IN THE SUPREME COURT FOR THE STATE OF OREGON

_____________________________________________________________

In re:

Complaint as to the Conduct of

LISA D. T. KLEMP,

Accused.

Supreme Court No. SC S064893

OSB Case No. 14-128 & 15-01

_____________________________________________________________

PETITION FOR REVIEW AND OPENING BRIEF

OF LISA D. T. KLEMP, ACCUSED-PETITIONER

_________________________

Review of Decision of an Oregon State Bar Trial Panel

J. David Coughlin, Trial Panel Chairman

_________________________

Nathan G. Steele Theodore W. Reuter OSB #004386 OSB #084529 The Steele Law Firm Oregon State Bar 125 NW Greeley Avenue P.O. Box 231935 Bend, Oregon 97703 Tigard, OR 97281 ngs@steelefirm.com treuter@osbar.org Attorney for Accused- Attorney for Oregon State Petitioner Bar-Respondent

July 26, 2017 09:20 PM

INDEX

I. STATEMENT OF CASE 1 A. Nature of the Action 1

B. Nature of the Judgment 1

C. Petition for Review and Statutory Basis for Appellate 2

D. Questions Presented for Review 3

1. Matter (Case No. 14-128) 2. Matter (Case No. 15-01)

E. Summary of Argument 4 F. Summary of Facts 8

1. Matter (Case No. 14-128) 2. Matter (Case No. 15-01)

II. ARGUMENT 30 A. Matter (Case No. 14-128) 30

1. First Assignment of Error: The Majority Erred in

finding Klemp violated RPC 1.16(d) based upon facts or evidence not pled by the Bar.

2. Second Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.16(d) based upon its determination that Klemp’s legal services had no value.

B. Matter (Case No. 15-01) 40

1. First Assignment of Error: The Majority Erred in

finding that Klemp violated RPC 4.3 based upon facts or evidence not pled by the Bar.

2. Second Assignment of Error: The Majority Erred in finding that Klemp Violated RPC 4.3 by implying that she was disinterested.

3. Third Assignment of Error: The Majority Erred in finding that Klemp violated PRC 4.3 by failing to disclose that she was representing to obtain the POA.

4. Fourth Assignment of Error: The Majority Erred in finding that Klemp violated PRC 4.3 by giving

legal advice.

5. Fifth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by modifying a residential lease based upon facts or evidence not pled by the Bar.

6. Sixth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by demanding Vinson pay rent to when Klemp knew that he was no longer successor trustee.

7. Seventh Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by preparing a Trust Deed for personal expenses, which was not pled by the Bar.

8. Eighth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by preparing a Trust Deed to secure repayment of personal expenses versus expenses on behalf of

or the Trust.

9. Ninth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by representing that had the power of attorney to execute the $9,500 check.

10. Tenth Assignment of Error: The Majority Erred in Finding that Klemp violated RPC 4.1(b).

III. CONCLUSION 58

APPENDIX

Relevant Oregon Rules of Professional Conduct App 1

Cast of Character App 2-4

EXCERPT OF RECORD

Formal Complaint ER 1-8

Trial Panel Opinion ER 9-26

Dissenting Opinion ER 27-39

TABLE OF AUTHORITIES

Cases:

Crawford v. Crane, 204 Or 60, 67, 282 P2d 348 (1955) 37

In re Ainsworth, 289 Or 479, 487, 614 P2d 1127 (1980) 35

In re Albrecht, 333 Or 520, 539, 42 P3d 887 (2002) 5

In re Chambers, 292 Or 670, 676, 642 P2d 286 (1982) 34

In re Fulop, 297 Or 354, 360, 685 P2d 414 (1984) 5, 35, 42, 48

In re Gildea, 325 Or 281, 295, 936 P2d 975 (1997) 5

In re Hockett, 303 Or 150, 162 n. 3, 734 P2d 877 (1987) 57

In re Jordan, 295 Or 142, 156, 665 P2d 341 (1983) 5

In re Thomas, 294 Or 505, 521, 659 P2d 960 (1983) 5, 35

Lee v. Lee, 5 Or App 74, 79 n.1, 482 P2d 745 (1971) 37

Ramstead v. Morgan; 219 OR 383, 399-400, 347 P2d 594 (1959) 33

Riley Hill General Contractor Inc. v. Tandy Corp., 303 Or 390, 405, 407, 737 P2d 595 (1987) 5

State ex rel. Currin v. Commission on Judicial Fitness and Disability, 311 Or 530, 533, 815 P2d 212 (1991) 36

Statutes:

ORS 9.534(2) 34

ORS 9.536(2) 2, 5

ORS 73.0402 27

ORS 87.430 37, 39

ORS 130.720(1) 22

Other Authorities:

Oregon Formal Ethical Opinion No. 2005-90 37

Oregon Rules of Professional Conduct Regulations (RPC):

RPC 1.16(d) 2, 3, 30, 31, 32, 33, 36, 37, 39, 40

RPC 1.2(c) 1, 2, 3, 4, 46, 47, 49, 50, 51, 52, 55, 56, 57

RPC 4.1(b) 1, 57, 58

RPC 4.3 1, 2, 3, 33, 40, 41, 42, 43, 44, 45

Rules:

Bar Rule 2.3(b)(3) 32

Bar Rule 2.4(f)(1) 32

Bar Rule 2.4(i)(1) 32, 33

Bar Rule 2.5(b)(2) 32

Bar Rule 2.6(a) 32

Bar Rule 2.6(c) 32

Bar Rule 2.6(c)(1)(B) 32

Bar Rule 2.6(f) 32

Bar Rule 4.1 32

Bar Rule 4.1(c) 34

Bar Rule 4.2 33

Bar Rule 4.3(c) 33

Bar Rule 4.4 33

Bar Rule 4.4(b)(1) 34

Bar Rule 5.2 5, 32

Bar Rule 10.1 2

Bar Rule 10.3 2

Bar Rule 10.5 2

Bar Rule 10.6 2

Former Disciplinary Rule 1-102 35

Former Disciplinary Rule 5-101(A) 35

Former Disciplinary Rule 6-101(A)(1) 35

Former Disciplinary Rule 6-101(A)(2) 35

Former Disciplinary Rule 6-101(A)(3) 35

Former Disciplinary Rule 7-104(4) 35

Former Disciplinary Rule 9-102 35

1

I. STATEMENT OF THE CASE

A. Nature of the Action.

Petitioner Lisa Klemp (“Klemp”), Bar No. 040012, appeals from a Trial

Panel Opinion rendered in disciplinary proceedings filed against her by the

Oregon State Bar (“the Bar”)

B. Nature of the Judgment.

In a combined Formal Complaint (Case Nos. 14-128 and 15-01) the Bar

alleged numerous violations of the standard of professional conduct against

Klemp A copy of the Formal Complaint is attached at ER-1-8. The Trial

Panel held a bifurcated hearing on March 23-26, 2016, and June 20-21,

2016, respectively (“hearing”). The Trial Panel issued both a Majority and

Dissenting Opinion on February 28, 2017.

The Majority Opinion (“MPO”) was signed by both attorney David

Coughlin (“Coughlin”), the Trial Panel Chair, and the sole public member,

William Olsen (hereinafter collectively referred to as the “Majority”). A

copy of the MPO is attached as ER -9-26. The MPO found that the Bar had

failed to carry its burden with respect to alleged violations of Oregon Rules

of Professional Conduct (“RPC”) 1.2(c), 4.1(b), and 4.3, but also found that

Klemp committed:

2

1) A violation of RPC 1.16(d) (surrender of papers and property upon

termination of representation);

2) Three violations of RPC 1.2(c) (a lawyer shall not counsel a client to

engage, or assist a client, in conduct that the lawyer knows is illegal or

fraudulent); and

3) One violation of RPC 4.3 (disinterested lawyer).1

The Dissenting Opinion (“DPO”) was signed by the other lawyer on the

Trial Panel, Max Taggart (“Taggart”). A copy of the DPO is attached as ER-

27-39. In his DPO, Taggart found that the Bar failed to carry its burden of

proof on any of its claims against Klemp, and recommended both cases be

dismissed.

C. Petition for Review and Statutory Basis for Appellate Jurisdiction.

Pursuant to Oregon State Bar Rule of Procedure (“BR”) 10.3, Klemp

timely filed her Request for Review on April 25, 2017, and petitioned this

Court for de novo review of each of the MPOs findings of violation. ORS

9.536(2); BR 10.1, 10.5, and 10.6.

1 Copies of the RPC’s at issue in this case are attached as Appendix (“App”)-1.

3

D. Questions Presented for Review.

1. Matter (Case No. 14-128)

a. Did the Majority err in finding a violation of the RPC 1.16(d) that

was not pled by the Bar?

b. Did the Majority err in finding that Klemp violated RPC 1.16(d) based

upon its conclusion that Klemp’s legal services had no value?

2. Matter (Case No. 15-01)

a. Did the Majority err in finding a violation of RPC 4.3 that was not pled

by the Bar?

b. Did the Majority err in finding that Klemp violated RPC 4.3 based

upon its conclusion that Klemp’s legal services had no value?

c. Did the Majority err in finding a violation of RPC 1.2(c) (disinterested

lawyer) that was not pled by the Bar?

d. Did the Majority err in finding that Klemp violated RPC 1.2(c) by

implying that she was a disinterested party?

e. Did the Majority err in finding that Klemp violated RPC 1.2(c) by

giving an unrepresented party legal advice?

4

f. Did the Majority err in finding a violation of RPC 1.2(c) (modifying a

residential lease) that was not pled by the Bar?

g. Did the Majority err in holding that Klemp violated RPC 1.2(c) based

upon its finding that Klemp modified a residential lease?

h. Did the Majority err in finding a violation of RPC 1.2(c) (drafting

Trust Deed) that was not pled by the Bar?

i. Did the Majority err in finding that Klemp violated RPC 1.2(c) by

drafting a Trust Deed that sought reimbursement for client’s personal

expenses?

j. Did the Majority err in finding that Klemp violated RPC 1.2(c) by

holding that she falsely represented to a financial institution that a check

signer held a valid power of attorney?

E. Summary of Argument.

The Bar’s Formal Complaint against Klemp pleads two separate

cases. The first case pertains to Klemp’s representation of Kathleen

(“ in connection with a wrongful death claim (“ Matter”). The

second case arises out of Klemp’s representation of Theodore

5 (“ in various matters (“ Matter”). 2 The Bar must prove the

violations alleged in its Formal Complaint by “clear and convincing

evidence”.” ORS 9.536(2); BR 5.2.; In re Thomas, 294 Or 505, 521, 659

P2d 960 (1983). Clear and convincing evidence is "free from confusion,

fully intelligible, distinct" and establishes that the truth of the asserted fact is

“highly probable.” Riley Hill General Contractor Inc. v. Tandy Corp., 303

Or 390, 405, 407, 737 P2d 595 (1987). This standard demands more than a

suspicion that a particular fact may be true. In re Albrecht, 333 Or 520, 539,

42 P3d 887 (2002). A lawyer accused of misconduct is presumed innocent

until proven otherwise. In re Jordan, 295 Or 142, 156, 665 P2d 341 (1983).

The lawyer is not required to prove that he or she did not commit the

violations alleged. In re Gildea, 325 Or 281, 295, 936 P2d 975 (1997).

Conflicting testimony between equally credible witnesses is not clear and

convincing evidence of an ethics violation. In re Fulop, 297 Or 354, 360,

685 P2d 414 (1984).

In reviewing this case on appeal, Klemp asks this Court to be mindful

of what is at stake. As Taggart wrote in his dissenting opinion, “[w]e should

not need to be reminded of that which should be obvious. These cases have

weighty consequences and are not things to be taken lightly.” (Er-27.)

2 The Cast of Characters is attached as App-2-4.

6

The evidence presented at the hearings was described by the Trial

Panel Chair as “spaghetti” and “confusing”. The Bar’s evidence did not

focus on the allegations against Klemp in the Formal Complaint. Rather, the

Bar centered its case on conduct and character, which was totally

irrelevant to the question of whether Klemp violated the RPCs. The Bar

failed to present any evidence of Klemp’s involvement in, or knowledge of,

purported wrongdoings, and thus, failed to prove its case.

The Bar’s case consisted of hypotheticals, assumptions, and

conjecture. On the second day of the hearing, Coughlin stated: “[w]e haven’t

looped [Klemp] into this at all.” (Tr. 44.) 3 The Bar’s focus on

conduct, coupled with its failure to establish Klemp’s involvement or

knowledge thereof, led Coughlin to remark: “The question is whether—not

what he did. *** The question is: What did Ms. Klemp do or know. That’s

the question.” (Tr. 550.) Taggart echoed this sentiment when he stated on the

record: “I’m having some problem here understanding how the bad acts or

the alleged bad acts of Mr. are being tied into the accused.” (Tr.

115.) At the conclusion of the hearing, Coughlin summed up the Bar’s case

3 References to the hearing transcript are made by using the last name of the witness and the page and line numbers in the court reporter’s transcript. Where the reference is to a statement by the Panel or lawyers, a generic “Tr.” cite is used.

7 thusly: “this is so convoluted. I mean, it’s just astounding***it’s a mess.”

(Tr. 1934-35.) The insufficiency of the Bar’s evidence against Klemp led

Taggart to write in his dissenting opinion:

“These violations require that [Klemp] have a specific state of mind that: a) her conduct was either illegal or fraudulent, or b) she had knowledge that she was counseling a client to engage in conduct which she believed was illegal or fraudulent and, additionally, that conduct of the client was either illegal or fraudulent. *** [T]his Panel member does not know how the Bar (given the facts it had to work with) could carry its burden by clear and convincing evidence.” (ER 37.)

The Bar’s focus on was not only fatal to proving its case against

Klemp, but also had the effect of thoroughly confusing the Majority. The

record is replete with examples of the Majority’s inability to track the

evidence. 4 Further, the Bar’s focus on attacking clearly lead the

Majority to dislike him. Early in the proceedings, Coughlin referred to

as “puke.” (Tr. 444.) Coughlin’s apparent disdain for

resulted in assumptions that were wholly unsupported by the evidence, e.g.,

incorrectly assuming had been “incarcerated” for his alleged

4 Olsen: “I’m confused. Maybe you can help. I’m pretty slow here.” (Tr. 376-377); Coughlin incorrectly stating was incarcerated. (Tr. 108); Coughlin incorrectly stating and Klemp were married. (Tr. 396); Coughlin repeating in MPO that and Klemp were married (ER-15.) Coughlin stating Klemp filed Guardianship when she did not. (Tr. 1363); Coughlin allowing extensive irrelevant testimony and then apologizing. (Tr. 1363); MPO finding that Klemp attempted to “cash the $9,500 check” when there was no evidence in the record to support such a finding. (ER-23.)

8 conduct. (Tr. 108). Coughlin’s dislike for also led him to make

legal conclusions unsupported by the evidence. For example, after hearing

the testimony of just one witness at the hearing, Coughlin concluded: “[w]e

decided the signature of Lauren is forged….” (Tr. 386.) These type of

erroneous factual and legal conclusions resulted in the Majority issuing an

Opinion that found violations against Klemp that were neither alleged in the

Bar’s Complaint, nor supported by the evidence. Taggart addressed this in

his dissenting opinion when he stated: “assuming for the sake of argument

that was a bad actor, it’s difficult to impute to [Klemp] that

requisite state of mind…” (ER 38.) Notably, Taggart provided a thorough

analysis of the credibility of primary witness who testified at the hearing.

(ER-29-30.) He found Klemp to be a “very credible witness.” (ER 30.)

Klemp is incredibly fortunate that Taggart saw the lack of evidence for what

it was, and wrote a detailed dissenting opinion recommending that all the

claims against Klemp be dismissed.

F. Summary of Facts

1. ( Matter (Case No. 14-128))

Klemp and met while working at the law firm of Bryant Emerson

& Fitch (“Firm”) in Redmond, Oregon. Klemp was as an associate and

was a paralegal. ( 695, 711). While working at the Firm,

9 represented that she was an attorney, though she did not have a law degree.

( 713-15). In July 2012, Klemp left the Firm and opened her own

practice in Redmond, Oregon. (Klemp 1626). In approximately September

2012, was fired from the Firm. ( 717). After being fired,

started a business called Central Oregon Probate ( 717).

promoted the business as an “estate planning” service. (Id.) held

herself out as an expert in the area of estate planning. ( 721.) Klemp’s

firm had additional office space, and and Klemp entered into an

office sharing agreement. (Klemp 1780.)

In November 2012, asked Klemp to represent her in a potential

wrongful death claim against a nursing home. ( 695.) mother

passed away while in the care of a nursing home located in Central Oregon.

(Id.) Klemp agreed to investigate potential claims against the nursing home.

(Id.) Klemp informed that she would bill an hourly rate of $225 for

work performed on the case. (Klemp 1782). The parties agreed Klemp

would keep track of her hours. ( 702.) Based upon their agreement,

Klemp arranged a meeting with the nursing home’s representatives. (

782; Klemp 1782.) Following the meeting, which lasted several hours,

brought Klemp a large binder containing the medical and nursing

home records for both her mother and father. ( 695, 782; Nichols

10 1523; Klemp 1781, 1783, 1826.) Klemp and her legal assistant, Linda

Nichols (“Nichols”), reviewed the voluminous records in the binder.

(Nichols 1523; Klemp 1793.) Klemp did legal research, prepared attorney

notes, and drafted an outline complaint for potential claims. (Klemp

1796; Klemp Ex. 218.)5 Both Klemp and Nichols tracked their time, which

was reflected in monthly invoices sent to (Nichols 1525; Klemp

1796; Klemp Ex. 122.) Nichols testified at the hearing that she understood

was being billed hourly. (Nichols 1525, 1559, 1597-98).

For the next five months, Klemp sent monthly invoices with

hourly billing entries. (Klemp Ex. 122.) Klemp’s bookkeeper Janice Fryer

(“Fryer”) testified that she sent the invoices to (Fryer 848.) Klemp

always expected to be paid for her services. (Klemp 1783-84.)

testified that she expected Klemp would be paid. ( 784.) The billing

invoices stated: “please remit payment”. (Klemp 1798; Klemp Ex. 122.)

Even after receiving monthly invoices, asked Klemp to perform

additional services, including reviewing additional records and participating

in discussions regarding the strategy for handling the matter. (Tr. 23).

5 Klemp’s Exhibits at the hearing will be referred to as “Klemp Ex.”, while the Bar’s Exhibits will be referred to as “Bar Ex.”.

11

On May 14, 2013, contacted Klemp regarding the outstanding

invoices. (Klemp 1824). The parties engaged in some discussions about the

possibility of entering into a modified fee arrangement if a lawsuit was filed.

(Klemp 1787.) The proposed modified agreement consisted of an

hourly/contingency fee arrangement. (Id.) However, the specific terms were

never fully discussed or agreed upon (e.g., there was no agreement regarding

payment of costs, attorney fees for review of case, percentages, etc.).

(Klemp 1787, 1791, 1797.)

As a result of a personal dispute between Klemp and

moved out of their office on May 16, 2013. ( 698.) Klemp terminated

her attorney-client relationship with and sent her a letter on May 30,

2013, confirming the same. ( 698; Klemp Ex. 155.) After sending

her termination letter, Klemp researched the legal and ethical rules

applicable to securing an attorney lien. (Klemp 1789, 1799.) Based upon this

research, Klemp wrote a second letter on June 4, 2013, asserting an

attorney lien against file in the amount of $4,252.50. (Klemp Ex.

157.) The fee lien reflected the total amount of legal work Klemp had

performed, and that had been documented in the invoices. Klemp asserted

the lien pursuant to ORS 87.430, which provides:

12

“An attorney has a lien for compensation whether specially agreed upon or implied, upon all papers, personal property and money of the client in the possession of the attorney for services rendered to the client. The attorney may retain the papers, personal property and money until the lien created by this section, and the claim based thereon, is satisfied, and the attorney may apply the money retained to the satisfaction of the lien and claim.” (Emphasis supplied.)

contested that she owed Klemp attorney fees, and filed an OSB

complaint against Klemp on September 6, 2013. (Klemp Ex. 186.)

2. Matter (Case No. 15-01)

The Bar’s allegations against Klemp in the Matter arise from

her representation of in various matters. was married to a

woman by the name of Lauren (“ The couple was married in

approximately 2002. (Kellogg 79; Klemp Ex. 102.) The two entered into a

Premarital Agreement that set forth their joint and separate property. (Klemp

Ex. 102.) On April 5, 2006, established the Lauren Robertson

Revocable Trust (“Trust”). (Klemp Ex. 103.) was named both the

trustor and trustee, while was named successor trustee. Id. In the

event that was “for any reason […] unwilling or unable to serve as

trustee,” would become the successor trustee. (Klemp Ex. 103, p.

1.) Additionally, if became incapacitated to the extent that she was

“unable to manage her business affairs,” would be entitled to

distribute income from the Trust. (Id., p. 3.) In the event of

13 incapacity, was empowered to make “discretionary

distributions…in such proportions as [ may deem proper, any real

or personal property, whether tangible or intangible, held by the trust….”

(Id.) Although the Trust owned numerous commercial and residential

properties that generated income, never established a separate bank

account for the Trust. (Bertalan 409-410; Bryant 1304; 1053.)

also executed a Durable General Power of Attorney (“Durable

POA”) on April 5, 2006 (Klemp Ex. 104, p. 1), and an Unlimited Durable

Power of attorney (“Unlimited POA”) on May 30, 2012. (Klemp Ex. 105.)

Both power of attorneys named as the power of attorney for

(Klemp Exhs. 104, 105.) Both gave broad authority as

attorney in fact, including the right to “sign, endorse, sell, discount, deliver

and/or deposit checks, drafts, notes and negotiable or nonnegotiable

instruments.” (Klemp Ex. 104, p. 1.) The power of attorneys were triggered

in the event that became incapacitated or disabled. (Klemp Ex. 104, p.

1; Ex. 105, p.)

Throughout marriage, suffered from extreme

alcohol and prescription drug addiction. (Klemp Exhs. 106, 107;

1071.) Over the course of their marriage, was convicted of numerous

DUII charges, assaults (including assaulting police officers), and hit and

14 runs. (Klemp Ex. 106, p. 1.) In May 2012, to avoid sentencing for her fifth

DUII, absconded to California. ( 1071). In June and July 2012,

was evaluated by a licensed psychotherapist and a medical doctor.

(Klemp Ex. 107, pp. 1-6.) The examiners determined that suffered

from numerous psychological problems, including PTSD, severe depression,

and anxiety. (see generally Klemp Ex. 107.) One of the doctors, Dr.

Marjores Geis, found that was incapable of any “rational participation

in court hearings or proceedings,” and recommended that a Guardian ad

Litem be appointed for (Klemp Ex. 107, p. 6.) In her declaration, Dr.

Geis stated that was unable to participate meaningfully in a “court

hearings”. (Klemp Ex. 107, p. 6). This reference was to pending litigation in

Oregon against both and The couple had been sued for

allegedly breaching a contract with Exchange Properties Inc. (“the Exchange

Litigation”) (Klemp Ex. 110.) Due to ongoing mental health issues,

managed the litigation on behalf, including the payment of

attorney fees. (Bryant 1292; Klemp 1638.)

At the end of June 2012, retained Klemp to file a bankruptcy

solely on his behalf. (Klemp 108.) At this time, Klemp was an associate at

Bryant, Emerson, & Fitch LLP (“Bryant Emerson”) (Klemp 1631.) In

addition to retaining Klemp, hired Steve Bryant (“Bryant”), a

15 partner at Bryant Emerson, to petition the court to have a guardian ad litem

appointed on behalf. (Bryant 1291-1292.)

In approximately September 2012, returned to Oregon, and was

incarcerated at the Deschutes County Jail (“Jail”). (Klemp 1657.) was

represented by Bend criminal defense attorney Angela Lee-Mandlin. (Lee-

Mandlin 593.) When returned to Oregon, already had an

Unlimited POA executed by however, it did not become effective

unless was deemed “disabled or impaired.” Bryant had not filed a

petition to appoint a guardian ad litem for and thus, her competency

had not yet been determined by a court. (Klemp Ex. 118, p. 1.)

therefore hired Klemp in September 2012 to obtain a durable power of

attorney from that was not contingent upon her disability or

competency. (Klemp 1657.) By this time, Klemp had started her own firm.

(Klemp 1735). Klemp’s first visited in Jail on September 14, 2012.

(Klemp 1660.) A notary by the name of Julie Boock (“Boock”)

accompanied Klemp to the Jail to assist with the execution of the power of

attorney. (Id.). Klemp brought the durable power of attorney with her, as

well as a list of questions to determine competency. (Klemp 1680;

Klemp Exhs. 112, 113.)

16

Because Klemp was an attorney, Jail staff had arranged for the

meeting to take place in the attorney-client conference room. (Klemp 1661.)

appeared agitated when Klemp and Book entered the room. (Klemp

1662.) Klemp told that she was there “because your husband asked

me to have you sign a POA for him.” (Klemp 1662.) Klemp and Boock both

testified at the hearing that responded: “I know who you are. I told

my attorney Angela Lee to tell you not to come. I’m not signing that – I

didn’t ask for it my husband did.” (Klemp 1662; Boock 931.) Klemp then

asked if Lee represented in relation to her financial matters.

said “No.” (Klemp 1666-67; Boock 931.) Klemp apologized for not getting

the message. (Klemp 1662.) refused to sign the power of attorney, but

asked to keep Klemp’s draft. (Klemp 1666.) Klemp allowed to keep

the power of attorney and informed her that, if she had any questions

concerning the document she could call an attorney. (Boock 955; Klemp

1666-67). responded that “Steve Bryant doesn’t return my calls.”

(Klemp 1666-67.) Klemp asked whether Bryant represented to which

responded “no”. (Klemp 1667.) Klemp then informed that the

OSB provided attorney referrals if she needed one. (Klemp 1667.) Klemp

and Boock then left the Jail.

17

After the Jail visit, called Klemp on September 15, 2012, and

said she would sign the power of attorney. (Klemp 1674.) Klemp informed

that she need approval before she could return to the Jail.

(Klemp 1674.) Subsequently, authorized Klemp to return to the

Jail, and thus, Klemp once again contracted Boock and arranged to meet her

at the Jail. (Klemp 1674 - 1675.) Klemp and Boock returned to the Jail on

September 17, 2012. (Klemp 1675.) Upon meeting Klemp

reintroduced herself and Boock, and explained the purpose of their visit,

whereupon stated she had already signed the power of attorney, which

was dated September 17, 2012 (“POA 1). (Klemp Ex. 112; Klemp 1675-76;

Boock 933.) Klemp informed that she did not think that the POA 1

would be valid because it was signed outside the presence of a notary.

However, after discussing the situation with Boock, Boock decided to

notarize POA 1. (Boock 934.). Because had POA 1 over the weekend,

Klemp asked whether she had contacted an attorney to discuss the

document. (Klemp 1680.) immediately responded: “I know what a

Power of Attorney is”. (Klemp 1680.).

After Boock notarized POA 1, Klemp read through the competency

questions with When Klemp asked if she had signed the POA 1

under duress, indicated that she had signed it under duress. (Klemp

18 1680; Boock 933.) Surprised by answer, Klemp again asked if

she had signed the POA 1 under duress. (Klemp 1680.) again stated

that she had signed under duress. (Id.) Based upon representation,

Klemp and Boock agreed the POA 1 was not valid. (Boock 935; Klemp

1680.) Klemp and Boock then left the Jail.

again contacted Klemp on September 19, 2012 and stated she

was prepared to sign a power of attorney. (Klemp 1685.) Klemp informed

of call and obtained his authority to return to the Jail.

(Klemp 1685-86.) Klemp and Boock returned to the Jail that day. (Klemp

1686.) At the outset of this third meeting, Klemp informed that they

were there to provide her with a power of attorney for her signature. (Klemp

1686). Klemp informed that the power of the attorney was in the

exact form as POA 1. (Klemp 1686). After reviewing the document,

made some changes to the power of attorney (Klemp 1687.) Boock asked

competency questions, which answered appropriately. (Klemp

Ex. 113; Klemp 1687). signed the durable power of attorney (“POA

2”), dated it September 19, 2012, and Boock notarized it. (Klemp Ex. 114.)

The meeting was uneventful. (Boock 963.) Boock testified that clearly

understood Klemp was there to obtain a power of attorney for so

that he could use it to “take care of the bills and mortgage and that sort

19 thing.” (Boock 964.) Klemp sent POA 2 to on September 20, 2012.

(Klemp Ex. 115.) For reasons that remain unexplained,

inadvertently filed the POA 1 instead of POA 2 with the Deschutes County

Clerk’s Office on January 11, 2013 (Bar’s Ex. 33.)

POA 2 gave numerous rights, including, but not limited to,

the authority to “receive, endorse, sign, sell, discount, deliver, and deposit

check, drafts, notes, and negotiable and nonnegotiable instruments….”

(Klemp Ex. 114, p. 1.) (Emphasis supplied.) Therefore, as of September 19,

2012, had a valid power of attorney signed by allowing him

to handle her financial affairs, including signing checks.

On September 27, 2012, Bryant filed a Petition for Appointment of

Guardian Ad Litem on behalf of On November 1, 2012, a Deschutes

County Circuit Court Judge entered a judgment declaring

incapacitated (“November Judgment”). (Klemp Ex. 118.) The November

Judgment also appointed an individual by the name of David Defoe as

Guardian. (Id.) Bryant, an experienced trust and estates attorney, testified at

the hearing that authority as successor trustee of the Trust vested

by November 1, 2012. (Bryant 1302-05.) The Bar’s trust and estates expert

Lisa Bertalan (“Bertalan”) agreed with Bryant’s conclusion regarding when

became successor trustee. (Bertalan 428.) Thus, by November 1,

20 2012, was serving as both attorney in fact and successor

trustee.

The Trust owned real property located at 22680 Crestview Lane, in

Bend Oregon (“property”). (Klemp Ex. 125.) On February 1, 2013,

as attorney in fact and successor trustee—entered into a

residential lease (“February Lease”) for the property with a tenant by the

name of Samantha Vinson (“Vinson”). (Klemp Ex. 125.) The term of the

February Lease was for three months, i.e., from February 1, 2013 until April

1, 2013. (Id.) The rent checks were made payable to “Lauren (Id.)

Klemp had no involvement with the preparation or execution of the February

Lease. (Klemp 1744). Moreover, the Bar presented no evidence that Klemp

was involved in the drafting or execution of the February Lease.

At the end of the lease term, entered into a new lease with

Vinson on May 1, 2013 (“May Lease”). (Klemp Ex. 142.) Klemp’s legal

assistant Linda Nichols (“Nichols”) testified at the hearing that she gave

a boilerplate lease from the Oregon State Bar’s website to use as a

template. (Nichols 1534; Klemp Ex. 141, p. 1-2) Nichols further testified

that made changes to the boilerplate lease and she reformatted it.

(Nichols 1535; Klemp Ex. 141, p. 1) Klemp never reviewed nor provided

any input regarding the May Lease. (Klemp 1745; Nichols 1535; Klemp Ex.

21 141, p. 2.) took the May Lease to Vinson for her signature.

(Nichols 1535). The May Lease named as “Landlord” and provided

that the lease payments be made to (Klemp Ex. 142, p. 1.) Klemp

never saw the May Lease, and did not know that it directed Vinson to pay

(Klemp 1748-49.)

At the hearing, Vinson testified that the May Lease was executed in

July 2013, and was backdated. (Vinson 898.) The date of the execution of

the May Lease was disputed between the parties at the hearing. Regardless,

asked Klemp later in May to prepare a separate addendum to the

May Lease. (Klemp 1747; Klemp Ex. 141, p. 47.) The addendum shortened

the notice period to terminate the lease. (Klemp 1747). Klemp never

reviewed nor saw the May Lease. (Klemp 1748.) Klemp prepared the

addendum and gave it to Nichols to format. Nichols in turn gave it to

(Klemp 1748.) Klemp never met with Vinson. (Klemp 1749-70.)

On February 26, 2013, filed a petition to have

appointed as permanent successor guardian ad litem for (“Petition”).

Klemp Ex. 127.) After the Petition was filed, acted in behalf

in the Exchange Litigation and made financial decisions affecting

(Klemp Exhs. 129, 130, 131, 134.)

22

In March 2013, was still the successor trustee, and therefore

had the legal authority over the Trust’s property. See ORS 130.720(1).

paid expenses on behalf of and the Trust, including writing

checks from his own personal bank account. (Klemp Ex. 136). Bryant

testified at the hearing that had the right, as successor trustee, to

sell or encumber Trust property and to reimburse himself for expenses he

personally paid. (Bryant 1307-10.) Bertalan—the Bar’s trust and estates

expert—agreed that had such rights as successor trustee. (Bertalan

398.) At the hearing, Bryant further testified that could legally

place a lien on Trust property to secure repayment, regardless of whether his

expenditures could be specifically documented. (Bryant 1313).

In an effort to get reimbursed for his expenditures, went to

a self-proclaimed estate and probate expert— to assist him in

documenting the expenses. (Klemp Ex. 130; Klemp 1757; 711.)

Working together, and compiled ledgers and documents,

including checks drawn from personal checking account to

support of his claim for reimbursement from the Trust. (Klemp Exhs. 136,

137; Fitch 574; Klemp 1753-54). had almost 250 pages of

documents to support his claims. (Klemp Exhs. 136, 137.) and

documented $53,741.81 in expenditures made by (Klemp

23 Ex. 136, p. 12.) On March 6, 2013, in her capacity as guardian ad litem for

and to assist wrote attorney and stated that

the Trust owed money for his personal expenditures. (Klemp Ex.

129.) informed the attorney that she would “dispose” of Trust

property to pay back. (Id.) also wrote in prison, and

advised her that she owed for expenditures and services he had

made on behalf of her and the Trust. (Klemp Ex. 140.) Despite writing these

letters, denied at the hearing that she had any involvement in assisting

with seeking reimbursement from the Trust. ( 757.)

Nevertheless, Klemp did not assist or with compiling or

preparing documentation in support of his expenditures. (Klemp 1756.)

In April 2013, and asked Klemp to prepare a

Promissory Note and Trust Deed for to secure repayment from the

Trust. (Klemp 1753.) Klemp believed that was still operating as

successor trustee as this time. (Klemp 1752.) Klemp agreed, and obtained a

conflict waiver from both and because of their respective

involvement with the Trust and to wit: as successor trustee,

and as Guardian Ad Litem. Ex. 138. Both and

executed the conflict waiver. (Klemp Ex. 138.) Klemp reviewed the ledgers

24 and documents compiled by and and drafted a Promissory

Note and Trust Deed. (Klemp 1753; Klemp Ex. 139.)

Bertalan testified at the hearing that a successor trustee is entitled to

secure repayment of its expenditures with a trust deed against trust property.

(Bertalan 396). Both Bryant and Bertalan testified that the documentation

compiled by and could legally justify the execution of a

promissory note or trust deed by a successor trustee against the Trust to

secure repayment. (Bertalan 396-97, 402-403, Bryant 1334-35; Klemp Ex.

136 and 137). Bertalan testified that, if checks were written, she would also

want a ledger showing the amount of the checks. (Bertalan 406.) According

to Bertalan, if sufficient documentation of expenditures on behalf the trust

existed, she ‘would approve it.” (Bertalan 402). The process described by

Bertalan for securing a loan to the Trust with a trust deed is the exact process

that Klemp followed in this case. (Klemp 1554-56.)

On May 14, 2013, terminated as guardian ad Litem.

(Klemp Ex. 131.) Angered by this move, traveled to Coffee Creek

Prison, where was incarcerated at the time, and obtained from her a

power of attorney and a handwritten note appointing her as successor trustee

(“ POA”). ( 1015; Klemp Ex. 145, pp. 1-2.) The handwritten

note also removed both and Linda ( sister) as

25 successor trustees. (Klemp Ex. 145, pp. 1-2.) At this time, the November

Judgment—adjudging that incapacitated—was still in place. (

1012; Klemp Ex. 118, p. 8-9.) Klemp never received nor reviewed copies

of the POA, nor the handwritten note by (Klemp 1897.) The

Bar presented no evidence that Klemp ever received copies of the

aforementioned documents.

On May 31, 2013, or 14 days after purportedly became

power of attorney and successor trustee, sister, Linda

(“ had execute an “Amendment of Lauren Robertson

Trust” (“Amendment”), wherein revoked the handwritten note

appointing the successor trustee. (Klemp Ex. 145, p. 3.) Although the

Amendment was signed by on May 31, 2013, the effective date of the

Amendment was May 20, 2013. (Klemp Ex. 145, p. 3). Klemp was never

aware of the Amendment, nor did she receive a copy of it. (Klemp 1897.)

By June 2013, became involved with business affairs.

She retained Bend attorney Linda Ratcliffe (“Ratcliffe”) to assist in taking

over as trustee. On May 31, 2013, executed a Special Power of

Attorney (“Special POA”) designating as her attorney in fact. (Bar’s

Ex. 27).

26

On June 10, 2013, Ratcliff wrote Bend attorney Brendon Alexander

(“Alexander”) regarding her representation of (“June 10 Letter”).

(Klemp Ex. 163.) The June 10 Letter starts with “I understand that you

represent Ted M. (Klemp Ex. 163.) The letter purported to attach

the Amendment and Special POA. (Klemp Ex. 163.) However, the June 10

Letter entered into evidence at the hearing did not have any attachments.

(Bar’s Ex. 134.) Thus, it is unclear what documents, if any, were attached to

the June 10 Letter. In any event, the scope of Alexander’s representation at

this time was unclear. (Ratcliffe 1376.) In fact, Ratcliffe testified that

was represented by a number of attorneys at this time. (Ratcliffe

1374, 1376.) The Bar presented no evidence that Alexander provided

with a copy of the letter, or the alleged attachments. Neither

nor Alexander testified at the hearing. Ratcliffe admitted at the

hearing that she could not confirm whether actually received a copy

of her June 10 Letter, nor whether he was aware of it. (Ratcliffe 1372-73;

1377.) The Bar presented no evidence that Klemp received a copy of the

June 10, 2013, letter, or the attached documents. There was no evidence that

Klemp was ever aware of the June 10 letter, POA, the Amendment,

or the Special POA. On the contrary, Klemp testified that these documents

were never provided to her, nor was she aware of them. (Klemp 1724, 1897,

1903.)

27

On June 17, 2013, wrote a check in the amount of $9,500

from bank account at Evergreen Federal Bank (“Evergreen”). (Klemp

Ex. 166.) endorsed the check as “Lauren (Id.) The subject

line for the check read “attorney fees.” (Klemp Ex. 166.) When

wrote the check, he was operating under the September 19, 2012 power of

attorney, which gave him full authority to sign checks on behalf.

Notably, Bryant, Bertalan, and Ratcliffe all testified that, with a valid power

of attorney, had the right to sign name on checks. (Bertalan

325, 411; Bryant 1300; Ratcliffe 1419). See ORS 73.040(2). In fact, Bryant

testified that, if had a valid power of attorney, then signing

name was not forgery. (Bryant 1301.)

Before the check was written, Klemp and had created a

company called TLA Properties. (Klemp Ex. 128.) The $9,500 check was

deposited into the TLA Properties’ business account at Washington Federal.

(Klemp Ex. 166.) At the hearing, Klemp testified that “ used the

TLA bank account as a personal account.” (Klemp 1698.) Klemp maintained

her own personal and business accounts separate and apart from TLA’s bank

account. (Klemp 1711.) used the TLA account to pay the debts of

and the Trust. (Klemp 1711-12; Klemp Ex. 215). wrote

checks on behalf of for horse hay, dog care, moving expenses,

28 insurance, and construction of a fence and dog houses for four dogs.

(Klemp 1699; Klemp Ex. 128, p. 9, 20, 46, 47.)

Klemp testified at the hearing that she had no knowledge of the

$9,500 check, nor what the funds were used for. (Klemp 1712-20.) The Bar

presented no evidence that Klemp knew of the deposit of the check, nor that

she benefited from the funds in any respect. (Id.) did not testify at

the hearing, and thus no evidence was presented regarding any facts

underlying the check, including whether he intended to use the check to pay

“attorney fees.”

Klemp did not learn about the check until she received a telephone

call from Washington Federal advising her that the $9,500 had been frozen.

(Klemp 1692.) The funds were frozen because had filed an Affidavit

of Forgery with Evergreen Bank. (Klemp 1692; Bar Ex. 69.) alleged

that committed forgery by signing name on the check. (Bar

Ex. 69.) As joint owner of the account, Klemp felt compelled to respond to

the allegation that had forged the check by signing name.

After reviewing the Affidavit of Forgery, Klemp asked about the

signature. (Klemp 1692-1695.) indicated that he signed it as Well’s

attorney in fact, based upon the September power of attorney. (Id.)

also revealed to Klemp that he had filed the September power of attorney

29 with Deschutes County. (Klemp 1694.) Klemp accessed Deschutes County’s

online records and obtained a copy of the power of attorney. As noted above,

had inadvertently recorded the September 17 power of attorney

rather than the September 19 power of attorney. (Klemp 1694.) Given that

eight months had passed since the execution of POA 1 and POA 2, Klemp

did not recall the exact date of the operative power of attorney (Klemp

1695.) It should be noted here that Bertalan testified that recording POA 1

did not invalidate the POA 2. (Bertalan 311.) Because POA 2 was still valid,

was attorney in fact when he signed the check. Based upon

Klemp’s review of the recorded power of attorney, Klemp concluded that

had the right to sign name as her attorney in fact, and thus,

he did not commit forgery. (Klemp 1695-96) Again, the Bar presented no

evidence that Klemp ever received copies of or powers of

attorney. Based upon her review of the power of attorney, Klemp

wrote a letter to Washington Federal on July 18, 2013. (Klemp 1694; Klemp

Ex. 177.) In this letter, Klemp wrote that had a “Power of Attorney

dated September 17, 2012…and the Power of Attorney authorized signature

for financial matters concerning Lauren (Klemp Ex. 177.)

Subsequently, Evergreen Bank conducted its own investigation and

ultimately approved the transfer of funds because “[u]nder the foregoing

30 facts, it is not clear that Mr. the apparent signer, was

unauthorized.” (Klemp Ex. 187.)

On June 21, 2013, Ratcliffe filed a Petition to appoint as

Successor Guardian and Conservator of (Klemp Ex. 168.) A Limited

Judgment was signed by the court on July 1, 2013 that specifically revoked

all “prior power of attorneys.” (Klemp Ex. 169, p. 4.; p. 2 ¶7.) Klemp

testified that she believed the Limited Judgment revoked

authority as power of attorney. (Klemp 1725.) However, the Limited

Judgment was entered after signed name on the check.

did not sign a formal resignation as successor trustee until July 9,

2013, three weeks after he signed the check. (Klemp 1752; OSB Ex. 53).

II. ARGUMENT

A. Matter (Case No. 14-128)

1. First Assignment of Error: The Majority Erred in finding Klemp violated RPC 1.16(d) based upon facts or evidence not pled by the Bar.

In its Formal Complaint, the Bar alleged that Klemp violated RPC

1.16(d) by withholding file upon the termination of her

representation. (ER-2) Specifically, the Bar alleged “Klemp agreed to

represent in pursuing the wrongful death claim on a contingency fee

basis.” (Id.) According to the Formal Complaint, when Klemp terminated

31 her representation of she “confirmed the prior contingency

arrangement with but announced that he was asserting a lien against

the file for her time spent on the wrongful death claim at her hourly rate.”

(Id.) Based upon the assertion of the hourly rate lien against a contingency

fee agreement, the Bar alleged that Klemp wrongfully withheld file.

(ER-2.) The Bar therefore alleged Klemp violated RPC 1.16(d) by failing to

take steps to protect interests.

The MPO ‘s Opinion definitively found that the Bar failed to “establish

by clear and convincing evidence of a violation of RPC 1.16(d)” regarding

its allegation that the Klemp had entered into a contingency fee agreement

with (ER-11.) The finding that there was no contingency fee

agreement should have resulted in a dismissal of this claim, as the Bar failed

to prove an essential element of its claim, to wit, Klemp placed an hourly fee

lien on a contingency fee file. However, instead of dismissing this claim, the

MPO sua sponte found a violation of RPC 1.16(d) on the basis that the legal

services rendered by Klemp had “little or no benefit to (ER-12.)

The MPO further found that “there was no evidence of what the fair market

value of Klemp’s work was, and *** there was no evidence of what her

reasonable services were.” (ER-13.) Based upon the aforementioned, the

MPO concluded that Klemp had no right to assert the lien because “nothing

32 would be owed by (ER-14.)

None of the facts underlying the MPO’s finding that Klemp violated RPC

1.16(d) were alleged by the Bar. There is no allegation that Klemp did not

perform legal work, that the work she performed had little or no value, nor

that the lien was invalid because the services she rendered were

unreasonable. (ER-1-2.)

A trial panel cannot unilaterally add charges to the Bar’s Formal

Complaint. Under the Rules adopted by this Court, only the State

Professional Responsibility Board ("SPRB") may authorize the charge of a

violation of the disciplinary rules. BR 2.6(c), (f); BR 4.1. Further, the

investigation of potential attorney misconduct is assigned to Bar

Disciplinary Counsel, BR 2.5(b)(2) and 2.6(a), under the SPRB’s oversight,

BR 2.3(b)(3) and 2.6(c). There is no role for a trial panel to play in the

investigation or charging process. It is only after charges have been

approved, and the accused lawyer denies them, that a trial panel is even

convened. BR 2.4(f)(l) and 2.6(c)(l)(B)

Trial Panels in Bar disciplinary proceedings have a limited role: to decide

issues of evidence and procedure and to determine impartially whether the

Bar has proven the charges in its complaint by clear and convincing

evidence. BR 2.4(i)(l) and 5.2. Trial Panels are required to "promptly try the

33 issues" and to "pass on all questions of procedure and admission of

evidence." BR 2.4(i)(l). By finding a violation of RPC 1.16(d) that was not

alleged in the Bar’s Formal Complaint, the MPO ignored the separation of

the roles of prosecutor and adjudicator embedded in the Bar Rules.

Moreover, the Rules of Procedure clearly establish a formal process for

amending a complaint. Amendments are permitted, see BR 4.4, but an

amended complaint must be filed and served, see BR 4.2. A trial panel has

no role in this process other than to extend the time for filing pleadings, see

BR 4.3(c), and presumably to ensure that all parties have sufficient notice

and time to respond. Maintaining the separation between the roles of

prosecutor and adjudicator is crucial to ensuring a fair process. As reflected

in the American Bar Association Model Rules on Lawyer Discipline,

"prosecutorial and adjudicative functions should be separated as much as

possible within the unitary system to avoid unfairness and any appearance of

unfairness.” The authority to change the roles and authority of the SPRB

and a trial panel, as well as the Rules of Procedure, lies solely with this

Court. See, e.g., Ramstead v. Morgan; 219 OR 383, 399-400, 347 P2d 594

(1959) ("'No area of judicial power is more clearly marked off and identified

than the Courts' power to regulate the conduct of the attorneys who serve

under it.").

34

The MPO’s finding of violations that were not alleged by the Bar is also

inconsistent with the statutory requirement that attorneys receive prior

written notice of the charges against them. Every member of the Oregon

State Bar, "formally accused of misconduct by the [B]ar, shall be given

reasonable written notice of the charges against the member [and] a

reasonable opportunity to defend against the charges[.]" ORS 9.534(2). The

Bar Rules reinforce this requirement. Members of the Bar are entitled to a

formal complaint identifying "the acts or omissions of the accused, including

the specific statutes or disciplinary rules violated, so as to enable the accused

to know the nature of the charge or charges against the accused." BR 4.1(c).

Though amendments to formal complaints are permitted, the accused lawyer

is entitled to "a reasonable time* * *to answer the amended formal

complaint, to procure evidence and to prepare to meet the matters raised by

the amended formal complaint." BR 4.4(b)(l).

Deviation from the process described in the rules has consequences. This

Court has repeatedly held that a trial panel's findings of disciplinary

violations not alleged by the Bar are improper and violate the notice rules.

See In re Chambers, 292 Or 670, 676, 642 P2d 286 (1982) ("The proof

supports this finding, but the pleadings do not. The complaint contains no

allegation that would put [the accused lawyer] on notice that he was charged

35 with this misrepresentation.") (decided under former DR 6-101(A)(1), (2)

and (3); 7-101(A)(3); 7-102(A)(5)); In re Ainsworth, 289 Or 479, 487, 614

P2d 1127 (1980) ("It also appears from an examination of the first charge of

the complaint that it does not very clearly charge the accused with a conflict

of interest in violation of either DR 5-105 or DR 7-104(A), so as to give him

a fair opportunity to defend himself against a charge of violating the terms of

those disciplinary rules.") (decided in relevant part under former DR 5-105

and DR 7- 104(A)). See also In re Thomas, 294 Or 505, 526,659 P2d 960

(1983) ("The difficulty is that the Bar in this cause did not allege that [the

accused lawyer] had violated the [statute the trial panel found that he

violated]. An attorney shall be given reasonable written notice of the charge

against him.") (decided under former DR 1-102 and 9-102).

This prohibition applies not only when a trial panel finds a violation

based on a disciplinary rule not alleged in the Bar's complaint, but also when

a panel finds a violation based on facts, or a theory about the facts, not

alleged in the complaint, even if the disciplinary rule was cited. In re Fulop,

297 Or 354, 359-60, 685 P2d 414 (1984) (rejecting the Disciplinary Review

Board's finding of a violation of DR 5-101(A) because, although DR 5-

101(A) was alleged to have been violated, the Bar's allegation was based on

the lawyer's alleged “financial” interest, whereas the Board's finding was

36 based on the lawyer's alleged “personal” interest, and thus the lawyer was

not "given fair notice that he should defend against that interpretation”).

This Court also has held in analogous circumstances that notice to a

defendant of the charges made against him, including in an administrative

proceeding, is a constitutional right. See State ex rel. Currin v. Commission

on Judicial Fitness and Disability, 311 Or 530, 533, 815 P2d 212 (1991)

("Adequate notice is a necessary component of due process of law.").

Petitioner in this matter did not, and does not, consent to the adjudication of

any unalleged charges against her.

In the case at bar, the MPO’s findings were not based upon allegations

plead by the Bar, and thus its decision violated Klemp’s right to fair notice

and due process. For this reason, the MPO’s finding that Klemp violated

RPC 1.16(d) should be dismissed.

2. Second Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.16(d) based upon its determination that Klemp’s legal services had no value.

The MPO found that Klemp violated RPC 1.16(d) by placing a lien on

file because her legal services provided little or no benefit to

(ER-12.) the MPO found there was no evidence of what Klemp’s

“reasonable services were.” (ER 5.) This decision was entirely inconsistent

with the law and facts presented at the hearing.

37

As a starting point, RPC 1.16(d) states that a lawyer may “retain papers,

personal properly and money of the client to the extent permitted by other

law.” (Emphasis supplied.) Oregon law permits an attorney to assert a lien

against a client’s file. Specifically, ORS 87.430 provides that:

“An attorney has a lien for compensation whether specially agreed upon or implied, upon all papers, personal property and money of the client in the possession of the attorney for services rendered to the client. The attorney may retain the papers, personal property and money until the lien created by this section, and the claim based thereon, is satisfied, and the attorney may apply the money retained to the satisfaction of the lien and claim.” (Emphasis added.)

See also, Oregon Formal Ethical Opinion No. 2005-90 (“if the lien is

otherwise valid, and the client has sufficient resources to pay the lawyer

what is due but chooses neither to make payment nor to file a bond, the

lawyer may lawfully withhold the client’s materials.”) The amount claimed

can be fixed, unliquidated or contingent, or based upon an assertion of the

reasonable value of the services rendered in the absence of an express

agreement for compensation. Crawford v. Crane, 204 Or 60, 67, 282 P2d

348 (1955); accord Lee v. Lee, 5 Or App 74, 79 n.1, 482 P2d 745 (1971).

Therefore, Klemp had a legal and ethical right under both RPC 1.16(d) and

ORS 87.430, to retain file to secure payment of fees, whether the

fees were specifically agreed upon or implied.

38

There was substantial evidence of the value of Klemp’s legal services.

Most of the supporting evidence was furnished by herself.

testified “I knew that [Klemp] was keeping track of her hours. That was the

agreement.” ( 702; 783.) further testified “[Klemp] was going

to keep track of her time and that—that a billing has been submitted to me

by her accountant, but I wasn’t---I wasn’t really in much of a frame of mind

to keeping track of that at that point.” ( 785.) understood that

Klemp was keeping track of her time because “when we finally finished the

litigation, that she would have an accounting of her time so that she could be

paid.” ( 785.) When asked whether she expected Klemp to provide

legal services for free, responded “of course not.” ( 784.)

further admitted that she understood that Klemp had the right to

charge for the time she spent on her case ( 787), and the right to

charge at her reasonable rate. ( 787.)

The undisputed evidence at the hearing was that Klemp provided legal

services for Klemp met with representatives of the nursing facility.

( 787.) Klemp did legal research, reviewed the nursing home records,

outlined legal issues in the case, met with and outlined the civil

complaint. (Klemp 1785, 2023-2024; Klemp Ex. 218.) When asked whether

Klemp’ legal work provided her value, responded “certainly.”

39 ( 786.) (Emphasis supplied.)

When Klemp terminated as a client, her unpaid legal fees totaled

$4,252.50. (Klemp Exhs.122, 155.) Klemp testified that when she first took

the case, she informed that she would charge her normal rate of $225

per hour. (Klemp 1787, 1799.) Klemp provided with invoices

showing the time she spent on the case, as well as her hourly rate. (Klemp

Ex. 122.) Klemp testified that the time reflected on the invoices was for legal

services actually performed for (Klemp 1799.) Notably,

conceded at the hearing that Klemp had the right to lien her file until her

legal fees were paid. ( 823.)

Based upon own testimony and the evidence presented at the

hearing, Klemp provided legal services to that were beneficial to her.

Klemp tracked the time she spent on the case, invoiced for that time,

and charged her normal hourly rate. Under RPC 1.16(d) and ORS

ORS 87.430, Klemp had the right to assert a lien on file. It was this

exact evidence that led Taggart to write in his dissenting opinion: “[i]t is

clear there was an attorney-client relationship. It is also clear

recognized [Klemp’s] work to be compensated.*** Based upon the unpaid

attorney fees, [Klemp] claimed a possessory lien under ORS 87.430 on

file and records which included the medical records. ***By reason

40 of the aforesaid, OSB has not carried its burden of proof.” (ER 33-34) For

the reasons stated above, the MPO’s finding that Kemp violated RPC

1.16(d) should be dismissed.

B. Matter (Case No. 15-01)

1. First Assignment of Error: The Majority Erred in finding that Klemp violated RPC 4.3 based upon facts or evidence not pled by the Bar.

The Bar alleged in its Formal Complaint that was an

unrepresented person. (ER-4.) It further alleged that, during Klemp’s initial

visit to the Jail on September 14, 2012, was confused about Klemp’s

role and that she “failed to make reasonable effort to correct the

misunderstanding.” (ER-4.) The Bar also alleged that Klemp failed to advise

that “she should secure her own counsel to advise her whether to sign

the power of attorney.” (Id.) The Bar additionally alleged that, during

Klemp’s third visit to the Jail on September 19, 2012, Klemp “took no steps

to clarify her role to nor did she advise to seek advice of

counsel prior to executing POA 2.” (ER-5.) Based upon this alleged conduct,

the Bar therefore accused Klemp of violating RPC 4.3. (ER-7.)

RPC 4.3 states:

“In dealing on behalf of a client or the lawyer’s own interests with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is

41

disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client or the lawyer’s own interests.” (Emphasis supplied.)

RPC 4.3 contains three distinct acts by a lawyer, to wit: (1) a lawyer dealing

with an unrepresented party shall not state or imply that the lawyer is

disinterested; (2) if the lawyer knows that the unpresented person

misunderstands the lawyer’s role, the lawyer must correct that

misunderstanding; and (3) the lawyer shall not give legal advice to a

unrepresented party, other than to secure legal counsel, if the interests of the

unrepresented party are in conflict with the interests of the lawyer or his/her

client. The Bar’s Formal Complaint, clearly alleged that Klemp violated

RPC 4.3 by engaging in conduct set forth in (2) and (3), above.

Notwithstanding the Bar’s allegations against Klemp, the MPO found

that Klemp violated RPC 4.3 by “implying that she was a disinterested party

and by not disclosing the fact that she was representing to obtain

the POA.” (ER-17.) Additionally, the MPO found that Klemp gave

legal advice, in violation of (3), above.

42

The MPO’s finding that Klemp violated RPC 4.3 by implying that she

was a disinterested party was in error, as this was never alleged by the Bar.

Klemp fully incorporates the points and authorities from pages 32-36 above

in into this section. For the reasons set forth in pages 32-36 above, and based

upon the holding in In re Fulop, 297 Or at 359-60, the MPO’s finding that

Klemp violated RPC 4.3 by implying that she was disinterested was

improper, as it was not alleged in the Formal Complaint, and thus violated

Klemp’s right to notice and due process. For these reason, the MPO’s

finding that Klemp violated RPC 4.3 by “implying that she was

disinterested” should be dismissed by this Court.

2. Second Assignment of Error: The Majority Erred in finding that Klemp Violated RPC 4.3 by implying that she was disinterested.

The only witnesses who testified at the hearing regarding Klemp’s

interactions with were Klemp and Boock. Both testified that Klemp

never stated that she was a disinterested party. (Boock 953; Klemp 1669.)

The Bar presented no evidence that Klemp even implied she was

disinterested. According to Boock’s testimony, Klemp told that “she

was there to have a power of attorney signed so her husband could take care

of the bills.” (Boock 954.) Klemp testified that told her: “I know who

you are. I told my attorney Angela Lee to tell you not to come. I’m not

signing that – I didn’t ask for it my husband did.” (Klemp 1662; Boock

43 931). therefore not only knew who Klemp was and who she

represented, but was unwilling to sign the POA on behalf of Klemp’s client.

The MPO’s finding that Klemp implied that she was disinterested during this

interaction with flatly contradicts the testimony of both Boock and

Klemp. Consistent with the testimony presented at the hearing, Taggart

stated in his dissenting opinion: “the evidence before the Panel does not

permit a finding that [Klemp] stated or implied to that [Klemp] was

disinterested….” (ER-36.) For these reasons, this Court should dismiss the

MPO’s finding that Klemp violated RPC 4.2 by implying that she was

disinterested.

3. Third Assignment of Error: The Majority Erred in finding that Klemp violated PRC 4.3 by failing to disclose that she was representing to obtain the POA.

As stated above, Boock and Klemp were the only two witnesses to the

interaction between Klemp and Both clearly testified that did

not appear to be confused about Klemp’s role. Boock testified that Klemp

never told that she was her attorney. (Boock 950, 952.) Boock also

testified that Klemp did not give legal advice. (Boock 954.) Boock

testified that Klemp advised that she was at the Jail to obtain a power

of attorney for so that he could pay the bills. (Boock 971.) There

was nothing about Klemp’s interactions with that led Boock to believe

that misunderstood Klemp’s role. (Boock 971.)

44

Klemp also testified that she told that she was at the Jail to obtain a

power of attorney for (Klemp 1662.) specifically told Klemp

that she knew who Klemp was, and that she would not sign the power of

attorney for (Klemp 1662; Boock 931.) Klemp also testified that

never appeared to be confused about her role. (Klemp 1669.) Before

leaving the jail, Klemp told that she should call an attorney if she had

questions about the power of attorney. (Klemp 1666.)

RPC 4.3 requires a lawyer to make a reasonable effort to correct an

unrepresented party if the unrepresented party misunderstands the

attorney’s role. The evidence in this case was that never appeared to

be confused about Klemp’s role. As Taggart wrote in his dissenting opinion:

“ fully understood who [Klemp] represented and why [Klemp] was

meeting with in jail. *** The evidence before the Panel does not

permit a finding that misunderstood [Klemp’s] role.” (ER-36.)

Because the evidence presented at the hearing did not support a finding that

misunderstood Klemp’s role, the MPO’s holding that Klemp violated

RPC 4.3 by failing to clarify her role to an unpresented party should be

dismissed.

4. Fourth Assignment of Error: The Majority Erred in finding that Klemp violated PRC 4.3 by giving legal advice.

45

The Majority found that Klemp violated RPC 4.3 by failing to advise

to seek legal counsel. (ER-16.) However, Klemp could only have

violated RPC 4.3 by failing to advise to seek legal counsel if she gave

legal advice, which she did not. The MPO’s finding that Klemp

violated RPC 4.3 is predicated on a finding that Klemp also gave legal

advice. However, the evidence at the hearing did not support this finding.

Both Klemp and Boock testified that Klemp never gave legal advice.

(Klemp 1669, Boock 954). Additionally, Klemp testified that she told

to contact an attorney if she had any questions about the power of attorney.

(Klemp 1666).

In his dissenting opinion, Taggart wrote that under RPC 4.3 “the lawyer

shall not give legal advice to an unrepresented person if the lawyer

reasonably knows the interests of the unpresented person have a reasonable

possibility of being in conflict with the interest of the lawyer’s client; the

evidence before the Panel does not permit a finding that [Klemp] gave legal

advice to (ER 36.) Because there was no evidence that Klemp gave

legal advice, this Court must dismiss the MPO’s finding that Klemp violated

RPC 4.3.

5. Fifth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by modifying a residential lease based upon facts or evidence not pled by the Bar.

46

The Bar alleged that Klemp violated RPC 1.2(c) when she “drafted one

or more leases in which she falsely and fraudulently identified as

the lessor of property that she knew belonged to the trust.” (ER 5.)

In its Opinion, the Majority held that Klemp violated RPC 1.2(c) by

“modifying the leases with the Trust properties to require payment to

be made to (Er-22.) Not only did the Majority not make a finding

that Klemp modified the May Lease, but its holding was not plead in the

Bar’s formal Complaint. The Bar alleged that Klemp “drafted one or more

leases.” (Id.) Because the MPO’s holding was not alleged in the Formal

Complaint nor supported by the evidence in the record, the MPO’s decision

violated Klemp’s right to fair notice and due process, and thus, should be

dismissed by this Court.

6. Sixth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by demanding Vinson pay rent to

when Klemp knew that he was no longer successor trustee.

In holding that Klemp violated RPC 1.2(c) by modifying the leases, the

MPO made specific findings. It found that Klemp was present when Vinson

executed the May Lease. (ER-21.) It found that Vinson continued to pay rent

to because “Ted and Lisa Klemp” told her that was

going to evict her. (Id.) The MPO found that “Klemp knew that had

been substituted as successor trustee under the Trust and yet both

47

and Klemp continued to demand that rent payments be made to

knowing full well that he was no longer the successor trustee.”

(Id.) Based upon the above findings, the MPO held that Klemp violated RPC

1.2(c) by “modifying the lease with the Trust properties to require

repayment to be made to (ER-22.)

The MPO’s above findings were erroneous is several respects. First,

the Bar never alleged Klemp violated RPC 1.2(c) by modifying leases.

Additionally, there was no evidence that Klemp drafted or modified the May

Lease to require Vinson to pay Klemp and Nichols specifically

testified that Klemp had no involvement in drafting or reviewing the May

Lease. (Klemp 1745; Nichols 1534-1535.) When Vinson (the Bar’s only

witness regarding the leases) was asked at the hearing whether Klemp

drafted the May Lease, she testified that “I never saw who actually drafted

[the leases].” (Vinson 921.) The only evidence of Klemp’s alleged

involvement with the May Lease came from the Vinson’s Declaration.

(Bar’s Ex. 25.) In her Declaration, Vinson stated “[ suggested

several changes to the July Lease, and [Klemp] made the changes on her

computer.” (Bar’s Ex. 25, p. 3, ¶14.) However, Vinson’s Declaration made

clear that the change to the May Lease involved a provision regarding horse

care. (Id., ¶14.) Vinson’s hearing testimony was less clear regarding

48 Klemp’s involvement. When asked about the execution of the second lease

and who was present, Vinson testified that “So [ came to me and

said were going to sign, were going to fill out this new lease—we’re going

to do a new lease for you, and were going to backdate it to May….” (Vinson

898.) Vinson made no mention of Klemp. (Vinson 898.) The Trial Panel

members later sought clarification regarding who instructed her to sign the

May Lease. (Tr. 900). In response, Vinson testified that “my ex-boyfriend

and I, when we—when we were going over this new lease and Ted was

telling us everything.” (Vinson 900.) Unsatisfied with her answer, the Bar

asked Vinson the following leading question “[s]o both Ted and Lisa were

talking to you at that time…”, to which Vinson responded, “Yes.” (Vinson

900.) Contrary to Vinson’s Declaration, both Klemp and Nichols testified

that Klemp never spoke to Vinson, nor directed Vinson to pay rent to

(Klemp 1744-45; Nichols 1538); see also, ER-30 (Taggart found

that Klemp to be a “very credible witness.”); In re Fulop, 297 Or 354, 360,

685 P2d 414 (1984) (conflicting testimony between equally credible

witnesses is not clear and convincing evidence of an ethics violation.)

Nichols also testified that Klemp was not present during the execution of the

Lease and made no changes to the Lease. (Nichols 1535-36.)

49

Second, the Majority erred when it found that Klemp violated RPC

1.2(c) on the basis that Vinson “was scared” not to pay rent

because “Ted and Lisa Klemp” told her that would evict

her. [ER-21.]. The Bar’s Formal Complaint alleged that Klemp “assisted

by directing tenant of the trust properties to pay rent directly

to (Er-5.] The Majority’s Opinion did not find that Klemp directed

Vinson to pay rent; instead, it found that Klemp told Vinson that was

going to evict her. [Er-21.] Even if this were true, which it is not, there was

no evidence that this representation was fraudulent. Moreover, Vinson’s

Declaration does not state that Klemp ever “demanded” that she pay

rent. (Bar’s Ex. 25, p. 3, ¶17.) Even in its own Opinion, the

Majority recognized that was the only person who “in the months

of June and July, 2013 […] “continued to require the rent money to be given

to him and not given to Linda [ER-22.]

Third, the MPO erred by finding that Klemp “knew” had been

substituted as successor trustee, and nevertheless continued to demand that

rent payments be made to [ER-21-22.] The Bar never presented

any evidence that Klemp “knew” that was the successor trustee when

the May Lease was executed. The May Lease is dated May 1, 2013. (Klemp

Ex. 142). This, coincidently, was the same time that Vinson’s prior lease

50 with expired. (Klemp Ex. 125.) Nichols testified that the May

Lease was executed in May. (Nichols 1535, 1568; Klemp Ex. 192.)

Assuming the date appearing on the May Lease, and the consistent

testimony of Nichols is correct, then the May Lease was executed before

May 20, 2013, i.e., the date the bar contended that appointed

successor trustee. (Klemp Ex. 145, p. 3). As such, had the authority

to execute the May Lease and demand payment of rents as successor trustee.

Assuming arguendo that was removed as successor on May 20,

2013, the Bar never proved that either or Klemp knew of

appointment as successor trustee. (Ratcliffe 1372-73, 1377) The only

testimony regarding Klemp’s knowledge came from Klemp, who testified

that she never received a copy of the Amendment appointing nor

was she aware of it. (Klemp 1724, 1897, 1903.) Further, there was never any

evidence presented by the Bar that Klemp demanded or directed Vinson to

pay rent money after the May Lease was executed.

For the reasons state above, the MPO’s finding that Klemp violated

RPC 1.2(c) by “modifying the leases” was not supported by the evidence,

and should be dismissed.

7. Seventh Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by preparing a Trust Deed for

personal expenses, which was not pled by the Bar.

51

The Bar alleged in it Formal Complaint that Klemp “fraudulently

executed a trust deed “against Trust property, knowing that “

had not in fact loaned $53,530 of his own money to the Trust.” [ER-

7.] (Emphasis supplied.) The Bar further alleged that Klemp “[k]new that

had no legal ability to execute the trust deed as trustee for the

trust.” (Id.) The Bar had to prove these allegations by clear and convincing

evidence.

The MPO found that Klemp violated RPC 1.2 by allowing to

procure a “promissory note and a deed trust against the Trust

property.” [ER-23.] However, this conclusion was not based upon a finding

that had not “loaned his own money.” Rather, the MPO’s

conclusion was based upon its finding that had, in fact, paid money,

but he improperly sought reimbursement for his personal expenses, not

expenditures made on behalf of the Trust. [ER-22.] As noted above, this was

not the allegation in the Bar’s Formal Complaint. Klemp fully incorporates

the point and authorities from pages 32-36 above into this section. Because

the MPO’s conclusion was not based upon facts alleged in the Formal

Complaint, the MPO’s decision violated Klemp’s right to fair notice and due

process, and thus should be dismissed by this Court.

52

8. Eighth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by preparing a Trust Deed to secure repayment of personal expenses versus expenses made on behalf of or the Trust.

The Bar’s estate and probate experts testified that it is not uncommon

for a trustee (or successor trustee) to loan or advance money to a trust.

(Bertalan, 396.) After reviewing the Trust language, Bertalan testified that

successor trustee could pay for Trust expenses out of his/her own

personal account. (Bertalan 398.) She further testified that the successor

trustee could secure repayment by executing a trust deed on trust property.

(Bertalan 396.); see also Bryant 1307, 1309-1310; ORS 130.680. Bertalan

testified that she advises successor trustees to document any such

expenditures. (Bertalan 397.) Bertalan testified that she advises successor

trustees to maintain receipts or checks documenting payment of expenses.

(Bertalan. 396-398, 402; see also, Bryant 1334-35; Klemp Ex. 103, p. 7,

¶¶13.2 and 13.4). If the provided to Bertalan appear valid, she testified that

she would execute a securing agreement. (Bertalan 402.)

In this case, it was uncontroverted that Klemp received substantial

documents from - including ledgers, receipts, invoices, and checks

- showing that he expended money from his own account on behalf of

or the Trust. (Klemp Exhs. 136, 137). and set out in the

ledger the basis by which the expense benefited or the Trust. (Klemp

53 Ex. 136, pp. 1-16). Even the MPO conceded this when it stated “[i]t is

undisputed that Klemp reviewed receipts and his list of

expenditures and, to some extent, relied on review of the same since

at that time had been substituted as both power of attorney and

successor trustee.” ([ER-23.] Bryant testified that the documents Klemp

relied upon to execute the Trust deed are the same documents other

practitioners in this area rely upon. (Bryant, 1335.) Based upon these

supporting documents, Klemp drafted the Trust Deed. (Klemp 1753.)

Disregarding all the above evidence and testimony, the MPO found

that all of the documented expenditures were personal expenses.

[ER-22.] What is shocking about this conclusion is that no evidence nor

testimony was presented at the hearing regarding the individual

expenditures. Instead, the evidence showed that provided Klemp

with a ledger of 91 different expenditures paid by (Klemp Ex. 136,

pp. 1-16.) Every entry reflected on the ledger was supported by a check

written by out of his own personal bank account. (Klemp Ex. 136,

pp. 20-53.) The ledger showed that wrote checks for expenditures

such as: (1) “Lauren’s Employees for antique store” in the amount of $45

(Ex. 136, p. 1); (2) Mini Pet Mart in the amount of $97.79 for “Care and

feed for Laurens [sic] dogs (Klemp Ex. 136, p. 1); (3) “Laurens [sic] SR22

54 filing in the amount of $114.98 (Klemp Ex.136, p. 3); (4) attorney

fees in the amount of $14,000 (Klemp Ex.136, p. 1); and (5) a water bill for

commercial property in Grants Pass (account #36635-278448) in the

amount of $69.21 (Klemp Ex. 136, p. 3). At the end of the ledger,

documented credits that he owed in the amount of $19,505, which he

deducted from the amount owed. (Klemp Ex. 136, p. 7.)

Even Ratcliffe testified that she was never able to determine whether

claimed expenditures were inappropriate. (Ratcliff 1399-1401.)

When asked about payment of $14,000 for attorney fees,

Bertalan testified: “Okay, so that seems legitimate. He sold his truck to come

up with the $14,500 that he gave to Lauren. ***I would want to make sure

that that really happened, and I think that would be fine if that’s truly what

happened.” (Bertalan 442). The Bar presented no evidence that did

not sell his truck, or that he did not pay attorney fees.

The MPO focused its Opinion on one of the expenditures, to wit,

request for reimbursement for the cost of domestic violence

counseling. ([ER-14.] Although the panel called this cost “egregious,”

Bryant disagreed. Bryant testified the possibility that this expense benefitted

or the Trust could not be ruled out. (Bryant 1333.) Bryant suggested

that, if could show that the domestic violence counseling improved

55 his relationship with this would benefit to (Id.) In short, there

was no testimony from or specific testimony from Klemp regarding

each and every expense, and therefore no way for the MPO to have come to

the broad conclusion that all of the expenses were personal and, therefore,

illegitimate.

Perhaps the most glaring omission in the MPO’s Opinion is the failure

to determine whether Klemp knew that the expenditures were not for the

benefit of the Trust. This is because the Bar never established Klemp has

such knowledge. All the evidence at the hearing supported a finding that the

expenditures documented, and Klemp relied upon in drafting the

Trust Deed, benefitted either or the Trust, and thus were valid. To find

that Klemp knew that none of these expenditures benefited or the

Trust is entirely inconsistent with the evidence and testimony at the hearing.

Taggart correctly concluded in his dissenting opinion that “ had a

monetary claim against individually, and the corpus of the Trust.”

[ER-39.]

9. Ninth Assignment of Error: The Majority Erred in finding that Klemp violated RPC 1.2(c) by representing that had a valid power of attorney to execute the $9,500 check.

The Bar alleged in its Formal Complaint that Klemp violated RPC

1.2(c) by falsely representing to Washington Federal that was

56 acting under a valid power of attorney to sign the $9,500 check.” [ER-6.]

The Bar further alleged Klemp’s representation was “false and material and

Klemp knew it was false and material when she made it.” (Id.)

Setting aside many of its factual misstatements in this section of its

Opinion,6 the MPO found that Klemp violated PRC 1.2(c) by representing to

Washington Federal that had a valid power of attorney when he

signed a $9,500 check on June 17, 2013. (Klemp Ex. 166.) The basis of its

finding is the conclusion that Klemp received notice from Ratcliffe on June

10, 2012 that no longer had a valid power of attorney, and thus, she

knew did not have authority to sign the check. This conclusion was

based upon the Majority’s erroneous assumption that Klemp was aware of

the June 10 Letter, and the documents allegedly attached thereto. (Klemp

Ex. 177.) The Bar presented no evidence that Klemp was aware of the June

10 Letter or Power of Attorney when she represented to Washington

6 The MPO misstates numerous facts in this section of its Opinion. To avoid any confusion, the MPO’s misstatements should be corrected, as follows. The Majority stated that sent Klemp and notice on July 10, 2013. In truth, Ratcliffe sent Alexander a letter on July 10, 2013. (Klemp Ex. 165.) The MPO stated that Klemp attempted to “cash a $9,500 check; yet, there was never any evidence that Klemp “attempted to cash a $9,500 check. The MPO found that Klemp had violated RPC 1.2(c) by falsely claiming to Evergreen Bank that had a valid power of attorney; but Klemp actually sent a letter to Washington Federal, not Evergreen Bank. (Klemp Ex. 177.)

57 Federal that had a valid power of attorney. Instead, the evidence

showed that Klemp believed possessed a valid power of attorney,

executed in September 2012. (Klemp 1725.) See In re Hockett, 303 Or 150,

162 n. 3, 734 P2d 877 (1987) (a lawyer with “a reasonable and good faith

basis for concluding that the conduct is legal” ought to be able to so advise a

client without the risk of discipline). The strongest evidence in support of

Klemp’s representation that had the authority to sign the check was

Evergreen Bank’s decision to authorize transfer of the funds. After

investigating the matter, Evergreen Bank’s attorney could not find that

did not have the authority to sign the check. (Klemp Ex. 187, p. 2.).

Klemp did not have burden to prove that had the authority to sign

the check; rather, it was the Bar’s burden to prove Klemp made a fraudulent

representation. A finding that Klemp committed fraud by misrepresenting

authority would mean Evergreen Bank’s representation was also

fraudulent, which is absurd. Because there was no evidence to support a

finding that Klemp made a fraudulent representation, The MPO’s finding

that Klemp violated RPC 1.2(c) should be dismissed.

10. Tenth Assignment of Error: The Majority Erred in Finding that Klemp violated RPC 4.1(b).

At the conclusion of the MPO’s Opinion, the Majority found that Klemp

violated RPC 4.1(b) by “draining and attempting to drain individual

58 assets and trust assets as outlined in paragraph 3 [modification of lease]; 4

[preparing a Trust Deed]; and 5 [$9,500 check], above.” [ER-24.] For the

reasons previously stated in this brief, the MPO’s findings and conclusions

were in error, and therefore Klemp could not be found to have violated RPC

4.1(b).

III. CONCLUSION

The finding and conclusions underlying the MPO’s Opinion were either

not plead in the Bar’s Formal Complaint, or were not supported by the

evidence. Each of the Majority’s holdings of violation should be dismissed

because they are based on the demonstrable errors of fact and law, and glaring

inconsistencies delineated in this brief. Justice requires that the Court put

these cases to an end, and vindicate Klemp with an order dismissing all claims.

Respectfully submitted,

s/ Nathan G. Steele

Nathan G. Steele, OSB 004386 The Steele Law Firm 125 NW Greeley Ave. Bend, Oregon 97703 Attorney for Accused-Petitioner

Filed on July 26, 2017

CERTIFICATE OF COMPLIANCE WITH BRIEF LENGTH AND TYPE SIZE REQUIREMENTS

Brief Length

The undersigned hereby certifies that (1) this Brief complies with the

word-count limitation on ORAP 5.05(2)(b); and (2) the word count of this

brief (as described in ORAP 5.05(2)(a)) is 13,147 words.

Type Size

I certify that the size of the type in this brief is not smaller than 14 point

for both the text of the brief and footnotes, as required by ORAP 5.05(2)(d)(ii)

and 5.05(4)(g).

s/ Nathan G. Steele

Nathan G. Steele, OSB No. 004386 Attorney for Accused-Petitioner

PROOF OF SERVICE

The undersigned hereby certifies that, on the 26th day of July, 2017, the original foregoing Petitioner’s Brief was delivered to the Supreme Court Administrator by filing through the Appellate Court’s efiling System, pursuant to ORAP 1.35(1)(a)(ii)(A). The undersigned further certifies that, on the 26th day of July, 2017, pursuant to agreement by counsel for the Oregon State Bar-Respondent, a true and accurate copy of the foregoing Petitioner’s Brief was served upon the following:

Theodore W. Reuter OSB #084529 Oregon State Bar P.O. Box 231935 Tigard, OR 97281 treuter@osbar.org Attorney for Oregon State Bar-Respondent

via electronic service through the Appellate Court’s efiling System, and by email at the last known email address of counsel as shown above.

s/ Nathan G. Steele

Nathan G. Steele, OSB No. 004386 Attorney for Accused-Petitioner