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Ligon v. Tapp

Supreme Court of Arkansas

May 18, 2017



          Stark Ligon, for petitioner.

          Jeff Rosenzweig, for respondent.

          SHAWN A. WOMACK, Associate Justice

         This is an original action under the Arkansas Supreme Court Procedures Regulating Professional Conduct. Stark Ligon, as Executive Director of the Arkansas Supreme Court Committee on Professional Conduct ("Committee"), seeks the disbarment of John Skylar Tapp ("Tapp"), an attorney licensed to practice law in the State of Arkansas. Our jurisdiction is pursuant to Arkansas Supreme Court Procedures Regulating Professional Conduct section 13(A).

         On March 12, 2013, Director Ligon filed a petition for disbarment, which was amended three times to include additional complaints. On March 15, 2013, we appointed special judge John Lineberger to preside over this matter. Ligon v. Tapp, 2013 Ark. 123 (per curium). While the disciplinary proceedings were ongoing, Panel B of the Committee entered an interim suspension of Tapp's license to practice law. Tapp v. Ligon, 2013 Ark. 259, 428 S.W.3d 492. The case was tried over a seventeen-day period from February 24 to October 10, 2014. The record generated is over 7, 200 pages and encompasses twenty-seven volumes. The Committee alleged over forty violations of the rules governing the conduct of attorneys throughout six separate cases. Each case was individually ruled on during the proceedings. The special judge entered findings of facts and conclusions of law on May 16, 2016, wherein he detailed his findings over 112 pages and concluded that disbarment was the appropriate sanction in this case. We accept his findings and recommendation.

         I. Standard of Review

         Disciplinary proceedings are neither civil nor criminal in nature but are sui generis, meaning of their own kind. Ligon v. Dunklin, 368 Ark. 443, 447, 247 S.W.3d 498, 503 (2007). We will accept the special judge's findings of fact unless they are clearly erroneous. Id., 247 S.W.3d at 498. We provide the appropriate sanctions based on the evidence. Id. There is no appeal from this court except as may be provided by federal law. Id.

         A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Id. at 447-48, 247 S.W.3d at 503; Ligon v. McCullough, 2009 Ark. 165A, at 4, 303 S.W.3d 78, 80; Ligon v. Stewart, 369 Ark. 380, 384, 255 S.W.3d 435, 438 (2007). We must view the evidence in a light most favorable to the decision of the special judge, resolving all inferences in favor of his or her findings of fact. Stewart, 369 Ark. at 384, 255 S.W.3d at 439; Ligon v. Newman, 365 Ark. 510, 516, 231 S.W.3d 662, 667 (2006). Disputed facts and determinations of the credibility of witnesses are within the province of the fact-finder. Stewart, supra; Newman, supra.

         II. Conduct

         The special judge made the following findings of fact and conclusions of law. We will briefly address the allegations below.

         A. Fenimore Matter

         Tapp formed an Arkansas Company, GFST, LLC ("GFST), with his former client, Marilyn Garrett-Fenimore, and her husband to develop coastal property in Florida. Tapp owned one-half of the company and the other half was owned by Garret-Fenimore, LLC, which was managed by the Fenimores. GFST was unable to meet its financial obligations after a downturn in the market, and the bank foreclosed on the GFST properties. Tapp then filed two pro se Chapter 13 bankruptcy petitions, one was for himself and the other was on behalf of GFST and listed the Fenimores as joint debtors and co-owners. Neither of the Fenimores gave him permission to file for bankruptcy on their behalf. Judge Taylor ultimately dismissed both petitions. Tapp admitted he had little experience in bankruptcy court, but could not afford to hire an attorney to represent him in the matter.

         Special Judge Lineberger found that Tapp's actions violated the following rules of the Arkansas Rules of Professional Conduct: 1.1; 1.4(a)(1); 3.1; 3.3(a)(1); 3.4(b); 4.4(a); and 8.4(c), (d). Tapp filed two complex bankruptcy petitions with limited knowledge and experience in bankruptcy court, he represented the Fenimores in the proceeding without their consent, he did not have the authority to unilaterally file for bankruptcy on behalf of GFST, and he improperly filled out the petitions. He failed to correct his mistake when it became clear that GFST was not eligible for Chapter 13 relief. His ignorance consumed valuable judicial resources that could have been used elsewhere. He filed for bankruptcy with the purpose to delay foreclosure proceedings and caused embarrassment to the Fenimores by involving them in a bankruptcy proceeding. The special judge's findings are not clearly erroneous.

         B. Hurst Matter

         Tapp represented his cousin, Katharine Hurst, during a divorce proceeding and obtained a divorce decree awarding each spouse half of the proceeds from the sale of their marital home. Tapp held Hurst's half of the funds in his client's trust account. The court of appeals affirmed the circuit court's decision in 2009, but Tapp refused to distribute the funds. After a filing with the Office of Professional Conduct ("OPC") in 2012, the OPC requested to review his financial statements regarding his trust account from 2006 to 2012. The statements revealed that despite his duty to hold the funds in his account, the funds available dipped well below the minimum $6, 611.82 that he was obligated to hold in trust for Hurst several times during the period, and reached a balance as low as $6 at one point. He attempted to make up the difference by infusing fees earned in a separate case.

         Special Judge Lineberger found that Tapp's actions violated the following rules of professional conduct: 1.15(a)(1), (4); 1.15(b)(1), (3); 1.16(d); and 8.4(c). Tapp argues that he did not distribute the funds because they belonged to the bankruptcy trustee and not his client. However, the judge rejected his argument and noted that he did not distribute the funds until after receiving an inquiry notice from the OPC. He failed to safeguard his client's funds, did not keep accurate records on a current basis, and commingled his funds with those of his clients. He declined to turn over his client's funds upon request despite his representation in the matter being terminated. Lastly, he made false statements to the OPC and to Mr. Wertzel, the bankruptcy trustee, by stating that he had safeguarded the $6, 611.82 in his client's trust account. The judge's findings are not clearly erroneous.

         C. Schlenker Condo Matter

         Tapp was hired by Mandi and Garland Schlenker and Kathryn DeJarnette to represent them against another property owner in their condo unit who had negligently repaired her unit and caused damage to their surrounding units. Through the course of his representation he learned that the unit in question was currently in a foreclosure proceeding and was being sold at a public sale. He offered to attend the sale and asked his clients if they wanted to purchase the property, which they declined. He personally bought the property at the sale for $15, 100, believing that it was in his clients' best interests. He then offered to sell it back to them for the purchase price with costs, but they once again declined.

         Special Judge Lineberger found that Tapp's actions violated the following rules of professional conduct: 1.2(a); 1.7(a); and 8.4(c), (d). Immediately after he purchased the property he stepped into the shoes of the former owner, which was an adverse interest to his clients. Tapp was under an ethical obligation to notify his clients that he intended to purchase the property and allow them to consider and waive the conflict. The judge's findings are not clearly erroneous.

         D. Bowerman Matter

         On October 24, 2011, Shawn Key filled suit on behalf of State Auto Property and Casualty Insurance Company ("State Auto") to obtain unpaid insurance premiums totaling $3, 112 from James Bowerman. Tapp filed an answer on Bowerman's behalf denying liability. Key later discovered that Tapp had filed a lawsuit on Bowerman's behalf against Susan Taylor in which he acknowledged the $3, 112 debt, but contended that Taylor assumed the liability when she purchased his business. Attached to the complaint was a copy of the agreement between Bowerman and Taylor, which stated that Taylor assumed no liabilities during the purchase of the business. Bowerman did not disclose this suit during ...

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