Peter M. Napolitano v. Board of Professional Responsibility
535 S.W.3d 481 (2017)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An attorney who misappropriates client funds and provides knowingly false testimony under oath commits egregious ethical violations that warrant a significant suspension from the practice of law, particularly when the attorney has a prior disciplinary history for similar misconduct.
Facts:
- In 2005, Gayle Connelly ('Client') hired attorney Peter M. Napolitano ('Attorney') for an employment claim against the Department of the Army.
- The claim settled in September 2007 for $75,000, which was deposited into Attorney's trust account.
- Attorney and Client agreed that Client would receive $40,000 of the settlement proceeds and Attorney would retain the remaining $35,000.
- Shortly thereafter, Attorney claimed a miscalculation of his expenses and asked Client to accept a reduced amount; Client refused.
- Attorney then refused to pay Client the agreed-upon $40,000 and, over the subsequent years, withdrew the disputed funds from his trust account until the account had a negative balance by February 2012.
- During a deposition in September 2012 related to a civil suit filed by Client, Attorney testified under oath that he had no prior bar complaints in New York, had never filed for personal bankruptcy, and could not recall any tax liens filed against him.
- In fact, Attorney's New York license had previously been suspended for five years for misappropriating funds and giving false testimony, he had filed for personal bankruptcy twice, and the IRS had filed two federal tax liens against his property.
Procedural Posture:
- In 2008, Gayle Connelly ('Client') filed a complaint against Peter M. Napolitano ('Attorney') with the Tennessee Board of Professional Responsibility ('the Board') concerning a fee dispute.
- The Board dismissed the first complaint in 2010.
- In March 2011, Client filed a civil lawsuit against Attorney in the Montgomery County Circuit Court (trial court) to recover the disputed funds.
- Following a deposition in the civil suit, Client filed a second complaint with the Board in 2012, alleging trust account violations and perjury.
- The Board filed a petition for discipline, and a hearing panel found Attorney had committed the violations.
- The hearing panel imposed a five-year suspension (one year active), restitution, and other conditions.
- Both Attorney (appellant) and the Board (appellant) sought review in the Montgomery County Circuit Court, with Attorney seeking a lesser sanction and the Board seeking disbarment.
- The circuit court affirmed the five-year suspension but modified other parts of the panel's order.
- Both Attorney and the Board appealed the circuit court's judgment to the Tennessee Supreme Court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is a five-year suspension from the practice of law, with one year served as active suspension, an appropriate disciplinary sanction for an attorney who misappropriated client funds and repeatedly provided false testimony under oath during a deposition?
Opinions:
Majority - Bivins, C.J.
Yes, a five-year suspension with one year of active suspension is an appropriate sanction. The court determined that misappropriating client funds and providing false testimony under oath are severe ethical violations that strike at the core of the legal system. The court weighed several aggravating factors, including the attorney's prior disciplinary suspension in New York for similar misconduct, a dishonest motive, lack of candor, and substantial experience in the law. These were balanced against mitigating factors, such as his positive reputation among local judges and lawyers. The sanction was deemed appropriate given the gravity of the offenses and was not considered arbitrary, capricious, or an abuse of discretion. The court also upheld the $7,500 restitution order, clarifying that restitution is a form of discipline not bound by private settlement agreements between the parties.
Analysis:
This decision reinforces the high premium Tennessee courts place on attorney honesty and the proper handling of client funds. It demonstrates that severe sanctions, short of disbarment, are appropriate for egregious misconduct like perjury and conversion, especially for an attorney with a history of similar offenses. The ruling clarifies that a professional board's dismissal of one complaint does not create a res judicata bar to a subsequent complaint alleging different misconduct, preserving the board's authority to address new violations. This case serves as a stark reminder that even a strong professional reputation and character testimony cannot shield an attorney from substantial discipline for core ethical failures.
Unlock the full brief for Peter M. Napolitano v. Board of Professional Responsibility