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In re Discipline of Reynolds

February 11, 2009

IN THE MATTER OF THE DISCIPLINE OF MICHAEL P. REYNOLDS, AS AN ATTORNEY AT LAW.


The opinion of the court was delivered by: Gilbertson, Chief Justice

ORIGINAL PROCEEDING

ARGUED

August 28, 2008

[¶1.] The Disciplinary Board of the State Bar of South Dakota (Disciplinary Board) filed a formal accusation against Michael P. Reynolds (Reynolds), a member of the State Bar of South Dakota. Reynolds failed to answer the formal accusation within thirty days. SDCL 16-19-68.*fn1 The Disciplinary Board also filed a petition for an order temporarily suspending Reynolds from the practice of law. Reynolds failed to respond to the petition for temporary suspension. SDCL 16-19-35.1*fn2 .

[¶2.] On July 25, 2008, this Court granted the petition for temporary suspension and ordered Reynolds to appear before the Court on August 28, 2008, to show cause why he should not be permanently disbarred from the practice of law. This Court did not receive any communication from Reynolds until August 22, 2008, when his attorney filed a notice of appearance. [¶3.] Two weeks after oral argument before this Court, Reynolds filed a motion for leave to file a response to findings of fact, conclusions of law and formal accusation. The Disciplinary Board filed a response. This Court denied the motion. [¶4.] Accordingly, this Court has proceeded to "render such judgment as the case requires" SDCL 16-19-68, and has concluded that the appropriate sanction in this case is a three-year suspension from the practice of law. SDCL 16-19-35(2).

Following the three-year suspension, Reynolds may petition for reinstatement. SDCL 16-19-83 - 16-19-87.

GENERAL BACKGROUND

[¶5.] Reynolds was raised in Sioux Falls and graduated from Washington High School in 1980. He graduated from Northwestern University in Chicago, Illinois, in 1984 with a B.S. in communication studies and a B.A. in political science. Reynolds attended the University of California at Los Angeles (UCLA) School of Law and interned for a semester with the chairman of the Federal Communications Commission. After graduation in 1987 he exclusively practiced commercial litigation with the Winston and Strawn law firm in Chicago except for a six month hiatus with another firm, Skadden Arps. [¶6.] When Reynolds and his wife had their first child in 1990 they began contemplating returning to their native South Dakota. Before starting his job search in South Dakota, Reynolds passed the July 1993 South Dakota bar examination and was admitted to the practice of law in South Dakota on February 22, 1994. [¶7.] Reynolds began working in the Quinn, Eisland, Day & Barker law firm on September 22, 1994, and remained with the firm when it became Quinn, Day & Barker in 1998. In 2001 Wilson, Reynolds & Burke was formed. Throughout this time Reynolds' practice focused on commercial litigation, primarily partnership, shareholder and employment disputes. Reynolds maintained between 65 to 80 active files. He worked from 7:00 a.m. to 7:00 p.m., went home until his children were in bed, and returned to the office until 2:00 a.m.

[¶8.] In 2006 Reynolds became President and Chief Executive Officer with Dunbar Enterprises, LLC. He maintained an "of counsel" position with the Barker Reynolds firm and continued working with two other clients. In 2007 Reynolds' practice was limited to Dunbar Enterprises, LLC only. [¶9.] In the course of his practice Reynolds has done a significant amount of pro bono work. He has been a speaker at State Bar CLEs. He has served on the boards of the United Way, Black Hills Symphony, Junior Achievement, Black Hills Community Theatre and the Tatanka Foundation. Reynolds was also the president of his church council for four years. Reynolds never missed his children's activities.

A.

[¶10.] On June 18, 2001, J.W., who held a management position with the City of Rapid City, was given the option to resign with a severance package or be suspended from his duties until the Rushmore Plaza Civic Center Board could meet to consider the Rapid City Mayor's request that J.W. be terminated from his position. J.W. chose the former.

[¶11.] Within days of what he considered a "forced resignation," J.W. retained Reynolds to represent him and wrote to city officials in an attempt to initiate the city's non-union personnel grievance procedure. The city advised J.W. that although he was not entitled to the grievance procedure the city would, as a courtesy, meet with him and his legal counsel to discuss J.W.'s performance problems and its concerns "regarding those events leading up to your resignation."

[¶12.] By letter dated July 10, 2001, Reynolds advised J.W. that: we should take the position that since your resignation was forced, the grievance provisions are triggered. I informed you when we talked that this would be a dicey issue, and one that could be the death-knell of any potential litigation. However, I think we need to give it the "old college try."

[¶13.] Reynolds and J.W. did meet with city officials. On August 28, 2001, the mayor wrote to Reynolds, told Reynolds that he had considered the request to reinstate J.W., and could not recommend that J.W. be allowed to revoke his resignation. On August 30, 2001, Reynolds wrote to J.W. and told him to call Reynolds so they could discuss the "next move."

[¶14.] For the next few months J.W., who had been in almost daily contact with Reynolds, focused on filing for unemployment insurance and searching for a new job. He secured a job in Wisconsin and moved on March 29, 2002. The day before he moved J.W. met with Reynolds and agreed on a contingent fee. According to J.W., Reynolds agreed to prepare a complaint and forward it to J.W. for review.

[¶15.] For the next two years J.W. attempted to communicate with Reynolds about the status of his case, the drafting of the complaint, and the statute of limitations through phone calls, faxes, and frequent e-mails which Reynolds, for the most part, did not answer. Due to Reynolds' failure to respond the tone of J.W.'s e-mails became increasingly desperate for information on the status of his case.

[¶16.] On March 4, 2004, almost two years after J.W. moved to Wisconsin, Reynolds responded to J.W.'s e-mail of the same day. Reynolds told J.W. that he was in talks with the city and would send a draft complaint at the end of the week. When that did not happen, J.W. continued to e-mail Reynolds and Reynolds responded that he was working on the complaint.

[¶17.] J.W. returned to Rapid City on May 28, 2004, and met in person with Reynolds who was apologetic, took responsibility for not communicating, and agreed to prepare a complaint. Reynolds e-mailed the complaint to J.W. on May 31, 2004.

[¶18.] J.W. e-mailed Reynolds on June 1, 2004, expressing his pleasure with the complaint and asking questions about it. In a series of unanswered e-mails throughout June 2004, J.W. attempted to find out if the complaint had been filed. Reynolds ultimately responded on June 23, 2004:

I will respond to no more e-mails of this nature. This is neither positive nor productive.

I drafted the complaint, I made your changes. Filing is in the pipeline. I'm peddling as fast as I possibly can.

Perhaps we should find you an attorney that is more attentive to your needs.

[¶19.] Throughout the rest of 2004 J.W. continued to e-mail and call Reynolds regarding the status of filing the complaint and whether Reynolds was representing him. On March 12, 2005, after Reynolds did not respond to any of J.W.'s communications, J.W. filed a formal complaint with the Disciplinary Board.

[¶20.] At the Disciplinary Board's hearing on September 22, 2005, Reynolds acknowledged that the complaint had never been filed and that a statute of limitations had expired. He admitted that his communication with J.W. was poor and the situation could have been avoided by better communication, honesty about the viability of J.W.'s claims, and the sending of a disengagement letter. Reynolds also admitted that during the time of his representation of J.W. he had also represented the City of Rapid City on two matters. Reynolds recognized the conflict and failed to disclose the conflict to either client or receive permission from either to proceed.

[¶21.] At the Disciplinary Board's hearing Reynolds was unable to articulate steps he could take to ensure that the situation with J.W. would not be repeated. Reynolds admitted that his life had no balance; he was overextended with his demanding legal caseload and "the pressures to produce," his family commitments, and his outside activities. While he did receive counseling for stress management and tried to implement what he had learned, he simply did not "have the answers" to solving his problems.

[¶22.] Following the September 2005 Disciplinary Board hearing, Reynolds, his law partner, Michael A. Wilson, Disciplinary Board counsel Robert B. Frieberg, and Disciplinary Board member Thomas J. Nicholson, who was assigned to Reynolds' case, met in October 2005 to negotiate a Private 60 Agreement pursuant to SDCL 16-19-60, which provides:

If it is determined after an investigation by the board that the complaint is meritorious, but that formal disciplinary proceedings are not warranted, the board and the attorney may agree in writing to hold the proceedings in abeyance for a definite period, provided the attorney throughout the period complies with specified reasonable conditions. Upon satisfactory compliance, the board may thereafter dismiss the proceedings and notify the complainant and such other persons as the board deems appropriate. If, after an investigation, the attorney general finds such action warranted, he shall report his findings to the Supreme Court and recommend that such action be taken by the board.

[¶23.] In the Private 60 Agreement Reynolds admitted that he violated Rules 1.3, 1.4, 1.5, 1.7, and 8.4(a)(c) of the South Dakota Rules of Professional Conduct by failing to respond to a client's numerous requests regarding the status of a case, neglecting the client's file and allowing the statute of limitations to expire without informing the client, and failing to seek permission from clients whose interests were potentially adverse with respect to an apparent conflict of interest. The Disciplinary Board and Reynolds agreed that the disciplinary proceeding would be held in abeyance from December 1, 2005, until November 30, 2008, provided Reynolds complied with specified reasonable conditions. These conditions included:

* a mental health evaluation to assess whether Reynolds suffered from a disorder which impaired his ability to practice law, and treatment, if necessary;

* a review of all Reynolds' files by Reynolds and Wilson, disengagement of matters of questionable merit and cases where there was a disagreement as to management of the case, fees and expenses as determined by Wilson, and, approval by Wilson to accept any new cases for a new or existing client;

* a biweekly review of every case or file by Reynolds to assure matters were not neglected and clients were informed;

* various reporting requirements to Wilson and the Disciplinary Board, and;

* the institution of formal disciplinary proceedings for a violation of the agreement or other complaints filed against Reynolds.

[¶24.] Board counsel Frieberg mailed the Private 60 Agreement to Reynolds for his signature and that of Wilson on November 2, 2006. When Frieberg telephoned Reynolds three weeks later, Reynolds assured Frieberg that the agreement was on his desk, and it would get signed and returned. On December 21, 2006, the Disciplinary Board sent Reynolds, by certified mail, a notice of hearing "with respect to your failure to respond to the Disciplinary Board concerning your agreement under SDCL 16-19-60." That same day Wilson signed the Private 60 Agreement and Reynolds mailed it to Frieberg with a handwritten note saying, "Sorry for the delay; a little miscommunication on this end."

[¶25.] At the January 5, 2006, due process hearing on the matter, the Disciplinary Board expressed its concern that either Reynolds was not taking the Private 60 Agreement seriously, or that he was exhibiting the same behavior that brought him before the Board initially: putting things aside and not getting back to them. The Board stressed the importance of following the agreement and scrupulously reporting and communicating his compliance with it to the entities required by the agreement.

[¶26.] Reynolds apologized to the Disciplinary Board, discussed the steps he had taken to implement the Private 60 Agreement, and assured the Disciplinary Board that he understood the seriousness of the agreement. The delay in returning the signed Private 60 Agreement, Reynolds said, was his inability to meet with his law partner, Wilson, to secure his signature. Reynolds explained, "So it's not as if I have tried to ignore this agreement in any way, shape or form. It was more in the nature of two ships passing in the night, Mike and I were, over the holidays, and I sincerely apologize."

B.

[¶27.] The Disciplinary Board held a "follow-up" hearing with Reynolds on June 20, 2006, to discuss amending the Private 60 Agreement. As of April 1, 2006, Reynolds' law firm had dissolved and Reynolds, with Disciplinary Board knowledge, had signed a two-year contract with Dunbar Enterprises, LLC to become its President and Chief Executive Officer.

[¶28.] Reynolds asked the Disciplinary Board to allow him to maintain an "Of Counsel" position with the Barker Reynolds Law Firm in order to periodically assist his former law firm and to use that firm's name on pleadings and correspondence in litigation involving Dunbar Enterprises. Reynolds also asked the Disciplinary Board to allow him to continue to work with Epic Outdoor Advertising and the Sturgis Area Chamber of Commerce and to continue limited pro bono work. His employer at Dunbar Enterprises, Kevin Costner, had already agreed to this request.

[¶29.] Reynolds told the Disciplinary Board that this arrangement decreased his caseload from eighty complex cases to a maximum of six pieces of litigation for three entities with whom he had strong, passionate relationships and for whom he did "a great job." In fact, Reynolds was office sharing with his client Epic Outdoor Advertising. Reynolds told the Disciplinary Board that he was now only working from 8 a.m. to 5 p.m. Monday through Friday for very good compensation. His stress level was down "300 percent," he lost 40 pounds by daily exercise, and he recently acted and sang in a community theater production of "Oklahoma."

[ΒΆ30.] On July 24, 2006, Reynolds signed the Amended Private 60 Agreement. In it, the Disciplinary Board approved his requests to work for Dunbar Enterprises, be "Of Counsel" with Barker Reynolds Law Firm, and continue working with Epic Outdoor Advertising and the Sturgis Area ...


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