KENTUCKY BAR ASSOCIATION V. JAMES E. ISENBERG
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2010-SC-000691-KB
KENTUCKY BAR ASSOCIATION
MOVANT
IN .SUPREME COURT
JAMES E. ISENBERG
RESPONDENT
OPINION AND ORDER
The Board of Governors of the Kentucky Bar Association (KBA) has
recommended that James E . Isenberg (KBA Member No. 35270), who was
admitted to the practice of law in 1976 and whose bar roster address is
429 W. Muhammad Ali Blvd., Suite 404, Louisville, KY 40202, be suspended
from the practice of law for five years. We adopt the Board's recommendation .
The Board heard oral argument on this case following Isenberg's filing of
a Notice of Appeal and the KBA's filing a Notice of Cross-Appeal from the Trial
Commissioner's Report and Recommendation . The Board voted unanimously'
to recommend finding Isenberg guilty of violating Kentucky Rules of Supreme
Court (SCR) 3 .130(1 .4) (a), SCR 3 .130(1 .15)(a), SCR 3 .130(1 .15) (b), and
Sixteen members of the Board participated in hearing this case.
SCR 3.130(8 .3)(c) (now SCR 3 .130(8 .4)(c)) . The Board also stated that "[t]he
consensus of the Board's voting members accept[s] the Trial Commissioner's
finding that Isenberg carried his burden in establishing a causal connection
between his mental illness and his unethical conduct, such that his mental
illness can be considered a mitigating factor."
The Board noted that the Trial Commissioner' had recommended a threeyear suspension from the practice of law with conditions, but twelve Board
members voted for a five-year suspension "with the additional requirement that
Isenberg submit to permanent monitoring by KYLAP [Kentucky Lawyers'
Assistance Program] of Isenberg's continued successful treatment and
compliance with his medication and therapy" and payment of costs. Four
other Board members cast votes for permanent disbarment and payment of
costs .
Isenberg has not challenged the Board's Findings of Fact, Conclusions of
Law, and Recommendations. So we find Isenberg guilty of the aforementioned
violations and order that he be sanctioned in the manner recommended by a
majority of the voting Board members, and we further adopt verbatim the
Board's Findings of Fact and Conclusions of Law as follows:
FINDINGS OF FACT
Isenberg was admitted to the practice of law in Kentucky on
May 1, 1976 . Initially, he began working in the Louisville law firm
in which his father was a partner, but left this firm in 2000 .
Thereafter, he practiced law in "office sharing" arrangements with
other attorneys in Louisville . In approximately March, 2005,
Isenberg began representing Mr . Randy Finley in a Workers
Compensation claim: in July, 2006, a settlement agreement was
entered for a lump sum payment of $20,394 .20. The Workers
Compensation carrier, Zurich, issued its settlement check which
Isenberg received; Isenberg then sent the settlement check to
Finley with a cover letter dated August 3, 2006, asking Finley to
endorse and return the check to Isenberg. On August 11, 2006,
Isenberg deposited the entire settlement check in an account with
BB&T styled "James E . Isenberg, 6710 Foxcroft Rd., Prospect, KY
40059-9420 ." This account is neither a trust nor escrow account.
At this point, Isenberg made a series of misrepresentations
to Finley, who. never received his share of the settlement. Isenberg
initially told Finley it would take ten days to two weeks for the
settlement check to "clear." After two weeks, Isenberg told Finley
that the payment on the check was stopped by the carrier, and
they would have to sue to recover the funds . On March 21, 2007,
Isenberg wrote to Finley and asked Finley to sign an affidavit so
Isenberg could " . . . present it to the Kentucky Bar Association in
order to get their approval to pay you the monies due to you under
the settlement agreement, and I will then file suit against the
insurance carrier to recovery [sic] my money ." Ultimately, in
December, 2007, Finley contacted Zurich and learned that no stop
payment order was ever issued on the check, and the check had
cleared in August, 2006 . Finley contacted Isenberg by telephone in
December, 2007, and confronted him with this information : the
call was disconnected, and Finley's subsequent attempts to contact
Isenberg were unsuccessful . On December 28, 2007, Finley
prepared a Complaint against Isenberg, which was filed with the
KBA on January 7, 2008.
In January, 2008, Isenberg was taken to University of
Louisville Hospital for psychiatric care and treatment; he was
transferred to Wellspring, Crisis. Stabilization Unit, where he was
admitted on January 25, 2008 and discharged on February 4,
2008 for inpatient treatment. While Isenberg received counseling
and treatment periodically for a number of years for anxiety and
depression, in 2008 his initial diagnosis was major depressive
disorder, moderate-severe . Outpatient treatment and counseling
on an ongoing basis was pursued at Bridgehaven, an affiliate of
Seven Counties Services, Inc. Gloria Everidge, LCSW, at
Bridgehaven, counseled Isenberg on an outpatient basis and
confirmed, by letter dated March 27, 2008, to the Louisville Bar
Association, and in testimony given by deposition on February 24,
2010, that Isenberg's true diagnosis is bipolar disorder, also
known as manic-depressive illness. Patients in a .manic stage have
inflated feelings of power, greatness, or importance and will do
reckless things without concern about the consequences . Other
features of the manic phase include poor judgment, reckless
behavior such as spending sprees, and a denial that anything is
wrong. At the hearing before the Trial Commissioner, Isenberg
testified that, when he took Finley's settlement proceeds, Isenberg
knew "what I was doing was wrong, but at the time I did not care ."
Ms. Everidge confirmed this behavior was consistent with the
manic phase of bipolar disorder.
From the time of his hospitalization in 2008 through the
present time, Isenberg voluntarily ceased practicing law. On
March 28, 2008, on behalf of Isenberg, attorney Stuart Pearlman
sent Finley a cashier's check in the amount of [approximately
$18,000] representing gross settlement of $20,394 .20 less
$4,078.84 (attorney's fee approved by Workers Compensation
Board) plus 8% interest thereon from August 17, 2006 through
March 31, 2008 . This payment was made unconditionally, and
was provided by Isenberg's longtime friend, Joseph Fadell.
With his diagnosis of bipolar disorder, Isenberg received new
medication, Seroquel, (an antipsychotic) and has pursued regular,
ongoing outpatient cognitive therapy. Ramona Johnson, president
and CEO of Bridgehaven Mental Health Services, testified to
Isenberg's progress and assumption of responsibility and
accountability for his recovery and moving on with his life. He has
worked as a substitute teacher since January, 2009 . Ms. Everidge
testified that Isenberg's illness is currently well managed and does
not present a threat so long a[s] he remains compliant with
medication and support treatment. She verified that Isenberg will
need continued monitoring support for his bipolar condition
forever, and that he will have, to manage his illness carefully to
limit his practice of law to fields that are not stressful.
Throughout these proceedings, from his answer to the
charge, his testimony at the hearing before the Trial
Commissioner, and in briefs on appeal, Isenberg has never denied
the facts giving rise to his unethical conduct. Isenberg has
explained that his actions resulted from his undiagnosed and
untreated bipolar disorder.
CONCLUSIONS OF LAW
On December 18, 2008, the Inquiry Commission issued a
Charge containing four counts charging violations of the following
KRPC [Kentucky Rules of Professional Conduct]
" Count I: SCR 3 .130-1 .4(a)-failing to keep Finley informed about
the status of his Workers Compensation claim and failing to
promptly respond to Finley's numerous requests for information
about his claim;
" Count II : SCR 3 .130-1 .15(a)-depositing Finley's settlement
proceeds into Isenberg's general account and failing to deposit
these funds into an escrow or trust account;
" Count III : SCR 3 .130-1 .15(b)-failing to promptly [deliver]
Finley's portion of the settlement proceeds which Finley was
entitled to receive ;
" Count IV: SCR 3.130-8 .3(c)-engaging in dishonesty, fraud,
deceit, or misrepresentation by misleading Finley with respect to
the status of his settlement proceeds, claiming that Zurich
stopped payment thereon, and by failing to provide the settlement
proceeds to Finley in a timely manner.[ 21
The Trial Commissioner accurately assessed this as a .
"particularly difficult case" with respect to discipline . Likewise, the
consensus of the voting members agrees that the case of KBA v.
Steiner, 157 S .W.3d 209 (Ky. 2005), provides the framework for
analyzing appropriate discipline in the context of mental illness.
Appealing from the Trial Commissioner's report, Isenberg
advocates a one-year suspension, while the KBA advocates
permanent disbarment . The consensus of the Board's voting
members accept the Trial Commissioner's finding that Isenberg
carried his burden in establishing a causal connection between his
mental illness and his unethical conduct, such that his mental
illness can be considered a mitigating factor . Unlike Steiner, who
committed over 100 instances of theft from clients over a 6-year
The prohibition against engaging in dishonesty, fraud, deceit, or misrepresentation
is now contained in SCR 3 .130(8 .4)(c) . Currently, SCR 3 .130(8 .3) (c) pertains to
reporting other attorneys' professional misconduct .
period, Isenberg has no record of prior discipline . While the Trial
Commissioner recommended a three-year suspension from the
practice of law, together with fulfillment of additional conditions,
the voting members of the Board of Governors recommend
discipline as follows:
[ 12 votes for five-year suspension with permanent KYLAP
monitoring and payment of costs; 4 votes for permanent
disbarment and payment of costs] . [3]
Neither Isenberg nor Bar Counsel has filed a notice of review under
SCR 3 .370(8), nor do we independently elect to review the decision of the Board
under SCR 3 .370(9), meaning that the decision of the Board is hereby adopted
under SCR 3 .370(10) .
Accordingly, the Court ORDERS:
1) James E. Isenberg is guilty of violating SCR 3 .130(1 .4) (a),
SCR 3 .130(1 .15)(a), SCR 3 .130(1 .15)(b), and SCR 3 .130(8 .3)(c) (now
SCR 3 .130(8 .4)(c)), for which he is suspended from the practice of law for five
years from the date of this Opinion and Order;
2) During this suspension, Isenberg must submit to monitoring by the
Kentucky Lawyers Assistance Program;
3) Isenberg must notify all courts and clients of his suspension in
accordance with SCR 3 .390 . Those notifications must be made by letter placed
in the United States mail within ten days from the date of entry of this Opinion
and Order. Isenberg must also simultaneously provide a copy of all notification
letters to the Director of the Kentucky Bar Association . Also, to the extent
Footnote omitted .
possible, Isenberg must cancel and cease any advertising activities in which he
is engaged ; AND
4) In accordance with SCR 3.450, Isenberg is directed to pay all costs
associated with these disciplinary proceedings, the sum of $2,335 .13, for which
execution may issue from this Court upon finality of this Opinion and Order.
All sitting. All concur.
ENTERED : January 20, 2011 .
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