THE NORTH CAROLINA STATE BAR

FALL JOURNAL2011

IN THIS ISSUE E-Discovery 101 page 8 Rules of Civil Procedure and Their Impact on Foreclosure Cases page 18 An Interview with Author John Hart page 28

THE NORTH CAROLINA STATE BAR JOURNAL

Fall 2011 Volume 16, Number 3 FEATURES Editor Jennifer R. Duncan 8 E-Discovery 101 By Ronald R. Davis Publications Committee Margaret J. McCreary, Chair John E. Gehring, Vice-Chair 12 The North Carolina Association of David Benbow Women Attorneys: Dorothy Bernholz Lauren Collins Creating Camaraderie, Nurturing Leaders, and G. Stevenson Crihfield Protecting the Rights of Women Rebecca Eggers-Gryder By Carolyn McAllaster and Jennifer Brobst Anna R. Hamrick George L. Jenkins Robert C. Montgomery 18Rules of Civil Procedure and Their Lonnie Player Impact on Foreclosure Cases in Carlyn G. Poole Harold G. Pope North Carolina G. Gray Wilson By Timothy J. Peterkin Alan D. Woodlief Jr. 23The Political Nature of John © Copyright 2011 by the North Carolina State Bar. All Marshall’s Fight for the Court in rights reserved. The North Carolina State Bar Journal (ISSN 10928626) is published four times per year in Marbury v. Madison March, June, September, and December under the direc- By Ward Zimmerman tion and supervision of the council of the North Carolina State Bar, 208 Fayetteville Street, Raleigh, NC 27601. 28An Interview with Author John Hart Member rate of $6.00 per year is included in dues. By John E. Gehring Nonmember rates $10.78 per year. Single copies $3.21. The Lawyer's Handbook $10.78. Advertising rates available 30 Blackbeard’s Last Raid upon request. Direct inquiries to Director of By Robert F. Stamps Communications, the North Carolina State Bar, PO Box 2011 Fiction Writing Competition Winner 25908, Raleigh, North Carolina 27611, tel. (919) 828- 4620. Periodicals postage paid at Raleigh, NC, and addi- tional offices. Opinions expressed by contributors are not necessarily those of the North Carolina State Bar. POST- Continued on page 4. MASTER: Send address changes to the North Carolina State Bar, PO Box 25908, Raleigh, NC 27611. The North Carolina Bar Journal invites the submission of unsolicited, original articles, essays, and book reviews. Submissions may be made by mail or e-mail ([email protected]) to the editor. Publishing and editorial decisions are based on the Publications Committee's and the editor's judgment of the quality of the writing, the timeliness of the article, Update Membership Information: Members who need to update their membership and the potential interest to the readers of the Journal. The information must do so by contacting the Membership Department via one of the four Journal reserves the right to edit all manuscripts. following methods: (1) log on to the Member Access section of the State Bar's website (www.ncbar.gov); (2) mail changes to: NC State Bar, Membership Dept., PO Box 26088, www.ncbar.gov Raleigh, NC 27611-5908; (3) call (919) 828-4620; or (4) send an e-mail to [email protected]. In deciding what address to list with the State Bar, be advised that this address will be used for all official correspondence from the State Bar and that PRINTED ON RECYCLED PAPER membership information is a public record pursuant to the NC Public Records Act.

THE NORTH CAROLINA STATE BAR JOURNAL 3 Officers Steve Annis, Investigator Carmen H. Bannon, Deputy Counsel Anthony S. di Santi, Boone - President 2010-2011 Betsy C. Barham, Receptionist James R. Fox, Mount Airy - President-Elect 2010-2011 Tim Batchelor, Investigator M. Keith Kapp, Raleigh - Vice-President 2010-2011 Kelly Beck, Compliance Coordinator, Membership/CLE L. Thomas Lunsford II, Raleigh - Secretary-Treasurer Krista Bennett, Fee Dispute Facilitator, ACAP Barbara B. Weyher, Raleigh - Past-President 2010-2011 Michael D. Blan, Systems Analyst/Programmer Peter Bolac, Judicial District Bar Liaison/Trust Account DEPARTMENTS Councilors Compliance Officer By Judicial District Elizabeth E. Bolton, Receptionist 1: Donald C. Prentiss, Elizabeth City Eddie Capel, Investigator 2: G. Thomas Davis Jr., Swan Quarter Becky B. Carroll, Paralegal 5 President’s Message 3A: Leslie S. Robinson, Greenville W. Donald Carroll Jr., Consultant to LAP Program 3B: Debra L. Massie, Beaufort Margaret Cloutier, Senior Deputy Counsel 6 State Bar Outlook 4: Robert W. Detwiler, Jacksonville Joseph J. Commisso, Director of Investigations 34 Trust Accounting 5: Harold L. Pollock, Burgaw Luella C. Crane, Director of ACAP 6A: Gilbert W. Chichester, Roanoke Rapids Bruno E. DeMolli, Staff Auditor & Investigator 35 Lawyer Assistance Program 6B: Ronald G. Baker Sr., Ahoskie Sharon Denton, Events Manager 7: Randall B. Pridgen, Rocky Mount Jennifer R. Duncan, Director of Communications 38 Legal Ethics 8: George L. Jenkins Jr., Kinston A. Root Edmonson, Deputy Counsel 9: Julius E. Banzet III, Warrenton William N. Farrell Jr., Deputy Counsel 40 IOLTA Update 9A: R. Lee Farmer, Yanceyville Martha Fletcher, Admin. Asst. 41 10: Nicholas J. Dombalis II, Raleigh David J. Frederick, Investigator Profile in Specialization John N. (Nick) Fountain, Raleigh Towanda Garner, Piedmont LAP Coordinator 42 Paralegal Certification David W. Long, Raleigh Lanice Heidbrink, Exec. Asst., Admin. Carlyn G. Poole, Raleigh Jeffery Hill, Computer Systems Administrator 43 Featured Artist Donna R. Rascoe, Raleigh Leanor Hodge, Deputy Counsel Sally H. Scherer, Raleigh Joshua Hoffman, Admin. Asst., Office of Counsel 44 The Disciplinary Department John M. Silverstein, Raleigh Debra P. Holland, Asst. Director, CLE Cynthia L. Wittmer, Raleigh Buffy Holt, Admin Asst, LAP 45 Proposed Ethics Opinions 11A: Marcia H. Armstrong, Smithfield Tammy Jackson, Membership Director 51 Rule Amendments 11B: Donald E. Harrop Jr., Dunn Katherine Jean, Counsel and Assistant Executive Dir. 12: Lonnie M. Player Jr., Fayetteville David R. Johnson, Deputy Counsel 57 Classified Advertising 13: Harold G. Pope, Whiteville Barbara Kerr, Archivist 14: John A. Bowman, Durham Melanie Kincaid, Paralegal Margaret J. McCreary, Durham Erica Leventhall, Grant Data Asst., IOLTA 15A: Steven H. Messick, Burlington Suzanne Lever, Asst. Ethics Counsel 15B: Dorothy Bernholz, Chapel Hill Joyce L. Lindsay, Exec. Asst., Admin. 16A: William R. Purcell, Laurinburg Carey Adam Maner, Membership Asst. 16B: C. Christopher Smith, Lumberton Beth McIntire, IT Manager BAR UPDATES 17A: Joseph G. Maddrey, Eden Beth McLamb, Membership Asst. 17B: John E. Gehring, Walnut Cove Nichole P. McLaughlin, Deputy Counsel 18: Barbara R. Christy, Greensboro Barry S. McNeill, Deputy Counsel 50 In Memoriam Robert C. Cone, Greensboro Diane Melching, Admin. Asst., ACAP Richard S. Towers, High Point Sandra R. Melvin, Office Manager 54 Law School Briefs 19A: James D. Foster, Concord Dottie K. Miani, Facilities Manager/Deputy Clerk of DHC 19B: W. Edward Bunch, Asheboro Claire U. Mills, Accounts Manager, IOLTA 55 Client Security Fund 19C: Darrin D. Jordan, Salisbury Alice Neece Mine, Asst. Executive Dir., Dir. of CLE, 19D: Douglas R. Gill, Southern Pines Specialization, & Paralegal Certification 56 Distinguished Service Award 20A: Frederick D. Poisson Jr., Wadesboro Robynn E. Moraites, LAP Director 57 Baker Nominated as 20B: Harry B. Crow Jr., Monroe Denise Mullen, Asst. Director of Specialization 21: Michael L Robinson, Winston-Salem Loriann Nicolicchia, Accreditation Coordinator, CLE Vice-President G. Gray Wilson, Winston-Salem Emily Oakes, Attendance Compliance Coordinator, CLE 22: C. David Benbow IV, Statesville Brian Oten, Deputy Counsel 58 Selected Financial Data 22B: Roger S. Tripp, Lexington Lisanne Palacios, Accounting Manager 23: Jimmy D. Reeves, West Jefferson Heather Pattle, Administrator, Office of Counsel 24: Rebecca Eggers-Gryder, Boone C. Fred Patton, Jr., Investigator 25: Forrest A. Ferrell, Hickory Wondella Payne, Paralegal 26: David N. Allen, Charlotte Scott Perry, AP Investigator Robert J. Bernhardt, Charlotte Angel Pitts, Mail/Copy Clerk Ronald L. Gibson, Charlotte Jennifer Porter, Deputy Counsel F. Fincher Jarrell, Charlotte Evelyn Pursley, Executive Dir., IOLTA Mark W. Merritt, Charlotte Sonja B. Puryear, Admin. Asst., IOLTA Nancy Black Norelli, Charlotte Lori Reams, Admin. Asst., Office of Counsel Mujeeb Shah-Kahn, Charlotte Joan Renken, Admin. Asst., LAP 27A: Sonya Campbell McGraw, Gastonia Randall C. Ross, Investigator 27B: Ralph W. Meekins, Lincolnton Sandra L. Saxton, Public Liaison, ACAP 28: Howard L. Gum, Asheville Sonya Sells, Paralegal 29A: Marvin R. Sparrow, Rutherfordton Fern Gunn Simeon, Deputy Counsel 29B: Margaret M. Hunt, Brevard Jaya Singh, Accounting Asst. 30: W. David Sumpter III, Murphy Jennifer Slattery, Accreditation Clerk, CLE Jessica M. Smith, Paralegal Judith Treadwell, Public Liaison, ACAP Public Members Pam Tully, Investigator William F. Dowdy III, Raleigh Edmund F. Ward, Asst. Director, LAP Dr. Vinod Goel, Morrisville A. Dawn Whaley, Admin. Asst., Investigations Issac Heard Jr., Charlotte Edward R. White, Investigator Tara J. Wilder, Asst. Dir., Paralegal Certification Mary D. Winstead, Deputy Counsel Staff Christiane Woods, Admin Asst., Investigations Roger Allen, Investigator

4 FALL 2011 THE PRESIDENT’S MESSAGE

July and the Council in Blowing Rock

B Y A NTHONY S. DI S ANTI

n July, the council of the North many lawyers are starting their practices law school, with the stipulation that the stu- Carolina State Bar met in Blowing without the guidance and experience of older dent must have completed a course in profes- Rock for the first time in many lawyers that many of us enjoyed when we sional responsibility and must be planning to years. The council meets quarterly in started our practices. As I noted at the annual remain in North Carolina upon graduation to RaleighI in October, meeting of the council in practice law. The students were assigned January, and April. It is the October 2010, the issue of councilors from the Ethics Committee to be prerogative of the president mentoring would be an their mentors during the meeting. On the to select the meeting site for important concept of my first day of the meeting the students were pro- the July meeting, and gen- year as president. vided an orientation regarding the business of erally, locations more resort- The issue of mentoring the NC State Bar, after which they attended oriented to which the coun- is of paramount importance all of the committee meetings with the excep- cilors may bring their fami- to the North Carolina Bar tion of the Grievance Committee (meetings ly are chosen. We do so Association as well, and its of the Grievance Committee are closed meet- because so many of the president, Martin Brinkley, ings). Each of the students, and each of the councilors are not able to reported to the council in students’ mentors, expressed to me that it was take vacations during the Blowing Rock that the asso- a most enlightening experience by which each year due to the time com- ciation will soon be unveil- student and each mentor gained valuable mitment required to fulfill ing its mentoring program. insight regarding the practice of law. During their responsibilities to the council and their As a result, the issue of mentoring will be the next academic year, each student will practices. As Blowing Rock is my home, I placed on the agenda for the council meeting arrange for a program to be presented at his or was proud to be able to introduce many of in October to discuss how the NC State Bar her law school, where officers and staff of the the councilors to Blowing Rock and to allow can assist with the implementation of this State Bar, as well as the student’s mentor, will them to escape the heat that we generally important program. An aspect of the discus- participate so that young lawyers will have a endure at our other meeting locations in the sion will be whether such a program will be better understanding of the issues that they state. voluntary or mandatory, as mentoring pro- will encounter when they commence their For the second consecutive year, in associ- grams in states that have implemented them practice. Hopefully, the program will help ation with Mel Wright and the Chief Justice’s have been successful using either concept. instill the credence of professionalism from Commission on Professionalism, we con- Synonymous with the term mentoring is the the inception of their practice. The council vened a special meeting of representatives of term professionalism. It is incumbent upon will be asked in October to implement this as district attorneys, criminal defense attorneys, those of us who believe that the issue of pro- a permanent program of the State Bar. judges, and administrators of their associa- fessionalism within our bar is the polar star I do not have sufficient space allotted to tions to discuss improving relations within by which we conduct our practices to pass me to inform you of all the work of the the criminal practice in our state. The first this principal on to those who will succeed council which is conducted during a quarter- meeting in Pinehurst last year was deemed us. ly meeting to fulfill our responsibility of pro- such a success by the participants that we The Summer Meeting Intern Program tection of the public to enable us to maintain decided to continue the effort, and this year was another program conducted in Blowing the privilege of self-regulation of the practice we were joined by Chief Justice Sara Parker. Rock which we hope will assist in conveying of law. However, Chief Justice Sarah Parker A broad range of topics was discussed, but if the credence of professionalism to our young and Martin Brinkley, president of the NC one were to synthesize the meeting into one lawyers. Last year Bonnie Weyher, our imme- Bar Association, each addressed an issue that issue, it would be the need for mentoring of diate past-president, and I discussed ways to is of utmost importance to the public and our young lawyers and, as several judges get younger and more diverse participation in the lawyers of North Carolina. It is the issue noted, the issue is not limited to the criminal the business of the NC State Bar. She of access to justice by so many of our citizens practice as mentoring is needed for our obtained the approval of the council to imple- who do not have the means to seek that young lawyers in the civil practice as well. ment a program in which a student from each access. Budgetary considerations due to the For a number of reasons, but one of predom- law school in North Carolina would attend economic condition of our state will reduce inantly the economic reality causing a lack of the summer meeting of the council. The jobs for recent graduates of our law schools, selection of the student was to be made by the CONTINUED ON PAGE 27

THE NORTH CAROLINA STATE BAR JOURNAL 5 STATE BAR OUTLOOK

It Isn’t Easy Being Coy

B Y L. THOMAS L UNSFORD II

27 N.C.A.C. 1B .0129 Confidentiality misconduct occurred—and became a very pointed inquiries from the media and mem- (a) Except as otherwise provided in this rule obvious part of the public record—my voice bers of the public with lame statements like, and G.S. 84-28(f), all proceedings involving was silent. Indeed, the State Bar was totally “our confidentiality rule prohibits the release allegations of misconduct by … a member will mute with respect to the matter from early of information concerning matters that may remain confidential until April, when our defendant uttered his first be under investigation;” and “we cannot con- (1) a complaint against a member has been patently unethical public statements regard- firm or deny that any particular matter is filed with the secretary after a finding by the ing the lacrosse players, until the disciplinary under investigation;” and, the always popular, Grievance Committee that there is probable case was filed before the Disciplinary “we read the newspapers and you can be sure cause to believe that the member is guilty of Hearing Commission (DHC) in late that the State Bar will do its duty in regard to misconduct justifying disciplinary action… December. This institutional silence evinced matters of apparent professional misconduct no dereliction on anyone’s part. It was, coming to its attention.” I’ve got to tell you, it while back, owing to an aston- rather, mandated by the State Bar’s confiden- isn’t easy being coy. ishing lack of tiality rule, quoted above, Certainly, most sophisticated people enterprise which in effect requires that understood that an investigation was ongoing within the all matters pertaining to and trusted that their State Bar would ulti- journalisticA fraternity, I felt it alleged or apparent miscon- mately take appropriate action, in public, to necessary to devote one of duct be treated as secret address the situation. Unfortunately, a signifi- my columns in the Journal to until investigation is com- cant segment of the population, having per- my personal exploits in plete, probable cause is haps been disappointed by the government in regard to the Duke lacrosse determined by the connection with other matters, was unwilling case and the State Bar’s con- Grievance Committee, and to take that leap of faith and persisted in sequent disciplinary prosecu- a formal complaint initiat- doubting our good intentions until the veil tion of Michael Nifong. ing a disciplinary case is was finally lifted. As noted above, it all turned Some of you may remember filed. It is only after the case out well in the end. Now, most people only the article, aptly entitled is filed that the matter, and remember my dogged and eloquent adher- “Fame,” in which I recount- the State Bar’s interest in it, ence to the script. They have forgotten that for ed my deft handling of the attendant media becomes public and can be acknowledged by a long time I didn’t have a script. Going for- circus as well as my own burgeoning celebrity the agency. Until that occurs, we cannot con- ward, one hopes that our success in the Nifong as the State Bar’s “official spokesman.” Of firm or deny that an investigation is even matter will incline the public to trust us to do course, my involvement, as intriguing as it pending. This, despite the fact that the entire what is necessary and appropriate in notorious was, was merely a sideshow. The main event world is aware of the misbehavior in question cases. And yet, one suspects that suspicion is was the disciplinary case itself. That proceed- and is wondering why “the State Bar isn’t more likely to be the public’s response to our ing, initiated at an absolutely critical doing anything.” next informational stonewall, and one won- moment, brought great credit upon the State It is now well known that the State Bar’s ders whether the benefit of the confidentiality Bar. The fearless prosecution of a rogue pros- office of counsel actually opened an investiga- rule can ever truly justify the discredit of the ecutor, even as he proceeded to prosecute, tive file within a few days after Nifong’s first agency. demonstrated the vitality and integrity of our ill-advised press conference. The investigation This raises the question, why do we have a self-regulation. Even more importantly, it was then vigorously pursued throughout the confidentially rule? The rule exists, I believe, seemed to accelerate the just outcome of the next several months leading toward the pres- mainly to protect the reputations of good underlying criminal case. Although my role entation of the case to the Grievance lawyers from gratuitous “besmirchment.” The was marginal, I was justifiably proud to be the Committee in October, and the subsequent fact is that anyone can file a grievance for any voice of the State Bar, if not its face. (That, filing of the disciplinary complaint a couple of reason or no reason at all at no cost. Since obviously, was Bruno.) months later. Had it not been for the confi- nearly 80% are ultimately dismissed, usually I advert to the Nifong case not to under- dentiality rule, it would have been apparent to because they are outlandish or not susceptible score my personal triumph or the agency’s anyone interested that the State Bar was fully of proof, it makes some sense as a matter of commendable attention to duty, but to engaged from the onset. As it was, the agency’s policy that the State Bar should not publicly remind you that for many months after the “official spokesman” was obliged to deflect acknowledge, and thereby lend credence to,

6 FALL 2011 mere allegations. And, besides, if the com- plaining party really believes that her grievance ought to be made public for some reason, she Claude M. Bogues, CPA, PLLC can always call the newspaper herself or, as is becoming increasingly common, resort to Offering Attorney Trust Account Reconciliation and Forensic Accounting Services defamation directly on the Internet. (Former SBI – Financial Crimes Investigator) The confidentiality rule has other virtues. It tends to protect client information that Hamilton Centre, Bldg. 100, Suite 203 might otherwise be disclosed. As things now 1415 Highway 54 West stand, none of the secrets that come into the Durham, NC 27707 possession of the State Bar incident to our investigation of the vast majority of grievances Telephone: (919) 489-6300 Fax: (919) 489-7923 are compromised. The information is gath- [email protected] www.claudeboguescpa.com ered discretely and evaluated in closed meet- ings by the Grievance Committee acting as a sort of grand jury. As noted above, in about 8 my duties, the State Bar as an entity can’t really various providers of legal services. Indeed, it out of 10 cases the matter is disposed of out- afford to be silly too often. It’s a matter of seems rather unlikely that any person with side the public eye, and all of the evidence institutional credibility. access to our records would ever hire or rec- marshaled in the investigation is consigned to The maintenance of credibility is, of ommend the employment of someone known oblivion. Were there no confidentiality rule, course, essential to effective self-regulation. If to be one of our “frequent flyers.” Now, I the content of each investigative file, which our efforts aren’t credible, they aren’t likely to would readily concede that a judgment predi- almost always includes sensitive client infor- be effective and they aren’t likely to be tolerat- cated on such information might be misguid- mation, would presumably be public record, ed. Maybe there’s something to be said for ed—and unfair to the falsely and repeatedly like virtually everything else in our files. absolute openness in the processing of griev- accused—but if I were doing the hiring, I’d And let’s not forget that in some cases ances. Maybe our demonstrably successful probably want to know. ignorance can be bliss. As things stand now, efforts to police ourselves would be all the Perhaps what we really need is a different the State Bar does not as a matter of policy more impressive if they could be observed sort of confidentiality rule—one that would even bother to advise lawyers that grievances throughout the process. Maybe the sky protect the content of the investigative file have been filed against them unless there is wouldn’t fall if we laid all our cards on the while confessing its existence and its origina- good reason to request a response. That table immediately after they’ve been dealt. tion. By simply and only acknowledging that being the case, a great many patently unmer- Interestingly enough, the sky hasn’t fallen an investigation is ongoing regarding a spe- itorious complaints come to be dismissed in Oregon lately. Oregon is the only state in cific matter, the State Bar could affirm its without anyone, except the complainant, which the grievance system is entirely public. responsibility and confirm its responsiveness ever realizing that they were submitted to the Every complaint filed against a lawyer in that without repeating—and thus dignifying— State Bar. Not only does this policy, in com- remote and idiosyncratic legal outpost is auto- scurrilous allegations. It could also protect bination with the confidentiality rule, spare matically a matter of public record. This has confidential client information. And it could the subject lawyers needless worry and aggra- been the case for many years. According to my take ownership of all of its decisions in regard vation, but it also obviates the necessity of sources, the system works well. Gratuitous to grievances, publicly rejecting claims found reporting groundless allegations to malprac- besmirchment is rare. Clients still confide in to be unmeritorious and resolutely proceed- tice insurers and other entities that might their lawyers. Everyone has professional liabil- ing where there is probable cause. Of course, have an interest in the disposition of all ity insurance. No one is silly, and most people the real question may be whether this admit- known grievances, however groundless. If wear Nikes and enjoy the out of doors. tedly radical notion is “besmirchment neu- the confidentiality rule were not in place, Leaving aside the quaint customs and pro- tral.” If not, it’s probably dead on arrival. Too anyone with the price of a postage stamp and fessional mores of the Pacific Northwest, one bad, because it would definitely be good for a willingness to swear falsely or ridiculously wonders whether information about griev- those of us in the “official spokesman” busi- might have you called to account—some- ances that are being investigated, or that have ness who must, from time to time, live in the where besides the State Bar. been dismissed after investigation, might be a uncomfortable world between the manifestly Although there appears to be ample justifi- valuable commodity in which the public unconfirmable and the obviously undeni- cation for the confidentiality rule, there are a could be said to have some legitimate interest. able. What a conundrum. Would that we few countervailing considerations. As my For instance, anyone familiar with the actual could simply agree to live according to the experience during the investigative stages of grievance files of the North Carolina State Bar garfunkular wisdom of the poet Simon who the Nifong case tended to show, it’s a little silly would quickly come to understand that seri- once famously sang, concerning two score to refuse to acknowledge that you are doing ous misconduct is occassionally foreshadowed and ten romantic grievances, “You don’t need what every other thinking person in the world by a welter of unsubstantiated complaints that to be coy, Roy.” n knows you are doing. And while experience have been quite properly dismissed. If such shows that I can personally get away with all information were generally available, it could L. Thomas Lunsford II is the executive direc- manner of foolishness in the performance of be useful to potential consumers in evaluating tor of the North Carolina State Bar.

THE NORTH CAROLINA STATE BAR JOURNAL 7 E-Discovery 101

B Y R ONALD R. DAVIS

-mail. E-books.

E-libraries. E-

commerce. The

world around us

Eseems inundated by the addition of the

letter “e” to terms we thought we knew

and understood. So it is perhaps not sur-

SIS/Todd Davidson prising that “e-discovery” has achieved

prominence in the world of litigation. But what does the term “e-discovery” really mean? And does the process of e-discovery differ

from traditional rules of discovery familiar to seasoned litigators?

This article will (1) summarize what e-dis- inbox, iPhone, or laptop, but your ability to refer to “electronic mail” and “electronic com- covery is and (2) explain the ways in which e- provide counsel is limited by your familiarity merce,” respectively. discovery procedures depart from or supple- with the technology she is using. E-discovery In today’s digital world, e-discovery is more ment traditional discovery. The goal of this guides abound but often read like they are important than ever because over 99% of all article is to provide North Carolina attorneys written in binary code rather than English. information being generated is created and with a basic overview of the topic of e-discov- Third-party vendors, hungry for your client’s stored electronically.1 This data exists in a vari- ery and the rules that may apply in North money, remind you with daily e-mails that ety of formats and mediums, ranging from Carolina. they are much better than you are at e-discov- simple documents stored on a client’s hard ery. Fortunately, e-discovery is not nearly as drive to archived data kept on backup tapes or What is “e-discovery,” and why should complicated as they make it out to be. hidden metadata containing information I be concerned? Essentially, e-discovery is the process of discov- about electronic documents.2 However, busi- The topic of e-discovery may at first glance ery of electronic data and documents. The ness technology is built to be used for every- seem daunting. Your client has gigabytes of term “e-discovery” is shorthand for “electronic day business and personal communications, potentially discoverable data stored in her discovery,” just as “e-mail” and “e-commerce” not for facilitating discovery in a lawsuit.

8 FALL 2011 Therefore, accessing relevant information can period of only 30, 60, or 90 days and then production would impose an undue burden, be more expensive and difficult than tradi- delete or store those emails on backup tapes it is not required. Of course, the parties may tional discovery. for emergency purposes only. Convincing a not see eye-to-eye on this issue. To show As North Carolina attorneys, we must client to suspend its routine e-mail retention undue burden, the responding party must know e-discovery rules because of the poten- or destruction policy and apply a “litigation prove that the burdens and costs of produc- tial consequences for us and our clients of hold” can be both difficult and time consum- tion outweigh the relevance of the responsive non-compliance. For example, a North ing due to pushback from the client. information. By contrast, the requesting party Carolina federal court recently gave an adverse To ensure that the “litigation hold” is can defeat this argument by showing that its inference instruction to the jury when a plain- properly administered, the attorney first need for the requested information outweighs tiff discarded a laptop containing relevant files should develop a strong knowledge of his the costs of producing it. Courts can test these and e-mails.3 Likewise, a Michigan plaintiff client’s technology and its retention and arguments by ordering a sampling of the who intentionally erased data from a zip drive, destruction policies. This information is best potentially-relevant data before compelling backdated computer files, and lost a CD and obtained by a personal visit with client person- full production, and parties often compromise an audio recording had its case dismissed.4 nel at the outset of litigation. It may be neces- by agreeing to a specific set of search terms. Sanctions for e-discovery violations are sary to retain a technology expert to assist you In some situations, courts will offset the becoming more common, tripling in frequen- if the client uses sophisticated data systems. burden of production by requiring cost-shar- cy between 2003 and 2004 and growing rap- Soon after this meeting, the attorney should ing arrangements between the parties.8 In idly since then.5 issue a “litigation hold” letter, outlining the deciding whether to grant such an order, client’s duty to preserve relevant e-mails and courts generally consider the following factors: How does e-discovery work? other electronic documents. Counsel should the specificity of the request, the availability of Fundamentally, e-discovery operates like continue to remind his client of its preserva- the information from other sources, the cost traditional discovery. However, e-discovery tion duties and ensure that new employees are of production relative to the amount in con- can be more complex because electronically aware of this duty as well. Resending the “lit- troversy, the cost of production relative to the stored information is retained in exponentially igation hold” communication, working with parties’ resources, the ability of each party to greater volume than hard-copy documents, the client’s technology staff to make sure data control costs, the importance of the issues in electronically stored information is dynamic, is preserved, and even taking possession of a the litigation, and the benefit to the parties of rather than static, and electronically stored client’s actual electronic storage media can having the information.9 information may be incomprehensible when ensure that this obligation is met. The second step is to decide how the data separated from the system that created it.6 should be produced. Unlike paper documents One handy tool to help remember the most Processing and tangible items, electronic information can important differences between e-discovery Processing involves collecting, cataloging, be produced in a variety of formats ranging and traditional discovery is to think of the and analyzing preserved information so that from static image files to fully-functional Four P’s: Preservation, Processing, Production, relevant documents can be targeted for pro- native forms. For instance, your client could and Privilege. duction and to assist attorneys in their evalua- produce e-mails as PDF files, which are essen- tion of the case. For complex matters involving tially pictures of the e-mails viewable on a Preservation large amounts of data, processing can be time- computer screen. Alternatively, your client A client has a duty at the outset of litiga- consuming and expensive. Costs range as high could produce e-mails in the form of the orig- tion to not destroy potentially discoverable as $500 to $1,000 per gigabyte to process and inal software, like Microsoft Outlook. information and data. This duty is triggered host data. However, an effective processing Production in such a native format allows the once a party reasonably foresees litigation, per- plan can save time and money later by ensur- requesting party to fully sort and search the haps before an actual complaint is filed. ing that the most relevant documents are data while also viewing it with attachments Therefore, attention to e-discovery should quickly produced for use in the litigation. intact. Discovery requests can specify a desired begin immediately upon learning of the form of production, but the responding party potential for litigation.7 Once litigation Production is not necessarily bound by the request and it becomes foreseeable, a client should apply a In the production stage, the first step is to can voice objections. Ultimately the form of “litigation hold” to govern the storage and identify what must be produced. Imagine production will be whatever is agreed to by alteration of electronic records. Within this your client has preserved 20 backup tapes the parties or mandated by the court. “litigation hold,” non-privileged information with e-mails from 2006. Recovering these e- that is potentially discoverable must be mails will cost tens of thousands of dollars, Privilege retained. Preservation may be more difficult in even though the exact content of the messages Protecting privileged information is an the e-discovery context, however, because elec- is unknown. This situation is common in e- especially difficult exercise in e-discovery. The tronic information is so easily generated, discovery because, although technology allows potentially enormous volume of discoverable manipulated, and deleted. Further, clients large volumes of information to be generated data often makes it impracticable (if not liter- may have standardized procedures in place to and stored with ease, the information is quick- ally impossible) to review every piece of retain only a certain amount of information at ly archived and recoverable sometimes only at responsive electronic material to determine if any one time. For example, a client’s e-mail great expense. In such situations, the key issue any are privileged. For instance, e-mail corre- retention policy might be to store emails for a is the familiar standard of “undue burden.” If spondence with a client might be protected by

THE NORTH CAROLINA STATE BAR JOURNAL 9 attorney-client privilege, yet it might take vides that an initial pretrial conference can be Procedure in 2006. For North Carolina law, hundreds of hours to review tens of thousands requested by the parties, at which e-discovery Analog Devices v. Michalski 12 provides a of responsive e-mails to weed out the few priv- and other issues can be discussed and resolved thoughtful analysis of e-discovery issues by the ileged ones. To deal with this difficult situa- before a magistrate judge. Additionally, LCvR North Carolina Business Court. Finally, the tion, courts have approved “clawback” agree- 45.1(C) states that non-parties producing Sedona Conference, a group devoted to “best ments. In a clawback agreement, the parties readily retrievable electronic data should do so practices” in e-discovery, maintains an exten- mutually agree to produce all identified infor- in electronic format, preferably on a CD. sive collection of helpful resources, available mation, and also agree to return and not use online at thesedonaconference.org. n as evidence any information that is later iden- North Carolina State Courts tified as privileged. This approach expedites Until June 2011 North Carolina had no Ronald R. Davis is a member of Womble litigation and saves clients time and money by specific rule of civil procedure governing e-dis- Carlyle Sandridge & Rice, PLLC, and practices eliminating the need for attorneys to spend covery. The North Carolina Rules of Civil business litigation in its Greensboro and hundreds of hours searching for every privi- Procedure were amended in June 2011 to add Winston-Salem offices. The author gratefully leged document. Note, however, that claw- rules pertaining to e-discovery in North acknowledges the assistance of Matt Triplett, a ris- back agreements in no way affect the substan- Carolina state courts.10 The new procedures ing second year law student at Duke University tive law of privilege as contained in evidence resemble the federal rules outlined above and School of Law, in the preparation of this article. rules or statutes. apply to actions filed on or after October 1, 2011. Specifically, Rule 26 now includes “elec- Endnotes Specific Rules for North Carolina tronically stored information,” including 1. David K. Isom, Electronic Discovery Primer for Judges, Fed. Specific e-discovery rules can vary by juris- metadata, within the scope of discoverable Cts. L. Rev. 1, 1 & n.1 (2005). diction. Different rules apply in North material. Additionally, Rule 26 now provides 2. For more information on metadata, see Erik Mazzone, Metadata 101: Beware Geeks Bearing Gifts, NC State Bar Carolina federal courts and North Carolina for a discovery meeting, conference, and plan J., Spring 2011, at 10. state courts. that must address, in part, e-discovery. Rules 3. Teague v. Target Corp., 2007 WL 1041191, at *2 34 and 45 were amended to address electron- (W.D.N.C. 2007). North Carolina Federal Courts ically stored information. Finally, and perhaps 4. Fharmacy Records v. Nassar, 248 F.R.D. 507, 530 (E.D. The Federal Rules of Civil Procedure most notably, Rule 37 contains a new protec- Mich. Mar. 31, 2008). (FRCP) were amended in 2006 to address e- tive clause that may shield clients from sanc- 5. Dan H. Willoughby, Rose H. Jones, & Gregory R. discovery. Rule 26 includes basic e-discovery tions for destruction of electronic informa- Antine, Sanctions for E-discovery Violations: By the Numbers, 60 Duke L.J. 789, 790-91 (2010). procedures. Rule 26(b)(2)(B) contains an tion. According to the new rule, a court may 6. Analog Devices v. Michalski, 2006 WL 3287382, at *5 added stipulation that production of electron- not impose sanctions if a party has lost elec- (NC Super. Nov. 1, 2006) (citing Comm. on Rules of ic documents not reasonably accessible is not tronically stored information as part of rou- Practice & Procedure, Judicial Conference of the US required when the responding party would tine, good-faith operation of an electronic Report of the Judicial Conference Committee on Rules of suffer undue burden or cost. Additionally, information system, absent exceptional cir- Practice and Procedure Rules App. C-18 (2005), www.uscourts.gov/rules/Reports/ST09-2005.pdf). according to Rule 26(f)(3)(C), the parties cumstances. In addition to the new require- 7. The issue of when litigation is foreseeable has recently must discuss e-discovery issues at their Rule ments of the North Carolina Rules of Civil been litigated in federal court. See Micron Tech. v. Rambus 26(f) conference, including the form in which Procedure, Rules 17 and 18 of the North Inc., 2011 WL 1815975 (Fed. Cir. May 13, 2011); Hynix electronic documents should be produced. Carolina Business Court place additional Semiconductor v. Rambus, 2011 WL 1815978 (Fed. Cir. Revised Rule 16(b)(3)(B)(iii) empowers the requirements on litigants with cases in the May 13, 2011) (holding that reasonable foreseeability is a flexible standard and that litigation need not be “immi- court to include a plan for e-discovery in its North Carolina Business Court. nent” to be foreseeable). These companion opinions pro- scheduling order. vide a helpful clarification of the “reasonably foreseeable” The FRCP also contain rules relating to Conclusion and Additional Reading standard. production. Rule 33(d) provides that a party’s Despite its seeming complexity, e-discovery 8. See, e.g., Analog Devices, Inc. v. Michalski, 2006 WL electronically stored business records can be actually operates much like traditional discov- 3287382 (NC Super. Nov. 1, 2006). examined by the other party if such an exam- ery. By remembering the Four P’s 9. Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. May 13, 2003). ination would provide an answer to an inter- (Preservation, Processing, Production, and 10. An Act to Clarify the Procedure for Discovery of rogatory. Rule 34(a)(1)(A) empowers parties Privilege), North Carolina attorneys should be Electronically Stored Information and to Make to specify the form of production, but Rule able to sufficiently manage the complexities Conforming Changes to the North Carolina Rules of 34(b)(2)(D) allows responding parties to and procedural requirements implicated by Civil Procedure, Session Law 2011-199 (2011). object to a specified form. Rule 45 allows third the addition of modern technology into the 11. Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. May 13, 2003); Zubulake v. UBS Warburg parties to be subpoenaed for their electronic world of litigation. For further reading on this LLC, 230 F.R.D. 290 (S.D.N.Y. May 13, 2003); information, subject to the other pre-existing topic, several court opinions are particularly Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 Rule 45 procedures for third-party subpoenas. helpful. The entire Zubulake v. UBS Warburg (S.D.N.Y. July 24, 2003); Zubulake v. UBS Warburg LLC, Finally, Rule 26(f)(3)(D) now specifically pro- series, consisting of seven different opinions 220 F.R.D. 212 (S.D.N.Y. Oct. 22, 2003); Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004); vides for the creation of clawback agreements authored by Judge Shira Scheindlin, is a must- Zubulake v. UBS Warburg LLC, 231 F.R.D. 159 11 to manage privilege issues. read for federal court practice. Many of (S.D.N.Y. Feb. 3, 2005); Zubulake v. UBS Warburg LLC, The western district of North Carolina has Judge Scheindlin’s recommendations were 382 F.Supp.2d 536 (S.D.N.Y. Mar. 16, 2005). local rules on e-discovery. LCvR 16.1(G) pro- incorporated into the Federal Rules of Civil 12. 2006 WL 3287382 (NC Super. Nov. 1, 2006).

10 FALL 2011 DEPRESSION, STRESS, CAREER ISSUES, AND ADDICTIONS. BELIEVE IT OR NOT, THIS IS AN UPLIFTING STORY. Actually, there are many stories. Every one confidential and is received by a professional of them about someone in the legal field. staff person. You can be confident that you're Lawyers are as vulnerable to personal and talking to the right person and that no one will professional problems as anyone else. know about it. Competition, constant stress, long hours, We understand what it's like to face person- and high expectations can wear down even the al problems within the profession, because we most competent and energetic lawyer. This can only help lawyers. lead to depression, stress, career problems, Our service is not only confidential, it's relationship issues, financial problems, or alco- free, paid for with your yearly bar fees. hol and substance abuse. If you have a personal issue, or know some- So where's the uplifting part? That's where one who does, we can be the crucial first step we come in. in turning things around, a role we've played The Lawyer Assistance Program was created for many of your peers. by lawyers for lawyers. While we started as a We have countless success stories we could way for attorneys to deal with alcohol related tell, and yes, they are uplifting. But we do our problems, we now address any personal issue work quietly, confidentially, and professionally confronted by those in the legal profession. so the stories will stay with us. Our message to anyone who may have a per- We're here for you. Visit www.nclap.org, sonal issue, whether a lawyer, a judge, or a law call 1-800-720-7257 or [email protected]. student, is don't wait. Every call we take is We can help if you get in touch with us.

FOR THE ISSUES OF LIFE IN LAW B Y C AROLYN M C A LLASTER AND J ENNIFER B ROBST

ne hundred years after Tabitha

Holton became the first woman to

pass the bar exam in North Carolina

and the first woman in the South to become a licensed attorney,1 the North Carolina Association of Women

Attorneys (NCAWA) began its formation on March 11, 1978, in Chapel

Hill.2 NCAWA was the brainchild of Durham attorney Sharon

Thompson. Along with attorneys Anne Slifkin, Carolyn McAllaster, and

SIS/Dave Cutler Kathy Schneberk-King, Thompson poured over the State Bar list of attorneys trying to identify those who were women, which was not always obvious (Leslie? Beverly?). They came up with a list of 375 female mem- bers of the Bar. In 1979, Carolyn McAllaster was elected as the first convener/president of the association, with a founding number of 100 members.

That first year, the North Carolina State Bar provided NCAWA with office space in its building.

12 FALL 2011 Today, NCAWA has hundreds of mem- women students in class and in the law heavy deed books. The formation of bers, including a number of men, and five school environment generally. In NCAWA’s NCAWA could create a network of support local chapters across the state.3 The organiza- first year, North Carolina was in the throes for women as they made their way in the tion is more structured, with an employed of a number of firsts: Naomi Morris became profession. executive director, large board, lobbyist, and the first woman to serve as chief justice of This need and desire for camaraderie numerous committees, but the purpose of the North Carolina Court of Appeals, Annie based on common experience and minority the organization remains consistent with its Brown Kennedy became the first African status is universal. For example, Lelia founding mission: American woman attorney to be appointed Robinson-Sawtelle, one of the first women 1. to increase the effective participation to the North Carolina General Assembly,4 in the 19th Century to practice before the by women in the justice system, in public and Linda Sedivec was the first Hispanic United States Supreme Court, helped form office, and within the legal profession; woman to graduate from the University of The Equity Club, the first national associa- 2. to promote the rights of women under North Carolina (UNC) School of Law. tion for women attorneys. She explained the law; As the NCAWA conveners reached out to their purpose in formation as follows:5 3. to promote the welfare of the women women attorneys, they were met with over- There is a certain “moral support” in the attorneys of North Carolina; and whelming support for the creation of the confiding sympathy of brave-souled, 4. to promote and improve the adminis- new bar association. They heard about the warm-hearted women, who have dared tration of justice. isolation women felt as they practiced law, and suffered in kind with ourselves, often as the only female attorneys in their which becomes a tower of strength to Creating Camaraderie counties. Women told stories of the reactions nerve the heart and sustain the brain The 1970s produced the first large classes they received when they walked into court, when both are taxed to the utmost as is of women graduating from law schools. such as judges addressing them as “sweetie” often the case in the practice of our grand Female law students were involved in and “honey” or hearing that they should not profession. I became convinced years ago, Women in Law organizations. They were walk in front of the bar because that was for that the few women lawyers of the coun- learning about laws and cases that strength- “attorneys only.” Women told stories of diffi- try should become better acquainted for ened the rights of women in employment, cult job searches—one being told that she their mutual benefit, and acting upon the family, and reproductive rights. Also, was not qualified to be a real estate attorney such conviction, wrote to several of my there was finally safety in numbers for because she would not be able to lift the sisters in the profession, from which

THE NORTH CAROLINA STATE BAR JOURNAL 13 has struggled over the WOMEN IN BAR ASSOCIATION EXECUTIVE LEADERSHIP 8 years to maintain diversi- (as of September 2010) ty in its membership and leadership positions. As BAR ASSOCIATION WOMEN OVERALL WHITE WOMEN WOMEN OF COLOR the chart on this page reveals, maintaining racial NC Advocates for Justice 2 out of 17 (18%) (2) 18% (0) 0% and ethnic diversity in NC Association of board leadership remains Women Attorneys 12 out of 12 (100%) (12) 100% (0) 0% a challenge for many bar associations. However, NC Association of NCAWA’s dedicated mis- Defense Attorneys 10 out of 27 (37%) (9) 33% (1) 4% sion and advanced moni- NC Bar Association 11 out of 33 (33%) (8) 24% (3) 9% toring will allow it to American Bar Association 5 out of 9 (56%) (4) 45% (1) 11% improve its reach. In a study of bar association National Association of leadership demographics, Women Lawyers 17 out of 17 (100%) (14) 82% (3) 18+% the need for both (not all members identified) increased leadership National Bar Association 7 out of 23 (30%) (0) 0% (7) 30% opportunities and a wel- (The nation's oldest and coming environment for largest national association women attorneys of color of predominantly African is apparent in many bar American law professionals) associations, both state and national. Hispanic National The trend towards Bar Association 6 out of 15 (40%) (0) 0% (6) 40% increasing recognition for National Asian American women attorneys in Pacific American Bar Association 5 out of 9 (56%) (0) 0% (5) 56% North Carolina has been constant. By 1997, NCAWA had joined the resulted a correspondence both pleasant The African American female lawyer is National Conference of Women’s Bar and profitable. unique. She is unique in her endurance Associations (NCWBA), and NCAWA At that first meeting of NCAWA on and will to survive in the face of repressive President Lynne Albert was elected NCWBA March 11, 1978, the keynote speaker was and restrictive conditions. Her experience President in 2006. Strength in numbers and attorney Dr. Pauli Murray, who had been and mere being is unlike that of other the power of the “old girls’” network cannot raised in North Carolina. She was the first female lawyers. It is this uniqueness that be denied. It may be that the greater diversity African American woman to become fortifies and encourages us all to keep the and number of attorneys today have engen- ordained as an Episcopal priest, and also the struggle for justice and equality alive. dered a greater choice of voluntary bar asso- first African American woman in the nation In the early 1990s, NCAWA began lob- ciation memberships. This will require a new to publish in an academic law review.6 Before bying the State Bar to collect demographic way of thinking about what members want attaining these achievements, Dr. Murray information (age, sex, and race) about the and need from professional associations. At had been refused admission to UNC School composition of its membership in order to the 2010 NCAWA annual conference, which of Law because of her race and to Harvard’s identify trends and needs in the profession. focused on diversity in the profession, a show graduate law program because of her sex. She After significant renewed efforts by NCAWA of hands during a plenary session revealed urged the group to remain diverse: “I hope Presidents Susan Dotson-Smith and that almost every woman attorney in the you will stay together as you have begun Charlotte-Anne Alexander in 2008 and room was a member of several bar associa- together. Black women…bring to the 2009, who both collaborated with other bar tions, mainstream and specialized, local, women’s movement a kind of experience and association partners, the State Bar agreed and state, and national. Many who had achieved a kind of toughness. Today, feminism for me has begun this year to ask its members to success in mainstream bar associations is fun—30 years ago, racism was agony.” provide these details. It should soon be pos- expressed a strong interest in retaining their The experiences of women are inherently sible to have an accurate demographic break- NCAWA membership in order to retain the diverse and complex. Among white women down of attorneys in our state, including sta- camaraderie they had enjoyed for many years attorneys and women attorneys of color, tistics based on race and gender. in the presence of other women attorneys. women law students from low income or NCAWA itself began to collect demo- affluent families, or from urban or rural graphic data on its members in 2009 to better Nurturing Leaders backgrounds, none will ever have the same identify the needs and diversity of its mem- In 1978, most of the 375 women attor- experience:7 bership. Despite a promising start, NCAWA neys in the state were under the age of 30.

14 FALL 2011 They were eager to become fully integrated NCAWA proved to be a launch pad for president Anthony di Santi has vowed to into the legal profession, not merely as women to become more involved in the continue these efforts. members, but as leaders—on bar commit- mainstream bar. Today a majority of North Carolina’s tees, as Bar councilors, on the Board of Law Perhaps the increasing number of Supreme Court justices are women and Examiners, as judges, and as legislators. women in the judiciary has been NCAWA’s include longstanding members of They saw the formation of NCAWA as a most successful effort for women in leader- NCAWA—Chief Justice Sarah Parker, vehicle to meet those goals. However, not all ship. NCAWA members had to work dili- Justice Patricia Timmons-Goodson, and of the women attorneys in North Carolina gently to exert their combined influence on Justice Robin Hudson. Seven of the 15 supported the formation of NCAWA. Most public appointments and elections. In 1982 court of appeals judges are also currently notably, Justice Susie Sharp of the North and 1983, NCAWA finally began to see women, including founding NCAWA Carolina Supreme Court and Judge Naomi some women appointed to the superior member Linda McGee. Nevertheless, a Morris of the North Carolina Court of court bench. Attorney Joyce Davis of number of counties in North Carolina still Appeals viewed the formation of a separate Raleigh and Francis Rutty of Salisbury were have never had a woman serve as a superior bar association as a step backwards for appointed to the Judicial Nominating court judge.11 Also, women corporate coun- women attorneys, and a path to isolation Committee by the governor and the chief sel continue to face thick glass ceilings. In rather than leadership and integration into justice. NCAWA worked with Governor 2009, only 17% of corporate counsel in the bar. They had spent their careers seeking Hunt's office to support the appointment of Fortune 500 companies were women, up inclusion in the power structure of the Mary Mack Pope to a special superior court from 8.4% in 2000.12 Clearly, the need for mainstream bar and had been successful in seat at a time when only two women had advocacy on behalf of women has not their efforts. Justice Sharp was the first previously been superior court judges— ended. female chief justice of any state’s highest Susie Sharp from 1949 to 1962 and court in the nation. They understandably Winifred Wells in 1972. In addition, Protecting the Rights of Women did not want to jeopardize the progress they NCAWA lobbied hard and successfully for NCAWA has taken its mission of pro- and a handful of other women attorneys had the appointment of Sarah Parker to the moting the rights of women under the law made. Katherine Everett was the exception court of appeals in 1984. seriously. Its first legislative position was to to this view. At age 83, and as the third In 1986, the NCAWA-PAC was formed support the Equal Rights Amendment in woman to pass the bar in North Carolina, in large part through the efforts of member 1978. In the early years, NCAWA was she sat in the middle of the first row at the Lynn Fontana to give members a vehicle instrumental in getting equitable distribu- convening meeting of NCAWA in 1978. through which to support judicial candi- tion passed in North Carolina. The legisla- When she was given an award by the associ- dates for election. Also that year, for the first tion was written by Greensboro attorneys ation in 1983, Ms. Everett wrote, “I was time, NCAWA succeeded in getting three Meyressa Schoonmaker, Gwyn Davis, and only one of the first—not the first woman women elected to the State Bar Council— Ellen “Lennie” Gerber and shepherded licensed—though I was the pioneer woman Trish Pegram, Julia Jones, and Kay Webb. In through the legislature by NCAWA in 1981. in arguing a case in person in the North 1998 as the number of women judges had It was NCAWA’s first major piece of legisla- Carolina Supreme Court, and winning. increased, Court of Appeals Judge Linda tion and, as Lennie stated, "it helped us get We’ve come a long way since 1920.” McGee created the Judicial Division of into the legislative halls." Notably, that same In 1978, there was only one woman on NCAWA. Each year since then, Judge year Sandra Day O’Connor became the first the North Carolina Supreme Court, one McGee has spear headed judicial panels of woman to serve as a United States Supreme woman on the North Carolina Court of female judges at each of the state’s law Court Justice. Appeals, no women on the superior court schools in collaboration with the law school Closely following this initial success, bench, no women Bar councilors, no women student organizations. NCAWA was successful in changing the ten- women on the Board of Law Examiners, As expected and hoped for, women attor- ancy by the entirety statute in 1983. At that and very few female district court judges. neys increasingly achieved leadership roles time the husband had the legal right to con- The creation of NCAWA gave women beyond the bounds of NCAWA. Successful trol all rents and profits of property owned attorneys a seat at the table. Almost imme- women in the law have not always been as tenants by the entirety. Domestic violence diately, doors opened. NCAWA began members of NCAWA, but many women legislation was also passed in 1983 with receiving calls from the governor’s office have been members of both mainstream and NCAWA’s support. Part of NCAWA’s suc- when judicial vacancies occurred, and specialized bar associations, such as cess in advocacy has been its ability and received invitations to send representatives NCAWA.10 For example, Rhoda Billings desire to collaborate with other organiza- to the long-range planning meetings of the became the first woman president of the tions. For example, in its successful advocacy State Bar. Various North Carolina bar asso- North Carolina Bar Association in 1991. In to eliminate the marital rape exemption in ciations asked for NCAWA recommenda- 2000, M. Anne Reed became the first North Carolina in 1993, NCAWA joined tions for committee assignments. NCAWA woman president of the North Carolina with NC NOW, the North Carolina was given designated positions on statewide State Bar. Last year, NCAWA member Coalition Against Sexual Assault, the North boards, such as the North Carolina Prisoner Bonnie Weyher made diversity of the North Carolina Council of Churches, North Legal Services.9 Instead of isolating women Carolina State Bar councilors one of the pri- Carolina Legal Services, and Planned attorneys into a separate bar association, orities of her State Bar presidency. Current Parenthood.13 Since then, NCAWA has

THE NORTH CAROLINA STATE BAR JOURNAL 15 often worked in coalitions and has support- the state on women’s rights and legal con- ed and worked for child support reform, day cerns for a number of years. Mediation care reform, reproductive freedom, domestic Most recently, NCAWA helped lead the violence programs, pay equity, and support effort for adoption by the North Carolina & Arbitration for low-income families. State Bar of the proposed amendment to NCAWA has also contributed several the Preamble to the Rules of Professional Services notable amicus briefs in key cases. For exam- Conduct that would have encouraged attor- in Federal Cases ple, in 1992 NCAWA member Elizabeth neys not to “discriminate on the basis of a Kuniholm authored an amicus brief in Doe person’s race, gender, national origin, reli- v. Holt, also signed by the North Carolina gion, age, disability, sexual orientation, or Academy of Trial Lawyers (North Carolina gender identity.” After vigorous debate and Advocates for Justice). This brief to the study, the proposed amendment was North Carolina Supreme Court supported approved by the North Carolina State Bar the lower court’s rejection of an application Council in January 2011, but regrettably on of the doctrine of parental immunity in a March 10, 2011, the North Carolina tort claim involving child sexual abuse. Supreme Court declined to approve the Policy efforts to ameliorate work-life bal- proposed amendment. ance concerns and gender equity in the workplace for women attorneys and judges Conclusion Carl Horn, III in North Carolina have had a longstanding Looking back to its first meeting in place of importance for NCAWA. In 1989, 1978, as the group worked through the as a result of the efforts of the NCAWA day’s agenda to set the goals of the organiza- • United States Magistrate Judge, administrations of Jane Wettach and Pam tion, lifelong friendships and professional 1993-2009; Chief Assistant U.S. Silberman, and in recognition of the increas- relationships were begun. They debated, Attorney, 1987-93 ing numbers of women in the profession, they laughed, they marveled at the energy, • Co-author of Federal Civil Practice in the NC Bar Association provided funding and most of all they basked in each other's the Fourth Circuit and author of for a statewide survey to be conducted joint- support and companionship. By the end of Fourth Circuit Criminal Handbook ly with NCAWA on how gender affects the the day the conveners had formed a steering • Experience handling the full gamut practice of law. As expected, the survey committee and voted to form as an organi- of federal civil litigation, including results highlighted many of the serious chal- zation. The energy, warmth, and dedication Title VII, ADEA, ADA, FMLA, Sexual lenges that women attorneys faced, includ- of that initial group of women have Harassment, ERISA, Fair Labor ing the impact of child-rearing on career remained a hallmark of NCAWA over the Standards Act, Intellectual Property, choices, income disparities between equally years, continuing to offer camaraderie, Civil Rights, Construction, Education, situated male and female attorneys, the opportunities for leadership, and efforts to Insurance and Antitrust Claims, as well as a variety of personal and impact of workplace policies on career protect women under the law in our state. commercial claims under the advancement, and other documented dis- The breadth of achievement for North Court’s diversity jurisdiction criminatory behaviors in legal professional Carolina women in the law in the last cen- settings. The survey results led to the forma- tury has been remarkable, not only in terms • Successful in settling most cases mediated, first as a Judicial tion of the Commission on the Status of of organizational strength and vision, but Settlement Officer and, more Women in the Legal Profession, co-chaired also in their ability to participate successful- recently, as a Court-appointed or by attorneys Dorothy Bernholz and Sharon ly in a number of arenas at once. No written privately retained Mediator Parker. The 1993 findings and recommen- work could adequately honor the numerous • Adjunct Professor, Charlotte School dations of the commission continue to be women who have contributed to the devel- of Law relevant and provide a model framework for opment of NCAWA and women in the legal employers on issues of gender equity legal profession. Women attorneys today • Named a 2011 North Carolina Super such as parental leave policies, alternative are successful leaders in the traditional Lawyer work schedules, involvement of women in mainstream, state and national (and inter- firm management and client development national) forums, and in networking that Carl Horn, III activities, and adoption of sexual harassment focuses on the common experience of race, policies. ethnicity, sexual orientation, age, gender, 2810 Wamath Drive As technology rapidly improved in the and much more. As long as women’s unique Charlotte, NC 28210 new millennium, NCAWA responded in needs continue to require a champion kind, unveiling a new, more expansive web- under the law, NCAWA will remain vigilant 704/591- 6398 site. In 2002, NCAWA sponsored the award- in ensuring that their voices are heard. n winning statewide television program [email protected] “Laying Down the Law,” with host Lynne Carolyn McAllaster, JD, is a clinical profes- Albert, whose televised interviews educated sor of law and director of the AIDS Legal

16 FALL 2011

+'0

Project at Duke University School of Law. She detailed overview of the history of NCAWA, see North Carolina Bar Association continuing legal edu- was a co-founder of NCAWA and its first con- Jennifer Brobst, “North Carolina Association of cation presentation manuscript 9 (October 2010). This Women Attorneys (1978-2009): A Comprehensive data was obtained through website research and tele- vener/president. History of NCAWA Members and Women Attorneys phone interviews with bar association offices. The Jennifer Brobst, JD, LLM, is the legal Nationally” available at www.ncawa.org/attachments author suggests the following conclusion on consider- director for the Center for Child and Family /files/60/NCAWA%20Chronology%20as%20of%20 ing these numbers: “Women’s leadership in public serv- Health, a nonprofit consortium of faculty and Dec%2011%202009_1.pdf. ice is bound to take its full and rightful place. Whether this destiny is achieved with honor and respect for the staff from Child and Parent Support Services, 3. See www.ncawa.org. Chapters include Charlotte Women’s Bar, Durham-Orange Women Attorneys, diversity within society as a whole and specifically Duke University, North Carolina Central Eastern North Carolina, Wake Women Attorneys, and among women will be the measure of our success.” Id. University, and the University of North Western North Carolina Women Attorneys. at 11. Carolina at Chapel Hill. The center’s Legal 4. Note that Alfreda Johnson Webb, a veterinarian, was 9. See generally, Michael S. Hamden, "North Carolina Program is a component of the NCCU School the first African-American woman appointed to the Prisoner Legal Services: A Model for Other States?" 40 No. 2 Crim. Law Bulletin ART 2 (2004). of Law Clinical Programs. She formerly served NC General Assembly in 1971. Annie Brown Kennedy was the second. 10. In an interview in 1995, former NCAWA President as the historian on the Board of Directors for the 5. Mary L. Clark, "The First Women Members of the Ellen “Lennie” Gerber advised women law students to North Carolina Association of Women Supreme Court Bar, 1879-1900," 36 San Diego L. join both women's law student and attorney organiza- Attorneys, and as president of its Durham- Rev. 87, 129 (1999). The Equity Club was formed in tions, as well as the general bar associations. Walter H. Orange Chapter. Many thanks to NCCU Law 1887 as a national correspondence club for women Bennett & Judith W. Wegner, "Law Alumni Service to the Public and the Law School," 78 N.C. L. Rev. 846, intern Jacinta Jones for her editing and helpful attorneys through the University of Michigan Law School, which was one of the first law schools to admit 897 (1995). comments. women in the United States. 11. E.g., Orange County. 6. J. Clay Smith Jr. (ed.), Rebels in Law: Voices in History 12. Hope E. Ferguson, “Women General Counsel: Endnotes of Black Women Lawyers 281 (University of Michigan Beyond the Glass Ceiling,” in Diversity and the Bar 1. See generally, Walter C. Holton Jr., “Tabitha Ann Press, 1998). Dr. Murray published her article in the (Minority Corporate Counsel Association, March Holton, First in the South,” 16 NC State Bar J. 2 UCLA Law Review in 1948. 2002), and Minority Corporate Counsel Association, (2011). 7. African American Female Pioneers in Search of Justice and "MCCA 2009 Survey of Fortune 500 Women General Counsel" (2009). 2. Both authors have relied in part on the current archives Equality: 1947-1990, vol. 3 Chronicle of Black of NCAWA, which are housed in Duke University Lawyers in North Carolina (North Carolina 13. Jaye Sitton, "Old Wine in New Bottles: The 'Marital Library’s Special Collections in the Sallie Bingham Association of Black Lawyers 1990). Rape Allowance,'” 72 N.C. L. Rev. 261, 287, fn 176 Center, available for viewing by the public. For a more 8. Jennifer Brobst, “Gender Disparity in Public Service,” (1993).

THE NORTH CAROLINA STATE BAR JOURNAL 17 Rules of Civil Procedure and Their Impact on Foreclosure Cases in North Carolina

B Y T IMOTHY J. PETERKIN

omeowners across the country are facing foreclosure.

The numbers are staggering.1 In fact, many economists

suggest that the rise in foreclosure rates has a direct

impact on the entire economy. In North Carolina, fore-

Hclosures are on the rise as well, even though the growth in North Carolina is not as volu-

minous as other states.2

The reasons for an increase in foreclosures Court is No Place For Equity are numerous and the subject of much If a homeowner is facing foreclosure, usu- debate. Some argue that the issue is simply ally the lender has a “power of sale” provision about personal responsibility. After all, if the in the deed of trust that allows the lender to go homeowners pay their mortgage (and proper- to the county clerk of court and have a hear- SIS/Rob Colvin ty taxes and insurance), there would be no ing.3 At this hearing, the clerk will not be in a foreclosures. Others argue that greedy lenders position to hear all of the arguments that the trick unsophisticated homeowners into get- homeowner may have. In fact, the clerk will will still not be heard and the homeowner will ting mortgages they cannot afford. In fact, have no choice but to proceed with the fore- still lose his home, regardless of the strength of the tricks are very subtle and sophisticated. closure even in the face of uncontroverted evi- the equitable arguments. There are teasers rates and adjustable rate dence that the lender has violated the Anti- It would surprise the average homeowner mortgages that make the mortgage payments Predatory Lending Act. The courts made a to know that equitable arguments cannot be lower at first, but then they rise. Congress and distinction between legal and equitable argu- raised at a foreclosure hearing. Only legal state legislatures have enacted legislation ments in these proceedings.4 The clerk can defenses are permitted at a foreclosure hearing designed to protect homeowners and limit only hear the legal arguments. If the home- before the clerk.5 Courts are seen as places unscrupulous lenders. However, some Rules owner only has equitable arguments, the people go to seek justice and fairness—equity, of Civil Procedure and some questionable homeowner will lose his home at this hearing. if you will. The images that are seen on televi- court opinions have hindered the enforceabil- If the homeowner files an appeal of the fore- sion suggest that a courtroom is a place to ity of the act and its ability to protect home- closure to be heard by the superior court address all of the issues and seek complete res- owners. judge, the homeowner’s equitable arguments olutions. However, time and time again, the

18 FALL 2011 appellate courts have made a distinction paperwork and determine if four elements are No one wanted to see the 90-year-old widow between legal and equitable defenses to a fore- met: existence of a valid debt, default, power lose her home. closure. The result is quite concerning. If the of sale granting the right to a non-judicial Unfortunately, fraud is an equitable homeowner is arguing what the court has foreclosure, and proper notice of the proceed- defense and the clerk cannot hear such defens- deemed an equitable argument, this argument ings.7 The clerk gets an affidavit from the es at a foreclosure hearing.13 It is irrelevant to or defense can have no bearing on the foreclo- trustee that says the homeowner has missed the clerk that this lady could not identify her sure hearing before the clerk or on the de novo some payments, no matter how much.8 Next, own daughter, much less understand that she appeal of the foreclosure order before the the trustee shows the clerk the deed of trust. In was signing a loan that would encumber her superior court judge. No matter how volumi- this document, the power to use the quick and primary residence. Instead of stopping the nous the evidence or how compelling the fast foreclosure process has been granted, foreclosure and demanding an investigation equitable argument may be, the clerk and the instead of a judicial foreclosure.9 The trustee into the matter before the hearing could pro- superior court judge are without jurisdiction can show the clerk that the homeowners were ceed, the clerk had no choice but to sign an to hear these arguments or make rulings based notified of the proceeding.10 If the trustee has order that was going to cause a 90-year-old upon these arguments when there is a foreclo- an executed promissory note, then the foreclo- woman to be removed from her home by the sure that has been filed under N.C. Gen. Stat. sure sale should be ordered. sheriff the day before Thanksgiving. The clerk § 45-21.16.6 The result is that the clerk does not hear an cannot be held responsible for this outcome Equitable arguments simply cannot be “equitable” argument at a legal proceeding because even in the most egregious of circum- raised at a foreclosure hearing or on the de novo when homeownership interests are at stake, stances, the clerk’s hands are tied. The legal appeal. Issues such as fraud and usury or viola- and the courts prohibit “equitable” arguments. advocates for Ms. Weeks had affidavits from tions of the NC Anti-Predatory Lending Act ministers and elected officials who had known are all considered equitable arguments and Legal Defenses Are Allowed Ms. Weeks for decades and attested to her lack thus improper before the clerk at the foreclo- The clerk can entertain a legal defense to a of competence. There was really no question sure hearing or the superior court judge in the foreclosure. The courts have been very narrow that this loan was executed under fraudulent de novo review. If the homeowner argues there in defining what is a legal defense to a foreclo- circumstances. The only question remaining was fraud in the loan transaction, this argu- sure in a hearing before the clerk. If the home- was how Ms. Weeks could get relief. Could ment cannot be raised in the foreclosure hear- owner says he/she never signed the loan docu- she get the advocate to go to the hearing and ing because fraud is an equitable argument. ments, this is a proper legal defense.11 explain that the mortgage company should Despite overwhelming evidence that the not be allowed to foreclose because the home- lender actually did defraud the homeowner, Equitable Defenses owner did not have contractual capacity to the clerk would still have to enter the order for Equitable defenses are strictly prohibited in execute a mortgage? Unfortunately, the the foreclosure. The superior court judge pre- a clerk’s hearing. In November 2005, a non- answer to the question is no. The advocate siding over the foreclosure appeal would also profit agency that is dedicated to mortgage could not properly present evidence of the have to ignore the fraud and uphold the fore- foreclosure defense filed a Motion to Set Aside fraud that caused this mortgage to come into closure order entered by the clerk. a Foreclosure in an effort to save Ms. Weeks’ existence. If no other action was filed, the fore- Foreclosure actions under §45-21.16 were home.12 Ms. Weeks was in her 90s and every- closure would be completed without address- designed to be simple, straightforward pro- one around her agreed that she had dementia ing the evident fraud that occurred. This can- ceedings. The questions were basic: did the at the time of the closing of the loan. There not be the result that the Legislature intended homeowner have an obligation to pay; did were affidavits from her daughter and her pas- when the North Carolina Anti-Predatory Act the homeowner pay as he promised he tor (a member of the Board of County was enacted. Ms. Weeks could have filed a would; does the paperwork say the lender can Commissioners) attesting to the fact that Ms. T.R.O. preliminary injunction and superior take the house back if the homeowner has not Weeks did not have contractual capacity. court complaint to ultimately enjoin the sale paid as promised; and did the homeowner There was no way that she could have known of her home. However, there is a real concern know about this hearing? As has often been what document she was signing. Further, no that this foreclosure took place in spite of the said, “If you don’t want to lose your house, notary or closing attorney would have evidence of fraud. pay your mortgage.” It does seem very simple. thought that she was in a position to sign loan Similarly, in In the Matter of Foreclosure Unfortunately, mortgage transactions have documents. Her home of over 50 years had Godwin, 121 N.C. App. 703, 468 S.E.2d 811 become more complicated and the reasons been mortgaged a few years earlier and had (1996), there was an issue regarding one of the for foreclosure have also become more com- now gone through a foreclosure. Her repre- homeowner’s contractual capacity at the time plicated. If the scenarios for the homeowner sentatives explained to the legal advocate that of the consummation of the loan. The appel- were simply a result of irresponsible derelicts they were not aware of any mortgage on the late court upheld the trial and clerk’s ruling taking advantage of lenders who were kind property, and more importantly, if there was a that allowed the foreclosure to proceed.14 The enough to loan money, there would be no mortgage, there was no way that Ms. Weeks foreclosure was upheld despite the fact that need for usury laws, anti-predatory lending understood what she was doing when or if she there was evidence of the mortgagor’s lack of laws, and there would certainly be no need signed any loan documents. This appeared to competency. for this article. be a clear case of fraud. Ms. Weeks was bedrid- A deed executed by an incompetent At first glance, this does not seem prob- den and spoke of being late for work, even grantor may be set aside by a suit in equity lematic. After all, the clerk is to look at the though she had not had a job in over 30 years. to rescind or cancel the deed (internal cites

THE NORTH CAROLINA STATE BAR JOURNAL 19 omitted). But such relief is not available as the process in which these predatory loans can have credit damage, etc. There must be a matter of right (internal cites omitted). be litigated. It defies common sense that the uniqueness to the home. Without a showing Rather, a court in the exercise of its equi- state legislature would enact a strong anti- of the uniqueness of the home, the court will table jurisdiction must weigh the equities of predatory lending law, but allow homes to be likely find that money damages are sufficient a particular case to reach a just resolution.15 foreclosed on even when the lender admits to to make the homeowner whole again and Pursuant to N.C. Gen. Stat. § 45-21.16, having violated the law. Issues of usury, fraud, thereby the preliminary injunction will be the clerk or the superior court judge on appeal and incompetency are still valid defenses and denied. can only hear legal arguments at these proceed- cannot be raised at a foreclosure hearing 3. To win the preliminary injunction is to ings. Issues such as incompetency are equitable because they have been deemed equitable win the battle, not the war. After the home- in nature. “The relief potentially available defenses. owner has prepared for a hearing with ten days because of a mortgagor's incompetency is If the court had ruled that superior court of preparation, if he is successful, he has still equitable in nature. Accordingly, the incompe- judges still have equity jurisdiction in foreclo- not saved his home, nor has he proven his tency of a mortgagor is an equitable rather sure appeals, homeowners who need to address case. He has merely stopped the foreclosure than a legal defense to foreclosure and may not serious legal matters would have a clear until a full trial can be heard on the merits of be raised in a hearing under G.S. § 45- method of doing that. For example, if the the underlying complaint.26 21.16.”16 While the issue of incompetency can court had equitable jurisdiction in a foreclo- 4. No appeal to denial of preliminary ultimately be litigated, those issues cannot be sure appeal, the court could stop a foreclosure injunction. If the homeowner is not successful raised in a foreclosure hearing or appeal such as the case of Ms. Weeks. The lender in the preliminary injunction hearing, an aver- because they are deemed “equitable.” could not unapologetically foreclose on a age person would think that the homeowner In 1978, a trial judge erroneously deter- home when all of the evidence suggests that was safe because it would not be reasonable to mined that a foreclosure should be dismissed the homeowner did not have contractual foreclose on the home when the fraud or other for equitable reasons.17 The judge was presid- capacity. Even in the most conservative state, equitable issues have not been fully addressed ing over a foreclosure appeal pursuant to N.C. such results are unpalatable and likely unantic- and there is a pending complaint yet to be lit- Gen. Stat. § 45-21.16. While there was a valid ipated by the legislature. igated. The average person would be wrong to debt and default on the payment obligation, think that the pending complaint stops the the court determined that equity concerns pre- The Process You Must Engage In to foreclosure. If the preliminary injunction is vailed and the foreclosure action should be dis- Litigate an Equitable Defense denied, the trustee moves on with the foreclo- missed. The appellate courts disagreed. In all fairness, it must be explained that it sure. The pending complaint can still be liti- Although a superior court judge has general is possible to litigate an equitable defense to a gated, but only monetary damages can be equitable jurisdiction, a court is without foreclosure action.21 The remedy is available, recovered. Even if the homeowner litigates the jurisdiction unless the issue is brought but much more difficult to pursue. It is virtu- full complaint, when the case is resolved the before the court in a proper proceeding. ally impossible to engage in this process with- home will have been sold.27 Here is another The proper method for invoking equitable out legal counsel. The homeowner must file a example of when the lender could have jurisdiction to enjoin a foreclosure sale is by temporary restraining order, a motion for a defrauded the homeowner and even when the bringing an action in the superior court preliminary injunction, and a superior court allegations are proven to be true, the lender pursuant to G.S. § 45-21.34.18 complaint that addresses the equitable was still able to foreclose on the home. Despite acknowledging that the superior defense(s). Perhaps it would have taken extensive discov- court judge has general equitable jurisdiction, 1. Temporary restraining order.22 This ery in order to demonstrate the likelihood of the appellate court determined the judge order is only in effect for ten days.23 The success on the merits. With only ten days to could not exercise such equitable jurisdiction homeowner must also post a bond to effectu- prepare, such discovery tools are not available. in a foreclosure appeal. The court focused on ate the order. The preliminary injunction hearing is a trun- the legislative intent of the statute as the basis 2. Preliminary injunction.24 The hearing cated or abbreviated trial. There is no time for for overturning the judge’s ruling. “In ascer- on the preliminary injunction should be with- depositions, discovery, or other tools in the taining this intent the courts should consider in ten days of the entry of the temporary attorney’s arsenal that might have allowed him the language of the statute and what it sought restraining order. This hearing is before a to have been successful. to accomplish.”19 Based on the interpretation superior court judge. The homeowner has the If the homeowner feels aggrieved after los- of the statute, it has become increasingly diffi- burden of proving he/she will suffer irrepara- ing the preliminary injunction hearing and cult to bring issues of fraud and predatory ble harm if the relief is not granted and that wants to appeal to an appellate court, the law lending before a competent court. Was it the he/she has a likelihood of success on the mer- does not provide such a remedy.28 Ironically, legislative intent to allow a lender to be able to its of the underlying complaint. This seems the preliminary injunction is not appealable foreclose on an admittedly predatory or fraud- simple enough, but the irreparable harm of because it is not considered to be a final adju- ulent loan? It is very likely that in 1978 the losing your house in a foreclosure has not dication on the merits of the complaint. After housing industry did not have the same con- seemed to persuade our judges.25 the preliminary injunction hearing is over, cerns that exist today.20 There was no Anti- Interestingly, a homeowner cannot prevail on there is still the underlying complaint to liti- Predatory Lending Act in 1978. Even with the preliminary injunction if the only argu- gate. Well, the homeowner will suffer the loss North Carolina serving as a trailblazer in con- ment regarding irreparable harm is that he will of his home if the motion for a preliminary sumer rights, the legislature has never revisited lose his home, be evicted, face homelessness, injunction is denied. As noted earlier, the sale

20 FALL 2011 will proceed and will be final. Thus, even the The most difficult legal “pill” to swallow is are shielded from the scrutiny the homeowner judge’s abuse of discretion in a preliminary the narrow interpretation of “validity of the is subjected to and will ultimately be able to injunction hearing will have no bearing on the debt” and “existence of default.” Lenders foreclose on a property without having proven ability of the homeowner to appeal and seek argue that the execution of a promissory note all rules have been followed. relief. The appeal would be interlocutory. is the only evidence needed to determine there The end result is that the homeowner has Courts have generally found that inter- is a valid debt. Homeowners want to argue two superior court cases being litigated at the locutory appeals are contrary to notions of that the debt is not valid if the debt is pack- same time. Both cases deal with the real judicial economy.29 While this is a firmly aged into a usurious loan, if the lender is col- property that is the subject of the foreclosure. rooted philosophy, the same logic does not lecting excessive interest, or if the violations of Both cases deal with the enforceability of the easily apply to a foreclosure case. In the fore- federal and state lending laws would cause the debt and the amount alleged as owed. closure, the issues have not truly been litigated lender to have to forfeit the interest. Further, if However, the cases cannot be heard together. at the preliminary injunction hearing. If the the homeowner is owed damages because of This flies in the face of basic notions of judi- homeowner has to wait until the full trial on the violations of the Anti-Predatory Lending cial economy. the merits of the case, the property will be Act, this can serve as a set-off to any arrears sold. If the homeowner wins and proves that that have accrued. This is not a frivolous posi- Conclusion the loan was predatory or proves that the tion to take. The NC Anti-Predatory Lending Act lender has engaged in fraudulent acts, the res- For example, if the lender alleges that the remains a potent law and its existence has pre- idence cannot be returned.30 homeowner is in default by $5,000, the vented many lenders from consummating or Oddly enough, the courts have allowed a homeowner may seek to defend himself by realizing the benefit of loans that were not junior lien holder to appeal the dissolution of alleging the lender has violated the Anti- advantageous to North Carolina homeowners. a temporary restraining order.31 In Carolina Predatory Lending Act. If the homeowner has However, loans that potentially have predatory Cooling & Heating, Inc. v. Blackburn, the jun- a viable claim, he may recover twice the inter- lending claims should not be subject to quick ior lienholder had a temporary restraining est that was collected over the last two years.35 foreclosure proceeding before the clerk. There order entered to halt a proceeding instituted Furthermore, if the homeowner can prove should be a more straightforward method to by the senior lienholder. When the superior damages under the Anti-Predatory Lending raising this defense and other equitable argu- court judge resolved the restraining order, the Act, the homeowner can prove damages ments. The homeowner should not be decision was appealed. under the unfair trade practices act and he can required to find a different court to address the Practically speaking, the action that was treble his damages.36 If the homeowner has a fraud in the mortgage loan or the usury. The filed was done with the intent to keep the $100,000 mortgage at a fixed 8% interest rate legal/equitable argument distinction needs to home. If the preliminary injunction is denied, for 30 years, within the first two years of the be abolished. If the homeowner has a defense the home will be sold,32 and the homeowner loan, the homeowner will pay over $600 a to a foreclosure, it should be raised in a foreclo- has no real incentive to continue pursuing lit- month in interest. If the damages for a viola- sure hearing. The clerk should be allowed to igation. A denial of a preliminary injunction is tion of the Anti-Predatory Lending Act are step aside in favor of a trier of fact who can not an adjudication on the merits of the case. determined to be twice the interest paid for weigh and balance the arguments that the par- The homeowner could still win the case— the two year period prior to the filing of the ties seek to bring. The State Home Foreclosure proven that there was fraud or predatory lend- action, the damages are $28,800 [($600 x 24 Prevention Project helps to ensure that some ing or that the loan was usurious—however, months) x 2]. If you subtract the $5,000 in predatory loans get scrutiny before the foreclo- the home will be gone forever. Who would arrears, the homeowner is still owed $23,800. sure. This project has been extended to 2013. continue to pay an attorney or continue to Applying this approach, the homeowner is However, the scope is not broad enough. The engage in the legal process when the ultimate not liable for the arrears and the lender owes project does not address all of the factors that goal has already been lost? the homeowner a refund. Thus, there is no can bring the legitimacy of the loan into ques- “existence of a default.” When the homeown- tion. There are servicing violations, bad faith Four Issues that the Clerk Will Decide er owes the lender $5,000 but the lender owes negotiations, misrepresentations, and many On at the Foreclosure Hearing the homeowner $28,800 it would seem that other issues that are causing foreclosures but The clerk can only hear four issues at a the lender would be in no place to foreclose. are beyond the scope of the project. hearing. If the clerk finds the existence of (i) Unfortunately, this argument is said to be Nevertheless, this is a great start. For the first valid debt of which the party seeking to fore- “beyond the scope” of the four issues. In all time, attorneys are looking at the loans before close is the holder, (ii) default, (iii) right to fairness, the court should not be able to act to the lender can foreclose and they are engaging foreclose under the instrument, (iv) notice to address the homeowners’ failure to comply in an analysis to determine if the loan violates those entitled to such, the clerk must enter an with the rules, but refuse to address the state law. The commissioner of banks is also order allowing the foreclosure sale.33 lenders’ failure to comply with the rules. No empowered to encourage negotiations and Unfortunately, as with any area of law, there is one wants to reward derelicts who ignore the postpone some foreclosures. much room to debate what these elements rules and seek to take advantage of the system. Implementing any new rules or policies actually mean. As with most of the issues dis- Our courts, with the encouragement of our will never eradicate foreclosures. This is not cussed in this article, the courts have found legislature, need to ensure that both sides are anyone’s goal. However, the goal should be to ways to interpret these matters to the benefit being given equal treatment in these foreclo- prevent foreclosures that are preventable, of the lenders and not the homeowners.34 sure cases. With this current system, lenders ensure homeowners are making informed

THE NORTH CAROLINA STATE BAR JOURNAL 21 20. The National Foreclosure Rate was 250,000 in 1979 as opposed to over 2 million in 2007. http://bet- Mary Hensley Johnson, MSN, RNC tyjung.wordpress.com/2008/12/06/historial-foreclo- sure-rates-1979-2007. Nurse-Legal Assistant 21. N.C. Gen. Stat. § 1-485 (2007) and § 45-21.34. 22. NC ST RCP § 1A-1, Rule 65. The temporary restrain- 29 years of nursing experience, 9 years as a ing order will be granted if “it clearly appears from spe- full-time in-house legal nursing consultant cific facts shown by affidavit or by verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or P. O. Box 1181 that party's attorney can be heard in opposition.” Spruce Pine, N.C. 28777 23. N.C. Gen. Stat § 45-21.16(d1) (2007) provides that there is no standard for amount of the bond. (828) 765-9928 : : [email protected] 24. N.C. Gen. Stat. § 1-485. 25. In re Foreclosure by McNeely v. Moab Tiara Cherokee Kituwah Nation Chief F.Supp.2d, 2008 WL 2679975. 26. N.C. Gen. Stat. § 1-485 provides the effect of getting decisions when purchasing a home, allow all ments before the clerk. See In re Hudson, 182 N.C.App. a preliminary injunction. the legal and equitable defenses to be raised at 499, 642 S.E.2d 485 (2007). In this case, the home- 27. Freedom Baptist Church v. Watson, 81 N.C. App owner argued that he had not signed the Deed of Trust, 478,344 S.E.2d 337 (1986). Melton v. Family First the time of the foreclosure hearing, and as it was presented by the lender. Failure to sign the Mortgage Corp., 156 N.C. App. 129, 133, 576 S.E.2d ensure all parties operate in their respective Deed of Trust or statute of frauds is a proper legal 365,368 (2003). (Protects the third party purchaser.) roles and maintain their fiduciary duties. If defense. 28. Little v. Stogner, 140 N.C.App. 380, 536 S.E.2d 334 these concepts are followed, the result will be 6. N.C. Gen. Stat. § 45-21.16 (2009) is the primary (2000). For a defendant “to have a right of appeal from fewer foreclosures and more homeowners statute that most foreclosures are filed under in North a mandatory preliminary injunction, ‘substantial rights' Carolina. of the appellant must be adversely affected. Pg. 382. See keeping their homes and more lenders mak- 7. Id. This is a process that lends itself to an administrative Dixon v. Dixon. Generally, a right is “substantial” only if n ing an honest profit. environment. There is basically a checklist for the clerk it would be lost if the ruling or order is not reviewed to follow. If the trustee presents a Deed of Trust, affidavit before final judgment. 62 N.C.App. 744, 303 S.E.2d Professor Timothy J. Peterkin is a legal writ- of default from the lender, a promissory note, and a 606. N.C.App.,1983. (In this case, the applellant appealed the injunction granted by the trial judge. The ing professor at North Carolina Central proper notice of hearing, along with proof of service, the statute is satisfied. appellate court found that the injunction entered was University School of Law. He is a former staff 8. Case says lender does not need to provide evidence of a only to maintain the status quo and no rights were sub- attorney for the Mortgage Foreclosure Defense sum certain that is owed; just show the homeowner is stantially affected.) Project, a statewide project of Legal Aid of North behind and the burden is satisfied. The amount alleged 29. See Carolina Bank v. Chatham Station, Inc., 186 N.C. Carolina, Inc. Professor Peterkin also works with as owed can be for a “sum certain or for a sum which App. 424, 228 (2007). “There is generally no right to appeal from an interlocutory order, because most inter- the NCCU Law Foreclosure Prevention Project, a can by computation be made certain.” N.C. R. Civ. Pro 55 (b)(1). However, see Hecht Realty, Inc. v. Hastings, 45 locutory appeals tend to hinder judicial economy by student-run project that assists homeowners facing N.C. App. 307 (1980). The court held that the clerk causing unnecessary delay and expense.” pending foreclosure actions. was without jurisdiction to enter the default order 30. Anyone who buys a property at a foreclosure sale will because the pleadings did not allege a sum certain, nor be considered an innocent purchaser. Jones v. Percy, 237 Endnotes did they provide for a reasonable method of ascertaining N.C. 239, 74 S.E.2d 700 (1953). the sum. 1. The Mortgage Bankers Association estimated that 2.2 31. See Carolina Cooling & Heating, Inc. v. Blackburn, 267 9. Judicial foreclosure is a longer process in which a lender million home mortgages would start the foreclosure N.C. 155, 148 S.E.2d 18 (1966). can seek foreclosure. Unlike the foreclosures that are process in 2009. Lynn Adler, “Late Mortgage payments 32. The homeowner could file a Notice of Lis Pendens so done under power of sale, this process involves filing and foreclosures hit record,” www.reuters.com/article/ that potential buyers will know that the property is the complaints, answers, etc. This process is rarely used. idUSTRE4B442320081205, Dec. 5, 2008. Loans in subject of ongoing litigation. N.C.G.S. A. §1-116. N.C. Gen. Stat. § 1-339.1. the foreclosure process rose to a record 2.97% up from 33. N.C. Gen. Stat. § 45-21.16(d). 10. The record owners of the property are to receive notice 2.75% in the prior quarter and 1.69% a year earlier. Id. 34. In re Espinosa, 135 N.C. App. 305, 520 S.E.2d 108 of the proceedings in a manner that complies with the Florida, Nevada, and Arizona had the highest foreclo- (1999). Bank instituted action for foreclosure under Rules of Civil Procedure. See N.C. Gen. Stat. § 45- sure rates power of sale against putative mortgagors. The superior 21.16. See In the Matter of the Foreclosure of R. Woodrow 2. In June 2011 there were 3,073 notices of foreclosure court, Jackson County, J. Marlene Hyatt, J., dismissed Norton, Jr., Unmarried. 255 S.E. 2d 287 (1979). NC filed in NC, representing 1 in every 1,386 housing action, and bank appealed. The court of appeals, Gen Stat 45-21.16 (2009). units. See www.realtytrac.com/trendcenter/. Last visited Horton, J., held that: (1) finding that there was no valid July 19, 2011. 11. In re Hudson, 182 N.C.App. 499, 642 S.E.2d 485 debt was supported by evidence that putative mort- (2007). 3. N.C. Gen. Stat. § 45-21 (2009). gagors' signatures were forged on loan documents; (2) 12. While this is an actual case in North Carolina, the par- 4. See Wilson v. Green, 47 S.E.2d 469, 470 (N.C. 1904). putative mortgagors did not ratify loan transactions; and ties names have been changed to preserve their privacy “While, under our present procedure, we have but one (3) superior court correctly declined to address bank's interests. form of action, the difference between actions at law equitable argument. In re Hudson, 182 N.C.App. 499, and suits in equity having been abolished, yet the dis- 13. In the Matter of Foreclosure Godwin, 121 N.C. App. 642 S.E.2d 485 (2007). Phil Mechanic Construction Co., tinction between legal and equitable principles has 703, 468 S.E.2d 811, (1996). v. Haywood, 72 N.C.App. 318, 325 S.E.2d 1 (1985.), provides what is and is not included in the four issues been fully retained, and equity has no jurisdiction 14. Id. that the clerk can hear. when there is an adequate, complete, and certain rem- 15. Id. at 705, 813. edy at law; and it is equally well settled as a rule of the 35. N.C. Gen. Stat. § 24-1.1E(d) specifically states that 16. Id. court of equity, which still obtains, that there will be “any person seeking damages or penalties under the pro- no interference by injunction when there is a sufficient 17. In re Watts, 38 N.C. App. 90 (1978). visions of this section may recover damages under either remedy at law.” 18. Id. at 94. this Chapter or Chapter 75, but not both.” 5. There are a few legal defenses that are available for argu- 19. Id. at 92. 36. N.C. Gen. Stat. § 24-1.1E (2009).

22 FALL 2011 The Political Nature of John Marshall’s Fight for the Court in Marbury v. Madison

B Y W ARD Z IMMERMAN

ustice wears a blindfold. That is how we know her. That is confidence upon which the court’s authority is built? Indeed, to engage in such heresy would require a counterweight of the heaviest how we expect her. It is with covered eyes that this person- magnitude. Despite this great burden, it seems that just such a weight was present for those involved in Marbury v. Madison.5 ification has proudly marched down the annals of our Yes, that Marbury v. Madison. The seminal case that established the foundational American principle of judicial review: the jurisprudence.1 By obscuring her vision, she has been power of the judiciary to pass judgment upon the constitutionality of the actions of the leg- islature and of the executive.6 This is a mon- Jgranted a greater insight and power—for it is this covering umental power, and just the sort of leaden counterweight to tip the scales away from preserving impartiality above all else. vestment that breathes life into the allegory of impartiality and bestows authority to the tools Without exaggeration, the power of judicial review forever resculpted our nation’s political landscape by elevating the judiciary to a com- in her hands: the scale of judgment and the sword of dominion. Without it, she remains a mensurate position among its fellow, coequal branches of government. Just as judicial impartiality breathes life marble ghost. into justice, so too does judicial review into our political system of separation of powers, which includes a vibrant judiciary. Without In Federalist 51, a young James Madison pass. We want her to take a pass. We admon- judicial review, our high court is merely the writes: “If men were angels, no government ish that a judge: last appellate stop on the track. With judicial would be necessary.”2 Likewise, if judges were disqualify himself/herself in a proceeding review, the Supreme Court is conferred as the perfect, they would not need to don figura- in which the judge’s impartiality may rea- great protector of our most noble document, tive blindfolds. But as justice’s ambassadors sonably be questioned, including but not the United States Constitution. Armed with are human, they take pains to preserve impar- limited to instances where. . . [t]he judge this power, the judiciary can brandish justice’s tiality. For even a perceived bias weakens the has a personal bias or prejudice concern- sword against unconstitutional dragons. force of a judicial ruling. As the Preamble to ing a party, or personal knowledge of dis- From where did this mighty power spring? our North Carolina Code of Judicial puted evidentiary facts concerning the Judicial review is absent in English common Conduct counsels: “An independent and proceedings.4 law. Even to this day, our robed—and honorable judiciary is indispensable to justice This practice preserves confidence in our wigged—cousins across the Atlantic cannot in our society.”3 system. sit in judgment on Acts of Parliament.7 Judicial recusal is one of the chief means of Yet, can circumstances justify setting aside Likewise, this power is nowhere to be found ensuring impartiality. If a judge has a personal this bedrock legal principle of judicial impar- in the Constitution. So, then, from where? interest in the matter before her, she takes a tiality, potentially shaking the very public John Marshall’s pen.

THE NORTH CAROLINA STATE BAR JOURNAL 23 Chief Justice Marshall was the first to tice, so as not to be filled by an incoming pose. Such was William Marbury.20 By 1801, apply the principle of judicial review in Republican. Furthermore, they doubled the Marbury was a middling political loyalist of Marbury.8 In accomplishing this great feat, number of federal circuit courts, paving the the party in exile. Originally from down the Marshall’s leadership and statesmanship were way for the lifetime appointment of 16 new road at Annapolis, Marbury was among the on full display. Foremost, the chief justice judges.13 first batch of political staffers drawn by the understood political nature. He fully grasped But these holdover Federalist insurrection- potential for patronage to the nascent capital. the importance of the court presenting a uni- ists were not finished. On February 27, with Before the election of 1800, he had served fied position and slowly worked his associate five days left in power, they passed the loyally as an aide to the first secretary of the justices into a banded whole, through a mix Organic Act of the District of Columbia,14 navy. Now shunned by the new principals, he of reason and charm.9 In the end, Marshall which authorized, among other things, the hung all hope upon the consolation prize attained unanimous support from his appointment of “such number of discreet per- granted by the former president for allegiance brethren for his opinion. sons to be justices of the peace, as the presi- rendered. But his promised judicial commis- Thus, from this most undemocratic of dent of the United States shall from time to sion seemed to have gotten lost in transit. origins, the judiciary was bestowed with its time think expedient.” President Adams Marbury petitioned the new secretary of greatest power. However, if the principle of thought it expedient to appoint 42 of his state, James Madison, for delivery. At the judicial impartiality had been strictly applied, friends. Moreover, these were five-year, remu- direction of President Jefferson, Madison through the practice of recusal, Marshall nerative posts that allowed the recipients to refused. would have lost the opportunity to write this hold courts “in personal demands to the value Marbury then turned to the courts. On famous opinion. For he was intimately of twenty dollars, exclusive of costs.” On December 17, 1801, he, through his lawyer, involved in the specific events that led to the March 3, the last day of Adams’ presidency, former-attorney general and close friend of suit later before him as chief justice. the Senate stamped the appointment list the chief justice, Charles Lee, filed suit in the To appreciate fully Marshall’s involve- given to them the day before. The final step presumably-sympathetic United States ment, it is necessary to grasp the greater his- in the confirmation process was to have the Supreme Court seeking a writ of mandamus torical landscape. The opinion in Marbury secretary of state affix the great seal of the to compel delivery of his signed and certified was but one skirmish in a protracted political United States and to deliver the commissions commission.21 This matter met a responsive war. This was a war for the very soul of our to the appointees.15 This is where the story crowd, and the following day, Marshall deliv- young nation; and the veteran soldier gets really interesting. ered the Court’s preliminary ruling: (1) Marshall, who had experienced the intense For central among the Federalist judicial Marbury’s suit could proceed, (2) Secretary suffering at Valley Forge, once again placed strategy was the placement of a political apos- Madison must “show cause,” if “any he hath,” himself squarely among the fiercest fighting. tle to lead the high court. The Federalists did why the Court should not compel delivery, The election of 1800 pitted the rising tide not have to look far. On February 4, 1801, and (3) a formal hearing, consisting of the of Thomas Jefferson’s Republicans against Secretary of State John Marshall16 was sworn presentation of evidence and argument, was incumbent President John Adams’ in as chief justice of the Supreme Court.17 calendared for the Court’s next term in June Federalists. After 12 years of Federalist con- Upon assuming his seat on the Court, how- 1802.22 Marbury, however, would have to trol, the national political pendulum had ever, Marshall did not relinquish his position wait for intervening events to run their finally swung. The result was a drubbing. as secretary of state. In fact, he served simul- course, for the new Republican majority was Thomas Jefferson won the presidency. The taneously as both United States Secretary of presently engaged in a frontal assault on their Federalists were routed in the “People’s State and chief justice of the Supreme Court vanquished opponent’s remaining bastion. House;” even the stalwart Senate, whose for the next month—until his second cousin To the new president, the federal judiciary members were chosen by the various state leg- once removed, Thomas Jefferson, became posed the greatest threat to the democratic islatures, was torn from Federalist hands.10 president.18 will of the people. Writing the day after This “Revolution of 1800”11 left the ban- To thicken matters further, as secretary of Marshall announced the high court’s prelim- ished Federalists grasping for power on their state, John Marshall was responsible for certi- inary ruling in Marbury, Jefferson despon- retreat from the battlefield. They set their fying and delivering the commissions to the dently observed that the Federalists “have sights on the federal judiciary. “midnight judges” of the newly-enlarged retired into the judiciary as a stronghold . . . Jefferson’s inauguration date was set for judiciary. Upon affixing the nation’s seal, and from that battery all the works of March 4, 1801, leaving only a short time for Marshall’s brother, James, volunteered to help Republicanism are to be beaten down and the lame-duck Federalists to entrench them- with delivery.19 Fraternal loyalty aside, this erased.”23 While this prediction may have selves within the third branch. However, was a bad choice. By the next day when been a bit inflated, his reason for fear was tan- these veterans of the Revolution were far from Thomas Jefferson repeated the presidential gible. Whereas the elected branches of gov- timid folk. Not limiting themselves to simply oath of office given by none other than John ernment blow in political winds, the appoint- stacking available vacancies, they moved with Marshall (this time, in his role as chief jus- ed branch is more firmly rooted. unrepentant audacity to reshape the very tice), James had failed to deliver a handful of Moreover, apart from the competitive body itself. On February 13, they passed the the justice of the peace commissions, includ- political rivalry, the two parties held a funda- Judiciary Act of 1801,12 which fortified their ing one made out to William Marbury. mental disagreement as to the role of the hold on the Supreme Court by eliminating History is replete with individuals plucked courts. The Republicans held a visceral dis- one seat, upon the retirement of the next jus- from certain obscurity to serve a greater pur- trust for imperious fixtures, such as a non-

24 FALL 2011 elected judiciary, which they dismissed as emphatically the province and duty of the can never be the other way around. remnants from the Anglo split.24 judicial department to say what the law is”31 Therefore, when thrown into conflict, politi- Furthermore, the federal courts were seen to and since the Supreme Court is the final cal principle won out over judicial principle. promote the interests of a strong national arbiter of the judicial department, it is there- Consequently, each of the four main actors government, so feared by Republican propo- fore the duty of the Supreme Court to define believed that having the chief justice partici- nents of states’ rights.25 In his first annual as null (i.e., judicially review) any political act pate in the ruling better served their interests. message to Congress, President Jefferson that violates the Constitution. Such was the First, William Marbury’s wishes go with- placed the third branch of government direct- case, said Marshall, when the Federalist out saying. ly in his party’s crosshairs: “The judiciary sys- Congress attempted to enlarge the high Second, the Republicans thought that tem of the United States, and especially that court’s authority to issue writs of mandamus Marshall’s presence could result in a final, fatal portion of it recently erected, will, of course, to the political branches. Thus, the Court was misstep by the Court. By 1803, the Supreme present itself to the contemplation of left powerless to order Madison to deliver Court was so emaciated politically that few Congress.”26 These words were understood Marbury’s commission. Into this conclusion, took their actions seriously. The first chief jus- by all as a rallying cry against this last Marshall’s opponents would eagerly sink their tice, John Jay, remarked that the Court by the Federalist holdout. The Republican Congress teeth. turn of the century lacked “the energy, weight, marched into action. In accepting this result, however, the and dignity which are essential to its affording In 1802, the Circuit Judge Act of the pre- Republicans were forced to swallow the deci- due support to the national government, nor vious year was repealed, abolishing the recent- sion whole, including what Jefferson termed [the] public confidence and respect which, as ly-created circuit court judgeships now the “obiter dissertation.”32 By this hook, the last resort of the justice of the nation, it stacked with Federalists—including a post Marshall had them. By stripping itself of should possess.”37 Thus, Marshall’s presence held by the chief justice’s brother, James, who power, the Supreme Court could publically on such an enfeebled panel seemed inconse- had failed to deliver Marbury’s commission condemn the president’s actions, which it did quential. But there was more. The the year earlier.27 Additionally, not to be out- vigorously, without being exposed to the Republicans’ desire to have Marshall remain done by their opponent’s earlier brazenness, calamitous situation of issuing an order that may have also come from the belief that his the Republicans attacked the high court itself. would be disregarded.33 Therein was the presence was better than just a neutral vari- In an act of retribution and intimidation, beauty. They would cede victory to the able—it could turn into a fortuitous positive. Congress passed a law that sent the high court Republicans in the minor skirmish to reestab- For the power of the executive and the legisla- into recess for the entire year of 1802.28 lish a footing in the greater war. In one mas- ture was so overwhelming relative to the judi- Therefore, it was not until 1803, two years terstroke, Marshall reconstituted the authori- ciary that the Republicans seemed to be arro- after first being filed, that the Court finally ty of the judiciary in our system of gover- gantly savoring a showdown with the Court heard the matter of William Marbury’s nance by formalizing the power of judicial and its chief justice. By ignoring or, better yet, appointment. By this time, however, the review; and Marbury set off down the path of acting directly against an opinion that ordered Court’s authority sat upon shifting sand. It fame. the political branches into action, the had only just survived its most recent But what about the initial question of why Republicans could decisively undercut the onslaught, and could expect much more to the chief justice sat for the case in the first Court’s authority.38 If this opportunity arose, follow. Moreover, without the support of place? Under even the mildest standard of the victory would be a more resounding swipe either the executive’s sword or the legislature’s judicial recusal, Marshall should have stepped if it included the entire bench, with its head purse to enforce its rulings, the Court was left away from Marbury.34 He had “a personal attached. impotent. Thus, the branch of government bias or prejudice concerning”35 not just one, Third, the chief justice wanted the fight.39 created by the third article of the but all parties involved. Moreover, he clearly As one historian writes, Marshall “ought to Constitution was relegated to an administra- had “personal knowledge of disputed eviden- have disqualified himself, but his fighting tive afterthought, eclipsed by the shadows of tiary facts concerning the proceedings,” for it spirit was aroused, and he was in no mood to its two siblings. was Marshall himself who certified the very back out.”40 Prior to assuming his seat on the How then to proceed? During his time in judicial commission in dispute and it was his high court, John Marshall had been a soldier exile, Marshall had contrived a brilliant strat- brother, James, who failed to make delivery. and statesman, founder and partisan, but egy that involved a retreating feint. If properly So why then did those involved in this case never a judge. Foremost, he was a political executed, this maneuver would turn the allow Justice’s blindfold to slip from her eyes? realist.41 By the spring of 1803, Marshall enemy upon itself—conscripting his oppo- The answer to this question may be more thought that his beloved government, with a nents into the Court’s own ranks by issuing a easily gleaned from the pages of The Prince fully-participating judiciary, hung in the bal- ruling that would not, could not, be evaded. than from the annals of law.36 Marshall was ance.42 In this time of exigency, he made the Marbury’s logic began with the premise allowed to sit for Marbury because all of those cool calculation that the gains to be had by that it is fundamental to our society that the involved wanted him there. These were men, pursuing the political principle of establishing Constitution is “the supreme law of the not angels, who came laden with experience, judicial review outweighed the harms to be land.”29 Hence, the “constitution controls personality, and bias. They were active politi- suffered by setting-aside the judicial principle any legislative act repugnant to it [and, as cal founders, who tended to place pragma- of impartiality through recusal. such, . . . ] an act of the legislature, repugnant tism above theory. They understood that Fourth, Marshall’s robed brethren wanted to the Constitution, is void.”30 Since “[i]t is while government can exist without justice, it their friend and able leader on the field at this

THE NORTH CAROLINA STATE BAR JOURNAL 25 decisive moment.43 The philosophical ques- our constitutional law ever since [it] was handed the first chief justice, John Jay, who was now serving as tion of whether Marshall’s presence would down.”); but cf. Samuel R. Olken, The Ironies of governor of New York. Before Jay’s letter declining the Marbury v. Madison and John Marshall’s Judicial offer reached Washington, however, the president had weaken the Court’s resulting authority seems Statesmanship, 37 J. Marshall L. Rev. 391, 394 (2004) taken the step of submitting his name to the Senate, who to have been sent to the rear during the (noting that a more accurate interpretation of Marbury’s had subsequently confirmed his reappointment. urgency of combat. importance was its ability to crack the door through Avoiding a second such awkward moment, the president Thus, all interests pointed towards bury- which the firm establishment of judicial review would next turned to someone able to confirm acceptance in later pass, through subsequent cases). person: his closest advisor, the secretary of state. See ing the question of recusal—and that is pre- 7. Erwin Chemerinsky, Constitutional Law, 1 (Aspen Lawrence Goldstone, The Activist: John Marshall, cisely what happened. The judicial principle 2001). Marbury v. Madison, and the Myth of Judicial Review, 150-2 (Walker 2008). of preserving impartiality was temporarily set- 8. Cf. Olken, supra note 7, at 403-9 (noting that the theory aside to make way for the political principle of of judicial review had predated its application in 18. Marshall’s great-grandfather and Jefferson’s grandfather establishing judicial review. Marshall Marbury); see, e.g., The Federalist, No. 51 (James were brothers, hailing from one of the elite dynasties of Madison), No. 78 (Alexander Hamilton). Virginia: the Randolphs. See Sloan & McKean, supra remained and a momentous battle ensued note 10, at 42. Moreover, they both studied law in 9. See R. Kent Newmyer, John Marshall as an American whereby the Republicans’ superior political Williamsburg under the esteemed legal scholar George Original: Some Thoughts on Personality and Judicial Wythe. See James F. Simon, What Kind of Nation: forces were outflanked by a more nimble Statesmanship, 71 U. Colo. L. Rev. 1365, 1376-82 Thomas Jefferson, John Marshall, and the Epic Struggle to opponent. But for Marshall’s strategic genius, (2000); Olken, supra note 7, at 414-5; Cliff Sloan and Create a United States, 24 (Simon & Schuster 2002). Marbury could have been a deathblow. David McKean, The Great Decision: Jefferson, Adams, 19. James Marshall assumed the role of courier under his Instead, Marshall brought the Court back Marshall, and the Battle for the Supreme Court, 80-1, 83 (Public Affairs 2009). authority as one of the recently-commissioned federal from the edge of exhaustion and reestablished circuit judges—a supposedly life-tenured position that 10. See Biographical Directory of the United States Congress, was to be shortly abolished, along with his 15 new it among the governing trinity created in the 1774-2005 (Joint Comm. on Printing rev. ed. 2006). first three Articles of our founding document. brethren, by the incoming Republican Congress. See 11. Many years after leaving the office of the presidency, Newmyer, supra note 13, at 159, 161. While many of The Supreme Court had found its first cham- Thomas Jefferson mused on the electoral victory that the specifics of this enigmatic failed-delivery have been pion. The United States Constitution was heralded his party into power as the “Revolution of lost to history, one piece of evidence to support its occur- 1800,. . . as real a revolution in the principles of our gov- rence is found in the Reporter’s Notes of Marbury at conferred an intrepid institutional protector. ernment as that of 1776 was in its form.” Letter from Justice was bestowed her political sword. n 1803 U.S. LEXIS 352, 17-8, whereby an affidavit of Thomas Jefferson to Spencer Roane (Sept. 6, 1819), in James Marshall is noted to have been read into the court vol. 10 The Writings of Jefferson, 140 (Paul L. Ford ed., record, recounting that on March 4, 1801, “finding [that Ward Alexander Zimmerman is an assistant 1892-1899); see generally Susan Dunn, Jefferson’s Second James] could not conveniently carry the whole [of the attorney general in the North Carolina Revolution: The Electoral Crisis of 1800 and the Triumph commissions], he returned several of them. . .” of Republicanism (Houghton Mifflin 2004). Presumably, Marbury’s commission was among this lot. Department of Justice. He can be reached at 12. Judiciary Act of Feb. 13, 1801, ch. 4, 2 Stat. 89 (1801), (919) 716-6600 or [email protected]. 20. See Rehnquist, supra note 7, at 35 (“Madison, of course, repealed by Judiciary Act of Mar. 8, 1802, ch. 8, 2 Stat. would have been remembered equally well in American 132 (1802). Prior to assuming his post as secretary of history as the father of the Constitution, drafter of the Endnotes state, Congressman Marshall had been a prominent Bill of Rights, and two-term Republican president, even voice on a US House committee tasked with review of 1. The artist Hans Gieng’s 1543 statue in Bern, if he had delivered William Marbury’s commission and the judiciary, whose recommendations later formed the Switzerland, is the first known allegorical representation thereby avoided the lawsuit of the latter. But William basis for the Judiciary Act of 1801. See R. Kent of blindfolded justice. Since then, the blindfold “has Marbury has been saved from historical obscurity only Newmyer, John Marshall and the Heroic Age of the become a ubiquitous element in western portrayals of by the fact that he was the plaintiff in the most famous Supreme Court, 134 (Louisiana State Univ. Press 2001). justice.” William Kloss & Diane K. Skvarla, S. Doc. case ever decided by the United States Supreme Court.”); 107-11: United States Senate Catalogue of Fine Art, 228 13. In Jefferson’s view, any judicial appointment made by see generally David F. Forte, Marbury’s Travail: Federalist (US GPO 2002). As one eminent iconographer has President Adams following his electoral defeat on Politics and William Marbury’s Appointment as Justice of explained this symbolism: “The white robes and band- December 12, 1800, was to be considered an “outrage the Peace, 45 Cath. U.L. Rev. 349 (2001) (setting forth age over her eyes allude to incorrupt justice, disregarding of decency” and a perversion of the democratic process. an excellent biographical sketch of William Marbury). every interested view, by distributing of justice with rec- Letter from Thomas Jefferson to Henry Knox (Mar. 27, 21. In fact, William Marbury was one of four plaintiffs, titude and purity of mind, and protecting the innocent.” 1801), in vol. 10 The Writings of Jefferson, 241, at 247 along with Dennis Ramsay, Robert Hooe, and William Id. quoting George Richardson, Iconology (1789) as (Andrew A. Lipscomb ed., 1903); see also Letter from Harper, to file suit for being denied delivery of a certified found in Vivien Green Fryd, Art and Empire: The Politics Thomas Jefferson to Benjamin Rush (Mar. 24, 1801), justice of the peace commission. See Sloan & McKean, of Ethnicity in the United States Capitol, 1815–1860 179 in vol. 10 The Writings of Jefferson, 241, at 241-4 supra note 10, at 94-5. Regarding Marbury’s decision to (Yale Univ. Press 1992). (Andrew A. Lipscomb ed., 1903). Furthermore, among sue directly in the high court, former-Attorney General these newly appointed circuit judges was James 2. The Federalist, No. 51 (James Madison). Lee argued that under the authority of Section 13 of the Marshall, brother of the current secretary of state and 3. NC Code of Judicial Conduct (amend. 2006). Judiciary Act of 1789, the Supreme Court had both chief justice, John. See Sloan & McKean, supra note 10, original jurisdiction for claims arising thereunder and 4. Id. at Canon 3C(1)(a); see also 28 U.S.C. § 455 (2011). at 61 (offering a brief biographical sketch of James the power to issue a writ of mandamus to “persons hold- 5. 5 US (1 Cranch) 137 (1803). Marshall). ing office, under the authority of the United States” (i.e. 6. See Cooper v. Aaron, 358 U.S. 1, 17 (1958) (“[Marbury] 14. Judiciary Act of Feb. 27, 1801, ch. 15, 2 Stat. 103 Secretary Madison). Reporter’s Notes at 1803 U.S. declared the basic principle that the federal judiciary is (1801). LEXIS 352, 21-2, Marbury, 5 U.S. (1 Cranch) 137. supreme in the exposition of the law of the Constitution, 15. Marbury, 5 US at 157-9. 22. See Sloan & McKean, supra note 10, at 99. and that principle has ever since been respected by this 16. After achieving national fame for his role in the XYZ 23. Letter from Thomas Jefferson to John Dickinson (Dec. Court and the country as a permanent and indispensable affair, John Marshall served in the Sixth Congress as a 19, 1801), in vol. 10 The Writings of Jefferson, 241, at 302 feature of our constitutional system.”); United States v. representative from the Richmond area of Virginia (Andrew A. Lipscomb ed., 1903). Nixon, 418 U.S. 683 (1974); William H. Rehnquist, before being nominated on May 7, 1800, by President 24. See Newmyer, supra note 13, at 150-1. The Supreme Court, 34-5 (Knopf new ed. 2006) (“The John Adams to serve as secretary of war. Two days later, 25. James A. O’Fallon, Marbury, 44 Stan. L. Rev. 219, 222 proposition for which [Marbury] stands in United States however, President Adams changed Marshall’s nomina- (1992). constitutional law—that a federal court has the authority tion to that of secretary of state. See Newmyer, supra note under the Constitution to declare an act of Congress 13, at 141. 26. 11 Annals of Congress, 11, 15 (1801). Moreover, in pri- unconstitutional—was not seriously challenged by con- vate correspondence, Jefferson was even more open about 17. President Adams’ initial choice for this chief post was temporary observers, and has remained the linchpin of his true antipathy towards Marshall and the Federalist

26 FALL 2011 Court: “nothing should be spared to eradicate this spirit acts or omissions in a dif- of Marshallism.” Letter from Thomas Jefferson to James ferent, non-judicial capac- Monroe (Apr. 12, 1800), in vol. 14 The Writings of ity, on precisely the same Jefferson (Andrew A. Lipscomb ed., 1903). specific transaction at issue 27. Judiciary Act of Mar. 8, 1802, ch. 8, 2 Stat. 132 (1802). in the case, are themselves the basis for the legal 28. Judiciary Act of Apr. 29, 1802, ch. 31, 2 Stat. 156 claim, was just as sound a (1802); see Newmyer, supra note 13, at 153. principle in 1803 as it is 29. Marbury, 5 U.S. at 180. today. That principle 30. Id. at 177. should have led Marshall 31. Id. not to participate.”). 32. Letter from Thomas Jefferson to Benjamin Rush (Mar. 36. See O’Fallon, supra note 24, 1801), in vol. 16 The Writings of Jefferson 241 26, at 221 (“To under- (Andrew A. Lipscomb ed., 1903). stand Marbury fully, we 33. As characterized by one prominent, and often cited, must appreciate it not sim- legal scholar, Marshall’s opinion in Marbury was a “mas- ply as a case deciding a terwork of indiscretion, a brilliant example of Marshall’s legal dispute between capacity to sidestep danger while seeming to court it, to William Marbury and advance in one direction while his opponents are looking James Madison, but as a in another.” Robert G. McCloskey, The American political act contributing Supreme Court, 40 (Univ. of Chicago Press 1960); see also to the establishment of a Olken, supra note 7, at 414. discourse of constitutional- ism in which the realms of 34. In fact, Marshall did recuse himself in a case decided six law and politics merge.”). days after Marbury, Stuart v. Laird, 5 U.S. (1 Cranch) 308 (1803), due to his involvement in the lower court 37. Letter from John Jay to Law to the People, LLC wishes to congratulate the proceedings. Additionally, in Martin v. Hunter’s Lessee, 14 John Adams (Jan. 2, aspiring attorneys, Erin Verdell, Jermey Moore, and 1801), in The U.S. (1 Wheat.) 304 (1816), Marshall recused himself Bishari Cooper for winning this year's Pre-Law due to personal involvement, along with his brother Correspondence and Public James, in the potential purchase of a portion of the realty Papers of John Jay 284 Scholarship Competition. at issue in the case. Thus, the idea of recusal seems to (Henry P. Johnston ed., have been alive and well in the Chief Justice’s mind. See 1890-3); accord Simon, Law to the People: offering practical and cost-effi- Sanford Levinson and Jack M. Balkin, Marbury at 200: supra note 19, at 138-9, cient CLE programs. A Bicentennial Celebration of Marbury v. Madison: 151 (noting the weakness Marbury as History: What Are the Facts of Marbury v. of the early Court); see also Visit www.lawtothepeople.com for more details. Madison?, 20 Const. Commentary 255, 260 (2003) Olken, supra note 7, at (“The juxtaposition of Marshall’s recusal in Stuart v. 392. Laird with his notable failure to recuse himself in 38. See Newmyer, supra note 13, at 160 (“Certainly the (June 1963; Volume 14, Issue 4). Marbury v. Madison is particularly striking.”); Sloan & Court’s dilemma was readily visible: If it issued a man- 41. See Olken, supra note 7, at 410-23; accord Levinson & McKean, supra note 10, at 170. damus, as Marbury requested, the president and secre- Balkin, supra note 35, at 262. tary of state would delight in ignoring it, leaving the 35. While the NC Code of Judicial Conduct was certainly 42. Newmyer, supra note 13, at 150 (Marshall “saw Court helpless and humbled; if it didn’t, the justices not in existence at the time of Marbury, its fundamental Jefferson as the evil genius behind the rising states’ rights would be damned by their own caution.”); see also Jean underpinnings are timeless guards of judicial authority. movement, which Marshall sincerely believed threatened Edward Smith, John Marshall: Definer of a Nation, 318 See Michael Stokes Paulsen, Marbury at 200: A to destroy the Constitution and the federal Union.”). (Holt & Co. 199). Bicentennial Celebration of Marbury v. Madison: 43. See Newmyer, supra note 10, at 1378 (“Ironically, 39. See Sloan & McKean, supra note 10, at 170; Simon, Marbury’s Errors?: Marbury’s Wrongness, 20 Const. Jefferson’s determination to crush the Court and extermi- supra note 19, at 182. Commentary 343, 350 (2003) (“[T]he principle that nate the spirit of ‘Marshallism’ was an important factor makes it self-evident, today, that a judge should not sit on 40. John A. Garraty, Marbury v. Madison: The Case of the because it encouraged the justices to ‘circle the wagons.’”). a case in which the propriety or legal effect of his own ‘Missing’ Commissions, American Heritage Magazine

President’s Message (cont.) coordinates private attorney involvement the pulpit to my well-qualified successor, Jim with Legal Aid of North Carolina, is an Fox of Winston-Salem. However, I can truly opportunity that will provide invaluable legal say that it has been an honor and privilege funding for programs such as the Equal assistance to those in need, fulfill your Rule for me to serve as your president. I will cher- Access to Justice Commission and the Legal 6.1 obligation, enhance professionalism ish the experience, the friendships, and the Aid offices throughout North Carolina. It is within our practice, and simply make you knowledge that has been verified by the during these difficult times that we can par- feel better for doing so. experience that the lawyers of the state of ticipate even more than we have in the past This is the last time that I will have the North Carolina are dedicated to the polar to assure that our most vulnerable citizens pulpit to address the more than 24,000 star of our practices—professionalism—and have access to justice. Fulfilling your obliga- lawyers who are licensed to practice law in we do so each day when we turn the lock to tion of Rule 6.1 regarding Pro Bono Publico North Carolina. With an editorial deadline open the door of our offices to help the citi- Service with a commitment to enabling of one week after the conclusion of each zens of our state in their time of need. n equal access to justice is crucial at this time. quarterly meeting, and with the demands of Participation in the “Call4All” program of a small town general practice in Boone, I Anthony S. di Santi is a partner with di the North Carolina Bar Association, which must admit that I am not saddened to pass Santi Watson Capua & Wilson in Boone.

THE NORTH CAROLINA STATE BAR JOURNAL 27 An Interview with Author John Hart

B Y J OHN E. GEHRING

s there life after the law? This question is being asked more

often these days, especially by those among us being long of

tooth and with graying hair. For one answer to this question I

asked my friend, John Hart, the New York Times best-selling author, to talk aboutI life after the law. This interview took place during a round of golf with the strict PGA rules, and those not so strict, being waived. The do-over mentality resulted in those things. I paint the world dark so a light that is often dim has a better chance to shine. What’s the an excellent, non-stressful round with plenty of conversation. Purists please note, the scores light? All the things that made humanity great: love and faith and hope, courage, sacri- fice, endurance. Much of it goes back to were not posted but the interview is contained herein. things I saw in criminal court, to the victims and innocent families, to the few who always try to do right, even when the people around Question: Your personal history indicates here without my time in the law. It was such a them are rotten to the core. I always marveled your varied interest in many things, from focused, powerful experience: the grueling at those who sacrifice in the pursuit of what being a helicopter mechanic, a bartender in a study, the pressure to bill, the in-the-trenches truly matters. London pub, an explorer of the Loire Valley in work with criminal clients. Practicing law gave Question: The King of Lies and Down River France, a stock and securities broker, a practic- me unique insights into the human condition. have included glimpses into the everyday ing attorney specializing in Criminal District It made me a hard worker and a deeper person, workings of our court system. A great portion Court work, and now an acclaimed author of all of which help drive the writing. of Down River centers on the abuse of women. three books (all of which have appeared on the Question: Your books, The King of Lies, Also, Down River brings us an ugly reminder New York Times bestseller list). With such Down River, and The Last Child, reflect a keen that many people are unjustly accused and acclaim has come three nominations for the insight into everyday America (in particular, many endure the horror of a trial. Is this an Edgar award and winning two Edgar awards. North Carolina). They also reflect a darkness example of being guilty until proven innocent? Obviously, you have made a life after the law. in each of your character’s lives. Why such a Is this a reminder that gender discrimination is Please comment. dismal view of life? alive and well in this day and time? Hart: I’m delighted to be where I am in Hart: Many people initially misperceive Hart: It’s more a reminder that underneath life—writing full-time, no longer worried with the thrust of my books. While there is ample bad behavior is a cause of some sort. Not the the many challenges of a law practice—but darkness—murder, betrayal, deceit—the core kind of cause that justifies evil—I’m no apol- know for fact that I could never have made it of my stories is about our ability to rise above ogist—but the kind that bears further exami-

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wwwwww.wealthcounsel.com.wealthcounsel.com PoweredPPoowerreed byby WealthDocxWWeealthDocx® nation before a rush to judgment or punish- does a current law license mean that you great party for the book launch. ment. Women, at times, do great evil in my might return to the practice of law? What Question: Are you happy to have left your books. Yet it is the men in their lives whose CLE courses help you the most? practice of law at a standstill while you pursue actions set events into terrible, irrevocable Hart: I continue CLE because I can’t imag- a life of fiction writing? Of course, there are motion. There’s no political statement in the ine giving up my law license. I love the chance to those who think that the practice of criminal way I’ve used such devices. For me it’s all learn and be with other lawyers. At the moment, law and the practice of fiction are somehow about storytelling, about motives and layers. though, I have the best job in the world and no related. Question: Your soon-to-be-released new plans to ever do anything different. Hart: Hah. I can think of at least one book, Iron House, appears to raise another Question: Many current authors borrow lawyer in Salisbury who would agree with issue which faces us all. How do we treat juve- the names of their friends for inclusion in their you, at least tongue-in-cheek. I have often said niles and orphans? The vision of Stonewall books. Do you follow this practice? Just what that I’m delighted to be a recovering attorney, Jackson training school comes to mind. Any is a charity launch and how does this help and the reasons for that are legion. Bottom comment on this issue? your work? line, I would never have been great at the law. Hart: Any lawyer with time in juvenile Hart: Some writers use naming rights to I think I have a shot at that in my writing court knows how bad the problems can go after their enemies. They shoot them in the career. become: abuse and neglect, indifference or kneecaps, maim them horribly, kill them off Question: Any further comments for the worse. My job, however, is not to indulge in in meaningful, gruesome ways. I’ve met a lot readers of the North Carolina State Bar social commentary, but to find credible, of those writers, heard the very humorous sto- Journal? strong drivers to motivate my characters. ries of who and why. Sadly, I have no enemies. Hart: Only that I remain a proud member Abuse is a powerful force in shaping a child. It So, yes, I use my friends shamelessly. I’ve killed of the bar, and that my fans who are also makes a compelling back-story for the adult off brothers-in-law and old friends. I’ve made lawyers have special meaning to me. Whenever that child becomes. That being said, good fic- cops of lunch buddies and neighbors; made a I meet one at a signing, I like to use the same tion should provoke meaningful thought. If heroine of one lucky lady who won a raffle for inscription: “A friend in the law…” n heightened awareness is a side effect of what I the privilege. And I do use the launch of new do, then great. books as an opportunity to raise money for John E. Gehring is a State Bar Councilor rep- Question: Has your continuing legal edu- good causes. To date, we’ve raised almost resenting Judicial District 17B. He is also a cation been of benefit in your writing? And $250,000. It’s good for the cause and I get a member of the Bar’s Publications Committee.

THE NORTH CAROLINA STATE BAR JOURNAL 29 FICTION WRITING COMPETITION - FIRST PRIZE

Blackbeard’s Last Raid

B Y R OBERT F. S TAMPS

The wind picked up and roughed the water ground snuff between his thumb and forefin- as Applebee put down his quill pen and ger. He slowed his stride, placed his thumb The Results Are In! glanced out the window. The Adventure, beneath his right nostril, and inhaled deeply. Blackbeard’s sloop, was on the sound practic- He sneezed, careful not to stain the fine lace This year the Publications ing gunnery and the roar from a broadside of ruffled cuff of his scarlet silk coat. Committee of the State Bar sponsored cannons was loud. He smiled, admiring his He smiled approvingly as the wind rattled its Eighth Annual Fiction Writing clothes in the mirror. He was proud of his silk lines and halyards in the beautifully rigged and Competition. Eight submissions were coat, wool waistcoat and breeches, and silk freshly varnished ship. A pair of Cormorants received and judged by a panel of nine stockings. It was the color of the red wild flow- dove into the water. One emerged with a fish committee members. The submission ers the settlers called Indian Blankets, or Fire- in its mouth. It flew rapidly towards the shore, that earned first prize is published in Wheels. The tips of the petals of the Indian chased by the other. this edition of the Journal. Blankets offered a splash of yellow, as did his Alongside the dock, barely above the debris handmade leather shoes, buttons, and ornate deposited by the last high tide, an African man belt buckle. He was proud that his clothes in dusty canvas pants and a cast-off shirt sweat- muscular man on the deck of The Adventure. matched any of the wealthy gentry. ed profusely as he tended an open cooking fire. “Captain Teach, permission to board, please.” Applebee was pleased with his legal prac- Above the flames, six skewered chickens Captain Teach, a huge man, fearsome in tice. His copy of Sir Matthew Hale’s Analysis of cooked slowly on an inch-thick piece of wood. appearance, raised one foot to the gunwale and the Common Law had arrived from London in In the smoke above the chickens, another rack grasped the rigging with a giant hand. His skin time for him to add some persuasive passages held freshly caught Red Drum and eel. The was fair, but his hair was jet black and flowed to a brief. chickens, covered with spices from the wildly under a scarlet bandana. His beard was The new spring leaves danced and Caribbean islands and dripping fat into the rich and dark. He wore a long leather topcoat hummed in the breeze. Applebee walked out- fire, sent forth a savory aroma. over bare skin, and ragged canvas pants reach- side and down the wooden dock. Two shapely “Mo’ning to you, Mas’sa Applebee,” called ing only to his knees. On his feet were wooden barmaids, in blouses and flowing skirts, were the African. He smiled and flipped his head so shoes in the style of the Dutch. nursing flagons of rum. He squinted and that Applebee would notice his huge gold “What’s that behind you?” Teach’s voice reached a hand to steady his fashionably large, hoop earrings and thick gold necklace. boomed, followed by a cackling peal of laugh- high parted wig and wide flowing hat. Nearing “Amos,” Applebee replied, “you are decked ter. “Have you bought freedom for William?” the end of the dock, tacking against the current out, indeed. The chicken smells marvelous. Applebee turned around and nearly on the Pamlico River was Blackbeard’s two- And the fish and eels look marvelous. When dropped his hat in surprise. A huge African mast sloop of war. Brightly polished brass can- will they be ready?” man was hobbling down the dock, supported nons protruded from a half dozen openings in “Oh, Mas’sa Applebee, I ‘spec they be ready by a carved wooden crutch. He wore a finely the side. Sailors scampered up the rigging, mos’ any time,” Amos replied, smiling broadly, embroidered silk and gold coat, his waistcoat checking and furling the sails. “mos’ any time a’tall.” and knee breeches gleamed, and his stockings The wharf bustled with activity, as shirtless, “You are too good, Amos,” Applebee snort- showed calves as big as Applebee’s waist. barefoot sailors in scruffy canvas pants scurried ed. “For a bloodthirsty pirate you are one Although the man was dark as mahogany, he around, ogling the barmaids and waiting to admirable cook.” was wearing a long wig, finely powdered white load supplies. Some carried crates, while others “I ‘spec so, Mas’sa Applebee. It make ‘ol like the judges in the courthouse. rolled large casks to the ship’s gangplank. Amos proud, you be good ‘nuf to notice. “That’s Mistuh William, Captain Teach,” Applebee was looking forward to going to sea. Amos be right ‘long wid dem chickens in no he said proudly, raising his right hand to show Applebee laughed as he saw the British flag. time. No time t’all.” a huge gold ring topped with a cluster of pre- Blackbeard was too cagey to fly his black pen- Applebee swept off his hat and bowed low cious stones. “I got ‘da ring, Captain Teach,” dant in port. He reached into a pocket in his in Amos’ direction. “My hat is off to you, sir.” the man roared. “I got ‘da ring, and now I’m a waistcoat and removed a small silver box. Still holding his hat, Applebee extended his gentleman. Ain’t no mo’ shuckin’ and jivin’ like Opening the lid, he pinched a bit of finely arm in a sweeping gesture and called to a tall ‘ol Amos. I gots ‘da ring. Yeah, ‘da ring.”

30 FALL 2011 “You lucky I don’ rip it off an’ toss it in’na Lady Giraffe has some locals staking out their “And William has his Super Bowl ring,” river,” Amos snarled good naturedly, turning house. She said as long as I have the satellite Applebee acknowledged. “With the help of his back and giving a quarter turn to the chick- phone, I can take some time off.” Then, everyone we have recreated Blackbeard’s origi- ens on the spit. chuckling as Applebee and William curtsied nal ship, The Adventure.” “I gots ‘da ring. I gots ‘da ring.” William for the crew, he whispered loudly, “Wish it had Marcus, now wearing buckskin pants and shouted, holding his hand high above his head a camera so I could send a picture of William linen shirt, wiped chicken from his fingers. He and, using the crutch for balance, hopping and Applebee to the media.” muttered under his breath as his satellite down the pier. “Exciting as that sounds, Marcus,” phone, carried in a buckskin pouch at his belt, “Pipe down and get aboard,” Captain Blackbeard grinned, winking at Amos who rang shrilly. Teach yelled. “We sail with the tide and it’s was now standing on the pier, “remember we “Lady Giraffe, huh,” teased Blackbeard. beginning to turn.” Then, to Applebee, he all agreed that we are going to pretend that it is “Probably,” Marcus called, heading out of asked, “Where’s Marcus? He’s the only one 1700 and we are pirates on the prowl. I’m the wind. Within minutes, he was back and that hasn’t reported in.” counting on you and Amos. With an FBI motioned for Blackbeard to join him. As Applebee and William neared the end of agent and Amos—a Navy SEAL—swinging “Giraffe has bad news,” Marcus said slowly. the pier, a loud rumbling and shrieking came their cutlasses, our video is going to be great. “The terrorists left the farm. Our locals were from the road leading to the pier. A horse And the cannons fire real lead balls. And our tailing them, but the terrorists sprung an whinnied in fear. Suddenly, a black sport utility marksmanship is spot on.” ambush with AK-47 assault rifles. Killed both vehicle appeared and slammed on its brakes. A “What a kick,” Marcus exclaimed, waving locals and stole their weapons and phones. The man in a sharply creased grey business suit and his briefcase in a joyous circle. “If you got the phones have GPS. The Bureau is trying to matching fedora hat emerged, slammed the powder, ball, and beer we can do this.” track them. Is it possible to head to shore?” door and raced down the pier. He carried a “Yo, Marcus,” Amos chuckled, “get dressed “Maybe,” Blackbeard shrugged. “William brown suitcase and a briefcase. and help me get the food on board. Then we’ll says there’s a storm coming, so its better for us “Marcus,” Blackbeard yelled, anger in his see how the crew fires these cannons.” to be at sea. Keep me posted.” voice, “you know we were all supposed to be in Several hours later, The Adventure was “OK,” Marcus said. They walked back out late-17th century period costume. What under sail. William, at the helm on the stern to the deck. The wind was much stronger. gives?” deck, looked down to the main deck where the William motioned for Blackbeard to join him “Sorry, Hank—I mean Blackbeard—be crew chatted and laughed around tables of at the helm. Blackbeard raced up the stairs to glad I’m here,” Marcus called, panting from food. In the panel before him, cleverly con- the upper deck. Marcus followed. the exertion of running with his suitcase. cealed, was a screen with a compass, radar, a “Storm is worse then we thought,” William “Some of us didn’t make the cut for the NFL continuously updated weather forecast, and a yelled, pointing to the radar screen. “It is going and have real jobs with limited vacation.” GPS image of the sound. Behind a closed to get rough.” “Yeah,” Applebee snorted, “like the FBI panel was a digital communication system. As they scanned the weather information can’t spare you for a week or two.” “Storm coming, Captain,” he called to and radar screen, Marcus’ satellite phone began “The Lady Giraffe wouldn’t listen to rea- Blackbeard. “Nothing we can’t handle.” to ring. “Jane, anything new?” he asked. son,” Marcus gasped, flinging his suitcase over “Avast, mateys,” Applebee shouted, “’tis “We’ve located them through the GPS the gunwale. “She nearly wouldn’t let me go.” time to celebrate. More than a decade ago we coordinates. They’re headed east, maybe “The Lady Giraffe, huh,” Blackbeard were the best college football team ever in towards I-95. We’ve notified the state. The laughed. “Why do you call her Lady Giraffe? North Carolina history.” local cops should be able to find them easily, so And since when do you let a chick tell you The men, most wearing canvass pants and just keep your phone handy.” Jane paused, and what to do?” waist coasts, cheered and clapped. Several Marcus could hear her talking, but could not “When she’s my six-foot-three boss, and hoisted tankards of ale and yelled “GO make out the words. After several minutes Jane has the strength of an ox.” Marcus gave PIRATES!” said, “I’ve just been told a huge storm is brew- William a hand to steady him as he boarded “As we began to win,” Applebee continued, ing off the coast. If it starts pouring rain, the the gangplank. “Hank decided it was bad luck to shave. After killers may be able to use back roads to slip past “Um,” Blackbeard raised his eyebrows and two more games, he had a thick beard. The the local cops. Got to go,” Jane said hurriedly. held his hands wide in a simulated grasping press began to call him ‘Blackbeard.’ The press On deck, Blackbeard and Amos, the most motion, “I like my women big. I hung out last decided that we, the rest of the team, needed a experienced sailors, were ensuring that the month with a former beach volleyball champi- nickname, too, and somehow, we became hatches and doors were closed, and that the on. Very tall. And strong. Oh, yeah.” ‘The Pirates.’ After the season ended with us in cannons were properly covered with tarpau- “Good for you. Lady Giraffe and I have the top 10 nationally, we decided we needed to lins. “Amos,” Blackbeard yelled, “do we need been tailing a suspected terror cell and we have actually sail a pirate ship. Now, with the help of to take in, or trim the sails?” indications that they might be making a move. Amos and his Navy training, and with “Not yet,” Amos called. Rain began to spat- That’s why,” he said, pulling an oversized cell Blackbeard and William drawing outrageous ter on the deck. The sea roughened and the phone from his brief case, “I carry this satellite money in the NFL...” wind whipped white caps that sprayed the phone. We followed them from New York to “I got ‘da ring!” William yelled from the deck with salt water. “We need to maintain Fayetteville. We think they may try something stern deck, raising his hand to show the gem- steerage. Good thing the bowsprit gives us at Fort Bragg, or are waiting to meet someone. encrusted ring. maneuverability.”

THE NORTH CAROLINA STATE BAR JOURNAL 31 “Get the food, beer, and tables below his satellite phone above the snarl of the wind spinning the wheel. “Course set for south deck,” Blackbeard hollered. He and Amos and the throbbing chatter of rain on the sails. Ocracoke.” began moving the tables into the galley. “This Instead, he sensed, or felt its rhythm. Hastily “Hot damn,” Amos yelled. “Bring it on!” is turning into a bad blow and we need to clear drawing it from his pouch, he pressed it The wind neared gale force as The the area and string lines so no one washes over- against his ear. Adventure rose, twisted, and broke into each board.” “Marcus, here,” he yelled. succeeding swell. William gripped the wheel “Aye aye, sir,” one of the men yelled, grab- Jane’s voice was edgy and he could tell she tightly, and the others clung to rails. Salt was bing several platters and heading into the gal- was disturbed. “Marcus,” she said, “we’ve lost beginning to cake on their faces and arms and ley. The other men helped, and soon the deck them. We found their cars near a dock outside their hair was sloppy wet. The rain sheets were was clear and strung with safety lines. New Bern on the Neuse River. Locals said they impenetrably thick, so William stared at the The Adventure was encountering long saw two high-speed cabin cruisers with deep- instrument panel to navigate. rolling waves that lifted the bow before plung- vee hulls for fast, rough water travel. We think “William,” Blackbeard hollered loudly, ing into a trough. William reached down and the terrorists knew the boats were there. They “what are these blue dots on the radar?” unhooked a panel to raise a seat from the deck. may be using the rough weather as cover for an “Those must be the craft for the amphibi- He snapped the seat into place, sat down firm- operation. We’re trying to figure out their ous landing exercise,” Amos shouted. ly and fastened a seatbelt around his waist. objective. Over.” Marcus heard a click as Jane “And these?” Blackbeard pointed to two “We good, Captain,” William called, hung up. blue dots several miles west of the marines. laughing and filled with excitement. “Those “What gives, Marcus,” Amos shouted. He “Crap,” Amos stared hard at the screen, lessons I took when I bought this rig included and Blackbeard were snapping a Plexiglas “those must be the terrorists. They are closing rough weather sailing.” William motioned for windshield into place above the instrument fast. Get your boss on the phone, Marcus. She’s Blackbeard and Marcus to lean close. They put panel. The windshield blocked the rain and got to warn the Marines about what’s coming their ears close to William. “Now, don’t go created a small cocoon of calm air. their way.” telling nobody, but The Adventure has a diesel Huddling close to the windshield, Amos Marcus dialed the phone and struggled to engine if we need it.” and Blackbeard listened as Marcus relayed hear above the raging elements. “Wow, William,” Marcus whistled softly, Jane’s update. “Marcus,” William yelled, pointing to a “this baby is hot. I guess having the tar beat out “That’s just 20 miles from here,” headphone wire, “can you plug that phone of you in the NFL every week has its rewards.” Blackbeard yelled, bringing up a map of the into the on-board radio? If so, I can crank up “Yes, indeed,” William grinned. “It do, it sound on the instrument panel. the speakers and you can speak into the mic.” do.” The satellite phone rang again. Marcus “Let’s try,” Marcus said. Suddenly, there After weathering the initial shock of the held it to his ear, but could not hear. In frustra- was a loud crackling. storm, The Adventure settled into a regular tion, he shouted, “Wait a minute,” and “What’s up, Marcus?” Jane asked. Her rhythm, rising and falling as she cruised crouched down between William and the voice was clearly audible. “Am I on a speaker through the waves. instrument panel. phone?” “This is good weather for training SEALs,” “Jane, is that you?” Marcus leaned close to “You are,” Marcus yelled. “Listen, our radar Amos said, looking out over the water. “My the panel. Blackbeard and Amos tried to block is showing blips off the south of Ocracoke that special warfare unit concentrates on counter- the wind and rain, which was now sluicing we think is the marine force. And two blips terrorism.” over the windshield in wet sheets. Marcus lis- several miles to the southwest, heading straight “You mean like when the USS Cole was tened carefully, and then grabbed William’s towards the marines. We think it’s the terror- bombed over in Yemen?” Marcus asked. waterproof notepad and pencil. He scribbled ists. We are headed there as well, with an ETA “No,” Amos said sadly, “that was a terrorist some coordinates, handed them to of...” Marcus looked at William. William attack, all right. We just didn’t anticipate it and Blackbeard, and yelled, “Find where this is on glanced at the screen and shouted “...20 to 30 didn’t have any teams in place.” Amos thought the chart.” minutes.” a moment before continuing. “We have teams Blackbeard entered the coordinates and a “Why are you headed there?” Jane asked that can penetrate a hostile coast line and insert small red “X” appeared on the south of sarcastically. themselves. Storms like this are good cover for Ocracoke Island. Marcus spoke into the phone “In case we can help,” Marcus responded. black ops.” and hung up. “Have you contacted the marines?” Hopping down the stairs and entering the “A marine amphibious company is there “No,” Jane answered slowly, “they are galley, Blackbeard cautioned the feasting men for a landing exercise,” Marcus yelled. “The under radio silence.” not to have too much rum or beer. exercise rules prohibit radio contact. Its classi- “We thought as much,” Marcus shouted. Standing at the helm near William, fied, but an internet leak site is carrying the “I’ve got a navy SEAL here with me.” Marcus looked out over growing swells, and date, time, and coordinates for the landing.” “Let me put you on the speaker,” Jane said, watched as the bow sliced into the grey-green Marcus pointed to the red “X” on the screen. “I’ve got a navy liaison on my conference line seas and the frothy waves surged over the for- “That is the only potential terrorist target any- listening in, and I’m using the county sheriff’s ward deck. A dark curtain of heavy rain raged where around here.” office. She is here, too.” towards The Adventure and burst upon the “William...” Blackbeard shouted over the “OK, Marcus,” Jane continued, “I don’t sails with a staccato percussion and occasional wind, “change course...” care if you have a whole SEAL team with you, loud snap of canvas. Marcus could not hear “Already done, Captain,” William said, I don’t want you taking a bunch of civilian

32 FALL 2011 party-boys anywhere near terrorists.” them. The boys can always back off if “Washington won’t authorize you to move “What do you mean ‘SEAL Team’?” a Washington says ‘no’.” in.” man’s voice boomed. “What’s that got to do “C’mon, Janey,” Blackbeard urged, “no Blackbeard emerged from the galley, gave a with anything?” harm, no foul. Ask Washington.” “thumbs up,” and raced up the stairs. Behind “Admiral Tungsten,” Amos interrupted, “is “I will call Washington,” Jane conceded him, running out of the galley and taking posi- that Admiral Tungsten?” without enthusiasm. “And, Hank, we need to tion along the deck were the rest of the team. “Yeah,” he answered gruffly, “who wants to talk.” He carried his rifle, and several of the men car- know?” “Agent Hutton,” Tungsten interjected, “let’s ried William’s shotguns. “This is Amos Bracket. Lieutenant Bracket. keep this line open. Amos, do you have “But,” she continued, “they won’t order We worked together,” he paused to find the enough battery?” you to stand down. It is up to you.” words, “on the pilot extraction in southwest Marcus plugged the phone into an outlet “Hutton,” Tungsten barked, “you can’t put Asia.” on the console. “This is Marcus,” he said, the crew of The Adventure in that kind of “Amos,” Tungsten exclaimed, “are you near “we’re plugged into the ship’s electric system.” pickle. If they take action you’ve got to back the marines?” The men watched anxiously as the hostile them.” “Yes, sir. On a boat with some buddies radar blips closed inexorably on the marine “I’m sorry,” Jane said slowly, “I have no from my old college football team. You landing craft. authority.” remember I told you I played with some guys Fifteen minutes later, as the radar showed Marcus and Amos looked at William. who are in the NFL. Hank and William. The Adventure closing to within a few miles of Blackbeard leaned in close to them and said, They are here, too. And, of course, Marcus, the marines, the telephone crackled and “The men are up for it. Let’s get Applebee up the FBI Agent who works for the lady on the Tungsten’s voice, clearly emotional, here.” phone.” announced, “The marines have just broken “Admiral,” Amos asked, “what happens if “Marcus,” Jane sniffed, irritated at being radio silence. They are taking automatic we go in with weapons?” referred to as “the lady” “you’ve got to change weapons fire. The terrorist’s bullets are unable “I don’t know, Amos,” Tungsten sighed. course. You can’t take civilians into danger.” to penetrate the skin of the landing craft, but Applebee, stripped to the waist and with- “Rubbish,” Tungsten broke in, “SEALS the marines are sitting ducks.” Tungsten took a out his hat and wig, was standing outside the and NFL players are not ordinary civilians. deep breath. “Amos, the marines have no live galley with a long cutlass in his hand. Amos is one of the best. If anything can be ammo. Repeat, the marines have no live Blackbeard beckoned him up to the helm. done to help the marines, Amos can do it.” ammo. Do you copy?” “What’s up?” Applebee asked. “I can’t...” Jane said, but Tungsten contin- “Aye aye, admiral.” Amos replied gravely. Amos leaned in, fighting to make his words ued. “We will intercept within ten minutes. For heard above the wildly blowing rain. “There is “Do you have any weapons?” some reason the terrorists have slowed down. a company of unarmed marines in landing “I’ve got a nine millimeter with three 20- Do we have permission to engage?” craft out there being fired upon by terrorists round clips,” Marcus said. “Agent Hutton,” Tungsten called, “you got with automatic weapons. What are the legali- “Six shotguns,” William added. your ears on?” ties if we go in with weapons?” “Thirty-ought-six,” Blackbeard yelled. “Yes,” Jane answered. “If the terrorists are using deadly force “That’s not enough,” Jane said vehemently, “Do you have word from Washington?” against the marines, I think we have legal jus- “you can’t do it.” “Any minute now.” Jane answered. tification to use deadly force to protect them,” Blackbeard reached over and took the At the helm of The Adventure, William Applebee said slowly. phone from Marcus. “Hey,” he said slowly, “are wiped water from his face and squinted at the The rain, which had been so fierce that it you by any chance a former beach volleyball instruments. “We’re closing fast,” he called. limited their view, suddenly slacked. Ahead, player?” “Blackbeard, you better check with the team. If through the mist, a number of small boats There was surprise in Jane’s voice. “What?” they gon’na be real pirates they need to know were now clearly visible. With the abating “Janey,” Blackbeard said slowly, “this is what’s happening and sign up for the fight, or wind, they could clearly hear the automatic Hank. You never told me you were an FBI we got’a pull the plug.” rifles. Two cabin cruisers loomed above the agent when we partied at the Pro Bowl.” Blackbeard shot a quick glance at Amos other craft. “Oh, crap,” Jane muttered, momentarily and Marcus, and then bounded down the “Janey,” Blackbeard said questioningly, “we speechless. “Hank, I...Oh, crap, Hank, I... I...I stairs and disappeared into the galley. William have to fish or cut bait. What’s your recom- have no excuse. I was going to tell you. I flipped a switch and brought up a Doppler mendation?” should have told you.” For a moment she radar screen. “I’m sorry,” Jane said slowly, “I have no couldn’t seem to find the right words. “I just... “Admiral, this is William. Doppler radar authority.” I just didn’t think you’d want to be with me if shows a break in the rain. The terrorists are “Well, I do,” a woman’s voice interrupted. you knew I was... .” riding a clear weather patch. That must be “Hank, this is Sheriff Amy Tzu. You are in “Enough,” Tungsten interrupted, “you why they slowed down. I’m going to break out my county. Consider yourself deputized. If love birds figure it out on your own time. We the shotguns and have Blackbeard—I mean you can help the marines, go for it with my need Amos to keep on course to the marines. Hank—get his rifle. Unless you or Agent blessings. If Washington doesn’t have the guts, Look, Jane,” he said solicitously, “why don’t Hutton order otherwise, we are going in.” you call Washington and get a read from “Agent Hutton here,” her voice cracked, CONTINUED ON PAGE 39

THE NORTH CAROLINA STATE BAR JOURNAL 33 TRUST ACCOUNTING

Bruno’s Top Tips: Protect Yourself from Financial Con-Artists

B Y B RUNO D E M OLLI

“Dear Sir, I am contacting you to seek your this pattern: Lawyer receives an email from a try. The lawyer had to do “very little haggling” assistance and cooperation in the actualization of prospective client from out of the country but with the ex-husband before he remitted a cer- this rare business opportunity…” with “ties” to the jurisdiction in which the tified bank check in the amount of $297,500, lawyer practices. Most of these schemes pro- because he did “not want this case to go fur- Many, if not all, of us have received an pose representation in either a simple debt col- ther involving a lawyer.” The lawyer, rightly email over the past few years from someone lection or a divorce settlement. The “client” suspicious, opened a new IOLTA account to who appears to be a barely literate Nigerian or retains the lawyer to collect a debt from a local protect the lawyer’s other clients and deposited Saudi prince begging us for assistance with a company, subtract attorney’s fees, and wire the the check in the new account. The lawyer financial matter and offering sizeable compen- remaining funds back to the “client’s” account. attempted to confirm the validity of the check sation for doing so. While many immediately Amazingly, before a demand letter is even sent but was only able to verify that the account recognized this email as a money scam, there to the bogus debtor, a cashier’s check arrives at number, not the actual check, was valid. are some who jump at the chance of a quick the lawyer’s office paying the debt in full. The Thankfully, before the lawyer wired any funds payoff and suffer major financial loss as a con- lawyer deposits the check in the trust account, to the “client,” the check was returned as sequence. Apparently, when the siren song of receives provisional credit from the firm’s counterfeit and the lawyer shut down the a fast buck plays loud enough, it can drown bank, subtracts the attorney’s fees for a job IOLTA account without losing the money of out even the most obvious sounds of warning. well done, and, assuming that the cashier’s his other clients. In these difficult economic times, lawyers are check represents good funds, wires the Sometimes these schemes occur without not immune to falling prey to fraudulent remaining funds to the “client.” By the time the willing participation of the lawyer. The money schemes in the pursuit of an easy and the cashier’s check is returned by the bank as State Bar has received reports of persons print- seemingly lucrative payday. counterfeit, the “client” has laundered the ing fraudulent checks on law firm accounts The upsurge of electronic communica- wired funds through multiple accounts and is and using them all over the country. For tions over the past decade improved efficiency, long gone. example, a firm in Charlotte was contacted by saved costs, and allowed for faster information This scheme has cost lawyers across the the fraud department of its depository bank sharing. Unfortunately, the benefits of this country hundreds of thousands of dollars in because recently-cashed checks had check new era are tempered by an alarming rise in losses and, in one case, a federal money laun- numbers that had been previously used. The attempts to defraud law firms. Scam artists dering charge.1 The State Bar has received criminals forged the signature of one of the have aggressively targeted law firms and reports of this scheme from multiple lawyers firm’s lawyers on 12 different checks totaling lawyers across the country since 2008. Until and law firms across North Carolina. For over $7,000. The firm was reimbursed by the recently, North Carolina was relatively insulat- example, a firm in Fayetteville was retained on bank for the stolen funds and is working with ed from this fraudulent activity. However, a contingency fee basis by an out-of-state the bank to prevent similar occurrences in the given the ever-increasing number of reports to company to collect a debt from a local busi- future. the State Bar, it is clear that North Carolina ness. The firm received a bank check for No lawyer can be 100% protected from lawyers are now major targets for Internet $300,000 from the debtor and was told to criminal activity, but these tips can help safe- financial criminals. Lawyers and their trust deduct a 10% legal fee and issue a trust guard you and your firm against check scams accounts are consistently targeted by scam account check for the remainder to the and fraud: artists who pose as potential clients, counter- client.2 Smartly, the firm examined the bank • “Available funds” does not equal collected feit trust account checks, steal account num- check and found it to be fraudulent before funds. Even if the bank makes a check’s funds bers, and forge signatures. Failing to recognize depositing the check or making any disburse- available within two days, it does not guaran- a scam could not only cost a lawyer hundreds ments, saving the firm’s lawyers hundreds of tee that the actual check will be paid. Fake of thousands of dollars, it could also result in thousands of dollars and a potential serious checks often take up to a week to get returned the use of funds belonging to the lawyer’s problem with the State Bar. because scammers put fake routing numbers other clients to cover a counterfeit check— Another example: a lawyer in Durham was on the checks. potentially violating the Rules of Professional retained via email by a woman to aid in the • Be sure to wire only “collected funds” Conduct. collection of a divorce settlement from her ex- The most common fraud scheme follows husband who allegedly lived out of the coun- CONTINUED ON PAGE 37

34 FALL 2011 LAWYER ASSISTANCE PROGRAM

An Interview with New LAP Director Robynn Mortaites

ust after being on the job a few days medicine, a program on alcoholism in the eld- in early July, Robynn Moraites, the erly, and a program concerning end-of-life new LAP director, sat down with issues. Each program was very compelling in outgoing Director Don Carroll. its own way. JHere are her answers to questions Question: Most of these programs were about her background and her new job. If you presented to doctors? would like to contact Robynn with a thought Robynn: Doctors and 16 affiliated health- ing programs that I enjoyed creating the most or suggestion you may reach her at care professions, like physical, occupational, dealt with helping healthcare professionals [email protected]. and speech therapists, psychologists, nurses, understand end-of-life issues. So I was Question: Robynn, you pharmacists. The list goes on. involved in understanding these issues from have had a very varied career We targeted a whole range of an educational point of view and then these before being selected as the healthcare disciplines and issues were all right before me in real life when LAP director. Tell us a little providers. my father passed away. And, yes, it was the about some of the experi- Question: What did you single most compelling experience of my life. ences you’ve had that you enjoy most in this educational I think it is one of the most real experiences we feel are pertinent to this setting? can have in life, if we can show up for it, position. Robynn: The collaborative which is hard to do. It is excruciatingly hard to Robynn: “Varied” is a nature of the work—it was be with a loved one and tend to their needs nice way to put it. I was a incredibly creative and reward- when there is little that can actually be done. second career law student. ing. Also, the wealth of infor- All we can do is just be with them and love Prior to law school, I did all mation. Interestingly, that one them. And as hard as it was, I would not trade sorts of things—event coor- job has had a major ongoing a minute of it. dinating, marketing and impact on my personal life As for the story of my dad’s passing, I had sales, teaching. You never drop the skills you and my family that continues to this day. After been waiting by my father’s bedside, keeping gain from each work experience. My seeming- having attended hundreds of hours of contin- watch, waiting for “the moment” for days on ly random work history has given me a skill set uing medical education, I coincidentally end, weeks really. I kept wondering, “Is it that is really well suited to this position. One wound up serving as a healthcare advocate for now?” because he was in a coma-like state and of the most significant work experiences I had several family members while they were criti- his breathing was very shallow and at times it was running a public health program at the cally ill or dying. Because I knew the medical would stop. On the day he passed, the hospice University of Miami, which combined the jargon and the lingo, I was able to help those nurse told me that she thought he had at least skills I gained from those prior event coordi- family members get really good care and get another week and that I should go on and run nating, marketing and sales, and teaching answers where we hadn’t been able to before. I errands and do what I needed to do. So I left jobs. I developed continuing education pro- was able to get some family members into his bedside and I called a former colleague grams for medical professionals focused on the comprehensive interdisciplinary care pro- from the University of Miami, a psychologist subject matter of interdisciplinary geriatric grams that they might not have otherwise specializing in end-of-life issues. During that medicine. I developed curriculum, selected been able to get into. I have no doubt they conversation, she asked me, as had about 50 presenters and speakers, organized events and lived healthier for longer and had a far better other people already, whether I had told my targeted hard-to-reach professional popula- quality of life for having received that care. dad that it was OK for him to go. I had done tions. I also developed some programs for the Those folks I worked with were also immense- that many times and told her so. I was on the general public, specifically the senior popula- ly helpful to me when my father was dying. phone for over an hour. tion, that had an enormous response. There Question: When you’re dealing with After we ended the call, I was hungry, so I are many parallels with what I will be doing as patients who are at the end of their life, it came back into his room and ate a sandwich. the director of the LAP. seems like you’re in one of the most real and As I was eating the sandwich, I thought, “I Question: Which programs were most compelling places to be present and to help need to tell my dad one more time, but I’ll tell interesting to you? people. Do you mind sharing what that expe- him in a different way.” My dad was a very Robynn: The programs I personally found rience was like? tough man from the streets of Boston and was most interesting were a program on alternative Robynn: As I mentioned, one of the train- not into anything transcendental, or as he

THE NORTH CAROLINA STATE BAR JOURNAL 35 might say, “airy fairy.” So between bites, rather depression or addiction, and because these you’ve also had the chance to work as a LAP irreverently, I told him the old-fashioned Irish two illnesses tend to thrive in isolation, folks volunteer. Could you share with us a little bit farewell used to urge a friend who has stayed have difficulty reaching out to get the about what your experience was like? too long to leave. “Hey dad, everyone keeps resources they need to get well. How might Robynn: It’s especially wonderful to work asking me if I have told you it is OK for you your University of Miami experience relate to with people one-on-one and see them get bet- to go. And I have. But just to make sure, I’ll the challenges that the LAP faces? ter. Not only get better, but become stronger, say it again: Don’t let the door bang you on Robynn: I hope that the LAP can create healthier, more content, and more joyous than the butt. Bon voyage. Fare thee well.” About compelling educational programs that de-stig- they were before. Watching folks overcome two minutes later I finished my sandwich and matize depression and addiction and other obstacles in their lives in a new and different, stood up and said, “I’ll be right back. I’m real world issues that everyone faces. In-person more healthy and successful way is very gonna throw this sandwich wrapper away…” programs and groups really open the door for rewarding. So I am very grateful for my expe- then I immediately said, “No, I’m not.” And I greater communication. It is amazing when rience in working one-on-one with other pulled a chair up to his bedside because every people hear their own story through another’s lawyers as a mentor and monitor. I’ve also real- part of me knew without question that he was experience, or some aspect of their story, and ly enjoyed getting to know the large network going to pass at that very moment. I put one realize that they are not alone in struggling of volunteers who work with lawyers suffering hand on his heart and one on his forehead and with issues, issues and obstacles that others from depression and addiction. As the LAP began to say prayers like, “Dad, may you have have also come up against. For a lot of mental has expanded its mission to address all manner peace. May you have joy. May you have love. health and addiction issues, it can be a matter of issues facing folks in the profession that can May you have happiness.” And because of all of degree. Lawyers like to talk about the slip- impair their legal practices, whether stress, liv- the reading that I’d done while waiting for this pery slope. To the extent that folks can identi- ing with an alcoholic spouse or child, dealing moment, I also welcomed everyone in the fy potential problems earlier in the process with eating disorder issues, gambling, suffer- room by name who I thought was probably and reach out for assistance in less critical ing in various ways from dealing with eco- there and encouraged my dad to go with phases, the greater the chance for long-term nomic stress…whatever it may be, it’s very them. I said, “Dad, I’ll see you when I see success. But that only happens when there is a exciting to talk with new volunteers and you.” And then he took his last breath. And I bridge of trust, communication, and trans- potential volunteers who have had similar was crying by that point and saying, “Thank parency with all of our humanness. experiences. Our greatest strength is each you, Dad. Thank you for letting me be here Question: Switching gears here, you’ve also other. This may sound like a cliché, but it’s with you. I love you.” Then I just sat there like practiced law. Tell us a little about the legal really true. I am really looking forward to that with him for maybe 10 or 15 more min- environment you practiced in. becoming more involved in the numerous utes until I felt like the room was empty. It was Robynn: My first position was with what is lawyer support group meetings across the state the strangest feeling because when I looked now Maguire Woods, formerly Helms Mulliss because I know this is one of the ways the LAP down at my dad, it was really obvious to me & Wicker. I split my time between the litiga- program has been most effective in helping that my dad had gone and what remained in tion and the environmental groups. I experi- lawyers who have had difficulties. the hospice bed was not actually my dad. enced what it was like to practice law in a big Question: What is your vision for some That’s the only way I can explain it. Then I firm with all the pressure and stress that that new things the LAP can do? went and alerted the hospice staff. entails. I was able to meet and get to know a lot Robynn: There is a brand new ADD sup- Question: What has this personal experi- of lawyers and was involved with the Charlotte port group that’s meeting in Charlotte, and if it ence with your own father and the experiences Women’s Bar during that time. I then transi- proves effective and successful, I’d like to with your prior work collectively taught you tioned to an in-house counsel position with expand that to other areas of the state. I have that will be meaningful to you as director of Premier, Inc. and moved to a transactional known for a while through friends working in the LAP? practice. I had a good opportunity to experi- trauma-related legal fields that some of them Robynn: I have had the chance to be in ence the unique stress and pressure that an in- have begun to suffer from the condition of sec- tough life situations with many people and to house position entails. I then moved to a small ondary post-traumatic stress disorder. be present and open to whatever was happen- firm, Bringewatt & Snover. There I developed Interfacing with trauma victims or perpetrators ing with them, and to honestly try to help a general commercial practice and specialized day in and day out can actually create the them in any way I could to navigate their par- in municipal and general commercial law and effects of the trauma in others. This can be par- ticular situation. We all go through messy continued the group purchasing and health- ticularly true for ADAs, public defenders, legal times in life—things that don’t look good on care-related work I had begun at Premier. I aid attorneys, and district court judges—partic- the outside but that we all have to get through became a partner there, which helped me to ularly those lawyers and judges who serve in and deal with. And when we go through these understand the pressures and stressors involved areas of domestic violence and child abuse. I’d times, we usually cannot do it alone. I also with a small firm. So I am fortunate to have really like to pull together support groups for have a real appreciation for the value of advo- had a range of experience in various settings that particular issue. I would also like to see the cacy. Education and advocacy go hand-in- and understand both the rewards and inherent LAP do a better job utilizing technology to hand in terms of better resources and out- difficulties associated with various types of legal interact with volunteers and the general Bar comes for everyone involved. All of this is very practice and settings. population. relevant to being the LAP director. Question: In addition to work with bar Question: Although the LAP program Question: Oftentimes people suffer from organizations like the Charlotte Women’s Bar, operates entirely separately from the other

36 FALL 2011 parts of the Bar, what is your vision for apathetic in client representation. The LAP is Robynn: Just that I appreciate the warm increasing the understanding among Bar the Bar’s proactive way to help lawyers before welcome I have gotten from Mark Merritt, councilors about the LAP? issues that impact the public arise, and the the chair of the LAP Board; Tom Lunsford, Robynn: I look forward to meeting as best way to get to the core of the remedy for the executive director of the Bar; Alice Mine, many Bar councilors as I can and building those issues. assistant executive director of the Bar; relationships with them so that I and the LAP Question: The number of law students in Katherine Jean, bar counsel; the LAP staff, can be a resource to help the lawyers in their NC has increased dramatically in the past especially Ed Ward and Towanda Garner; and districts. I’ve always worked in a very collabo- couple of years with two new law schools so many of the LAP board members and vol- rative setting. I think the strongest approach is coming at Elon and Charlotte. What is the unteers. As we do this interview I have only relationship-based, building trust and under- role for the LAP with law students? been on the job a few days, but I already see standing. Robynn: I’d like to see the LAP become the possibility to work with so many diverse Question: What do you see are some of more meaningfully and interactively involved stakeholders in really exciting and positive the challenges facing the LAP during the next with the law schools. I think the incidence of ways. I am so delighted to have been given this few years? alcoholism and substance abuse in law schools opportunity and I hope to contribute mean- Robynn: Maintaining strong community is probably higher than the incidence within ingfully to our Bar through the LAP and and relationship ties with a growing, diverse the current population of practicing attorneys. maintain our LAP as one of the strongest and Bar population is a big challenge. We need to Binge drinking in college and law school has most well-respected and robust programs in find effective and meaningful ways to reach become a norm which is culturally approved the nation. It truly is an honor. n out to underrepresented lawyers who are suf- of by students. In other words, if you don’t go fering from the same stresses and illnesses that out and get smashed every weekend, you’re The North Carolina Lawyer Assistance our majority population deals with. Some of not seen as a regular gal or guy. So I think Program is a confidential program of assistance our minority and underrepresented Bar mem- there is a dual role that the LAP has: 1) to for all North Carolina lawyers which helps bers may not feel as comfortable reaching out reach out to law school administrations to let lawyers address problems of stress, depression, to us, so we need to reach out to them. I think them know that there are things that they can addiction or other problems that may lead to that continued public awareness is also crucial. do to create a more positive culture than the impairing a lawyer’s ability to practice. If you are It has been demonstrated through other states default binge-drinking culture that we so a North Carolina lawyer, judge or law student that track liability data that a robust LAP often have, on the one hand; and 2) to reach and would like more information, go to greatly reduces the chance of ethical violations out to law students who have gotten into dif- www.nclap.org or call toll free: Robynn Moraites and malpractice, thereby greatly increasing ficulty because of their use of alcohol or other (for Charlotte and areas West) at 1-800-720- protection for the public. I think a robust LAP drugs. I know in the past the LAP has had 7257, Towanda Garner (in the Piedmont area) is the greatest protection we can offer the pub- some sporadic recovery meetings for law stu- at 1-877-570-0991, or Ed Ward (for Raleigh lic because it has the potential to get to the dents in some of the law schools. I would and down East) at 1-877-627-3743. If you core of problems which result in behavior that hope we could do more of that throughout have a personal story that you would like to sub- is problematic. Discipline is essential, but it’s the state. mit for consideration for publication in the LAP not going to get to the core issues that lead a Question: Robynn, anything else you column, please forward it to Don Carroll at lawyer to fail to return client calls or become would like to add in closing? [email protected].

Trust Accounting (cont.) the client is requesting services from you ject to an attempted or successful fraud, con- which are out of your area of expertise that is tact the State Bar at (919) 828-4620 and the a warning sign that something may be awry. North Carolina Attorney General’s Office at from your trust account. Wired funds are • MONITOR YOUR TRUST (919) 716-6000. very hard to recover if a check is returned as ACCOUNT REGULARLY! If someone is counterfeit. writing fraudulent checks on your trust Where Bruno is Headed • Closely examine cashier’s checks. account, you should be able to catch it during Bruno will be auditing Judicial District 28 Scammers are now counterfeiting certified your monthly review. If you are suspicious of (Buncombe County), and Judicial District 30 bank checks from nearly every major and illicit activity, daily or weekly make reviews of (Cherokee, Clay, Graham, Haywood, minor bank. For a complete list of counterfeit your trust account. Keep your staff informed Jackson, Macon, and Swain Counties) this check alerts, go to the US Treasury Dept. web- of these scams so they can spot the tell-tale quarter. n site at www.occ.treas.gov/news-issuances/ signs of fraud. alerts/2011/index-2011-alerts.html. • If something seems fishy, it probably is. Endnotes • Be wary of doing business with out-of- By following these tips, knowing your 1. Martha Neil, Lawyer Victimized in $300K Check Fraud state clients via email. Look for suspicious clients, and monitoring your trust account, is Charged with Money-Laundering, ABA Journal (Aug. 27, 2010). generic terms in the emails like “your jurisdic- you can protect your firm and yourself from 2. The amount of the check was actually $298,750. Scam tion” and for poor grammar. attacks by Internet financial criminals. artists will often avoid round numbers in order to make • Question how the client found you. If If you believe that your firm has been sub- the amount in question appear legitimate.

THE NORTH CAROLINA STATE BAR JOURNAL 37 LEGAL ETHICS

You Can’t Touch This—A Look at the Anti-Contact Rule

B Y S UZANNE L EVER

You can't touch this person who is seeking a second opinion from an degree of involvement in the legal representa- Look man you can't touch this independent lawyer. Comment [2] to Rule tion. A lawyer generally may interview rank- You'll probably get hyped boy 4.2 states that a lawyer from whom such a sec- and-file employees without the knowledge or 'Cause you know you can't touch this ond opinion is sought “should, but is not consent of the organization’s lawyer. RPC 67. Ring the bell school's back in required to, inform the first lawyer of his or There are four situations where a current (Oh-oh-oh oh-oh) her participation and advice.” However, if the employee is considered off-limits: (1) the You can’t touch this person asks you not to disclose the request for employee supervises, directs, or consults with —MC Hammer a second opinion, this becomes confidential the organization’s lawyer concerning the legal information that you may not disclose. matter; (2) the employee has authority to obli- Like MC Hammer’s legendary dance Third, the rule only prohibits communica- gate the organization with respect to the mat- moves, there are certain persons or entities tions “about the subject of the representation.” ter; (3) the employee’s act or omission in con- that cannot be “touched” by lawyers when The rule does not apply if the lawyer is com- nection with the matter may be imputed to they are representing a client. Rule 4.2, com- municating with a represented person about a the organization; or (4) the employee partici- monly known as the “anti-contact” rule, gen- matter outside the subject matter of the repre- pated substantially in the legal representation erally prohibits a lawyer who is representing a sentation. of the organization. client in a matter from communicating about Fourth, the rule only applies if the person There is a different standard for former the subject matter of the representation with a has legal representation in “the same matter.” employees. Rule 4.2 generally permits ex parte person the lawyer knows is represented in the This element of the rule is perhaps the most communications with former employees. same matter unless the represented person’s difficult to understand and apply. Clearly, if a This is true even though the former employ- lawyer consents. person is represented by a domestic lawyer in ee’s acts or omissions may be the subject of (Break it down.) First, the rule only applies a divorce case, and that person is also proceed- the representation. A lawyer may communi- if the lawyer knows that the person is repre- ing pro se in a breach of contract action against cate directly with a former employee of a rep- sented. The lawyer has to have “actual knowl- his landlord, the landlord’s lawyer does not resented organization, unless the former edge” of the fact of representation. However, need the consent of the domestic lawyer to employee participated substantially in the knowledge may be inferred from the circum- speak to the person about the breach of con- legal representation of the matter. 97 FEO 2. stances and the lawyer cannot ignore facts sug- tract case. The issue becomes murky if one set According to our ethics opinions, if a former gesting that the person is represented. The of facts gives rise to more than one action and employee was privy to privileged communi- lawyer does not have an affirmative duty to a party is represented in one of the actions but cations with the company’s lawyer as to the ask whether the person is actually represented. not the others. In this situation, the lawyer strategy and objectives of the representation, However, the better practice is to ask to avoid should consider the public policies advanced the management of the case, or other matters possibly violating the rule. What if the oppos- by Rule 4.2: preserving the client-lawyer rela- pertinent to the representation, the former ing party tells you that he has fired his lawyer? tionship; preventing lawyer overreaching; and employee is off-limits and consent of the rep- If retained counsel has entered an appearance reducing the likelihood that privileged or con- resented organization’s counsel is required. 97 in a litigated matter, you may not communi- fidential information will be disclosed. Where FEO 2. cate with the person until the court has grant- the answer is still unclear, the lawyer should If a former employee is not considered off- ed the opposing lawyer’s motion to withdraw. err on the side of obtaining consent. limits by the standard above, the lawyer If no motion is forthcoming, you may make a (Oh-oh oh oh oh-oh-oh.) What if the repre- should determine whether the former motion to have the lawyer for the opposing sented “person” is actually an organization? employee has separate counsel. If the former party disqualified by the court (because he has There is a distinction between communica- employee does not have counsel, the lawyer been fired) in order to negotiate directly with tions with management and “blue collar” should follow the requirements for commu- the (now) unrepresented opposing party. employees and between current and former nicating with an unrepresented party that are Second, the rule only applies if the com- employees. Rule 4.2’s protections extend only set out in Rule 4.3. In addition, when com- municating lawyer is also representing a client to those employees who should be considered municating with former employees of a in the matter. Therefore, Rule 4.2 does not the lawyer's clients because of the authority party-opponent, the lawyer may not solicit preclude communication with a represented they have within the organization or their information that is reasonably known or

38 FALL 2011 which reasonably should be known to the under the following circumstances: (1) in “authorized by law or court order.” See, e.g., lawyer to be protected from disclosure by writing, if copied to the opposing lawyer; (2) RPC 218 and (in this publication) Proposed statute or by an established evidentiary privi- orally, upon adequate notice to the opposing 2011 FEO 15, Communication with Adverse lege. See Rule 4.4 counsel; or (3) in the course of official pro- Party to Request Public Records. As noted (Oh-oh oh oh oh-oh-oh.) What if the repre- ceedings. above, direct communications with elected sented organization is a government entity? You can touch this. There are some scenar- governmental officials are permitted under Our ethics opinions provide that Rule 4.2 ios where Rule 4.2 does not prohibit commu- certain conditions. only applies to communications with a gov- nication. For instance, the rule does not pro- Now back to “Hammer Time.” ernment employee related to a specific claim hibit represented parties from communicating of a client. 2005 FEO 5. Routine communi- directly with each other. And the rule does not Wave your hands in the air cations on general policy issues or administra- prohibit a lawyer from encouraging his client Bust through the moves run your fingers through tive matters do not require consent. A lawyer to communicate with the opposing party “in your hair representing a party in a controversy with the a good faith attempt to resolve the controver- This is it for a winner government may communicate directly with sy.” Rule 4.2, Cmt. [4]. But see (in this publi- Dance to this and you're gonna get thinner elected officials who have authority to take cation) Proposed 2011 FEO 11, Move slide your rump action in the matter. The lawyer must, how- Communication with Represented Party by Just for a minute let's all do the bump n ever, give government counsel reasonable Lawyer Who Is the Opposing Party. Rule 4.2 advance notice. Rule 4.2(b) permits commu- also allows communications with represented Suzanne Lever is assistant ethics counsel for nications with a represented elected official parties when those communications are the North Carolina State Bar.

Blackbeard’s Last Raid (cont.) through the clouds. The marines cheered as sails. William pressed a button to start the the ports on The Adventure opened and the diesel engine. He put the lever into reverse I do.” cannons poked out. and brought The Adventure to a stop. “All right, sheriff,” Tungsten cheered. Amos ordered half the cannons to fire “What’s happening?” Tungsten yelled. “Men, God be with you. It takes an awful lot when The Adventure passed the first cabin “All da bad guys in da water,” William of guts to face automatic weapons with shot- cruiser and the rest to fire on the second. The yelled, exultantly. guns.” Adventure closed in. If the terrorists saw The “All right,” Jane cheered. Applebee looked puzzled. Speaking to Adventure approaching, they could easily “Good job,” said Sheriff Tzu. the telephone, he said, “Didn’t these boys sweep its deck with automatic weapons and The pirates on The Adventure smiled at tell you? The Adventure has a dozen can- prevent the cannons from firing. each other. Amos, ripping off his shirt, nons, six on each side. And the guys have Amos, steely eyed and firm, raised his pulled a wood splinter from his shoulder and been practicing. We’ll blow the crap out of right arm. “On my signal,” he called, and held up his arms to show he was not badly them.” then lowered his arm. hurt. Amos raced to the deck and directed the Three of the cannons roared to life, belch- Blackbeard, descending from the crow’s men to uncover the cannons. Blackbeard ing flame and hurling their lead balls into the nest, looked at William who was still clothed took his rifle, slung a rucksack over his first cruiser. “Again,” called Amos, raising his in his English finery. William’s finely embroi- shoulder, and climbed the rigging to the arm, “on my signal.” dered silk and gold coat, waistcoat, and knee crows nest. On the deck the men used ram- The first cruiser, ripped by two of the breeches were now wet and bedraggled. His rods to push in loads of powder and lead lead balls, began to list sharply with its deck fine white wig looked like he had placed an ball. towards The Adventure. A terrorists fired, old mop on his head. His stockings draped The terrorists’ boats were now within a bullets raked the ship and spit splinters of over his shoes. Blackbeard began laughing hundred yards of the marines. The noise of wood. Blood appeared on the top of Amos’ hysterically. The pirates, appreciating the firing, and the whine of the bullets ric- shirt, darkening it. Amos did not move. William’s bedraggled state of dress, began ocheting off the sides of the landing craft, Blackbeard, high in the crows nest, took laughing, too. echoed loudly. High in the crows nest, careful aim and shot the terrorist. “Laugh all you want,” William yelled, Blackbeard opened his rucksack and took Amos shouted, “Now!” and lowered his holding up his right hand. “I gots ‘da ring. I out a large American flag. Grabbing a line, arm. The cannons spit their lead and flame. gots ‘da ring.” n he raised it to the top of the mast. One ball was a direct hit, puncturing the side On board the landing craft, the marines of the second cruiser. A second ball hit the Robert Stamps consults on federal contracts peering through slits on the side of the craft water and skipped like a stone into the bow and grants. He practiced international law with saw The Adventure emerge from the mist of the cruiser, tearing a hole. The motion the air force, served as the staff judge advocate and sail towards the cabin cruisers. Silently, threw the terrorists into the water. for the air force district of Washington, and as a The Adventure approached, the American “Lower the sail,” William roared. Men prosecutor in the Office of Military flag illuminated by a lone ray of sun breaking slipped ropes from pinions, lowering the Commissions. He retired as a colonel.

THE NORTH CAROLINA STATE BAR JOURNAL 39 IOLTA UPDATE

Comparability Halts Income Slide but Income Still Low

Income After experiencing an unprecedented income downturn in 2009—a 55% decrease over the previous year—the total income of $2.2 million received in 2010 was only a 6% decrease compared to the previous year. However, the first two quarters showed a 34% decrease. Improved income in the last two quarters can be attributed to the imple- mentation of comparability on July 1, 2010. Under comparability lawyers must keep IOLTA accounts only in banks that agree to pay IOLTA accounts the highest rate avail- able to that bank’s other customers when the IOLTA accounts meet the same qualifica- tions. Income for the first quarter of 2011 is up 39% over that period last year, but we are not quite meeting our hoped-for projection of $200,000 per month. We are continuing discussions with SunTrust Bank regarding its decision to stop $3 million in 2010 and a high of $4.1 mil- per case. The $.95 filing fee allocation for waiving service charges on IOLTA interest, lion in 2009) using $1 million from the domestic violence work remained the same. which caused a dramatic drop in income as IOLTA reserve for a second year. Grants have A new fee added for cross claims and count- SunTrust is one of the largest banks (in num- been restricted for two years to a core group er claims in district and superior court will ber of IOLTA accounts). We appreciate the of grantees at the forefront of access to justice also yield the $1.50 and $.95 legal aid allo- fact that a number of their attorney cus- work. Even so, grants to legal aid organiza- cations. tomers have let their North Carolina bank tions were decreased by approximately 20% representatives know that IOLTA is impor- in 2010 and another 11% in 2011. Grant NC IOLTA Trustees and Leadership tant to them and have asked that the bank applications for 2012 will be available in At their July meeting, the NC State Bar revisit this policy change. August. It is expected that grants will again Council appointed IOLTA leadership for be restricted. The IOLTA reserve fund now 2011-12 and IOLTA trustees to three-year Settlement Agent Accounts Added to holds $800,000. terms that begin on September 1, 2011. The NC IOLTA council reappointed the Honorable Linda M. An amendment to the Good Funds State Funds McGee of the NC Court of Appeals to a sec- Settlement Act passed in the recent legislative In addition to its own funds, NC IOLTA ond three-year term as an IOLTA trustee and session requires interest-bearing accounts of administers state funding for legal aid on appointed two new trustees: Hope H. settlement agents handling closing and loan behalf of the NC State Bar. In 2010-11, NC Connell, who served as the first female chair funds to be set up as IOLTA accounts and IOLTA administered $5 million in state of the NC Bankers Association (2005-06) directed the NC State Bar to adopt rules to funds. Appropriated funds for legal aid have and is vice-chair of First Citizens BancShares administer such accounts. The requirement already suffered decreases. Although propos- Inc., and John B. McMillan, former president takes effect on January 1, 2012. We hope als in the House would have dramatically cut of the NC State Bar (2008-09) who is in pri- that some additional income will be generat- the filing fee allocation for general legal aid vate practice in Raleigh. Former NC State ed from these accounts. (from $2.05 per case to $1 per case), the Bar President Irving W. (Hank) Hankins III work of the Equal Access to Justice was appointed chair and former NC Bar Grants Commission, the NCBA, and the legal aid Association President Michael C. Colombo NC IOLTA is administering just over programs along with many individual attor- was appointed vice-chair of the NC IOLTA $2.7 million in grants for 2011 (compared to neys resulted in a smaller decrease to $1.50 Board of Trustees for 2011-2012. n

40 FALL 2011 LEGAL SPECIALIZATION

Profiles in Specialization—Jeri Whitfield

A N I NTERVIEW BY D ENISE M ULLEN, ASSISTANT D IRECTOR OF L EGAL S PECIALIZATION

I recently met with Jeri Whitfield, a board group and very proud of what we created. lent plaintiff’s bar—well organized and with certified specialist practicing in Greensboro, to Q: Was the certification process valuable to great leadership. They have often been able to talk about her certification in workers’ com- you in any way? move the law in a particular direction through pensation law as well as her recent appoint- Yes, it was. As we spent time developing an organized effort over the years. As a defense ment as chair of the Board of Legal exam questions, I learned a tremendous lawyer, I need to be aware of how the law is Specialization. Jeri attended Cornell for her amount about areas of the law in which I did changing and the plaintiffs’ bars agenda to undergraduate degree in Design and not practice. I found it to be really valuable to move the law in a new direction. My years of Environmental Analysis, and attended George learn about the differences in each attorney’s experience and commitment to a more narrow Washington University for her law degree, fin- practice. As a group, we realized that no one practice area allow me to have a depth of ishing her last year at Duke to accommodate practice had depth in all areas. Even within knowledge about not only the practice, but her husband’s residency pro- workers’ compensation law, also the history of case law and why certain gram. Following law school our practices had specialized changes were made. That aids my ability to she went to work in further. We were able to use analyze the public policy considerations and Greensboro for Smith that information to help us tai- see the bigger picture. All of this helps me to Moore Smith Schell and lor the exam questions and to develop a strategy for the representation of my Hunter (now Smith Moore give us a reasonable expecta- client’s interest, which benefits my clients. Leatherwood), handling tion for how examinees would Q: Is certification important in your practice general litigation cases. She handle the variety of questions. area? became a board certified Q: Has certification been Board certification is incredibly impor- specialist in workers’ com- helpful to your practice? tant in workers’ compensation law for plain- pensation law in 2000. It has been helpful to my tiffs’ work. The directory of board certified Jeri served on the inau- practice overall. I know that specialists and the online listings are tremen- gural specialty committee when I need to make a referral, dously valuable for the public. For the that drafted and graded the I look for board certified spe- defense side, it hasn’t traditionally been as first specialization exam for workers’ compen- cialists throughout the state and in other states. popular. I do think it’s becoming more pop- sation law. She served on the committee from I am a real believer in credentialing. Beyond ular and that we’ll get there someday. I think 1997–2003. Jeri was to the board in 2006 and the legal field, I look for professionals with the about the path that certification has followed was recently appointed chair of the board at most initials behind their names. I know that in the medical field and think that’s where the State Bar Council meeting in July 2011. this person takes his or her profession seriously we’re headed as well. Following are some of Jeri’s comments about and wants to achieve the highest level of Q: Does certification benefit the public? the specialization program, the impact it has knowledge and recognition. I know that my Absolutely. One of the main reasons for the had on her career, and her thoughts about certification shows potential clients and other existence of legal specialization is service to the leading the board. lawyers that I am highly dedicated to this prac- public. The board takes that mission very seri- Q: Why did you pursue certification? tice and value the knowledge and skill that I’ve ously and it is one of the main areas of focus. I had served on an earlier committee that gained. Providing objective information to potential focused on exploring the possibility of creating Q: What have your clients said about your clients is a reliable yet easy way for them to a specialty in civil litigation. We ultimately certification? locate a qualified attorney. The program also determined that litigation wasn’t a good fit at One of my largest corporate clients inter- encourages lawyers to deepen their knowledge that time, but I learned a lot about specialty viewed many attorneys before selecting me. It of their practice area. This promotes compe- certification. Based on that experience, I was turned out that I was the only board certified tence among the members of the bar as well. asked to join the initial committee for workers’ attorney being considered. I think that clients Q: What would you say to encourage other compensation law. We wrote the standards for appreciate the additional evidence of compe- lawyers to pursue certification? the specialty and once it was approved, began tence and expertise. I would encourage lawyers to look beyond to draft the initial examination. It was a very Q: How does your certification benefit your the marketing aspect of certification; to take interesting and challenging process! We spent clients? their careers seriously and gain all of the cre- a good deal of time drafting questions, writing I have dedicated my career to workers’ dentials they can. Yes, it is hard to take another model answers, and debating about open compensation law, and the defense side in par- book options. I felt honored to be a part of the ticular. In North Carolina, we have an excel- CONTINUED ON PAGE 42

THE NORTH CAROLINA STATE BAR JOURNAL 41 PARALEGAL CERTIFICATION

What’s the Bright Idea?

B Y T ARA J. WILDER

The Board of Paralegal Certification is convenience, the issue is COST. When the for comment in the State Bar Journal before looking for some bright ideas for resolving a course registration fee must be paid by the taking effect. dilemma the certification program is facing paralegal, and especially if the paralegal is Paralegal certification promotes proper uti- due to the economic downturn. The board is unemployed, the cost of the required educa- lization of paralegals and assures that legal serv- considering how to assist certified paralegals tional credits becomes prohibitive and many ices are professionally and ethically offered to who are not eligible for renewal because they certified paralegals allow their certifications to the public. The renewal requirements main- were unable to pay for the required annual lapse. To date, 1,053 of 5,287 total paralegals tain certification validity through required continuing legal education (CLE/CPE). who have been certified have allowed their continuing education. A better educated para- The renewal process is administered as fol- certification to lapse. This is nearly 20% of legal is able to better perform his or her job lows: renewal applications are sent by mail 60 the paralegals certified since the program responsibilities. We welcome your input on days before they are due back to our office; began. (Not all of those lapses are a result of how to help certified paralegals to maintain certified paralegals complete the renewal lack of CLE/CPE.) certification despite personal financial difficul- application by updating contact information, The registration fees for CLE/CPE courses ties. Contact Tara Wilder at [email protected] completing CLE/CPE course information are controlled solely by CLE/CPE sponsors. It with your ideas for board consideration. from the past 12 months, disclosing any crim- has been suggested, however, that the board For those unemployed CPs who are look- inal convictions or charges within the past 12 set up some form of scholarship fund that ing for work, NC certified paralegals have an months, signing the form in the presence of a could assist qualified CPs. Another idea is for online community where information on notary, and mailing it to the NC State Bar the board to sponsor a limited number of free paralegal job openings is shared. This is a with the required $50 renewal fee. The board CPE hours for qualified CPs. These options members-only group on LinkedIn that can be has a grace period that allows late filing of the are being researched, but other bright ideas are found by searching for “NC Certified application and completion of the required welcomed. Paralegal.” Any member of the LinkedIn educational credits. The board is also considering creating an group can post a job opening for free to a cap- When certified paralegals change or lose “inactive status” for certified paralegals who tive audience composed only of certified para- jobs or leave the legal field but want to main- are unemployed, experiencing financial hard- legals. Many of our state and local paralegal tain certification, their number one com- ship, or following a military spouse to a loca- associations also have job banks for their plaint is the expense of obtaining the educa- tion outside of North Carolina. This status members. Other ideas on how to assist unem- tional credits required for renewal. The board would be similar to the inactive status for NC ployed certified paralegals to return to the allows certified paralegals to complete all con- lawyers. We currently do not have an inactive legal filed are appreciated. n tinuing education online. A list of accredited status since the renewal requirements are min- courses can be found at www.nccle.org or imal. We are drafting a proposed rule that, if Tara Wilder is the assistant director of the www.nccertifiedparalegal.gov. Despite this approved by the board, would be published Paralegal Certification Program.

Specialization (cont.) fessionals. I have enjoyed being a part of the also move forward on working with other group, learning about the different practice state programs and national programs to areas and being involved in some great discus- establish some common ways to identify exam, but it should be just another part of a sions and plans. There have been opportuni- board certified lawyers, including initials. I strong career plan. Board certification provides ties to consider some challenging issues and think that would only enhance the program an excellent way to be recognized in your area I’ve been proud of our ability to think deeply for both lawyers and potential clients. I take of expertise and an excellent personal achieve- about a situation and find a creative solution. the responsibility of leading the program ment goal. Q: How do envision your leadership of the very seriously and am honored to have the Q: How has your experience been serving on board? opportunity. n the Board of Legal Specialization? I am most proud of the work we’ve done I have really enjoyed working with the staff over the past years with making our exami- For more information on the State Bar’s spe- and the other lawyers and public members of nations stronger and even more valid and cialization programs, please visit us on the web at the board. It’s a great group of dedicated pro- reliable. I want to continue those efforts and nclawspecialists.gov.

42 FALL 2011 FEATURED ARTIST

Featured Artist—Lisa M. Stroud

As an artist and writer, I am always looking for a feeling, a phrase, a story, a line from poetry Where the Dogwoods Bloom, 2 or music, a snatch of conversation—the catalysts that inspire my work. I step up to the easel and work intuitively with colors, shapes, textures, and gestural drawing. Most recently, my work has been in the tradi- tion of abstract expressionism with heavy reliance upon drip making and mark making. Between multiple layers of paint, colors shift and words or calligraphic marks weave in and out with mys- tery and emotion, often evoking a dialogue between the real and the imagined. What is or what could be.

Lisa Stroud did not grow up wanting to be an artist. Her parents, children of the depres- sion, saw art as an indulgence. Stroud’s mother described her as the kid “without an artistic bone in her body.” Her parents encouraged her to pursue a legal career—to make money, not art.1 Stroud did not become a lawyer but she did pursue several different career paths, including work at a large insurance company, before recognizing her desire to create. She Show at the Maria V. Howards Art Center in nent collection of The National Museum of explains her metamorphosis on her website, Rocky Mount and was purchased for the the Marine Corps in Triangle, Virginia. The http://lisastroudartist.com: museum’s permanent collection. In 2010 and painting honors the memory of Stroud’s I freelanced for magazines and newspapers, again in 2011, she won the People's Choice father-in-law, Master Gunnery Sergeant for politicians and corporations. I worked Award, First Friday, from the Artspace Artists Luthor P. Stroud Sr., USMC. It is also the first as a garden designer. When I went through Association in Raleigh. Also in 2010, from abstract painting ever selected for the muse- an extended period of caregiving, I yearned among 6,200 artists, she was selected as a final- um’s permanent collection. for another creative outlet. One day I ist in the abstract/experimental category in Stroud’s creative story is not unlike that of signed up for a painting class. I was The Artist’s Magazine’s 27th Annual Art her abstract paintings which she describes as hooked. Competition. follows: Since following her muse, Stroud’s work Of her many shows, exhibitions, and As I begin the quest for resolution, I use a has received numerous awards and honors. In acquisitions by collections, Stroud may take host of mixed media processes….With June, her painting “If Only” was proclaimed the most pleasure in the selection of her paint- time, luck, and patience, my story begins Best in Show at the 54th National Juried Art ing “Honor by Any Measure” for the perma- to unfold on the canvas. My hope is that somewhere between the obvious and the hidden, viewers will be enticed to create Each quarter, the works of a different contemporary North Carolina artist are displayed stories of their own. n in the storefront windows of the State Bar building. The State Bar is grateful to The Mahler Fine Art, the artists' representative, for arranging this loan program. The Mahler Endnote is a full-service fine art gallery in Raleigh representing national, regional, and North 1. Stroud’s college roommate and good friend, former Carolina artists, and provides residential and commercial consulting. Readers who want State Bar councilor and Asheville lawyer Sara Davis, confirms that “being an artist is the last thing I ever to know more about an artist may contact owners Rory Parnell and Megg Rader at (919) thought Lisa would do.” Davis, now an admirer, sug- 896-7503 or [email protected]. gested that Stroud’s artwork be featured at the State Bar.

THE NORTH CAROLINA STATE BAR JOURNAL 43 THE DISCIPLINARY DEPARTMENT

Grievance Committee and DHC Actions

account and when the bank discovered its was reprimanded by the Grievance Disbarments error four years later, Staples refused to Committee. He notarized signatures he David Bayard of Cary prepared false return the funds. The DHC suspended had not witnessed. HUD-1 Settlement Statements to facilitate him for three years. Charles D. Mooney of Raleigh was rep- fraudulent real estate closings. Bayard con- rimanded by the Grievance Committee. sented to disbarment by the DHC. Censures Mooney did not obtain service of a com- W. Rickert Hinnant of Winston-Salem Durham lawyer Robert C. Ekstrand plaint, as a result of which the complaint surrendered his law license and was dis- was censured by the Grievance Committee was dismissed and his client lost any avail- barred by the Wake County Superior for changing the terms of a plea transcript able remedy. Mooney did not respond to Court. Hinnant admitted that he misap- previously agreed upon by one assistant his client’s requests for status reports and propriated entrusted funds totaling at least district attorney and tendering the changed did not notify his client that the case had $10,000. transcript to a different assistant district been dismissed. R.C. Hunter of Durham surrendered attorney. Goldsboro lawyer Robert M. Smith was his law license and was disbarred by the Eric Levine of Charlotte was censured reprimanded by the Grievance Committee. Wake County Superior Court. Hunter by the Grievance Committee for failing to Smith failed to appear for trial and was failed to report a foreign bank account to appeal an arbitrator’s decision, failing to found in criminal contempt of court. He the Internal Revenue Service. inform his client that he did not file the also made misleading statements to the Don Sam Neill of Hendersonville sur- appeal, and filing a false verification. Grievance Committee. rendered his law license and was disbarred Camilla J. Davis of Durham was cen- New York lawyer Anthony A. Pearl was by the Wake County Superior Court. Neill sured by the Grievance Committee. Davis reprimanded by the Grievance Committee admitted that he misappropriated entrust- did not perfect a client's appeal, misled the for assisting another New York lawyer in ed funds. client to believe the appeal was progressing, the unauthorized practice of law. Raleigh lawyer Charles Ruffin Poole and tried to dissuade the client from purs- pled guilty to the felony offense of federal ing the appeal in an effort to conceal her Reinstatements income tax evasion in violation of 26 error. John Austin of Raleigh was reinstated U.S.C. § 7201. He surrendered his law from suspension by the secretary. license and was disbarred by the State Bar Reprimands The DHC recommended that the rein- Council. David L. Best of Jacksonville was repri- statement petition of Larry R. Linney, for- Samuel Thomas of Statesville misap- manded by the Grievance Committee. Best merly of Asheville and presently of propriated $500 in legal fees belonging to hired a disbarred lawyer as a paralegal and Charlotte, be denied. Linney was disbarred his law firm employer. He was disbarred by did not properly supervise him, resulting in in 1996 for misappropriation and making the DHC. the disbarred lawyer engaging in the unau- false statements in the investigation. thorized practice of law. Linney has 30 days from service of the Suspensions & Stayed Suspensions The Grievance Committee reprimand- DHC order to appeal the decision to the Perry Martin of Ahoskie made unwant- ed China Grove lawyer Keith C. Booker. council. ed sexual advances to a client on numerous Booker did not communicate with clients, Nikita V. Mackey, formerly of occasions. The DHC suspended him for neglected one client's case, did not notify Charlotte, was reinstated from suspension three years. The suspension is stayed on clients that he had closed one of his offices by the secretary. The remaining two years numerous conditions. and disconnected the telephone number, of his suspension are stayed upon compli- Raleigh lawyer John Kirby used another did not participate in the State Bar's ance with numerous conditions. lawyer’s identity on a commercial website mandatory fee dispute process, and did not S. Vann Sauls of Johnston County was to provide legal advice for profit to mem- timely respond to the Bar. reinstated from suspension by the secretary. bers of the public and provided legal advice David Erdman of Charlotte was repri- The remaining two and a half years of his about state law in jurisdictions where he manded by the Grievance Committee. suspension are stayed upon compliance was not licensed to practice law. The DHC Erdman had improper ex parte communi- with numerous conditions. suspended him for two years. cations with a judge and did not provide a Jack McLamb of Johnston County was Asheville lawyer Porter Staples did not written order to the opposing party before reinstated from suspension by the secretary. reconcile his trust account. A bank mistak- he submitted it to the court. enly wired $80,000 to Staples’ trust George F. Goosmann IV of Asheville CONTINUED ON PAGE 57

44 FALL 2011 PROPOSED OPINIONS

Committee Applies the Anti-Contact Rule to Lawyer-Litigants

Council Actions At a meeting on July 15, 2011, upon the Proposed 2011 Formal Ethics recommendation of the Ethics Committee, Opinion 10 Public Information the State Bar Council adopted the opinions Lawyer Advertising on Deal of the Day summarized below: or Group Coupon Website The Ethics Committee's meetings 2011 Formal Ethics Opinion 5 July 14, 2011 are public, and materials submitted for Representation of Lender in Contested Proposed opinion rules that a lawyer may consideration are generally NOT held in Foreclosure When Corporate Trustee is advertise on a website that offers daily discounts confidence. Persons submitting requests Owned by Spouse and Paralegal to consumers where the website company’s com- for advice are cautioned that inquiries Opinion rules that a lawyer may not rep- pensation is a percentage of the amount paid to should not disclose client confidences or resent the beneficiary of the deed of trust in the lawyer if certain disclosures are made and sensitive information that is not neces- a contested foreclosure if the lawyer’s spouse certain conditions are satisfied. sary to the resolution of the ethical ques- and paralegal own an interest in the closely- tions presented. held corporate trustee. Inquiry: 2011 Formal Ethics Opinion 8 Lawyer would like to advertise on a “deal Utilizing Live Chat Support Service on of the day” or “group coupon” website. To paid regardless of whether the purchaser Law Firm Website utilize such a website, a consumer registers actually claims the discounted service and Opinion provides guidelines for the use his email address and city of residence on the the lawyer earns the fee by providing the legal of live chat support services on law firm web- website. The website company then emails services to the purchaser. Therefore, the fee sites. local "daily deals" or coupons for discounts retained by the website company is the cost 2011 Formal Ethics Opinion 9 on services to registered consumers. The of advertising on the website and does not Use of Letterhead by Person Who Is Not daily deals are usually for services such as spa violate Rule 5.4(a) which prohibits, with a Employed or Affiliated with Firm treatments, tourist attractions, restaurants, few exceptions, the sharing of legal fees with Opinion rules that a lawyer may not photography, house cleaning, etc. The daily nonlawyers. The purpose for the fee-splitting allow a person who is not employed by or deals can represent a significant reduction off prohibition is not confounded by this affiliated with the lawyer’s firm to use firm the regular price of the offered service. arrangement. As noted in Comment [1] to letterhead. Consumers who wish to participate in the the rule, the traditional limitations on shar- “deal of the day” purchase the deal online ing fees prevent interference in the inde- Ethics Committee Actions using a credit card that is billed. pendent professional judgment of a lawyer At its meeting on July 14, 2011, the The website company negotiates the dis- by a nonlawyer. There is no interaction Ethics Committee voted to send the follow- counts with businesses on a case-by-case between the website company and the lawyer ing proposed opinions to subcommittees for basis; however, the company’s fee is always a relative to the legal representation of pur- further (or continued) study: Proposed 2010 percentage of each “daily deal” or coupon chasers at any time after the fee is paid on- FEO 14, Use of Search Engine “Adwords” to sold. Therefore, the revenue received by the line other than the transfer of the proceeds of Advertise on Internet; Proposed 2011 FEO 4, business offering the daily deal is reduced by the “daily deal” to the lawyer. Rule 7.2(b)(1) Participation in Reciprocal Referral Agreement; the percentage of the revenue paid to the allows a lawyer to pay the reasonable cost of Proposed 2011 FEO 6, Subscribing to website company. advertisements. As long as the percentage Software as a Service While Fulfilling the May a lawyer advertise on a group charged against the revenues generated is rea- Duties of Confidentiality and Preservation of coupon website and offer a “daily deal” to sonable compensation for the advertising Client Property; and Proposed 2011 FEO 7, users of the website subject to the website service, a lawyer may participate. Cf. 2010 Using Online Banking to Manage a Trust company’s fees without violating the Rules of FEO 4 (permitting participation in a barter Account. Six new proposed opinions are pub- Professional Conduct? exchange program in which members pay a lished for comment. The comments of read- cash transaction fee of ten percent on the ers are welcomed. Opinion: gross value of each purchase of goods or serv- Yes. Although the website company’s fee ices). There are, however, professional is deducted from the amount paid by a pur- responsibilities that are impacted by this type chaser for the anticipated legal service, it is of advertising.

THE NORTH CAROLINA STATE BAR JOURNAL 45 providing the service and, if so, the purchas- does not need the legal service or that a con- er’s money will be refunded (see below for flict of interest prohibits the representation, Rules, Procedure, explanation of the duty to refund). the lawyer must refund the prospective Second, a lawyer must deposit entrusted client’s entire advance payment, including Comments funds in a trust account. Rule 1.15-2(b). The the amount retained by the website compa- payments received by the lawyer from the ny, to make the prospective client whole. All opinions of the Ethics website company are advance payments1 of Committee are predicated upon the legal fees that must be deposited in the Endnote Rules of Professional Conduct as revised lawyer’s trust account and may not be paid to 1. In light of the many uncertainties of a legal representa- effective March 1, 2003, and thereafter the lawyer or transferred to the law firm tion arranged in the manner proposed, a lawyer may amended, and referred to herein as the not condition the offer of discounted services upon the operating account until earned by the provi- Rules of Professional Conduct (2003). purchaser’s agreement that the money paid will be a flat sion of legal services. The proposed opinions are issued pur- fee or a minimum fee that is earned by the lawyer upon Third, a professional relationship with a payment. See 2008 FEO 10. suant to the "Procedures for Ruling on purchaser of the discounted legal service is Questions of Legal Ethics." 27 established once the payment is made and this Proposed 2011 Formal Ethics N.C.A.C. ID, Sect .0100. Any interest- relationship must be honored. The lawyer has Opinion 11 ed person or group may submit a writ- offered his services on condition that there is Communication with Represented ten comment or request to be heard no conflict of interest and the service is appro- Party by Lawyer Who Is the concerning a proposed opinion. Any priate for the purchaser, and the purchaser has Opposing Party comment or request should be directed accepted the offer. At a minimum, the pur- July 14, 2011 to the Ethics Committee at PO Box chaser must be considered a prospective client Proposed opinion rules that a lawyer who is 25908, Raleigh, NC 27611, by entitled to the protections afforded to himself a party in a lawsuit, whether pro se or September 30, 2011. prospective clients under Rule 1.18. represented by counsel, may not communicate Fourth, a lawyer may not retain a clearly with the represented opposing party without excessive fee. Rule 1.5(a). If a prospective obtaining the consent of the opposing party's client fails to claim the discounted legal serv- lawyer. Captions and ice within the designated time (before the “expiration date”), one might consider the Inquiry #1: Headnotes advance payment forfeited. Even if it is Attorney A is the plaintiff in his own A caption and a short description of assumed that this is a risk that is generally equitable distribution case. He is represent- each of the proposed opinions precedes known to consumers, however, it does not ing himself. Attorney A's former wife, Ms. A, the statement of the inquiry. The cap- justify the receipt of a windfall by the lawyer. is represented by Lawyer S. Attorney A tions and descriptions are provided as As a fiduciary, a lawyer places the interests of would like to communicate directly with his research aids and are not official state- his clients above his own and may not accept former spouse in an effort to settle the case. ments of the Ethics Committee or the a legal fee for doing nothing. Such a fee is Lawyer S believes that Attorney A's direct council. inherently excessive. Therefore, if a prospec- communications with Ms. A violate Rule tive client does not claim the discounted 4.2, which prohibits a lawyer from engaging service within the designated time, the in direct communications with a party who lawyer must refund the advance payment on is represented in a particular matter. Lawyer First, a lawyer may not engage in mislead- deposit in the trust account for the prospec- S does not consent to Attorney A’s direct ing advertising. Rule 7.1. Therefore, the tive client or, if the prospective client still communications with Ms. A. advertised discount may not be illusory: the desires the legal service, the lawyer may Without obtaining the consent of Lawyer lawyer must have an established, standard fee charge his actual rate at the time the service S, may Attorney A communicate directly for the service that is being offered at a dis- is provided but must give the prospective with his former spouse in an effort to resolve count. Moreover, the lawyer’s advertisement client credit for the advance payment on the litigation? on the website must include certain disclo- deposit in the trust account. sures. Clients should not make decisions Last, a lawyer has a duty of competent Opinion #1: about legal representation in a hasty manner. representation pursuant to Rule 1.1. The No, Attorney A must obtain the consent The advertisement must explain that the lawyer must consult with each prospective of Lawyer S prior to communicating with his decision to hire a lawyer is an important one client to determine what service the prospec- former wife about the litigation. that should be considered carefully and made tive client actually requires. If competent rep- Rule 4.2(a) provides that “[d]uring the only after investigation into the lawyer’s cre- resentation requires the lawyer to expend representation of a client, a lawyer shall not dentials. In addition, the advertisement must more time than anticipated to satisfy the communicate about the subject of the repre- state that a conflict of interest or a determi- advertised service, the lawyer must do so sentation with a person the lawyer knows to nation by the lawyer that the legal service without additional charge. Similarly, if upon be represented by another lawyer in the mat- being offered is not appropriate for a partic- consulting with a prospective client the ter, unless the lawyer has the consent of the ular purchaser may prevent the lawyer from lawyer determines that the prospective client other lawyer or is authorized to do so by law

46 FALL 2011 or a court order.” The purposes of Rule 4.2 8.4(d) justifies the extension of the anti-con- notify the court when a clerk of court mistaken- are: (1) to prevent lawyers from circumvent- tact rule to a lawyer/litigant who is represent- ly dismisses a client’s charges. ing opposing counsel to obtain statements ed by counsel. from adverse parties; (2) to protect the Inquiry: integrity of the client-lawyer relationship; (3) Inquiry #3: Lawyer has a client in custody who has to prevent the inadvertent disclosure of priv- Rule 4.2(a) permits a lawyer “to encour- numerous cases pending in district court. ileged information; and (4) to facilitate set- age his or her client to discuss the subject of Lawyer negotiates a plea agreement with the tlement by channeling disputes through the representation with the opposing party in assistant district attorney (ADA) whereby all lawyers. See Rule 4.2, Cmt.[1]. a good-faith attempt to resolve the contro- but two of the charges will be dismissed. In In re Discipline of J. Michael Schaefer, versy.” Lawyer asks for the client to be brought into 117 Nev. 496, 25 P.3d 191 (2001), the Does this provision authorize direct com- the courtroom to enter his plea. At that time, Nevada Supreme Court concluded that the munications with Ms. A by Attorney A, Lawyer is informed that the client has already purposes served by the rule against commu- without Lawyer S’s consent, when Attorney been taken back to the jail. Lawyer and the nicating with represented persons are equally A appears pro se or through counsel? ADA agree to continue the case to the next present when a lawyer appears pro se. The business day. When Lawyer subsequently Nevada Supreme Court noted that, “the Opinion #3: goes to visit his client in jail, he is told that lawyer still has an advantage over the average No. Direct communication presents the the client was released because all of his layperson, and the integrity of the relation- same potential harms, as described in charges were dismissed. ship between the represented person and Opinion #1, regardless of Attorney A’s Upon investigation, Lawyer confirms that counsel is not entitled to less protection motives. all of the client’s charges had been voluntarily merely because the lawyer is appearing pro Nevertheless, resolutions of a client’s dis- dismissed. The dismissals are clearly the se.” Id. at ___, 25 P.3d at 199. pute should be facilitated whenever possible, result of an error by the clerk of court and do We agree with the reasoning of the Nevada especially in domestic relations cases where not reflect the plea agreement entered into by Supreme Court. Accord DC Bar Legal Ethics matters of child custody, visitation, and Lawyer and the ADA. Committee, Op. 258 (1995), and property distribution may be handled more Must lawyer inform the clerk of court of Disciplinary Board of the Hawaii Supreme efficiently and economically outside the the error? Court, Formal Op. 44 (2003). Obtaining the courtroom. When a lawyer is asked to con- consent of opposing counsel is a small burden sent to a direct communication with his or Opinion: in light of the protection provided to the her client, the lawyer should behave reason- Yes. The preamble to the Rules of client-lawyer relationship by the prohibition ably and grant such requests whenever the Professional Conduct provides that as a on direct communications in Rule 4.2. interests of his or her client will not be member of the legal profession, a lawyer is an This opinion overrules Ethics Decision harmed. Moreover, consent may be granted “officer of the legal system.” Rule 0.1. Rule 2000-8. broadly by the lawyer to facilitate direct com- 8.4(d) states that it is professional miscon- munications between the parties if the lawyer duct for a lawyer to “engage in conduct that Inquiry #2: deems it beneficial to his or her client. The is prejudicial to the administration of jus- The facts are the same as in Inquiry #1 authority to deny consent should never be tice.” Similarly, Comment [2] to Rule 3.3 except that Attorney A is represented by used to gain a tactical advantage by delaying (Candor Toward the Tribunal) refers to the Lawyer H. a resolution and increasing the costs of litiga- special duties of lawyers as officers of the Without obtaining the consent of Lawyer tion. court to “avoid conduct that undermines the S, may Attorney A communicate directly integrity of the adjudicative process.” with his former spouse in an effort to resolve Inquiry #4: Under Rule 3.3, for example, a lawyer the litigation? May Attorney A communicate directly has a duty to disclose a client's false testimo- with his former wife in the absence of an ny even though it may have grave conse- Opinion #2: express request by Lawyer S to refrain from quences for the client, where the alternative No. A direct communication by a lawyer communicating directly with the former is that the lawyer cooperate in deceiving the regarding the subject of the litigation poses wife? court thereby subverting the truth-finding the same threats to the interests of the process which the adversary system is adverse party whether the lawyer is represent- Opinion #4: designed to implement. Rule 3.3, Cmt. ing a client, proceeding pro se, or being rep- No, he must obtain the consent of [11]. Thus, if a conflict arises between a resented by another lawyer. In each scenario, Lawyer S to communicate with Ms. A. See lawyer’s duty to his client and his duties as the lawyer may use his legal training to influ- Opinions #1 and #2. an officer of the court, the lawyer’s duty to ence or intimidate the adverse party and to the court must prevail. interfere with the client-lawyer relationship. Proposed 2011 Formal Ethics This inquiry differs from that addressed in Although Rule 4.2, by its own terms, applies Opinion 12 98 FEO 5, which provides that a defense only “[d]uring the representation of a client,” Disclosing Clerk’s Error to Court lawyer does not have a duty to inform the the prohibition on conduct that is prejudicial July 14, 2011 court of an inaccurate driving record present- to the administration of justice in Rule Proposed opinion rules that a lawyer must ed by the prosecutor. In the situation

THE NORTH CAROLINA STATE BAR JOURNAL 47 addressed in 98 FEO 5, both advocates are of the PLLC issues would be paid from lawyer may not hold funds to coerce a client present in court and each is expected to pres- funds of the PLLC. into accepting the lawyer's contention.” ent evidence and carry his burden of proof. Administrator recently terminated the Regardless of whether the funds are iden- The opinion states that the burden of proof representation and demanded return of the tified as funds of the Estate of E or funds of is on the state to show that the defendant's remaining funds of the estate (approximately the PLLC, the funds in this inquiry are the driving record justifies a more restrictive sen- $2,500) and of the PLLC (approximately property of the Estate of E1 and were deliv- tencing level and that the defense lawyer is $100,000) held in the general trust account ered to Attorney for the purpose of being not required to volunteer adverse facts when of Attorney’s law firm. managed by Attorney as a part of his legal the prosecutor fails to bring them forward. Attorney contends that his firm is owed services to the estate. The funds are subject to In the instant inquiry, Lawyer knows that $29,000 in legal fees for the representation of legal requirements to pay the claims of the his client’s charges were dismissed in error the PLLC. Administrator contests these legal creditors of the PLLC and of the estate.2 and that “justice” (in the form of a negotiat- fees and did not authorize Attorney to pay Moreover, payment of administrative ed plea to which Lawyer and the client the fees from any of the money held in trust. expenses of an estate from estate assets, agreed) was not carried out. Therefore, Rule 1.15-2(g) states: including attorney’s fees, is only permitted Lawyer has an obligation to inform the [w]hen funds belonging to the lawyer are on the issuance of an order of the clerk of court or the clerk of court of the apparent received in combination with funds superior court and requires the clerk to exer- error. Accord Wis. Formal Ethics Op. E-84- belonging to the client or other persons, cise judicial discretion in such matters.3 A 7 (1984)(defense attorney has obligation to all of the funds shall be deposited intact. personal representative must file a petition inform the court or the court’s staff of clerk The amounts currently or conditionally seeking an order from the clerk enabling the of court’s error). belonging to the lawyer shall be identified payment of attorney’s fees by an estate.4 on the deposit slip or other record. After These legal restrictions on the assets of an Proposed 2011 Formal Ethics the deposit has been finally credited to estate demonstrate that Attorney had no Opinion 13 the account, the lawyer may withdraw the claim of entitlement to the funds. Therefore, Retaining Funds in Trust Account to amounts to which the lawyer is or when the representation ended, Attorney was Pay Disputed Legal Fee becomes entitled. If the lawyer's entitle- obliged to deliver all of the funds as directed July 14, 2011 ment is disputed, the disputed amounts by Administrator. Rule 1.15-2(m)(a lawyer Proposed opinion rules that client funds or shall remain in the trust account or fidu- shall promptly pay or deliver to the client, or the funds of a third party that are placed in the ciary account until the dispute is resolved. to third persons as directed by the client, any lawyer’s control for the purpose of being safe- May Attorney retain $29,000 in his firm’s entrusted property belonging to the client guarded, managed, or disbursed in connection trust account and transfer only the difference and to which the client is currently entitled). with a transaction, but which were not desig- to Administrator until the dispute over the Rather than deposit the funds of an estate nated or identified as funds for the payment of legal fees is resolved? in a general trust account, estate funds legal fees, may not be retained in the trust should, in most instances, be deposited in a account, pursuant to Rule 1.15-2(g), as disput- Opinion: fiduciary account maintained solely for the ed funds to which the lawyer may be entitled. No, the funds must be returned to deposit of fiduciary funds or other entrusted Administrator and Attorney may file a claim property of a particular person or entity. Rule Inquiry: with the Estate for payment for his legal 1.15-1(e)(defining “fiduciary account”). In a Attorney agreed to represent the Estate of services. fiduciary account, the funds can be invested E. E was a North Carolina lawyer who con- Rule 1.15-2(g) permits a lawyer to with- as usually required for prudent management ducted his practice through a professional hold only funds to which the lawyer has a of fiduciary funds. The comment to Rule limited liability company (PLLC), in which claim to entitlement such as funds deposited 1.15 explains that: he was the sole member. Attorney’s represen- as a client’s advance payment of a legal fee or [c]lient funds must be deposited in a gen- tation included collecting the assets and pay- funds from a settlement negotiated by the eral trust account if there is no duty to ing the claims of the PLLC with the inten- lawyer that, by prior agreement, include a invest on behalf of the client. Generally tion that the PLLC would eventually be dis- contingent fee. However, client funds or the speaking, if a reasonably prudent person solved and any remaining assets of the PLLC funds of a third party that are placed in the would conclude that the funds in ques- would be distributed to the estate. lawyer’s control for the purpose of being safe- tion, either because they are nominal in The funds of the estate, approximately guarded, managed, or disbursed in connec- amount or are to be held for a short time, $3,000, were deposited in the general trust tion with a transaction, but which were not could probably not earn sufficient interest account for Attorney’s law firm and a ledger otherwise designated or identified as funds to justify the cost of investing, the funds card for the estate was established. The for the payment of legal fees, may not be should be deposited in the general trust funds of the PLLC, in excess of $100,000, retained in the trust account as disputed account. In determining whether there is were also deposited in the trust account and funds pursuant to Rule 1.15-2(g). As a duty to invest, a lawyer shall exercise his a separate ledger for the PLLC was estab- explained in Comment [14] to Rule 1.15, or her professional judgment in good lished. Attorney billed his work for the “[a] lawyer is not required to remit to the faith and shall consider the following: PLLC separately from his work for the estate client funds that the lawyer reasonably a) The amount of the funds to be in order that the legal fees for the resolution believes represent fees owed. However, a deposited;

48 FALL 2011 b) The expected duration of the deposit, the company utilizes and found them to be ee of an adverse party, whose lawyer does not including the likelihood of delay in the extensive. consent to the communication. matter for which the funds are held; Is Law Firm required to disclose the out- c) The rates of interest or yield at finan- sourcing of these clerical tasks to its clients Inquiry #1: cial institutions where the funds are to and obtain their informed written consent as Adopted in 1995, RPC 219 rules that a be deposited; contemplated by 2007 FEO 12? lawyer may communicate with a custodian d) The cost of establishing and adminis- of public records, pursuant to the North tering dedicated accounts for the client's Opinion: Carolina Public Records Act, N.C. Gen. benefit, including the service charges, Yes. 2007 FEO 12 provides that a lawyer Stat. Chap. 132, for the purpose of making a the costs of the lawyer's services, and the has an ethical obligation to disclose the use of request to examine public records related to a costs of preparing any tax reports foreign, or other, legal assistants and to representation although the custodian and required for income accruing to the obtain the client's written informed consent the government entity employing the custo- client's benefit; to the outsourcing. The opinion notes that, dian are adverse parties and the lawyer for the e) The capability of financial institu- in the absence of a specific understanding custodian and the government entity does tions, lawyers, or law firms to calculate between the lawyer and client to the con- not consent to the communication. and pay income to individual clients; trary, the reasonable expectation of the client Has the ruling in this opinion changed in f) Any other circumstances that affect is that the lawyer, using resources within the light of the comprehensive revisions to the the ability of the client's funds to earn a lawyer's firm, will perform the requested Rules of Professional Conduct in 1997 and net return for the client. legal services. 2007 FEO 12 (citing 2002 2003? Generally, the funds of an estate are of FEO 9; San Diego County Bar Ass'n. Ethics sufficient quantity or will be held for a suffi- Opinion 2007-1). Opinion #1: ciently long period of time that deposit in a 2007 FEO 12 does not differentiate No. RPC 219 relies upon Rule 7.4(a), the fiduciary account is required. between administrative support services and “anti-contact rule”1 at that time, and specifi- legal support services in finding a duty to cally applies the provision in the rule that Endnotes disclose the use of foreign assistants and to allows a lawyer to communicate with a rep- 1. N.C. Gen. Stat. §57C-6-01(4) provides that E’s PLLC obtain client consent. Based on concerns as resented opposing party without the consent dissolved by statute on the 90th day following E’s to confidentiality, ABA Formal Opinion 08- of opposing counsel if the communication is death. E’s PLLC and all of its assets are assets of the estate. 451 (2008) similarly provides that “where authorized by law. Rule 7.4(1) provided at 2. See N.C. Gen. Stat. §57C-6-05(1) and N.C. Gen. Stat. the relationship between the firm and the that time: §28A-19-6. individuals performing the services is atten- [d]uring the course of his or her represen- 3. See Wachovia Bank & Trust Co. v. Waddell, 237 N.C. uated, as in a typical outsourcing relation- tation of a client, a lawyer shall not 342, 75 S.E. 2d 151 (1953). ship, no information protected by Rule 1.6 (1) communicate or cause another to 4. See In re Estate of Longest, 74 N.C. App. 386, 328 S.E. may be revealed without the client's communicate about the subject of the 2d 804, cert. denied and appeal dismissed, 314 N.C. informed consent” (emphasis added). The representation with a party the lawyer 330, 333 S.E. 2d 488 (1985). bar associations of New York and Ohio have knows to be represented by another reached similar conclusions. NY State Bar lawyer in the matter unless the lawyer has Proposed 2011 Formal Ethics Ass’n. Comm. on Prof’l Ethics, Op. 2006-3 the consent of the other lawyer or is Opinion 14 (2006); Ohio Ethics Op. 2009-6 (2009). authorized by law to do so. Outsourcing Clerical or Administrative But see VA State Bar Standing Comm. on The essential provisions of the anti-con- Tasks Legal Ethics, Op. 1850 (2010)(certain tact rule were not changed when the Rules July 14, 2011 “rudimentary functions” that are truly cleri- were revised and renumbered in 1997 and Proposed opinion rules that lawyer must cal or administrative can be outsourced again revised in 2003. The current version of obtain client consent before outsourcing its tran- without client consent). the rule, Rule 4.2(a), provides: scription and typing needs to a company located [d]uring the representation of a client, a in India. Proposed 2011 Formal Ethics lawyer shall not communicate about the Opinion 15 subject of the representation with a per- Inquiry: Communication with Adverse Party to son the lawyer knows to be represented by Law Firm would like to outsource its Request Public Records another lawyer in the matter, unless the transcription and typing needs to a compa- July 14, 2011 lawyer has the consent of the other lawyer ny located in India. Specifically, voice files Proposed opinion rules that, pursuant to the or is authorized to do so by law or a court would be sent via email and some docu- North Carolina Public Records Act, a lawyer order. It is not a violation of this rule for ments would be scanned to the company via may communicate with a government official a lawyer to encourage his or her client to email. The communications would, in turn, for the purpose of identifying a custodian of discuss the subject of the representation be transcribed to paper. The files would public records and with the custodian of public with the opposing party in a good-faith include information about client matters records to make a request to examine public attempt to resolve the controversy. and work product regarding client matters. records related to the representation although ABA Formal Ethics Opinion 95-396 Law Firm investigated the security measures the custodian is an adverse party, or an employ- (1995) observes that Model Rule 4.2’s excep-

THE NORTH CAROLINA STATE BAR JOURNAL 49 tion permitting a communication “autho- the purpose of identifying the documents tity of the custodian. May the lawyer speak rized by law” is satisfied by “a constitutional sought or for any other purpose related to the to government employees for this purpose provision, statute, or court rule, having the representation? without the consent of the lawyer for the force and effect of law, that expressly allows a government? particular communication to occur in the Opinion #2: absence of counsel.” A lawyer may communicate with a custo- Opinion #3: N.C. Gen. Stat. §132-6(a) requires that: dian of public records for the purposes set N.C. Gen. Stat. §132-2 provides that: [e]very custodian of public records shall forth in N.C. Gen. Stat. §132-6(a), to [t]he public official in charge of an office permit any record in the custodian's cus- inspect, examine, or obtain copies of public having public records shall be the custodi- tody to be inspected and examined at rea- records. To the extent that the lawyer must an thereof. sonable times and under reasonable communicate with the custodian to identify A lawyer may communicate with govern- supervision by any person, and shall, as the records to be inspected, examined, or ment employees, without obtaining the con- promptly as possible, furnish copies copied, the communication is in furtherance sent of the government’s lawyer, for the pur- thereof upon payment of any fees as may of the purpose of the Public Records Act2 to pose of identifying the public official in be prescribed by law. facilitate access to public records and is charge of an office and therefore the custodi- The statute authorizes direct communication allowed without obtaining the consent of an of the records of that office. n with a custodian of public records for the opposing counsel. Such communications purpose of inspecting and furnishing copies should be limited to the identification of Endnote of public records and remains an exception records and should not be used by the lawyer 1. This term is used frequently by the ABA and others to to the communications prohibited in current as an opportunity to engage in communica- refer to the rule that restricts lawyers from communi- cating directly with represented persons. See e.g., ABA Rule 4.2(a). tions about the substance of the disputed Formal Ethics Opinion 95-396 (1995). matter. 2. The public policy for the Public Records Act is set forth Inquiry #2: in N.C. Gen. Stat. §132-1(b): RPC 219 does not examine whether there Inquiry #3: The public records and public information compiled are limitations on the content of the commu- The identity of the custodian of public by the agencies of North Carolina government or its subdivisions are the property of the people. nications with the public records custodian. records may vary depending upon the nature Therefore, it is the policy of this state that the people Apart from communications for the purpos- of the records sought and the organization of may obtain copies of their public records and public es of submitting a request for public records, the government entity. RPC 219 does not information free or at minimal cost unless otherwise arranging a convenient time to inspect the examine any limitations on the lawyer’s specifically provided by law. As used herein, "mini- mal cost" shall mean the actual cost of reproducing records, and inspecting the records, may the inquiries of government employees or offi- the public record or public information. lawyer communicate with the custodian for cials for the purpose of determining the iden-

In Memoriam

Lemuel Showell Blades III Forrest W. Goldston Robert F. Snipes New Bern Raleigh Wilson William C. Blossom III Resa L. Harris Judith G. Stewart Wilmington Charlotte Chapel Hill Howard S. Boney Jr. Jill B. Hickey Grady B. Stott Tarboro Harkers Island Gastonia John J. Carroll III John D. Hicks Leland Q. Towns Wilmington Charlotte Wilson Thomas L. Cherry Evelyn W. Hill Robert L. Warren Ahoskie Raleigh Concord Vernon F. Daughtridge Jr. Robert A. Ingram Jr. Richard L. Wharton Wilson Delaware, OH Greensboro George L. Fitzgerald Douglas M. Jones Robyn J. Williams Charlotte New Bern King Elizabeth Y. Fox Bennett H. Perry Jr. Richard A. Wood Jr. Apex Henderson Durham

50 FALL 2011 RULE AMENDMENTS

Amendments Pending Approval of the Supreme Court

At its meeting on July 15, 2011, the Proposed Amendments to the Regulations Governing the Administration council of the North Carolina State Bar Procedures for the Administrative of the Continuing Legal Education voted to adopt the following rule amend- Committee Program ments for transmission to the North 27 N.C.A.C. 1D, Section .0900 The proposed amendments expand the Carolina Supreme Court for approval (for Procedures for Administrative Committee definition of professional responsibility the complete text see the Summer 2011 edi- The proposed amendments correct two courses to include instruction on ethical tion of the Journal or visit the State Bar web- erroneous references to the “period of sus- decision-making and confirm the CLE site: www.ncbar.gov): pension” rather than the “period of inactive Board’s authority to determine how CLE status” in rule amendments approved in credits are applied to satisfy a deficit. Proposed Amendments to the March that require a petitioner for reinstate- Discipline and Disability Rules ment who has been inactive for one year or Proposed Amendments to The Plan of 27 N.C.A.C. 1B, Section .0100 more to take 12 CLE credit hours for each Legal Specialization Discipline and Disability of Attorneys year of inactivity or, if inactive or suspended 27 N.C.A.C. 1D, Section .2500 The proposed amendments to Rule for seven years or more, to pass the bar exam- Certification Standards for the Criminal Law .0112 require a respondent lawyer to submit ination. Specialty a signed response to a letter of notice and The proposed amendments create juve- make non-substantive improvements to the Proposed Amendments to the Rules nile delinquency law as a subspecialty of the rule. Governing the CLE Program criminal law specialty. 27 N.C.A.C. 1D, Section .1500

Proposed Amendments At its meeting on July 15, 2011, the coun- tive or disciplinary suspension order is “pend- Administrative Committee pursuant to the cil voted to publish the following proposed ing” if the order has been entered by the coun- procedure set forth in Rule .0903(e)(1) of sub- rule amendments for comment from the cil or the Disciplinary Hearing Commission chapter 1D of these rules. If the member members of the bar: but has not taken effect. “Good standing” shows good cause, the contested amount shall makes no reference to delinquent member- be refunded to the member. Proposed Amendments to the ship obligations, prior discipline, or any disci- (c) Certificate of Good Standing for Membership Rules plinary charges or grievances that may be Inactive Member 27 N.C.A.C. 1A, Section .0200, pending. Upon application, the secretary of the Membership—Annual Membership Fees (b) Certificate of Good Standing for Active North Carolina State Bar shall issue a certifi- A proposed new rule will define “good Member cate of good standing to any inactive member standing” and clarify when a certificate of Upon application and payment of the pre- of the State Bar who was in good standing at good standing will be issued to a member of scribed fee, the secretary of the North the time that the member was granted inactive the State Bar. The proposed rule is entirely Carolina State Bar shall issue a certificate of status and who is not subject to any discipli- new and is not, therefore, printed with bold, good standing to any active member of the nary order or pending disciplinary order. The underlined font. State Bar who is in good standing and who is certificate shall state that the member is inac- current on all payments owed to the North tive and is ineligible to practice law in North .0204 Good Standing Definition and Carolina State Bar. A certificate of good stand- Carolina. Certificates ing will not be issued unless the member pays (a) Definition any delinquency shown on the financial Proposed Amendments to the Rules A lawyer who is an active member of the records of the North Carolina State Bar Governing IOLTA North Carolina State Bar and who is not sub- including outstanding judicial district bar 27 N.C.A.C. 1D, Section .1300, Rules ject to a pending administrative or disciplinary dues. If the member contends that there is Governing the Administration of the Plan for suspension order or an order of suspension good cause for non-payment of some or all of Interest on Lawyers’ Trust Accounts (IOLTA) that has been stayed is in good standing with the amount owed, the member may subse- Recently enacted legislation (N.C. Gen. the North Carolina State Bar. An administra- quently demonstrate good cause to the Stat. 45A-9) requires the interest-bearing trust

THE NORTH CAROLINA STATE BAR JOURNAL 51 and escrow accounts of settlement agents to be loan funds shall direct that any interest a bank on an IOLTA Account) as defined established as IOLTA accounts. The proposed earned on funds held in that account be paid in paragraph (e), at least quarterly to NC rule amendments set forth the requirements to the NC State Bar to be used for the pur- IOLTA; for doing so. poses authorized under the Interest on (2) transmit with each remittance to NC Lawyers Trust Account Program according IOLTA a statement showing for each .1301 Purpose to section .1316(d). For the purposes of these account: (i) the name of the law firm/ or The IOLTA Board of Trustees (board) rules, all such accounts shall be known as lawyer or settlement agent maintaining shall carry out the provisions of the Plan for “IOLTA Accounts” (also referred to as the account, (ii) the lawyer/ or law firm’s or Interest on Lawyers’ Trust Accounts and “Accounts”). settlement agent’s IOLTA Account num- administer the IOLTA program (NC (b) Eligible Banks. Lawyers may maintain ber, (iii) the earnings period, (iv) the aver- IOLTA). Any funds remitted to the North one or more IOLTA Account(s) only at banks age balance of the account for the earnings Carolina State Bar from banks by reason of and savings and loan associations chartered period, (v) the type of account, (vi) the rate interest earned on general trust accounts under North Carolina or federal law, as of interest applied in computing the remit- established by lawyers pursuant to Rule 1.15- required by Rule 1.15 of the Rules of tance, (vii) the amount of any service 2(b) of the Rules of Professional Conduct or Professional Conduct, that offer and maintain charges for the earnings period, and (viii) interest earned on trust or escrow accounts IOLTA Accounts that comply with the the net remittance for the earnings period; maintained by settlement agents pursuant to requirements set forth in this subchapter and N.C.G.S. 45A-9 shall be deposited by the (Eligible Banks). Settlement agents shall (3) transmit to the law firm/ or lawyer or North Carolina State Bar through the board maintain any IOLTA Account as defined by settlement agent maintaining the account in a special account or accounts which shall be N.C.G.S. 45A-9 and paragraph (a) above a report showing the amount remitted to segregated from other funds of whatever only at an Eligible Bank. The determination NC IOLTA, the earnings period, and the nature received by the State Bar. of whether a bank is eligible shall be made by rate of interest applied in computing the …. NC IOLTA, which shall maintain a list of par- remittance. ticipating Eligible Banks available to all mem- (e) Allowable Reasonable Service Charges. .1312 Source of Funds bers of the State Bar and to all settlement Eligible Banks may elect to waive any or all Funding for the program carried out by agents. A bank that fails to meet the require- service charges on IOLTA Accounts. If a bank the board shall come from funds remitted ments of this subchapter shall be subject only does not waive service charges on IOLTA from depository institutions by reason of to termination of its eligible status by NC Accounts, allowable reasonable service charges interest earned on trust accounts established IOLTA. A violation of this rule shall not be may be assessed but only against interest by lawyers pursuant to Rule 1.15 of the Rules the basis for civil liability. earned on the IOLTA Account or funds of Professional Conduct and Rule .1316 of (c) Notice Upon Opening or Closing deposited by the lawyer/ or law firm or settle- this subchapter or interest earned on trust or IOLTA Account. Every lawyer/ or law firm or ment agent in the IOLTA Account for the escrow accounts maintained by settlement settlement agent maintaining IOLTA purpose of paying such charges. Allowable agents pursuant to N.C.G.S. 45A-9; volun- Accounts shall advise NC IOLTA of the estab- reasonable service charges may be deducted tary contributions from lawyers; and interest, lishment or closing of each IOLTA Account. from interest on an IOLTA Account only at dividends, or other proceeds earned on the Such notice shall include (i) the name of the the rates and in accordance with the bank’s board’s funds from investments or from other bank where the account is maintained, (ii) the standard practice for comparable non-IOLTA sources intended for the provision of legal name of the account, (iii) the account num- accounts.… services to the indigent and the improvement ber, and (iv) the name and bar number of the of the administration of justice. lawyer(s) in the firm and/or the names(s) of .1318 Confidentiality any non-lawyer settlement agents maintain- (a) As used in this rule, “confidential infor- .1316 IOLTA Accounts ing the account. The North Carolina State mation” means all information regarding (a) IOLTA Account Defined. Pursuant to Bar shall furnish to each lawyer/ or law firm or IOLTA account(s) other than (1) a lawyer/’s order of the North Carolina Supreme Court, settlement agent maintaining an IOLTA or law firm’s or settlement agent’s status as a every general trust account, as defined in the Accounts a suitable plaque explaining the pro- participant, former participant, or non-partic- Rules of Professional Conduct, must be an gram, which plaque shall be exhibited in the ipant in NC IOLTA, and (2) information interest or dividend-bearing account. (As used office of the lawyer/ or law firm or settlement regarding the policies and practices of any herein, “interest” shall refer to both interest agent. bank in respect of IOLTA trust accounts, and dividends.) Funds deposited in a general, (d) Directive to Bank. Every lawyer or law including rates of interest paid, service charge interest-bearing trust account must be avail- firm and every settlement agent maintaining policies, the number of IOLTA accounts at able for withdrawal upon request and without North Carolina IOLTA Accounts shall direct such bank, the total amount on deposit in all delay (subject to any notice period that the any bank in which an IOLTA Account is IOLTA accounts at such bank, the total bank is required to reserve by law or regula- maintained to: amounts of interest paid to NC IOLTA, and tion). Additionally, pursuant to N.C.G.S. (1) remit interest, less any deduction for the total amount of service charges imposed 45A-9, a settlement agent who maintains a allowable reasonable bank service charges by such bank upon such accounts. trust or escrow account for the purposes of or fees, (as used herein, “service charges” (b) Confidential information shall not be receiving and disbursing closing funds and shall include any charge or fee charged by disclosed by the staff or trustees of NC IOLTA

52 FALL 2011 to any person or entity, except that confiden- ist, a lawyer applicant must pay any required tial information may be disclosed (1) to any fee, comply with the following minimum chairperson of the Grievance Committee, staff standards, and meet any other standards The Process attorney, or investigator of the North Carolina established by the board for the particular State Bar upon his or her written request spec- area of specialty. Proposed amendments to the Rules ifying the information requested and stating (1) …. of the North Carolina State Bar are pub- that the request is made in connection with a (4) The applicant must make a satisfacto- lished for comment in the Journal. They grievance complaint or investigation regarding ry showing, as determined by the board are considered for adoption by the coun- one or more trust accounts of a lawyer/ or law after advice from the appropriate specialty cil at the succeeding quarterly meeting. firm or settlement agent; or (2) in response to committee, of qualification in the special- If adopted, they are submitted to the a lawful order or other process issued by a ty through peer review by providing, as North Carolina Supreme Court for court of competent jurisdiction, or a subpoe- references, the names of at least five approval. Amendments become effective na, investigative demand, or similar notice lawyers, all of whom are licensed and cur- upon approval by the court. Unless oth- issued by a federal, state, or local law enforce- rently in good standing to practice law in erwise noted, proposed additions to ment agency. this state, or in any state, or judges, who rules are printed in bold and under- are familiar with the competence and lined, deletions are interlined. .1319 Certification qualification of the applicant as a special- Every lawyer admitted to practice in ist. None of the references may be persons North Carolina shall certify annually on or related to the applicant or, at the time of before June 30 to the North Carolina State application, a partner of or otherwise Comments Bar that all general trust accounts main- associated with the applicant in the prac- tained by the lawyer or his or her law firm are tice of law. The applicant by his or her The State Bar welcomes your com- established and maintained as IOLTA application consents to confidential ments regarding proposed amendments accounts as prescribed by Rule 1.15 of the inquiry by the board or appropriate disci- to the rules. Please send your written Rules of Professional Conduct and Rule plinary body and other persons regarding comments to L. Thomas Lunsford II, .1316 of this subchapter or that the lawyer is the applicant’s competence and qualifica- The North Carolina State Bar, PO Box exempt from this provision because he or she tions to be certified as a specialist. 25908, Raleigh, NC 27611. does not maintain any general trust (A) Each specialty committee shall account(s) for North Carolina client funds. evaluate the information provided by Any lawyer acting as a settlement agent an applicant’s references to make a rec- committee, of substantial involvement who maintains a trust or escrow account ommendation to the board as to the (which shall be determined in accordance used for the purpose of receiving and dis- applicant’s qualification in the specialty with the principles set forth in Rule bursing closing and loan funds shall certify through peer review. The evaluation .1720(a)(2) of this subchapter) in the spe- annually on or before June 30 to the North shall include a determination of the cialty during the entire period of certifica- Carolina State Bar that such accounts are weight to be given to each peer review tion as a specialist. Substantial involve- established and maintained as IOLTA and shall take into consideration a ref- ment for continued certification shall be accounts as prescribed by N.C.G.S. 45A-9 erence’s years of practice, primary prac- determined in accordance with the prin- and Rule .1316 of this subchapter. tice areas and experience in the special- ciples set forth in Rule .1720(a)(2) of ty, and the context in which a reference this subchapter and the specific stan- Proposed Amendments to The Plan of knows the applicant. dards for each specialty. In addition, Legal Specialization (5) …. unless prohibited or limited by the stan- 27 N.C.A.C. 1D, Section .1700, (b) …. dards for a particular specialty, the fol- Minimum Standards for Certification of lowing judicial service may be substitut- Specialists .1721 Minimum Standards for ed for the equivalent years of practice The proposed amendments clarify that Continued Certification of Specialists experience if the applicant’s judicial serv- the evaluation of a specialization applicant’s (a) The period of certification as a special- ice included presiding over cases in the peer review information includes considera- ist shall be five years.…To qualify for contin- specialty: service as a full-time state or tion of each peer reference’s practice experi- ued certification as a specialist, a lawyer federal trial, appellate, or bankruptcy ence, particularly in the specialty, and rela- applicant must pay any required fee, must judge (including service as a federal tionship to the applicant. The proposed demonstrate to the board with respect to the magistrate judge); service as a judge for amendments also allow judicial service to sat- specialty both continued knowledge of the the courts of a federally recognized isfy the substantial involvement requirement law of this state and continued competence, Indian tribe; service as an administrative for recertification. and must comply with the following mini- law judge for the Social Security mum standards. Administration; and service as a com- .1720 Minimum Standards for (1) The specialist must make a satisfacto- missioner or deputy commissioner of Certification of Specialists ry showing, as determined by the board the Industrial Commission. (a) To qualify for certification as a special- after advice from the appropriate specialty (2) …. n

THE NORTH CAROLINA STATE BAR JOURNAL 53 BAR UPDATES

Law School Briefs

All of the law schools located in North general of the United States, addressed stu- school’s opening. Carolina are invited to provide material for dents of Campbell Law as they made the · Charlotte School of Law became the this column. Below are the submissions we move from students to law school graduates. third law school in the nation to have a received this quarter. He is most noted for his work with the 2006 Cooperative Legal Education Program, Supreme Court case Hamdan v. Rumsfeld by piloted this spring through its Corporate Campbell University School of Law serving as lead counsel for the Guantanamo Counsel track which included partnerships Campbell Law School and NC State Bay detainees. with Compass Group, Family Dollar, Rack University partner on law and master of Room, and TIAA-CREF. business administration dual degree pro- Charlotte School of Law gram—The Norman Adrian Wiggins The American Bar Association awarded Duke Law School School of Law at Campbell University and Charlotte School of Law full accreditation at Duke launches Center for Judicial the Jenkins MBA program in the NC State its June 10, 2011, meeting. Through its Studies—Duke Law School has established Poole College of Management recently accreditation process, the ABA determined a new Center for Judicial Studies to address announced a partnership to provide students that the Charlotte School of Law is in full a need for advanced educational opportuni- with the opportunity to obtain a dual Juris compliance with its Standards for Approval ties for judges and to support scholarly Doctor (JD) and Master of Business of Law Schools, including those relating to research on judicial institutions and judicial Administration (MBA) degree. Beginning bar passage, job placement, and diversity. decision making. The center will sponsor with the fall 2011 semester, the JD/MBA For Judge Shirley Fulton, the accredita- conferences, symposia, educational pro- degree will enable students to earn both tion is the final step in a process that has been grams, and publications on a range of topics degrees in four years of full-time study, with years in the making. When she began work relating to judging and the judiciary. It will the option to take electives and specialization as an early organizer and chair of the school’s draw faculty from other Duke University courses in both business and law. Board of Advisors in 2005, first-pass ABA schools and departments as well as distin- Campbell Law hosts national conference approval was already the top priority. "I have guished visiting instructors from other on restorative justice—Campbell Law watched this team of dedicated faculty, staff, institutions to teach and participate in pro- School hosted the 3rd National Conference students, and board members work tirelessly grams and events. on Restorative Justice in June 2011. The toward the goal with full support from the A master’s program in judicial studies, a conference was a joint venture between uni- Charlotte community,” said Fulton. “I salute core component of the center, will be open versities, restorative justice practitioners, and all for a job well done and appreciate the to an inaugural class of 10 to 15 judges the faith community to promote and refine opportunity to be part of a successful team.” entering in the summer of 2012. Offered the use of restorative justice in the United To Dennis Stone, interim dean of over two intensive four-to-six week sessions States. Charlotte School of Law, the ABA’s accredi- in two summers, the program will examine The keynote address was given by tation affirms the school’s commitment to the history, institutions, and processes that Nontombi Naomi Tutu, daughter of provide a legal education focused on achiev- shape the judiciary and affect judicial deci- Archbishop Desmond Tutu, and described ing great student outcomes, preparing excel- sion making in the United States and South Africa’s experience with restorative jus- lent lawyers who are ready for practice, and abroad. Read more at www.law.duke. tice through the process of truth and recon- serving the underserved. “We are particularly edu/judicialstudies. ciliation. Under the rules of the process, pleased that the ABA gave CharlotteLaw its Justice Antonin Scalia teaches at Duke those who told the truth about their actions full approval in the minimum time Transnational Law Institute—US Supreme and demonstrated their acts were politically required,” said Stone. Court Associate Justice Antonin Scalia motivated were granted complete amnesty The news of full accreditation culminated joined the faculty of the Duke-Geneva for their actions, however reprehensible. She a year of noteworthy distinctions: Institute in Transnational Law in July. He also explained how the young country could · Professor Sheryl Buske was selected as a co-taught a course titled Separation of not move forward until the truth had been 2011-2012 Fulbright Scholar and is current- Powers. Duke’s other summer residential told and the victims had had an opportunity ly on a lecturing and research appointment summer program, the Asia-America to listen to and speak with those who had in Ghana. Institute in Transnational Law, is headquar- harmed them. · As of June 2011, CharlotteLaw stu- tered in Hong Kong. US solicitor general delivers commence- dents had completed over 70,000 hours of New faculty—Two top public law schol- ment address at Campbell Law School—On pro bono public and community service ars joined the governing faculty on July 1. Friday, May 13, Neal Katyal, acting solicitor work in over 500 community sites since the Margaret H. Lemos, a scholar of constitu-

54 FALL 2011 tional law, federal courts, and civil proce- Strategies That Work. His article, “Legal School of Law had a Spring 2011 graduating dure, joined the faculty as a professor of law. Education and the Changing Face of class of 167 people. Approximately 123 of She came to Duke from the Benjamin N. Practice” is forthcoming in the New York these recent graduates are scheduled to take Cardozo School of Law where she was an Law School Law Review. the July North Carolina bar exam. The law associate professor. Stephen E. Sachs is an Hoffman serves as a program director for school concluded its Admissions season this emerging scholar in the areas of civil proce- the National Institute for Trial Advocacy. year with 2,573 applications for 142 avail- dure, constitutional law, Anglo-American He has delivered more than 450 CLE pre- able seats in our day program and for 24 legal history, and conflict of laws. He previ- sentations in 34 states and territories and 14 available seats in our evening program. Total ously was an associate in the litigation prac- countries. From 1994 to 1996, Hoffman enrollment for the law school is targeted at tice at Mayer Brown in Washington, DC. served as associate justice of the Supreme 550 students beginning Fall 2011. Court of the Republic of Palau. He is a two- The law school is moving forward with Elon University School of Law time Fulbright Senior Specialist, having the development of its Low-Income Tax Elon Law secures full ABA approval— taught law and advised on the establish- Clinic, which will provide tax services for The American Bar Association on June 10 ment of trial advocacy programs in Hong financially challenged citizens in Durham announced the full accreditation of Elon Kong and India. County. This program is expected to add to Law. Elon’s approval was achieved at the Mike Rich featured in Wall Street the law school’s expansive community out- earliest possible date under the ABA’s Journal—In the Wall Street Journal’s June 18 reach through legal services provided by the accreditation guidelines. front-page article, “Rogue Informants law clinic. Elon Law welcomes Peter T. Hoffman— Imperil Massive US Gang Bust,” Elon Law The law school is also proceeding with Peter T. Hoffman, one of the nation’s lead- professor Mike Rich provides insights into the development of a summer Maritime Law ing authorities on trial advocacy, deposi- police investigatory methods and the use of program to be held in Wilmington in part- tions, and evidence, has been named profes- informants in federal criminal investigations. nership with the University of North sor of law and director of legal skills at Elon Rich’s article, “Lessons of Disloyalty in the Carolina Wilmington. This summer pro- Law. World of Criminal Informants,” is forth- gram is scheduled to begin in May 2012 and Hoffman held the Newell H. Blakely coming in the American Criminal Law will be available to law students throughout Chair in Evidence at the University of Review. the country along with practicing attorneys Houston Law Center from 2003 to 2011. Visit law.elon.edu for details about the seeking instruction in the fundamentals of At the center, he served as director of the news summarized above and reports on maritime law. Blakely Advocacy Institute and director of others news and events at Elon Law. The NCCU School of Law is proud to Clinical Legal Education. report that Arenda L. Wright Allen, Class of Hoffman is co-author of the largest-sell- North Carolina Central University ’85, was appointed by President Obama and ing book on deposition practice, The School of Law confirmed by the US Senate to serve as US Effective Deposition: Techniques and The North Carolina Central University District Judge. n

Client Security Fund Reimburses Victims

At its July 14, 2011 meeting, the North and losses caused by the executor of the other Stone clients $18,500. Carolina State Bar Client Security Fund client’s aunt’s estate. Hinnant failed to pro- 5. An award of $5,000 to an applicant Board of Trustees approved payments of vide any valuable legal services for the fee who suffered a loss because of Mark Waple of $20,650 to six clients who suffered financial paid. Fayetteville. The board found that Waple was losses due to the misconduct of North 3. An award of $150 to a former client of retained by the applicant to represent his Carolina lawyers. William Noel, III of Henderson. The board stepson in a court martial. Waple failed to The new payments authorized were: found that Noel was retained to handle a complete the representation prior to aban- 1. An award of $5,000 to a former client client’s traffic ticket. Noel failed to provide doning his practice. The board previously of W. Rickert Hinnant of Winston-Salem. any valuable legal services for the fee paid. reimbursed four other Waple clients $25,850. The board found that Hinnant was retained 4. An award of $3,500 to a former client 6. An award of $3,000 to a former client to sue a client’s former attorney for malprac- of Marsha Stone of Asheville. The board of Lyle Yurko of Charlotte. The board found tice. Hinnant failed to provide any valuable found that Stone was retained by a client to that Yurko was retained to represent a client legal services for the fee paid. Hinnant was file a motion for child support modification. on drug charges and a speeding ticket. Yurko disbarred on June 15, 2011. Stone abandoned her practice without pro- abandoned his practice without providing 2. An award of $4,000 to a former client viding any valuable legal services for the fee any valuable legal services for the fee paid. of W. Rickert Hinnant. The board found that paid. Stone was disbarred on September 9, The board previously reimbursed ten of Hinnant was retained to recover executor fees 2008. The board previously reimbursed six Yurko’s clients a total of $93,080. n

THE NORTH CAROLINA STATE BAR JOURNAL 55 BAR UPDATES

John B. McMillan Distinguished Service Award

Recent Award Recipients to the PALS program and promoted ethics Hall of Fame in 1992. In addition to his Judge Edwin L. Johnson is a recipient of and professionalism in the courtroom with- decades of service to the legal profession, the John B. McMillan Distinguished out fanfare or grandstanding. Judge Mr. McMillan is very active in his local Service Award. Judge Johnson graduated Johnson’s commitment to enhancing the Baptist Church, was a scoutmaster of Boy from the University of North Carolina- legal system, his service to the state of Scout Troop 306, served as president of his Chapel Hill in 1963 and earned his law North Carolina, and his leadership in many local Rotary Club, and was commander of degree from UNC School of Law in 1966. civic activities has earned him the respect an American Legion Post in Raleigh. Mr. A career public servant, Judge Johnson was and admiration of the 12th Judicial District McMillan has mentored and served as a a special agent for the FBI until 1970, when Bar and the broader legal community. role model to some of the finest lawyers in he became what is now known as an assis- Robert L. McMillan Jr. is a recipient of North Carolina, teaching every lawyer who tant district attorney for the 12th Judicial the John B. McMillan Distinguished comes in contact with him about a lawyer’s District. In 1973, Judge Johnson entered Service Award. A veteran of World War II duty of professionalism to his clients and to private practice in Fayetteville, NC, and and the Korean War, Mr. McMillan gradu- the legal profession. Mr. McMillan’s distin- remained in private practice until 1983. ated from Wake Forest College and earned guished career as a trial lawyer and his com- From 1983 until his retirement in 2010, his law degree from the University of North mitment to community service have earned Judge Johnson was resident superior court Carolina School of Law. He received his law him the title of “Dean of the Wake County judge and then senior resident superior license in 1949 and has practiced primarily Bar.” n court judge in the 12th Judicial District. In criminal defense law for 62 years. Mr. addition to his dedicated service on the McMillan was a founding member and bench, Judge Johnson consistently gave past-president of the Wake County back to the legal community by serving on Academy of Trial Lawyers, a past-president Thank You to Our countless committees and task forces, and of the Wake County Bar Association, a past by volunteering at local Law Day activities. State Bar councilor, and was the first recip- Meeting Sponsor His participation in Law Day activities ient of the Wake County Bar Association’s served as a model for other lawyers to follow Joseph Branch Professionalism Award. In Thank you to Lawyers Mutual Liability and boosted the image of the Fayetteville recognition of his outstanding career, Mr. Company for sponsoring the July quar- legal community. Judge Johnson worked McMillan was inducted into the North terly meeting of the State Bar Council. tirelessly to refer lawyers who needed help Carolina Bar Association’s General Practice

Seeking Distinguished Service Award Nominations

The John B. McMillan Distinguished who, because of economic or social barriers, tricts, usually at a meeting of the district bar. Service Award program honors current and cannot afford or secure adequate legal coun- The State Bar Councilor from the recipient's retired members of the North Carolina State sel; seeking to improve the administration of district will participate in introducing the Bar throughout the state who have demon- justice and the quality of services rendered recipient and presenting the certificate. strated exemplary service to the legal profes- by the legal profession; promoting diversity Recipients of the Distinguished Service Award sion. Such service may be evidenced by a and diverse participation within the legal will also be recognized in the State Bar Journal commitment to the principles and goals profession; providing professional services at and honored at the State Bar's annual meeting stated in the Preamble to the Rules of no fee or a reduced fee to persons of limited in Raleigh. Members of the bar are encour- Professional Conduct, for example: further- means or to public service or charitable aged to nominate colleagues who have ing the public's understanding of and confi- groups or organizations; encouraging and demonstrated outstanding service to the pro- dence in the rule of law and the justice sys- counseling peers by providing advice and fession. The nomination form is available on tem; working to strengthen legal education; mentoring; and fostering civility among the State Bar's website, www.ncbar.gov. Please providing civic leadership to ensure equal members of the bar. direct questions to Peter Bolac at the State Bar access to our system of justice for all those Awards will be presented in recipients' dis- office in Raleigh, (919) 828-4620. n

56 FALL 2011 BAR UPDATES

Baker Nominated as Vice-President

Ahoskie Scholar, and he earned his JD with honors Committee. He has also served on the Client attorney Ronald from the University of North Carolina School Assistance Committee, Authorized Practice G. Baker Sr. was of Law. Committee, Legislative Committee, selected by the Baker practiced with Henson, Donahue & Administrative Committee, Disciplinary State Bar's Elrod in Greensboro from 1975-1978, then Advisory Committee, Executive Committee, Nominating moved to Ahoskie and has since practiced with Program Evaluation Committee, Committee to what is now Baker, Jones, Daly & Carter, PA. Appointments Committee, Special stand for elec- Baker has substantial involvement in bar Committee to Study Disciplinary Guidelines, tion to the office organizations. He is a member of the North and the Issues Committee. of vice-president Carolina Bar Association and the American Mr. Baker is active in numerous civic of the North Bar Association. He has served on the board organizations. He is a past-president and life Carolina State and is past-president of the North Carolina member of the Ahoskie Jaycees, is a US Jaycees Bar. The election will take place in October at Association of Defense Attorneys, and has ambassador, is a former Hertford county com- the State Bar's annual meeting. been a North Carolina representative to the missioner, and is past-chair of the Hertford As an undergraduate Baker attended the Defense Research Institute. As a State Bar County Board of Education and the Hertford University of North Carolina as a Morehead Councilor, Baker has chaired the Grievance County Committee of 100. n

Disciplinary Department In The Matter of Harry L. Notice of Intent to Seek Southerland (cont.) Reinstatement Individuals who wish to note their con- Notice is hereby given that Harry L. The remaining two and a half years of his currence with or opposition to these peti- Southerland intends to file a petition for suspension are stayed upon compliance tions should file written notice with the reinstatement before the Disciplinary with numerous conditions. secretary of the State Bar, PO Box 25908, Hearing Commission. Southerland was Raleigh, NC 27611, before November 1, ordered disbarred by the DHC by order 2011 (60 days from publication). dated August 5, 1994. n

Classified Advertising Advertising Rates about/jobdetail. aspx?ID=130 Positions Available If you would like to advertise in the The Charlotte School of Law is looking Services Available State Bar Journal, please send your for tenure-track faculty for the 2012 aca- Fire Investigator available to conduct advertisement to the director of com- demic year. Our mission is to provide a legal origin and cause and other fire investigation munications, the North Carolina education that is student-centered, facilitates services. Retired police fire investigator, cer- State Bar, 6568 Towles Rd., practice readiness, fosters personal integrity, tified, licensed, and insured. Visit my web- Wilmington, NC 28409, telephone and serves underserved communities. site at www.pyropi.com. Contact me at 919- 910-397-0353. The cost of advertis- Striving to create a collegial work environ- 625-8556 or [email protected]. ing is $75 for up to 35 words and $.50 ment, we value emotional intelligence as Freelance Attorney Available for Project for each additional word. Ads for the much as IQ. In keeping with our practice Work—Yale Law School graduate and attor- Winter (December) 2011 issue must ready mission, we prefer candidates with 4+ ney licensed in NC & NM available for be received by October 1, 2011. years of legal practice experience. For more project-based legal research, writing, editing, details please visit: www.charlottelaw.edu/ and review. www.celesteboyd.com.

THE NORTH CAROLINA STATE BAR JOURNAL 57 The North Carolina State Bar and Affiliated Entities Selected Financial Data

Operating expenses (3,125,183) (3,443,125) Fund equity- The North Carolina State Bar Non-operating revenues 41,213 114,421 retained earnings 145,685 127,250 2010 2009 Net loss $(880,967) $(1,066,190) $147,477 $128,430 Assets Revenues and Expenses Cash and cash Board of Client Security Fund Operating revenues- equivalents $6,549,628 $4,921,621 2010 2009 specialization fees $116,450 $110,444 Property and Assets Operating expenses (99,215) (87,561) equipment, net 2,435,514 1,999,039 Cash and cash Non-operating revenues 1,200 2,288 Other assets 190,303 192,567 equivalents $1,755,261 $1,430,159 Net income $18,435 $25,171 $9,175,445 $7,113,227 Other assets 4,699 3,600 Liabilities and Fund Equity $1,759,960 $1,433,759 The Chief Justice's Commission on Current liabilities $4,118,464 $3,445,824 Liabilities and Fund Equity Professionalism Long-term debt 188,927 289,596 Current liabilities $14,691 $17,206 2010 2009 4,307,391 3,735,420 Fund equity- Assets Fund equity- retained earnings 1,745,269 1,416,553 Cash and cash retained earnings 4,868,054 3,377,807 $1,759,960 $1,433,759 equivalents $146,332 $111,901 $9,175,445 $7,113,227 Revenues and Expenses Other assets 88,174 73,821 Revenues and Expenses Operating revenues $752,073 $654,044 $234,506 $185,722 Dues $7,019,115 $6,005,650 Operating expenses (441,822) (684,124) Liabilities and Fund Equity Other operating Non-operating Current liabilities 446 861 revenues 715,662 647,476 revenues 18,465 31,383 Fund equity- Total operating Net income $328,716 $1,303 retained earnings 234,060 184,861 revenues 7,734,777 6,653,126 $234,506 $185,722 Operating expenses (6,269,203) (6,171,343) Board of Continuing Legal Education Revenues and Expenses Non-operating 2010 2009 Operating revenues 24,673 542,487 Assets revenues-fees $332,474 $294,665 Net income $1,490,247 $1,024,270 Cash and cash Operating expenses (284,519) (292,847) equivalents $249,915 $324,371 Non-operating revenues 1,244 2,281 The NC State Bar Plan for Interest on Other assets 239,950 194,576 Net income $49,199 $4,099 Lawyers' Trust Accounts (IOLTA) $489,865 $518,947 2010 2009 Liabilities and Fund Equity Board of Paralegal Certification Assets Current liabilities 26,635 27,186 2010 2009 Cash and cash Fund equity- Assets equivalents $3,196,878 $4,578,898 retained earnings 463,230 491,761 Cash and cash Interest receivable 311,228 180,137 $489,865 $518,947 equivalents $323,027 $205,591 Other assets 323,350 361,368 Revenues and Expenses Other assets 6,733 14,838 $3,831,456 $5,120,403 Operating revenues $665,757 $597,547 $329,760 $220,429 Liabilities and Fund Equity Operating expenses (697,353) (668,991) Liabilities and Fund Equity Grants approved Non-operating Current liabilities - but unpaid $2,700,300 $3,079,446 revenues 3,065 7,880 accounts payable 8,850 8,201 Other liabilities 325,493 354,327 Net loss $(28,531) $(63,564) Fund equity- 3,025,793 3,433,773 retained earnings 320,910 212,228 Fund equity- Board of Legal Specialization $329,760 $220,429 retained earnings 805,663 1,686,630 2010 2009 Revenues and Expenses $3,831,456 $5,120,403 Assets Operating Revenues and Expenses Cash and cash revenues-fees $260,785 $252,970 Interest from IOLTA equivalents $140,386 $123,539 Operating expenses (154,514) (166,916) participants, net $2,200,832 $2,262,514 Other assets 7,091 4,891 Non-operating Other operating revenues 2,171 - $147,477 $128,430 revenues 2,411 (487,586) Total operating Liabilities and Fund Equity Net income (loss) $108,682 $(401,532) revenues 2,203,003 2,262,514 Current liabilities 1,792 1,180

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