVANT
IN SUPREME COURT
AN UNNAMED ATTORNEY
RESPONDENT
OPINION AND ORDER
The Kentucky Bar Association brought these disciplinary proceedings against
three attorneys : David Weinberg, Deno Capello, and an unnamed attorney (who the
Board of Governors ultimately found not guilty of all charges) . The Kentucky Bar
Association consolidated the proceedings because the transactions and the client
matter were identical in that all charges against Weinberg, Capello and the unnamed
attorney arose from their representation of a single client, Scottsdale Insurance
Company, on a single matter. The matter involved Scottsdale Insurance Company's
referral of a subrogation case to Weinberg on December 8, 1993. At the time of the
referral, Weinberg and Capello had a law firm in Lexington, Kentucky. The unnamed
attorney worked for the firm of Weinberg and Capello while attending law school and
later became an associate with the firm. The background, facts and ensuing charges
are as follows:
1. Background and Facts
Weinberg was admitted to the practice of law in the Commonwealth of Kentucky
on September 1, 1972. Capello was admitted to the practice of law in the
Commonwealth of Kentucky on October 30, 1987. The unnamed attorney was
admitted to the practice of law in the Commonwealth of Kentucky on October 13, 1995.
The case that Scottsdale referred to Weinberg on December 8, 1993, involved a
claim that a faulty waterbed heater caused a fire, which damaged a mobile home
owned by Scottsdale's insureds, the Adamsons . The fire occurred on March 5, 1993 .
Shortly after Weinberg received the case, he delegated it to Capello . Capello handled
the case until 1995, when he delegated the case to the unnamed attorney.
Unaware that Weinberg had assigned the case to Capello, Scottsdale attempted
to contact Weinberg on several occasions to receive an update on the status of its
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claim . Weinberg failed to respond to Scottsdale . Except for casual interoffice
conversation, Weinberg, the senior attorney in the firm, did not supervise Capello or the
unnamed attorney or monitor the progress of the case.
In January of 1995, Scottsdale finally learned that Capello had assumed
responsibility for the case. Capello waited until October, 1995, to file a complaint on
behalf of Scottsdale's insureds, which alleged, in part, negligence and breach of
warranty. By that time, however, the statute of limitations for the negligence claim had
expired . From December, 1993, until October, 1995, Capello had no contact with
Scottsdale and had sent only one letter to Scottsdale's insureds .
The unnamed attorney had assisted Capello with the case while employed with
the firm but not yet admitted to the practice of law. Once the unnamed attorney was
admitted in October 1995, Capello transferred total responsibility for the file to him .
Meanwhile, the trial court dismissed the complaint in its entirety based on the statute of
limitations . But the unnamed attorney argued successfully that the warranty claim
should be reinstated . Unlike Weinberg and Capello, the unnamed attorney stated that
he communicated with Scottsdale and attempted settlement negotiations .
Neither Weinberg nor Capello supervised or otherwise directed the unnamed
attorney, who continued to handle the case until August, 1998, when he left the firm.
Nine months after the unnamed attorney left the firm, Capello resumed responsibility,
although he ignored various requests from Scottsdale for status reports . One year
later, Scottsdale asked Weinberg and Capello to withdraw, which was six and one-half
years after Weinberg received the file .
Weinberg and Capello did not maintain institutional controls, such as tickler
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systems, cover letters for transmitting copies of pleadings to clients, periodic review of
files, or diary systems, in order to monitor and direct control over their files.
On February 27, 2002, the Inquiry Commission issued a three-count charge
against Weinberg. On the same day, the Inquiry Commission issued a four-count
charge against Capello. Seven months later, on September 27, 2002, the Inquiry
Commission issued a three-count charge against the unnamed attorney and
consolidated the three cases shortly after charging the unnamed attorney .
11. Charges
A. Charges against David Weinberg, KBA File No . 8035
The Inquiry Commission charged Weinberg with three counts of professional
misconduct. Count I alleged a violation of SCR 3.130-1 .3, which requires a lawyer to
act with reasonable diligence and promptness in representing a client. Count II alleged
a violation of SCR 3.130-1 .4(a) and (b), which require a lawyer to adequately
communicate with his client . Count III alleged a violation of SCR 3.130-5.1(a), which
requires a partner in a firm to "make reasonable efforts to ensure that the firm has in
effect measures giving reasonable assurance that all lawyers in the firm conform to the
Rules of Professional Conduct" and SCR 3 .130-5 .1(b), which requires a supervisory
lawyer to make reasonable efforts to ensure that the subordinate lawyers conform to
the Rules of Professional Conduct.
B. Charges against Deno Capello, KBA File No. 8036
The Inquiry Commission charged Capello with four counts of professional
misconduct . Count I alleged a violation of SCR 3 .130-1 .1, which requires a lawyer to
provide competent representation to a client . Count 11 alleged a violation of SCR 3.130
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1 .3, which requires a lawyer to act with reasonable diligence and promptness in
representing a client. Count III alleged a violation of SCR 3 .130-1 .4(a) and (b), which
require a lawyer to adequately communicate with his client . Count IV alleged a violation
of SCR 3 .130-5 .1(a), which requires a lawyer to "make reasonable efforts to ensure that
the firm has in effect measures giving reasonable assurance that all lawyers in the firm
conform to the Rules of Professional Conduct," and SCR 3.130-5 .1( b), which requires
a supervisory lawyer to make reasonable efforts to ensure that the subordinate lawyers
conform to the Rules of Professional Conduct .
C. Charges against the Unnamed Attorney, KBA File No . 9218 .
The Inquiry Commission charged the unnamed attorney with three counts of
professional misconduct . Count I alleged a violation of SCR 3.130-1 .3, which requires
a lawyer to act with reasonable diligence and promptness in representing a client.
Count II alleged a violation of SCR 3 .130-1 .4(a) and (b), which require a lawyer to
adequately communicate with his client. Count III alleged a violation of SCR 3.130-3 .2,
which requires a lawyer to make reasonable efforts to expedite litigation consistent with
the interests of the client.
111. Proceedings before the Trial Commissioner
Under SCR 3.230, a Trial Commissioner was appointed . The commissioner
conducted an evidentiary hearing on March 23 and 24, 2005 . After the hearing, the
commissioner filed his report on August 17, 2005, and filed an amended report on
September 19, 2005.
The commissioner found Weinberg guilty of violating SCR 3 .130-5 .1(a) and (b)
for failing to implement institutional controls to marshal and monitor cases filed with his
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firm. But the commissioner found Weinberg not guilty of violating SCR 3.130-1 .3 and
SCR 3.130-1 .4(a) and (b).
The commissioner found Capello guilty of violating SCR 3.130-1 .3, SCR 3.1301 .4(a) and (b), and SCR 3.130-5.1(x) and (b), but not guilty of violating SCR 3.130-1 .1 .
The commissioner found the unnamed attorney guilty of violating SCR 3.130-1 .3,
SCR 3.130-1 .4(x) and (b), but not guilty of violating SCR 3.130-3 .2.
The commissioner recommended that Weinberg and Capello receive a public
reprimand and that the unnamed attorney receive a private reprimand .
IV. The Board of Governors
A. Decision and Recommendation for David Weinberg
Following a review of the commissioner's report, the Board of Governors of the
Kentucky Bar Association found Weinberg guilty of violating SCR 3.130-1 .3 by a count
of 11 to 8; guilty of violating SCR 3.130-1 .4(x) and (b) by a count of 11 to 8; and guilty
of violating SCR 3.130-5.1(x) and (b) by a unanimous vote of 19 to 0.
After reviewing prior discipline records, which consisted of a private admonition
in 1990, the Board recommended that Weinberg receive a public reprimand. The vote
on the issue of punishment was 14' to 2 to 3, with 2 governors voting for public
reprimand plus 8 hours of ethics training and 3 governors voting for a private reprimand.
B . Decision and Recommendation for Deno Capello
As to Capello, the Board found him not guilty by a unanimous vote of violating
SCR 3.130-1 .1, but guilty by a unanimous vote of violating SCR 3.130-1 .3, SCR 3 .130The Board's report provided that the vote was 13 to 2 to 3, but the minutes and certification of the
Board's proceeding specified that 14 governors recommended public reprimand.
1 .4(a) and (b) and SCR 3 .130-5 .1(a) and (b).
After reviewing prior discipline records, which consisted of a private reprimand in
2000, the Board recommended that Capello receive a public reprimand. The vote on
the issue of punishment was 17 to 2, with 2 governors voting for a public reprimand plus
8 hours of remedial ethics training.
C. Decision on the Unnamed Attorney
As to the unnamed attorney, the Board found him not guilty by a unanimous vote
on all counts .
V. Our Adoption of the Decision of the Board of Governors
Neither Weinberg nor Capello nor the KBA filed a notice for review in this Court.
Accordingly, under SCR 3 .370(10), we adopt the decision of the Board of Governors .
Although Capello did not file a notice of review, he has filed a motion regarding
allocation of costs, which we will address in the assessment of costs section of our
order below.
Therefore, it is ordered that David Weinberg be publicly reprimanded for his
violations of SCR 3 .130-1 .3, SCR 3.130-1 .4(a) and (b), and SCR 3.130-5 .1(a) and (b).
Moreover, it is ordered that Deno Capello be publicly reprimanded for his violations of
SCR 3.130-1 .3, SCR 3.130-1 .4(a) and (b), and SCR 3.130-5 .1(a) and (b).
It is further ordered that:
1 . The unnamed attorney is not guilty of all charges in KBA File No. 9218 .
2 . David Weinberg and Deno Capello shall pay the costs of $5,952 .93 for which
execution may issue from this Court upon finality of the Opinion and Order. Capello
filed a limited Notice of Review under SCR 3.370 seeking only review of the allocation
of costs . This Court has reviewed the amended certification of costs and agrees with
the KBA that they are indivisible costs incurred in prosecuting consolidated disciplinary
proceedings against three associated attorneys involving the same nexus of proof.
That one attorney was found not guilty of all charges by the Board does not mean that
the attorneys who remain are paying for anything more than the cost of the proceedings
against them. The KBA excluded the expense solely attributed to the unnamed
attorney's costs. If the cases had not been consolidated under SCR 3.260, the costs
would inevitably have been greater. That they were consolidated, however, does not
require this Court to allocate or apportion costs. In this proceeding, there is simply no
way to apportion costs based on relative fault, and any attempt by this Court to do so
would be purely arbitrary .
All concur.
Entered : August 24, 2006.
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