Opinions and Orders

STATE OF MICHIGAN Attorney Discipline Board

14 SfP 16

AM 10: 25

Grievance Administrator, Petit ionerl Appellee/Cross-Appellant,

v

Gregory 1. Reed, P 24750,

Respondent!A ppellant/Cross-Appellee,

Case No. 10-140-GA

Decided: September 16,2014

Appearances: Todd A. McConaghy, for the Grievance Administrator, PetitioneriAppellant/Cross-Appellee Lynn H. Shecter, for RespondentiAppellantiCross-Appellee, Oral Argument only Ernest L. Jarrett, for RespondentiAppellantiCross-Appellee, Briefs only

BOARD OPINION

Tri-County Hearing Panel #80 issued an order of discipline in this matter on June 6, 2013, suspending respondent's license to practice law in Michigan for 90 days, with the condition that respondent attend 15 hours of Continuing Legal Education (CLE) in pre-trial procedure, with at least half of the CLE hours to include civil pre-trial procedure. The panel found that respondent unreasonably advocated that personal jurisdiction over a defendant was proper in the State of Michigan; filed vexatious or frivolous pleadings in one matter; filed a frivolous lawsuit in a related matter; and failed to report an attorney's known professional misconduct to the Attorney Grievance Commission. Respondent filed a petition for review and the Grievance Administrator filed a cross-petition. The Attorney Discipline Board has conducted review proceedings in accordance with MCR 9.118 and, for the reasons discussed below, we affirm the hearing panel's sanction and findings of misconduct, except for the finding that respondent violated MRPC 8.3(a).

Grievance Administrator v Gregory J. Reed. Case No.1 0-140-GA -- Board Opinion Page 2 I. Factual Background. According to the complaint filed in the United States Court for the Eastern District of Michigan filed by respondent Reed (and two other attorneys, Stephanie Hammond and Francois Nabwangu), Cheryl Janky is an artist and songwriter transacting business in Detroit and other cities in the US and the author of a song called "Wonders ofIndiana," sometimes called "Indiana." The hearing panel's report on misconduct summarizes the history of this case: This matter commenced on December 28, 2010, when the Grievance Administrator filed a formal complaint against Stephanie L. Hammonds, Case #10-138-GA; Francois M. Nabwangu, Case #10-139-GA; and Gregory J. Reed, Case #10-140-GA. The complaint alleged misconduct premised upon respondent's, Hammonds' and Nabwangu's representation of Cheryl Janky in three legal actions filed against the Lake County Convention & Visitors Bureau (LCCVB) and other defendants that were all related to Janky's claim of copyright infringement of a song she wrote. The three actions are referred to in this report as ["Janky F'], ["Janky 11"], and ["Janky IlI"]. Respondent filed Janky Ion behalf of his client in the United States District Court for the Eastern District of Michigan in October 2003. The court transferred that action to the United States District Court for the Northern District of Indiana early in March 2005. Respondent, with Indiana counsel, filed Janky lIon September 7,2006, in the Lake County (Indiana) Circuit Court against LCCVB and other defendants. Reed, Hammonds and Nabwangu filed Janky III against LCCVB and other defendants, including legal counsel for LCCVB in Janky I, on September 28,2007.

The Grievance Administrator's five-count formal complaint alleged misconduct in the manner in which the respondents conducted the Janky cases, the unlawful practice of law in Indiana and the failure of each respondent to report to the Attorney Grievance Commission (AGC) the misconduct of the other respondents. The Grievance Administrator supported his complaint with a book of27 tabbed exhibits. Those exhibits included many pleadings, papers and opinions and orders from the three Janky actions. [Report all misconduct, p 2.]

The proceedings prior to the commencement of the hearing before the panel included numerous motions by respondents for summary disposition, l disqualification of the panel,

1 The motion ofr espondents Reed and Hammonds for summary disposition under MeR 2.116(C)(8) and (C)( 10) was granted in part. Allegations of misconduct for fail ure to communicate settlement offers to J anky were dismissed; the panel relied on a judicial finding that Hammonds and Reed had conveyed settlement offers to J anky. (Petitioner'S Exhibit 18, pp 80-81.)

Grievance Administrator v GregaI}' J. Reed, Case No.1 0-140-GA -- Board Opinion Page 3 disqualification of counsel for the AGe, a renewed motion to disqualify the panel, petitions for interlocutory review, the stipulation to consent discipline by co-respondents Hammonds and Nabwangu, and pretrial conferences. Hearings were held on October 25-26, 2011. After confirming multiple times that Petitioner's Exhibits 1-27 were admitted and that it would not be necessary to call judges or other court personnel, the Grievance Administrator's counsel called only respondent as a witness and rested after the panel issued an order on February 24, 2012, admitting Petitioner's Exhibits 1-27 and allowing respondent to introduce any rebuttal evidence thereto. Respondent's counsel called only respondent, Cheryl J anky, and local counsel, Thomas Lewis. Additional hearings were held on May 8,2012; May 10,2012; and June 7, 2012. Closing arguments were submitted in briefs.

II. The Panel's Reports. A. Report on Misconduct. In its January 3, 2013 report on misconduct, the panel made the following findings with respect to the Grievance Administrator's allegations of misconduct as set forth in the Grievance Administrator's July 9,2012 written closing argument. The Grievance Administrator alleged that respondentviolatedMRPC 1.2(a); 1.3; 3.1; 3.2; 5.S(a); 8.3(a); 8.4(a)-(c); andMCR 9.104(A)(1)-(4). -1 'he panel' I~ouna' l"'nal' resp 0 n.u.1 e- nt -V -! i U - l ' a~ L e. . U J ~ lV AL RP\r..>' 1 1 .L ".r\.C ~ l \.j., ' . 1 .J •• 1 , . '1 2', v Q . 'I oJ. ~\ f , ~ ,) , . ~ Q . 4'(\,;~J ) < ,;J..n. d ( , r ~ ) " ' :_:.l _ n_d MCR 9.104(A)(1), (2), and (4) by: 1. unreasonably advocating that personal jurisdiction of Lake County Convention & Visitors Bureau was appropriate in the State of Michigan in Cheryl Janky v Henry Farag, Street Gold Records, and Lake County Convention and Visitors Bureau, United States District Court for the N orthem District of Indiana Hammond Division, Case No. 3 :OS-CV -00217 ("Janky I");

2. 3.

4.

filing vexatious or frivolous pleadings in the above matter; failing to report the misconduct of Attorney Francois M. Nabwangu, despite knowing that Attorney Nabwangu had committed a significant violation ofthe Rules of Professional Conduct; and,

filing a frivolous lawsuit brought for the improper purpose of harassing the defendants and needlessly increasing the cost of litigation in Cheryl Janky v Speros Batistatos, Lake County

Grievance Administrator v Gregory J. Reed, Case No.1 0-140-GA -- Board Opinion Convention & Visitors Bureau and its Board of Directors, United States District Court for the Northern District of Indiana Hammond Division, Case No. 2:07-CV-00339 ("Janky III").

Page 4

The panel specifically did not find that respondent violated MRPC 1.3 (lack of diligence); 5.5(a) (unauthorized practice oflaw); or, 8.4(b) and MCR 9.104(A)(3) (dishonest conduct). B. Report on Sanctions. In its sanction report, the panel noted that, when applying the American Bar Association (ABA) Standards for Imposing Lawyer Sanctions (Standards), as directed in Grievance Administrator v Lopatin, 462 Mich 235, 238 (2000), respondent violated his ethical duty to his client, the public, and the legal system; that his misconduct was done knowingly; and that there was actual injury to his client on multiple occasions. The panel also found that respondent's conduct warranted a suspension under Standard 6.22 (Abuse of the Legal Process) and Standard 7.2 (Violations of Duties Owed as a Professional). In determining the appropriate length of suspension, the panel found that the mitigating factors identified by respondent under ABA Standard 9.32,2 did not outweigh the aggravating factors/ and, because ofthe number and the nature of the aggravating factors present in this case, the panel determined that respondent should be suspended for 90 days. The panel also determined that respondent should attend 15 hours of Continuing Legal Education (CLE) in pre-trial procedure. III. Arguments on Review. A. Admission of Grievance Administrator's Exhibits and Reliance On Findings Therein as Prima Facie Evidence of Misconduct.

Respondent does not dispute the fact that he was sanctioned, and, he has not actually argued that the Grievance Administrator's Exhibits 1-27 were inadmissible. Instead, he tirst argues that his stipUlation to their admissibility was actually not such; it was, he argues, ambiguous and, at most,

2 Standard 9.32(a) (absence of a prior disciplinary record), Standard 9.32(d) (timely good faith effort to rectify consequences of misconduct - respondent made timely rectification by paying his sanctions), and, Standard 9.32(k) (the imposition of other penalties or sanctions - the court has sanctioned respondent).

3 Standard 9.22(b) (dishonest or selfish motive - respondent's conduct was done to gain an advantage in the litigation), Standard 9 .22(c ) (pattern of misconduct - as noted, respondent's conduct spanned three di tIerent legal actions over a period of several years); Standard 9.22(d) (multiple offenses - the panel found multiple offenses to have occurred in multiple cases before multiple judges), Standard 9.22(g) (refusal to acknowledge wrongful nature ofc onduct - respondent accepted zero responsibility despite mUltiple sanctions by the federal court and continued to insist that all wrongdoing was due to others and not himself), and, Standard 9.22(i) (substantial experience oflaw - respondent has been practicing for 38 years).

Grievance Administrator v Gregory J. Reed, Case No.1 0-140-GA -- Board Opinion Page 5 a stipulation to authenticity of the documents. Second, respondent argues that even if the court orders and documents are admissible, MeL 600.2106 does not apply to these court orders and opinions and that, therefore, no presumption should arise with respect to the truth ofthe contents of these court documents.4 Finally, respondent argues that it wasn't proven that he was afforded due process in Indiana. We can dispose of the last argument in short order. Respondent analogizes this proceeding to a reciprocal discipline case,s and argues that portions of that rule should be deemed applicable here a..f1d apparently contends that the opinions and orders at issue should not have been admitted or afIorded any weight because the Administrator did not establish that respondent's due process rights were violated in the Indiana federal courts. These civil sanction orders do not impose attorney discipline under rules ofp rofessional conduct. Further, MCR 9 . 120(C) does not apply here; this case was not conunenced under that rule. Finally, respondent shifts the burden impermissibly. Were this a reciprocal discipline matter, it would be the respondent's burden to establish denial of due process in the original jurisdiction. No such showing has been attempted here.

1. Standard of Review. Error may not be predicated upon a ruling admitting evidence unless a timely objection or motion to strike appears of record, stating the specific ground of the objection. MRE 103(a)(1). A trial court's decision to admit or exclude evidence is reviewed for an abuse of discretion. People v Burns, 494 Mich 104,110; 832 NW2d 738 (2013). The application of this standard has been discussed by our appellate comts: A trial court's decision whether to admit or exclude evidence will not be disturbed on appeal absent an abuse of discretion. Elezovic v Ford Motor Co, 472 Mich 408, 419; 697 NW2d 851 (2005). The trial court abuses its discretion if its decision is outside the range of principled outcomes. People v Orr, 275 Mich App 587, 588-589; 739 NW2d 385 (2007). "A decision on a close evidentiary question ordinarily cannot be an abuse of discretion." Lewis v LeGrow, 258 Mich App

4 That statute provides that an authenticated "copy of any order, judgment or decree, of any court of record in this state ... shall be prima facie evidence of ... all facts recited therein." The Board held that MCL 600.2106 applied to discipline proceedings in Grievance Administrator v Geoffrey N. Fieger, 97 -83-GA (ADB 1999).

5 He cites fmmer MeR 9.104(B), which, like the current rule - MCR 9.120(C) - provides that an adjudication of attorney misconduct in another jurisdiction is conclusive proof of attorney misconduct in a

Michigan discipline proceeding unless due process was not afforded to respondent in the original jurisdiction.

Grievance Administrator v Gregory J. Reed, Case No.1 0-140-GA -- Board Opinion 175, 200, 214; 670 NW2d 675 (2003). Moreover, even if a court abuses its discretion in admitting or excluding evidence, the error will not merit reversal unless a substantial right of a party is affected, MRE 103(a), and it affirmatively appears that the failure to grant relief is inconsistent with substantial justice, MCR 2.613(A). See Chastain v General Motors Corp, 467 Mich 888, 654 NW2d 326 (2002); Lewis, supra at 260. [Morales v State Farm Mut Auto Ins Co, 279 MichApp 720, 729; 761 NW2d454 (2008), Iv den 483 Mich 877 (2009).]

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To those standards and harmless error rules, we must add MCR 9. 10 7(A), which provides that a proceeding under Subchapter 9.100 "may not be held invalid because of a nonprejudicial irregularity or an error not resulting in a miscarriage of justice." 2. Panel Proceedings Regarding Submission of Exhibits. As noted, respondent first contends that he did not stipulate to the admission of the 27 exhibits proffered by the Administrator. Both parties quote from the colloquies in the transcript about the admission of these exhibits. Respondent argues that he only intended to stipulate to the authenticity of the documents. This was not borne out by the record, as the panel correctly found. At the May 23, 2011 pretrial, the panel chair inquired of the parties how many witnesses would be testifying. When counsel for the Administrator spoke to this question he stated as follows: MR. McCONAGHY: Just as housekeeping, I can narrow this down dramatically, my witness list. In fact, I can narrow it down I believe to the three respondents. But one matter I'd just like -- that comes to my mind as we're talking about this so that 1 know that, is, and this may seem redundant, but the book of exhibits we attached to the fOlmal complaint, every party has stated that they intend to rely on these exhibits. Every party has stated that they're okay with the exhibits. They're certified court records. As long as this can be, this can come in, 1 can try this case based on the three respondents. Now, if this does not come in, I need to wrangle numerous judges and et cetera. I can speak to the issue of why this is admissible if you'd like me to, but 1 don't know ifl need to. Everybody has already indicated they intend to rely on these. [Tr OS/23111, p 57.]

A colloquy followed, and the subject was returned to when the Administrator's counsel stated: "Could 1 just clarify as long use [sic] we're okay with the exhibit book, though, as is right now?" Respondent replied on the record: "1 think that's been stipulated. That's been stipulated." Tr OS/23/11, p 60.

Grievance Administrator v Gregory J. Reed, Case No.1 0-140-GA -- Board Opinion Page 7 At the October 25, 2011 hearing, near the end of his opening statement, counsel for the Administrator sought to confinn that "the exhibit book is admitted before we proceed with Mr. Reed's testimony.,,6 Respondent's counsel argued to the panel that "there's nothing more than a stipulation as to authenticity of these documents but not their admissibility."7 The Administrator's counsel, Mr. McConaghy, disagreed and read from the May 23rd transcript, as did the panel in ruling that "Mr. Reed and his counsel can argue the weight of the documents, but there was clearly a stipulation that those documents were admitted."s The examination of respondent in the Administrator's case-in-chief then CO!Ilmenced <LTld the exllibits were the subject of questioning throughout the hearing. The next day, October 26,2011, the Administrator's examination of respondent continued with Mr. McConaghy questioning respondent about the orders of the Indiana federal court and objections by respondent's counsel raising the intertwined issues ofthc admissibility and effect of those orders in the disciplinary proceeding.9 A fair amount ofthe substance ofthe federal sanctions orders came in through the testimony of respondent. For exanlple, this question and answer show how some facts were established: Q. Well, what I want to know, and I guess I can ask it in a broader question, the three motions we just discussed, do they all contain the same allegations of -- there are really four points here. One, that there were some ex parte communications; two, that Ms. Ja nky was either under duress or very upset by the settlement negotiations; three, that Judge Cherry told you that you were one of the reasons the case has not settled; and, four, that there had been some racial remarks that Judge Cherry didn't address. Are those four points common to those three motions?

A. Yes. [Tr 10/26/11, pp 67-68.] However, at other times, respondent's counsel would object that he didn't have the particular judge there to cross examine about the contents of the order. After awhile, the panel chairperson sought to put this to rest:

6 Tr 10/25/2013, p 64. 7 Tr 10/25/2013, p 67.

8 Tr 10/2512013, pp 68-70. 9 Tr 10/26/2013, pp 40,44-50.

Grievance Administrator v Gregory J. Reed, Case No. 10-140-GA -- Board Opinion CHAIRPERSON MANTESE: Counsel, let me ask you this, your case is pretty much premised on your exhibit book, you're not going to call Magistrate Cherry or Judge -- the judge in Indiana, am I correct?

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MR. McCONAGHY: Well, correct. And I have to state why, if you'll allow me. We were prepared to call every judge, we were prepared to call records custodians. As you know, this was brought to our attention by the U.S. District Court in Indiana, so their cooperation was implicit in bringing this to our attention. We honestly believed it would expedite matters, rather than try this case and call each judge to explain what the order was, to attach the orders to the complaint in the way we did. So, no, we are not going to call them. And I only ask questions of these records -- of the witness based on these records to get his recollection, get his impressions, and whether or not he wants to contradict something that's in the order. [Tr 10/26/11,pp 73-74.]

The hearing continued and the panel retired to deliberate about the admissibility of the exhibits and the effect of MCL 600.2106 and Grievance Administrator v Geoffrey N. Fieger, 97 -83-GA (ADB 1999). Upon returning, the panel asked the parties to brief the questions, and also directed the parties to discuss the admissibility of the court documents in light of the rules against hearsay, including MRE 803 (24) and 804. The Administrator's brief argued that the respondent's stipulation to the admission of the exhibits was unambiguous, relied upon, and should therefore be enforced. As for the applicability of Fieger and MCL 600.2106, the Administrator cited a panel decision in Grievance Administrator v lvfarkL. Silverman, 11-3-0A (RP order, 4113/2011), Respondent's brief argued the same grounds advanced on review - that there was not a stipulation, that the statute and Fieger should not apply, and that the reciprocal discipline rule (or analogy thereto) required the petitioner to show that due process was afforded in the Indiana courts. The Administrator responded concisely and added an additional point: respondent's 2/2112011 response to the Grievance Administrator's discovery demand states that "Respondent proposes to introduce the following documentary evidence at hearing: ... All of Petitioner's exhibits to the Formal Complaint." The panel issued an order stating its ruling: (1) "that petitioner's exhibits are ADMITTED for all purposes, including for their truth, pursuant to the parties' stipulation," and (2) "that respondent retains the right to introduce any and all rebuttal evidence thereto." (Hearing Panel Order, February 24,2012.)

Grievance Administrator v Gregory J. Reed, Case No. 10-140-GA -- Board Opinion Page 9 Ultimately, we find that this case can be decided upon the finding by the panel that respondent did in fact stipulate to the admissibility of petitioner's exhibits 1-27. 3. Evidentiary Weight of Federal Court Orders. The second facet in respondent's argument concerns what a hearing panel may do with an order sanctioning respondent under Rule 11 or Rule 37 properly admitted through stipulation (or some other basis) if the statute does not apply. Is the statute necessary for these documents to have evidentiary weight, i.e., to be considered prima facie evidence of the facts recited? We do not think so. Prima facie evidence is simply" [e]vidence that will establish a fact or sustain a judgment unless contradictory evidence is produced." DeCosta v Gossage, 486 Mich 116, 133; 782 NW2d 734 (2010). A certified order imposing sanctions is certainly probative of the fact that a lawyer was sanctioned under a rule proscribing frivolous or other such conduct. Compare Waknin v Chamberlain, 467 Mich 329,333; 653 NW2d 176 (2002).10 The panel did not adopt wholesale the reasoning of the courts that sanctioned respondent or the claims of the Administrator about what those courts said or did. Rather, the panel sifted the evidence, including the court's orders, and dismissed some of the allegations against respondent. Throughout the proceedings, the Grievance Administrator sought a stipulation and a ruling from the panel in order to obviate the need to bring in live witnesses to testify as to the contents of the orders. He got both and proceeded accordingly. Respondent indicated in his discovery response that he would rely upon the exhibits himself, stipulated to the admissibility of the exhibits at a prehearing conference, and confirmed the same at a later hearing. It would be grossly inefllcient and more than a little unfair in this particular case to now hold that the docllllents were inadmissible. We affIrm the panel's factual determination that the admission of Petitioner's Exhibits 1-27 was stipulated to and find no error in the panel's reliance upon this evidence to prove the allegations of the formal complaint.

10 "[T]he fact that defendant had been convicted of assault and battery for the same conduct that plaintiff is now seeking civil damages for certainly 'would have a tendency to make the existence of any fact that is of consequence ... more probable or less probable than it would be without the evidence. '" The court also found that MR E 403 did not preclude admission. The ruling did not specifically address documentary evidence, but was broad enough to invite introduction of court records.

Grievance Administrator v Gregory J. Reed, Case No. 10-140-GA -- Board Opinion Page 10 C. Should the Panel Have Been Disqualified After Considering and Approving the Stipulations for Consent Orders of Discipline by the Co-Respondents?

Respondent's brief on review offers a short argument on this issue which consists of two components. First, there is the argument set forth in the statement of this issue and its argument heading - the two co-respondents, Hammonds and Nabwangu, consented to discipline along the way to hearing and through "exposure to admissions of misconduct by Respondent's former co-respondents ... the panel was exposed to information bearing on the Respondent's CUlpability which compromised its ability to hear this matter in a fair and impartial man.ner." (Respondent's Brief, p 14.) This argument is not developed at all beyond this conclusory assertion. In fact, Ms. Hammonds pled nolo contendere to neglectllack of diligence for her role here. 11 Mr. Nabwangu was charged in another formal complaint involving charges unrelated to this one. In that case (10-139-GA) he was alleged to have neglected and failed to communicate with several clients, and to have failed to return some unearned fees. Exposure to that information and those admissions could not have prejudiced Respondent Reed. In this case, Mr. Nabwangu pled only to "Knowingly disobeying an obligation under the rules of a tribunal in violation ofMRPC 3.4(c)." Thus, there is little overlap between Hammonds' plea and the panel's ultimate findings regarding respondent, and no overlap with respect to Nabwangu. It has not been established, or even persuasively argued, that Board Chairperson Danhof erred in his September 27, 2011 order denying disqualification of the panel on these grounds. Respondent also argues that the panel should have been disqualitied because of the attaclunent of the exhibits to the formal complaint. Respondent essentially contends that a Board order in Grievance Administrator v Leonard C. Jaques, DP 7/86 (ADB Order 1995), constitutes support for the proposition that a panel must be disqualified whenever a comi order is attached to a complaint. This argument also lacks merit. First, the Jaques order was declared "distinguishable" in the September 27, 2011 order denying the motions of respondents Reed and Hammonds to