Douglas's Case

Summary

The Supreme Court of New Hampshire reviewed attorney-discipline proceedings arising from Caroline G. Douglas’s withdrawal of escrowed divorce funds and application of those funds to her client’s legal fees. The court upheld findings that she violated New Hampshire Rules of Professional Conduct 1.15(a)(1), 1.15(c), and 8.4(a), while affirming the referee’s finding that an intentional misrepresentation under Rule 8.4(c) was not established. The court imposed a suspension of six months or until completion of specified ethics coursework, whichever was longer, and ordered reimbursement of disciplinary costs.

Holdings

1. Douglas was not denied due process because she was permitted to retake the stand to rebut testimony concerning the escrow account, and the testimony she was prevented from giving to attack credibility was not shown to be material and noncumulative.
2. The referee reasonably found that Douglas did not violate Rule 8.4(c) because the evidence supported a finding that her incorrect representation about the authorization letter was not intentionally designed to mislead the superior court.
3. Douglas violated Rules 1.15(a)(1) and 1.15(c) by withdrawing the escrow funds without client permission and before the dispute over entitlement to the funds was resolved, and by applying the funds to legal fees.
4. A six-month suspension, or suspension until Douglas completed a course in ethics and study of the Rules of Professional Conduct, whichever was longer, was appropriate, together with reinstatement conditions and reimbursement of disciplinary costs.

Questions Presented

1. Whether the judicial referee violated Douglas's due-process rights by refusing to allow her to retake the stand to offer rebuttal testimony attacking another attorney's credibility.
2. Whether the referee's finding that Douglas did not intentionally mislead the superior court, and therefore did not violate Rule 8.4(c), was supported by the evidence.
3. Whether Douglas violated Rules 1.15(a)(1) and 1.15(c) by withdrawing disputed escrow funds and applying them to legal fees before an accounting, severance of interests, or resolution of the dispute.
4. What sanction was appropriate for Douglas's violations of the Rules of Professional Conduct.

Disposition

remanded